HeidelbergCement achieves 10% revenue growth in 2018
HeidelbergCement has presented its preliminary, unaudited figures for sales volumes, revenue and result from current operations before and after depreciation and amortisation for the 4Q18 and the whole of 2018. Group revenue rose by 10 per cent to EUR 4.7bn, up from EUR4.3bn in 2017.
In 2018 the cement and clinker sales volumes of the group increased moderately by three compared with the previous year to 130Mt, up from 126Mt in 2017. Deliveries of aggregates rose slightly by one per cent to 309Mt from 305Mt. Deliveries of ready-mixed concrete increased by four per cent to 49Mm3 from 47Mm3 in 2017.
As a result of the increase in sales volumes in all business lines and successful price increases, group revenue rose by five per cent to EUR18.1bn from EUR17.3bn in 2017.
"In 2018, we achieved new record values in sales volumes and revenue," says Dr Bernd Scheifele, chairman of the Managing Board. “In operational terms, we were almost able to offset the impact of adverse weather conditions, particularly in the USA, and the higher than expected cost inflation through growth in sales volumes and price increases. Our action plan is also producing its first results: thanks to the accelerated portfolio optimisation and expenditure discipline, we were able to reduce net debt at year end to below EUR8.4bn."
4Q18
In 4Q18, cement and clinker sales volumes rose by two per cent to 33Mt up from 32Mt previously, driven by solid growth in Europe and Asia. Deliveries of aggregates remained stable at 76Mt. The growth in North America and in Western and Southern European sales regions offset declines in the other group areas. Sales volumes of ready-mixed concrete increased by eight per cent to 13Mm3 up from 12Mm3 in 2017.
Regional results
In north America, demand for building materials increased further, particularly as a result of sustained economic growth and falling unemployment figures. However, construction activity was hampered by the long winter in the north and heavy rainfall, particularly in the north and southwest of the USA. Like-for-like, revenue rose by three per cent over the full year and by four per cent in the 4Q18.
North American cement volumes totalled 16.2Mt in 4Q18, down from 16.4Mt in 4Q17. Aggregates rose to 123.4Mt in 4Q18 from 120.8Mt in 4Q17 and ready-mix rose from 6.6Mm3 in 4Q17 to 7.1Mm3 in 4Q18. Asphalt increased marginally from 4Mt to 4.1Mt in 4Q18.
Western and southern Europe cement volumes reached 30.8Mt in 4Q18 compared to 28.9Mt in 4Q17, up 1.2 per cent. Aggregates rose to 81.3Mt from 78.5Mt in 4Q17 and ready-mix volumes totalled 17.5Mm3 in 4Q18 compared to 17.3Mm3 in 4Q17. Asphalt volumes reached 3.6Mt in 4Q18 compared to 3.3Mt in 4Q17.
In the Northern/Eastern Europe & Central Asia group area cement volumes fell by -1.4 per cent to 25.6Mt in 4Q18 from 25.9Mt in 4Q1. Aggregates also fell to 51.3Mt in 4Q18 from 52.3Mt in 4Q17. However, ready-mix volumes grew to 7Mt in the quarter from 6Mt in 4Q17.
The Asia-Pacific region saw cement volumes of 36.9Mt in 4Q18, up from 34.7Mt in 4Q17. Aggregates jumped to 43.4Mt from 41.5Mt in the corresponding quarter of 2017. Ready-mix volumes also rose in 4Q18 to 11.6Mm3 from 10.6Mm3 in 4Q17. Asphalt volumes increased by 19 per cent in 4Q18 to 2.1Mt from 1.8Mt in 4Q17.
Africa and eastern Mediterranean had cement volumes of 19.7Mt in 4Q18 up from 19Mt in 4Q17. Aggregates fell to 10.1Mt in 4Q18 down from 12.4Mt in 4Q17. Ready-mix volumes rose to 5.3Mm3 in 4Q18 from 5.1Mm3 in 4Q17. Asphalt volumes slipped to 0.5Mt in 4Q18 from o.6Mt in 4Q17.
Outlook
HeidelbergCement expects worldwide demand for cement to increase further in 2019. This applies in particular to Indonesia, India, Africa south of the Sahara and North America.
"Considering the overall positive outlook for the global economy, we are confident about the future," says Dr Bernd Scheifele. "We assume that some of the factors that impaired our results in 2018 will not be present in 2019. In particular, this relates to the adverse weather conditions in the USA, energy price inflation that was stronger than expected, and the price collapse in Indonesia. In 2019, we will focus on our action plan in order to accelerate our portfolio optimisation and increase cash flow and margins. In addition, we will press ahead with the digitalisation of our entire value chain in order to further improve our operational excellence. In view of our strong positioning in raw material reserves and production sites in attractive locations, the unique vertical integration, our excellent product portfolio, and our industry-leading margin management, we believe we are well equipped for the opportunities and challenges of 2019."
