Highlights from HeidelbergCement’s 2012 results
HeidelbergCement has released its consolidated financial results for 2012. The year saw cement sales volumes increase by 1.4% y/y as positive sales in North America, Asia-Pacific and the Africa-Mediterranean Basin Group helped to mitigate low demand in Europe. However, aggregates and asphalt sales did not fare as well, with declining infrastructure investment in the US, UK and certain areas in Eastern Europe leading to lower sales volumes.
Operating income before depreciation reached €2.48 billion, up 7% from last year’s €2.3 billion, while operating income rose by 9% y/y. The increase has been partially attributed to savings from the “FOX 2013” programme, which exceeded expectations. Revenue grew by 9% y/y to €14 billion due to price increases and exchange rate effects. Profit increased by 2% y/y to €545 million in spite of large non-cash one-off effects. HeidelbergCement managed to reduce its net debt by over €700 million to €7 billion.
The company continued to expand its operations in growing markets. This included the commissioning of a 0.8 million t cement mill in Bangladesh, expanding grinding capacity at the Górazdze plant, Poland, by 1.4 million t, as well as inaugurating a new 1 million t cement mill in Ghana.
Thus far in 2013, capacity expansion projects have been completed in central India to the tune of an additional 2.9 million t. New grinding capacity projects are due to become operational in Indonesia and Liberia this year, with a capacity of 1.9 million t and 0.5 million t, respectively.
HeidelbergCement expects growing demand in North America, Africa and much of Asia. However, it expects demand in central Asia and Europe to be mixed. Although markets in Germany, Northern Europe, Russia and central Asia are likely to remain stable or experience growth, demand is expected to be weak in other regions.
The firm predicts that there will be a moderate price increase in energy, raw materials and personnel. HeidelbergCement aims to address any increase and recover the margin loss from rising energy costs over the last few years through its pricing initiatives, “PERFORM” (for the cement business in the USA and Europe) and “CLIMB Commercial” (for aggregates).
“Our strategic points of focus remain unchanged in 2013”, commented Dr Bernd Scheifele. “Deleveraging remains a high priority for us, in order to improve the relevant financial key figures to investment grade level. We will also remain on course with our successful strategy of targeted investments to expand cement capacities in emerging countries. We will continue our efforts to lower costs and increase efficiency with the “FOX 2013” and “LEO” programmes. A new point of focus is definitely the increase of sales prices. For this purpose, we will implement the “PERFORM” and “CLIMB Commercial” pricing initiatives with high priority in order to achieve margin improvements totalling €350 million. With our global market leadership in the aggregates business line and our advantageous geographical positioning in attractive markets, we will make every effort to benefit over-proportionally from the continued economic growth.”
Adapted from press release by Louise Fordham.
Read the article online at: https://www.worldcement.com/europe-cis/14032013/heidelberg_cement_financial_results_2012_919/