HeidelbergCement reports its revenue up by 13% to $16.14bn (€15.2bn) in 2016, its best year since the financial crisis.
Preliminary figures show operating income before depreciation increased by 13% to $3.08bn (€2.9bn).
Bernd Scheifele, chairman, HeidelbergCement, said in a statement: “With the acquisition of Italcementi, we made a big leap in growth and achieved the best operating income since the financial crisis.
“The integration of Italcementi is well under way and offers significant earnings potential resulting from the implementation of identified synergies. With the investment grade rating, we reached our strategic target as result of our strengthened business profile and improved creditworthiness. Our consistent focus on efficiency and margin improvement during the last years made a major contribution.”
In 2016 sales volumes of the core products cement, aggregates, and ready-mixed concrete rose significantly as a result of the consolidation of Italcementi in July 2016.
In the fourth quarter, cement sales volumes rose by 50% to 30.8 million tonnes (previous year: 20.5). They include sales volumes of Italcementi in Italy, France, Spain, Greece, Bulgaria, Kazakhstan, India, Thailand, Egypt, Morocco, Mauritania, Gambia, and North America.
Aggregates sales volumes increased 16% to 73.3 million tonnes (previous year: 63.3). They include the shipments of Italcementi in France, Italy, Spain, Greece, Morocco, and North America.
In the fourth quarter, total ready-mixed concrete deliveries rose also due to consolidation effects by 27% to 12.1 million cubic metres (previous year: 9.6). Therein included are contributions from Italcementi markets in France, Italy, Spain, Greece, Kazakhstan, Egypt, Morocco, Thailand and North America.
Revenue and operating income also increased significantly as a result of the consolidation of Italcementi in 2016. In the fourth quarter, Group revenue rose by 25% to €4.2 billion (previous year: 3.4). OIBD could be increased by 18% to €818 million (previous year: 696) and operating income by 2% to €507 million (previous year: 499).
In North America, the growth in demand for building materials continued, in particular due to the sustained economic recovery and declining unemployment figures. Main drivers in 2016 were commercial construction and the construction of multi-family houses, HeidelbergCement, said.
Particularly strong growth of building materials deliveries was recorded in the north and south of the US. Sales in the west suffered from bad weather in the first quarter, but remained almost stable over the year. The drop in sales volumes in the Canadian Prairie provinces, as a result of the decline in oil production projects, was compensated to a certain degree by increases in the Vancouver and Seattle areas.
Revenue grew slightly on a comparable pro forma basis. The operating income, on the other hand, rose significantly, partly due to the decline in energy costs and price increases.
In the fourth quarter, sales volumes of aggregates, ready-mixed concrete and asphalt declined due to the early end of the construction season. Especially in Canada sales volumes were impaired by an early winter start.
Looking ahead, HeidelbergCement expects a stronger economic recovery in North America, and an increase in demand for building materials.
“In 2017, we will once again benefit from the economic development in the USA,” Scheifele said. “With our strong positioning in raw material reserves and production sites at attractive locations, our unique vertical integration, and excellent product portfolio, as well as our margin management which is best-in-class in our industry, we believe that we are well equipped for the opportunities and challenges of 2017.”
The complete consolidated financial statements of HeidelbergCement including the outlook will be published on 16 March 2017.
