HeidelbergCement with significant margin increases in all regions in the first quarter of 2021
Quarterly Statement January to March 2021
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Group revenue rises by 1% to €3,958 million (like-for-like*: +4%)
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Result of current operations before depreciation and amortisation (RCOBD) rises by 33% to €538 million (like-for-like*: +38%); result of current operations (RCO) rises by 280% to €233 million (like-for-like*: +295%)
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Significant margin increase in all regions, particularly in North America, Europe, and Africa-Eastern Mediterranean Basin
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Next step in portfolio optimisation: disposal of the aggregates business and two ready-mixed concrete plants in Greece
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Important target of “Beyond 2020” strategy achieved: upgrade of the rating by rating agencies S&P and Moody’s in solid investment grade range (BBB and Baa2, respectively)
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Strong first quarter confirms optimistic outlook for 2021
*Adjusted for consolidation and currency effects
“HeidelbergCement has made an excellent start to 2021,” said Dr. Dominik von Achten, Chairman of the Managing Board. “In all Group areas, we have once again been able to significantly increase our results and margins compared with an already strong first quarter in the previous year. This is a seamless continuation of our very good development in recent quarters”.
Positive development of sales volumes in the first quarter of 2021
In the first quarter, sales volumes in all business lines increased compared with the previous year.
Group-wide cement and clinker sales volumes increased by 2.4% to 28.4 million tonnes (previous year: 27.7). Excluding consolidation effects, the increase amounted to 2.9%. Increases in sales volumes in the Group areas Asia-Pacific, Africa-Eastern Mediterranean Basin and, in particular, Western and Southern Europe more than offset volume losses in Northern and Eastern Europe-Central Asia and North America.
Deliveries of aggregates increased by 2.0% year-on-year to 61.3 million tonnes (previous year: 60.1). While volumes rose in North America, Asia-Pacific and above all in Western and Southern Europe, they significantly decreased in Northern and Eastern Europe-Central Asia as well as in Africa-Eastern Mediterranean Basin.
Ready-mixed concrete sales volumes increased by 1.2% to 10.8 million cubic meters (previous year: 10.7). Excluding consolidation effects, the increase amounted to 2.5%. While deliveries in Western and Southern Europe were significantly higher and in North America and Africa-Eastern Mediterranean slightly above the previous year's level, sales volumes in Northern and Eastern Europe-Central Asia and Asia-Pacific decreased. Asphalt deliveries increased by 11.5% to 2.0 million tonnes (previous year: 1.8).
Strong development of revenue and results
Compared with the previous year, Group revenue increased by 0.7% to €3,958 million (previous year: 3,930). Excluding consolidation and currency effects, the increase was 4.3%. Changes in the scope of consolidation had a negative impact of €17 million and exchange rate effects a negative impact of €120 million.
Result from current operations before depreciation and amortisation (RCOBD) increased significantly by €133 million or 32.9% to €538 million (previous year: 405). Excluding consolidation and currency effects, the operational increase was €149 million, 38.0% higher than the previous year. Increased volumes in all business lines and an overall positive price trend made a major contribution to the increase in results. In addition, despite a significant rise in energy prices, energy costs were kept under control thanks to long-term supply contracts concluded in the previous year.
RCOBD margin, i.e. the ratio of result from current operations before depreciation and amortisation to revenue, increased significantly in all Group areas, particularly in North America, Europe, and Africa-Eastern Mediterranean Basin.
Result from current operations (RCO) increased by 279.5% to €223 million (previous year: 59). Changes in the scope of consolidation impacted the RCO by €1.3 million and exchange rate effects by €2.0 million.
Solid investment grade rating
In mid-April 2021, the rating agencies S&P Global Ratings and Moody’s Investors Service each raised HeidelbergCement's corporate rating by one notch to BBB and Baa2, respectively. At both agencies, the outlook for the credit rating is stable. “The increase in our credit ratings underlines the confidence of the two leading rating agencies in HeidelbergCement’s significantly increased financial strength,” said Dr. Lorenz Näger, Chief Financial Officer of HeidelbergCement. “With the two current ratings in the solid investment grade range, we have achieved an important target ahead of schedule as part of our “Beyond 2020” strategy.”
Next step in portfolio optimisation
In January 2021, HeidelbergCement sold its majority participation of 51% in the Kuwaiti cement and ready-mixed concrete company Hilal Cement. This disposal was the first step of a comprehensive portfolio optimisation announced by HeidelbergCement last year as part of its “Beyond 2020” strategy.
In a further step at the beginning of May 2021, HeidelbergCement signed an agreement to sell its aggregates business and two ready-mixed concrete plants to the Swiss group LafargeHolcim as part of the realignment of its business in Greece. HeidelbergCement will focus on its core business in Greece and will continue cement production through its subsidiary Halyps Cement.
Optimistic outlook for 2021
“The very good first quarter confirms our optimistic outlook for 2021,” said Dr. Dominik von Achten. “We expect continued strong demand in private residential construction and infrastructure in all regions. In particular, the stimulus programmes launched by many governments to support the economic recovery are likely to have a positive impact on construction activity and thus on our sales in the short and medium term.”
HeidelbergCement expects a slight increase in revenue and result from current operations before consolidation and currency effects in 2021.
Risks and opportunities
Risks that could have a significant impact on our financial position and performance in the 2021 financial year and for the foreseeable future thereafter, as well as opportunities, are presented in detail in the Annual Report 2020 in the Risk and opportunities report on page 65 f.
From today’s perspective, a holistic view of individual risks and the overall risk position does not reveal any risks that could jeopardise the continued existence of the company or any other significant risks.
Group overview
|
HeidelbergCement Group |
January-March | |||
|---|---|---|---|---|
| €m | 2020 | 2021 | Variance | Like-for-like1) |
| Sales volumes | ||||
| Cement (Mt) | 27.7 | 28.4 | 2% | 3% |
| Aggregates (Mt) | 60.1 | 61.3 | 2% | 2% |
| Ready-mixed concrete (Mm3) | 10.7 | 10.8 | 1% | 2% |
| Asphalt (Mt) | 1.8 | 2.0 | 12% | 12% |
| Income statement | ||||
| Revenue | 3,930 | 3,958 | 1% | 4% |
| Result from current operations before depreciation and amortisation (RCOBD) | 405 | 538 | 33% | 38% |
| in % of revenue | 10.3% | 13.6% | ||
| Result from current operations (RCO) | 59 | 223 | 280% | 295% |
| in % of revenue | 1.5% | 5.6% | ||
1) Adjusted for currency and consolidation effects.
Development in the Group areas
| North America | January-March | |||
|---|---|---|---|---|
| €m | 2020 | 2021 | Variance | Like-for-like1) |
| Sales volumes | ||||
| Cement (Mt) | 3.3 | 3.1 | -5% | -5% |
| Aggregates (Mt) | 22.5 | 23.1 | 3% | 3% |
| Ready-mixed concrete (Mm3) | 1.6 | 1.7 | 2% | 2% |
| Asphalt (Mt) | 0.5 | 0.5 | 17% | 17% |
| Income statement | ||||
| Revenue | 920 | 849 | -8% | 0% |
| Result from current operations before depreciation and amortisation (RCOBD) | 52 | 80 | 54% | 67% |
| in % of revenue | 5.6% | 9.4% | ||
| Result from current operations (RCO) | -44 | -3 | n.a. | n.a. |
| in % of revenue | -4.8% | -0.4% | ||
1) Adjusted for currency and consolidation effects.
| Western and Southern Europe | January-March | |||
|---|---|---|---|---|
| €m | 2020 | 2021 | Variance | Like-for-like1) |
| Sales volumes | ||||
| Cement (Mt) | 6.1 | 6.8 | 11% | 11% |
| Aggregates (Mt) | 18.2 | 19.9 | 9% | 9% |
| Ready-mixed concrete (Mm3) | 3.8 | 4.2 | 10% | 10% |
| Asphalt (Mt) | 0.8 | 0.9 | 16% | 16% |
| Income statement | ||||
| Revenue | 1,105 | 1,236 | 12% | 13% |
| Result from current operations before depreciation and amortisation (RCOBD) | 62 | 121 | 94% | 97% |
| in % of revenue | 5.6% | 9.8% | ||
| Result from current operations (RCO) | -39 | 28 | n.a. | n.a. |
| in % of revenue | -3.6% | 2.2% | ||
1) Adjusted for currency and consolidation effects.
| Northern & Eastern Europe-Central Asia | January-March | |||
|---|---|---|---|---|
| €m | 2020 | 2021 | Variance | Like-for-like1) |
| Sales volumes | ||||
| Cement (Mt) | 4.6 | 4.4 | -4% | -4% |
| Aggregates (Mt) | 9.0 | 8.0 | -11% | -11% |
| Ready-mixed concrete (Mm3) | 1.3 | 1.2 | -9% | -9% |
| Asphalt (Mt) | ||||
| Income statement | ||||
| Revenue | 584 | 571 | -2% | -1% |
| Result from current operations before depreciation and amortisation (RCOBD) | 63 | 67 | 7% | 9% |
| in % of revenue | 10.8% | 11.8% | ||
| Result from current operations (RCO) | 14 | 21 | 44% | 46% |
| in % of revenue | 2.4% | 3.6% | ||
1) Adjusted for currency and consolidation effects.
| Asia-Pacific | January-March | |||
|---|---|---|---|---|
| €m | 2020 | 2021 | Variance | Like-for-like1) |
| Sales volumes | ||||
| Cement (Mt) | 8.4 | 8.8 | 5% | 5% |
| Aggregates (Mt) | 8.3 | 8.5 | 2% | 2% |
| Ready-mixed concrete (Mm3) | 2.6 | 2.5 | -1% | -1% |
| Asphalt (Mt) | 0.4 | 0.5 | 15% | 15% |
| Income statement | ||||
| Revenue | 737 | 767 | 4% | 6% |
| Result from current operations before depreciation and amortisation (RCOBD) | 131 | 158 | 21% | 23% |
| in % of revenue | 17.8% | 20.6% | ||
| Result from current operations (RCO) | 65 | 99 | 51% | 56% |
| in % of revenue | 8.9% | 12.9% | ||
1) Adjusted for currency and consolidation effects.
| Africa-Eastern Mediterranean Basin | January-March | |||
|---|---|---|---|---|
| €m | 2020 | 2021 | Variance | Like-for-like1) |
| Sales volumes | ||||
| Cement (Mt) | 5.2 | 5.2 | 1% | 1% |
| Aggregates (Mt) | 2.1 | 1.8 | -16% | -16% |
| Ready-mixed concrete (Mm3) | 1.2 | 1.2 | 1% | 1% |
| Asphalt (Mt) | 0.1 | 0.1 | -53% | -53% |
| Income statement | ||||
| Revenue | 444 | 444 | 0% | 6% |
| Result from current operations before depreciation and amortisation (RCOBD) | 96 | 115 | 20% | 26% |
| in % of revenue | 21.6% | 25.9% | ||
| Result from current operations (RCO) | 69 | 89 | 29% | 36% |
| in % of revenue | 15.4% | 20.0% | ||
1) Adjusted for currency and consolidation effects.
| Group Services | January-March | |||
|---|---|---|---|---|
| €m | 2020 | 2021 | Variance | Like-for-like1) |
| Income statement | ||||
| Revenue | 298 | 263 | -12% | -7% |
| Result from current operations before depreciation and amortisation (RCOBD) | 5 | 6 | 11% | 33% |
| in % of revenue | 1.8% | 2.3% | ||
| Result from current operations (RCO) | 5 | 6 | 13% | 36% |
| in % of revenue | 1.7% | 2.2% | ||
1) Adjusted for currency and consolidation effects.
