22 February 2005

Interim Report January - December 2004

– Extract –

  • Changes in the chairmanship of the Supervisory Board and Managing Board
  • Development of sales volumes and turnover in the fourth quarter in line with expectations
  • Cement and clinker sales volumes exceed 65 million tonnes
  • Elimination of balance sheet risks leads to one-time extraordinary charges of around EUR 700 million
  • Acquisition of majority stake in Teutonia Zementwerk AG, Hanover/Germany
  • Managing Board and Supervisory Board resolve cash capital increase in the amount of around EUR 270 million

The international economic environment remained varied in the fourth quarter of 2004. The environment in the construction industry varied significantly in the individual countries. In Germany the gross domestic product increased by 1.6%, which is just below the average for the euro zone. However, construction activity once again recorded a decline amounting to expected 2.5%.

During 2004, Group turnover increased by 8.8% to EUR 6,929 million (previous year: 6,372). Both the first-time consolidation of Indocement with a plus of EUR 411 million and currency effects - especially from the reduced US dollar exchange rate - with a minus of EUR 185 million, were significant influential factors. Adjusted for currency and consolidation effects, turnover rose by 5.8%. In particular, operating improvements were achieved in North America, Africa-Asia-Turkey and Central Europe East.

The complete annual accounts of HeidelbergCement will be published on 23 March 2005.

Cement and clinker sales volumes exceed 65 million tonnes

During 2004, the cement and clinker sales volumes increased to 65.2 million tonnes (previous year: 51.1). This is largely attributable to the first-time consolidation of Indocement. Welcome increases in sales volumes were achieved in North America, Central Europe East, Africa and China. Excluding consolidation effects, the sales volumes rose by 2.2% compared with the previous year.

Balance sheet risks eliminated

As part of the pre-audit of the 2004 annual accounts, a decision was made to carry out a thorough revaluation of balance sheet items, which will lead to one-time extraordinary charges in the region of up to EUR 700 million. The majority of this is due to the revaluation of goodwill for the Western Europe and Northern Europe regions, as well as for Indocement. Other significant amounts result from the laying of restructuring provisions for the Belgian-Dutch cement business and valuation adjustments for deferred tax assets.
The extraordinary charges are mainly non-cash items. They will result in a loss for the Group for the 2004 financial year in the amount between EUR 350 million and EUR 400 million. The Managing Board and Supervisory Board will make a decision regarding the proposed dividend for the HeidelbergCement AG at a later date.

Capital increase

Above this, the Managing Board of HeidelbergCement AG has resolved, with the consent of the Supervisory Board, to implement a capital increase with subscription rights for shareholders following the extraordinary charges in 2004. In order to strengthen the equity base, the company expects cash proceeds in the amount of around EUR 270 million. The share-offer price amounts to EUR 35 per share. For 13 existing shares, shareholders may subscribe for 1 new share.

Changes in the Managing Board and Supervisory Board

On 1 February 2005, Dr. Bernd Scheifele was appointed Chairman of the Managing Board of HeidelbergCement, succeeding Hans Bauer. Dr. Bernd Scheifele was previously Chairman of the Managing Board of PHOENIX Pharmahandel Aktiengesellschaft & Co KG and Chairman of the Supervisory Board of HeidelbergCement. Hans Bauer, who began his career at HeidelbergCement, was appointed to the Managing Board in 1997 and named Chairman in 2001. After more than 35 years of successful work for HeidelbergCement, Hans Bauer went into retirement at the end of January.

The Supervisory Board elected Fritz-Jürgen Heckmann, who has been a member of the Supervisory Board of HeidelbergCement since 2003, as Dr. Scheifele’s successor in the post of Chairman of the Supervisory Board.


The varied trend in the global economy should continue in 2005, albeit slightly weakened. Once again, the growth impetus is expected from the United States, Asia and the middle and Eastern European countries. Growth remains limited in the euro zone and weak in Germany.

In view of the international economic environment, we anticipate moderate increases in sales volumes for 2005. In Germany, demand continues to decline. The development of turnover will benefit from the proceeds situation in numerous markets. Rising energy costs and freight rates will increase pressure on costs.

HeidelbergCement has set a new course in order to consistently take advantage of attractive opportunities for growth to enlarge its international market position on the basis of a risk-free balance sheet. In operational terms, we focus on increasing the efficiency in all areas to further reduce the costs significantly.

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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