Buzzi Spa signalled that unfavourable weather conditions and falling sales contributed to regional performances being slightly down in the 2Q24, leading to lower cement volumes in the 1H24.
Cement and ready-mix concrete sales in Italy declined in the first six months of 2024 by 5.9 per cent and 6.4 per cent, respectively, due to the abundant rainfall across the country during the spring months. Net sales in Italy came in at EUR414.4m, down 2.3 per cent from EUR424.1m in the 1H23. EBITDA achieved EUR107.9m, improving by 9.5 per cent compared to EUR98.5m of last year.
US sales volumes contracted following the first three months, affected by unfavourable weather conditions recorded in most of the regions where Buzzi operates, as well as by increased import flows in the coastal area. Therefore, 6M24 closed with cement volumes down 5.7 per cent compared to the 2023 level. Ready-mix concrete output, essentially present in Texas, showed a 4.6 per cent decrease. Conversely, selling prices further strengthened in the cement business, while they confirmed the winter levels in the ready-mix concrete segment, showing good YoY development overall. As a result, net sales in the 1H24 reached EUR836.5m, moderately down (-1.2 per cent) compared to EUR846.8m in the 1H23, while EBITDA increased 9.1 per cent from EUR256.9 to EUR280.2m over the same period.
In Germany in line with the development of demand in the country, Buzzi's cement volumes sold showed a negative trend (-16.1 per cent) in the 1H24 compared to the same period of the 1H23. The ready-mix concrete sector also recorded contracting volumes (-11.4 per cent). Selling prices, on the other hand, closed the half-year period moderately improving YoY, both for cement and ready-mix concrete. Overall net sales thus decreased 12.1 per cent from EUR441.3m to EUR388.m, while EBITDA declined by 26.1 per cent from EUR100.1m to EUR73.9m.
In Luxembourg and The Netherlands, Buzzi cement deliveries contracted during the second quarter, although less significantly compared to the beginning of the year, closing the half-year down by 12 per cent YoY. The decline in deliveries was more evident in the ready-mix concrete sector (-32.7 per cent), partly due to the disposal of the subsidiary Beton Du Ried, while selling prices did not undergo relevant changes during the second quarter. Therefore, net sales came in at EUR89.1m in the 1H24, down 23.1 per cent compared to the first six months of the previous year, when net sales reached EUR115.8m. EBITDA stood at EUR4.7m, also decreasing compared to EUR12.6m in the 1H23.
In the Czech Republic, cement sales recovered ground in the spring after declining moderately in the 1Q24, closing the first half-year up 0.7 per cent compared to last year, with selling prices in local currency strengthening year on year. Conversely, the ready-mix concrete sector, which includes Slovakia, recorded a rather weak trend, with volumes contracting 10.3 per cent. Consolidated net sales amounted to EUR96.2m, down 6.5 per cent YoY from EUR102.8m in 2023. EBITDA decreased 16 per cent YoY to EUR28.3m from EUR33.6m. The increase in electricity supply costs negatively impacted the operating results, while fixed items marginally improved, claimed Buzzi SpA.
In Poland, deliveries confirmed the slowdown during the second quarter, but showed signs of recovery with the start of the spring. Therefore, cement sales closed the first six months of the year down 20.6 per cent, but selling prices were clearly strengthening. Ready-mix concrete volumes recorded a favourable trend, up 12.2 per cent YoY. Net sales decreased 4.6 per cent YoY from EUR76.6m to EUR73.1m while EBITDA fell 44.3 per cent from EUR22.7m to EUR12.7m .
In Ukraine cement and ready-mix concrete sales volumes continued to recover, by 24.5 and nine per cent, respectively although with diminishing momentum starting from the second quarter, due to the less favourable comparison with last year. Selling prices in local currency further strengthened in spring, thus showing a marked increase YoY. Net sales in the 1H24 stood at EUR44.7m, up 27.4 per cent compared to EUR35.1m achieved in 1H23, while EBITDA amounted to EUR2.4m, representing a 4.3 per cent YoY increase from EUR2.3m.
In Russia, due to the sanctions imposed by the European institutions since May 2022, Buzzi has ceased any operational involvement in the activity carried out by the local subsidiaries. At the balance sheet date, the net asset value of the Russian business amounts to EUR397.8m. In the period under review, net sales amounted to EUR132.5m, contracting 7.2 per cent YoY compared to EUR142.8m of the previous year. EBITDA decreased 11.7 per cent YoY from EUR48.4m to EUR42.8m.
In Mexico, the sales of the company's joint venture, which were slowing down during the first quarter, recorded a less volatile dynamics in the spring, therefore closing the first six months of the year declining by 2.6 per cent. The ready-mix concrete sector continued to grow strongly by 16.5 per cent YoY. Prices in local currency also improved compared to last year. Net sales, referring to 100 per cent of the joint venture, stood at EUR552.4m, up 10.4 per cent on the previous year, while EBITDA came in at EUR254.5m, up 12 per cent compared to EUR227.3m of 2023.
The sales of the joint venture in Brazil after the slowdown recorded at the start to the year, recovered during the spring, closing the first half with substantially stable levels compared with the previous year (-0.4 per cent). Prices did not undergo significant changes compared to the same period of 2023, reflecting a highly competitive market situation that made it difficult to implement new increases. Net sales stood at EUR186.9m, down 1.5 per cent compared to EUR189.7m of the previous year. EBITDA reached EUR44.5m, improving 16.2 per cent YoY compared to EUR38.3m of 2023.
Outlook
In the second half of the year, Buzzi consider it likely that demand in Italy may stabilise with the start of the good weather, mainly supported by resources from the PNRR, in a construction market still hampered by weak dynamics in the residential sector. In the USs, it is expected that, thanks to improved weather conditions, deliveries may show a more favourable trend in the second half of the year. In central Europe, in line with the most recent market projections, Buzzi continue to anticipate a rather negative demand development, although at a less pronounced pace than at the beginning of the year. Looking at eastern Europe, the latest published estimates predict a recovery in construction activity across all relevant sectors in Poland. Therefore, Buzzi expect its sales volumes to regain ground, mitigating the contraction recorded in the first part of 2024. In the Czech Republic, Buzzi believes that the recent resilience in demand can be maintained for the rest of the fiscal year.
