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[January 2008]
HeidelbergCement Successful With Growth and Integration in 2007
HeidelbergCement was able to continue its successful development in the fourth quarter of 2007. Economic slowdowns and weather-related losses had an effect at regional level. The growth drivers were the group’s leading positions in Eastern Europe and Central Asia as well as increases in the emerging countries. Business in North America benefited from the strong market positions in Western Canada and on the east coast of the US.
Cement and clinker sales volumes for the whole of 2007 reached around 88 million tonnes, a rise of more than 10%. Sales volumes of aggregates more than doubled to 179 million tonnes, while deliveries of ready-mixed concrete increased by more than 30% to just under 33 million cubic metres. To some extent significant increases were achieved even without the inclusion of Hanson.
On the basis of this development in sales volumes, overall turnover of approximately €10.7 billion (previous year: €7.9 billion) is expected for the whole of 2007. Hanson accounts for around €2 billion of this figure. The company expects operating income to rise to about €1.8 billion (previous year: €1.3 billion), with Hanson contributing approximately €0.2 billion.
In order to ensure comparability, maxit Group is not included in the figures for 2006 and 2007, as a discontinued operation. Hanson was included in the 2007 annual accounts for the months of September to December.
Just 100 days after the completion of the Hanson transaction, the fundamental cornerstones of the reorganisation were established and communicated. The company said that its high expectations of the outstanding complementary capabilities and strong synergy potential arising from the merger were confirmed right from the first phase of the integration process. The comprehensive communication on all levels, which was received very positively by the employees, firmly supported the integration, it added.
The reorganisation in North America and the UK brings together cement, aggregates, asphalt and ready-mixed concrete into an integrated approach in the regional markets. Important management positions were filled and the locations of the headquarters were determined.
The main factors for the strong synergy potential of around €350 million are purchasing, administration, production, as well as financing and taxes. “The cost synergies are significantly higher than originally expected, thanks to the concentration of the purchasing activities and the use of best practices,” commented Dr Bernd Scheifele, Chairman of the Managing Board of HeidelbergCement.
As a result of consistent implementation, the integration programme will be largely completed by the middle of 2008.
As far as prospects for this year are concerned, the company asserted that the accelerated integration of Hanson ensured the rapid tapping of the high synergy potential. The reduction of liabilities continues to be given high priority. Funds from an additional cost reduction programme are also being used for this purpose. For the financial year 2008, HeidelbergCement expects a jump in turnover to about €15 billion and a solid growth in results.
ENDS