HeidelbergCement reports record year 2017
HeidelbergCement has brought the 2017 financial year to a successful close. The decisive factors were the successful integration of Italcementi and the strong operational development, especially as a result of the successful management of energy costs and the programmes to increase efficiency and margins.
“2017 was an exceptional year for HeidelbergCement,” states Dr. Bernd Scheifele, Chairman of the Managing Board of HeidelbergCement. “In its history stretching back over 140 years, HeidelbergCement has never sold more cement, concrete, gravel, and sand than in 2017. New record figures were also achieved in revenue and result from current operations.”
Revenue rose by 14 % to € 17.3 billion (previous year: 15.2) as a result of consolidation. The result from current operations rose by 13.5 % to € 2.2 billion. Overall, this resulted in a significantly increased profit for the financial year of € 1058 million (previous year: 831).
Italcementi integration faster than planned – synergy target increased
Synergies from the Italcementi integration are being realised more quickly than expected. HeidelbergCement already exceeded its synergy target of € 470 million by the end of 2017 with a total of € 513 million – a year earlier than planned. As a result of this pleasing progress, HeidelbergCement has raised its synergy target to € 550 million by the end of 2018. The non-recurring costs recorded so far for integration and restructuring were considerably lower than the realised synergies of around € 345 million.
Free cash flow increased by 10 % to € 1.4 billion as a result of the consolidation of Italcementi and the operational performance. Net debt could be significantly reduced from € 9 billion to just under € 8.7 billion at the end of 2017.
Sustainability – an integral part of the group strategy
Sustainable business is an integral part of the group strategy. In 2017, the Sustain-ability Commitments 2030 were introduced, which define the key topics and principles for HeidelbergCement’s future sustainability strategy. These focus on the six areas: economic strength and innovation, occupational health and safety, ecological footprint, circular economy, relationships with the neighbours, as well as compliance with legal standards and transparency. HeidelbergCement has made a commitment to accept its share of the global responsibility to limit the worldwide rise in temperature to below 2°C. In line with the target set in Paris, HeidelbergCement aims to reduce its specific CO2 emissions by 30 % by 2030 (compared with the 1990 level). HeidelbergCement plays a leading role in major research projects that aim at avoiding CO2 emissions and using them as raw materials.
Outlook for 2018
HeidelbergCement will benefit from the good and stable economic development in the industrial countries, above all in the USA, Canada, Germany, the countries of Northern Europe, and Australia. The continued economic upturn, particularly in the countries of Eastern Europe, as well as in France, Spain, and – somewhat less pronounced – in Italy, will also be to the group’s advantage. These countries generate approximately 75 % of the revenue. In the growth countries such as Egypt, Indonesia, Thailand, India, and Morocco, as well as in Western and Eastern Africa, HeidelbergCement anticipates an ongoing economic recovery.
In view of the overall positive development of demand, HeidelbergCement projects an increase in the sales volumes of the core products cement, aggregates, and ready-mixed concrete.
In terms of costs, HeidelbergCement anticipates a further rise in the prices of energy and raw materials.
On the basis of these assumptions, the Managing Board has set the goal for 2018 of increasing revenue moderately and result from current operations by a mid- to high-single digit percentage before exchange rate and consolidation effects, and significantly improving the profit for the financial year.