As a result of the consolidation of Italcementi, revenue and result from current HeidelbergCement operations before depreciation and amortization increased significantly in the second quarter of 2017. Group revenue rose by 29 percent to €4,611 million ($5.45 billion). The result from current operations before depreciation and amortization improved by 22 percent to €964 million ($1.14 billion). After depreciation and amortization, the result from current operations rose by 14 percent to €683 million ($807 million).
On pro forma basis, revenue increased slightly. However, the result from current operations before and after depreciation and amortization declined slightly by 1 percent and 3 percent, respectively. Cost inflation and a decline in sales volumes due to fewer working days as well as bad weather were almost offset by successful price increases and the realization of synergies. In California, weather-related production problems prevented a more significant improvement in results.
“In the light of the difficult general conditions, we achieved a good result in the second quarter,” said Dr. Bernd Scheifele, chairman of the managing board. “We were able to almost offset the effect of higher energy costs, bad weather conditions, fewer working days, and increased competition in some emerging countries. The synergies from the Italcementi acquisition are clearly visible in the results. Thanks to the ongoing refinancing of our maturities at more favorable terms, we could further improve the financial result and thereby make an important contribution to the further rise in our cash flow. All in all, we have again increased the group share of profit for the period despite the challenging environment.”
Sales volumes of HeidelbergCement’s building materials rose substantially as a result of the Italcementi consolidation. On a pro forma basis, sales volumes declined slightly. The group’s cement and clinker sales volumes increased by 47 percent to 32.8 million metric tons (Mt) as a result of the acquisition. On a pro forma basis, sales volumes declined slightly by 1 percent. The strongest increase on a pro forma basis was recorded in North America followed by Northern and Eastern Europe-Central Asia as well as Africa-Eastern Mediterranean Basin.
Deliveries of aggregates also registered an acquisition-related rise of 18 percent to 81.4 Mt (previous year: 69.1). Taking into account Italcementi’s deliveries in the same period of the previous year, the growth amounts to 5 percent. Higher sales volumes in all group areas, excluding Western and Southern Europe and North America, and particularly the consolidation of the Mibau Group in Northern Europe, contributed to this increase.
Deliveries of ready-mixed concrete also rose as a result of the consolidations by 22 percent to 12.2 million cubic meters (previous year: 10.0). On a pro forma basis, sales volumes fell by 6 percent. Asphalt sales volumes declined by 5 percent to 2.4 Mt (previous year: 2.6).
In the first half of 2017, cement and clinker sales volumes rose as a result of the consolidation by 52 percent to 60.7 Mt (previous year: 39.9). Deliveries of aggregates climbed by 20 percent to 142.3 Mt (previous year: 118.4) and of ready-mixed concrete rose by 26 percent to 22.6 million cubic meters (previous year: 17.9). Asphalt sales volumes fell slightly by 1 percent to 3.9 Mt (previous year: 4.0). On a pro forma basis, cement and clinker sales volumes declined slightly by 1 percent. Deliveries of aggregates increased by 6 percent, whereas deliveries of ready-mixed concrete declined by 4 percent.
“We have seen a clear upward trend since Easter and expect a significantly stronger development in the second half of the year,” explained Dr. Scheifele. “We confirm our outlook for 2017. Strategically, 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. We will focus our investments on projects which strengthen our market position and offer synergy potential. In operational terms, we further concentrate on the following five areas: increase in customer satisfaction, high operating leverage, cost leadership, vertical integration, and optimized 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 programs to optimize costs and processes. Furthermore, we will deal more intensively with potentials arising from the digitization of our value chain.”
“We remain cautiously optimistic about 2017,” he continued. “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, Europe and Australia. These countries generate more than 60 percent 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.”
