HeidelbergCement doubles Group profit in 3Q13
HeidelbergCement records that sales volumes improved in all business lines compared with the 3Q12, due to the continued recovery of demand for construction materials in Europe and North America as well as the sustained growth in Asian and African countries.
During the third quarter, cement and clinker sales volumes increased by 4.1 per cent to 25.3Mt (24.3Mt in 3Q12). The North American operations experienced the strongest growth in sales volumes, followed by Asia-Pacific and Africa-Mediterranean Basin. Cement sales volumes in Western and Northern Europe as well as Eastern Europe-Central Asia increased also slightly. Deliveries in the United Kingdom were more than 10 per cent above those of the previous year, due to the recovery in private residential construction and current infrastructure projects in the area of London.
Following the drop in demand in 1H13, cement sales volumes stabilised in Eastern Europe. Adjusted for consolidation effects, cement sales volumes increased by 2.9 per cent. Deliveries of aggregates rose significantly by 6.3 per cent to 73.1Mt (68.8Mt in 3Q12); adjusted for consolidation effects, the increase amounted to 5.5 per cent. North American aggregates sales volumes increased considerably.
Deliveries of ready-mixed concrete rose by 4.5 per cent to 11.Mm3. Key growth drivers were the markets in Asia, especially in Indonesia. While deliveries of aggregates fell marginally by 1.2 per cent to 180.6Mt, deliveries of ready-mixed concrete rose by 2.6 per cent to 29.8Mm3.
Group revenue remained fairly stable at EUR3.891m (3Q12 EUR3.944m). The increase in sales volumes and successful cement and aggregates price increases in principal markets could not fully offset negative currency effects in the Group areas. Excluding exchange rate and consolidation effects, revenue grew by 4.9 per cent, with all Group areas recording an increase, except for Eastern Europe-Central Asia.
Operating income before depreciation (OIBD) declined by seven per cent to EUR811m, while operating income decreased by 6.8 per cent to €603m. Although the increase in sales volumes, successful price increases, and declining energy and raw material costs contributed positively to the development in results, they could not fully compensate for negative currency effects. Excluding exchange rate and consolidation effects as well as a EUR48m gain from the sale of a depleted quarry in the 3Q12, operating income before depreciation increased by 4.2 per cent and operating income by 7.1 per cent.
“The positive development of sales volumes, prices, and costs shows, that we continue to be operationally well on track”, says Dr Bernd Scheifele, Chairman of the Managing Board. “Thanks to the cost savings measures implemented at an early stage, we see a significant increase in results in North America and the United Kingdom. On Group level, however, we had to face growing headwind in revenue and operating income in the third quarter, due to the significant strengthening of the euro. Our efficiency improvement programmes continue to progress according to plan.”
At the end of the 3Q13, HeidelbergCement’s net debt amounted to €8bn, which is €0.2bn higher compared with the end of the third quarter of 2012. Thereby, gearing rose to 61.5 per cent (55 per cent in 2012).
Outlook for 2013
In North America, HeidelbergCement continues to expect an on-going economic recovery and consequently a further increasing demand for building materials, especially from residential construction and the raw materials industry. A three-layered economic development is anticipated in Europe and central Asia: The markets in Germany, Northern Europe, and the United Kingdom should continue to develop positively.
Markets in central Asia should stabilise, and in Benelux and Eastern Europe a continuing weak development of the economy and demand for building materials is anticipated. In Asia and Africa, HeidelbergCement expects no changes in the sustained growth in demand.
Based on the increase in the stake of Cement Australia, Midland Quarry Products, and CJSC “Construction Materials”, the Group will probably exceed its target of €1.1bn for cash flow investments and reach a level of about €1.35bn. HeidelbergCement nevertheless sticks to the original target and will continue with its disciplined investment policy.
