10 February 2010

HeidelbergCement – preliminary overview 2009

  • Turnover reaches EUR 11.1 billion
  • Operating income before depreciation (OIBD) at EUR 2.1 billion
  • Q4 results impacted by bad weather conditions
  • Goodwill impairment of EUR 404 million expected
  • Solid financing structure for 2010
  • Additional EUR 300 million cost savings targeted for 2010

Today, HeidelbergCement presented its preliminary and unaudited sales volumes, turnover, operating income before depreciation (OIBD) and operating income (OI) for the fourth quarter and full year 2009. These figures decreased in 2009 compared to the prior year, reflecting the impact of the global economic crisis on the overall construction industry. Decline in turnover in the mature markets of North America and Europe continued to slow down in the fourth quarter due to increased spending for infrastructure and the bottoming out of the decline in residential construction, partially offset by further weakening in commercial construction. Bad weather conditions in the fourth quarter prevented a better development in the mature markets. In contrast, turnover in emerging markets in Asia stabilized and results improved as markets recovered and growth accelerated.

“We have proactively and consistently reduced our cost base during the crisis year 2009 and successfully protected our operating margins from the considerable decline in turnover. We have clearly exceeded our saving targets and achieved cost reductions of EUR 550 million in 2009,” said Dr. Bernd Scheifele, CEO of HeidelbergCement. “While global economies are expected to return to growth in 2010, we continue to expect a slow recovery for the construction industry in mature markets. Therefore, we will continue our successful cost saving programme and target additional savings of EUR 300 million in 2010.”

Preliminary Group Financials

January - DecemberOctober - December
Operating income before
depreciation (OIBD)
in % of turnover20,8%18,9%23,2%18,2%
Operating income2.1471.317-38,6%575290-49,6%
Sales volumes
Cement/clinker/GGBS (mt)89,079,3-10,9%20,520,1-2,1%
Aggregates (mt)299,5239,5-20,0%70,660,8-13,8%
Rmc (m³)44,435-21,2%10,78,8-17,3%
Asphalt (mt)12,110-17,2%3,82,4-35,9%

Full year as well as fourth quarter 2009 turnover and results were negatively impacted by currency effects, in particular by the weakening of European currencies outside the Euro and by fluctuations of the US-Dollar exchange rate. Adjusted for exchange rate fluctuations and consolidation effects, full year 2009 Group turnover declined by only 19.4% and OIBD by only 26.1% compared to 2008. The decrease in turnover and OIBD in the fourth quarter 2009 was only 11.7% and 34.0% respectively.

Supported by a solid development in Asia, the decline in turnover and sales volumes continued to slow down in the fourth quarter 2009. Adjusted for consolidation effects in the fourth quarter 2009, cement, aggregates and ready-mixed concrete sales volumes decreased by 6.0%, 15.9% and 12.2%; asphalt volumes even increased by 5.8%. The asphalt business in Singapore and Australia were deconsolidated after their disposal in 2009.

HeidelbergCement continued to consistently adjust its capacities and costs to the weak economic environment, especially in North America. At the end of December 2009, the number of employees in HeidelbergCement’s continuing operations was 53,963, a decrease of more than 1,800 compared to end of September 2009 and of almost 7,000 compared to end of December 2008.


January - DecemberOctober - December
Operating income before
depreciation (OIBD)
in % of turnover22,6%18,8%26,5%17,2%
Operating income1.223622-49,1%316118-62,8%
Sales volumes
Cement/clinker/GGBS (mt)43,235,3-18,4%9,88,1-17,4%
Aggregates (mt)125,1103,2-17,5%29,828,3-4,9%
Rmc (m³)24,119,2-20,4%5,74,9-13,6%
Asphalt (mt)4,64,2-8,4%1,41-26,6%

Turnover and results in Europe were most impacted by weakening currencies. Full year turnover, OIBD and operating income declined by only 19.9%, 32.7% and 43.9%, respectively, when adjusted for currency fluctuations.

Overall decline in sales volumes and turnover continued to slow down in Europe, although the development varied significantly in individual countries. The economic crisis negatively affected volumes in large parts of Eastern Europe, especially in Russia, Georgia and the Ukraine. Aggregates volumes in the UK were still impacted by the weakness of the local construction sector and asphalt shipments declined due to the finalization of road construction projects. In Western Europe, average prices for cement rose slightly year-over-year.

Without consolidation effects, aggregates volumes declined by 14.8% and asphalt by 9.4% in the fourth quarter 2009 compared to prior year.

North America

January - DecemberOctober - December
Operating income before
depreciation (OIBD)
in % of turnover16,7%11,5%19,4%8,7%
Operating income40676-81,4%116-4-103,1%
Sales volumes
Cement/clinker/GGBS (mt)13,610,1-25,9%32,3-22,8%
Aggregates (mt)134,6102,1-24,2%29,423,9-18,8%
Rmc (m³)9,05,7-37,3%1,81,2-32,4%
Asphalt (mt)4,03,5-11,0%0,90,95,6%

North America experienced the biggest impact on turnover and operating income among all Group areas in 2009. Without considering exchange rate fluctuations, full year turnover decreased by 30.8% while the decline in the fourth quarter was only 26.4%. In the fourth quarter 2009, the decrease in sales volumes for aggregates, cement and ready-mixed concrete continued in North America - albeit at a lower rate - with the north-eastern part of the US experiencing the smallest decrease compared to the other US regions and Canada. Asphalt sales volumes, however, recorded a rise of 5.6%, reflecting increased activities in road construction.


January - DecemberOctober - December
Operating income before
depreciation (OIBD)
in % of turnover21,6%25,8%20,7%26,9%
Operating income49759119,0%13617428,6%
Sales volumes
Cement/clinker/GGBS (mt)32,2345,6%7,89,824,9%
Aggregates (mt)39,834,2-14,0%11,48,6-24,2%
Rmc (m³)11,310,1-10,1%3,22,7-15,1%
Asphalt (mt)3,62,3-35,3%1,50,5-67,7%

Turnover in the Asia-Australia-Africa Group area remained almost unchanged in 2009 compared to 2008 as increasing cement shipments and improving price levels compensated for the decline in sales volumes of aggregates, ready-mixed concrete and asphalt. The increase in cement volumes was mainly due to rising demand and increased production capacities in China and market improvement in Indonesia in the second half of 2009. OIBD and operating income increased year over year by 16.6% and 19.0 %, respectively as operational performance and price levels improved.

Adjusted for consolidation effects, aggregates and ready-mixed concrete shipments in the fourth quarter 2009 declined by only 12.0% and 1.0%, respectively. Adjusted for the sale of the asphalt activities in Singapore and Australia, asphalt shipments increased by 40.1%. Cement and clinker volumes increased by 14.6%. Therefore, turnover in the fourth quarter 2009 increased by 15.2% when adjusted for consolidation effects, clearly reflecting accelerated growth in the region.


According to preliminary figures, HeidelbergCement expects to record a goodwill impairment of EUR 404 million in the fourth quarter. The impairment which is mainly related to the company’s building products business line in North America and its operations in Spain has become necessary due to the weak market development especially in residential construction in these regions.

Solid financing structure for 2010

HeidelbergCement successfully issued Eurobonds with a total issuance volume of EUR 1.4 billion in January 2010. With the proceeds of this transaction, HeidelbergCement has further optimised its maturity profile and reduced the level of bank debt. The company started year 2010 with a solid financing structure and is well positioned to negotiate new credit agreements with better conditions and with selected banks.

The complete annual accounts of HeidelbergCement will be published on 18 March 2010.

Outlook for 2010

HeidelbergCement continues to expect a slow and U-shaped recovery of the world economy with emerging markets decoupling from mature ones. The company expects stimulus programmes, notably in the US, to unfold their full impact in 2010 while a hesitant recovery is assumed for Europe. Visibility on timing and extent of the economic recovery in 2010 is still low, but should improve by the middle of the year. Accelerated growth is expected for China, India, Indonesia, Malaysia and Australia.

“The construction industry in the mature markets is still weak. Therefore, we will continue our successful cost saving programme in 2010 under the name ‘FitnessPlus 2010’, targeting EUR 300 million savings,” explains Dr. Bernd Scheifele. “Our focus remains unchanged on cash flow generation and margin stability in order to further deleverage and improve financial metrics.”

Due to its strong market positions in North America and Europe, HeidelbergCement believes it is well positioned to benefit over proportionally from infrastructure stimulus programmes or a general market improvement in these regions.

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Andreas Schaller

Group Spokesman, Director Group Communication & Investor Relations
+49 6221 481 13249
+49 6221 481 13217
HeidelbergCement AG
Berliner Straße 6
69120 Heidelberg