Italcementi Group sales for the year to 30 September 2013 reflected an easing in the reduction in volumes, assisted by continuing healthy performance in Asia, the confirmed upturn on the North American market and the slower decline in the EU area. The Group’s key operating results (net of income from the sale of CO2 emission rights) were substantially in line with the first nine months of 2012, despite a particularly negative exchange-rate effect.

“Despite the stagnation in demand on the European markets, over the last four quarters, with the exception of March, which was severely affected by the impact of bad weather on construction operations, the Italcementi Group has reported a positive trend in results for its industrial operations,” commented the Group Chief Operating Officer, Giovanni Ferrario.

“The efficiency plan implemented on fixed and variable costs was a positive factor, notwithstanding the strong impact of the rise in energy prices in Egypt, enabling us to achieve results in line with our plans and targets. Meanwhile, the Group confirms the solidity of its financial situation: our liquidity profile is adequate, given stable net debt of around EUR2bn, and this was highlighted recently when Standard and Poor’s confirmed our rating.”

In 9M13, the cement and clinker segment reported sales volumes of 32.6Mt (-5.6 per cent from the first nine months of 2012, with the sharpest decreases in Italy and Egypt, the latter affected by fuel procurement difficulties). In aggregates, sales totalled 24.8Mt (-3.4 per cent), while sales of ready-mixed concrete amounted to 9.3Mm3 (-4.2 per cent).

In the third quarter, cement and clinker sales (-2.4 per cent) increased in North America (+8.2 per cent) and Asia (+3.2 per cent). The slowdown on the Italian market generated the overall reduction in central western Europe (-3.8 per cent), while the volatility of the Egyptian market noted above led to a reduction in sales volumes in emerging europe, North Africa and Middle East (-12.6 per cent), despite the upturn in sales in Morocco.

With a positive dynamic in sales prices – especially in Egypt and Thailand and, to a lesser extent, Italy and Morocco – the sales volume trend in the first nine months generated revenue for the period January-September 2013 of EUR3217.5m (-5.2 per cent, or -2.4 per cent net of the exchange-rate effect).

Overall, recurring EBITDA was EUR473.1m, down by seven per cent from the year-earlier period. At individual-country level, the most significant growth was reported in Thailand, France-Belgium, North America and Morocco, while the largest reductions were in Egypt, India and Italy.

In Italy, the restructuring measures previously put in place had a positive impact that outweighed the reduction in the result caused by the fall in sales volumes, and led to a significant lowering of the break-even point. Net of the CO2 effect and considering the return to break-even at Calcestruzzi after years of losses, the industrial result for Italian operations in the first nine months of the year was positive, confirming the strategic importance of the measures taken to improve efficiency. EBITDA, at EUR460.1m (-12.3 per cent), reflected net non-recurring expense of EUR13m (net income of EUR16.2m in the first nine months of 2012), arising on increased charges for corporate restructurings associated in part with the review of Project 2015 in Italy.

EBIT was EUR108.1m (-35.6 per cent) after amortisation and depreciation of EUR317.8m and impairment of EUR34.2m, mainly in Italy and Spain. Finance costs net of finance income amounted to EUR85.7m, in line with the previous-year figure, while impairment on financial assets, zero in the first nine months of 2012, totalled EUR14.9m, relating mainly to the impairment of some equity investments.

Capital expenditure, relating largely to production efficiency measures, was EUR238m in the year to 30 September (EUR258.4m in the first 9M12), and was fully funded by cash flow from operating activities, which rose to EUR247.1m from EUR211.8m in the year-earlier period. Net debt at 30 September 2013 was EUR2031.1m, substantially in line with the situation at 30 June 2013(EUR2000.7m). Compared with the situation a year earlier, net debt reflected an improvement of approximately EUR170m.

Total equity was EUR3849.9m compared with EUR3958.8m at 30 June 2013. Consequently, the gearing ratio (net debt / equity) was 52.8 per cent at 30 September (50.5 per cent at 30 June 2013).

Outlook
The favourable conditions in both demand and sales prices in some countries, as well as the visible effects of the efficiency plans introduced throughout the group, allow to forecast an improvement in recurring EBITDA in the fourth quarter. Full-year recurring EBITDA – net of the exchange-rate and CO2 effects – will be in-line with the 2012 result, although it will be affected by the negative impact on sales volumes in the first quarter of the year.