Buzzi Unicem Full Year 2017 results
In 2017 Buzzi Unicem group sold 26.8Mt of cement (+4.4 per cent compared to 2016) and 12.3Mm3 of ready-mix concrete (+3 per cent YoY). Consolidated net sales increased by 5.1 per cent, from EUR2669.3m to EUR2806.2m.
EBITDA decreased by 7.7 per cent from EUR550.6m to EUR508.2m. The foreign exchange effect was negative for EUR2m. The figure for the year under review includes non-recurring costs of EUR68.2m, of which EUR59.8m for antitrust sanctions inflicted to the Italian cement sector, EUR3.2m for provision for legal claims, EUR2.4m for provisions for fiscal claims, EUR2m related to facility disassembling costs and EUR0.8m for restructuring expenses. Excluding non-recurring items, EBITDA increased from EUR550.7m to EUR576.4m (+4.7 per cent), with EBITDA-to-sales margin at 20.5 per cent (20.6 per cent in 2016).
Amortisation and impairment charges amounted to EUR222.1m, versus EUR202.6m of the
previous year. Net finance costs decreased from EUR147.2m to EUR35.0m,
Gains on the disposal of investments contributed for EUR1.5m, while equity in earnings of associates, among which the joint venture operating in Mexico stands out, improved the contribution on the previous year (EUR96.2m compared to EUR79.9m in 2016).
Net debt as at 31 December 2017 stood at EUR862.5m, down EUR79.1m from EUR941.6m at year-end 2016.
Italy
Cement and clinker volumes sold were up 19.5 per cent, mainly thanks to the first full consolidation of Cementizillo in the second part of the year, to the growth in volumes exported overseas and to clinker sales.
The company achieved a good increase in production (+11.3 per cent), however with rather weak selling prices. This trend in volumes and prices generated net sales of EUR427.8m, up 14 per cent (EUR375.2m in 2016. EBITDA, which remained negative, declined from -EUR22.2 to -EUR79.7m.
Central Europe
Overall net sales thus increased from EUR572.4m to EUR588m (+2.7 per cent) and EBITDA increased from EUR76.8 to EUR78.1m (+1.7 per cent). In Luxembourg and The Netherlands cement and clinker sales closed the period up (+4.5 per cent) with average unit revenues slightly improving. EBITDA amounted to EUR17.6m (EUR25.8m in 2016).
Eastern Europe
In Poland the cement volumes sold marked a slight increase (+0.7 per cent), with average prices in local currency improving. EBITDA improved from EUR23.4m to EUR24.1m (+3 per cent). Meanwhile, in the Czech Republic cement volumes reported a strong growth trend (+8.2 per cent), with average selling prices in local currency slightly down. In Ukraine cement volumes were slightly down compared to last year (-1.5 per cent), with prices in local currency strongly moving up, driven by inflation. In Russia sales volumes, which have been improving in the second semester, closed the entire period slightly up on the previous year (+1.7 per cent), thanks also to the positive trend of special oil well cements.
USA
In the USA overall net sales increased from EUR1117.8m to EUR 1119.7m (+0.2 per cent) and EBITDA from EUR356.5m to EUR369. 6m (+3 .7 per cent). The trend of deliveries was quite uneven in the different regions where the group is present: substantial recovery of oil well cements, compared to an easy basis of comparison, gradual development in the Midwest, shipments stopped for a few weeks in Houston and in the surrounding areas.
Mexico
Cement sales of the associate Corporación Moctezuma, thanks to the gradual and sustainable
introduction of the new production line erected at the Apazapan (Veracruz) plant, achieved
satisfactory growth, with strongly strengthened average prices in local currency. Net sales and EBITDA, in local currency, posted an improvement of 16.3 and 15.8 per cent, respectively.
Outlook
In Italy, following the important consolidation transactions that occurred in 2017, the industry structure is now less fragmented and, in perspective, it should achieve a better balance between supply and demand. Expectations on cement consumption in 2018 are characterised by moderate growth.
