22 March 2007

HeidelbergCement presents a successful picture

  • Turnover (+18.3%), operating income before depreciation (OIBD) (+31.1%) and operating income (+44.6%) rise to record levels
  • Consistent implementation of “win” makes significant contribution to results
  • Return on turnover after tax grows to 11.1%
  • Increase in dividends to EUR 1.25 per share proposed
  • Prospects: noticeable growth as a result of expanded presence and targeted acquisitions

Record figures for turnover and results

HeidelbergCement achieved profitable growth in all Group areas in 2006. Turnover rose to EUR 9.2 billion (previous year: 7.8) and operating income to EUR 1.5 billion (previous year: 1.0). The noticeable improvement in results is attributable to both the favourable market development and the considerable increase in cost efficiency. The profit for the financial year more than doubled, exceeding EUR 1 billion (previous year: 0.5), and the return on turnover grew to 11.1%. Another important key figure – earnings per share – rose from EUR 3.74 to EUR 8.22. “We have thus achieved the objective we set at the start of the year, i.e. to bring our rate of return in line with the rest of our industry”, states Dr. Bernd Scheifele, Chairman of the Managing Board of HeidelbergCement.

Profitable growth in all Group areas

Total cement and clinker sales volumes rose to just under 80 million tonnes (previous year: 68). Significant growth rates were also achieved in the other business lines: Ready-mixed concrete sales volumes rose to 31 million cubic metres (previous year: 28) and aggregates sales volumes to 104 million tonnes (previous year: 92). All Group areas contributed to the dynamic development.

In Europe-Central Asia, turnover increased by 22.7% to EUR 4.2 billion (previous year: 3.4). Significant increases were achieved in Eastern Europe and, for the first time in many years, double-digit growth rates were recorded in Germany. An even stronger improvement was made in operating income, which rose by 67.9% to EUR 648 million (previous year: 385). The considerable improvement in the quality of results is primarily attributable to the consistent implementation of our “win” programme to increase efficiency.

In North America, turnover rose by 14.2% to EUR 2.4 billion (previous year: 2.1). As a result of considerable cost savings, an even stronger improvement was made in operating income, which increased by 29.5% to EUR 477 million (previous year: 369).

The combined Group area Asia-Africa-Mediterranean Basin recorded substantial growth overall, which was strengthened further by acquisitions. At EUR 1.3 billion (previous year: 1.1), turnover exceeded the previous year’s value by 23.2%. Operating income rose by a similar percentage to EUR 194 million (previous year: 158).
With a high increase in demand, maxit Group was able to improve its turnover by 10.6% to EUR 1.2 billion (previous year: 1.1). As a result of improved cost efficiency and successful restructuring in Germany, operating income grew by 42.2% to EUR 125 million (previous year: 88).

Turnover and operating income of Group Services rose by 11.1% to EUR 642 million (previous year: 578) and by 47.4% to EUR 15 million (previous year: 10) respectively.

Investments remain stable

In 2006, investments in tangible and financial fixed assets remained at the previous year’s level, totalling EUR 933 million (previous year: 934). The biggest investments in tangible fixed assets related to extensive modernisation measures in our cement plants in Estonia, Romania, Ukraine and in the Leeds plant in the US, the construction of the new plant in China and capacity increases in Indonesia and Turkey. The investments in financial fixed assets primarily include our involvement in India, the expansion in Ukraine and the acquisition of the Danish company Dansk Leca.

Sustainable development

HeidelbergCement has defined the sustainable development of the Group as a strategic goal. Climate protection is the central environmental issue with our commitment to reduce specific net CO2 emissions by 15 % by 2010 compared with 1990. In 2006, we already reached a reduction of 13%. The use of alternative fuels in place of fossil fuels is a focal area of our efforts to demonstrate environmental awareness. Across the Group, the substitution level rose to 17%; in Europe, more than a third of the thermal energy was produced from alternative fuels such as used tyres, plastics and, increasingly, biomass. “In this area, which is important for reducing energy costs and CO2 emissions, we are the leading company in our industry”, explains Dr. Scheifele. “Energy efficiency is decisive for the sustainable development of our company.”

Prospects: noticeable growth in 2007

HeidelbergCement anticipates continued lively growth in the construction industry in the markets in Eastern Europe, Central Asia, Asia and Africa. After a pleasing prelude at the start of 2007, we expect a positive trend over the whole year, even in the mature markets of Europe. In North America, the Group expects stable development at a high level. Dr. Scheifele sums up the situation: “In 2007, we are counting on internal growth, strategic acquisitions, cost leadership and the strengthening of our focus on customers. In view of these prospects, we have set ourselves ambitious goals and want to achieve significant increases again in turnover and results.”

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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