HeidelbergCement 3Q sales €2.58B Vs €2.25B

HeidelbergCement 3Q sales €2.58B Vs €2.25B
07 November 2006

HeidelbergCement AG - Heidelberg, Germany 

       3 Mos Sep 30 


                      2006             2005 

Sales          EUR2.58 Bln      EUR2.25 Bln 

Oper Pft           523 Mln          453 Mln 

EBIT - a           587 Mln          467 Mln 

Pretax Pft         522 Mln          410 Mln 

Net Profit         345 Mln          274 Mln 


 a. Earnings before interest and taxes 


       9 Mos June 30 


                      2006             2005 

Sales          EUR6.86 Bln      EUR5.74 Bln 

Oper Pft          1.09 Bln          744 Mln 

EBIT - a          1.29 Bln          826 Mln 

Pretax Pft        1.13 Bln          654 Mln 

Net Profit         721 Mln          387 Mln 


 a. Earnings before interest and taxes 


German cement maker HeidelbergCement AG said it saw an 86% jump in its net profit in the first nine months of the year, owing largely to an acceleration of growth in Europe.

HeidelbergCement’s net profit rose to EUR721 million from EUR387 million in the first nine-months of the year.

Profit for the financial year exceeded last year’s amount considerably and reached EUR790 million after EUR438 previously.

In the first nine months, the cement and clinker sales volumes of HeidelbergCement rose by 14.3% to 58.8 million tonnes versus 51.4 million tonnes. Excluding consolidation effects, the increase amounted to 8.9%.

The growth in Europe was strongest, followed by the Africa-Asia-Mediterranean Basin Group area. In North America, sales volumes decreased during the third quarter in comparison with the previous year.

Ready-mixed concrete sales volumes grew by just under 12% in total to 23.2 million cubic metres 20.8 million cubic meters; an increase of 14% was recorded in sales volumes of aggregates, which reached 76.6 million tonnes compared to 67.1 million.

Turnover for the period January to September rose by 19.4% to EUR6.9 billion compared to EUR5.7 billion. Excluding exchange rate and consolidation effects, an increase of 14.6% was achieved. Besides the broad organic growth, the positive effects of the "win" restructuring programme are increasingly being reflected in the development of earnings figures.

Operating income before depreciation, or OIBD grew by 31.8% to EUR1.5 billion from EUR1.1 billion. Operating income rose to EUR1.1 billion from EUR0.7 million in the first nine months. The increases in profit are primarily attributable to the acceleration of development in the European countries as well as in Asia and the Mediterranean Basin.

In North America, the rates of growth are leveling off. At EUR146 million, the results from participations rose slightly in comparison with the previous year; a significant proportion of this is due to our involvement in the French Vicat Group.

The additional ordinary result remained largely unchanged in comparison with the first half of the year at EUR61 million. Taxes on income rose to EUR334 million from EUR216 million as a result of the improved development of results in all group areas.

HeidelbergCement consistently pursued its strategy of geographical diversification with a focus on cement in growing markets. Important steps were taken to expand our market positions in Eastern Europe and Asia by means of acquisitions in Russia, India and China. Number of employees increased due to new consolidations.

In the first nine months of 2006, the number of employees across the Group amounted to just under 43,000. The increase from the consolidation of our activities in Kazakhstan and the expansion in the Ukraine outweighed the decrease resulting from restructuring measures in Europe and Asia.

In the first half of the year, cash flow investments amounted to EUR574 million after EUR536 million previously. Investments in tangible fixed assets, which primarily relate to maintenance and optimization measures in our cement plants, totalled EUR327 million. Investments in financial fixed assets rose to EUR247 million from EUR230 million. Significant individual items related to the expansion of our activities in China and the Ukraine as well as to our involvement in India. Our cement deliveries experienced predominantly marked growth in all countries as a result of increased construction activity and, in some cases, new consolidations. The strongest growth was achieved by the countries of Eastern Europe, with the exception of the Czech Republic. We were also able to noticeably increase our sales volumes in Germany, Sweden and the Benelux countries. In total, the cement and clinker sales volumes of the Europe Group area rose by 18.8% to 29.5 million tonnes from 24.9 million tonnes. Adjusted for consolidation effects, the increase amounted to 10.3%.

After a slight decrease in the third quarter, the cement and clinker sales volumes of our plants in North America were 3.5% above the previous year’s level at 11.4 million tonnes as of the end of September. As the capacities of our plants are fully utilized, around a quarter of the total sales volumes had to be imported from other Group areas. Deliveries of ready-mixed concrete and aggregates also increased, although this is partly attributable to consolidation effects, particularly in the southern US. The turnover of the North America Group area rose by 21.2% to EUR1.9 billion from EUR1.5 billion. Further growth in the Africa-Asia-Mediterranean Basin Group area The cement and clinker sales volumes of the Africa-Asia-Mediterranean Basin Group area rose by a total of 14.8% to 17.8 million tonnes. Excluding the consolidation effect from the inclusion of the joint venture Fufeng in China, founded at the end of 2005, the increase amounted to 10.5%. With growth of 41.5% on a like-for-like basis, China recorded the biggest increase in sales volumes in the Group area, followed by Bangladesh and Turkey. In Indonesia, the cement market began to recover slightly in the third quarter. Deliveries from our subsidiary Indocement significantly exceeded the previous year’s level as a result of increased clinker exports.

The building materials activities of maxit Group recorded positive development in most markets. In particular, the countries of Northern and Eastern Europe as well as France, the United Kingdom, Portugal and Turkey recorded healthy sales volumes. In Germany, the restructuring measures have already contributed to rising results. At EUR923 million, the turnover of maxit Group was 9% above the previous year. Group Services Trading in cement and clinker increased significantly in the first three quarters, more than compensating for declines in dry mortar and related materials. The overall trade volume rose by 10.3% to 9.6 million tonnes.

Turnover in the Group Services business unit, which also includes our trading in fossil fuels, increased by 13.6% to EUR484 million. Significant double-digit growth confirmed The global economic expansion should slow down in the next few months. However, we do not anticipate a fundamental change in the positive economic environment.

In the US, the slowdown in the real estate market is expected to lead to significantly weaker economic dynamics. In Germany, the upturn is being dampened by a more restrictive finance and fiscal policy. The risks arising from the development of the US dollar exchange rate and the energy markets remain high.

HeidelbergCement’s development in the third quarter confirms the company’s expectations. The "win" project is proving effective: Emphasis on performance and results, efficiency, productivity and speed have increased considerably in the Group. Key figures have improved noticeably. For the whole of 2006, the company anticipates significant double-digit growth in turnover and results. HeidelbergCement consistently continues the expansion of its positions in growing markets. 

Published under Cement News