5 August 2008
HeidelbergCement reports Q2 2008 results
HeidelbergCement with global growth despite weakness in the US and UK
- Group turnover increases to around EUR 7 billion (+67%)
- Significant double-digit increase in operating income (+37%)
- Profit for the financial year grows to more than EUR 1.7 billion (+29%)
- Group structure strengthened and optimised as a result of rapid implementation of the Hanson integration
- “Fitness 2009” (EUR 250 million) adopted
- Forecast of appreciable growth in sales and earnings for the whole of 2008 confirmed
|Operating income before depreciation (OIBD)||623||891||876||1,276|
|Additional ordinary result||792||5||829**||24|
|Results from participations||89||28||106||34|
|Earnings before interest and income taxes (EBIT)||1,387||731||1,583||945|
|Profit before tax||1,32||564||1,464||579|
|Net income from continuing operations||1,179||449||1,283||460|
|Net income from discontinued operations||44||-6||59||1,271|
|Profit for the financial year||1,223||443||1,342||1,731|
|Group share in profit||1,194||410||1,303||1,674|
* Figures have been adjusted following the presentation of maxit Group as discontinued operation (IFRS 5)
** Vicat effect:EUR 805 million
Significant growth in Group turnover and results
In the first six months, Group turnover increased by 66.5% to EUR 6,928 million (previous year: 4,160). This was due to the inclusion of Hanson in particular, but the countries of Eastern Europe and Central Asia as well as the Benelux countries, Scandinavia, Indonesia, China, Africa and Turkey also contributed to this growth. Excluding exchange rate and consolidation effects, turnover increased by 9.2%. Operating income before depreciation (OIBD) rose by 45.8% to EUR 1,276 million (previous year: 876). Operating income grew by 36.8% to EUR 888 million (previous year: 649).
During the first half of the year, HeidelbergCement’s cement and clinker sales volumes rose by 8.0% to 44.4 million tonnes (previous year: 41.1). Excluding consolidation effects, the increase amounted to 2.6%. The growth was strongest in the Asia-Australia-Africa Group area, followed by Europe. In North America, our sales volumes were impaired not only by the significant decline in construction activity, but also by adverse weather conditions. Deliveries of aggregates more than trebled, reaching 145.4 million tonnes (previous year: 42.3). Ready-mixed concrete sales volumes grew by 81.5% to 22.2 million m3 (previous year: 12.2). Even excluding the Hanson activities, the sales volumes of both operating lines improved noticeably.
Overall, the profit for the financial year also increased to EUR 1,730.6 million (previous year: 1,342.0). Consequently, the Group share of profit rose to EUR 1,674.3 million (previous year: 1,302.7).
Cornerstones of the integration completed
Less than a year after the takeover of the Hanson Group, the fundamental cornerstones of the integration process were successfully completed. In connection with the restructuring of our organisations in North America and the United Kingdom, far-reaching changes were consistently implemented.
We have also achieved remarkable progress in other main issues of the integration. ”We are confident of being able to achieve the targeted savings potential of more than EUR 400 million per year from 2010. We anticipate that this figure will be around EUR 130 million for the whole of 2008” explains Dr. Bernd Scheifele, Chairman of the Managing Board of HeidelbergCement.
HeidelbergCement reacts systematically to cost pressure
HeidelbergCement is responding to the ongoing cost pressure from rising energy and raw materials prices with a worldwide “Fitness 2009” programme and price increases ranging from 10% to 25% across all business lines.
Key measures of “Fitness 2009” include for example a continued increase in the proportion of alternative fuels in the cement production. In aggregates and concrete as well as building products, a flexible working-hours system with the aim of reducing overtime and the reduction maintenance and repair costs are in the focus.
Dr. Bernd Scheifele: “Fitness 2009” encompasses further optimisation and efficiency gains in all business lines as well as a reduction of administrative expenses. We plan to achieve cost savings of EUR 250 million annually“.
Outlook confirmed: appreciable growth in 2008 sales and earnings
The expansion of the global economy will slow down in 2008 as a whole. Noticeable growth rates are still expected in Eastern Europe, Russia and the emerging countries of Asia; Canada and Australia are experiencing positive overall economic conditions as well.
Despite the weakness in the US and the United Kingdom, HeidelbergCement anticipates a significant double-digit increase in turnover and earnings for the whole of 2008 as a result of the operational growth on the European and Asian markets as well as the inclusion of Hanson. Capacity adjustments and the optimisation of locations in the US and United Kingdom, which are particularly affected by the weak property situation, will also contribute to this growth.