European majors remain optimistic

European majors remain optimistic
Published: 10 May 2005

European building materials producers Lafarge, Holcim and HeidelbergCement have reiterated their growth forecasts for 2005 despite the expected four per cent year-on-year decrease in demand in the sector in Germany, it was reported on May 6, 2005.  The companies’ confidence is attributed to the fact that the three largest European building materials producers are active worldwide. The companies managed to cut themselves loose from the sluggish demand in Germany.
Lafarge reported a decrease in sales for the first quarter of 2005, but the turnover increased due to the introduced price hikes. The sales slump at the beginning of the year does not affect Lafarge’s expectations for 2005 and the company still expects favourable conditions on the market, Lafarge CFO Jean Jacques Gauthier. Lafarge registered a 2.2 per cent year-on-year fall in sales to EUR 2.9bn for the first quarter of 2005. 
HeidelbergCement expects a slight increase in turnover and a sales increase of some five per cent for 2005. The company’s results were boosted by strong development in eastern Europe, Asia and North America. Domestic sales are expected to continue to fall.  HeidelbergCement reported a 0.6 per cent year-on-year increase in turnover to EUR 1.35bn for the first three months of 2005. The operating loss rose to EUR 35m from EUR 33m a year earlier.
Bernd Scheifele, who was appointed CEO of Heidelberg Cement in February 2005, plans to narrow the company’s loss by introducing cost-cutting measures. The company had to book some EUR 366m write-offs on the company value for 2004. Asia and eastern Europe are seen as HeidelbergCement’s main growth regions. The company is interested in small and medium-sized rivals. 

Swiss construction materials producer Holcim also suffered from high energy costs and bad weather in the first three months of 2005. The company will offset for the weak first quarter and will achieve its targets for 2005. Holcim’s turnover fell slightly to EUR 1.76bn between January and March 2005, company CEO Markus Akermann said.