6 November 2007

HeidelbergCement – Interim Report January to September 2007

– Extract –

HeidelbergCement shows strong increase in turnover and results

  • Purchase of Hanson completed according to plan – consistent integration started
  • Significant operating increases in turnover (+11.8%) and results (+29.1%)
  • Group share in profit rises like for like by 42 %
  • Market leadership in Eastern Europe and Central Asia as a growth driver
  • North America benefited from the strong positioning in western Canada and on the east coast of the US.
  • Strong growth rates in emerging countries
  • Successful refinancing through bond issues and disinvestments
  • Double-digit turnover and results forecast for 2007 confirmed
  • Consistent reduction of liabilities will be continued

Overview January–September 2007

July-SeptemberJanuary-September
EURm2006(*)20072006(*)2007
Turnover2,2213,0925,9357,254
Operating income before depreciation (OIBD)5748671,2931,721
Operating income4617169531,343
Additional ordinary result08361912
Results from participations7237155143
Earnings before interest and income taxes (EBIT)5338361,1692,398
Profit before tax4686901,0022,133
Net income from continuing operations3315006871,762
Group share in profit3455267211,829
Investments2068,79049312,404

(*) Figures have been adjusted following the presentation of maxit Group as discontinued operation (IFRS 5) and are therefore not comparable with those presented in 2006.

In the first nine months, HeidelbergCement’s turnover increased by 22.2% to EUR 7,254 million (previous year: 5,935). This was due in particular to the consolidation of Hanson for the first time in September and the contributions made by the countries of Eastern Europe and Central Asia, as well as Norway, Africa, Asia and Turkey.
“In North America we benefit from our strong positions in Western Canada and on the east coast of the USA,“ comments Dr. Bernd Scheifele, CEO of HeidelbergCement, on the stable development of turnover and improvement in operating income in this area.

HeidelbergCement’s cement and clinker sales volumes grew by 11.5% to 65.5 million tonnes (previous year: 58.8) during the reporting period. The strongest growth was achieved in the Asia-Australia-Africa-Mediterranean Group area, followed by Europe-Central Asia. The inclusion of Hanson for the first time in September led to a considerable increase in volumes of aggregates as well as ready-mixed concrete. In most market regions, sales volumes also improved on a comparable basis. Sales volumes of aggregates across the Group rose by 55.4% to 98.1 million tonnes (previous year: 63.1); deliveries of ready-mixed concrete increased by 14.5% overall to 21.3 million cbm (previous year: 18.6).

An increase of 40.9% was recorded in operating income, which reached EUR 1,343 million (previous year: 953). The marked organic growth of 29.1% is attributable to higher sales volumes, price adjustments and increases in efficiency. By far the biggest contribution to the increase in results came from Europe-Central Asia.

Sustained growth and one-off effects, particularly in the second and third quarters, led to an increase in profit before tax from continuing operations, taking the total to EUR 2,133 million (previous year: 1,002). Taxes on income rose by EUR 55 million to EUR 371 million (previous year: 316). The disproportionately small increase in taxes is due to the below-average taxation of capital gains. The net income after tax from continuing operations (excluding maxit Group) improved to EUR 1,762 million (previous year: 687). The Group share in profit rose to EUR 1,829 million (previous year: 721); like for like it increased by 42%.

HeidelbergCement clearly on track with the integration of Hanson

The initial steps in the tightly organised integration process have already been successfully taken. Integration teams made up of experts from Hanson and HeidelbergCement are analysing the processes at the most important locations, making performance comparisons and identifying potential improvements. Our high expectations for the quality of the management and the production facilities have been confirmed. The implementation of the organisational changes will start at the beginning of 2008.

Consistent reduction of liabilities

The proceeds of the disposal of maxit Group, the sale of the Vicat shares and the activities in Nigeria/Niger will contribute to deleveraging and debt reduction. Further proceeds from the issue of a euro bond and two Certificates of Indebtedness are also being used for this purpose. “HeidelbergCement will consistently continue to reduce its existing liabilities. We will use a combination of different capital market instruments, particularly bonds and Certificates of Indebtedness. In addition, we are also considering a further cash capital increase,” said Dr. Bernd Scheifele.

Positive prospects for 2007

The high dynamics of the global economy are weakening slightly. Development in the emerging countries and in most Eastern European countries remains strong.

Because of our geographical positioning, which comprises a good mix of growing and mature markets, even in North America, we are confident of achieving the planned improvements in turnover and results. The rapid integration of Hanson will allow us to exploit further potential for synergy and increasing efficiency.

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Andreas Schaller

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

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