23 March 2006

HeidelbergCement – Annual Report 2005

– Extract –

  • Turnover rose to EUR 7.8 billion
  • Increase of OIBD and operating income by 23.5 % and 37.4% respectively
  • First successes achieved in efficiency increase and cost reduction
  • Shareholders’ equity basis strengthened
  • Further development of portfolio by targeted acquisitions
  • Increase in turnover to EUR 7.8 billion

In 2005, Group turnover rose by 12.6% to EUR 7,803 million (previous year: 6,929). Our operational growth of EUR 587 million was primarily achieved in North America, central Europe East, Africa-Asia-Turkey and Northern Europe. Other significant influential factors were new consolidations, which contributed EUR 262 million.

Thanks to high efforts, HeidelbergCement achieved the trend reversal. “Many things were tackled and successfully implemented”, says Dr. Bernd Scheifele, Chairman of the Managing Board. “Through extensive restructuring measures with a focus on Europe, an organisational reshuffle and significant cost savings, we positioned HeidelbergCement even closer to the market.”

Varying business development in the regions

In Central Europe West, construction activity reached its lowest point once again. Turnover rose by 8.7% to EUR 920 million (previous year: 846), primarily as a result of the new consolidation of Teutonia Zementwerk AG. The growth of operating income to EUR 67 million (previous year: 43) is attributable to improvements in the cement business line and the sand-lime brick operating line. In Western Europe, restructuring measures were initiated in the cement business line. The decline of 3.1% in turnover to EUR 900 million (previous year: 929) was partly due to continuing import pressure. Operating income fell to EUR 65 million (previous year: 83). Thanks to the good economic situation, Northern Europe developed positively. Turnover improved significantly, rising by 11.6% to EUR 799 million (previous year: 716). The high increase in operating income to EUR 66 million (previous year: 34) was partly caused by the growth of domestic sales volumes. Most countries in the Central Europe East region recorded strong growth in economy and construction activity. The increase of 29.2% in turnover to EUR 849 million (previous year: 657) was supported by consolidation and exchange rate effects. Operating income improved significantly, reaching EUR 188 million (previous year: 135). For North America, 2005 was a record year. Turnover grew by 26.1% to EUR 2,142 million (previous year: 1,699). A peak figure was also reached in operating income with 369 million (previous year: 230). In the combined growth region Africa-Asia-Turkey turnover climbed 4.9% to EUR 1,057 million (previous year: 1,007). Operating income reached EUR 158 million (previous year: 119). The markets of maxit Group developed positively in 2005, with the exception of Germany. Turnover rose by 6.1% to EUR 1,118 million (previous year: 1,053). At EUR 88 million, operating income remained at the previous year’s level. The rise in turnover in the Group Services business unit by 14.5% to EUR 578 million (previous year: 505) mainly resulted from increasing freight rates. Operating income reached EUR 10 million (previous year: 2).

Prospects 2006

Business conditions for 2006/2007 are considered widely positive. The further development of energy prices is a source of risk.

HeidelbergCement’s improved positioning leads us to anticipate further noticeable increases in sales volumes and turnover for 2006. Our results will reflect the effects of the restructuring. Once again, increasing efficiency will be one of our main tasks.

HeidelbergCement seeks to further develop its international business portfolio. Dr. Bernd Scheifele says: “Through targeted geographical diversification in rapidly growing markets and strengthened vertical integration in mature markets, we want to play a larger part in the development of the worldwide building materials market.”

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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