HeidelbergCement has released its results for 1Q15.
- Cement and clinker sales volumes declined by 0.8% to 16.8 million t.
- Aggregates sales volumes increased by 4.4% to 46.3 million t.
- Ready-mixed concrete sales volumes improved by 1.9%, from 7.7 million m3 to 7.9 million m3.
- Asphalt sales volumes grew by 2.6% to 1.6 million t.
- Sales volumes in Europe were in line with 1Q14, while strengthening construction activity in the UK and North America led to positive growth in volumes in those regions. A fall in cement sales in Indonesia was mitigated by increases in other Asian markets and by double-digit growth in Africa.
- The company’s net debt was €6.1 billion at the end of 1Q15. This is €1.74 billion less than at the end of 1Q14. This reduction was aided by the sale of the company’s building products business, which was completed in March 2015.
- Revenue grew by 12% to €2.8 billion, boosted by improvements in aggregates, ready-mixed concrete and asphalt sales volumes, as well as the successful implementation of higher prices in major markets.
- Operating income before depreciation totalled €299 million, up €94 million (46%) on 1Q14.
- Operating income increased by 183% from €41 million in 1Q14 to €115 million in the corresponding quarter this year.
- Profit before tax from continuing operations was up by €79 million, rising from negative €112 million to negative €33 million.
- The loss for the period amounted to €80 million, an improvement on 1Q14’s loss of €108.
“In operational terms, the first quarter 2015 was the best since the financial crisis and has therefore upheld the positive trend of the previous year,” commented Dr Bernd Scheifele, Chairman of the Managing Board. “The continued recovery in our mature markets and the sustained growth in Asia and Africa have made a significant contribution. We were able to increase the margins in operational terms in all Group areas, thanks to our margin improvement programmes and price rises in core markets. Furthermore, we have benefited from the weak euro and declining fuel costs. Our balance sheet structure has been considerably strengthened following the sale of the building products business, and net debt is below the target figure of €6.5 billion.”
Dr Scheifele on the outlook for the year ahead
“Business development in the first quarter has strengthened our conviction in our outlook for 2015,” said Dr Scheifele. “Our strategic focal points remain unchanged: cost leadership through continuous efficiency improvements, deleveraging with the aim of attaining investment grade status, and targeted investment in cement capacities in growth markets as well as in raw material deposits to strengthen our global market leadership in aggregates.”
“We are confident about 2015. The outlook for the global economy is positive, but there are still macroeconomic and especially geopolitical risks. We will continue to benefit from the positive development in North America, the United Kingdom, Germany, and Northern Europe. These countries generate almost 50% of our revenue. The considerable drop in the oil price and the weaker euro will provide us with additional tailwind. In view of our strong positioning in raw material reserves, our production sites in attractive locations, our outstanding vertical integration, and our excellent product portfolio, we are well positioned to achieve our goals,” added Dr Scheifele.
The managing Board hopes to increase revenue, operating income and profit for the financial year before non-recurring items in 2015.
HeidelbergCement will also continue with its price initiatives, PERFORM and CLIMB Commercial, for its cement operations in the US and Europe and for its aggregates business, respectively. The Continuous Improvement Programme launched in 2014 will help the company to safeguard and improve upon the cost savings and efficiency increases achieved within the cement and aggregates businesses over the last few years. Process optimisations are forecast to generate a sustainable improvement in results of at least €120 million by the close of 2017. HeidelbergCement’s LEO programme will also continue to drive logistics optimisation, with the target of reducing costs by €150 million over a period of several years.
The full report can be found here.
Adapted from press release by Louise Fordham
Read the article online at: https://www.worldcement.com/europe-cis/11052015/highlights-from-heidelbergcement-1q15-results-813/