Titan publishes its 2019 annual report
Titan has published its 2019 annual report outlining the group's financial, environmental and social performance.
While Titan delivered another solid financial performance and made good progress on its 2020 environmental and social targets, responding to climate change and the digital revolution, the coronavirus broke out during the writing of the report. TITAN has mobilised to take measures to protect its staff. An assessment of the impact of COVID-19 is included in the report.
Dimitri Papalexopoulus, chairman of Titan's Group Executive Board, said: "In 2019, we successfully managed the traditional cycles of economic and construction activity in each of the regions we operate in, delivering another solid financial performance."
Titan Group's consolidated revenue for 2019 reached EUR1609.8m, higher by eight per cent compared to 2018. EBITDA reached EUR267.1m, up two per cent.
USA
Group results were led by the US operations. Improved market demand combined with strong demographics in the areas Titan America operates, resulted in increased sales across all product lines, with the exception of fly ash due to supply shortages. Profitability was supported by higher selling prices and better weather patterns but was burdened by higher cement import costs, higher distribution costs and lost earnings from the fly ash business.
US revenues reached US$1.06bn and in euro terms, revenue in the USA recorded a 10.7 per cent increase, reaching EUR952m and EBITDA at EUR179.3m was marginally higher at 0.8 per cent compared to 2018.
Greece
Performance in Greece improved, driven by modest demand growth. Cement exports remained strong, with the USA remaining Greece's biggest export market. Lower margin clinker exports declined, due to lower marginal profitability arising from CO2 costs. Total revenue in Greece and western Europe in 2019 increased by 3.3 per cent to EUR244.9m, while EBITDA increased by 9.2 per cent to EUR11.9m.
Southern Europe improved significantly supported by continuing economic growth in the region. Revenue in southern Europe in 2019 posted a 10 per cent increase reaching EUR262.6m, while EBITDA was up by 29.4 per cent, reaching EUR77.2m.
Eastern Mediterranean
The Eastern Mediterranean continued to be a challenging market for Titan. In Egypt cement consumption fell by 3.6 per cent and recession in Turkey led to a 30 per cent drop in cement demand with the biggest fall in the first semester of 2019. Total revenue in Turkey reached EUR150.3m, recording a 2.6 per cent decline, while EBITDA decreased to EUR1.2m versus EUR11.3m in 2018. Turkish performance was impacted by the deceleration in the construction sector. The decline in cement production followed the general slowdown trend in the market. While prices increased in local currency, this was not sufficient to cover for inflation and the depreciation of the Turkish lira. Higher fuel and electricity prices further impacted results. The market showed signs of stabilisation in the 2H19. Adocim, thanks to lower gearing, modern asset base and competitive production costs is in an advantageous competitive position to face these challenges. Adocim was fully consolidated for the year following the acquisition of a 25 per cent stake from the minority partner in October 2018.
Brazil
In Brazil revenues rose by 3.7 per cent after a small increase in demand in the northeast of the country. 2019 was the third-consecutive year when the economy grew by one per cent. Cement demand, mainly driven by private construction started to strengthen, growing by 3.5 per cent and reaching 54.7Mt. This marked the first growth since the peak year of 2014. Apodi Cement increased its sales volumes, mainly owing to higher bulk sales. Cement prices remained stable, though higher transportation cost and adverse weather conditions impacted operating profitability.
Dimitri Papalexopoulus concluded that Titan was "well placed to simultaneously navigate the market cycles of our business and participate in the major transformational changes that will affect our sector and beyond, focussing on operational excellence and profitability, as well as on adaptability, agility and long-term sustainability."
