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HeidelbergCement sees increased sales volumes in all business lines

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World Cement,

HeidelbergCement has released its financial results for the quarter ended 30 September 2014 (3Q14).

Sales volumes

The continued recovery of the markets in North America, the UK, and Eastern Europe, as well as sustained growth in emerging countries, have had a favourable impact on HeidelbergCement’s sales volumes, with all business lines recording an increase in 3Q14.

Cement and clinker sales volumes rose by 3% to 23.1 million t (previous year: 22.4 million t) in 3Q14. The strongest growth was achieved in the Asia-Pacific Group area, followed by North America and Eastern Europe-Central Asia. In contrast, cement sales volumes in the Western and Northern Europe Group area declined slightly. The continued recovery of the construction sector in the UK led to a notable increase in the demand for cement. In other Group regions, cement sales volumes remained slightly below the same quarter of the previous year due to anticipatory effects in construction owing to the mild winter weather in the first quarter. The decrease in cement sales volumes in Ukraine due to the conflict in the east of the country was more than offset by increasing volumes in other countries of the Group area. The Africa-Mediterranean Basin Group area saw a decrease in sales volumes due to the sale of the company’s Gabon activities. A slight increase in sales volumes was achieved, however, in the remaining countries. The Ebola epidemic has not yet had a significant effect on cement sales. Adjusted for consolidation effects, Group cement sales volumes rose by 4%.

Deliveries of aggregates increased by 3% to 72.1 million t (previous year: 70.3 million t). Higher sales volumes, particularly in the North America, Eastern Europe-Central Asia, and Asia-Pacific Group areas, as well as in the UK, contributed to this development. Deliveries of ready-mixed concrete rose by 4% to 9.8 million m3 (previous year: 9.5 million m3).

In the first nine months of the year, cement and clinker sales volumes rose by 5% to 62.9 million t (previous year: 59.6 million t). In addition, deliveries of aggregates increased by 5% to 180.8 million t (previous year: 172.3 million t) and deliveries of ready-mixed concrete also rose by 5% to 27.0 million m3 (previous year: 25.8 million m3); asphalt sales volumes even improved by 14% to 6.9 million t (previous year: 6.1 million t).

Financial highlights


  • Group revenue rose by 4% 3Q14 to €3.809 billion (previous year: €3.675 billion). The impact of negative exchange rate effects on revenue and operating income eased noticeably in the third quarter.
  • Operating income before depreciation (OIBD) improved by 10% to €866 million (previous year: €789 million) and operating income rose by 13% to €675 million (previous year: €595 million).
  • Tax expenses in 3Q14 amounted to €109 million (previous year: €85 million). As a result, net income from continuing operations fell to €418 million (previous year: €661 million).
  • Consequently, the profit for the financial year decreased in 3Q14 by 37% to €417 million (previous year: €660 million), and the Group share dropped by 40% to €368 million (previous year: €612 million).
  • Earnings per share fell to €1.96 (previous year: €3.27). However, without taking into consideration the one-off effect in the previous year of around €1.38 per share, earnings per share have improved.
  • The operating cash flow also increased in 3Q14 from €522 million to €641 million due to the good operating performance.

January – September 2014

  • Group revenue rose by 3% despite negative exchange rate effects of €571 million to €10.127 billion (previous year: €9.862 billion). On a comparable basis, revenue rose considerably by 9%.
  • Operating income before depreciation (OIBD) improved by 6% to €1.794 billion (previous year: €1.697 billion); operating income increased significantly by 11% to €1.241 billion (previous year: €1.119 billion).
  • Profit attributable to non-controlling interests decreased to €145 million (previous year: €156 million) and the Group share of profit dropped to €454 million (previous year: €745 million).
  • Earnings per share declined to €2.42 (previous year: €3.98).

Targeted expansion of market position in growth markets

At the start of October, HeidelbergCement commissioned a new cement mill with a capacity of 0.8 million tpa in its cement plant at Dar Es Salaam, Tanzania. In the 4Q14, HeidelbergCement is planning the start of production and commissioning of additional production capacities, among others the clinker plant in Togo with an annual capacity of 1.5 million t and the cement mill in Burkina Faso (0.7 million tpa). The commissioning of a further cement mill in Takoradi, Ghana, (0.8 million tpa) is expected at the start of 2015. The capacity expansion enables HeidelbergCement to serve the growing markets in West Africa.

Outlook for 2014

In North America, HeidelbergCement expects a continuing economic recovery and consequently a further growth in demand for building materials. Besides residential construction, commercial and infrastructural construction are increasingly making a contribution to this growth. A stabilisation of the Eastern European market is anticipated following the weak phase experienced during 2013. Poland is the first country in this Group area to profit from an incipient recovery. The company projects a further rise in demand for building materials in Central Asia. The crisis in eastern Ukraine is impairing the sales volumes and result of the country, but has not yet had a significant effect on the operating activities of HeidelbergCement in Russia. However, the currencies of both countries have depreciated considerably against the euro since the crisis began. In Western and Northern Europe, a positive market development is expected. This is based on the recovery in the UK, the healthy economy in Germany, and the stable economic development in Northern Europe, and Benelux. In Asia and Africa, the Group still counts on sustained growth in demand. In view of the positive development of demand and the commissioning of new capacities, HeidelbergCement anticipates an increase in the overall sales volumes of the core products cement, aggregates, and ready-mixed concrete. The negative impact of exchange rate effects on revenue and results has already eased in the third quarter.

Adapted from press release by Rosalie Starling

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