This week, Buzzi Unicem released its FY20 preliminary results. The Italian-based cement producer announced cement volumes of 29.3Mt, a YoY rise of 0.4 per cent despite the difficulties of the COVID-19 pandemic.

The COVID-19 pandemic caused an unprecendented recession in the first half of 2020. The extraordinary economic policy packages taken out helped cushion the impact from the contraction of international trade, while the loosening of restrictive measures by the second half helped deliver a stronger than expected global economic recovery. However, the pandemic had a resurgence in the European Union and the USA in 4Q20 which resulted in a new slowdown.

In FY20, Buzzi Unicem reported ready-mix concrete volumes of 11.7Mm³, down 3.1 per cent on 2019. Consolidated net sales reached EUR3222.4m, in line with the EUR3221.4m recorded in 2019, but a 1.8 per cent increase on a like-for-like (LfL) basis. Net debt at the end of 2020 totalled EUR242m, down from EUR568m in 2019.

Regional performances
Italy
The group's hydraulic binders and clinker volumes, after a sharp decline in the first half, maintained a positive trend in the second part of the year. Average selling prices, for the whole of the year, showed a positive development. The ready-mix concrete sector posted a more evident contraction, despite a meaningful rebound occurring during the second half, with prices also improving. Overall net sales in Italy stood at EUR501.1m, down 0.7 per cent compared to 2019 (LfL: -2.1 per cent). 

Central Europe
In Germany the group’s shipments of hydraulic binders showed good development in the second half of the year, after a slight decline in the first part of 2020. The ready-mix concrete sector showed an increase in production compared to 2019. Consequently, at year-end 2020, overall net sales came in at EUR717m, up 5.5 per cent compared to EUR679.6m in 2019 (LfL: +4.7 per cent).

In Luxembourg and the Netherlands, overall net sales of 2020 amounted to EUR191.7m, down 0.4 per cent compared to EUR192.5m of the previous year.

Eastern Europe
In Poland cement volumes sold by the group closed 2020 below levels reached in the previous year, despite an overall positive second half, which allowed a partial recovery. Ready-mix concrete output recorded a more evident decline. Following these market dynamics, net sales amounted to EUR117.8m, down 4.8 per cent compared to EUR123.8m in 2019.

In the Czech Republic, cement sales, contracted sharply during the second half, closing below the levels reached at the end of 2019. Consolidated net sales amounted to EUR159.5m, down 5.2 per cent compared to 2019.

Cement sales in Ukraine closed 2020 with a sharp decline compared to the levels reached the previous year, penalised by the pandemic emergency and by the increase in imports from Turkey. Ready-mix concrete output showed more pronounced weakness. Net sales stood at EUR116.1m, down from EUR131.9m recorded in 2019 (-12 per cent).

In Russia cement sales in the 2H20 showed a positive trend. In 2020 net sales stood at EUR195.8m, down 8.7 per cent compared to EUR214.5m of the previous year. 

USA
In the USA sales of hydraulic binders advanced positively, thanks to generally favourable weather conditions, particularly in the winter months, and to the soundness of demand during the second half of the year. Selling prices, in local currency, only slightly improved in the year as a whole.

Ready-mix concrete output, mainly located in Texas, showed some weakness in the 2H, which was already noted during the first six months, closing the year down compared to 2019. Overall net sales amounted to EUR1260.6m, up 1.5 per cent compared to EUR1242.5m in 2019. At constant exchange rates net sales would have increased by 3.5 per cent.

Mexico (valued by the equity method)
Sales of the associate Corporación Moctezuma recorded a clear strengthening in the second half of the year, thanks to the significant recovery in public works activity. Ready-mix concrete sales, on the other hand, confirmed the weakness already recorded in the first half, closing the year in clear decline compared to 2019, with prices in local currency down. With reference to 100 per cent of the associate, in 2020 net sales came in at EUR573.8m, down 3.3 per cent on the previous year.

Brazil (valued by the equity method)
In the 2H20 cement shipments of Buzzi's joint venture confirmed the positive momentum already recorded in the first six months, closing the year with a marked increase compared to the levels reached in 2019, with selling prices, in local currency, clearly improving. With reference to 100 per cent of the associate, net sales amounted to EUR139.1m, slightly progressing (+3.2 per cent) compared to EUR134.7m of the previous year. 

Outlook 
The weather conditions of the last quarter were favourable overall. In the October-December period, Buzzi Unicem sales volumes exceeded the level of the previous year, particularly in the USA, Russia and Italy. The price level remained sound and the rise in energy factors had, for the moment, a limited adverse impact on production costs.

Based on the preliminary information available, Buzzi Unicem expects the consolidated financial statements for FY20 to close with a recurring EBITDA of about EUR780m.

Published under Cement News