The FINANCIAL — In 2008, HeidelbergCement achieved its announced turnover and result goals despite the difficult economic environment. According to preliminary figures, turnover for the full year 2008 increased to approximately EUR 14.2 billion (previous year: 10.9).
As announced, operating income should rise to more than EUR 2 billion (previous year: 1.8). In view of the declines experienced in building materials markets worldwide and the considerable weakening of major currencies against the euro, these results illustrate the Group's operational strength.
"The good results in 2008 are attributable to the successful integration and first full year of consolidation of Hanson, HeidelbergCement's worldwide strong market position, consistent cost management and a solid raw material base, among other factors," said Dr. Bernd Scheifele, Chairman of the Managing Board of HeidelbergCement. "Since the acquisition of Hanson in August 2007, we are one of the world's leading companies in all our business areas."
According to preliminary figures, cement and clinker sales volumes for the full year 2008 increased to over 89 million tonnes (previous year: 87.9). Sales volumes of aggregates reached 299 million tonnes (previous year: 179.6), an increase of more than 66 per cent, while deliveries of ready-mixed concrete amounted to around 44 million cubic metres (previous year: 32.7).
Cornerstones of the Hanson integration completed
The integration of Hanson was largely completed by the end of 2008, just 15 months after the acquisition. Continuing measures to exploit additional synergies will be taken at the country level. To date, HeidelbergCement has exceeded its targets regarding the realisation of synergies: Around EUR 135 million was achieved in 2008.
Reorganisation of the financing structure
HeidelbergCement is reorganising its financing structure and aims to reach a long-term solution by the middle of 2009, in consultation with all parties. The financial reorganisation at HeidelbergCement is independent of the pending measures taken by the minority shareholder VEM, with which HeidelbergCement has no credit relationship.
The objective of the reorganisation is to strengthen the equity capital base in a sustainable way and restructure the financing for the long term. In addition, the Group is planning to sell selected non-core business units over the next two to three years in order to further reduce its financial liabilities. These are businesses that fall outside the core activities of cement, aggregates (sand and gravel) and concrete. In Germany, for example, initial steps have been taken to sell the lime activities. The Group is also investigating the possible sale of activities in regions where it doesn’t see a possibility of vertical integration.
Outlook for 2009
Forecasts for 2009 are difficult at the moment. The duration and extent of the global recession cannot be determined. Important planning parameters with immediate effect on results such as exchange rates, energy and raw material prices are very volatile. Therefore, it is impossible to make substantiated forecasts regarding market development. Due to the worldwide economic downturn, HeidelbergCement expects a decline in turnover and a negative effect on operating income in 2009. However, thanks to its operational strength and international market positions, HeidelbergCement as one of the industry’s leaders considers itself to be well equipped to continue its above-average development in the future. In 2008, HeidelbergCement responded at a very early stage to the slowdown and adjusted capacities and production structures accordingly.
The "Fitness 2009" programme, additional cost-saving measures and synergies resulting from the Hanson integration are expected to have a significant positive impact on costs this year. In the 2009 financial year, HeidelbergCement also intends to benefit from its strong position in growing markets and densely populated areas worldwide.
From the second half of 2009, HeidelbergCement expects impetus to come from the worldwide economic programmes focusing on road construction and infrastructure – sectors in which HeidelbergCement is particularly strong throughout the world. Overall, these sectors account for approximately 60 per cent of HeidelbergCement's aggregates sales volumes and 50 per cent of its cement deliveries. Accordingly, HeidelbergCement believes that it is well positioned to benefit from these infrastructure projects to an above-average degree.
