HeidelbergCement half-year results, significant revenue growth, high energy costs almost offset in the second quarter

The first half of 2022 was characterized by the sharp rise in energy and commodity prices.

In this still difficult market environment, we were again able to significantly increase our turnover,” said Dr. Dominik von AchtenChairman of the Management Board of HeidelbergCement.

“Our Commercial Excellence program launched at the end of last year is taking effect. Thanks to targeted price adjustments, we were able to almost compensate for the significant increase in energy and raw material costs during this quarter.

However, given the unprecedented rise in energy prices in recent weeks, the second half of the year remains difficult. For the full year, we continue to expect a significant increase in sales, while for current operating income we now expect a slight decrease on a comparable basis compared to the strong previous year.

We are making great progress in the field of climate protection. In the first half of the year, we were again able to reduce CO2 emissions beyond our expectations. Our CCUS projects are developing as planned. I am confident that we will achieve our ambitious climate goals.

Price adjustments cannot fully offset cost inflation

After the development of sales volumes in the first quarter of 2022 was almost at the level of the previous year, sales volumes decreased in the second quarter due to consolidation and the economic slowdown in Europe. Overall, H1 2022 sales volumes were slightly lower than the prior year level across all businesses. Group-wide cement and clinker sales volumes decreased by 4.8% to 58.8 million tonnes (previous year: 61.8). Aggregates deliveries slightly decreased by 2.4% compared to the previous year to 141.5 million tonnes (previous year: 145.0). Sales volumes of ready-mixed concrete decreased by 4.5% to 22.5 million cubic meters (previous year: 23.5). Asphalt deliveries fell sharply by 25.8% to 3.6 million tonnes (previous year: 4.8).

Group revenue increased significantly by 11.3% to €9,950 million (previous year: 8,938) compared to the first half of the previous year. Excluding scope and exchange rate effects, the increase was 11.6%. This is mainly due to successful price adjustments across all business lines.

The significant increase in energy, raw materials and freight expenses led to an 11.4% drop in operating income before depreciation and amortization (ROCOBD) to €1,525 million (previous year: 1,720). Excluding scope and exchange rate effects, the decline amounts to 11.8%. The RCOBD margin, i.e. the ratio between current operating income before depreciation and amortization and sales, decreased by 392 basis points to 15.3% (previous year: 19.2%) . Income from current operations fell by 16.3% to 908 million euros (previous year: 1,084). Excluding scope and exchange rate effects, the decline was 15.6%.

The profit for the period amounts to €597 million (previous year: 825). The profit attributable to HeidelbergCement AG shareholders amounted to €542 million (previous year: 755). Excluding additional ordinary income, the profit attributable to HeidelbergCement AG shareholders have almost reached the value of the previous year at €604 million (previous year: 608).

Earnings per share attributable to HeidelbergCement AG shareholders adjusted for additional ordinary profit increased by EUR 0.09 at €3.15 (previous year: 3.06).

Further net debt reduction

Due to the difficult market environment and the significant increase in energy and raw material prices compared to the corresponding period of the previous year, there was a cash outflow from operating activities of the continuing operations of 133 million euros (previous year: cash inflow of 158) in the first half of 2022. Net debt amounted to €6.8 billion (prior year: 7.5) at the end of the first half of 2022. The leverage ratio was 1.85x (prior year: 1.85x) and therefore within the target range of 1.5x to 2.0x.

Rene Aldachfinancial director of HeidelbergCementsaid: “Even though we had to record a lower result in the first half, we were able to further reduce our net debt and expand our financial cushion. With our new syndicated credit line and the bond issuance program, both now linked to achieving our climate goals, we have taken a major step towards sustainable financing, ensuring the company’s liquidity even in difficult times.

Good progress in reducing the carbon footprint

In the first half of 2022, HeidelbergCement reduces specific CO2 emissions by around 2.5% compared to the end of 2021. In May 2022, HeidelbergCement significantly tightened its CO2 reduction targets on Capital Markets Day and aims to reach a value of 400 kg CO2/t of cementitious material by 2030. In addition to product and process optimization, the company is focusing in particular on CO2 capture, use and storage (CCUS). With the CCUS projects that have already been launched alone, the company aims to save 10 million tonnes of cumulative CO2 by 2030.

Slightly adjusted outlook

The market environment in the construction sector is also influenced by the negative effects of the war of Russian aggression against Ukraine and its effects. Energy, commodity and transport prices have risen significantly, especially in recent weeks, and an easing is not expected at this time.

In this context, the company continues to anticipate a strong increase in its turnover for the 2022 financial year and now anticipates a slight drop in current operating income compared to the strong evolution of the previous year, each time before consolidation and currency effects. .

About HeidelbergCement

HeidelbergCement is one of the world’s largest integrated manufacturers of building materials and solutions, with leading market positions in aggregates, cement and ready-mixed concrete. More than 51,000 employees at nearly 3,000 locations in more than 50 countries deliver long-term financial performance through operational excellence and openness to change. At the center of the actions is the responsibility for the environment. Pioneer on the path to carbon neutrality, HeidelbergCement designs hardware solutions for the future.

Contact:

Christopher Beumelburg

Such. : +49 6221 481 13249