Buzzi Unicem cement sales reach 29.1Mt in 2019
Buzzi Unicem's sales volumes during 2019 exceeded the level reached in the previous year in all the areas where it operates, thanks to the robust growth recorded in the USA. Group cement sales stood at 29.1Mt, up 4.3 per cent compared to 2018.
Ready-mix concrete output, amounting to 12.1Mm3, was in line with the volumes of the previous year (+0.2 per cent). Consolidated net sales increased by 12.1 per cent, from EUR2873m to EUR3221m. Variances in the exchange rates, mainly consisting of the appreciation of the dollar, the Ukrainian hryvnia and the Russian ruble, had an overall unfavourable impact of EUR81m.
Net debt at the end of 2019 amounted to EUR566m, down EUR325m compared to EUR891m at the end of 2018. Therefore, like-for-like net sales would have been up 8.6 per cent.
Italy
After a satisfactory start to the year, favoured by the not particularly cold weather, sales of hydraulic binders and clinker in Italy maintained a positive change thanks to the additional contribution, starting from 1 July, of the Testi cement plant (near Florence) and of the two grinding plants in Piedmont, despite a lower contribution of export shipments and of clinker.
Average prices, thanks to the more stable market environment, were still improving. The
ready-mix concrete sector stabilised on the production levels reached at the end of 2018 but
with selling prices recovering. Overall consolidated net sales of Italian operations amounted to EUR505m, up 9.8 per cent compared to 2018. Like-for-like they would have been up 7.5 per cent.
Central Europe
After a robust increase during the first half of the year, facilitated by the favourable weather conditions and the additional contribution of shipments from the Seibel & Söhne production plant, deliveries of hydraulic binders in central Europe at a later time resumed a more regular pace. This was not influenced by the scope of activities, still closing the year with a positive result and average selling prices improving. Production volumes in the ready-mix concrete sector confirmed the levels reached at the end of 2018, while average selling prices increased. Overall net sales thus stood at EUR680m, up 7.5 per cent compared to EUR632m in 2018. On a like-for-like basis, they would have increased by 5.9 per cent.
In Luxembourg and The Netherlands, due to a more lively trend in shipments in the second half of the year, overall cement and clinker volumes sold closed the year with a marginal decline and average unit prices slightly progressing. The ready-mix concrete sector, on the other hand, maintained an unfavourable change in volumes, mainly attributable to the slowdown in the works relating to an important infrastructure project in The Netherlands, albeit with prices well recovering. Overall net sales came in at EUR192m, down (-2.4 per cent) compared to EUR197m in the previous year.
Eastern Europe
In Poland, cement volumes sold by the group, after the progress achieved in the first months thanks to
the particularly favourable weather conditions, in the second half of the year maintained a more regular trend, in line with expectations, closing at an only marginally lower level compared to the results recorded at year-end 2018. Average selling prices in local currency showed a marked improvement. The ready-mix concrete sector achieved weaker results, with average selling prices in local currency confirming a clear rise.
Net sales increased, despite the marginal depreciation of the local currency, from EUR111m to EUR124m (+11.1 per cent). At constant exchange rates, net sales would have been up 12.1 per cent.
In the Czech Republic, cement sales confirmed for the whole of the year the slight decrease already recorded during the first half, with average selling prices in local currency improving. The ready-mix
concrete sector, which also includes Slovakia, recorded weaker production levels, balanced
by progressing prices. Consolidated net sales, on which the slight depreciation of the koruna marginally impacted, therefore came in at EUR168m (+2.2 per cent). At constant exchange rates, they would have been up 2.3 per cent.
In Ukraine, 2H19 cement sales confirmed a significant improvement, in line with the development recorded at the beginning of the year, favoured by the decline in imports from the neighbouring countries, particularly Russia, following the recent imposition of restrictions on imports, closing the entire year with double-digit percentage progress and average prices in local currency still driven upwards by inflation. Ready-mix concrete output confirmed a weak trend but with average prices in local currency strongly improving.
Net sales stood at EUR132m, substantially increasing compared to the EUR88m achieved in 2018 (+49.3 per cent). The good trend of the local currency positively affected the translation of results into euro. At constant exchange rates, they would have increased by 34.5 per cent.
In Russia cement sales, after a significant 1H19 acceleration due mainly to the expansion of the distribution network, continued their growth at a more regular pace, also favoured by the progress recorded by the special oil-well cements. Average unit prices, in local currency, confirmed the positive performance already shown in the first part of 2019. Net sales amounted to EUR214m, improving compared to EUR185m in the previous year (+15.6 per cent). The strengthening of the ruble favourably affected the translation of turnover into euro. At constant exchange rates, it would have increased by 13.2 per cent.
USA
US cement sales, thanks to the favourable weather conditions that characterised the second half of the year, including the winter months, improved during the second half by closing the year extremely progressing compared to 2018, which was strongly affected by intense cold at the beginning of the year and high rainfall in the third quarter. Selling prices, in local currency, showed a slight improvement. Ready-mixed concrete output, mainly present in Texas, recorded even more marked progress, supported by modestly growing prices.
Overall net sales stood at EUR1242m, robustly increasing (+16.2 per cent) compared to the EUR1070m of the previous year. The appreciation of the dollar had a positive impact on the translation of the results into euro. At constant exchange rates, they would have increased by 10.1 per cent.
Mexico
Corporación Moctezuma, after the clear 1H19 decline, started to stabilise, closing the year down, but less unfavourably compared to the levels recorded in the 1H, with prices, in local currency, decreasing. Likewise, ready-mix concrete output also showed an even more marked decrease compared to the levels of the previous year, but the respective prices, in local currency, improved. With reference to 100 per cent ownership of Corporación Moctezuma, net sales are estimated at just over EUR590m, down approximately five per cent on the previous year, although the appreciation of the Mexican peso positively affected the translation of the results into euro. At constant exchange rates net sales would have decreased by approximately 10 per cent.
Brazil
The cement shipments achieved by the new joint venture maintained a positive trend, above all thanks to the contribution of the northeast region, where the increase was more marked. Average selling prices, in local currency, showed a marginal improvement. Net sales of 2019, with reference to 100 per cent of the associate, slightly increased from EUR133m, registered in 2018 to approximately EUR135m. The depreciation of the Brazilian real adversely affected the translation of the results into euro. At constant exchange rates, net sales would have increased by approximately EUR5m.
Outlook
Thanks to quite favourable weather conditions, the last quarter also closed with sales higher than those of the same period of the previous year, confirming the positive developments in demand and prices, especially in the United States of America, eastern Europe and Italy. Based on the preliminary information available, Buzzi Unicem expects the consolidated financial statements for the year 2019 to close with a recurring EBITDA of approximately EUR700m, about EUR20m thereof deriving from the favourable exchange rate effect.
