HEIDELBERGCEMENT

2014 – The best year in operational terms since the financial crisis

HeidelbergCement has brought the 2014 financial year to a successful close. All business lines clearly improved their sales volumes year on year. In operational terms, the sales figures for cement and aggregates rose in all Group areas.

Thanks to this growth in sales volumes and successful price increases in major markets, revenue improved moderately to €12614 million (previous year: 12128) despite substantial negative exchange rate effects of €515 million. Operating income rose significantly by 12.9 % before exchange rate and consolidation effects. Although the operating income rose to €1595 million (previous year: 1519). Financial results fell by €92 million to €-629 million (previous year: -537). The profit before tax from continuing operations decreased by €91 million to €931 million (previous year: 1022). The profit for the financial year decreased by €246 million to €687 million (previous year: 933). The previous year’s figure, however, included numerous non-recurring effects amounting to around €420 million.

Operating cash flow increased by €313 million to around €1.5 billion. Net debt at the end of the year amounted to €6.9 billion, which was €378 million less than at the end of 2013. Gearing (net debt-to-equity ratio) decreased to 48.6 % (previous year: 58.3%) by the end of the year.

Targeted expansion of market position

in growth markets

Cement and clinker facilities with a capacity of over 5 million tonnes were put into operation. At the Citeureup production site in Indonesia, a grinding facility with an annual capacity of 1.9 million tonnes became fully operational in May 2014. In July, production started at the new CaspiCement cement plant in western Kazakhstan, with an annual capacity of 0.8 million tonnes. At the beginning of October, ­HeidelbergCement put into service a new cement mill with an annual cap­acity of 0.8 million tonnes in its cement plant in Tanzania. In the fourth quarter, the commissioning of a clinker plant in Togo with an annual capacity of 1.5 million tonnes and a cement mill in Burkina Faso (0.8 million tonnes per year) followed. In 2015 ­HeidelbergCement are planning to put additional capacities of over 5 million tonnes into operation, including 4.4 million tonnes alone at the ­Citeureup production site in Indonesia.

Outlook for 2015

In North America, HeidelbergCement expects a continuing economic recuperation and consequently a further increase in demand for building ma­te­rials. In Eastern Europe, markets should continue to stabilise and the first impetus is expected to stem from the EU’s new infrastructure programme. HeidelbergCement anticipate a further rise in demand for building materials in Central Asia. The crisis in eastern Ukraine is impairing the sales volumes and results of the country, but has not yet had a significant effect on the operating acti­vities of ­HeidelbergCement in Russia. In Western and Northern Europe, positive market development is expected. This is based on the recovery in the United Kingdom, the consistent solid state of the German economy, and stable economic development in Northern E­urope and Benelux. In Asia and Africa, the Group still counts on sustained growth in demand.

In view of the positive development of demand and the commissioning of new capacities, HeidelbergCement ­anticipates an increase in the overall sales volumes of the core products cement, aggregates, and ready-mixed concrete.

Process optimisations are expected to achieve a sustainable improvement in results of at least €120 million by the end of 2017. In addition, the optimisation of logistics activities will be pursued with the aim of reducing costs by €150 million over a period of several years.

The Managing Board has set the goal of significantly increasing revenue, operating income, and profit for the financial year in 2015. Additionally, ­HeidelbergCement should earn its cost of capital in 2015.

HeidelbergCement expects to make investments of around €1.2 billion to upgrade and expand capacities in 2015. New capacities of more than 5 million tonnes are set to be commissioned in 2015, primarily in Indonesia and the countries south of the Sahara. Furthermore, investments are planned for modernisation measures and increasing efficiency, as well as environmental protection, particularly in the USA and Germany.

www.heidelbergcement.com

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