Heidelberg Cement Heidelberg Cement Preliminary Overview 2012 and Outlook 2013

Heidelberg Cement presented its preliminary and unaudited figures for sales volumes, revenue, operating income before depreciation (OIBD) and operating income (OI) for the fourth quarter and full year 2012, together with an Outlook for 2013. Revenue and operating income rose in comparison to the previous year and in line with the outlook given in the 2011 Annual Report.

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Heidelberg, Germany – According to the company, the improvements reflect the continuing positive development in Heidelberg Cement’s growth markets and the ongoing recovery in North America. Sales volumes and result declined in Europe, mainly as a result of government budget constraints in some countries which led to significant reductions in infrastructure spending. Measures to reduce costs and increase prices contributed significantly to the rise in OIBD and OI of the Group.

“We are pleased that we achieved our goal of increasing revenue and operating income despite the negative impact of the euro crisis on many countries in Europe,” said Dr. Bernd Scheifele, CEO of Heidelberg Cement. “Once again we could reap the benefit from our advantageous geographical positioning in growth markets and the successful continuation of our programmes for efficiency and margin improvement. The margins in the core businesses cement and aggregates continued to increase. The strong development in our markets in Asia, Africa and North America contributed to the positive margin development.”

Preliminary Group Financials (see Fig. 1)

Cement sales volumes rose slightly compared to the previous year due to a positive volume development in the North America, Asia-Pacific, and Africa-Mediterranean Basin Group areas which more than compensated for the weak demand in Europe. Aggregates and asphalt sales volumes declined due to decreasing infrastructure spending in the USA, the UK, and some Eastern European countries. Group revenue and OI could be increased compared to the previous year, mainly because of the successful implementation of measures for cost reduction, efficiency improvement, and price increases. The strong development in the Group areas Asia-Pacific, Africa-Mediterranean Basin and North America contributed to the improvement of the operating income margin. The “FOX 2013” programme clearly exceeded expectations and resulted in cash savings of €384 million in 2012.

Full year 2012 revenue and results were positively influenced by the weakening of the euro compared to other currencies. This mainly affected the Group areas of Western and Northern Europe, North America, and Asia-Pacific.

Supported by the measures for margin improvement and owing to a sustained strong development in the Group areas of Asia-Pacific, North America, and Africa-Mediterranean Basin, Group revenue and OI continued to improve in the fourth quarter 2012 despite declining sales volumes.

At the end of December 2012, the number of employees was 51,966 (previous year: 52,526). The reduction of 560 employees essentially results from two opposing developments: on the one hand, around 1200 job cuts were made in North America, the United Kingdom, Spain, and some Eastern European countries as a result of overhead efficiency improvement programmes, location optimisations, and capacity adjustments. On the other hand, Heidelberg Cement hired more than 600 new employees in growth markets such as India and Indonesia.

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