The group adds that higher energy and raw material prices had a significant impact on construction activity in 2022 and therefore on demand for its building materials. The negative market dynamics in many of Heidelberg Materials’ key markets led to significantly weaker development of sales volumes in all business lines during the reporting year compared with the previous year.
However, Heidelberg says that price adjustments in all group areas more than compensated for this decline in volumes and led to significant revenue growth of +12.7 % to €21,095m (previous year: €18,720m). On a like-for-like basis, i.e. excluding consolidation and exchange rate effects, the increase was +11.9%.
Despite good price momentum and strict cost management, Heidelberg Materials says it could not fully offset the sharp increase in energy and raw material costs compared to the previous year. The result from current operations before depreciation and amortisation (RCOBD) therefore decreased slightly by -3.5% to €3,739m (previous year: €3,875m) (on a like-for-like basis: -5.1%). The result from current operations (RCO) decreased by -5.3% to €2,476m (previous year: €2,614m) (on a like-for-like basis: -6.1%).
For the financial year 2023, Heidelberg Materials anticipates further growth in revenue (excluding consolidation and exchange rate effects) and expects the result from current operations (RCO) to be in a corridor of €2.35 billion to €2.65 billion.
“We closed 2022 with a very good result thanks to a great finish in the fourth quarter,” said Dominik von Achten, CEO of Heidelberg Materials. “As part of our Customer Excellence Programme, we were able to more than offset the sharp rise in energy costs in the fourth quarter for the first time during the year. Despite the challenging conditions last year, we are on track with all key figures.
"It’s evident that we can only be profitable in the long term by shaping our future as a company in a climate-compatible way, further reducing the footprint of our products and closing material loops. We are making good strides in all areas. Compared with the previous year, we were able to reduce our specific net CO2 emissions by another -2%. Our CCUS projects launched worldwide are progressing favourably."
von Achten added that, at the group's CCS project in Brevik, Norway, it is well on track with the construction of the world's first CO2 capture plant in the industry, and it looks forward to commissioning in 2024.
"We have made a good start to 2023," said von Achten. "The fourth quarter showed that we have laid a good foundation for the development in this year. Volatility on energy and raw material markets remains high, but the current easing in energy prices is giving us some breathing room. On the demand side, government infrastructure plans should compensate for the decline in private housing construction. We are optimistic about the further course of the year.”
Decarbonisation
Heidelberg Materials is continuing to focus on rapid decarbonisation as a contribution to climate protection. The company was able to reduce specific CO2 emissions by another -2% compared to the previous year in 2022 to 551kg per tonne of cementitious material. A lower clinker factor and the significant increase in the proportion of non-fossil fuels were the main contributors to this reduction.
Heidelberg Materials is further expanding its role in this field of carbon capture, utilisation and storage (CCUS). In Bulgaria, the company has initiated the ANRAV 2022 project, the first full-chain CCUS project in Eastern Europe, which is scheduled to start operations as early as 2028. In Mitchell, USA, around 95% of CO2 emissions from the cement plant are also to be captured from 2028. With an emission reduction of around 2 million tonnes of CO2 per year, this is the largest CCUS project planned to date worldwide for Heidelberg Materials.
As part of its portfolio optimisation, Heidelberg Materials made particular progress in the area of recycling in 2022. Acquisitions of leading building materials and recycling companies in Germany, the UK, and the USA marked another important step in the implementation of the circular economy strategy.
In addition to the climate targets, Heidelberg Materials says it has also tightened its Sustainability Commitments 2030, the pillars of the company’s sustainability strategy. “The Sustainability Commitments describe our fields of action and focus topics in the area of ESG,” said Dr Nicola Kimm, chief sustainability officer and member of the managing board. “We have made our sustainability targets stronger and more comprehensible. In addition to climate protection and our commitment to the circular economy, we are now focusing even more on topics such as diversity and sustainability in the supply chain.”
The company says demand in the construction sector is likely to remain mixed in the current year. The good order situation for infrastructure projects and parts of the non-residential construction sector should offset the decline in residential construction. Cost developments on the energy and raw material markets remain volatile, although energy prices currently appear to be easing somewhat. The focus is therefore on further price adjustments and strict fixed cost management.
