Consolidation of Italcementi leads to increased revenues for HeidelbergCement
Published by Rebecca Bowden,
HeidelbergCement has reported its results for 1Q17, indicating strengthened sales volumes, revenues and results due to the acquisition if Italcementi.
HeidelbergCement has reported a sales volume of 28 million t of cement for 1Q17, up 58% from 1Q16. It also sold 61 million t of aggregates (+23%) and 10 million m3 of ready-mixed concrete (+31%). Revenue was up by 34%, from €2.8 in 1Q16, to €3.8 in 1Q17. This rise is a result of the consolidation of Italcementi, combined with the continued recovery of the construction industry in North America and Europe.
“We continued our strong operational development in the first quarter and realised further synergies,” says Dr. Bernd Scheifele, Chairman of the Managing Board. “We were able to almost offset the effect of higher energy costs, bad weather conditions, and increased competition in some emerging countries in the most seasonally weak quarter of the year. Thanks to the ongoing refinancing of our maturities at more favourable terms, we have successfully continued to improve the financial result and made an important contribution to the further rise in our cash flow. All in all, we have slightly increased the Group share of profit for the financial year despite the challenging environment.”
The company’s outlook for 2017 remains unchanged, with a positive outlook for the global economy, despite higher geopolitical and macroeconomic risks. Sales of cement, aggregates and ready-mixed concrete are expected to grow, with moderate increases in revenue. HeidelbergCement is well positioned to benefit from good and stable development in industrial countries, particularly in the USA, Canada, the United Kingdom, Germany, the countries of Northern Europe, and Australia.
“We continued our strong operational development in the first quarter of 2017,” explains Dr. Bernd Scheifele. “We will maintain our focus on concluding the integration of Italcementi and reducing net debt through disciplined cash flow management. Our declared aim is to maintain a long-term investment grade rating. In operational terms, we concentrate on five areas: an increase in customer satisfaction, high operating leverage, cost leadership, vertical integration, and optimised geographical positioning. As a result, we will increase our efficiency and the satisfaction level of our customers, especially in the world’s rapidly growing metropolitan areas. We will continue to drive forward our global programmes to optimise costs and processes as well as increase margins for aggregates (“Aggregates CI”), cement (“CIP”), ready-mixed concrete (“CCR”), and purchasing (“FOX”).”
“We remain cautiously optimistic about 2017,” continues Dr. Bernd Scheifele. “While the overall outlook for the global economy is positive, major macroeconomic and particularly geopolitical risks remain. HeidelbergCement will benefit from the good and stable economic development in the industrial countries, above all in the USA, Canada, the United Kingdom, Germany, the countries of Northern Europe, and Australia. These countries generate approximately 60% of our revenue. With the acquisition of Italcementi and its rapid integration, we have impressively demonstrated our tremendous business potential and strong momentum. From a global perspective, we are well positioned to achieve our strategic goals – continuous growth and sustainable returns for our shareholders.”
Read the article online at: https://www.worldcement.com/europe-cis/10052017/consolidation-of-italcementi-leads-to-increased-revenues-for-heidelbergcement/
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