Annual Report • Apr 7, 2011
Annual Report
Open in ViewerOpens in native device viewer
| Figures in EURm | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
|---|---|---|---|---|---|---|---|
| Number of employees as at 31 December | 42,062 | 41,260 | 40,983 | 67,916 | 60,841 | 53,302 | 53,437 |
| Sales volumes | |||||||
| Cement and clinker (million tonnes) | 65.2 | 68.4 | 79.7 | 87.9 | 89.0 | 79.3 | 78.4 |
| Aggregates (million tonnes) | 69.5 | 77.2 | 85.8 | 179.6 | 299.5 | 239.5 | 239.7 |
| Asphalt (million tonnes) | 4.8 | 12.1 | 10.0 | 9.1 | |||
| Ready-mixed concrete (million cubic metres) | 19.5 | 21.8 | 24.9 | 32.7 | 44.4 | 35.0 | 35.0 |
| Profit and loss accounts | |||||||
| Total Group turnover | 6,929 | 7,803 | 7,997 | 10,862 | 14,187 | 11,117 | 11,762 |
| Operating income before depreciation (OIBD) 1) | 1,243 | 1,547 | 1,890 | 2,423 | 2,946 | 2,102 | 2,239 |
| Operating income 1) | 759 | 1,051 | 1,429 | 1,850 | 2,147 | 1,317 | 1,430 |
| Profit/loss for the financial year | -333 | 471 | 1,026 | 2,119 | 1,920 | 168 | 511 |
| Group share | -366 | 415 | 951 | 2,022 | 1,808 | 43 | 343 |
| Dividend in EUR per share | 0.55 | 1.15 | 1.25 | 1.30 | 0.12 | 0.12 | 0.25 4) |
| Investments | |||||||
| Investment in tangible fixed assets | 466 | 548 | 506 | 1,039 | 1,101 | 795 | 734 |
| Investment in financial fixed assets | 45 | 389 | 315 | 11,735 | 150 | 25 | 138 |
| Total investment in fixed assets | 511 | 937 | 821 | 12,774 | 1,251 | 820 | 872 |
| Free cash flow | |||||||
| Cash flow from operating activities | 937 | 795 | 1,259 | 1,911 | 1,523 | 1,164 | 1,144 |
| Cash flow from investing activities 2) | -309 | -747 | -665 | -10,677 | 1,113 | -539 | -648 |
| Balance sheet | |||||||
| Shareholders' equity and minority interests | 3,936 | 5,058 | 5,828 | 7,519 | 8,261 | 11,003 | 12,884 |
| Balance sheet total | 10,716 | 11,935 | 12,318 | 29,201 | 26,288 | 25,508 | 27,377 |
| Net debt 3) | 3,668 | 3,545 | 3,081 | 14,608 | 11,566 | 8,423 | 8,146 |
| Ratios | |||||||
| OIBD margin | 17.9 % | 19.8 % | 23.6 % | 22.3 % | 20.8 % | 18.9 % | 19.0 % |
| Net debt/shareholders' equity (gearing) 3) | 92.7 % | 70.1 % | 52.5 % | 193.4 % | 139.8 % | 76.5 % | 62.9 % |
| Net debt/OIBD 3) | 2.95x | 2.29x | 1.63x | 6.03x | 3.93x | 4.01x | 3.64x |
| Earnings per share (EUR) | -3.64 | 3.74 | 8.22 | 17.11 | 14.55 | 0.30 | 1.83 |
1) 2004 - 2006: figures have been restated as a result of the reclassification of emission rights and pension interest (IAS 19).
2) 2004 - 2008: including decrease/increase in ownership interests in subsidiaries
3) Without adjustment to IAS 32.18 b) Puttable Minorities in the amount of EUR 96 million (2010), EUR 37 million (2009), EUR 50 million (2008), EUR 86 million
(2007), EUR 106 million (2006)
4) The Managing Board and Supervisory Board will propose to the Annual General Meeting on 5 May 2011 the distribution of a cash dividend of EUR 0.25.
| Figures in EURm | 2008 | 2009 | 2010 |
|---|---|---|---|
| Western and Northern Europe | |||
| Turnover | 4,936 | 3,848 | 3,811 |
| Operating income before depreciation | 1,014 | 687 | 683 |
| Investment in tangible fixed assets | 357 | 248 | 178 |
| Employees as at 31 December | 15,770 | 14,640 | 14,302 |
| Eastern Europe-Central Asia | |||
| Turnover | 2,046 | 1,282 | 1,138 |
| Operating income before depreciation | 718 | 361 | 299 |
| Investment in tangible fixed assets | 321 | 270 | 202 |
| Employees as at 31 December | 11,556 | 9,481 | 9,959 |
| North America | |||
| Turnover | 3,958 | 2,892 | 3,033 |
| Operating income before depreciation | 676 | 340 | 448 |
| Investment in tangible fixed assets | 199 | 152 | 146 |
| Employees as at 31 December | 15,739 | 12,601 | 11,899 |
| Asia-Pacific | |||
| Turnover | 2,177 | 2,211 | 2,609 |
| Operating income before depreciation | 462 | 612 | 718 |
| Investment in tangible fixed assets | 161 | 96 | 174 |
| Employees as at 31 December | 15,044 | 14,030 | 13,682 |
| Africa-Mediterranean Basin | |||
| Turnover | 974 | 837 | 938 |
| Operating income before depreciation | 182 | 157 | 156 |
| Investment in tangible fixed assets | 61 | 28 | 34 |
| Employees as at 31 December | 2,680 | 2,499 | 3,539 |
| Group Services | |||
| Turnover | 701 | 475 | 709 |
| Operating income before depreciation | 22 | 30 | 20 |
| Investment in tangible fixed assets | 2 | ||
| Employees as at 31 December | 52 | 51 | 55 |
January – By issuing two Eurobonds to institutional investors in Germany and abroad, the company is generating proceeds of EUR 1.4 billion in total. The proceeds will be exclusively used for the repayment of the syndicated loan.
April – Arrangement of a new EUR 3 billion syndicated credit line with 17 banks and a term running until the end of 2013. Thus, the remaining liabilities from the credit agreement entered into with 60 banks in June 2009 will be repaid. The new credit line serves primarily as a liquidity reserve.
May – With the acquisition of the remaining 50 % in Pioneer North Queensland, Heidelberg-Cement secures its market position in Australia. The company operates two sand pits, two crushed rock quarries, an asphalt plant and a ready-mixed concrete facility.
May – Agreement with IFC, a member of the World Bank Group, and its financial partners to promote the expansion of infrastructure in the countries in Sub-Saharan Africa by increasing local cement capacities. IFC acquires a minority interest in our African business; in return, we are expanding cement capacities in Liberia, Ghana and other countries.
June – HeidelbergCement is the first German company in the construction and building materials sector to be listed on the DAX. On the day of admission, the company holds position 22 with respect to market capitalisation and order book turnover.
August – By commissioning two new cement mills in the Cirebon production site, cement capacity of Indocement increases by 1.5 to 18.6 million tonnes. An additional cement mill is also set to be constructed at the Citeureup location, with a capacity of 2 million tonnes, by beginning of 2013.
September – HeidelbergCement acquires the majority in three cement plants. One is located near the capital city of Kinshasa and the other two in the east of the country. Over the next few years, we plan to increase the cement capacity from 500,000 tonnes to more than 1.4 million tonnes.
October – CJSC "Construction Materials" is located approximately 150 km south of Ufa and operates a cement plant with a capacity of 2 million tonnes and 600 employees. The modern plant is situated in the most important investment district in Russia.
1
3
Dr. Bernd Scheifele, Chairman of the Managing Board
The 2010 financial year drew to a successful close for HeidelbergCement in the face of a challenging global economic environment. Our corporate culture, characterised by consistent management, strength of implementation, cost efficiency and speed, combined with the exceptional commitment of our employees and managers was decisive in achieving this success.
Compared to its major competitors, HeidelbergCement fared well during the global economic crisis of 2009 and 2010. This is mainly thanks to cost-cutting measures, which we implemented early on – in some cases even before outbreak of the crisis. Following successful completion of the "Fitness 2009" programme with savings of more than EUR 550 million, we managed to reach more than EUR 300 million savings in the reporting year with our "FitnessPlus 2010" programme. Over the last two years, we have significantly and sustainably reduced administration and distribution costs, as well as considerably lowered repair expenses, especially in the cement business. Our location portfolio has been streamlined in the aggregates, ready-mixed concrete and concrete products business lines, and our purchasing initiatives have made significant contributions to profits
The success of these various measures is clearly evident looking at HeidelbergCement's improved earnings quality.
Group turnover increased by 5.8 % to EUR 11.8 billion in 2010, supported by consistently good performance in our growing markets in Asia and Africa as well as advantageous exchange rate effects. Across the Group, sales volumes for cement and clinker, aggregates and ready-mixed concrete remained constant.
Operating income before depreciation (OIBD) rose by 6.5 % to EUR 2.24 billion. At the same time, we were one of the few companies in the industry that managed to improve the OIBD margin at Group level and in the two core business lines of cement and aggregates. Our successful cost-saving programme "FitnessPlus 2010" made a significant contribution to the improvement of this margin.
Operating income increased by 8.6 % to EUR 1.43 billion. In addition to exchange rate effects, the noticeable improvement of results in North America also played an important role in this positive development. At EUR 188 million, we managed to more than double operating income in the Group area. The significant increase in margins in the cement and aggregates businesses were key. With regard to the aggregates margin, HeidelbergCement is now amongst the best in the industry.
The most significant contribution to operating income came from the Asia-Pacific Group area with EUR 586 million. Despite a major increase in variable costs, particularly in the second half of the year, we managed to keep the OIBD margin almost constant at 27.5 %, a peak value in the industry.
| To our shareholders | |
|---|---|
| Letter to the shareholders | Managing Board |
| Report of the Supervisory Board | HeidelbergCement in the capital market |
We achieved another record result in Africa, increasing cement sales volumes by almost 13 % to 5.2 million tonnes. Total operating income in the Africa-Mediterranean Basin Group area, however, declined slightly as a result of the continuing difficult market conditions in Spain.
Due to lower financing costs and significantly fewer goodwill impairments, we were able to more than triple profit for the financial year, which totalled EUR 511 million. As a result, earnings per share increased from EUR 0.30 to EUR 1.83.
In view of these results, the Managing Board and Supervisory Board will propose a dividend increase from EUR 0.12 per share to EUR 0.25 per share at the Annual General Meeting on 5 May 2011. This dividend proposal is still quite a way off our medium-term goal of a payout ratio between 30 % and 35 %. In light of the ongoing global economic uncertainties, we consider a frugal approach, in order to further reduce our debt, the better alternative for the Group and our shareholders.
With the successful bond issues and arrangement of a new credit line amounting to EUR 3 billion, we substantially improved the Group's financing structure in 2010, ensuring liquidity until the end of 2013. This enabled us to reduce credit margins by more than 50 % and the number of participating financial institutions to 17 core banks. Thanks to the successful cost-saving measures and consistent cash management, we also reduced our net debts by a further EUR 0.3 billion compared to last year. There is one particular figure that underlines the effectiveness of our financial management: EUR 3.5 billion free liquidity as at the balance sheet date! The rating agencies responded to the successful improvement of our financing structure with a significant rating upgrade.
In June 2010, HeidelbergCement became the first ever building materials company to be included in the DAX, an index of the 30 largest listed companies in Germany.
The prerequisite for this was a free float, which increased to approximately 75 % following the capital increase in the autumn of 2009. In 2010, we intensified professional communication with our significantly expanded Group of shareholders. This resulted in a further geographic diversification of our shareholder structure and noticeably increased the number of institutional investors with a long-term interest in the company. An investor survey conducted at the end of last year clearly showed that we did an exceptional job in the area of investor relations in 2010.
Another positive piece of news was that Mr Ludwig Merckle increased his shareholding in HeidelbergCement to more than 25 % following successful restructuring of the Merckle Group, and thereby emphasised his ongoing pledge to our Group. The Managing Board and Supervisory Board expressly welcome Mr Ludwig Merckle's long-term commitment. Particularly in a cyclical industry such as ours, an anchor shareholder is of major importance to the Group's stability and long-term business orientation.
1
4
2010 demanded a great deal from our employees. Their strong personal dedication and unflagging loyalty to the Group formed the foundation for us to achieve such solid operating income in 2010. I would like to express sincere thanks and appreciation on behalf of myself and my colleagues on the Managing Board. Our gratitude also goes out to the employee representatives who co-operated very closely, openly and trustingly with the Managing Board in this challenging environment for the good of the Group.
I would like to personally thank and express my utmost appreciation to our managers in the operating units and staff functions worldwide. They responded to the economic and financial crisis at an early stage, in a disciplined and very consistent manner, implementing drastic cost reductions. The significant increase in profit for the financial year, the major improvement in the financing structure and the inclusion in the DAX would not have been possible without them. Our mutual aim is clear: We want to be the best-managed company in our industry!
We expect the global economy to recover further in 2011 and 2012. In light of this, we have defined three strategic focal points:
Because HeidelbergCement operates in markets with largely standardised local products, cost leadership is decisive for success. This is why we launched the new "FOX 2013" efficiency improvement initiative at the start of the 2011 financial year, which aims to realise liquidityrelated savings of EUR 600 million over the next three years. In addition to enhancing working capital and improving our purchasing conditions, our main focus is on increasing the efficiency of our 600 sand, gravel and crushed rock production sites. Following the successful pilot phase in Europe, we launched a project in March 2011 with the intention of improving our margins by optimising our products and further reducing our specific production costs. In this way, we intend to achieve our aim of making HeidelbergCement not only the largest manufacturer of aggregates in the world, but also the most profitable! Furthermore, we have initiated a programme for improving energy efficiency in the cement business line with which we intend to reduce power costs by 5 % and fuel costs by 3 %.
Our main priority is still to reduce debt with the aim of improving our creditworthiness into the investment grade range. We will therefore continue to exercise strict discipline when it comes to costs and investment decisions. With the ongoing recovery of the global economy, we are also planning on driving forward the divestment of non-core activities. These are areas that are not part of the cement, aggregates and concrete value chain, as well as smaller local investments that are of minor importance to the global market position of HeidelbergCement. The planned disposals are clearly subject to obtaining an acceptable sales price.
| To our shareholders | |
|---|---|
| Letter to the shareholders | Managing Board |
Report of the Supervisory Board HeidelbergCement in the capital market
And finally, we will continue our strategy of targeted expansion of cement capacities in the emerging countries of Asia, Africa, Eastern Europe and Central Asia. This is not primarily a matter of acquisitions, but rather relates to expansion of production capacities and construction of new plants in markets where we already operate. For instance, at the end of May 2011, we intend to commission a new cement plant near Moscow with a capacity of around 2 million tonnes. In the Polish plant of Górazdze, we are increasing cement capacities by around 1.2 million tonnes. At our Citeureup plant in Indonesia and our Damoh and Jhansi plants in India, we will likewise expand cement capacities by 2 million tonnes and 2.9 million tonnes, respectively. Major acquisitions that would significantly increase the Group's debt are not part of the strategy.
We expect the global economy to continue its recovery in 2011, although it will not be as strong as in 2010. We believe our important emerging countries in Asia (China, Indonesia, India) and Africa (Ghana, Tanzania) will achieve economic growth of between 5 % and 9 %. According to IMF forecasts, our mature markets in the US, United Kingdom, Germany, the Benelux countries, Northern Europe and Australia will continue their economic recovery in 2011 and 2012, albeit at a medium growth rate of just 2 % to 3 %.
On the cost side, we anticipate an increase in energy and commodity prices as well as rising inflation, particularly in emerging countries. In the mature markets, we also expect an increase in personnel costs. Our aim is to offset the rise in costs through cost-saving measures and targeted price increases as well as fuel surcharges in the individual markets.
On the basis of these assumptions, the Managing Board has set the objective of further increasing turnover and operating income. The business trend in the first two months of 2011 confirms this estimation. Thanks to our positioning in attractive markets both in emerging and industrialised countries, and our global market leadership in aggregates, HeidelbergCement is ideally positioned to benefit over-proportionally from the continued recovery of the global economy, supported by growth acceleration in North America.
Yours sincerely,
Dr. Bernd Scheifele Chairman of the Managing Board
1
Fritz-Jürgen Heckmann, Chairman of the Supervisory Board
1
HeidelbergCement's operations in the 2010 financial year were characterised by the recovery of virtually all markets relevant for the company from the economic and financial crisis, which, in its intensity, triggered effects in the global building materials industry comparable, and partly even worse, to those of the 1929 global economic crisis. In the second half of the financial year, in particular, North America – which is important for the overall Group result – showed a pleasing trend reversal with continuously increasing sales volumes and earnings. HeidelbergCement is barely represented in the southern European countries that continue to be significantly affected by the economic and financial crisis, and the company is benefiting from its significant presence in the fast-growing regions of Asia and in the African countries south of the Sahara. Once again, the advantageous geographical footprint of the Group and the distribution of activities across mature markets in Europe and North America as well as across fast-growing regions in Asia and Africa serves as a guarantee for effectively cushioning declines in sales volumes during times of crisis in the building materials economy and, in times of its recovery, for efficiently and sustainably benefiting again from the improvement of the market conditions in a way that exceeds the average.
Following the successful refinancing in 2009, which was accompanied by a significant change in the shareholder structure, HeidelbergCement is in a financially comfortable position for the future and is well on the way to achieving key financial ratios in the Investment Grade area. As a result of the changes to the shareholder structure, the free float increased to almost 75 %. In combination with the increased order book turnover in HeidelbergCement shares, this meant that HeidelbergCement was able to join the DAX on the basis of the fast-entry rule in June 2010, making it one of the leading listed companies in Germany. In addition, the successful restructuring of the Merckle group in the reporting year meant that the company could continue to be supported by an anchor shareholder - the family business run by Ludwig Merckle - who reaffirmed his enduring commitment to HeidelbergCement at the start of November 2010 by increasing his participation to more than 25 %.
The Supervisory Board actively accompanied and supported the dual strategy of the Managing Board to continue its rigorous cost-cutting initiative in 2010 and maintain investment discipline, but to also be aware of potential growth opportunities in the market. The acquisitions and capacity expansions in Africa, Australia, and Eastern Europe in 2010 represent this growth and profit-oriented business policy.
The Supervisory Board firmly supported the aforementioned measures and co-ordinated them with the Managing Board at numerous ordinary and extraordinary meetings of the plenary session and its committees as well as through contact outside the scheduled meetings. Additionally, it received regular and detailed reports, both in writing and verbally, about the intended business policies, fundamental issues of financial, investment, and personnel planning, the progress of Report of the Supervisory Board HeidelbergCement in the capital market
1
5
business, and the profitability of the company. All deviations of the actual business development from the plans were explained in detail by the Managing Board. The Managing Board co-ordinated the Group's strategic approach with the Supervisory Board. The Supervisory Board was directly involved in all decisions of fundamental importance to the company. Investment, disinvestment and in particular financing projects requiring authorisation were presented by the Managing Board and discussed before decisions were made. The Supervisory Board is satisfied that the Managing Board has installed an effective risk management system capable of recognising at an early stage any developments that could jeopardise the survival of the company. The Supervisory Board has also had this certified by the auditor. Furthermore, it is satisfied as to the effectiveness of the compliance programme, which guarantees Group-wide compliance with the law and with internal guidelines. During this process, the Managing Board informed the Supervisory Board about the positive result of an audit on the existing Group-wide antitrust compliance system performed by a renowned law firm. The Chairman of the Supervisory Board was also in regular contact with the Chairman of the Managing Board outside the scheduled meetings. In summary, it is evident that the Supervisory Board has duly fulfilled the duties incumbent upon it under the law, the Articles of Association, the Rules of Procedure, and the German Corporate Governance Code.
Both the plenary session of the Supervisory Board and the Personnel Committee met five times in the reporting year, the Audit Committee three times, and the Nomination Committee once; the Arbitration Committee, formed in accordance with § 27, section 3 of the German Codetermination Law, did not need to meet. Both the Supervisory Board and the Audit Committee also held several conference calls during the reporting year. The following plenary session was informed about the results of the committees' meetings. The members of the Supervisory Board and its committees are listed in the Corporate Governance chapter on page 137 ff.
The ordinary plenary sessions in March, May, September, and November dealt, amongst other things, with the adoption of the 2009 annual accounts, preparations for the 2010 Annual General Meeting, reporting on business trends, reporting and resolutions on refinancing projects, further resolutions on Corporate Governance issues, as well as reporting on the sale of activities that were not part of the company's core business. The Supervisory Board also approved the emission of a five-year EUR 650 million Eurobond to further improve the maturity profile of liabilities and the acquisition of new activities and capacity expansions within the framework of growth-oriented company development in North America, Russia, Africa, Australia, and India.
Following the change to the allocation in the German Stock Company Act, the plenary session dealt in several meetings with the variable remuneration for the Managing Board in terms of the 2009 annual bonus and the 2008/2009 medium-term bonus. The intensive preparation work for the new Managing Board remuneration system, which came into force on 1 January 2011, was the main focus of several meetings of the plenary session and the Personnel Committee in autumn 2010. Furthermore, the Supervisory Board was regularly informed about the progress of the "FitnessPlus 2010" programme and the development of the Group's key financial ratios. The topic of energy management in the Group was also on the agenda of one of the Supervisory Board meetings. The Supervisory Board was additionally updated about the ongoing German antitrust proceedings and given a status report regarding the company joining the DAX.
Three extraordinary meetings were held in the reporting year: In the extraordinary meeting in January, the emission of Eurobonds was discussed and agreed; the extraordinary meeting in February predominantly covered the approval of the 2010 planning, the subsequent appointment of committee members, and the setting of parameters for the target bonus of the Managing Board for the 2010 financial year. In April, the new syndicated credit line was presented to and approved by the Supervisory Board.
In its meetings, the Audit Committee dealt with the 2009 annual accounts of Heidelberg Cement AG and the HeidelbergCement Group and its audit focal topics, the 2009 compliance report, the quarterly and half-year reports, the preparation of the Supervisory Board proposal to the 2010 Annual General Meeting for appointing the 2010 auditor, as well as with Corporate Governance matters. After a review, the committee stated that it had at least one independent member that is considered to be an expert in the areas of accounting or auditing.
The Personnel Committee meetings covered, amongst other things, the preliminary discussion and recommendation to the Supervisory Board regarding Managing Board remuneration for 2009 and 2010, as well as the intensive discussion and preliminary preparation of the new 2011 Managing Board remuneration system.
The Nomination Committee prepared proposals for suitable candidates, which the Supervisory Board then put forward to the 2010 Annual General Meeting as shareholder representatives for by-election. Mr Alan Murray and Dr.-Ing. Herbert Lütkestratkötter, who were put forward for by-election, received wide support from the shareholders.
At 95 %, attendance at the meetings of the Supervisory Board and its committees was, as it has been in the past, pleasingly high. There were no conflicts of interest of any Supervisory Board member when dealing with topics at the Supervisory Board. There were also no consulting or other contracts for services or work between any member of the Supervisory Board and the Company.
The joint statement of compliance of the Managing Board and Supervisory Board in the reporting year was adopted and submitted on 17 March 2010, and this year's statement was submitted on 8 February 2011 by the Managing Board and 10 February 2011 by the Supervisory Board. The complete text can be found in the section Statement of compliance in accordance with § 161 of the German Stock Company Act in the Corporate Governance chapter on page 122. The statements of compliance are made permanently available to the shareholders on the company's website. In its meeting on 17 March 2010, the Supervisory Board established – amongst other things – that, in its opinion, the Supervisory Board and its Audit Committee had a sufficient
Report of the Supervisory Board HeidelbergCement in the capital market
number of independent members and, furthermore, that at least one independent member of the Supervisory Board and the Audit Committee had the required expertise in the areas of accounting or auditing. In the same meeting, it also discussed the company's compliance with the recommendations of the German Corporate Governance Code in the version of 18 June 2009. In addition, on 17 March 2010, the Supervisory Board decided, for reasons of capital market transparency, to abandon the company's own Corporate Governance Principles in favour of a general reference to the adopted recommendations of the German Corporate Governance Code. The Rules of Procedure for the Supervisory Board have been adjusted accordingly.
With the implementation of the German Corporate Governance Code dated 26 May 2010, the Supervisory Board approved guidelines in its extraordinary meeting on 10 February 2011 regarding the implementation of the diversity principles in the Managing Board and Supervisory Board. The Supervisory Board is fully complying with the guidelines of the Corporate Governance Code regarding the future appointment of Managing Board members and has firmly established its commitment with a corresponding amendment to its Rules of Procedure. Regarding its own composition, it welcomes the diversity goals stipulated in the German Corporate Governance Code and aims to have the largest possible pool of candidates available for the election of future Supervisory Board members. However, it abstains deliberately from setting specific diversity goals, meaning there is neither a set quota for individual candidate groups in its composition in the future, nor a set quota for the appropriate participation of women, because it will evaluate and select all potential candidates solely on the basis of their qualifications and professional experience to date. Aside from this, the Supervisory Board welcomes and supports the selection criteria for its composition set out in the Code, i.e. an appointment based on a sufficient number of independent members that fulfil one or more of the following criteria: Successful work in management positions outside the company, internationality, industry-relevant and specific knowledge in the areas of accounting or financing.
As regards the remuneration structure for the members of the Managing Board for the past financial year, details on remuneration of the Managing Board are included in the Corporate Governance chapter on page 128 ff. to avoid repetition. This chapter also includes another section containing details of the new Managing Board remuneration system discussed and passed in September and November, which came into force on 1 January 2011. The Supervisory Board believes that the new remuneration system demonstrates a balanced implementation of legal guidelines, the interests of the company and its stakeholders, and the interests of the Managing Board in ensuring fair, performance-related remuneration that is in line with market standards. The Supervisory Board consulted a renowned remuneration expert when developing the new system. The new system was then reviewed on behalf of the Supervisory Board by an independent renowned remuneration expert, which found the system to comply with the law and to be adequate to the market. The new Managing Board remuneration system shall be presented to our shareholders at the Annual General Meeting on 5 May under the agenda item "Say on Pay" and shall be proposed for approval in accordance with § 120 of the German Stock Company Act.
4
As part of the implementation of the new remuneration system, all Managing Board agreements were amended and adjusted and the standardised administration of the agreements in the Super visory Board ensured. In the course of the statutory increase of the deductibles in the D&O liability insurance for the members of the Managing Board in the new Managing Board agreements from 1 January 2011, the deductibles in the D&O liability insurance for the members of the Supervisory Board were also increased in accordance with the Code.
In its May meeting, the Supervisory Board was informed about the results of the Corporate Governance survey completed by HeidelbergCement managers. In its November meeting, it dealt with the external review of the current antitrust compliance system, which had been performed for the first time. Furthermore, an internal training event was held for the Supervisory Board in February 2011 – following last year's amendments to the Code – which covered the actual development in national and international accounting guidelines and the Corporate Governance and compliance topics relating to Supervisory Board duties. The Supervisory Board thus reaffirmed its commitment to effective Corporate Governance and Compliance in the Group.
Before the contract for the auditing of the annual accounts of the company and Group was awarded, the focal points for the audit, the content of the audit, and the costs were discussed in detail with the auditor, Ernst & Young GmbH, Wirtschaftsprüfungsgesellschaft, Stuttgart. In February 2011, the Managing Board informed the Supervisory Board about the interim, uncertified key figures for the 2010 financial year and provided a status report on the annual account work. The annual accounts of HeidelbergCement AG, the Group annual accounts as at 31 December 2010 and the combined management report for the company and the Group, as prepared by the Managing Board, were examined by the independent auditors. The auditors gave the accounts the unqualified confirmation. The annual accounting documents and auditors' reports were sent to the members of the Supervisory Board. At first, the Audit Committee dealt intensively with the annual accounts in the presence of the auditors. The auditors reported on the main results of their audit. Then, the Supervisory Board discussed the annual accounts in detail, once again in the presence of the auditors. The Supervisory Board approved the audit results. It examined the company and the Group annual accounts, the combined management report as well as the Managing Board's proposal for the use of net profit shown in the balance sheet. The results of the pre-audit conducted by the Audit Committee and the results of its own audit correspond fully to the results of the official auditor. The Supervisory Board raised no objections to the final results of this examination. The Supervisory Board has therefore approved the company and the Group annual accounts. The annual accounts have thus been adopted.
A dependent companies report did not have to be prepared in the reporting year due to the changes in the shareholder structure.
The Supervisory Board approved the Managing Board's proposal for the use of net profit shown in the balance sheet, including the payment of a dividend of EUR 0.25 per share.
In 2010, the mandates relinquished as a result of the Schwenk Group's departure from the group of shareholders were reappointed. With the appointment of Mr Alan Murray and Dr.-Ing. Herbert Lütkestratkötter, HeidelbergCement gained two international managers with industry knowledge, who bring expertise and dedication to the operation of the Supervisory Board. The mandates that became vacant in the committees were subsequently filled from the group of acting Supervisory Board members in the first Supervisory Board meeting attended in person in the reporting year. In its meeting on 10 February 2011, the Supervisory Board followed the recommendation made by the Personnel Committee and extended the Managing Board mandates for Mr Daniel Gauthier and Mr Andreas Kern by five years each, until 30 June 2016. The Supervisory Board would like to combine this extension with its thanks and appreciation for the very successful work Mr Gauthier has performed in the regions of Northern and Western Europe, Africa, the Mediterranean, and Group Services, and likewise that of Mr Kern in the Central Europe-Central Asia region.
The Supervisory Board would finally like to thank the Group's management and all the employees of the Group for their high level of personal dedication during 2010. Their performance in consolidating and further developing the Group under the still difficult economic conditions in the building materials industry has been quite outstanding.
Heidelberg, 16 March 2011
On behalf of the Supervisory Board
Yours sincerely,
Fritz-Jürgen Heckmann Chairman
4
| To our shareholders | |
|---|---|
| Letter to the shareholders | Managing Board |
| Report of the Supervisory Board | HeidelbergCement in the capital market |
Born in Freiburg (Germany), aged 52 years. Studies in law at the universities of Freiburg, Dijon (France) and the University of Illinois (US). Since 2005, Chairman of the Managing Board; in charge of Strategy and Development, Communication & Investor Relations, Human Resources, Legal, Compliance and Internal Audit.
Born in Munich (Germany), aged 45 years. Studies in law and economics at the German universities of Freiburg and Munich. Member of the Managing Board since 2007; in charge of the North America Group area, Purchasing and worldwide coordination of the Competence Center Materials.
Born in Charleroi (Belgium), aged 54 years. Studies in mining engineering at Mons (Belgium). Since 1982 at CBR, the Belgian subsidiary of HeidelbergCement. Member of the Managing Board since 2000; in charge of the Group areas Western and Northern Europe (without Germany), Africa-Mediterranean Basin and Group Services as well as Environmental Sustainability.
Born in Neckarsteinach (Germany), aged 52 years. Studies in business administration at Mannheim (Germany). Since 1983 at HeidelbergCement. Member of the Managing Board since 2000; in charge of the Eastern Europe-Central Asia Group area and Germany, Sales and Marketing and worldwide coordination of secondary cementitious materials.
Born in Ravensburg (Germany), aged 50 years. Studies in business administration at the German universities Regensburg and Mannheim and in Swansea (UK). Since 2004, member of the Manag ing Board; in charge of Finance, Group Accounting, Controlling, Taxes, Insurance & Risk Management, IT, Shared Service Center and Logistics.
Born in Alsfeld (Germany), aged 53 years. Studies in mechanical engineering/process tech nology at Clausthal (Germany). Since 1992 at HeidelbergCement. Member of the Managing Board since 2007; in charge of the Asia-Pacific Group area and worldwide coordination of Heidelberg Technology Center.
4
In Germany, the HeidelbergCement share is listed for trading on the Prime Standard stock market segment of the Frankfurt Stock Exchange and on the Regulated Market of the Stuttgart, Dusseldorf, and Munich stock exchanges. On 21 June 2010, the HeidelbergCement share was promoted to the German benchmark index, DAX. HeidelbergCement was the first company in the construction and building materials industry to be recognised as one of the 30 largest listed companies in Germany.
Our share ranks among the most important building materials shares in Europe: Besides the DAX, it is also included in other indices, such as the DAXsector All Construction Index, the MSCI World Construction Materials Index, and the Dow Jones Sector Titans Construction & Materials Index, which comprises the 30 largest construction shares and second-tier stocks in the world.
Driven by the expectation of a rapid global economic recovery, particularly in view of the economic and infrastructure projects in the US, the HeidelbergCement share price reached its highest level in 2010 on 11 January with EUR 51.36.
A slower than expected economic recovery in the US and a long, extremely snowy winter in North America and Europe led to share price reductions and inconsistent share performance in the following months.
After disappointing US economic data in the summer, the price of our share reached its lowest point on 25 August with EUR 31.40. In the ensuing months, the economic indicators improved, particularly in the US, and the price of our share recovered significantly. In November, the publication of our results for the third quarter, which were received positively by the capital markets, was largely responsible for a more substantial rise in the share price and a continuation of the positive trend. The HeidelbergCement share closed at EUR 46.90 at the end of 2010.
Overall, the price of our share could not make up the ground lost during the first half of the year and fell by 2.5 %, while the DAX rose by 16.1 %, supported by the automotive industry's strong export figures. The HeidelbergCement share developed more positively in comparison with the worldwide sector index, the MSCI World Construction Materials Index, which weakened by 4.5 %. At the end of 2010, HeidelbergCement's market capitalisation amounted to EUR 8.8 billion, slightly below the previous year's value (EUR 9.0 billion).
| To our shareholders | |
|---|---|
| Letter to the shareholders | Managing Board |
| Report of the Supervisory Board | HeidelbergCement in the capital market |
| Development of the HeidelbergCement share (ISIN DE0006047004, WKN 604700) 1) | |
|---|---|
| EUR | 2010 |
| Year-end share price 2009 | 48.10 |
| Highest share price | 51.36 |
| Lowest share price | 31.40 |
| Year-end share prices 2010 | 46.90 |
| Shareholders' equity per share on 31 Dec. 2010 | 68.72 |
| Market value on 31 Dec. 2010 (EUR '000s) | 8,793,750 |
| Change compared with 31 Dec. 2009 | |
| HeidelbergCement share | -2.5 % |
| DAX | +16.1 % |
| MSCI World Construction Materials Index | -4.5 % |
1) Share prices adjusted for corporate actions
1) Share prices adjusted for corporate actions
4
1
Earnings per share in accordance with IAS 33 for the 2010 financial year were EUR 1.83 (previous year: 0.30). For continuing operations, earnings per share amount to EUR 1.98 (previous year: 0.36).
The calculation of the earnings per share in accordance with IAS 33 is shown in the following table. To determine the average number of shares, additions were weighted in proportion to time. Further comments are provided in the Notes under item 13.
| Earnings per share according to International Financial Reporting Standards (IAS 33) | |||
|---|---|---|---|
| EURm | 2009 | 2010 | |
| Group share of profit | 42.6 | 342.7 | |
| Number of shares in '000s (weighted average) | 142,170 | 187,500 | |
| Earnings per share in EUR | 0.30 | 1.83 | |
| Net income from continuing operations – attributable to the parent entity | 50.6 | 371.1 | |
| Earnings per share in EUR – continuing operations | 0.36 | 1.98 | |
| Net loss from discontinued operations – attributable to the parent entity | -8.0 | -28.4 | |
| Loss per share in EUR – discontinued operations | -0.06 | -0.15 |
In view of the development of results, the Managing Board and Supervisory Board will propose to the Annual General Meeting on 5 May 2011 the distribution of a dividend of EUR 0.25 per HeidelbergCement share.
A shareholder study conducted in December 2010 showed a significant change in HeidelbergCement's shareholder structure since the capital increase in autumn 2009. We were able to increase the proportion of institutional investors from Germany and continental Europe considerably; in contrast, the proportion of British investors, particularly hedge fund investors, decreased.
At the start of December 2010, investors from Germany formed the largest investor group at 32 %, followed by investors from North America at 24 %, the United Kingdom and Ireland at 18 % and continental Europe excluding Germany at 17 %.
As at 31 December 2010, the free float amounted to 74.89 %. According to information available to the company, Mr Ludwig Merckle now holds 25.11 % of the shares.
On average, around 1.1 million HeidelbergCement shares are traded per day in Xetra trading on the Frankfurt Stock Exchange. In the "Ranking Equity Indices" published by Deutsche Börse, our share was in place 26 at the end of 2010 for the free float market capitalisation criterion and in place 22 for order book turnover.
| To our shareholders | |
|---|---|
| Letter to the shareholders | Managing Board |
| Report of the Supervisory Board | HeidelbergCement in the capital market |
| Shareholder structure | |
|---|---|
| 31 Dec. 2010 | |
| Ludwig Merckle, Ulm / Germany (4 November 2010) | 25.11 % |
| Free float | 74.89 % |
| Comprising: | |
| BlackRock, Inc., New York / US 1) (6 September 2010) | 5.48 % |
| FMR LLC, Boston / US 1) (24 August 2010) | 4.86 % |
| Arnhold and S. Bleichroeder Holdings, Inc., New York / US (via First Eagle Investment Management, LLC, New York / US) 1) (20 May 2010) |
3.12 % |
1) Attribution in accordance with § 22 section 1 sentence 1 no. 6 of the German Securities Trading Law (Wertpapierhandelsgesetz) In brackets: date on which percentage exceeded or fell below a reporting threshold
| HeidelbergCement AG share capital | ||
|---|---|---|
| Share capital EUR '000s |
Number of shares |
|
| 1 January 2010 | 562,500 | 187,500,000 |
| 31 December 2010 | 562,500 | 187,500,000 |
In the 2010 financial year, HeidelbergCement issued Eurobonds totalling EUR 2.05 billion to institutional investors in Germany and abroad. As early as January, we were able to place two Eurobonds with a total issue volume of EUR 1.4 billion: one bond of EUR 650 million with a term of five years and a second of EUR 750 million with a term of ten years. The proceeds from the issue were exclusively used for the partial repayment of the syndicated loan from June 2009.
For long-term borrowing in the capital market, HeidelbergCement has issued a EUR 10 billion European Medium Term Note (EMTN) programme. Under this programme, we issued a further Eurobond on 1 July with an issue volume of EUR 650 million with a term ending on 15 December 2015. The proceeds from the issue of the bond were used to further improve our maturity profile. 4
The bonds are unsecured and rank pari passu with all other capital market debt. Further information on the bonds issued by HeidelbergCement can be found in the Group financial management section on page. 71 ff.
HeidelbergCement's credit quality is assessed by the leading international rating agencies Standard & Poor's, Moody's Investors Service, and Fitch Ratings. The successful refinancing measures in the 2010 financial year resulted in our credit rating being further upgraded by the rating agencies. The ratings are "BB-/B/Outlook Positive" from Standard & Poor's, "Ba2/Not Prime/Outlook Positive" from Moody's Investors Service, and "BB/B/Outlook Stable" from Fitch Ratings.
In 2010, we strengthened our investor relations team by appointing an additional IR manager and were thus able to further intensify our investor relations work and align the activities with primarily regional focuses.
At the forefront of the investor relations work was the stabilisation of the shareholder structure following the capital increase together with a placement of existing shares in 2009. By directly addressing institutional investors through visits and conferences, particularly in Germany and continental Europe but also in the capital market centers in the US and London, we succeeded in diversifying the shareholder base further and attracting well-known institutional investors as shareholders.
In May 2010, a total of around 50 analysts and investors responded to an invitation to come to our Group headquarters in Heidelberg for an analysts' and investors' day. We used this event to present the Group and its strategy in detail and to further deepen the relationships with our analysts and investors. The presentations shown during this event and at visits and conferences are available on the Internet. Through discussions with analysts, we supported coverage by additional banks. The number of analysts regularly reporting on HeidelbergCement has risen to 27 since the publication of the last annual report.
As in the previous year, we conducted a survey among selected international investors and analysts at the end of 2010 to determine their opinions and expectations of our Group, and also asked them to assess the performance of the investor relations team. Once again, the results are being incorporated into the ongoing development of our investor relations work this year, with the aim of successfully continuing open dialogue and transparent communication with the capital market and further strengthening trust in our Group and our share.
| To our shareholders | |
|---|---|
| Letter to the shareholders | Managing Board |
| Report of the Supervisory Board | HeidelbergCement in the capital market |
| HeidelbergCement AG | |
|---|---|
| Group Communication & Investor Relations | |
| Berliner Strasse 6 | |
| 69120 Heidelberg | |
| Germany | |
| Phone: | |
| Institutional investors US and UK (Mr Ozan Kacar): | +49 6221 481-925 |
| Institutional investors EU and rest of the world (Mr Steffen Schebesta): | +49 6221 481-9568 |
| Private investors (Mr Günter Wesch): | +49 6221 481-256 |
| Department Head (Mr Andreas Schaller): | +49 6221 481-249 |
| Fax: | +49 6221 481 217 |
| E-mail: | [email protected] |
1
3
4
Combined management report of Heidelberg-Cement Group and HeidelbergCement AG
HeidelbergCement operates on five continents as a fully integrated building materials company. Our core activities include the production and distribution of cement and aggregates, the two essential raw materials for the manufacture of concrete. We supplement our product range with downstream activities, such as ready-mixed concrete, concrete products and concrete elements, as well as other related products and services.
Organisational structure of the Group areas and business lines
| Western and Northern Europe |
Eastern Europe Central Asia |
North America |
Asia-Pacific | Africa Mediterranean Basin |
Group Services |
|---|---|---|---|---|---|
| Belgium Denmark Estonia Germany1) Latvia Lithuania Netherlands Norway Sweden Switzerland United Kingdom |
Bosnia Herzegovina Croatia Czech Republic Georgia Hungary Kazakhstan Poland Romania Russia Slovak Republic Ukraine |
US Canada |
Bangladesh Brunei China India Indonesia Malaysia Singapore Australia |
Benin DR Congo Gabon Ghana Liberia Sierra Leone Tanzania Togo Israel Spain Turkey |
|
| - Cement - Aggregates - Building products - Concrete- service-other |
- Cement - Aggregates - Concrete- service-other |
- Cement - Aggregates - Building products - Concrete- service-other |
- Cement - Aggregates - Building products - Concrete- service-other |
- Cement - Aggregates - Concrete- service-other |
1) Germany, as a mature market, is reported on as part of the Western and Northern Europe Group area. For management reasons, however, the country belongs to the area of responsibility of the same Managing Board member who is in charge of Eastern Europe-Central Asia.
HeidelbergCement reorganised its structure at the beginning of 2010 by dividing the Group into five geographical Group areas: Western and Northern Europe, Eastern Europe-Central Asia, North America, Asia-Pacific and Africa-Mediterranean Basin (see organisation chart for breakdown of countries). Our global trading activities are pooled together in the sixth Group area, which is Group Services. Within the geographical Group areas, we have divided our activities into four business lines: cement, aggregates, building products, and concrete-service-other. In Asia-Pacific, however, building products are only represented to a below-average extent, and in the Eastern Europe-Central Asia and Africa-Mediterranean Basin Group areas, they are not represented at all.
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
Cement and aggregates form the basis of our dual resource and growth strategy. In cement, the focus is on growth markets, whereas we concentrate on vertical integration and securing resource access for aggregates in mature markets. The focus is on pockets of growth characterised by higher rates of expansion than their surrounding regions. The expansion can be achieved organically, through partnerships or acquisitions.
An excellent management team and dedicated, qualified employees are the source of our business success. As a company with a focus on performance and results, we greatly value the competence of our employees and management. The focus is on comprehensive efficiency and clear customer-orientation. HeidelbergCement pursues an integrated management approach, the success of which is based on a balance between local operational responsibility, Group-wide standards and global leadership. Our local operations are key for the success of our business. Local management bears full responsibility for production, market and management development, with the aim of market and cost leadership. They are supported by nationwide shared service centers, which handle administration for all business lines on the basis of a standardised IT infrastructure. In order to ensure transparency, efficiency and rapid implementation of measures throughout the Group, HeidelbergCement has standardised all important management processes. Group-wide, uniform KPIs facilitate direct comparability and provide a foundation for continual benchmarking.
In a market with largely standardised products, cost leadership is a key factor for success. In addition to our consistent focus on cost cutting programmes, emphasis is placed on continual improvement of operational performance at individual production sites through intensive benchmarking. When it comes to investment, we also aim to keep costs as low as possible through a combination of HeidelbergCement engineering and low-cost suppliers worldwide for machines, equipment and services.
We build our long-term success on sustainable business practices. This includes securing access to raw materials reserves with adequate productive lifetimes and introducing innovative production processes. Together with development of new products, this leads to emission reductions and conservation-oriented handling of our raw materials base. HeidelbergCement is also active in the promotion of biodiversity at its extraction sites, through targeted implementation of biodiversity management plans.
2
4
2
For information on financial management-related targets and policies, please refer to the section Group financial management on page 70 ff.
The internal management control system at HeidelbergCement is based primarily on annual operational planning, ongoing management accounting and control, quarterly management meetings, central coordination of investment processes, as well as regular Managing Board meetings and reporting to the Supervisory Board.
Annual planning takes place as part of so-called top-down/bottom-up planning, under which the Managing Board defines a top-down budget from which it derives specific targets for individual operating units. These specific targets are used as the basis of detailed planning for the individual units and setting of targets with local managers. The individual operational plans created by the operating units are then consolidated centrally to a final Group-wide plan.
Ongoing management accounting and control of the company is carried out using a comprehensive system of standardised reports on the Group's net assets, financial position and results of operations. The indicators used for this purpose are determined and presented uniformly throughout the Group. Reports on financial status and selected sales volumes and production overviews are prepared weekly, whereas reporting on results of operations and developments in working capital occurs monthly. Detailed reports on assets position are submitted at the end of each quarter. At the quarterly management meetings, the Management Board and country managers discuss business developments, including target achievement, along with the outlook for the relevant year and any measures that need to be taken.
Central functions in the areas of strategy, finance and technology follow a formalised process to review and assess all major investments and acquisitions. This ensures comparability between different projects and consistent high quality in investment decision making. Investments in expansion are assessed using a discounted cash flow (DCF) model. The standard is that investment projects must generate at least enough income to cover their weighted average cost of capital (WACC). This long-term approach to investment returns is supported by simulated calculations that show the impact of an investment on the profit and loss accounts, cash flow statement, balance sheet and taxes over a period of five years.
Since markets can be subject to significantly greater volatility over the course of the planning period than can be anticipated for the calculation of the financial models, the financial analysis process is complemented by a strategic analysis of the planned investments. Here, the strategic value of an investment is determined taking into account the expected market position, growth potential, synergies with other Group units and the risk structure. The overall result of these analyses is the criterion by which the Managing Board makes its investment decisions.
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
The most important short-term indicator of the company's earnings strength is operating income, which is determined in detail and analysed for all operating units. The decisive indicator at Group level is Group share of profit. The financial and assets positions of the operating units are monitored short-term primarily via the amount of working capital and investment. Fixed targets are agreed with all operating units for each indicator.
The company uses return on capital employed (ROCE) at operational level and return on invested capital (ROIC) on strategic level for medium-term management control and capital allocation. ROCE is calculated as the ratio of invested capital to EBIT (earnings before interest and taxes). Taxes and goodwill are not taken into account for calculation. These are strategic-level indicators, and are therefore taken into account for determination of ROIC. Strategic management and capital allocation are based on ROIC, which is defined as the ratio of earnings before interest but after tax to the sum of shareholders' equity and interest-bearing liabilities.
The target is generation of ROCE between 19 % and 20 % and ROIC at least equivalent to weighted average cost of capital (WACC). HeidelbergCement's weighted WACC totalled 7.8 % at the end of the reporting year, and ranged between 6.5 % and 18.9 % in the individual countries. In 2010, the low point of the construction cycle, targets were not reached in all Group areas.
The return to an investment grade rating is HeidelbergCement's stated goal, in order to ensure favourable conditions for financing of the Group's further development. To achieve this goal, we are focussing on financial indicators which the rating agencies consider as necessary for a stable investment grade rating. An important indicator is the dynamic debt ratio, i.e. the ratio of net debt to operating income before depreciation, which we intend to lower to less than 2.8x. By the end of 2010, we had succeeded in lowering this ratio to 3.6x, as compared to 4.0x at the end of 2009.
Further information on non-financial performance figures is available in the chapters Sustainability, Employees and Social Responsibility, and Environmental precaution.
2
4
2010 was marked by a return to economic growth in most industrialised countries, further acceleration of growth in emerging countries, and ultimately also by the rise in inflation and, in particular, in raw material prices as of the middle of the year.
In the battle against the economic crisis, central banks in the US and Europe systematically pursued their low interest rate policy and supported the banking sector by purchasing debt instruments with a high probability of default. Driven by further increases in the demand for investment and consumer goods – particularly in the growth regions of Asia – considerable progress could be made in industrial production, especially in the export countries, and part of the loss incurred in the crisis year was made up. Consumer spending also increased worldwide as a result of the low interest rate and the improvement of economic prospects. According to IMF, global economy grew by 5.0 % in 2010, following a decline of 0.6 % in the previous year.
| in % | 2009 | 2010 2) | in % | 2009 | 2010 2) |
|---|---|---|---|---|---|
| Western and Northern Europe | Asia-Pacific | ||||
| Belgium | -2.8 | 2 | Australia | 1.3 | 2.7 |
| Germany | -4.7 | 3.6 | Bangladesh | 5.6 | 5.8 |
| Netherlands | -3.9 | 1.7 | China | 9.1 | 10.3 |
| Norway | -1.3 | 0.4 | India | 5.8 | 9.8 |
| Sweden | -5.3 | 5.2 | Indonesia | 4.6 | 6.1 |
| UK | -5 | 1.4 | Malaysia | -1.7 | 7.5 |
| Eastern Europe-Central Asia | Africa-Mediterranean Basin | ||||
| Czech Republic | -4 | 2.4 | DR Congo | 2.8 | 5.4 |
| Hungary | -6.5 | 0.8 | Ghana | 4.1 | 5 |
| Kazakhstan | 1.2 | 7 | Tanzania | 6 | 6.5 |
| Poland | 1.7 | 3.8 | Togo | 3.1 | 3.3 |
| Romania | -7.1 | -1.9 | Israel | 0.8 | 3.8 |
| Russia | -7.9 | 4 | Spain | -3.7 | -0.1 |
| Ukraine | -15.1 | 4.4 | Turkey | -4.7 | 8 |
| North America | |||||
| US | -2.6 | 2.8 | |||
| Canada | -2.5 | 2.9 |
1) Source: Deutsche Bank Research and Deutsche Bank Global Markets
2) 2010 values are based on estimations and forecasts.
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
The increased demand for raw materials and energy in the emerging countries and the concerns about inflationary trends led to an increase in prices for raw materials, precious metals, and energy as of mid-2010. This trend was reinforced at the end of 2010 and early 2011 as a result of the floods in Australia and the unrest in North Africa. As a reaction to the significantly improved economic growth, some countries already responded with interest rate rises in 2010.
General economic recovery varied in the different economic sectors. While the automotive, chemical, and steel industry benefited from strong demand in Asia, construction industry development in industrialised countries was only below average. In Germany, for example, construction investments increased by 2.8 % against 2009, compared with a 3.6 % rise in the gross domestic product. In the US, the national cement association PCA anticipates a 2.8 % rise in economic output for 2010, but a decline of 7.1 % in construction investments. In Asia, on the other hand, construction activity continued to increase. In Indonesia, our largest Asian market, for example, demand for cement grew by 6.2 % at a similar rate to the gross domestic product, which increased by 6.1 %.
Demand for building materials depends on the development of construction investments. Weak construction activity in most industrialised countries in 2010 resulted, amongst other things, from late-cycle investment in commercial construction. With the economic recovery, office, storage, and sales spaces vacant as a result of the crisis have to be filled before companies are ready to build and expand. In the US, the PCA anticipates a decline of more than 30 % in commercial construction in 2010. In Germany, commercial construction fell by 0.2 % despite the significant recovery of the economy.
Furthermore, some industrialised countries, particularly the US and Spain, suffer from a high surplus of residential property, which affects negatively house and apartment prices. High unemployment also affects the demand for houses and apartments. In 2010, however, residential construction investments in many industrialised countries reached their lowest point and are now again showing initial signs of recovery. In Germany, residential construction permits increased by 8 % in the first eleven months of 2010, compared with 2009. After a sharp decline of 25 % in residential construction in the US in 2009, the PCA anticipates a slight increase of 2.9 % for 2010.
In the area of public construction and infrastructure, demand for building materials improved in some countries in 2010 – for example, the US, Germany and China – as a result of statefunded infrastructural measures. Part of the decline in demand could be counterbalanced by these additional projects.
Like the construction industry, building materials markets also showed fairly inconsistent trends. In 2010, global cement consumption rose by around 8 %. However, excluding China – responsible for more than half the world's cement consumption – it only rose by around 3 %. The strong increases in some emerging countries were offset by far lower growth rates in the industrialised countries. In China, for example, cement consumption probably rose considerably by more than 10 %; Indonesia and India recorded higher demand of around 6 %. In contrast, in the US, cement consumption remained the same as the year before. While cement demand in the United Kingdom was up around 4 % following the significant decline the previous year, in Germany, it fell once again by 3 %.
2
The business figures for 2010 have shown continuous improvement compared with the previous year. They reflect the sustained positive development in HeidelbergCement's growing markets, such as Africa and Asia, and the recovery now underway in the industrial countries of North America and Europe after the crisis passed through its lowest point in 2010. Group turnover increased overall by 5.8 % to EUR 11,762 million (previous year: 11,117). Positive exchange rate effects of EUR 783 million contributed to this increase in all Group areas. Around fifty percent stem from the Asia-Pacific Group area, where all currencies – particularly the Australian, Indonesian, and Indian currencies – were stronger than the euro. The same also applies for the US and Canadian dollar, the Swedish krona, Norwegian krone, and the British pound, which made a significant contribution to positive exchange rate effects in North America as well as Western and Northern Europe. Excluding exchange rate and consolidation effects, turnover remained at approximately the same level as the previous year.
In 2010, cement and clinker sales volumes fell slightly by 1.2 % in comparison with the previous year to 78.4 million tonnes (previous year: 79.3); excluding consolidation effects, the decline amounted to 0.4 %. While cement volumes increased in the Asia-Pacific Group area and particularly in Africa, we had to accept losses in Europe and Central Asia. Cement deliveries in North America were just below the previous year's level.
At 239.7 million tonnes (previous year: 239.5), we sold slightly more aggregates Group-wide in 2010 than we did the year before. The increase in North America was particularly pleasing. While demand in the Group areas Asia-Pacific and Western and Northern Europe was almost as high in the reporting year as it was in 2009, it declined in the Eastern Europe-Central Asia Group area. High volume losses in Spain also lowered the total aggregates sales volumes of the Africa-Mediterranean Basin Group area.
Asphalt sales volumes fell by 9.4 % to 9.1 million tonnes (previous year: 10.0). Without taking into account the deconsolidation effects from the sale of the asphalt activities in Australia in 2009, the decline amounted to 6.2 %. With the exception of North America, shipments declined in the other Group areas where we conduct asphalt activities.
At 35 million cubic metres, our ready-mixed concrete sales volumes were the same as the previous year. Excluding consolidation effects, there was a slight improvement of 0.7 %. The highest growth in sales volumes was achieved in the Africa-Mediterranean Basin Group area, followed by Asia-Pacific. Volumes declined in Western and Northern Europe, Eastern Europe-Central Asia and in North America.
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
The earnings position of HeidelbergCement improved in 2010 compared with the previous year. On the market side, the continuing positive development in our growth markets in Asia and Africa as well as the recovery in North America and parts of Western and Northern Europe contributed to this improvement and were able to offset a further decline in the earnings position of Eastern Europe and the Mediterranean Basin. The strengthening of major currencies against the euro was also positively reflected in the earnings figures, as was the successful implementation of the Group-wide initiatives concerning cost reduction and efficiency improvements.
Operating income before depreciation (OIBD) improved by 6.5 % to EUR 2,239 million (previous year: 2,102). The OIBD margin rose slightly to 19.0 % (previous year: 18.9 %). The cost-saving programme "FitnessPlus 2010" was successfully completed and achieved cost savings of more than EUR 300 million. Combined with a positive exchange rate effect of EUR 162 million, the cost-saving measures were able to overcompensate the effects of increasing material and energy costs as well as the negative consequences of the prolonged winter in the first quarter of 2010 and the early, extremely harsh onset of winter in the fourth quarter of 2010.
Material costs increased disproportionately by 12.1 % to EUR 4,731 million (previous year: 4,220) in comparison with turnover. This is essentially due to the increase of EUR 122 million (+10.9 %) in energy costs as well as the EUR 181 million increase (+37.9 %) in expenses for goods purchased for resale, resulting from the expansion of trading activities.
Personnel costs only rose slightly by EUR 45 million to EUR 2,086 million (previous year: 2,041). The increase of 2.2 % in comparison with the previous year is essentially due to exchange rate effects. Adjusted, personnel costs showed a slight decline. The number of employees had marginally risen by the end of 2010 to 53,437 (previous year: 53,302); this is essentially due to two contrary trends, one being the location optimisations and capacity adjustments linked with job cuts, particularly in North America and the United Kingdom, and the other being the increase in the number of employees in Eastern Europe and Africa because of the expansion of cement activities in Russia and the Democratic Republic of Congo. The 10.3 % rise in other operating income to EUR 454 million (previous year: 412) is primarily attributable to the proceeds included in the book profits of fixed assets resulting from the sale of emission rights that were not required, for an amount of EUR 147 million (previous year: 99).
Operating income rose by 8.6 % to EUR 1,430 million (previous year: 1,317). Excluding exchange rate and consolidation effects, the increase amounted to 0.6 %.
The additional ordinary result improved by EUR 393 million to EUR -102 million (previous year: -495). This was mainly due to the decline in additional ordinary expenses of EUR 505 million to EUR 134 million (previous year: 639) resulting from lower impairments in goodwill amounting to EUR 24 million (previous year: 421), which related mainly to Spain. Furthermore, the additional ordinary expenses include restructuring expenses of EUR 47 million, which primarily concerned Germany and North America, impairments of tangible fixed assets totalling EUR 27 million, and losses from the sale of tangible fixed assets and provisions amounting to EUR 9 million. The additional ordinary income fell by EUR 112 million to 32 (previous year: 144), 2
4
which, in comparison with the previous year, were particularly affected by declining disinvestments. In the previous year, book profits were included from the sale of 14.1 % of shares in the Indonesian subsidiary PT Indocement Tunggal Prakarsa (EUR 73.8 million), from the physical division of the Belgian company Gralex S.A. (EUR 21.2 million), as well as the proceeds from the disposal of shares in the Australian joint venture Pioneer Road Services (EUR 3.1 million).
The decline of EUR 32 million in result from participations to EUR 6 million (previous year: 38) is, to a large extent, the result of impairments of participations in North America and Poland, amounting to EUR 32 million.
The improvement of the financial result by EUR 140 million to EUR -735 million (previous year: -875) is primarily attributable to one-off effects in the other financial result amounting to EUR 91 million as well as to the reduction of net interest result by EUR 52 million to EUR -584 million (previous year: -636) resulting from the repayment of the syndicated loan from June 2009. The one-off effects concerned the reduction from the release of capitalised financing costs by EUR 56 million to EUR 75 million (previous year: 131) and the EUR 15 million improvement in the results from the evaluation of the financial instruments shown as "held for trading."
The profit before tax from continuing operations amounts to EUR 599 million (previous year: -14). Taxes on income increased by EUR 250 million to EUR 60 million (previous year: income of EUR 190 million). The change is primarily attributable to positive one-off effects in the previous year from the release of deferred taxes and the capitalisation of losses carried forward. Net income from continuing operations amounts to EUR 539 million (previous year: 176). Net income from discontinued operations amounting to EUR -28 million (previous year: -8) relates to expenses from the Hanson Group takeover in the 2007 financial year and from maxit Group, which was sold in 2008.
| EURm | 2009 | 2010 | Change |
|---|---|---|---|
| Turnover | 11,117 | 11,762 | 6 % |
| Operating income before depreciation (OIBD) | 2,102 | 2,239 | 7 % |
| Amortisation and depreciation of intangible assets and tangible fixed assets |
-785 | -809 | 3 % |
| Operating income | 1,317 | 1,430 | 9 % |
| Additional ordinary result | -495 | -102 | -79 % |
| Result from participations | 38 | 6 | -85 % |
| Earnings before interest and taxes (EBIT) | 860 | 1,334 | 55 % |
| Financial result | -875 | -735 | -16 % |
| Profit / loss before tax from continuing operations | -14 | 599 | |
| Taxes on income | 190 | -60 | |
| Net income from continuing operations | 176 | 539 | 207 % |
| Net loss from discontinued operations | -8 | -28 | 257 % |
| Profit for the financial year | 168 | 511 | 205 % |
| Group share of profit | 43 | 343 | 704 % |
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
In total, the profit for the financial year amounts to EUR 511 million (previous year: 168). The increase in profit attributable to minority interests by EUR 43 million to EUR 168 million (pre vious year: 125) is largely a consequence of the improvement in results of Indocement. The Group share of profits therefore amounts to EUR 343 million (previous year: 43).
Earnings per share – Group share in profit – in accordance with IAS 33 increased to EUR 1.83 (previous year: 0.30). For continuing operations, earnings per share amounts to EUR 1.98 (previous year: 0.36).
In view of the development of results, the Managing Board and Supervisory Board will propose to the Annual General Meeting on 5 May 2011 the distribution of a dividend of EUR 0.25 (previous year: 0.12) per share.
HeidelbergCement operates in eleven countries in the Western and Northern Europe Group area. In these mature markets, we manufacture cement, aggregates, asphalt, ready-mixed concrete and various building products as a fully integrated building materials company. We are the market leader in most of the countries in which we produce cement. We also operate a comprehensive network of aggregate quarries and ready-mixed concrete plants. The United Kingdom is our largest market region in Western and Northern Europe and the second largest in the Group.
Some of the countries in the Western and Northern Europe Group area experienced strong economic recovery following the severe winter at the start of the year. In Germany and Sweden in particular, the gross domestic product grew again strongly by 3.6 % and 5.2 % respectively in 2010 compared with a decline of 4.7 % and 5.3 % the year before. However, in the United Kingdom and other countries in the Group area, economic activity increased only moderately in 2010.
After sharp declines for the most part in 2009, construction activity in the countries of the Group area was inconsistent in 2010. Following losses in the first quarter relating to adverse weather, activity in the construction sector and sales volumes of building materials increasingly improved in the subsequent months. Due to the early onset of winter at the end of the year, however, the demand for building materials was below that of the previous year in a few markets, despite noticeable economic recovery.
Construction investments in Germany increased by 2.8 % in 2010 compared with the previous year. The increase is attributable to growth in both residential and public construction, as non-residential construction declined slightly. The United Kingdom also recorded an increase in construction activity of more than 6 % in 2010, driven mainly by an upturn in residential construction. New housing starts increased by around 30 % from an all-time low in 2009. Infrastructure investments also increased due to the government's fiscal stimulus programme, while the commercial sector regressed slightly. In Sweden and Norway, construction activity also recovered slightly again during the financial year. By contrast, 2010 was another difficult year for the construction industry in the Netherlands and Belgium, with a decline of 8 % and 1 % respectively. In the Baltic countries and Denmark, construction activity also decreased.
2
2
While cement consumption in Germany remained 3 % below the previous year's level, cement consumption in the United Kingdom was up by approximately 4 % compared with the previous year. Cement and clinker sales volumes in the Group area decreased by 6.3 % to 19.7 million tonnes (previous year: 21.0). Our Northern European plants in Estonia and Sweden best affronted the crisis with a significant increase in their domestic cement sales. Thus, they were able to more than balance out the decline in clinker sales volumes and – in the case of Sweden – in cement exports as well. German plants, on the other hand, experienced a noticeable loss in domestic sales volumes compared with the previous year. The downward trend in Germany was exacerbated by a considerable decline in exports. Although total volumes were lower in the Benelux countries, domestic cement sales volumes were relatively stable, whereas cement exports and clinker sales volumes fell compared with the previous year. In the United Kingdom, our cement volumes were slightly ahead of the overall market gains, although sales of ground granulated blast furnace slag fell noticeably. Denmark endured the most significant loss in sales volumes on a percentage basis compared with the previous year. Turnover of the cement business line increased slightly by 1.5 % to EUR 1,618 million (previous year: 1,594).
Capital investment was governed by strict expenditure control. We limited ourselves principally to improving the use of alternative fuels. In Belgium, we commissioned a new high-performance facility for processing alternative fuels. In our Norwegian plants, we also invested in installations for burning alternative fuels. Due to lower utilisation and an anticipated increase in the need for repairs and investment, we decided to close our cement plant in Wetzlar/Germany at the end of 2010.
HeidelbergCement operates an extensive network of production sites in the Western and Northern Europe Group area. Overall – despite a slight decline of 1.1 % – aggregates sales volumes were roughly the same as 2009 at 68.8 million tonnes (previous year: 69.6). In the United Kingdom, our largest market region, sales volumes rose slightly in comparison with the previous year, while in Germany and Sweden they remained stable. There were double digit increases in sales volumes in the Baltic countries, but volumes were considerably lower than the previous year in the Benelux countries and Norway. Turnover of the aggregates business line increased by 5.0 % in total to EUR 770 million (previous year: 734).
The aggregates business line was also governed by strict expenditure control regarding investments. We limited our investments principally to an expansion of activities at our locations in Riksten/Sweden and Jelsa, the biggest quarry in Norway, the acquisition of land for a sand pit in Uivermeertjes in the Netherlands and the increase in our participation in Belgian aggregates company Carrières d'Antoing. In Germany, we sold four production sites. Furthermore, a strategic review of our aggregates business in Scotland led to the sale of two quarries.
The building products business line essentially comprises Hanson building products in the United Kingdom; in addition, there are also the lime and sand-lime brick operating lines, which predominantly focus on Germany. Our building products are mainly used in residential construction. Hanson is one of the largest manufacturers of clay bricks and lightweight blocks in the United Kingdom.
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
While sales volumes of bricks, masonry blocks, and concrete paving blocks remained below the previous year's level, there was volume growth in precast concrete products and lightweight blocks. Turnover of the building products business line fell by 17.1 % to EUR 433 million (previous year: 523). However, the introduction of capacity adjustments and cost reduction measures at an early stage resulted in the building products business line achieving considerable improvement in results over the previous year.
This business line primarily comprises ready-mixed concrete and asphalt activities. We have an extensive network of ready-mixed concrete facilities in many parts of the Group area, but our asphalt activities are mainly limited to the United Kingdom. In 2010, ready-mixed concrete deliveries amounted to 11.7 million cubic metres (previous year: 12.2), a decrease of 3.4 %. While our production sites in Sweden, the Baltic countries, United Kingdom, and Norway increased sales, those in Germany and the Benelux countries declined considerably. Asphalt sales volumes were also below the previous year's level at 3.4 million tonnes (previous year: 3.6); a decline of 4.6 %. Total turnover of the concrete-service-other business line increased slightly in 2010 by 0.4 % to EUR 1,560 million (previous year: 1,554).
Investments were predominantly made in ready-mixed concrete activities with new plants in Norway, Belgium and the Netherlands. At the same time we temporarily closed some plants in the United Kingdom as a result of lower local demand.
Turnover of the Western and Northern Europe Group area fell slightly by 1.0 % to EUR 3,811 million (previous year: 3,848). In operational terms, i.e. excluding consolidation and exchange rate effects, the decline amounted to 3.9 %. Operating income before depreciation (OIBD) of EUR 683 million (previous year: 687) almost reached the level of 2009. Operating income declined by 6.4 % to EUR 407 million (previous year: 435).
| Key data Western and Northern Europe | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Operating income | 435 | 407 |
| Investment in tangible fixed assets | 248 | 178 |
| Cement and clinker sales volumes (Mt) | 21.0 | 19.7 |
| Aggregates sales volumes (Mt) | 69.6 | 68.8 |
| Asphalt sales volumes (Mt) | 3.6 | 3.4 |
| Ready-mixed concrete sales volumes (Mm3 ) |
12.2 | 11.7 |
| Employees as at 31 December | 14,640 | 14,302 |
2
4
HeidelbergCement operates in eleven countries in the Eastern Europe-Central Asia Group area. In most of these growth markets, the Group is not only the market leader in the cement business, but is also continually improving its position as a result of capacity expansions. The production of aggregates and ready-mixed concrete is also becoming increasingly important. In terms of turnover, Poland is our largest market region in Eastern Europe-Central Asia. In this country, we are not only represented in cement business but also in aggregates and ready-mixed concrete activities.
After the somewhat dramatic growth slump in 2009, most national economies in the Group area are hesitantly recovering. Eastern Europe-Central Asia was the last Group area to be hit by the economic crisis and is now the last area to recover from it. Kazakhstan and Georgia have best affronted the economic crisis with growth rates of 7 % and 5.5 %. In Poland, economic growth of 3.8 % is anticipated for 2010, and 2.4 % in the Czech Republic. Romania is bringing up the rear with -1.9 %. Construction activities are also significantly affected. The Hungarian and Czech Republic markets, in particular, are still weak. In contrast, Poland recorded steady growth. In the second half of 2010, the construction industry in Poland picked up speed, mainly because of infrastructural projects in road construction.
Aside from Croatia and the Slovak Republic, HeidelbergCement produces clinker and cement in all other countries of the Eastern Europe-Central Asia Group area. Total cement and clinker deliveries of the Group area fell by 9.8 % in 2010 to 14.2 million tonnes (previous year: 15.7). Consolidation effects mainly resulted from the conversion of activities in Hungary and Bosnia Herzegovina, from full consolidation to proportionate inclusion at the end of 2009, and the acquisition of the majority stake in a cement company in Russia at the end of 2010. Adjusted for these consolidation effects, the decrease was 5.5 % compared with the previous year.
While cement sales volumes dramatically declined in Hungary, in particular, and also remained well below those of the previous year in the Czech Republic and Bosnia Herzegovina, there was a noticeable increase in the Ukraine, Georgia, and Kazakhstan. In Poland, cement sales for the year were indeed lower than 2009, but the second half of the year showed – aside from low sales volumes in December resulting from severe weather conditions – an improvement compared with the previous year. This positive trend is mainly attributable to numerous infrastructure projects. In Russia, sales volumes were up on the previous year, but remained slightly below the previous year in Romania. The turnover of the cement business line fell by 13.6 % to EUR 865 million (previous year: 1,001).
In 2010, the majority of investments was made in Russia. We acquired the majority stake in CJSC "Construction Materials", which operates a modern cement plant with a capacity of 2 million tonnes in Sterlitamak in the Republic of Bashkortostan. The production site with 600 employees is situated in one of the most important investment districts in Russia.
Good progress was made with the construction of the new TulaCement plant in 2010, which has a cement capacity of around 2 million tonnes; the project is due for completion at the end of May 2011. We will use this plant for the future supply of cement to the Moscow area, Russia's largest cement market.
54
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
The capacity expansion in the Polish cement plant of Górazdze also went according to plan in 2010. The first phase of the project, which aims to expand the plant's clinker capacity by around 30 % to 12,000 tonnes of clinker per day, is expected to be complete by mid-2011. The second phase of the project involves the construction of a new cement mill and is to be implemented by 2012. This will increase total cement capacity of the plant by 1.2 million tonnes to 5.3 million tonnes.
Aside from the capacity expansions, we have invested in several market regions of the Eastern Europe-Central Asia Group area to improve environmental protection. For example, we have commissioned new filter systems at our cement plants in Kazakhstan, Georgia, and the Ukraine.
In the aggregates business line, HeidelbergCement mainly operates in the Czech Republic, Poland, Russia, Hungary and Romania. At 20.1 million tonnes (previous year: 21.3), aggregates deliveries in the Group area in 2010 were 5.7 % lower than in the previous year. However, the decline in aggregates sales volumes slowed consistently over the year.
Our Polish aggregates plants have recorded pleasing development in sales volumes since spring and managed to exceed the deliveries of the previous year. Our aggregates sales volumes considerably improved in Russia as a result of strong demand and the first-time consolidation of the Strelitsa quarry in Voronezh. Sales volumes in the Czech Republic, Hungary, and Romania, on the other hand, remained below the figures of the previous year. Turnover of the aggregates business line rose by 3.0 % to EUR 125 million (previous year: 121).
Investments in the aggregates area were essentially limited to the acquisition of land for guaranteeing reserves in the Czech Republic.
HeidelbergCement has a dense network of ready-mixed concrete plants. Our main market regions, however, are located in the Czech Republic and Poland. In 2010, ready-mixed concrete sales volumes in Eastern Europe-Central Asia fell by 4.5 % to 3.9 million cubic metres (previous year: 4.0) in comparison with 2009, as a result of the change in the consolidation of Hungary and Bosnia Herzegovina mentioned above. Excluding these effects, growth of 2.3 % was recorded.
While sales volumes of ready-mixed concrete remained below the previous year in the Czech Republic, Slovak Republic, and Hungary in 2010, Poland managed to achieve significant volume growth. Deliveries in Romania, Georgia and Kazakhstan also developed pleasingly. At EUR 241 million (previous year: 256), turnover in the concrete-service-other business line fell by 5.8 % in 2010.
Investments in 2010 were limited to the acquisition of a ready-mixed concrete plant in Romania as well as to the sale of our ready-mixed concrete activities in St. Petersburg/Russia. In addition, we responded to the continuing low demand in Hungary by closing down a few of our readymixed concrete plants.
Turnover in the Eastern Europe-Central Asia Group area decreased by a total of 11.2 % to EUR 1,138 million (previous year: 1,282). Adjusted for currency and consolidation effects, turnover decreased by 11.8 % on the year. Negative consolidation effects from the conversion of our activities in Hungary and Bosnia-Herzegovina from full consolidation to proportionate inclusion 2
at the end of 2009 were offset by positive exchange rate effects. At EUR 299 million (previous year: 361), operating income before depreciation (OIBD) was 17.3 % below the previous year. Excluding consolidation and exchange rate effects, the decline amounted to 16.4 %. Operating income fell by 23.1 % to EUR 203 million (previous year: 263).
| Key data Eastern Europe-Central Asia | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Operating income | 263 | 203 |
| Investment in tangible fixed assets | 270 | 202 |
| Cement and clinker sales volumes (Mt) | 15.7 | 14.2 |
| Aggregates sales volumes (Mt) | 21.3 | 20.1 |
| Ready-mixed concrete sales volumes (Mm3 ) |
4.0 | 3.9 |
| Employees as at 31 December | 9,481 | 9,959 |
The United States and Canada form the North America Group area. In its largest market region, HeidelbergCement is a leading manufacturer of aggregates, cement, ready-mixed concrete, asphalt and building products.
The US economy experienced slight growth of 2.8 % in 2010, as compared to a decline of 2.6 % the year before. However, the upturn and optimism that marked the start of the year began to weaken towards the end of 2010. The negative impacts of the recession, continued high unemployment and US State budget deficits were especially felt by the construction industry. Starting from a low level, residential construction increased only slightly, by 2.9 %. Over three million foreclosures and a high vacancy rate adversely affected prices and new construction activity. The effect upon the western US was particularly severe. Non-residential construction again exhibited a significant decline of 32 %. Even public construction – which was largely fuelled by the government's economic stimulus programme in the first half of the year – waned significantly, and did not surpass prior-year levels for the year as a whole. This was due to declining tax revenue, together with the fact that the Federal Highway Bill road construction programme was not renewed, which delayed planning and implementation of construction projects.
Canada's gross domestic product increased by 2.9 % in 2010. Similarly to the US, construction activity, which was mainly supported by residential construction and governmental economic stimulus programmes, dissipated somewhat in the second half of the year. However, our primary market regions in the Province of British Columbia and Edmonton/Alberta, saw residential construction increase by 40 %. Commercial construction showed only slight improvement.
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
While cement consumption in the US remained on par with the previous year, at around 71 million tonnes, consumption in Canada rose by around 10.3 % to 8.8 million tonnes. In 2011, the American Cement Association PCA anticipates increases in the low single-digit range for the US and in Canada.
At 10.0 million tonnes (previous year: 10.1), cement and clinker sales volumes at our plants in North America almost reached 2009 levels. While our production sites in Canada achieved healthy growth, sales volumes in the US – with the exception of the South Region – declined slightly. Sales volumes at both of our white cement plants also lagged slightly behind 2009. Turnover of the cement business line increased by 3.7 % to EUR 883 million (previous year: 851). In local currency terms, there was a slight decline. Despite waning demand and increasing cost pressures, we were able to considerably improve our result by adopting strict cost controls, adjusting production plans and focusing on generating cash.
Investment was also governed by strict control over expenditures. At our cement plant in Leeds/ Alabama, we commissioned a new cement silo with a capacity of 20,000 tonnes, as well as a faster, more efficient loading facility. At our plants in Union Bridge/Maryland, York/Pennsylvania, Mason City/Iowa, Glens Falls/New York, and Mitchell/Indiana, we made preparations to extend the use of alternative fuels to bio-solids and other engineered fuels. Both of our plants in California, Redding and Tehachapi, were awarded the prestigious "2010 Energy Star" by the American Environmental Protection Agency (EPA) for their excellent energy efficiency.
HeidelbergCement has a dense network of production sites in the US and western Canada. Overall sales volumes rose by 2.9 % year on year to 105.0 million tonnes (previous year: 102.1). The strongest growth was achieved by our production sites in Canada, but also most market regions in the US managed to report increases. Total turnover of the aggregates business line rose by 11.6 % to EUR 921 million (previous year: 825).
In 2010, our production site in Sechelt/British Columbia became the first aggregates plant to receive the esteemed "British Columbia Jake McDonald Mine Reclamation Award" for its innovative and comprehensive environmental protection and reclamation initiatives.
The building products business line includes production of concrete pipes, precast concrete parts, concrete paving blocks, roof tiles and bricks.
2010 proved to be another difficult year for building products due to their heavy reliance on residential construction. Some products were affected more than others. Precast concrete parts and roof tiles in particular experienced major volume declines. Overall sales volumes of concrete pipes and paving blocks were also weaker than in 2009, while sales of pressure pipes and bricks almost reached the previous year's level.
Overall, turnover of the building products business line fell by 2 % to EUR 707 million (previous year: 721). In local currency terms, the drop was much greater, but thanks to intense cost savings in sales and administration, we were able to significantly increase operating income before depreciation (OIBD).
2
This business line primarily comprises our ready-mixed concrete and asphalt activities. While we have an extensive network of ready-mixed concrete plants throughout the Group area, our asphalt production mainly focuses on New York and Pennsylvania, as well as California.
Ready-mixed concrete sales volumes, which depend heavily on residential construction, fell by 4.2 % to 5.4 million cubic metres (previous year: 5.7) in comparison with 2009. With the exception of the North Region, which achieved slight growth in sales volumes, all other market regions saw volumes decline.
Asphalt sales volumes, on the other hand, benefited from the economic stimulus programmes for road construction. In the reporting year, total volumes increased by 5 % to 3.7 million tonnes (previous year: 3.5) in both market regions where we operate.
Total turnover of the concrete-service-other business line increased slightly by 7.4 % in 2010 to EUR 849 million (previous year: 790).
Total turnover of Group area North America rose by 4.9 % to EUR 3,033 million (previous year: 2,892). Stated in local currency, levels were around the same as 2009 at USD 4,023 million (previous year: 4,032). However, as a result of our intensive measures to reduce costs, such as the successful "WIN NAM" project to increase efficiency in sales and administration, operating income before depreciation (OIBD) rose by 31.6 % to EUR 448 million (previous year: 340), equivalent to 25.2 % in local currency terms. At EUR 188 million (previous year: 86), operating income more than doubled in both euro and US dollar.
| Key data North America | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Operating income | 86 | 188 |
| Investment in tangible fixed assets | 152 | 146 |
| Cement and clinker sales volumes (Mt) | 10.1 | 10.0 |
| Aggregates sales volumes (Mt) | 102.1 | 105.0 |
| Asphalt sales volumes (Mt) | 3.5 | 3.7 |
| Ready-mixed concrete sales volumes (Mm3 ) |
5.7 | 5.4 |
| Employees as at 31 December | 12,601 | 11,899 |
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
The Asia-Pacific Group area comprises seven Asian countries and Australia. In most of the growth countries of Asia, the focus is on cement production. In India, Indonesia and Bangladesh, in particular, cement capacities are currently undergoing major expansion. In Malaysia and Hong Kong, HeidelbergCement has a strong market position in aggregates and ready-mixed concrete. In Australia, HeidelbergCement has significant market positions in ready-mixed concrete and aggregates, with a dense network of production sites. We also have a participation in the largest cement company in Australia.
The emerging countries of Asia remained on course for growth in 2010. In China, the gross domestic product increased by 10.3 %. The economic conditions also maintained momentum in India, Indonesia, and Bangladesh. Thus in 2010, economic output rose in India by 9.8 % and in Indonesia and Bangladesh by around 6 %. However, there are still concerns surrounding consumer prices in Asia, which have risen noticeably. Australia recorded economic growth of 2.7 % in 2010, which was driven by the economic stimulus programme and the high demand for raw materials from China.
Cement and clinker deliveries of the Asia-Pacific Group area grew by a total of 4.3 % in 2010 to 26.6 million tonnes (previous year: 25.5).
In Indonesia, our subsidiary Indocement benefited from consistently lively construction activity, especially in residential construction. In 2010, domestic cement consumption increased by 6.2 % in comparison with the previous year. Domestic sales volumes of Indocement rose by 8.5 %. As a result of the strong domestic demand, export deliveries – which are marked by lower margins – were reduced by 35 %. Overall, cement and clinker sales volumes grew by 3.2 % to 13.9 million tonnes (previous year: 13.5). At the Cirebon production site, two new cement mills with a total grinding capacity of 1.5 million tonnes started production at the end of August 2010; Indocement now has a cement capacity of 18.6 million tonnes. Indocement predicts that Indonesian cement consumption will also continue to increase in the future, which is why we are planning to build an additional cement mill in the Citeureup production site with a capacity of 2 million tonnes; construction is intended to start in 2011, ready for commissioning at the beginning of 2013.
In China, HeidelbergCement is represented with the two joint ventures China Century Cement and Jidong Heidelberg Cement Company in the Guangdong and Shaanxi provinces. Despite the economic stimulus programmes coming to an end, both provinces recorded vivid construction activity in 2010. Good economic development, the Asian Games in Guangzhou (the capital of Guangdong), and the state economic development programmes in Shaanxi (including the 10 year "Go-West Plan") were all contributing factors. Despite strong competition in Guangdong, the decline in our clinker production due to the closing of the unprofitable Huadu cement plant in January 2010, could be more than offset by production increases in the other plants and additional clinker purchases, which led to a rise in total sales volumes of our joint ventures in China by 2.1 % to 7.3 million tonnes (previous year: 7.1). To further improve energy efficiency and the preservation of resources, the use of sewage sludge as an alternative fuel was further promoted in the Guangzhou plant. Currently, up to 600 tonnes of sewage sludge can be dried each day by using the waste heat from the kiln and then fed into the kiln as fuel.
2
4
In India, HeidelbergCement operates two cement plants and three grinding facilities in the south and west, as well as in central India. Also in 2010, the construction volume increased significantly as a result of infrastructural projects and growth in rural residential construction. However, the commissioning of new cement production capacities in the second half of the year led to price pressure, particularly in the south and west of the country. In addition, heavy rainfall in August, September and November adversely affected construction activity in some of our market regions. Therefore, total sales volumes of our Indian cement plants dropped slightly by 1.6 % in comparison with the previous year. As a result of the good growth outlook, we are currently expanding our cement capacities in central India by 2.9 million tonnes. We are planning to commission the new facilities in our Damoh and Jhansi plants in the first quarter of 2012. HeidelbergCement will then have a total capacity of 6 million tonnes in India.
In Bangladesh, we achieved a considerable increase in sales volumes and results. In order to benefit from steady growth in the Bangladeshi cement market, we are currently building an additional cement mill with a capacity of 0.8 million tonnes in our Chittagong grinding plant; commissioning is planned for end of 2011. In the Sultanate of Brunei, we also greatly exceeded the cement deliveries of the previous year. Since the acquisition of Hanson in 2007, we have held a 25 % share in the cement company Cement Australia, which has been proportionately consolidated.
Turnover of the cement business line rose by 20.8 % to EUR 1,547 million (previous year: 1,281).
In the aggregates business line, HeidelbergCement is represented in Australia, Malaysia, Indonesia and Hong Kong. Overall, our deliveries of aggregates almost reached the level of the 2009 figures at 33.4 million tonnes (previous year: 33.5). In Australia, our largest market by far in this Group area, sales volumes remained stable, despite the consistently heavy rainfall in the first half of the year and the floods in Queensland at the end of the year. In May 2010, we further strengthened our market position in Australia by purchasing the remaining 50 % of the shares in our joint venture Pioneer North Queensland Pty Ltd. The company operates two sand pits, two quarries for crushed rock, an asphalt plant, and a ready-mixed concrete production site in the north of Queensland. In Malaysia, our deliveries of aggregates fell due to state spending cuts on infrastructural projects. As activity in the infrastructure sector is expected to pick up in 2011, we acquired a strategically well-located quarry in the federal state of Penang. We managed to achieve volume growth in Hong Kong and, especially, in Indonesia. The turnover of the aggregates business line rose by 25.6 % to EUR 446 million (previous year: 355).
HeidelbergCement operates three precast plants in the Sydney area and one in Singapore. The turnover of the building products business line grew by 18.5 % to EUR 34 million (previous year: 28).
In the ready-mixed concrete business, HeidelbergCement is represented in Australia, Malaysia, Indonesia and China. In Malaysia, we conduct major asphalt activities. After selling the asphalt business in May 2009, we only have one asphalt plant in Australia, which is run by Pioneer
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
North Queensland Pty Ltd (see Aggregates business line). Our deliveries of ready-mixed concrete increased by 4.9 % overall to 8.9 million cubic metres (previous year: 8.5). One major contributing factor was Indonesia, which achieved a double-digit growth rate, but also Australia and Malaysia, where volume growth was achieved as well. Deliveries from our Chinese ready-mixed concrete plants decreased slightly. While volumes increased in Hong Kong, they decreased in Guangzhou due to the termination of major building projects and a construction halt ordered by the government during the Asian Games. The decline in asphalt sales volumes by 31.2 % to 1.6 million tonnes (previous year: 2.3) was the result of reduced infrastructure measures in Malaysia and the sale of the asphalt operating line in Australia the previous year. The turnover of the concrete-service-other business line rose by 12.7 % to EUR 881 million (previous year: 782).
The turnover of the Asia-Pacific Group area rose by 18.0 % to EUR 2,609 million (previous year: 2,211). Excluding consolidation and exchange rate effects, the increase amounted to 1.9 %. The positive exchange rate effect, amounting to EUR 389 million, essentially resulted from the weakening of the euro against the Australian dollar and the Indonesian rupiah, but also against the Indian rupee and Malaysian ringgit. Operating income before depreciation rose by 17.4 % to EUR 718 million (previous year: 612). Excluding consolidation and exchange rate effects, the amount was the same as the previous year. At EUR 586 million (previous year: 498), operating income achieved growth of 17.6 %. Excluding consolidation and exchange rate effects, the increase amounted to 0.6 %. Operating margin, which is the highest in our Group, reached again the high level of the previous year.
| Key data Asia-Pacific | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Operating income | 498 | 586 |
| Investment in tangible fixed assets | 96 | 174 |
| Cement and clinker sales volumes (Mt) | 25.5 | 26.6 |
| Aggregates sales volumes (Mt) | 33.5 | 33.4 |
| Asphalt sales volumes (Mt) | 2.3 | 1.6 |
| Ready-mixed concrete sales volumes (Mm3 ) |
8.5 | 8.9 |
| Employees as at 31 December | 14,030 | 13,682 |
Turnover Asia-Pacific 2010: EUR 2,609 million
2
4
In Africa, HeidelbergCement is represented in eight countries south of the Sahara, where it exclusively produces cement. Our locations in the Mediterranean Basin are located in Spain, Israel and Turkey. In Spain and Israel, HeidelbergCement mainly produces aggregates and readymixed concrete. In Turkey, our joint venture Akçansa is one of the country's leading cement manufacturers; in addition, Akçansa also operates ready-mixed concrete and aggregates plants.
The majority of African countries south of the Sahara are experiencing dynamic economic development and lively construction activity. Solid economic growth, population increase, urbanisation and infrastructural measures are the main drivers in these countries when it comes to the rise in construction activity and cement demand. In Turkey, the construction industry is also benefiting from the extremely positive economic development; the Turkish economy showed growth of around 8 % in 2010. In Spain, on the other hand, the gross domestic product decreased by 0.1 % in 2010. The ongoing real estate crisis, the government's savings package, which has susceptibly cut infrastructure expenses, and the lack of financial resources in local and regional administrations have again caused the demand for building materials to fall significantly. Israel reported economic growth of 3.8 % and lively construction activity, although the infrastructure area decreased.
In Africa, our cement deliveries have risen significantly in all countries, with the exception of Benin. In our main market of Ghana, newly exploited gas and oil fields made a major contribution to the increase in sales volumes. Our plants in Sierra Leone, Tanzania, Liberia and Togo achieved also noticeable growth. Cement sales volumes in our African subsidiaries increased by 12.7 % to 5.2 million tonnes (previous year: 4.6).
Due to the positive growth prospects, HeidelbergCement expanded its activities in Africa. In May 2010, HeidelbergCement and IFC, a member of the World Bank Group, (together with further financial partners of IFC) signed an agreement to promote the expansion of infrastructure in the African countries south of the Sahara by increasing the local cement supply. IFC and its financial partners have undertaken to acquire (indirectly) a minority participation in HeidelbergCement's African activities and to inject equity of up to USD 180 million. In return, HeidelbergCement will invest these funds in the expansion of its cement capacities in the countries south of the Sahara supported by the International Development Association (IDA). The first tranche of USD 60 million was paid in on 5 August 2010. Part of the starting capital is currently being used to build a new cement mill in Liberia; start of operation is planned for the first quarter of 2012. A new cement mill is also scheduled for construction in Ghana and we are evaluating options for capacity expansions in other African countries.
In September 2010, HeidelbergCement signed an agreement with Forrest Group to expand cement production capacity in the Democratic Republic of Congo. With the newly agreed shareholder structure, HeidelbergCement holds the majority share in the cement business of Forrest Group in the central African country. HeidelbergCement acquired majority shares of 55 % in the Cimenterie de Lukala (CILU) cement plant near the capital, Kinshasa, and 70 % in the two Interlacs plants in the east of the country. In the new partnership, Forrest Group retains
62
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
30 % of the shares in the plants. Total cement capacity of all three plants stands at more than 500,000 tonnes per year and is set to be increased to over 1.4 million tonnes in the next few years in order to benefit from the continuing heavy increase in domestic demand for cement.
As a result of the lively construction activity in Turkey, the domestic cement sales volumes of our joint venture Akçansa increased by 20 % in 2010 in comparison with the previous year. While cement exports also significantly increased due to strong demand from West Africa, clinker exports – which have weaker margins – were reduced. Overall, cement and clinker sales volumes of Akçansa rose by 14.5 % to 7.6 million tonnes (consolidated quantity: 3.0 million tonnes). At our Çanakkale plant, we started building an installation in 2010 for the generation of electricity from waste heat from the kiln, that will come into operation in 2011. The installation will cover around 30 % of the entire electricity requirement of the plant and will also cut CO2 emissions by 60,000 tonnes.
Total cement and clinker sales volumes in the Africa-Mediterranean Basin Group area increased by 13.3 % to 8.2 million tonnes (previous year: 7.3); excluding consolidation effects, the growth amounted to 11.7 %. The turnover of the cement business line rose by 16.5 % to EUR 647 million (previous year: 555).
HeidelbergCement is active in the aggregates business line in Spain, Israel and Turkey. At 14.3 million tonnes (previous year: 15.2), sales volumes of aggregates were 5.8 % below those of the previous year. The decline resulted from the consistently low construction activity in Spain, where our deliveries of aggregates reduced significantly again, following the sharp decline in 2009. At the end of 2010, we acquired a new quarry near Barcelona, our most important market in Spain, which will replace another quarry where the mining permission will expire at the end of 2012. In Israel, our aggregates activities benefited from the strong demand for ready-mixed concrete. In Turkey, the aggregates operating line of Akçansa recorded also healthy growth in volumes as a result of lively construction activity. Total turnover of the aggregates business line fell by 3.6 % to EUR 85 million (previous year: 88).
In this Group area, HeidelbergCement operates major ready-mixed concrete activities in Spain, Israel, and Turkey. The asphalt operating line, on the other hand, is only represented in Israel. In 2010, total deliveries of ready-mixed concrete rose by 8.9 % to 5.0 million cubic metres (previous year: 4.6); significant growth in Israel and particularly in Turkey more than compensated for the losses in Spain. As a result of low construction activity in Spain, it was necessary to adjust our ready-mixed concrete capacities in the Barcelona region. In Israel, however, our ready-mixed concrete deliveries increased by double digits thanks to the strong demand. Sales volumes showed even more growth in Turkey, where the ready-mixed concrete operating line of Akçansa operates 35 plants. Our asphalt business in Israel had to face significant losses in sales volumes due to the decline in infrastructure construction. Turnover of the concrete-service-other business line rose overall by 5.9 % to EUR 274 million (previous year: 258).
2
Overall, turnover of the Africa-Mediterranean Basin Group area increased by 12.0 % to EUR 938 million (previous year: 837). Excluding consolidation and exchange rate effects, the increase amounted to 4.2 %. Operating income before depreciation (OIBD) of EUR 156 million (previous year: 157) almost reached the level of 2009; excluding consolidation and exchange rate effects, a decline of 4.7 % was recorded. Operating income decreased by 3.9 % to EUR 121 million (previous year: 126); excluding consolidation and exchange rate effects, it fell by 6.7 %. The drop in results is essentially due to losses in volumes and to lower sales prices in Spain.
| Key data Africa-Mediterranean Basin | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Operating income | 126 | 121 |
| Investment in tangible fixed assets | 28 | 34 |
| Cement and clinker sales volumes (Mt) | 7.3 | 8.2 |
| Aggregates sales volumes (Mt) | 15.2 | 14.3 |
| Asphalt sales volumes (Mt) | 0.6 | 0.4 |
| Ready-mixed concrete sales volumes (Mm3 ) |
4.6 | 5.0 |
| Employees as at 31 December | 2,499 | 3,539 |
Group Services comprises the activities of HC Trading and HC Fuels. HC Trading is one of the largest international trading companies for cement and clinker. The company is also responsible for purchasing and delivering coal and petroleum coke via sea routes to our own locations and to other cement companies around the world. In 2010, our subsidiary HC Fuels was responsible – amongst other things – for the overland supply of the Group's own locations with coal and petroleum coke that was purchased internationally.
Thanks to the global trading network of HC Trading, with locations in Malta, Istanbul, Singapore, Shanghai and Dubai, we are able to better control the capacity utilisation of our plants and deliver the surplus from one country to another with high demand.
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
The gradual economic recovery was also noticeable in international sea trade in 2010, with increasing cargo volumes. HC Trading's activity in cement, clinker and other building products such as gypsum and dry mortar increased by 13.8 % to 9.6 million tonnes (previous year: 8.4) in the reporting year. While deliveries of cement were the same as the previous year, the trade volume of clinker in particular rose significantly in 2010. The majority of our own cement and clinker volumes were delivered by HC Trading to Africa and Bangladesh. The key delivery countries were Indonesia, Turkey, Sweden and Norway. Deliveries of coal and petroleum coke, which HC Trading has been conducting via sea routes since 2009, nearly tripled in 2010 to 2.6 million tonnes (previous year: 0.9).
Overall, HC Trading even managed to win new customers outside the Group in Africa, South America, the Mediterranean Basin and Asia in 2010. Deliveries to our existing customers in North Africa, the United Arab Emirates, Senegal, Taiwan and India also rose considerably in comparison with the previous year. More than 900 different-sized ships transported goods mostly via the main sea routes from Asia, the Mediterranean Basin and Continental Europe to their destinations in Africa, the Middle East and South America. HC Trading also operates two floating terminals, which are equipped to load, package, store and deliver more than 500,000 tonnes of cement. This means that HC Trading can respond quickly and efficiently to the additional demand of cement from its customers.
As an energy-intensive company, HeidelbergCement requires large amounts of fuels, such as coal, petroleum coke, diesel and gas, as well as electrical energy. Our subsidiary HC Fuels, has thus far shared the responsibility for optimising energy costs within the Group. HC Fuels monitored developments on the international commodity markets together with their impact on local markets, and determined the Group's fuel requirements. In order to better co-ordinate energy purchasing across the Group, the purchase of fossil fuels and electricity will be pooled together in the Group Purchasing department. The purchasing team "Group Energy Purchasing" therefore took on the previous tasks of HC Fuels at the beginning of 2011. By bundling and co-ordinating energy purchases in one place, we will be able to better observe the development of energy markets in order to absorb the impact of volatile price trends and to react quickly to attractive market opportunities.
Turnover in the area of Group Services increased by 49.3 % to EUR 709 million (previous year: 475) in comparison with 2009. In contrast, operating income before depreciation (OIBD) fell by 31.5 % to EUR 20 million (previous year: 30). Operating income declined by a similar magnitude to EUR 20 million (previous year: 29). This decline in results was caused by one-time extraordinary proceeds in 2009. Excluding this special effect, results have actually improved in comparison with the previous year.
| Key data Group Services | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Turnover | 475 | 709 |
| Operating income | 29 | 20 |
| Employees as at 31 December | 51 | 55 |
2
4
Net income from discontinued operations includes expenses and income relating to damages and environmental obligations for US subsidiaries of the Hanson group, which was taken over in 2007, and to maxit Group, which was sold in 2008. In 2010, net income from discontinued operations amounted to EUR -28 million (previous year: -8).
The cash flow statement of the 2010 financial year is characterised by the continuation of our efficiency and cost-saving programmes and the further reduction of financial liabilities.
The cash flow before changes to working capital and utilisation of provisions improved by EUR 547 million to EUR 1,461 million (previous year: 914) and is therefore considerably higher than the year before. On the one hand, this is a result of the increase in operating income before depreciation owing to the ongoing recovery of our markets. On the other hand, positive effects resulted from the rise in interest received to EUR 198 million (previous year: 65) – mainly due to one-off effects from the close-out of interest rate swaps – and the decrease in interest paid to EUR 798 million (previous year: 1,013) – mainly due to reduced refinancing cost. The decline of EUR 67 million in tax payments also contributed to an increase in cash flow. The working capital could almost be kept at the same low value of the previous year. While the considerable improvement in working capital in 2009 led to an additional cash inflow of EUR 557 million, 2010 saw a low cash outflow of EUR 55 million. As a result, the cash flow from operating activities decreased slightly by EUR 20 million to EUR 1,144 million (previous year: 1,164).
Cash outflow from investments increased in the financial year by EUR 52 million to EUR 872 million (previous year: 820). Thereby, an increase of EUR 57 million resulted from gains from exchange rate effects compared to the original planning. The investments are divided into investments for sustaining capacity amounting to EUR 467 million and investments for expanding capacity amounting to EUR 405 million. In the case of measures for capacity expansion, our targeted, growth-oriented investments in the cement business in the emerging countries in Asia, Africa, and Eastern Europe have to be mentioned. Especially significant in this regard is the acquisition of the majority share of cement activities in the Forrest Group in the Democratic Republic of Congo for EUR 62 million (USD 80 million) and in CJSC "Construction Materials" in Russia for EUR 40 million (USD 54 million). We also acquired the outstanding 50 % share in our Australian joint venture Pioneer North Queensland Pty Ltd for EUR 11 million. The other cash inflows in the investment area fell by EUR 58 million to EUR 223 million (previous year: 281). The decline is mainly attributable to the sale of Pioneer Road Services the previous year. The other cash inflows include, amongst other things, the net cash inflows from the sale of emission rights that were not required, for EUR 106 million (previous year: 99).
The cash outflow from financing activities decreased in the reporting year by EUR 105 million to EUR 543 million (previous year: 648). Also in 2010, financial liabilities could be settled through the repayment of bonds and loans amounting to EUR 504 million (previous year: 3,046). Net debt, on the other hand, only decreased by EUR 277 million, which is primarily due to exchange rate effects and other non-cash effects. In the previous year, the cash inflows from the capital increase amounting to EUR 2,233 million and payments from the sale of 520.5 million shares
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
in Indonesian cement manufacturer PT Indocement Tunggal Prakarsa for EUR 216 million and of the participation in the Australian joint venture Pioneer Road Services Pty Ltd. for EUR 99 million could all be used to repay financial liabilities. The newly created reporting lines for the 2010 financial year concerning cash flow from the "decrease/increase in ownership interests in subsidiaries" based on the amendments of the IAS 7 (Statement of Cash Flows) as part of the revision of IAS 27 (Consolidated and Separate Financial Statements) comprise payment flows from equity transactions with holders, which do not lead to a loss of control. The values of the previous year have been adjusted accordingly. The main cash inflow comes from the USD 60 million (EUR 45 million) capital contribution from IFC and its financial partners for the acquisition of a minority share of around 6.06 % in Scancem International DA. In the previous year, cash inflows came mainly from the sale of 14.1 % of shares in Indocement for EUR 216 million. Dividend payments led to a cash outflow of EUR 79 million (previous year: 50).
In the 2010 financial year, HeidelbergCement was able to meet its payment obligations at all times.
| Group cash flow statement (short form) | |||
|---|---|---|---|
| EURm | 2009 | 2010 | Difference |
| Cash flow | 914 | 1,461 | 547 |
| Changes in working capital | 557 | -55 | -612 |
| Decrease in provisions through cash payments | -307 | -262 | 45 |
| Cash flow from operating activities | 1,164 | 1,144 | -20 |
| Investments (cash outflow) | -820 | -872 | -52 |
| Other inflows of cash and cash equivalents | 281 | 223 | -58 |
| Cash flow from investing activities | -539 | -648 | -109 |
| Capital increase | 2,233 | -2,233 | |
| Dividend payments | -50 | -79 | -29 |
| Decrease/increase in ownership interests in subsidiaries | 215 | 41 | -174 |
| Net repayment of bonds and loans | -3,046 | -504 | 2,542 |
| Cash flow from financing activities | -648 | -543 | 105 |
| Effect of exchange rate changes | 35 | 64 | 29 |
| Change in cash and cash equivalents | 11 | 16 | 5 |
2
4
The strict spending discipline regarding investments was also a significant cornerstone of rigid and consistent cash management for the 2010 financial year. Cash flow investments amounted to a total of EUR 872 million in 2010 (previous year: 820). EUR 734 million (previous year: 795) was invested in tangible fixed assets and intangible assets. The investments in financial fixed assets reached EUR 138 million (previous year: 25).
The investments in tangible fixed assets related mainly to maintenance, optimisation and environmental protection measures at our production sites. Of particular importance are the commissioning of a new cement silo in the American cement plant Leeds and numerous projects aimed at expanding the use of alternative fuels and improving energy efficiency in all Group areas. HeidelbergCement has, however, also invested in expansion projects in growth markets: As part of the 2012 cement capacity expansion plan, targeted investments were made in Asia, Africa, and Eastern Europe in order to lay the foundations for future growth. Larger projects included the expansion of our cement capacities in Central India by 2.9 million tonnes, the new construction of the TulaCement plant in Russia with a capacity of 2 million tonnes and the capacity expansion of the Polish plant of Górazdze by 1.2 million tonnes.
Investments in financial fixed assets primarily concerned the takeover of the majority participations in the cement activities of the Forrest Group in the Democratic Republic of Congo and of the cement company CJSC "Construction Materials" in Russia as well as the acquisition of the outstanding 50 % share in Australian joint venture Pioneer North Queensland Pty Ltd.
| Fixed assets investments | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Western and Northern Europe | 248 | 178 |
| Eastern Europe-Central Asia | 270 | 202 |
| North America | 152 | 146 |
| Asia-Pacific | 96 | 174 |
| Africa-Mediterranean Basin | 28 | 34 |
| Group Services | ||
| Financial investments | 25 | 138 |
| Total | 820 | 872 |
Investments in intangible assets and tangible fixed assets by business lines 2010
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
The structure of the Group balance sheet improved again in the 2010 financial year. The proportion of shareholders' equity in relation to total capital increased by 4.2 percentage points to 47.4 % (previous year: 43.2 %). In particular, it was possible to reduce the ratio of net debt to shareholders' equity (gearing) by 13.7 percentage points to 62.9 % (previous year: 76.5 %) in the 2010 financial year. One contributing factor was the reduction of net debt of EUR 0.3 billion to EUR 8.1 billion (previous year: 8.4), despite the marginal rise in net investments of EUR 0.1 billion.
As at 31 December 2010, the balance sheet total had increased by EUR 1.9 billion to EUR 27.4 billion (previous year: 25.5). Exchange rate effects of EUR 1.4 billion contributed to this increase.
Long-term assets rose by EUR 1.8 billion to EUR 23.1 billion (previous year: 21.3). The increase in fixed assets by EUR 1.6 billion to EUR 22.4 billion (previous year: 20.8) is mainly attributable to exchange rate effects amounting to EUR 1.4 billion and changes in the consolidation scope.
Short-term assets rose only marginally by EUR 0.1 billion. Regarding changes in current assets, the increase in inventories by EUR 0.1 billion and in trade receivables by EUR 0.1 billion as well as the reduction in tax assets by EUR 0.2 billion have to be mentioned.
On the liabilities side of the Group balance sheet, the shareholders' equity rose by EUR 1.9 billion to EUR 12.9 billion (previous year: 11.0). This is primarily attributable to the exchange rate effects of EUR 1.4 billion and to the profit for the financial year of EUR 0.5 billion. The strength of the Australian, US and Canadian dollar, the British pound, the Swedish krona and the Indonesian rupiah had a significant effect on this development.
Growth of long-term liabilities by EUR 0.2 billion to EUR 11.3 billion (previous year: 11.1) was mainly due to an increase of EUR 0.1 billion in provisions for pensions and to the rise of EUR 0.1 billion in the long-term interest-bearing liabilities resulting from exchange rate effects. Short-term liabilities decreased by EUR 0.2 billion to EUR 3.2 billion (previous year: 3.4). This mainly resulted from the repayment of short-term financial liabilities amounting to EUR 0.3 billion and to an increase in trade payables of EUR 0.2 billion.
| EURm | 31 Dec. 2009 | 31 Dec. 2010 | Part of balance sheet total |
|---|---|---|---|
| Intangible assets and tangible fixed assets | 20,289 | 21,837 | 80 % |
| Financial fixed assets | 493 | 520 | 2 % |
| Other non-current assets | 469 | 683 | 2 % |
| Current assets | 4,257 | 4,333 | 16 % |
| Disposal groups held for sale | 3 | 0 % | |
| Shareholders' equity and minority interests | 11,003 | 12,884 | 47 % |
| Non-current liabilities | 11,138 | 11,337 | 41 % |
| Current liabilities | 3,367 | 3,151 | 12 % |
| Liabilities in disposal groups | 4 | 0 % | |
| Balance sheet total | 25,508 | 27,377 | 100 % |
2
| Key financial ratios 1) | |||
|---|---|---|---|
| 2008 | 2009 | 2010 | |
| Assets and capital structure | |||
| Shareholders' equity/total capital | 31.5 % | 43.2 % | 47.4 % |
| Net financial liabilities/balance sheet total | 44.0 % | 33.0 % | 29.8 % |
| Long-term capital/fixed assets | 107.2 % | 106.6 % | 108.4 % |
| Gearing (net debt/shareholders' equity) | 139.8 % | 76.5 % | 62.9 % |
| Earning per share | |||
| Earnings per share (EUR) | 14.55 | 0.30 | 1.83 |
| Profitability | |||
| Return on total assets before taxes | 6.9 % | 2.8 % | 4.7 % |
| Return on equity | 8.1 % | 1.6 % | 4.2 % |
| Return on turnover | 4.7 % | 1.6 % | 4.6 % |
1) Without adjustment to IAS 32.18 b) Puttable Minorities in the amount of EUR 96 million (2010), EUR 37 million (2009), EUR 50 million (2008)
The goal of external financing is to ensure sufficient liquidity for the Group at all times. The crisis in the international capital markets has emphasised how important it is to focus on liquidity.
Our external financial flexibility is primarily assured by capital markets and a group of major international banks. Within the Group the principle of internal financing applies, i.e. financing requirements of subsidiaries are – where possible – covered by internal loan relationships. In 2010, our subsidiaries were financed according to this principle primarily by our Dutch finance company HeidelbergCement Finance B.V. (HC Finance B.V.) and HeidelbergCement AG. This central financing guarantees uniform presence in the capital markets and in relation to rating agencies, eliminates structural benefits for individual creditor groups, and strengthens our negotiating position with credit institutions and other market participants. Furthermore, it enables us to allocate liquidity in the most efficient way and to monitor and eliminate the financial risk position (currencies and interest) across the Group on the basis of net positions.
The Group companies use either liquidity surpluses from other subsidiaries in cash pools (Germany, Scandinavia/Baltic States, US, Benelux countries, Australia, United Kingdom, Canada, Czech Republic, Russia, Spain and other countries) or are provided with Intra-Group loans from Heidelberg-Cement Finance B.V. or HeidelbergCement AG. In some cases, the Group Treasury department also arranges credit lines for subsidiaries with local banks in order to accommodate legal, tax or other conditions. Local financing is mainly used for particularly small volumes.
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
2010 was characterised by three successful bond issues and the conclusion of a self-syndicated and arranged revolving credit line for cash drawings and letters of credit and guarantee facilities amounting to EUR 3 billion.
On 19 January 2010, we were the first European company to issue two Eurobonds to domestic and foreign institutional investors with a total issue volume of EUR 1.4 billion: one bond of EUR 650 million with a term of 5 years and a second of EUR 750 million with a term of 10 years. The proceeds from the issue were exclusively used for the partial repayment of the syndicated loan of EUR 8.7 billion from June 2009. This issue significantly reduced our Group's liabilities to banks and demonstrated the confidence of the capital market in HeidelbergCement. The bonds had fixed coupons of 6.5 % p.a. for the 5-year term and 7.5 % for the 10-year term. The issue prices were 98.8561 % and 98.2192 %, yielding to maturity of 6.75 % and 7.75 % respectively.
On the basis of these successful bond issues and the thereby reduced dependence on bank financing, we were able to negotiate a self-arranged, syndicated revolving credit line amounting to EUR 3 billion with a group of just 17 banks. This enabled us to repay liabilities still outstanding from the syndicated loan of EUR 8.7 billion that we concluded with 60 banks in June 2009, and to subsequently cancel it. The conditions of the new credit line are much more favourable and the term, which runs until the end of 2013, improved financial and operational flexibility considerably. Securities were also significantly reduced, which benefits the bond creditors and also noticeably cuts down on securities administration and its implications for operational business. The new credit line, which can be used for cash drawings and letters of credit and guarantee facilities is mainly intended as a liquidity reserve, and as at 31 December 2010, only EUR 396 million had been drawn upon. The free credit line amounted to EUR 2,604 million at year-end 2010 (see following table). Overall, it is thereby ensured that all Group companies have sufficient cash and available headroom for drawings to enable them to successfully finance operational business and new investments.
| Credit line | |
|---|---|
| EURm | 31 Dec. 2010 |
| Syndicated facility (SFA) | 3,000.0 |
| Utilisation (cash) | 131.8 |
| Utilisation (guarantee) | 264.2 |
| Free credit line | 2,604.0 |
The reduction in the number of creditors from 60 to 17 core banks is evidence of the strength of our bank relationships and simplifies the coordination processes with bank creditors. In addition, we were able to significantly improve conditions compared with the EUR 8.7 billion credit line from the previous year: the initial credit margin was reduced to 300 basis points from the former 425 basis points. In order to honour our additional deleveraging progress, we have agreed on a margin grid with the banks which provides for a quarterly measurement of the ratio of Group net debt to EBITDA as the basis for the credit margin calculation (see following table). In November, we were able to negotiate an adjustment of the margin grid on the basis of our improved credit rating and the very good operational performance, enabling the original 2
4
credit margin from April to be further reduced by 100 basis points. As a result, the borrowing costs from January 2010 thus fell from 425 basis points to 200 basis points in December 2010.
The following banks are creditors of the credit lines and are therefore our core banks: Bank of America/Merrill Lynch, BayernLB, BNP/Fortis, Citigroup, Commerzbank, Deutsche Bank, Svenska Handelsbanken, Helaba, ING, Intesa, LBBW, Mediobanca, Morgan Stanley, Nordea, RBS, RZB and SEB.
| Facility amount | EUR 3,000,000,000 | |
|---|---|---|
| Facility: | A syndicated multicurrency cash and letter of credit facility EUR 500,000,000 letter of credit facility operating as a sub-limit. |
|
| Maturity date: | 31 December 2013 | |
| Margins: | ||
| - Cash drawdowns | Initial margin in % p.a | 3.00 |
| Subsequent margin depending on the ratio of Group net debt to EBITDA: |
||
| Group net debt : EBITDA | Margin in % p.a. | |
| Greater than or equal to 4.50 : 1 | 3.00 | |
| Less than 4.50 : 1 but greater than or equal to 4.00 : 1 | 2.00 | |
| Less than 4.00 : 1 but greater than or equal to 3.50 : 1 | 1.75 | |
| Less than 3.50 : 1 but greater than or equal to 3.00 : 1 | 1.50 | |
| Less than 3.00 : 1 but greater than or equal to 2.50 : 1 | 1.25 | |
| Less than 2.50 : 1 | 1.00 | |
| - Issued letters of credit |
75.00 % p.a. of the applicable margin | |
| Upfront fee: | 1.00 % of the total commitment | |
| Commitment fee: | 35.00 %. p.a. of the applicable margin | |
| Utilisation fee: | Depending on the utilisation of credit line from October 2010 onwards: | |
| > 33.33 % outstanding | 0.25 % | |
| > 66.66 % outstanding | 0.50 % | |
| Security: | The lenders benefit from the following security package: | |
| (i) Upstream guarantees of Group companies, which together represent about 70 % of Group turnover and Group assets |
||
| (ii) Share pledges over all shares in 100 % subsidiaries held directly by HeidelbergCement AG |
Syndicated facility agreement (SFA) from 27 April 2010, amended on 19 November 2010
On 1 July, we were able to make use of the excellent market environment and issue a further Eurobond with an issue volume of EUR 650 million and a maturity date of 15 December 2015 under our EUR 10 million EMTN programme. The issue proceeds were utilised to repay bank debt. This also further improved the maturity profile (see table in the Prospects chapter on page 116) and again reduced the dependency on banks. The bond had a coupon of 6.75 % p.a. The issue price was 99.444 %, resulting in a yield to maturity of 6.875 %.
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
The bonds issued in 2010 are unsecured and rank pari passu with all other capital market debt. According to the terms and conditions of these bonds and of the three Eurobonds already issued in October 2009, there is a limitation on incurring additional debt if the consolidated coverage ratio (i.e. the ratio of the aggregate amount of the consolidated EBITDA to the aggregate amount of the consolidated interest expense) of the HeidelbergCement Group is below 2. The consolidated EBITDA of EUR 2,124 million and the consolidated interest expense of EUR 599 million are calculated on a pro forma basis in accordance with the terms and conditions of the bonds. At the end of 2010, the consolidated coverage ratio amounted to 3.55. In the reporting year, net financial liabilities decreased by EUR 0.3 billion, and amounted to EUR 8.1 (previous year: 8.4) billion as at 31 December 2010.
The following table shows the new issues and repayments of HeidelbergCement Group in 2010:
| Transaction | Offering date |
Duration | Maturity date |
Nominal volume |
Yield | ||
|---|---|---|---|---|---|---|---|
| New issue | 2010-01-19 | 5 years | 2015-08-03 | EURm 650 | 6.500 % | ||
| New issue | 2010-01-19 | 10 years | 2020-04-03 | EURm 750 | 7.500 % | ||
| New issue | 2010-07-01 | 5 years | 2015-12-15 | EURm 650 | 6.750 % | ||
| Repayment | 2000-09-27 | 10 years | 2010-09-27 | USDm 750 | 7.875 % | ||
| Early redemption SFA | 2009-06-18 | 3 years | 2010-04-27 | EURm 8,744 | variable | ||
| SFA refinancing | 2010-04-27 | 3 ½ years | 2013-12-31 | EURm 3,000 | variable |
New issues and repayments of HeidelbergCement Group
The following table shows the financial liabilities of HeidelbergCement Group as at 31 December 2010:
| Debenture loans | ||||||
|---|---|---|---|---|---|---|
| Issuer EURm |
Nominal volume |
Book value |
Coupon rate in % |
Offering date |
Maturity date |
ISIN |
| HC Finance B.V. | 480.0 | 469.0 | 5.625 | 2007-10-22 | 2018-01-04 | DE000A0TKUU3 |
| HC Finance B.V. | 1,000.0 | 1,080.6 | 7.625 | 2008-01-25 | 2012-01-25 | XS0342136313 |
| HC Finance B.V. | 1,000.0 | 1,007.4 | 7.500 | 2009-10-21 | 2014-10-31 | XS0458230082 |
| HC Finance B.V. | 1,000.0 | 1,017.8 | 8.000 | 2009-10-21 | 2017-01-31 | XS0458230322 |
| HC Finance B.V. | 500.0 | 485.5 | 8.500 | 2009-10-21 | 2019-10-31 | XS0458685913 |
| HC Finance B.V. | 650.0 | 653.7 | 6.500 | 2010-01-19 | 2015-08-03 | XS0478802548 |
| HC Finance B.V. | 750.0 | 742.1 | 7.500 | 2010-01-19 | 2020-04-03 | XS0478803355 |
| HC Finance B.V. | 650.0 | 629.8 | 6.750 | 2010-07-01 | 2015-12-15 | XS0520759803 |
| Hanson Australia Funding Limited USDm 750 |
560.6 | 563.2 | 5.250 | 2003-03-18 | 2013-03-15 | US411336AA85 |
| Hanson Limited USDm 750 | 560.6 | 579.6 | 6.125 | 2006-08-16 | 2016-08-15 | US411349AA15 |
| Total | 7,228.8 |
2
4
| Bank loans | |||||
|---|---|---|---|---|---|
| Issuer EURm |
Nominal volume |
Book value |
Coupon rate in % |
Offering date |
Maturity date |
| Certificate of debt | |||||
| HeidelbergCement AG | 5.0 | 5.0 | 6-M-Euribor + 1.600 | 2002-09-27 | 2013-03-27 |
| HC Finance B.V. | 200.0 | 202.3 | 5.710 | 2007-10-16 | 2012-10-16 |
| HC Finance B.V. | 100.0 | 101.2 | 6.000 | 2007-10-16 | 2014-10-16 |
| HC Finance B.V. | 40.0 | 40.2 | 3-M-Euribor + 1.900 | 2008-04-18 | 2013-04-18 |
| HC Finance B.V. | 100.0 | 100.5 | 3-M-Euribor + 2.100 | 2008-05-05 | 2013-05-05 |
| HC Finance B.V. | 73.5 | 74.3 | 3-M-Euribor + 1.950 | 2008-05-07 | 2012-05-07 |
| HC Finance B.V. | 33.5 | 35.4 | 6.360 | 2008-05-07 | 2012-05-07 |
| HC Finance B.V. | 8.5 | 9.0 | 3-M-Euribor + 1.950 | 2008-05-07 | 2012-05-07 |
| HC Finance B.V. | 25.0 | 26.1 | 6.570 | 2008-05-07 | 2014-05-07 |
| HC Finance B.V. | 18.0 | 18.1 | 3-M-Euribor + 2.150 | 2008-05-07 | 2014-05-07 |
| HC Finance B.V. | 50.0 | 50.1 | 6-M-Euribor + 2.050 | 2008-06-09 | 2013-06-10 |
| Syndicated facility | |||||
| HeidelbergCement AG | 131.8 | 95.9 | 2010-04-27 | 2013-12-31 | |
| Others | |||||
| HeidelbergCement Group | 380.7 | ||||
| Total | 1,139.0 |
| Issuer EURm |
Nominal volume |
Book value |
Coupon rate in % |
Offering date |
Maturity date |
ISIN |
|---|---|---|---|---|---|---|
| European Medium Term Note | ||||||
| HC Finance B.V. | 50.0 | 50.5 3-M-Euribor + 2.900 | 2004-04-08 | 2011-04-08 XS0190041391 | ||
| HC Finance B.V. | 10.0 | 10.0 6-M-Euribor + 2.500 | 2004-03-26 | 2011-05-20 XS0189520256 | ||
| HeidelbergCement AG | 10.0 | 10.0 6-M-Euribor + 2.500 | 2004-04-01 | 2011-05-20 XS0189795353 | ||
| HC Finance B.V. SEKm 150 | 16.7 | 16.8 | 4.400 | 2006-11-07 | 2011-11-07 XS0274376564 | |
| HC Finance B.V. SEKm 150 | 16.7 | 16.7 | 3-M-Stibor + 0.400 | 2006-11-07 | 2011-11-07 XS0274376481 | |
| HC Finance B.V. | 6.0 | 6.0 6-M-Euribor + 0.200 | 2005-01-20 | 2012-01-20 XS0210446448 | ||
| HC Finance B.V. | 50.0 | 50.1 3-M-Euribor + 0.200 | 2007-01-23 | 2012-01-23 XS0283649621 | ||
| HeidelbergCement AG SEKm 290 |
32.3 | 32.4 | 3-M-Stibor + 1.050 | 2007-10-25 | 2012-10-25 XS0327475744 | |
| HC Finance B.V. | 30.0 | 29.8 3-M-Euribor + 1.450 | 2005-06-09 | 2015-06-09 XS0221489155 | ||
| Commercial Paper | ||||||
| HeidelbergCement AG | 173.8 173.8 | |||||
| Others | ||||||
| HeidelbergCement Group | 287.8 | |||||
| Total | 683.9 |
| Puttable minorities | |
|---|---|
| EURm | Book value |
| Puttable minorities | 95.6 |
| Total | 95.6 |
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
The following table shows the main liquidity instruments as at 31 December 2010:
| Liquidity instruments | |
|---|---|
| EURm | 31 Dec. 2010 |
| Cash and cash equivalents | 869.7 |
| Liquidable financial investments and derivative financial instruments | 36.0 |
| Free credit line | 2,604.0 |
| Free liquidity | 3,509.7 |
The successful refinancing measures coupled with the operational performance led to a significant upgrade of the credit rating by rating agencies Standard & Poor's, Moody's and Fitch Ratings (BB-/B, Ba2/NP, BB/B). Consequently, we were able to revive issue activity on the money market and issue a total volume of EUR 7.0 billion via our EUR 1 billion Euro Commercial Paper Programme over the course of 2010. At the end of 2010, around EUR 174 million of the Commercial Paper issued by HeidelbergCement AG were outstanding. The EUR 3 billion syndicated credit line thereby serves as a back-up line.
| Rating agencies | |||
|---|---|---|---|
| Long-term rating | Outlook | Short-term rating | |
| Standard & Poor's | BB- | positive | B |
| Moody's | Ba2 | positive | Not Prime |
| Fitch | BB | stable | B |
In addition to the Group reporting, the parent company's development is described below. In contrast with the Group annual accounts, the annual accounts of HeidelbergCement AG are prepared in accordance with German commercial law. The regulations of the German Accounting Law Modernization Act (BilMoG) have been applied since 1 January 2010. Extraordinary proceeds amounting to EUR 16.6 million resulted from the switch to the BilMoG regulations. Furthermore, EUR 21.9 million was recorded in the revenue reserves as BilMoG conversion differences recognised with no effect on profit and loss accounts.
HeidelbergCement AG's report to the shareholders is combined with that of the Heidelberg-Cement Group in accordance with § 315, section 3 of the German Commercial Code (Handelsgesetzbuch, HGB), as the business trend, economic position, and future opportunities and risks of the parent company are closely linked with the Group on account of their common activity in the building materials business line.
As the controlling company, HeidelbergCement AG plays the leading role in the Heidelberg-Cement Group. In addition, it is also operationally active in Germany in both the cement and the building products business lines. Following the merger of HC Zementwerk Hannover GmbH on 2
1 January 2010 and the closure of the Wetzlar cement plant at the end of 2010, the company now operates ten cement and grinding facilities and one lime plant.
In 2010, the effects of the global economic crisis were still obvious in the German construction industry. The harsh winter months at the start of the year and the early onset of winter in December also affected cement and clinker sales volumes. Export deliveries decreased also noticeably. The Wetzlar cement plant was closed at the end of 2010 due to low utilisation and an anticipated increase in repair and investment requirements.
In the 2010 financial year, the turnover of HeidelbergCement AG decreased by 3.6 % to EUR 477 million (previous year: 495). It must also be noted that the previous year's figure included turnover from ready-mixed concrete sales as a result of the accretion of Heidelberger Beton Nordwest GmbH & Co. KG. The operational activities of this company were included in Heidelberger Beton GmbH at the end of 2009. Excluding the consolidation effect from the merger of HC Zementwerk Hannover GmbH on 1 January 2010, turnover decreased by 11.6 %. The negative effect resulting from the merger of HC Zementwerk Hannover GmbH amounting to EUR 99.6 million and the restructuring expenses of the closure of the Wetzlar cement plant could be partly offset by savings from the "FitnessPlus 2010" programme. Overall, earnings before interest and taxes (EBIT) fell by EUR 19 million to EUR -61 million (previous year: -42). Results from participations decreased as a result of lower dividends from directly held subsidiaries to EUR -7 million (previous year: 89). Interest income from loans increased to EUR 257 million (previous year: 145); this was primarily attributable to the transfer of the proceeds from the three Eurobonds issued in October 2009 and the two issued in January 2010 to HeidelbergCement UK Holding Limited/United Kingdom. The increase in other interest and similar earnings to EUR 539 million (previous year: 289) is essentially the result of proceeds from interest rate swaps, including income from the close-out of interest rate swaps with positive market value. The increase in interest and similar expenses to EUR 633 million (previous year: 445) is due to interest expenses for the Eurobonds issued in October 2009 and January 2010, the amortisation of the transaction costs for the syndicated credit lines dated June 2009 and April 2010, the amortisation of the transaction costs and discount of the Eurobonds issued in January 2010, and the expenses from interest rate swaps, including losses from the transfer at negative market values to HeidelbergCement Finance B.V. Overall, the profit for the financial year amounted to EUR 47 million (previous year: 123), while the balance sheet profit amounted to EUR 63 million (previous year: 64).
The balance sheet total fell by EUR 2.4 billion in comparison with the year before to EUR 16.3 billion (previous year: 18.7). The decline was essentially a result of the transfer of the three Eurobonds issued in October 2009 with a total volume of EUR 2.5 billion to wholly-owned Dutch subsidiary HeidelbergCement Finance B.V. as well as of the simultaneous transfer of loans of the same amount, that HeidelbergCement UK Holding Limited/United Kingdom had received, to HeidelbergCement Finance B.V. In July 2010, HeidelbergCement Finance B.V. took over from HeidelbergCement AG as the issuer of these bonds and the two Eurobonds issued in January 2010 with a total volume of EUR 1.4 billion. On the assets side, loans to affiliated companies decreased by EUR 2.4 billion to EUR 3.5 billion (previous year: 5.9). The decline is primarily attributable to the transfer of loans to HeidelbergCement Finance B.V. These loans came from the transfer of the Eurobonds issued in October 2009 and January 2010 to HeidelbergCement UK Holding Limited/United Kingdom. Financial fixed assets declined by EUR 2.6 billion to EUR
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
11.2 billion (previous year: 13.8); total fixed assets also fell by a similar extent to EUR 11.5 billion (previous year: 14.0). In current assets, the receivables and other assets increased to EUR 4.8 billion (previous year: 4.4). This increase is essentially a result of the rise in receivables from affiliated companies to EUR 4.7 billion (previous year: 4.3).
On the liabilities side, the shareholders' equity remained the same at EUR 11.6 billion (previous year: 11.6), as did the provisions at EUR 0.6 billion (previous year: 0.6). In contrast, liabilities fell by EUR 2.4 billion to EUR 4.0 billion (previous year: 6.4). This reduction reflects the replacement of HeidelbergCement AG by HeidelbergCement Finance B.V. as bond issuer in July 2010. The amount of EUR 2.5 billion shown under debenture loans in the previous year decreased to zero as a result of the transfer of the bonds issued in October 2009 and in January 2010.
2010 was characterised by a significant two-part geographical trend in the demand for building materials. In the emerging countries of Asia and Africa, consumption was further driven by the continuous economic growth. In Europe and the US, on the other hand, total demand for building materials fell in comparison to the previous year as a result of the negative effects of the financial and economic crisis on the construction sector and because of the severe wintry conditions at the start and end of the year. However, the lowest point was reached in these markets in the course of the year, and the volumes rose again, first in North America and lastly also in Eastern Europe.
As the market leader for aggregates and one of the leading manufacturers of cement with vertically integrated activities, HeidelbergCement was able to benefit from infrastructure programmes, particularly in North America. Thanks to advantageous geographical positioning in local growth markets in emerging countries and in the mature markets of North America and Europe as well as the successful implementation of the cost reduction and efficiency improvement measures as part of the "FitnessPlus 2010" programme, we were able to slightly increase our operating margin compared with the previous year. The net result also profited from the decline in financing costs.
The financing structure of HeidelbergCement improved further in 2010. The sustainably high cash inflow from operating activities enabled us to reduce the net debt from EUR 8.4 billion at the end of 2009 to EUR 8.1 billion at the end of 2010. At the same time, we continued with our disciplined and focused investments in expanding cement capacity in attractive growth markets. As a result of the successful issuance of several Eurobonds, we have also improved the maturity profile. Furthermore, HeidelbergCement has negotiated a new credit line based on significantly better terms and thus managed to increase available liquidity to EUR 3.5 billion at the end of 2010.
2
4
On 31 December 2010, the share capital of HeidelbergCement AG amounted to EUR 562,500,000. It is divided into 187,500,000 no-par value bearer shares, each with a nominal value of EUR 3, which corresponds to a proportionate amount of the subscribed share capital. Each share carries one vote at the Annual General Meeting. All shares carry the same rights and obligations; there are no different classes of shares. The Managing Board knows of no restrictions concerning voting rights or the transfer of shares. According to information available to the company in accordance with the German Securities Trading Law (Wertpapierhandelsgesetz), as at 31 December 2010, Mr Ludwig Merckle, Ulm, holds more than 10 % of the voting rights in the company. He currently holds 25.11 % of the voting rights directly and indirectly via various companies, including SC Vermögensverwaltung GmbH (formerly Spohn Cement GmbH), Zossen. No holder of shares has been granted special rights giving powers of control.
The company's Managing Board is appointed and discharged by the Supervisory Board. The Articles of Association may be amended by the Annual General Meeting with a simple majority of the share capital represented at the time of voting, except where a greater majority is required by law. Amendments affecting only the wording of the Articles of Association may be made by the Supervisory Board.
As at 31 December 2010, there were two authorised capitals; namely authorisation of the Managing Board and Supervisory Board to increase the capital by issuing new shares in return for cash contributions (Authorised Capital I), and authorisation of the Managing Board and Supervisory Board to increase the capital by issuing new shares in return for contributions in kind (Authorised Capital II). The authorised capitals are described as follows:
The Managing Board is authorised to increase, with the consent of the Supervisory Board, the company's share capital by a total amount of up to EUR 225,000,000 by issuing new no-par value bearer shares in return for cash contributions on one or more occasions until 5 May 2015 (Authorised Capital I). The shareholders must be granted subscription rights. However, the Managing Board is authorised
The Managing Board is also authorised to increase, with the consent of the Supervisory Board, the company's share capital by a total amount of up to EUR 56,100,000 by issuing new no-par
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
value bearer shares in return for contributions in kind on one or more occasions until 5 May 2015 (Authorised Capital II). Furthermore, the Managing Board is authorised to exclude, with the consent of the Supervisory Board, the subscription right, provided that the capital increase in return for contributions in kind is performed for the purposes of acquisition of companies, parts of companies, or of participations in companies, or of other assets. In addition, the Managing Board is authorised to exclude, with the consent of the Supervisory Board, the subscription right of shareholders in so far as it is necessary to grant bearers of the warrants and convertible bonds issued by the company or its subsidiaries with subscription rights for new shares to the extent to which they would be entitled after exercising the option or conversion rights and/or fulfilling the warrant or conversion obligation. The Managing Board is authorised to determine, with the consent of the Supervisory Board, the further details and implementation of the capital increase, particularly the content of the share rights and the terms of the share issue.
As at 31 December 2010, the authorisation to issue new shares in return for cash contributions or contributions in kind forming the basis of the Authorised Capitals I and II had not been used.
Ultimately, the conditional share capital described below existed as at 31 December 2010: The share capital was conditionally increased by a further amount of up to EUR 187,500,000, divided into up to 62,500,000 new no-par value bearer shares (conditional share capital 2009). The conditional capital increase is only carried out insofar as the bearers of option or conversion rights, or those obliged to exercise conversions or options in connection with warrant or convertible bonds, profit-sharing certificates, or participating bonds issued or guaranteed by HeidelbergCement AG, or a Group company of HeidelbergCement AG in the sense of § 18 of the German Stock Company Act (Aktiengesetz) in which HeidelbergCement AG directly or indirectly has a participation of at least 90 %, on the basis of the authorisation agreed by the Annual General Meeting of 7 May 2009 under agenda item 7, make use of their option or conversion rights or, if they are obliged to exercise conversions or options, fulfil their obligation to exercise conversions or options, or, if HeidelbergCement AG exercises an option to grant shares of HeidelbergCement AG in place of all or part of the payment of the monetary amount due, provided that a cash settlement is not granted and no treasury shares or shares of another listed company are used to service this right. As at 31 December 2010, the authorisation to issue warrant or convertible bonds forming the basis of the conditional share capital 2009 had not been used. Within the framework of a co-operation agreement, subject to the consent of the contractual partners, the company has undertaken as part of the cash capital increase in September 2009 not to issue convertible bonds with the right to convert into new shares from the 2009 conditional share capital before April 2011.
The company has no treasury shares and there is no authorisation to acquire treasury shares.
A list of the company's significant agreements contingent on a change of control resulting from a takeover bid, and a summary of the effects thereof, is provided below in accordance with §§ 289, section 4 no. 8, 315 section 4 no. 8 of the German Commercial Code (HGB). Please note that we are disregarding agreements whose potential consequences for the company fall below the thresholds of EUR 50 million in a singular instance or EUR 100 million in the case of several similar agreements, as they will not normally affect the decision of a potential bidder. The existing change-of-control clauses are standard for this industry and type of transaction and have not been agreed with the intention of hindering any takeover bids. The following significant agreements of HeidelbergCement AG are contingent on a change of control within HeidelbergCement AG resulting from a takeover bid:
2
4
| Name of agreement / date | Type of contract | Nominal amount EURm |
Repayment Type of | clause |
|---|---|---|---|---|
| Syndicated credit and aval agreements | ||||
| Syndicated credit and aval credit facility of 27 April 2010 |
Credit and aval credit facility |
3,000 1) | To the extent outstanding by 31 December 2013 |
(1) |
| Bonds issued by HeidelbergCement Finance B.V. under the guarantee of HeidelbergCement AG | ||||
| 5.625 % bond 2007 / 2018 | Debenture bond | 480 | To the extent outstanding by 4 January 2018 |
(2) |
| 6.375 % bond 2008 / 2012 | Debenture bond | 1,000 | To the extent outstanding by 25 January 2012 |
(2) |
| 7.5 % bond 2009 / 2014 | Debenture bond | 1,000 | To the extent outstanding by 31 October 2014 |
(3) |
| 8.0 % bond 2009 / 2017 | Debenture bond | 1,000 | To the extent outstanding by 31 January 2017 |
(3) |
| 8.5 % bond 2009 / 2019 | Debenture bond | 500 | To the extent outstanding by 31 October 2019 |
(3) |
| 6.5 % bond 2010 / 2015 | Debenture bond | 650 | To the extent outstanding by 3 August 2015 |
(3) |
| 7.5 % bond 2010 / 2020 | Debenture bond | 750 | To the extent outstanding by 3 April 2020 |
(3) |
| 6.75 % bond 2010 / 2015 | Debenture bond | 650 | To the extent outstanding by 15 December 2015 |
(3) |
| Debt certificates issued by HeidelbergCement Finance B.V., guaranteed by HeidelbergCement AG | ||||
| of 16 October 2007 | Debt certificates | 200 100 |
by 16 October 2012 by 16 October 2014 |
(2) |
| of 18 April 2008 | Debt certificates | 40 | by 18 April 2013 | (2) |
| of 5 May 2008 | Debt certificates | 100 | by 5 May 2013 | (2) |
| of 7 May 2008 | Debt certificates | 115.5 43 |
by 7 May 2012 by 7 May 2014 |
(2) |
| of 9 June 2008 | Debt certificates | 50 | by 10 June 2013 | (2) |
| Shareholders agreement | ||||
| between HeidelbergCement AG and IFC dated 19 May 2010 |
Agreement between HeidelbergCement AG and IFC as well as their associated share holders in Scancem International DA |
to be determined |
to be determined | (4) |
1) In this, EUR 396 million was outstanding as at 31 December 2010.
The relevant change-of-control clauses give the contractual partner or bearer of the bonds or debt certificates the right to immediately accelerate and to demand repayment of the outstanding loans, debenture bonds, or debt certificates, or to end the common participation in Sancem International DA in the event of a change in the company's shareholder structure as defined variously as follows:
The syndicated credit facility and aval credit facility agreement dated 27 April 2010 marked (1) in the "Type of clause" column give each bank syndicate creditor the right, in the event of a change of control, to accelerate the loan amount it provided (plus any accrued interest) and to demand repayment accordingly. A change of control is deemed to occur when a person or a
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
group of people acting jointly in the sense of § 2 section 5 of the German Securities Acquisition and Takeover Act (WpÜG) has acquired more than 30 % of the shares in the company.
The bonds and debt certificates marked (2) in the "Type of clause" column give each bearer of the debenture bond or debt certificate the right of early termination in the event of changes to the shareholder structure that lead to a change in the control of the company. An entity has control if it controls more than 50 % of the subscribed capital or more than 50 % of the voting rights contractually or by other means, whereby - in connection with a concept of "registered partner" - a change in control to (i) Spohn Cement GmbH or (ii) any partner of Spohn Cement GmbH including successors and legatees of partners of Spohn Cement GmbH and persons who are beneficial owners of shares in Spohn Cement GmbH, or (iii) any legal person or foundation or comparable institution managed by such persons to whom shares in HeidelbergCement AG were transferred by persons mentioned under (i) to (iii) is exempted from the regulation regarding a right of early termination.
The bond terms of the six Eurobonds issued in October 2009 as well as in January and July 2010, marked (3) in the "Type of clause" column, give each bond creditor the right, in the event of a change of control as described below, to demand full or partial repayment from the company or, at the company's option, the full or partial purchase of his debenture bonds by the company (or, at the company's request, by a third party) at the Early Repayment Amount (Put), whereby the Early Repayment Amount (Put) for each debenture bond (exclusively) means 101 % of the nominal amount of the debenture bond plus accrued and unpaid interest up to the repayment date defined in the bond terms.
A change of control is deemed to occur when one of the following events takes place:
The USD 750 million 6.125 % bond taken out by Hanson Limited, issued on 16 August 2006 and maturing on 15 August 2016, now guaranteed by HeidelbergCement AG, includes a provision whereby not only the direct but also the indirect acquisition of more than 50 % of the shares or voting rights in Hanson Limited may represent a change of control. The acquisition of 30 % of the voting rights in HeidelbergCement AG, which indirectly holds 100 % of the shares in Hanson, could be regarded as an indirect acquisition. A change of control would grant the bearers of this bond a put option at 101 % of the nominal value plus interest against Hanson Limited if, in connection with this change of control, the bond was downgraded below "Investment Grade" by Moody's and Standard & Poor's. As the bond is already classified below Investment Grade, this change-of-control provision is currently not applicable.
2
4
In May 2010, the company signed a shareholders agreement, marked (4) in the "Type of clause" column, with International Finance Corporation (IFC), a member of the World Bank Group, and further financial partners of IFC (see section Africa-Mediterrean basin on page 62). This agreement governs the rights of the shareholders in the jointly-held Norwegian holding partnership Scancem International DA, which bundles the main African activities of the HeidelbergCement Group in the countries south of the Sahara. The agreement provides IFC (and its financial partners) with the opportunity of selling their indirect holding in Scancem International DA to HeidelbergCement at a price that corresponds to the reference price mentioned in the agreement or that is to be determined on the basis of an expert opinion, if an "adverse sponsor change in control" occurs. This is defined as a change in control at HeidelbergCement AG, which leads to a mandatory offer, pursuant to the German Securities Acquisition and Takeover Act (WpÜG), for the outside shareholders of HeidelbergCement AG, if the purchaser of the control is either included in one of the sanction lists of the UN, EU, France, US, or the World Bank specified in the agreement, or if the purchaser of the control takes action or makes decisions that would end or compromise the objectives planned with IFC's participation in Scancem International DA, i.e., the modernisation and expansion of the jointly led activities in the countries south of the Sahara.
Agreements also exist in relation to pension schemes in the United Kingdom, which stipulate that a change in control (not contractually specified) at HeidelbergCement AG must be communicated to the trustees of these pension schemes. If, according to the corresponding regulatory guidelines, a change in control imposes a considerable risk to the fulfilment of the pension obligations ("Type A Event"), the trustees can request negotiations on the suitability of the safeguarding of the pension cover and these can be verified by means of a "clearance" procedure before the Supervisory Authority, which may lead to the adjustment of the securities.
With the introduction of the new Managing Board remuneration system in November 2010, the HeidelbergCement AG Supervisory Board has decided, in the event of new contracts and the extension of Managing Board contracts in accordance with the German Corporate Governance Code (point 4.2.3), to agree that a possible redundancy payment in the case of early termination of membership of the Managing Board be limited to 150 % of the redundancy pay cap, but at the most to the remuneration for the remaining term of the appointment.
The other details required in accordance with §§ 289, section 4, 315, section 4 of the German Commercial Code (HGB) relate to circumstances that do not exist at HeidelbergCement AG.
HeidelbergCement AG has no regional branches either domestically or internationally.
In the course of the capital increase implemented in September 2009, the HeidelbergCement AG shareholder structure changed dramatically. Mr Ludwig Merckle scaled back his majority ownership of the company to 24.42 % on 25 September 2009. According to the notification made available to us, Mr Ludwig Merckle held 25.11 % of the voting rights as at the end of 2010. The Group is therefore no longer dependant and there is no obligation to create a dependency report for the past financial year.
82
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
Events occuring after the close of the 2010 financial year After the balance sheet date of 31 December 2010, there were no reportable events.
HeidelbergCement's risk policy is based on the business strategy, which focuses on safeguarding the Group's existence and sustainably increasing its value.
Entrepreneurial activity is always forward-looking and therefore subject to certain risks. Identifying risks, understanding them and reducing them systematically is the responsibility of the Managing Board and a key task for all managers.
HeidelbergCement is subject to various risks that are not fundamentally avoided, but instead accepted, provided they are well balanced by the opportunities they present. Opportunity and risk management at HeidelbergCement is closely linked by Group-wide planning and monitoring systems. Opportunities are recorded in the annual operational plan and followed up as part of monthly financial reporting. Operational management in each country as well as central Group departments are directly responsible for identifying and observing opportunities at an early stage.
Specific notes on potential opportunities can be found in the Prospects chapter on page 119.
The Managing Board of HeidelbergCement AG is obliged to set up and supervise an internal control and risk management system. The Managing Board also has overall responsibility for the scope and organisation of the established systems.
HeidelbergCement has installed transparent regulations of competences and responsibilities for risk management that are based on the Group's structure.
A code of conduct, guidelines and principles apply across the Group for the implementation of systematic and effective risk management. The standardised internal control and risk management system at HeidelbergCement is based on financial resources, operational planning, and the risk management strategy established by the Managing Board. It comprises several components that are carefully co-ordinated and systematically incorporated into the structure and workflow organisation.
The essential elements of the risk management system are:
2
4
1) Part of the annual audit
2) Legal, Compliance, Tax, IT, Treasury, Corporate Finance, Human Resources, Strategy & Development, Marketing & Sales
The process of identifying risks is performed regularly on a decentralised basis by the country management and by the globally responsible Group functions. General macro-economic data as well as other industry-specific factors and risk information sources serve as auxiliary parameters for the identification process.
Appropriate thresholds for reporting relevant risks have been established for the individual countries, taking into account their specific circumstances. On the basis of our Group's risk model and according to the defined risk categories, the risks are assessed with reference to a minimum probability of occurrence of 10 % and their potential extent of damage. The decline in operating income, which serves as the key parameter for corporate success, presents the scale for the extent of damage.
The risk statement also includes risks that do not have a direct impact on the financial situation, but that can have an effect on non-monetary factors such as reputation or strategy. In the case of risks that cannot be directly calculated, the potential extent of damage is assessed on the basis of qualitative criteria such as low risk or risks constituting a threat to the Group's existence.
The process of regular identification is supplemented with an ad-hoc risk report in the event of the sudden occurrence of serious risks or of sudden damage caused. This can arise, in particular, in connection with political events, trends in the financial markets or natural disasters.
The quantitative, updated risk reports for all business lines in our Group countries are presented to the Managing Board on a quarterly basis within the framework of central management reporting to ensure that risks are monitored in a structured and continuous way. Correlations between individual risks and events are considered at local level as far as possible. The quarterly management meetings provide a platform for the Managing Board and responsible country managers to discuss and determine promptly appropriate risk control measures. Decisions are thus made as to which risks will be intentionally borne independently and which will be transferred to other risk carriers, as well as which measures are suitable for reducing or avoiding potential risks.
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
The Group Insurance & Corporate Risk department is responsible for co-ordinating the risk management processes. It also carries out an annual survey amongst the Group functions about recording risks. Furthermore, all significant quantitative and qualitative risks for countries and Group functions are summarised once a year in a central risk map and presented to the Managing Board.
The Group Internal Audit department systematically examines and assesses risk management to help increase risk awareness. In addition, the auditor carries out an examination of the risk management system as part of the annual audit in accordance with legal guidelines to determine whether the monitoring system is capable of identifying in good time any issues that could threaten the Group's existence. The Managing Board also regularly informs the Supervisory Board about the risk situation.
The internal control system within the HeidelbergCement Group includes all principles, processes and measures intended to ensure the effectiveness, cost efficiency and accuracy of the accounting and to ensure observance of the relevant legal provisions.
The internal monitoring system within the HeidelbergCement Group consists of processindependent and process-integrated control measures. The process-integrated auditing activities include controls that are incorporated into the process (e.g. the principle of dual control). Process-independent measures are controls carried out by persons not directly involved in the accounting process (e.g. Group Internal Audit).
The organisational and management structure of HeidelbergCement AG and its Group companies is clearly defined. The responsibilities and functions within the accounting process (e.g. accounting of HeidelbergCement AG and its Group companies, Controlling, Treasury and Group Accounting) are also clearly separated and defined. The Group's organisational and management structure, the use of suitable software and internal Group requirements form the basis for a uniform, prompt and efficient accounting process.
The Group companies generally prepare their annual accounts locally with SAP and Oracle accounting systems and transmit these using a data model that is standardised across the Group and subject to the Group accounting guideline.
To prepare the Group annual accounts, further information is added to the individual accounts of the Group companies and these are then entered into a standardised consolidation programme developed by SAP. All consolidation adjustments, such as the capital or debt consolidation, the expense and income consolidation and the at equity valuation, are then carried out and documented in the consolidation system. The various elements that make up the Group annual accounts, including the explanatory notes, are created entirely from the consolidation programme.
4
All departments involved in the accounting process have the requisite qualifications and are equipped in accordance with the requirements. In the case of accounting issues that are complex or require discretionary judgement, external service providers (e.g. appraisers or pension experts) are also appointed. Uniform accounting and valuation is ensured by means of Groupwide guidelines, which are continuously adapted to current developments (e.g. from the Group's economic or legal environment) and changes to the financial reporting framework.
At HeidelbergCement, the accounts data are checked regularly for completeness and accuracy by means of spot checks and plausibility checks, using both manual and IT controls. The accounting process is also checked by integrated controls (e.g. principle of dual control, data analysis).
Process-independent checks are carried out by the Audit Committee of the Supervisory Board and by Group Internal Audit. The latter systematically checks the internal control system for the structures and processes described. Additional process-independent monitoring activities are also performed by the Group auditor and other auditing bodies, such as the external tax auditor.
Complete and accurate accounting is guaranteed by ensuring equipment with a sufficient number of qualified personnel, by employing suitable control and review mechanisms, and by clearly defining areas of responsibility and functions.
In order to identify and assess risks, individual business transactions at HeidelbergCement are analysed using the criteria of potential risk and probability of occurrence. Suitable control measures are then established on the basis of these analyses.
To limit the risks, transactions above a certain volume or with a certain complexity are subject to an established approval process. Furthermore, organisational measures (e.g. separation of functions in sensitive areas) and ongoing target/actual comparisons are performed for key accounting figures. The IT systems used for accounting are protected from unauthorised access by means of appropriate security measures.
The established control and risk management systems are not able to guarantee accurate and complete accounting with absolute certainty. In particular, individual false assumptions, inefficient controls, and illegal activities may limit the effectiveness of the internal control and risk management systems employed. Exceptional or complex circumstances that are not handled in a routine manner also entail a latent risk.
The statements made here apply only to the Group companies included in the Group annual accounts of HeidelbergCement AG whose financial and business policies can be determined directly or indirectly by HeidelbergCement AG for the purpose of deriving benefit from the activity of the company.
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
Risks that may have a significant impact on our assets and financial positions as well as results in the 2011 financial year and in the foreseeable future thereafter are divided into three categories based on the risk catalogue established in the Group: financial risks, market and strategic risks, and operational risks.
Our significant financial risks are currency risks, interest rate risks, refinancing risks, and credit risks. We manage these risks primarily as part of our ongoing business and financing activities and, when required, by using derivative financial instruments. These risk areas are monitored on a continuous basis by the Group Treasury department in accordance with internal Group guidelines. All Group companies must identify their risks and hedge them in co-operation with Group Treasury on the basis of these guidelines. The activities and processes of Group Treasury are governed by comprehensive guidelines, which, amongst other things, regulate the separation of trade and the processing of financial transactions. As part of our ongoing risk management, we manage the transaction risk, i.e. the risk of fluctuating prices (e.g. currency exchange rates, interest rates, raw material prices) that may affect the Group's earnings position.
Currency risks arising as a result of transactions with third parties in foreign currency (transaction risks) are hedged in certain cases using derivative financial instruments with a hedging horizon of up to twelve months. We primarily use currency swaps and forward exchange contracts for this purpose, as well as currency options in some individual cases. Currency risks arising from intra-Group transactions in goods are not hedged, as the inflows and outflows in the various currency pairs cancel one another out at Group level to a large extent. Through our in-house banking activities, the borrowing and investment of liquidity of the subsidiaries leads to currency positions that are hedged by means of external currency swap transactions, which are appropriate in terms of maturities and amounts.
In general, we do not hedge currency risks arising from converting the annual accounts of foreign individual companies or subgroups (translation risks). The associated effects have no impact on cash flow, and influences on the Group balance sheet and profit and loss accounts are monitored on a continuous basis. More information on currency risks can be found in the Notes on page 203 f.
Interest rate risks exist as a result of potential changes in the market rate of interest and may lead to a change in fair value in the case of fixed interest-bearing financial instruments and to fluctuations in interest payments in the case of variable interest-bearing financial instruments. Interest rate risks are maintained within the parameters set by the Group's Chief Financial Officer. By using financial instruments, primarily interest rate swaps, we are able to hedge both the risk of fluctuating cash flows and the risk of value fluctuations. Furthermore, the downgrading of our credit rating by the rating agencies (see Rating on page 75) could increase the interest margins in the event of a refinancing measure. On the basis of the balanced maturity structure
of financial liabilities (see diagram in the Prospects chapter on page 116) and the expected cash inflow from operating activities, there is no significant short- or medium-term need to refinance, meaning that no significant effects on the financial results are to be expected. More information on interest rate risks can be found in the Notes on page 203.
Refinancing/liquidity risks exist when a company is not able to procure the funds necessary to fulfil operational obligations or obligations entered into in connection with financial instruments.
Possible risks from fluctuating cash flows are considered as part of the Group liquidity planning. Assumptions concerning the expected economic cycle harbour particular uncertainties in liquidity planning, which is why we update them on an ongoing basis and simulate them by means of so-called stress tests. On this basis, we can – if necessary – initiate the appropriate measures, such as the issue of additional money and capital market securities or the raising of fresh funds in the bank market. Due to our extensive refinancing measures over the last 24 months, including the establishment of a syndicated credit line of EUR 3 billion, we have access to substantial amounts of cash and cash equivalents and have considerably reduced the refinancing risk. In addition, cash is continuously accruing from operating activities. As an additional precautionary measure, an appropriate amount for increasing shareholders' equity was decided upon at the 2009 and 2010 Annual General Meetings.
The revolving syndicated credit line of EUR 3 billion mentioned above with a term ending in December 2013, of which only EUR 396 million had been drawn upon as at the balance sheet date, is available for financing existing payment obligations. In total, we have EUR 3.5 billion of cash and cash equivalents as well as securities in our portfolio across the Group (see liquidity instruments table in the Group financial management section on page 75). More information on liquidity risks can be found in the Notes on page 201 f.
Credit risks exist when a contractual partner in a business cannot fulfil its obligations, or at least not within the stipulated period. We minimise the risk position arising from this by diversification and ongoing assessment of the creditworthiness of the contracting parties.
Credit risks from operating activities are monitored continuously as part of our receivables management. We apply strict standards with regard to the creditworthiness of our business partners. In this way – as well as by avoiding concentrations of positions – we are able to minimise the Group's credit risks. We minimise credit risks for our financial investments by only conducting transactions with banks that are particularly creditworthy. We select banks for payment transactions and establishing cash pools in the exact same way.
In connection with credit agreements, we agreed to comply with various financial covenants, which were all met in the reporting period. The most important key financial ratios are the ratio of net debt to EBITDA and the interest coverage ratio. Within the framework of Group planning, compliance with the covenants is monitored consistently, with notification issued to the creditors on a quarterly basis. In the event of a breach of the covenants, the creditors could, under certain conditions, accelerate corresponding loans irrespective of the contractually agreed terms. Depending on the volume of the relevant loan and the refinancing possibilities in the financial markets, this could lead to a refinancing risk for the Group.
88
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
On 27 April 2010, the company concluded a new syndicated credit line in the total amount of EUR 3 billion with a term ending on 31 December 2013 (see the Group financial management section on page 71 ff.). This agreement contains covenants, which were adapted to a level that met the requirements of the changed economic environment. More information on credit risks can be found in the Notes on page 201.
Changes in demand obviously present both opportunities and risks for HeidelbergCement. We are confident that the recovery of the global economy will, on a whole, continue in 2011, but that economic growth in the individual regions will still vary greatly regarding magnitude and time frame. Therefore, we expect that a few countries and regions will still be prone to considerable risks in relation to demand and price trends. Global economy recovered much quicker than anticipated in 2010, and as a result, prices for energy and food rose significantly in some countries. Speculations in raw materials, poor harvests and natural disasters exacerbated the upward trend in prices. As a result of an overheating market, analysts consider inflation to be the main risk in countries like Indonesia, India and China. Additionally, there is a risk of inflation spreading from the emerging countries to Europe, the US and Japan.
The demand for building materials is driven by certain fundamental developments. As a result of the global growth in population and wealth, the need for residential property is increasing. Economic growth leads to the expansion of production capacities, storage and office space. Increasing industrialisation brings urbanisation and an increased need for infrastructure, such as roads, railways and ports. Therefore, the demand for building materials is essentially divided into three sectors: private residential construction, commercial construction and public construction. The overall demand depends on the development of the demand in the individual sectors, whereby trends may mutually reinforce or weaken each other.
Demand in private residential construction depends on factors such as access to affordable loans, the trend in house prices and the available household income, which is in turn influenced by additional parameters such as the rate of unemployment or inflation. The development of these factors and thus the demand in this sector is mostly subject to country-specific risks and uncertainties. In the US, the burst of the property bubble led to a high excess of houses and apartments and to a corresponding price collapse. It is still difficult to predict how quickly this excess housing stock can be reduced and when house prices will rise again, and it additionally depends, for example, on the further developments in interest rates. Due to the increasing food prices in Asia, there is a risk that this could negatively impact the revenue available for construction projects and thereby also the investments in private residential construction. In China, risks arise from speculations in urban residential property. The government and central bank have already taken steps to combat overheating in the booming property market, by tightening the monetary policy, for example.
The utilisation of production facilities, office spaces and storage areas is primarily decisive for the demand in commercial construction, and in turn depends on the general order situation both at home and abroad. As a result of the economic crisis, the vacancy rate of office and industrial
spaces is still high in some countries, such as in the US. The time frame of the recovery in this sector is still fraught with risk and uncertainty. In particular, increasing interest rates resulting from rising inflation pressure could have a negative effect on economic growth and the future demand for building materials.
Investments in infrastructure such as roads, railways, airports, and waterways fall into the public construction sector. The demand in this sector depends on national budgets and the implementation of special infrastructure funding programmes. Risks exist insofar as countries could cut back on their infrastructure investments in order to reduce some of their national debt. As part of budget consolidation in a few European countries, but also in the US, spending cuts were also announced for the public construction sector, amongst other things. In Hungary, the extent to which investments will be made in infrastructure is uncertain. Rather than investing in the road construction sector, it is expected that water and energy supply projects will be implemented. The new Czech government has also frozen planned investment projects in their preparation phase and has subjected them to a review. Noticeable growth in income from state-funded projects will only materialise with a further time delay. In Germany, the infrastructure funding programme expires in 2011. The scope of the cutbacks and their effects on the demand for building materials cannot be predicted with absolute certainty.
Building materials are characterised by heavy weight in relation to the sales price and are thus not transported overland for long distances. Excess cement volumes are traded by sea on a regional level as well as between individual continents. If the difference of the price level between two countries, with connection to the sea trade, is so high that it exceeds the transportation costs, there is a danger of increased import pressure and thus of a price drop in the importing market.
We counteract risks from trends in sales markets with regional diversification, increased customer focus, the development of special products and, to the extent possible, with operational measures: for example, we adjust the production level to the demand situation and use flexible working time models. In order to further improve relationships with our customers and to respond to country-specific needs, HeidelbergCement carries out customer surveys across the Group and expands research and development operations at Group level.
A significant risk in building materials sales volumes results mainly from seasonal demand, especially because of the dependency on weather conditions. Weather-related sales volume fluctuations can vary over the year, but can also affect the sales of the year as a whole. Harsh winters with extremely low temperatures or high precipitation in the form of rain or snow impact construction activity or even bring it to a standstill, thereby having a negative effect on the demand for building materials. We counteract this risk with regional diversification, demand-oriented production scheduling and flexible working time models. In 2010, severe winter weather in the first quarter and an early, harsh start of the winter in Europe in December adversely affected the sales volumes of our building materials. In addition to winter weather, monsoons in some of our Group countries, such as India, are also counted amongst the seasonal weather conditions that impact the sales volumes of our products.
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
Capacity expansions from acquisitions and investments ensue opportunities, but also risks. HeidelbergCement constantly monitors the market environment with respect to embarking on suitable acquisitions or partnerships. In addition, market potential and raw material deposits are also systematically analysed and turned into proposals for investment projects. We place very high return requirements on every acquisition or investment decision across the Group, which are explained in the Strategy, management control and targets chapter on page 43 ff. Significant investment and acquisition projects are also subject to subsequent checks.
In the case of acquisitions, risks may arise from the integration of employees, processes, technologies and products as well as risks unknown at the date of acquisition. Acquisitions can also affect the debt to equity ratio and financing structure as well as lead to increases in fixed assets, including goodwill. In particular, impairments of goodwill due to unforeseen business trends can lead to burdens.
Investment projects can span over several years from the planning phase to completion. In this process, there are particular risks when it comes to obtaining the necessary permission for mining raw materials or developing infrastructure, including connecting to energy and road networks, as well as risks concerning the requirements for subsequent use plans for quarrying sites.
In the case of future acquisitions, partnerships and investments, there is a risk that political restrictions may only allow them to be implemented under complicated conditions or may prevent them at all. A resulting shortage in capacity expansion projects could affect the growth prospects of HeidelbergCement. Against this backdrop, we look for suitable partners, particularly in politically unstable regions, in order to minimise financial burdens and risks and to better exploit opportunities.
As is the case for all companies, potential turmoil in a political, legal and social context poses fundamental risks. Natural disasters, pandemics or terrorist attacks also represent a theoretical danger to the Group's financial and earnings position. Appropriate compensation limits of our Group-wide property insurance programme guarantee comprehensive coverage against natural disasters, including earthquakes, for our activities in heavily endangered regions of North America and Asia. Fortunately, the earthquake in Indonesia in October 2010, which led to the eruption of Mount Merapi and to a tsunami, did not affect our local employees or production sites. Also in 2010, loss experience showed positive development in all areas across the Group, despite minor flood damages in Poland and Australia.
HeidelbergCement operates in more than 40 countries around the world and is therefore also exposed to political risks such as nationalisation, prohibition of capital transfer, terrorism, war and other unrest. In countries with good growth potential, such as Russia, India and China, conflicts could also be triggered by geopolitical competition. At a number of HeidelbergCement locations, our management cannot rule out certain security risks because of internal political circumstances. In isolated cases, like Ghana, for example, cement prices are subject to state regulations.
2
5
The cement industry builds up its capacities in the markets of Eastern Europe, Asia and Africa in order to benefit from economic growth and the rising domestic demand driven by increasing wealth. HeidelbergCement is likewise pursuing a capacity expansion programme in the cement sector and, in the course of this endeavour, is focusing on local markets with exceptional growth potential. In 2011, we are planning to commission our new cement plant in Tula, which will supply the Moscow area with cement. Competitors are also building up new capacities in the same region. If the capacity increases in the markets in which we operate exceed the growth in demand, there is a risk that the prices will drop, which has negative effects on turnover and operating income.
Prior to capacity expansion projects, HeidelbergCement reviews both the market environment and market potential and responds to excess capacities by means of cost saving and efficiency improvement programmes, capacity adjustments and location enhancements.
For an energy-intensive company such as HeidelbergCement, a considerable risk results from price trends in energy markets, which are extremely volatile and can barely be influenced. Energy and electricity prices have significantly increased again across the globe due to the economic recovery.
The price of coal is expected to rise as a result of the flood-related production losses in the Australian mining industry. In addition to the energy price increases, infrastructural bottlenecks also pose a common risk with regard to electricity supply, especially in Africa. In a few countries, risks also arise from cutbacks in state subsidies for electricity or from the state regulation of oil and gas prices.
The energy price risks are minimised across the Group by means of the pooled and structured procurement processes of our purchasing organisation. Furthermore, we rely on the increasing use of alternative fuels and raw materials. In this way, we minimise price risks while reducing CO2 emissions and the proportion of energy-intensive clinker in the end product cement. The Group-wide "Operational Excellence" project, which was launched in the summer of 2010, aims to sustainably increase the efficiency of the cement production process. By means of a reduced and optimised consumption of electricity, fuel and raw materials, we are directly impacting energy costs.
HeidelbergCement requires a considerable amount of raw materials for cement and aggregates production, which is ensured by our own high deposits. In order to emphasise the key role of raw materials in our company and to facilitate the transfer of expertise beyond national borders, we have bundled the area of geology across the Group into HTC Global (see the Research and technology chapter on page 107) in 2010. There is, however, potential for certain risks in particular locations with regard to obtaining mining concessions. In Malaysia, for example,
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
the expansion of urbanisation may prevent a quarry from further operating and the necessary permissions may be refused in the short term. Furthermore, ecological factors and the fulfilment of environmental regulations play a role when it comes to accessing raw material deposits.
Availability and prices of the additive blast furnace slag, which is used in cement manufacturing and is a by-product in steel manufacturing, are subject to economic fluctuations. As a result of the good order situation in the steel industry, the supply of blast furnace slag is guaranteed for 2011. As a precaution against future declining volumes, we are optimising our stock holding and range of cement types.
The cement industry is a very facility-intensive industry with complex technology for storing and processing raw materials, additives and fuels. Due to accident and operating risks, personal injury or material damages may occur and business interruptions or environmental pollution may arise. In order to avoid the potential occurrence of damage and the resulting consequences, we have installed various surveillance security systems in our plants as well as integrated management systems. To identify the threat of potential dangers, it is imperative that every employee has a strong sense of risk awareness and that regular training is conducted in this respect.
HeidelbergCement's risk transfer strategy sets retention amounts for the main insurance programmes that have been adjusted to the size of the Group and are based on many years of failure analyses. The international liability insurance initiative intends from 2011 to optimise the cover and liability limit particularly for risks resulting from environmental damage.
As part of the European climate package adopted in December 2008, which concerns the reduction of greenhouse gas emissions, ambitious goals have been set by the European Parliament and the European Commission with regard to climate protection. The cement industry, like other CO2-intensive industry sectors, will not be affected by the full auction of emission rights from 2013. The emission rights will thus continue to be allocated free of charge, but by 2020 their quantity will have been reduced by 21 % compared with 2005. The emission certificates are to be allocated on the basis of demanding, product-specific benchmarks. A rise in climate protection cost may be assumed as the total volume of certificates continues to decrease. In the long term, this may create additional burdens in Europe as a result of higher manufacturing costs and therefore clear competitive disadvantages in comparison with producers from countries not involved in emissions trading.
Emissions trading in the US state of California is also scheduled for introduction from 2012, according to the European model. A cap-and-trade initiative governs the maximum limits of CO2 emissions and permits companies to trade with emission rights.
The National Standards for Hazardous Air Pollutants (NESHAP) issued in the US in September 2010 could have a negative impact on the competitive position of our American plants if there is no harmonisation, e.g. with EU regulations.
Climate protection and reducing CO2 emissions are a focus of HeidelbergCement's sustainability strategy. By increasing energy efficiency, developing cement types with a lower proportion of 2
4
clinker and using alternative fuels such as biomass, we were able to reduce our specific net CO2 emissions from 1990 to 2009 by more than 19 %. Additional measures concerning climate and environmental protection are described in the Environment precaution chapter on page 104 ff. and the Research and technology chapter on page 106 ff.
2
Personnel risks are divided into four areas: the turnover of qualified employees and managers in key positions, difficulties in filling key positions, assurance of the required qualifications and skills of the workforce, as well as problems with laying off personnel. We consider these to be low-level risks. Occurrence of these risks would have a negative effect on turnover and results in the medium to long term.
When it comes to reducing these risks, we rely on:
As part of sustainable corporate governance, HeidelbergCement particularly avows to protect the environment, preserve resources, conserve biodiversity and to act in a socially responsible way. The compliance of current legal and Group regulations forms an integrated part of our corporate culture and is therefore a task and an obligation for every employee. Violations against our commitments within the framework of sustainability or against laws and Group guidelines pose direct sanction risks in addition to a considerable risk to the Group's reputation, and can have significant effects on our results, assets and financial position. We have implemented a compliance programme across the Group to ensure conduct that is compliant with both the law and Group guidelines. This comprises, amongst other things, informational leaflets, a compliance hotline and employee trainings, which are conducted using state-of-the-art technologies and media such as electronic learning platforms, and which focus on the risk areas of antitrust and competition legislation as well as anticorruption regulations.
The business processes (administration, sales, etc.) of HeidelbergCement are increasingly supported by information systems. Risks mainly arise from the unavailability of IT systems, the delayed provision of important data, and the loss or manipulation of data. To minimise these risks, our Group uses comprehensive IT systems, back-up procedures, as well as integrated and standardised IT infrastructures and applications. The systems used for information security are reviewed on an ongoing basis.
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
All important server systems (e-mail, application servers, data bases) and all PCs are constantly protected against potential threats by means of up-to-date antivirus software. In addition, operating system platforms and critical business applications are regularly updated.
Information security is a central part of the Group-wide IT strategy and is viewed comprehensively: we prepare, implement and revise measures to protect data, applications, systems and networks. One particular focus is access protection as well as the monitoring and filtering of data traffic. The IT security process is structured and divided into a series of guidelines, standards and recommendations.
A continuous improvement process facilitates corrections, amendments and a sustainable efficiency increase in security measures. We also take measures to counteract the ageing process of equipment and system technology. In the case of existing applications, we are particularly concerned with business-critical resources (e.g. ERP applications, WAN infrastructure), which are updated or replaced in a consolidation programme.
Some of our Hanson participations in the US are exposed to particular legal risks and disputes relating to former activities. The most significant of these are the numerous asbestos-related claims, which, amongst other things, allege bodily injury and involve several American subsidiaries. Products containing asbestos were manufactured in the period from 1973 to 1984, and thus before these companies belonged to the Hanson Group and to HeidelbergCement. In the US, these damage claims are being handled and intensively managed by a team of in-house lawyers in collaboration with insurers and external consultants. The dispute is likely to continue for a few more years due to the complexity of the cases and the peculiarities of the American legal system. Adequate provisions have been formed on the basis of an extrapolation of the claims, the existing liability insurance coverage and reliable estimates of the development of costs.
Furthermore, there are a considerable number of environmental and product liability claims against former and existing Hanson participations in the US, which relate back to business activities discontinued a long time ago. There is partly insufficient insurance cover for law suits and liability loss claims relating to toxic substances such as coal by-products or wood preservatives. Our subsidiaries may also be charged further fines set by the court in addition to the cleanup costs and the compensation; there is, however, a possibility to settle authorised claims for compensation outside of court. Sufficient financial provision has been made for this event.
In the cartel proceedings initiated in 2002 against German cement companies, the Düsseldorf High Court (Oberlandesgericht) imposed a fine of around EUR 170 million against Heidelberg-Cement in June 2009; an appeal against the fine has been lodged with the Federal Supreme Court in connection with the breach of various procedural and material regulations. A decision is yet to be made on this matter. The proceedings before the Federal Supreme Court will not result in any increase in the fine. No decision has yet been made regarding the action for damages brought by the Belgian company Cartel Damage Claims SA before the District Court (Landgericht) of Dusseldorf, which is based on allegedly inflated cement prices as the result of 2
4
a cartel between 1993 and 2002. Even after the decision of the Düsseldorf High Court, HeidelbergCement believes that it still has a chance of defending itself successfully against the action. Appropriate financial provision has been made for the two proceedings. In November 2008, HeidelbergCement was confronted with additional cartel allegations, with reviews conducted by the European Commission at locations in Germany, Belgium, the Netherlands and the United Kingdom. The investigations of HeidelbergCement and its external lawyers into the circumstances have not confirmed the alleged antitrust violations. The proceedings were continued with the transmission of questionnaires at the end of September 2009 and additional enquiries in 2010, which HeidelbergCement answered by the respective deadlines. In December 2010, the European Commission informed HeidelbergCement that in this connection, proceedings had commenced in several EEA countries on the basis of suspicions concerning the violation of EU competition legislation. The notice from the Commission reads in part: "The initiation of proceedings does not imply that the Commission has conclusive proof of the infringements, but merely signifies that the Commission will deal with the case as a matter of priority."
These and other proceedings motivate us to continuously review and develop intensive internal precautions, particularly regular training initiatives – by means of modern IT media, amongst other things – in order to avoid cartel law violations.
As the global economy has started to stabilise, we predict a further reduction in the overall risk for the HeidelbergCement Group in 2011. However, despite the improvement of prospects for global economic growth, future development is still associated with risks and uncertainties.
Risks resulting from volatile energy and raw material prices as well as exchange rates could also reach a high level in 2011. Furthermore, a considerably narrower capital market resulting from a global investment boom could increase the real interest rates and thus capital costs as well. Generally speaking, the stability of the global finance system is currently still characterised by numerous uncertainties.
In a holistic view of individual risks and the overall risk situation, there are, from today's perspective, no identifiable risks that could threaten the existence of the Group or any other apparent significant risks. Our control and risk management system standardised across the Group ensures that major risks, which, if they occurred, would lead to a considerable deterioration of the Group's economic position, are identified at an early stage.
The commitment to sustainable development is a pillar of HeidelbergCement's corporate strategy. The creation of economic added value, ecological competence and social responsibility secure the Group's future viability. For us, sustainable corporate governance means ensuring a balance between making profit and securing future viability. We strive to act in a socially and ecologically responsible way. We take into account the effects of our entrepreneurial activity on the environment and society, and thereby reduce the risks for our business. Our sustainability strategy is thus derived from our corporate profile.
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
As a commodity company, people, nature and society are the focus of our sustainability strategy. We consider concern for the environment, climate protection, and sustainable resource conservation to be the foundation for our future development. In the same way, our obligation to prevent employees from work-related dangers and to protect their health has become an integral part of our activities for many years. Last but not least, acting in a sustainable way for us also means taking on social responsibility at our locations.
In order to make improvements, particularly in the areas of environmental protection and occupational health and safety, and to promote the exchange of information between the regions and business lines, the Group Environmental Sustainability Committee was founded in 2008. Under the lead management of the Global Environmental Sustainability department, 16 experts from the various business lines and Group areas define guidelines, goals and measures and coordinate their implementation.
The key tool for our sustainability management are the Sustainability Ambitions 2020. They describe our obligation together with goals and measures on six main topics, which are intended to ensure sustainable growth across the Group.
| HeidelbergCement Sustainability Ambitions 2020 1) | ||
|---|---|---|
| Obligation | Examples for the implementation by 2020 | |
| We give highest priority to occupational health and safety. |
HeidelbergCement aims to reduce the number of accidents, injuries and occupational illnesses to zero. |
|
| We consider climate pro tection as a key issue. |
HeidelbergCement continuously strives to lower its greenhouse gas emissions and offers solutions to adapt to the effects of climate change. |
|
| We make a significant contribution to preserv ing biodiversity. |
HeidelbergCement aims to establish a leading role in the promotion of biodiversity at its quarrying sites. All active quarrying sites will receive subsequent use plans and 50 % of them will have biodiversity management plans. |
|
| We promote sustainable construction. |
HeidelbergCement promotes sustainable construction by being an active member in all existing Green Building Councils in our Group countries. We are committed to deliver ing sustainable building materials that have a positive impact on society and the envi ronment throughout their lifetime and afterwards. We want to recycle building materi als and increase, for example, the amount of recycled material in asphalt to 10 %. |
|
| We use waste as a resource. |
We minimise the use of natural resources and offer solutions for sustainable waste management by using waste materials and by-products as alternative raw materials and fuels. In our cement business, we want to increase the amount of alternative fuels to 30 % and replace 30 % of the amount of clinker in cement with alternative raw materials. |
|
| We further reduce other environmental impacts. |
HeidelbergCement aims to be best in class in managing and minimising its environ mental impacts. In comparison with 2008, we want to reduce dust emissions by 35 % and nitrogen oxide and sulphur dioxide emissions by 10 % each. |
|
| All production sites are to undergo regular audits. |
1) The Sustainability Ambitions 2020 can be found at www.heidelbergcement.com/Sustainability/Sustainability strategy.
2
4
At the end of 2010, the number of HeidelbergCement's employees amounted to 53,437 (previous year: 53,302). The increase of 135 employees essentially results from two opposing developments: the location optimisations and capacity adjustments linked with job cuts, particularly in North America and the United Kingdom and the increase in the number of employees in Africa and Russia because of the first-time consolidation of the cement activities in the Democratic Republic of Congo and of the CJSC "Construction Materials" cement plant in the Republic of Bashkortostan.
| Employees by Group areas | |||
|---|---|---|---|
| 31 December | 2009 | 2010 | Change |
| Western and Northern Europe | 14,640 | 14,302 | -2.3 % |
| Eastern Europe-Central Asia | 9,481 | 9,959 | 5.0 % |
| North America | 12,601 | 11,899 | -5.6 % |
| Asia-Pacific | 14,030 | 13,682 | -2.5 % |
| Africa-Mediterranean Basin | 2,499 | 3,539 | 41.6 % |
| Group Services | 51 | 55 | 7.8 % |
| Total | 53,302 | 53,437 | 0.3 % |
Expenditure on salaries, social security contributions, as well as pension scheme contributions and social aid rose by 2.2 % in comparison with the previous year to EUR 2.086 million (previous year: 2,042). This corresponds to a share in turnover of 17.7 % (previous year: 18.4 %).
| Personnel costs | |||
|---|---|---|---|
| EURm | 2009 | 2010 | Change |
| Wages, salaries, social security costs | 1,891.9 | 1,991.3 | 5.3 % |
| Costs for retirement benefits | 94.5 | 71.4 | -24.4 % |
| Other personnel costs | 55.1 | 23.5 | -57.4 % |
| Total | 2,041.5 | 2,086.2 | 2.2 % |
Qualified and motivated employees are an important prerequisite for the sustainable success of HeidelbergCement. The core of our Group-wide personnel policy involves identifying our employees' talents, developing them and – in competition with other companies – also retaining our employees within the Group. This is supported by the HeidelbergCement competence model, which defines the requirements for the employees. It enables the respective superiors to perform systematic, Group-wide assessments of performance and potential in accordance
| Sustainability at HeidelbergCement |
|---|
| Employees and society |
| Environmental precaution |
| Research and technology |
| Prospects |
with standardised regulations and serves as a basis for strategic development of managers and succession planning. Superiors and employees discuss development opportunities and prospects within the framework of structured appraisal interviews. The dialogue is primarily targeted at upper and middle management, those in specialist roles and future executives. We aim to achieve the following three goals:
Sustainable personnel work means investing in training, even during times of difficulty, i.e., employing and training qualified talents. In Germany, the training quota remains unchanged at 6.5 %. Thus, we traditionally train beyond our needs. The percentage of apprentices we take on is 76 %.
Technical skills are essential in ensuring the functionally sound operational management of process technology and maintenance in our plants. In addition to technical training, we also offer every year master classes at the German Cement Works Association (Verein Deutscher Zementwerke e.V.).
Our extensive training programmes in virtually every work area are characterised by practical learning and therefore serve as the best prerequisite for ongoing development, both professionally and personally.
The motivation and skills of our managers play a crucial role in determining how well HeidelbergCement positions itself among its global competitors and how prepared the Group is for future challenges. In order to prepare our managers for their future tasks, we offer training programmes tailored specifically to the needs of our Group. This applies to both traditional topics such as strategy, leadership and management, or the method of capital expenditure budgeting, and to special training topics, e.g. in the area of technology. Uniform training content ensures that a common understanding of strategy, integrated management approach and leadership is developed everywhere.
As part of a strategic Group-wide initiative, we aim to further develop the skills of our top managers. For this purpose, we have enhanced our current programmes, both conceptually and in terms of content, in co-operation with Duke Corporate Education, one of the leading business schools for customised advanced training for managers. Between 2011 and 2014, 500 managers from across the Group will go through a three-stage curriculum focusing on general management and leadership as well as global, regional and local issues, lasting nine months. Members of the Managing Board will actively partake in all modules through discussion forums and with their own presentation contributions.
Despite the difficult economic environment, the advancement of future executives was consistently pursued in 2010. We offer highly motivated and qualified university graduates international 2
4
trainee programmes focusing on the following areas: technology, sales, finance, personnel, purchasing and IT. In total, 122 people take part in these programmes. We now also offer a specific curriculum for highly qualified engineers: Upon completion of the Engineer in Training Programme, the trainees go through several years of specifically defined technical training stages in various plants both in Germany and abroad – supplemented by advanced training in general management and leadership – in order to prepare them for higher engineering positions.
Our Group is increasingly faced with the consequences of demographic change. We have analysed the capacity and ageing effects arising from demographic development for the middle and upper management worldwide. The analysis shows that more than two thirds of our workforce is less than 50 years of age and around 14 % of our employees are younger than 30. The majority is aged between 30 to 49, making up around 55 % of the Group's total workforce. 31 % our employees are above 50 years of age.
We have already taken initial steps in the areas of health management and training to maintain the performance of our employees. As a pilot project, we have launched a health initiative in Germany, which includes a prevention programme for identifying illnesses and risk factors at an early stage, but which primarily focuses on the initiative of individuals to adopt a healthy lifestyle.
We understand diversity as a management concept, which, through team work and the inclusion of various cultures, talents and horizons of experience, creates a personnel setup that mirrors our presence in the international markets, our client structure and our business environment. The goal is to advance and acquire highly qualified and motivated employees around the world who advocate various social and technical skills for our company and thus contribute to the success of the Group. A good example of this is the international personnel structure at the locations of our headquarters and the technical centers Heidelberg Technology Center and Competence Center Materials in Heidelberg and Leimen. From a total of around 700 employees in these locations, more than 130 come from 35 different countries.
We are also mindful of diversity when filling management positions in the Group. The international composition of our management team enables us to benefit from various horizons of experience and different cultural backgrounds, thereby allowing us to respond flexibly to both global challenges and local market needs. The proportion of local managers at the upper management level is 80 %. We are able to sustainably guarantee this distinctive international composition in the Group by continuously recruiting and training talented graduates worldwide.
To aid diversity, we believe it is important for management positions to be held by both men and women, thereby providing a true reflection of our employee structure. Within the Group, the proportion of women made up around 15 % of the total number of personnel, and in upper management positions approximately 8 % in 2010. In Germany, women represent around 17 % of the total personnel and in upper management positions around 5 %. To increase the number of women in management positions, we focus on promoting women through our advancement of future executives programme. The proportion of women in our advancement programmes of future executive currently accounts for around 15 % Group-wide and around 28 % in Germany.
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
We consider the diversity of our management team's composition and the focus on commitment, technical expertise and conformity with our corporate values to be the main advantages in global competition.
In the race for the best employees, we adapt ourselves globally to changing lifestyles. In terms of what we offer insofar as encouraging a work-life balance, we focus on models such as flexitime, part-time and leave of absence. The part-time ratio at HeidelbergCement AG is 9.3 %. On the basis of the typically low number of employees at our locations, co-operation with external networks has proven itself in terms of children's day care, caring for family members, or, for example, holiday camps for children. Employees benefit from having easy access to a professional and flexible network at reasonable costs.
For our numerous foreign employees at the Heidelberg/Leimen location, we have launched an "Expatriate Network Day" as part of an initiative to help people to help themselves. The company supports a network of employees, friends and family members that was founded especially for this purpose, to help with the integration into the Rhine-Neckar metropolitan area, e.g. in looking for places to live, dealing with administative authorities, nursery/school affairs, etc.
As part of a management survey in 2010, we asked 1,200 managers worldwide about issues such as Group strategy, management and leadership understanding, Group values and the workplace. Answers to questions on strategy, corporate culture, corporate governance and managerial conduct proved particularly positive. After analysing the responses (rate of return: 87 %), we have introduced over 200 individual initiatives worldwide, which are aimed at improving the working environment. The focus lies on campaigns to optimise personnel development and cooperation across business lines and functions. In the follow-up survey in 2012, the managers shall assess the implementation of these measures.
We have also used the management survey in a targeted way to measure the success of the Hanson integration. The outcome shows that we have made major progress and developed a mutual understanding regarding all fundamental issues.
If you expect performance, you need to create a suitable environment. This involves an appealing remuneration system. Alongside fixed salaries governed by a collective agreement or an individual work contract, HeidelbergCement AG employees also receive variable remuneration elements based on their individual performance and on corporate success. In the case of managers, we consciously aim to achieve a high variable element as part of the total remuneration in order to observe, in a clear and direct way, collective and personal performances as well as corporate success. The employees in our foreign subsidiaries benefit from attractively designed remuneration systems that relate to the respective local market conditions.
2
4
2
Over the past few years, the main priority with our Group guidelines on Working at Heights and Machine Safety has been on the production area. Our focal point for 2010 has been transport safety and safety in construction projects. With the Driving Safety guideline, we have implemented the recommendations of the Cement Sustainability Initiative, which HeidelbergCement helped to create. The analyses of the work group, which has been managed by HeidelbergCement and another member company of the Sustainability Initiative since the beginning of 2010, have shown that the majority of deaths reported in our industry on a percentage basis are traffic accidents on the plant grounds or on public roadways. Unfortunately, this has also been the case for HeidelbergCement in recent years. The Group guideline now sets globally standardised regulations for drivers and management with which we aim to preemptively avoid such accidents. Our goal is to gradually implement the necessary measures by the end of 2014.
Mandatory minimum requirements for occupational health and safety within our global construction projects have been in place at HeidelbergCement for many years now. To enable us to carry out these projects – which often involve several hundreds of employees from external companies and of varying nationalities simultaneously working together on one site over a long period of time – without any accidents, extensive measures on both the part of the contractor and of the employer are required. We have analysed the experiences we have gained from previous projects and revised and amended our documentation accordingly. The updated requirements should ensure that future construction projects around the world also meet our safety standards.
In spring 2010, we produced a safety film relating to actual accidents that had occurred within the Group. The film, which is available in 18 languages, is being used across the Group for training purposes. We want to use this to raise awareness of the dangers of everyday situations in working life. Our poster campaign serves the same purpose. For all Group guidelines, we have created uniformly structured posters, which were translated into the respective languages of each country and distributed Group-wide for use in training.
Although we were able to reduce the accident frequency and accident severity rate in 2010, we didn't make as much headway as we had hoped to achieve. It is with regret that we had to report the deaths of five Group employees and ten employees from external companies. We have examined all accidents in order to identify their reasons and prevent further accidents at the accident site and at Group level by taking appropriate countermeasures. In this respect, we consistently use our internal safety network. In order to achieve our ambitious goal of an accident-free Group, we will take further measures in the future both locally and at Group level. As our accident analyses show that human error often plays a significant role when it comes to accidents, we will also focus more on measures concerned with changing behaviours.
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
| Occupational health and safety | |||||
|---|---|---|---|---|---|
| 2006 | 2007 | 2008 | 2009 | 2010 | |
| Accident frequency rate 1) | 7.4 | 5.8 | 4.8 | 4.6 | 4.3 |
| Accident severity indicator 2) | 191 | 154 | 132 | 167 | 146 |
| Fatality rate 3) | 0.3 | 0.6 | 0.9 | 1.7 | 1.1 |
1) Number of accidents (with at least one lost working day) suffered by Group employees per 1,000,000 working hours 2) Number of lost working days resulting from accidents suffered by Group employees per 1,000,000 working hours 3) Number of fatalities of Group employees per 10,000 Group employees
By employing local people and using local suppliers and service providers, HeidelbergCement contributes to the creation of value at its locations. With wages, investments, purchasing and taxes, we promote economic development in these places.
Our social responsibility, however, is not just reflected in our business processes. On the contrary, we are convinced that companies also take on an increasingly significant role when it comes to fulfilling social tasks.
Commitment at HeidelbergCement is geared towards proximity to core business. We support areas in which we have the greatest expertise and can achieve the best results for the benefit of the community. This is why we support local projects with a focus on Education-Building-Environment and have established corresponding principles in our Corporate Citizenship guideline.
Regardless of these principles, in January 2010, we supported the aid programmes for the earthquake victims of Haiti by donating EUR 100,000 to the Red Cross. The funds were used to build and operate a mobile hospital and to supply it with drinking water.
In Górazdze/Poland, we have been supporting health-promoting initiatives for many years. These include sports events in the quarry, for example. In April 2010, a Nordic walking competition was held there, and the newly constructed professional Nordic walking course, which partially runs by the quarry's nature trail, was inaugurated. In Hungary, we financed the reconstruction of the historical Calvary in Pécs, the 2010 European Capital of Culture; we carried out the project together with the city and in keeping with biodiversity and nature conservation.
In Africa, we have been already supporting the construction of schools and hospitals or making contributions to their upkeep for many years. In 2010, for example, we financed the construction of extra classrooms in a primary school near our plant location of Dar es Salaam, Tanzania. We also supported pupils and students in several countries with scholarships and with payment of their course fees.
As an active member of the Cement Sustainability Initiative of the World Business Council for Sustainable Development, HeidelbergCement takes its responsibility for the sustainable development of its business activity seriously. Over the last few years, we have made remarkable progress, particularly with regard to reducing our CO2 emissions and environmental effects, utilising waste materials as fuels, and promoting biological diversity at our quarrying sites. These improvements are promoted by the HeidelbergCement Sustainability Ambitions 2020, which describe the Group's main sustainability issues and goals (see page 97).
HeidelbergCement wants to consolidate its worldwide leading role in the promotion of biodiversity at quarrying sites. In Europe, we already issued a mandatory guideline in 2009 concerning biodiversity management. As a result, numerous pilot projects were launched in 2010. The goal is to install a biodiversity management plan for all quarrying sites that are related to the EU Natura 2000 network. In this way, we can ensure the long-term supply and production of raw materials and manage this within the framework of strict environmental legislation. In the reporting year, biodiversity management plans were developed for a total of 50 locations.
Our public-private partnership project in Georgia, which we are running together with the German Federal Ministry for Economic Co-operation and Development and the German Society for Technical Co-operation (GTZ), focuses on the restoration and preservation of biological diversity using modern renaturation methods. The project is progressing successfully with active involvement from all stakeholders and particularly from local communities.
In the Asia-Pacific Group area, we have published a guidance document on the subject of biodiversity and rehabilitation taking into account the biodiversity specifics of the region. It is intended to serve the sustainable restoration of quarrying sites in consideration of biological diversity.
In Africa, HeidelbergCement initiated another public-private partnership project with GTZ in the reporting year. The aim is to promote the afforestation and sustainable land use around the quarrying sites of our subsidiary Tanzania Portland Cement Company, whose production site is located near the harbour city of Dar es Salaam.
We are also implementing several biodiversity projects in North America; for example at our quarry in Romeoville/Illinois, where we are developing and implementing together with the authorities a plan to protect the habitat of the endangered Hine's Emerald dragonfly.
Our Sechelt quarry in British Columbia, Canada, was the first sand and gravel operation that received the prestigious "British Columbia Jake McDonald Mine Reclamation Award" in 2010. The quarry was recognized for its innovative and comprehensive reclamation and environmental protection measures.
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
HeidelbergCement and its subsidiaries are working with Green Building Councils around the world to develop certification systems for sustainable buildings and to make the design, construction, and management of the buildings in a more sustainable way. In the reporting year, HeidelbergCement joined the Romanian, Swedish and Polish Green Building Councils and became a founding member of the Norwegian Green Building Council.
The process of recycling concrete and asphalt rubble already forms part of our standard of good practice for sustainable construction. HeidelbergCement seeks also to expand its recycled aggregates activities, where it makes sense both ecologically and economically.
HeidelbergCement also invests a great deal in product innovations. The workforce in the Research and Development department of HTC Global (see page 108) has been reinforced in order to offer further innovative and sustainable solutions for the construction sector. Group-wide, there are already numerous product innovations for sustainable construction, for example, pervious concrete paving blocks AquaFlow®, which is used e.g. for stormwater control, or photocatalytically active cement TioCem®, which breaks down nitrogen oxides and other air pollutants under the influence of light.
Last but not least, by signing the "Manifesto for Energy Efficiency in Buildings" of the World Business Council for Sustainable Development, our Group has also pledged to improve energy efficiency in its office buildings.
HeidelbergCement regards waste materials and by-products from other industries as valuable raw materials and fuels for the production of cement. With alternative fuels in the fuel mix reaching 21.5 % in 2010, HeidelbergCement remains the front runner among the major international cement manufacturers.
We have also further increased the processing and use of hazardous waste. One of the factors that made this possible was the commissioning of a state-of-the-art waste processing plant in Belgium in the summer of 2010. Use of hazardous waste also increased in German and Indonesian cement plants, primarily old paints and varnishes, used oil filters and roofing felt. At an internal conference held last year, experts from various Group areas were able to exchange their experiences and practical examples.
We increased the use of sewage sludge in North America, China and Turkey. Successful trials with sewage sludge were conducted in various plants in Belgium and Germany. We also increased the use of plastic waste considerably in Hungary and Northern Europe.
Climate protection is at the heart of HeidelbergCement's environmental policy. As an energyintensive company, we have been striving for many years to minimise our CO2 emissions. Between 1990 and 2009, we reduced our specific net CO2 emissions by more than 19 % to 631 kg CO2 per tonne of cement. Compared to 1990, we want to reduce our specific net CO2 emissions by 23 % by 2015.
We are working intensively on the development and implementation of innovative solutions for reducing CO2 emissions. In many countries, we are a leader in the use of biomass as fuel; we also promote forward-looking projects for CO2 capture and storage – including at our Brevik location in Norway. Our joint implementation project, with which we aim to reduce CO2 emissions by using alternative fuels in our Ukrainian plant of Kryvyi Rih, was officially approved by United Nation's officials in October 2010.
In line with the goals set out in our Sustainability Ambitions 2020, we are implementing certified environmental management systems pursuant to ISO 14001 in all our cement plants.
Continuous investment in environmental protection remains the focus of our environmental policy. At our Norwegian cement plant in Brevik, we installed a gas scrubber to reduce sulphur dioxide, and in North America, we invested a considerable amount in new technologies for reducing emissions. At our Polish cement plant in Górazdze, we are currently modernising the second kiln line to make it possible to cover up to 70 % of energy requirements with alternative fuels. The modernised water treatment system at our cement plant in Kakanj, Bosnia-Herzegovina, has enabled us to significantly reduce the consumption of water. For our plants in Africa, we have developed a water conservation plan, which is currently being implemented on a locationspecific basis by means of water management plans. We are also mindful of energy-efficient processes and the reduction of emissions at our ready-mixed concrete production sites and aggregate plants.
The innovation work at HeidelbergCement can essentially be divided into three areas:
| Sustainability at HeidelbergCement |
|---|
| Employees and society |
| Environmental precaution |
| Research and technology |
current standards. Reducing the proportion of clinker is the most important lever when it comes to minimising energy consumption and CO2 emissions, and in preserving natural raw materials. Finally, we are also researching entirely new kinds of binder systems that dispense with the use of clinker altogether. These innovative alternative products are only in the early stages of research and it will take several years until they are ready for the market and for wider deployment.
In the reporting year, we set up the global competence center HTC Global (Heidelberg Technology Center Global) in Leimen. With its numerous international employees, HTC Global is subdivided into four areas: Research & Development, Global Engineering, Geology and Training & Reporting. This competence center pools together the knowledge and expertise in our Group and makes it available to the operational units quickly and comprehensively.
As our particular focus is on research and development, we have concentrated the Group-wide research and development activities in the cement and concrete business lines at HTC Global. To match the high importance of the development of CO2-minimised products, we are currently reinforcing this area even more, both financially and in terms of personnel. All projects are defined and carried out in close co-ordination with the operating companies. This close collaboration from the very start of the project facilitates the efficient implementation of the development results and a quick market launch.
The national companies in the Group areas are supported by technical centers. In the cement business line this is the Heidelberg Technology Center (HTC) with two locations in Europe, which also support the Mediterranean Basin, Africa and Central Asia, one location in North America, and one in Asia with sites in China, India and Indonesia. They support the cement plants with all technical issues, from securing raw materials and operational optimisations, to process control and quality assurance. With plant investment projects, HTC locations are involved in project management up until the new installation or plant is commissioned. Similarly, the Competence Center Materials (CCM) supports the Group companies in the aggregates, ready-mixed concrete and asphalt business lines. The close dialogue between HTC or CCM and the plants ensures efficient implementation of potential optimisations and a continuous improvement process.
The close proximity to the market of our activities requires intensive customer-oriented development and consultation, which is also reflected in high financial expenditure (see following table). The relevant departments and employees, which are integrated directly into the organisation of the respective national companies, develop and optimise the cements and concretes that are tailored to the local needs, often in close co-operation with the customer.
4
The total expenditure in the area of research and technology amounted to EUR 67.6 million in the reporting year (previous year: 63.6). The following table shows a breakdown of expenses for the last five years for each of the three areas mentioned above:
| Expenditure for research and technology | |||||
|---|---|---|---|---|---|
| EURm | 2006 | 2007 | 2008 | 2009 | 2010 |
| Central research and development 1) | 3.6 | 3.6 | 4.1 | 4.3 | 4.9 |
| Technology and innovation | 19.4 | 22.4 | 26.9 | 29.4 | 32.2 |
| Customer-related development and consultation | 43.9 | 32.6 | 32.2 | 29.9 | 30.5 |
| Total | 66.9 | 58.6 | 63.2 | 63.6 | 67.6 |
1) Including capitalised expenses
In comparison with previous annual reports, data has increased because employees and expenditure for research and technology in the concrete business line have been included for the first time. To improve comparability, the amounts have been retroactively adjusted to 2006.
The development projects that were capitalised as investments include, amongst others, our innovative special cements ChronoCem® and TioCem® (see page 110 f.). As these expenses amount to around EUR 1 million annually, they are not shown separately.
In the 2010 financial year, a total of 748 people (previous year: 736) were employed in the area of research and technology. The personnel breakdown and development over the last five years is shown in the following table:
| Employees in research and technology | ||||||
|---|---|---|---|---|---|---|
| 2006 | 2007 | 2008 | 2009 | 2010 | ||
| Central research and development | 27 | 32 | 37 | 38 | 42 | |
| Technology and innovation | 146 | 198 | 243 | 260 | 262 | |
| Customer-related development and consultation | 512 | 476 | 474 | 438 | 444 | |
| Total | 685 | 706 | 754 | 736 | 748 |
The high importance of customer-related development and consultation as well as technology and innovation is not only reflected in the costs but also in the number of employees.
Our employees' high level of expertise in research and technology is a key competitive factor, and the qualification requirements to this effect are high. Around 70 % of the employees in our technical competence centers have a university degree; 8 % have a PhD (see following graph). Intensive ongoing training and a systematic exchange of knowledge in expert networks across the Group ensure a high level of qualification.
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
Close co-operations with institutes and universities at both a local and global level complement our research and development activities. At a global level, we refer in particular to our participation in "Nanocem", the world's most important research network in the cement sector. The network includes cement and admixture companies as well as 24 leading universities in Europe, who all work together to carry out fundamental research, which is supported by public funding. In terms of product development, we prefer bilateral co-operations with individual universities in order to build on our own expertise in a targeted way. The total expenditure for contract research is considerably less than EUR 1 million for the year and will therefore not be shown separately; these expenses are included in the "Central research and development" section in the table on page 108. Aside from the research co-operations mentioned above, no acquisition of research and development expertise took place in 2010.
In the reporting year, our plants around the world systemically exploited cost-savings potential together with the technical centers. In addition to the ongoing optimisation of electricity and fuel consumption in our production facilities and the replacement of primary fuels and raw materials with alternative materials, we also placed particular emphasis on reducing maintenance costs and tied-up capital by means of targeted projects geared towards the long term.
In particular in growing markets, we were able to increase the replacement of primary fuels. The launch of new products, which included new composite cements, consequently helped – aside from the reduction of CO2 emissions – to exploit cost benefits. In 2010, we successfully introduced the "Operational Excellence" initiative, which aims to sustainably improve energy efficiency and production of our cement plants by the end of 2013 through the optimisation of the production facilities.
The "Maintenance Improvement Project", which was already launched in 2008 in order to standardise maintenance organisation and reduce maintenance costs in our production facilities, was again successful in 2010, exceeding internal expectations. The programme was supported in 2
the reporting year by an additional project, which focuses on reducing tied-up capital for spare parts. Within just one year, it was possible to lower the tied-up capital in this area by more than 10 %. The resulting increase in our production sites' cost effectiveness is very significant, particularly because of the high level of capital commitment in our industry sector, and represents a major competitive advantage.
Despite the difficult economic environment across the globe in the reporting year, we still managed to initiate or finalise several strategic investments in growing markets in addition to numerous optimisation and expansion investments in our existing plants. You can read more about this in the Investments section on page 68.
An investment priority in the reporting year was air pollution control and energy recovery. Following the successful commissioning of power plants in China, which are based on waste heat recovery technology, we started a similar project in our Çanakkale plant in Turkey.
In 2010, the purchasing strategy of "low-cost country sourcing" was consequently implemented for all investments in our production facilities. This strategy not only demonstrates clearly positive effects with regard to initial investments but also – through the most extensive standardisation – with regard to follow-up costs for maintenance.
We have made further progress in the development of cements with less clinker, thereby achieving a reduction in both CO2 emissions and in costs. Our plants in the Netherlands and Poland were the main frontrunners in this respect. Both countries managed to reduce the average proportion of clinker regarding all cement types to less than 65 % – a peak value by international comparison. This achievement is particularly remarkable in Poland, because blast furnace slag – a by-product of the steel industry and previously the primary replacement for clinker – is only available in limited quantities. As a result of the development and successful market launch of two new cement types using fly ash, which instantly achieved a sales volume of around 1 million tonnes in 2010, we were able to more than make up for this shortage.
As part of the "2010 Eco-Responsibility Campaign", Belgium and the Netherlands are working closely with customers to optimise very low-clinker CEM II/B and CEM III cements for highquality applications as well, e.g. for pre-cast element production.
For our plants in Ghana, we have developed a completely new composite cement based on dolomite. Due to our dwindling limestone reserves, we would have had to import raw materials to manufacture Portland limestone cement in the future. However, following thorough research and optimisations, we are now manufacturing a comparable cement based on locally available dolomite, meaning that the costly import of limestone can be avoided.
We have also achieved success in the development and market launch of special binders. In various European markets, we have optimised cements especially for the manufacturing of shotcrete for tunnel construction, which is used for large infrastructural projects. We have already acquired the first projects for the newly built ICE lines in Germany. The special cement ChronoCem® IR has already been successfully launched in the market. It facilitates the quick repair of runways, roads and motorways or logistics centers overnight. Despite the frequently
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
high requirements involved in construction execution and difficult general conditions, the system has proved very robust.
In 2010, numerous projects were implemented with white and grey TioCem®. Concrete products like paving stones, for example, which are produced with this photocatalytically active cement, reduce air pollutants such as nitrogen oxides and have a lower level of surface contamination and thus better aesthetics. Various applications already exist in the US and many European countries, a development that has also attracted the attention of the European Parliament, which asked for a presentation of the functions.
With Powercrete®, a highly thermally conductive concrete has been developed as a bedding and filling material for buried high voltage and extra-high voltage cables. The high temperatures of the cable surface can cause damage and thus lead to costly complaints. By using highly thermally conductive special concrete, the resulting heat is conducted away much more effectively. This means that the maximum current carrying capacity of the cable can be increased by up to 40 %.
In various countries, we also participate in the development of restoration concepts for contaminated soils and harbour sediments. Supported by public funding, systems are being developed on a cement base in Scandinavia and the United Kingdom, for example, which permanently bind the pollutants in the soil. This will enable us to tap into new market areas for our building materials.
The expected future development of HeidelbergCement and the business environment in 2011 and 2012 is described below. As such, please note that this annual report contains forwardlooking statements based on the information currently available and the current assumptions and forecasts of the Group management of HeidelbergCement. Such statements are naturally subject to risks and uncertainties and may therefore deviate significantly from the actual development. HeidelbergCement undertakes no obligation and furthermore has no intention to update the forward-looking statements made in this annual report.
While 2010 was characterised by the return of significantly positive economic growth in most industrialised countries, 2011 is expected to see this recovery slow down. The International Monetary Fund (IMF) predicts global economic growth of 4.4 % and 4.5 % in 2011 and 2012 respectively, compared with 5.0 % in 2010. IMF expects the differences in growth rates to continue – particularly between emerging countries in Asia and Africa and the industrialised countries in North America and Europe. Varying developments are also anticipated for price increase rates concerning consumer goods. While the inflation rate in the mature markets is expected to stabilise at 1.6 % in 2011 and 2012 following 1.5 % in 2010, a rate of 6.0 % is predicted for emerging countries in 2011 and a decline to 4.8 % for 2012. Regarding raw material prices, the IMF surmises a further increase in 2011, particularly with regard to oil, followed by a stabilisation in 2012.
In Asia, China will continue to be the driving force of industrial development. IMF forecasts a slight decline in growth for emerging countries in Asia, from 9.3 % in 2010 to 8.4 % in 2011 and 2012, and also expects economic growth in China to drop slightly from 10.3 % to 9.6 % and 9.5 %, respectively. Further positive developments are also predicted for Africa, especially in the countries south of the Sahara, where growth rates are expected to rise again from 5.0 % in 2010 to 5.5 % in 2011 and 5.8 % in 2012.
In contrast, economic recovery is expected to slow down in the mature markets. Following a significant increase – from a low base – of 3.0 % in 2010, IMF anticipates annual growth of 2.5 % for 2011 and 2012. According to IMF forecasts, the important markets for HeidelbergCement in the US, the United Kingdom, Germany and Canada will continue their economic recovery in 2011 and 2012. In 2011, the US are expected to achieve the highest economic growth with a rate of 3.0 %, followed by Canada with 2.3 %, Germany with 2.2 % and the United Kingdom with 2.0 %.
Realisation of the economic forecasts predicted for the next two years is associated with various uncertainties. The mature markets face the challenge of combating unemployment after the crisis but also of relieving public debt through ongoing cost-saving measures. The growing markets of emerging countries are exposed to rising inflation pressure. Energy prices were also driven by natural disasters and conflicts in oil producing countries at the start of 2011. Crucial factors for further economic growth are especially the development of raw material prices, food prices, unemployment in mature markets and interest rates.
The varied development of economic growth is reflected in the forecasts for the demand for building materials in the regions. The forecasts of the US cement association PCA from November 2010 estimate an increase of 5.8 % and 5.1 % in global cement sales volumes for 2011 and 2012, respectively. The development in demand will be driven by the emerging countries with growth rates of 6.5 % and 5.2 %. According to PCA, 55 % of globally produced cement in 2012 will be consumed in China and an additional 8 % in India, the second largest market. The increase in cement demand for North America is only expected to be slow – also starting from a low level – with growth rates of 2.4 % in 2011 and 4.0 % in 2012. In Europe, trends in the demand for building materials are expected to vary greatly by region. For the countries most affected by the property crisis, like Spain, Portugal and Ireland, Euroconstruct's forecasts from December 2010 anticipate a further decline in cement consumption for 2011 and stabilisation for 2012. High cement growth rates of 6.0 % and above are expected for countries in Northern Europe such as Sweden and Norway, which already showed considerable economic growth in 2010. Consumption in the Benelux countries and the United Kingdom is expected to stagnate during the same period. For Germany, the national cement association BDZ (Bundesverband der Deutschen Zementindustrie) predicts a slight increase in cement deliveries for 2011, particularly as a result of the recovery of private residential construction.
Like the general economic forecasts, demand development for building materials during the years 2011 and 2012 is also associated with uncertainties. With the expiration of the infrastructure development programmes and intense efforts in relation to budget consolidation, the time frame and strength of further recovery in the mature markets is increasingly dependent on recovery in private residential construction and commercial construction. This in turn assumes further
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
positive economic development, a reduction in the unemployment rate, and affordable property financing. In the growing markets of the emerging countries, continued, steady economic growth also plays an important role, as does income available for private residential construction, which mainly depends on the development of local food prices and thus also on inflation.
On the basis of the general economic and industry-specific prospects for the building materials industry and the special growth prospects for markets in which HeidelbergCement operates, a moderate increase in turnover is expected for 2011 in comparison with the previous year. One contributing factor is capacity expansions, which have already been implemented in 2010 and are also planned for 2011. They include primarily the purchase of the majority stake in the cement plants in the Democratic Republic of Congo and in the Russian Republic of Bashkortostan, which have been included in the consolidation scope since autumn 2010, and the new cement plant TulaCement in Russia, which is scheduled to start operation at the end of May 2011. We expect sales volumes of cement, aggregates and ready-mixed concrete to increase, while asphalt sales volumes are likely to fall as a result of the expiration of government infrastructure programmes. We are planning to pass on part of the predicted cost increase to our customers by increasing prices. The turnover forecast for 2011 has, compared with 2010, been based on virtually stable exchange rates against the euro.
In the Western and Northern Europe Group area, we generally anticipate further recovery in demand and thus increasing sales volumes for cement and aggregates, which will be primarily driven by strong trends in Scandinavia and Germany. In the United Kingdom, we assume that development will remain quite steady as a result of government cost-saving measures, while the Benelux countries are likely to face further price pressure due to the weakness in the construction industry.
We expect varying trends in our Eastern Europe-Central Asia Group area. As a consequence of the difficult general economic conditions in Hungary and Romania, we anticipate weak development in sales volumes in these countries. In the Czech Republic, we anticipate that demand will stabilise and then return to growth again in the second half of 2011. For Poland, we expect further recovery and increasing sales volumes. In the eastern countries of Eastern Europe and in Central Asia, we also predict an increase in cement deliveries as well as a recovery of prices.
In North America, we expect slight increase in cement and aggregates volumes owing to ongoing investments in road construction in the United States. We are planning price increases for both of these core products in order to balance out the margin erosion in 2010, rising costs and expenses in connection with the National Emissions Standards for Hazardous Air Pollutants (NESHAP). In Canada, we surmise that demand for building materials, which is driven by the raw materials industry in Alberta, Saskatchewan and Manitoba, will continue to show positive development.
2
In the Asia-Pacific and Africa-Mediterranean Basin Group areas, we expect a sustainably positive demand trend with strong growth in China, Indonesia, India and Bangladesh as well as stable development in Australia. In our African core markets in Tanzania, Gabon, Ghana and the Democratic Republic of Congo, we anticipate an above-average rise in demand compared with general economic growth in the region. In Spain, on the other hand, we expect a further weakening of demand for building materials. Overall, we anticipate a rise in the sales volumes of cement and aggregates for both Group areas. For India, we forecast a continuation of price and margin pressure due to the ongoing expansion of new capacities, especially in the south of the country, combined with increasing energy costs.
In light of increasing energy and raw material prices as well as rising inflation trends worldwide, HeidelbergCement expects 2011 to see an increase in the cost base for electricity, fuels, raw materials and personnel. Not least to combat this rise in costs, we have combined several measures relating to the further optimisation of costs and cash flow in our new programme for financial and operational excellence "FOX 2013". The programme focuses on improving efficiency in the core activities of aggregates and cement Group-wide. In cement manufacturing, a sustainable reduction in energy costs is planned as part of the "Operational Excellence" programme. Regarding aggregates, we want to achieve a sustainable improvement in margins and best practices by means of comprehensive, global benchmarking and portfolio optimisations. Over the next three years, we are planning to increase the cash flow by EUR 600 million with our "FOX 2013" measures. Of this total cash flow, we want to achieve EUR 200 million in 2011, EUR 160 million in 2012, and EUR 240 million in 2013. These amounts include financing and operational cost savings recognised in the profit and loss accounts amounting to EUR 35 million in 2011, EUR 110 million in 2012, and EUR 200 million in 2013.
As a result of the reduced debt and improved margins for our syndicated credit line compared with the previous year, we anticipate a corresponding decrease in financing costs for 2011.
For 2011, HeidelbergCement forecasts a moderate increase in operating income based on the assumption that the predicted rise in costs can be compensated by cost saving measures and price increases. As a result of the anticipated improvement in operating income and lower financing costs, we also expect growth in profit before tax.
For 2012, HeidelbergCement predicts a further increase in turnover and results on the basis of sustainable economic growth worldwide and the resulting rise in the demand for building materials.
As in 2010, we will also adjust the dividend to the development of the net debt to operating income before depreciation (OIBD) ratio and to the operating income of the HeidelbergCement Group for the next two years, and, in doing so, take into account the general economic development. In the medium term, we aim to achieve an industry-specific payout ratio of 30 % to 35 % related to the Group share of profit.
| Sustainability at HeidelbergCement |
|---|
| Employees and society |
| Environmental precaution |
| Research and technology |
| Prospects |
As in 2010, HeidelbergCement will continue to exercise strict spending discipline regarding investments. Debt reduction remains an important area of focus. At the same time, the Group will continue with its targeted investments in future growth – especially in cement activities in the emerging countries of Asia, Africa, and Eastern Europe. In the long term, HeidelbergCement aims to increase the proportion of its cement capacities in these markets from the current 59 % to 67 % of total Group capacity.
The construction of the new cement plant TulaCement in Russia, with a cement capacity of 2 million tonnes, is due to for completion at the end of May 2011, when it will be ready to start supplying the Moscow area. The capacity expansion in the Polish cement plant of Górazdze is progressing according to plan. The expansion of clinker capacity by approximately 30 % to 12,000 tonnes of clinker per day is set to be complete by mid-2011. The project also involves the construction of a new cement mill, which is expected to be ready by 2012. In total, the plant's cement capacity will thus increase by 1.2 million tonnes to 5.3 million tonnes.
Following the expansion of the cement grinding capacity in the Cirebon plant in Indonesia in 2010, we are now planning to set up an additional cement grinding facility at the Citeureup plant with a capacity of 2 million tonnes; construction is intended to start in 2011, ready for commissioning early 2013. As a result of the good growth outlook, we are also currently expanding our cement capacities in Central India by 2.9 million tonnes. We are planning to commission new facilities in our Damoh and Jhansi plants in the first quarter of 2012. HeidelbergCement will then have a total capacity of 6 million tonnes in India. The commissioning of another cement mill with a capacity of 0.8 million tonnes is scheduled to take place at the grinding plant in Chittagong at the end of 2011 and will enable us to profit from the rapidly growing cement market in Bangladesh.
Another investment focus lies in the expansion of our cement capacities in Africa. One important milestone in this regard was the partnership with IFC, a member of the World Bank Group, and its finance partners entered into in May 2010. They have undertaken to acquire an indirect minority share in HeidelbergCement's African activities and to put in up to USD 180 million. HeidelbergCement will invest these funds in the expansion of cement capacities in the countries south of the Sahara. In Liberia, the construction of a new cement mill is underway and is scheduled for commissioning in the first quarter of 2012. A new cement mill is also scheduled for construction in Ghana and we are evaluating options for capacity expansions in other African countries. We also want to expand further in the Democratic Republic of Congo, where we acquired the majority of the Forrest Group's cement business in September 2010. We intend to increase the capacity of the three cement plants – currently at around 500,000 tonnes of cement – to more than 1.4 million tonnes over the next few years.
Thanks to the successful refinancing measures on the banking and capital markets in 2010, HeidelbergCement has a stable financing structure for the long term and a well balanced debt maturity profile (see the following diagram). In 2011, HeidelbergCement has no significant maturities on the banking or capital markets, which means that the refinancing requirements are limited to smaller money market maturities that we will refinance either by rolling over
the relevant position or by utilising free credit lines. Subject to the environment on the capital markets, we will opportunistically refinance the EUR 1 billion Eurobond becoming due in January 2012 by either using available liquidity or by making use of credit lines or proceeds from new issues on the banking, money, or capital markets.
The following diagram shows the maturity profile of HeidelbergCement as at 31 December 2010:
As at the end of 2010, we had liquidity reserves, consisting of cash, securities portfolios and committed bank credit facilities, amounting to EUR 3.5 billion (see Group financial management section on page 75). We also have framework programmes in the money and capital markets in place that allow us to issue the relevant securities within a short period of time (EUR 1 billion Commercial Paper Programme and EUR 10 billion EMTN Programme).
Our goal is to further improve our financial ratios in the coming years in order to create the necessary preconditions for our credit rating to be upgraded further by the rating agencies. In particular, we want to reduce the ratio of net debt to operating income before depreciation (OIBD) to below 2.8x (31 December 2010: 3.6x). An investment grade rating remains our objective as – given the capital-intensive nature of our business – favourable refinancing opportunities in the banking, money and capital markets create an important competitive advantage.
The consistent extension of our Group-wide core personnel processes – such as performance management, goal agreements, employee dialogue or individual development plan – to middle and junior management as well as to future executives will remain a focus of our efforts in the coming years. We have started the implementation phase of our IT optimisation project HR GLOBE. By April 2012, the performance management, remuneration and successor planning processes should be fully IT-supported.
The new management training programme in co-operation with Duke Corporate Education will be the focus of our training measures at Group level from 2011 to 2014. In the coming years we will further expand our programmes for the advancement of future executives, such as the trainee programme for new employees from the CIS countries. We have added a follow-up
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
programme to our existing Engineer-in-Training Programme: over a period of four to five years, our talented engineers are specifically prepared for management positions in the technical field both in Germany and abroad.
The results of a worldwide 2010 manager survey on occupational health and safety showed a strong commitment of the line managers to these topics. This is a major success in our efforts to prevent accidents and health problems, on which we will build on further in the future. Although we have made improvements in recent years, far too many accidents involving injuries and even fatalities are still occurring. Occupational health and safety therefore remains a central topic for us in 2011. Our goals for 2012 are: no fatalities and a 50 % reduction of accidents resulting in lost working days in comparison with 2008. We will focus on conscientious implementation of our Group guidelines as well as on behaviour-changing measures to prevent accidents resulting from human error in particular.
Over the next two years, we will develop new Group guidelines. We aim to carry out the necessary measures for the implementation of the Driving Safety Group guideline, introduced in 2010, by the end of 2014. In 2011, we are planning to introduce a Group-wide safety week and formulate a set of Golden Rules.
HeidelbergCement is aware of its social responsibility. In the future, we will continue to foster relationships with the people in the areas surrounding our locations and support projects in line with our Corporate Citizenship Policy. All our measures are designed to achieve positive results for the benefit of society. In addition, we want to promote mutual trust and partnership through transparency, open communication and co-operation.
In the next two years, we will continue to press ahead with the implementation of the Sustainability Ambitions 2020. We have set ourselves interim goals by 2012 in six strategic topic areas (see Sustainability chapter on page 97), and we will monitor progress towards these goals.
We will further expand our systematic biodiversity management and extend it to the quarrying sites of our North American locations by means of a special guideline.
Our commitment to sustainable construction and sustainable product innovations also remains an important topic for us. In addition, we will promote recycling of aggregates. As a member of the Cement Sustainability Initiative (CSI), HeidelbergCement is involved in the development of a global certification system for sustainably produced concrete. It is also our aim to continually increase the use of waste materials as fuel and to invest in energy-efficient processes and renewable energies. A new waste processing plant in Belgium and a crushing facility in Indonesia will allow us to increase the use of hazardous waste in our cement kilns. New or modernised installations at our cement plants in Europe, Turkey, China, the US and Africa will allow us to continue recycling biomass and waste materials from agriculture without residues on an increasingly large scale.
For the imminent third phase of the EU Emissions Trading System (EU ETS), which begins in 2013, we will revise our existing strategy for reducing CO2 emissions.
4
In the coming years, we are planning an even greater expansion of our research and development activities in order to further increase our innovative strength. Efforts will be centred on developing cement types with a reduced proportion of clinker and thus low CO2 emissions. The alternative raw materials and fuels used will benefit the environment as well as helping us to lower costs.
Another focal area will be the development of high-quality binders and concrete applications in order to achieve greater benefit for our customers and added value for our Group.
In the area of production, we will continue the "Operational Excellence" programme introduced in 2010. By the end of 2013, we will systematically identify and exploit potential savings in energy and fuel costs at all our cement plants by optimising our production facilities.
Following the worldwide recession in 2009, global economy returned to the path of growth in 2010. The construction industry in the mature markets of North America and Europe was still battling against the effects of the crisis in the first half of 2010 – in the form of a declining demand in private residential construction and especially in commercial construction – and also against the effects of a severe, prolonged winter. In the course of 2010, the construction industry reached its lowest point in the mature markets and demand from private residential construction started to rise and commercial construction showed signs of stabilising. At the same time, the infrastructure programmes initiated during the crisis will expire in 2011 and lead, with a time lag, to a decline in public construction activities in the respective countries, especially in 2012.
The risks relating to the further development primarily concern both the slowdown of the economic upturn in Europe and the US and a relapse into recession – also known as a "double-dip" scenario. Measures already implemented and potential future measures relating to the debt reduction of individual national budgets – for example, in the US and the United Kingdom – may have a negative effect on economic growth and thus on the demand in commercial construction as well as on the decline of the unemployment rate and, in turn, on the demand in private residential construction.
Following the bursting of the housing bubble, there is still a relatively high number of new houses in foreclosure, especially in the US, which need to be taken up by the property market. The excess supply of houses and flats puts pressure on prices and reduces demand for new residential property. If the relief of this excess supply is only slow or delayed, there is a risk that recovery will be weaker than expected in private residential construction.
An additional risk for sales volumes, turnover and earnings is that the rise of inflation could turn out to be greater than anticipated, which will consequently trigger an increase in global interest rates. As a result, the household income available and thus the demand for residential construction could lessen and HeidelbergCement's financing costs rise.
| Combined management report | |
|---|---|
| Core activities and organisational structure | Sustainability at HeidelbergCement |
| Strategy, management control and targets | Employees and society |
| 2010 business trend | Environmental precaution |
| Additional statements | Research and technology |
| Risk report | Prospects |
The increase in energy and fuel prices since mid-May 2010, has presented a risk for the development of earnings in 2011 and 2012, i.e. if this increase turns out – for example, because of regional unrest in North African countries – to be higher than expected or HeidelbergCement is unable to compensate the increase by raising prices and improving efficiency.
Fluctuations in the exchange rates of foreign currencies against the euro present both risks and opportunities. On the one hand, for example, appreciation of the US dollar against the euro leads to growth in turnover and operating income; on the other hand, the US dollar-based proportion of debt measured in euro also increases.
In 2011, opportunities could arise from a faster-than-expected recovery of the economies in Europe and North America and the resulting upturn in commercial and private residential construction. Public construction could benefit as a result of higher tax yield. In the medium and long term, we also see particular opportunities for an increase in demand for building materials for residential, commercial, and public construction in the growing markets of emerging countries as a result of rising population figures, growing wealth and the ongoing trend of urbanisation.
Even during the crisis we continued to expand capacities in attractive growth regions in a focused and highly disciplined way. This enabled us, for example, to continuously increase our cement capacity in the growing markets of Asia, Africa and Eastern Europe. In Indonesia, we commissioned two new cement mills in 2010 and extended our cement activities to the Democratic Republic of Congo. In Russia, we are expanding our market position through the majority participation acquired at the end of 2010 in the Republic of Bashkortostan and the commissioning of the new cement plant in Tula at the end of May 2011. This creates opportunities for us to benefit from the anticipated growth in these regions. We also intend to continue with this growth strategy in the coming years.
The consistent and ongoing implementation of measures to improve efficiency and reduce production costs and to realise the opportunities associated with this, is an integral part of our strategy. As part of the new "FOX 2013" programme, which was launched in early 2011, we are working on reducing energy consumption in cement manufacturing and improving our margins comprehensively in the aggregates business line. Furthermore, we see opportunities for improving the cost structure by increasing the use of alternative fuels and raw materials, and in doing so, simultaneously reducing our CO2 emissions.
With its integrated product portfolio, its strong positions in growing markets, and its efficient cost structure, HeidelbergCement considers itself well-prepared to profit from the recovery of the global economy and the arising opportunities.
Part of the combined management report of HeidelbergCement Group and HeidelbergCement AG
On 8 February 2011, the Managing Board and on 10 February 2011, the Supervisory Board resolved to submit the following statement of compliance in accordance with § 161, section 1 of the German Stock Company Act: The Managing Board and Supervisory Board of HeidelbergCement AG declare, in accordance with § 161, section 1 of the German Stock Company Act, that they have complied with, and are in compliance with, the recommendations of the Government Commission on the German Corporate Governance Code (hereafter referred to as the "Code"), with the following exceptions:
Justification: The previous variable component of the Managing Board remuneration, linked to multi-year performance targets, has come to an end and was deliberately not replaced before the radical restructuring of the Managing Board remuneration system planned for autumn 2010. From 1 January 2011, the introduction of the new Managing Board remuneration system shall enable the Code recommendation to be fully satisfied.
– The Chairman of the Supervisory Board does not chair the Personnel Committee (deviation from point 5.2).
Justification: The Supervisory Board deems this allocation appropriate on the basis of the shareholder structure of the company.
– The Supervisory Board shall not designate specific goals and quotas for its composition (deviation from point 5.4.1).
Justification: The Supervisory Board regards the qualification of the Supervisory Board member and a Supervisory Board candidate as the decisive criterion for taking on a Supervisory Board mandate and its composition. It thereby supports and considers the criteria specified in point 5.4.1 but does not allow itself to be restricted by specific targets or quotas within the scope of its discretion in selection.
– The shareholdings of members of the Supervisory Board are not disclosed (deviation from point 6.6).
Justification: The members of the Supervisory Board are bound by the shareholding disclosure requirements under § 21 of the German Securities Trading Law (Wertpapierhandelsgesetz) and the "Directors' Dealings" disclosure requirements under § 15a of the German Securities Trading Law. This seems to guarantee sufficient transparency as regards the shareholdings of members of the Supervisory Board.
The above statement relates to the version of the Code dated 18 June 2009, published on 5 August 2009 in the Electronic Federal Gazette (Bundesanzeiger), for the period from 17 March 2010 (submission date of the previous statement of compliance) to 2 July 2010. For the period from 3 July 2010, it relates to the version of the Code dated 26 May 2010, published on 2 July 2010.
A Group-wide Code of Business Conduct requires all employees to observe the basic rules of business decorum − irrespective of whether these rules have been expressed in legal regulations or not. In particular, the Code calls for
The Code of Business Conduct, which is published on the Group website www.heidelbergcement.com under "About us/Corporate Governance/Code of Business Conduct", is part of the comprehensive compliance programme and its observance is monitored by means of control mechanisms included in the programme.
As a German public limited company, HeidelbergCement is required by law to have a two-tier board system: The Managing Board is responsible for independently managing the Group. Its members are jointly accountable for the management of the Group; the Chairman of the Managing Board co-ordinates the work of the members of the Managing Board. The Supervisory Board appoints, monitors, and advises the Managing Board and is directly involved in decisions of fundamental importance to the Group; the Chairman of the Supervisory Board co-ordinates the work of the Supervisory Board.
In managing the Group, the Managing Board is obliged to act in the Group's best interests and increase the sustainable value of the Group. It develops the Group's strategy, co-ordinates it with the Supervisory Board, and ensures its implementation. It ensures that all provisions of law and the Group's internal guidelines are adhered to, and works to achieve compliance by Group companies. It ensures appropriate risk management and risk controlling within the Group. The Managing Board considers diversity when filling management positions within the Group, and in doing so, strives to give due consideration to women; however, the Managing Board is opposed to a fixed quota of women. The Managing Board Rules of Procedure issued by the Managing and Supervisory Boards govern, in connection with the schedule of responsibilities approved by the Supervisory Board, the work of the Managing Board, in particular the departmental responsibilities of individual members of the Managing Board, matters reserved for the full Managing Board, and the required majority for resolutions. In accordance with these rules, each member of the Managing Board runs his management department independently, with the provision that all matters of clearly defined fundamental importance are to be decided upon by the full Managing Board. This takes place in the regular meetings of the Managing Board, led by the Chairman of the Managing Board, on the basis of prepared meeting documents. The results of the meeting are recorded in minutes, which are issued to all members of the Managing Board. There are no Managing Board committees.
The task of the Supervisory Board is to regularly advise and supervise the Managing Board in the management of the Group. The Managing Board must involve the Supervisory Board in decisions of fundamental importance to the Group. The Supervisory Board Rules of Procedure issued by the Supervisory Board govern the work of the Supervisory Board, in particular the required majority for resolutions, the legal transactions and measures requiring its consent, the standard retirement age for Managing and Supervisory Board members, and the tasks of established committees.
The Supervisory Board meets at least twice every half-year; at these meetings, it usually discusses the open topics and passes the required resolutions, on the basis of reports drawn up by the Managing Board and documents received in advance in preparation for the meeting. Additional meetings are held if necessary. The results of the meeting are recorded in minutes, which are issued to all members of the Supervisory Board. The Supervisory Board comprises a number of independent members – a number which it deems sufficient – and at least one independ-
ent member with expertise in either accounting or auditing. In accordance with the Articles of Association, the Supervisory Board has set up a total of four committees, which are entrusted with the tasks and working methods described below. The following respective plenary session
of the Supervisory Board is given an account of the results of the committee work.
The Personnel Committee is responsible for preparing the decision of the Supervisory Board concerning the appointment of members of the Managing Board, the election of the Chairman of the Managing Board, and the establishment of the Managing Board's remuneration structure as well as the remuneration paid to the individual members of the Managing Board. It is also responsible for making a decision concerning the structuring of the non-remuneration-related legal relationships between the company and the members of the Managing Board. The Personnel Committee comprises Messrs Fritz-Jürgen Heckmann, Josef Heumann, Hans Georg Kraut, Ludwig Merckle, Tobias Merckle, and Heinz Schmitt; the Chairman is Mr Ludwig Merckle.
The Audit Committee is responsible for preparing the decision of the Supervisory Board concerning the adoption of the annual accounts and the approval of the Group annual accounts. It is also responsible for monitoring the accounting process, the effectiveness of the internal control system, the risk management system, the internal audit system, the compliance programme, and the audit. In addition, it has the task of preparing the Supervisory Board's proposal to the Annual General Meeting for the appointment of the auditor, issuing the audit assignment, establishing focal points for the audit, concluding the fee agreement with the auditor, obtaining the auditor's statement of independence, and making the decision concerning measures to be taken if reasons emerge during the audit to warrant the possible disqualification of the auditor or suggest a conflict of interest on the part of the auditor. The Audit Committee discusses the half-yearly and quarterly reports with the Managing Board before they are published. The results of the meeting are recorded in minutes, which are issued to all committee members. In addition to the Chairman, the Audit Committee includes at least one independent member with expertise in either accounting or auditing. The Audit Committee comprises Messrs Robert Feiger, Fritz-Jürgen Heckmann, Max Dietrich Kley, Ludwig Merckle, Heinz Schmitt, and Werner Schraeder; the Chairman is Mr Ludwig Merckle.
The Nomination Committee is responsible for putting suitable candidates forward to the Supervisory Board for its proposals for election to be made to the Annual General Meeting. It comprises Messrs Fritz-Jürgen Heckmann, Ludwig Merckle, and Tobias Merckle as shareholder representatives; the Chairman is Mr Fritz-Jürgen Heckmann.
The Arbitration Committee, formed in accordance with § 27, section 3 and § 31, section 3 of the German Codetermination Law, is responsible for making a proposal to the Supervisory Board for the appointment of members of the Managing Board if the necessary two-thirds majority is not initially achieved. It comprises Messrs Fritz-Jürgen Heckmann, Hans Georg Kraut, Tobias Merckle, and Heinz Schmitt; the Chairman is Mr Fritz-Jürgen Heckmann.
In its meeting of 10 February 2011, the Supervisory Board decided regarding its composition to support the principles mentioned in point 5.4.1 of the German Corporate Governance Code ("Code") and to consider diversity when selecting the available candidates. In a deviation from point 5.4.1 of the Code, however, it shall not set fixed goals in the form of quotas or absolute figures because it regards the qualification of a Supervisory Board member and a candidate as the decisive criterion for its composition and/or for taking on a Supervisory Board mandate. The Rules of Procedure for the Supervisory Board specify the standard retirement age for members of the Managing Board as 65, and 75 for members of the Supervisory Board.
The Managing Board and Supervisory Board co-operate closely for the benefit of the Group. To this end, the Managing Board co-ordinates the Group's strategic approach with the Supervisory Board and discusses the current state of strategy implementation with the Supervisory Board at regular intervals. For clearly defined transactions of fundamental importance, the Supervisory Board has specified provisions in the Managing Board Rules of Procedure requiring its approval.
The Managing Board informs the Supervisory Board regularly, without delay and comprehensively, of all issues of importance to the Group with regard to planning, business development, risk situation, risk management, and compliance. The Managing Board explains deviations of the actual business development from previously formulated plans and goals, indicating the reasons for this. The Supervisory Board has included detailed provisions in the Managing Board Rules of Procedure with regard to the Managing Board's information and reporting duties. Documents required for decisions, in particular, the annual accounts, the Group annual accounts, and the auditors' report, are sent to the members of the Supervisory Board in due time before the meeting.
The direct or indirect ownership of shares or share-based derivatives by members of the Managing Board has, neither in any individual case nor in total, exceeded the threshold of 1 % of the issued shares.
According to the available reports, Supervisory Board member Ludwig Merckle indirectly holds 25.11 % of the issued shares. As regards the other members of the Supervisory Board, the ownership of shares or share-based derivatives has, neither in any individual case nor in total, exceeded the threshold of 1 % of the issued shares, according to the available reports.
In line with the options provided for in accordance with the law or the Articles of Association, the shareholders exercise their rights before or during the Annual General Meeting and thereby exercise their voting right. Each share carries one vote at the Annual General Meeting (one-share-one-vote principle). The ordinary Annual General Meeting is normally held in the first five months of the financial year. All important documents for exercising shareholder rights as well as the resolution issues and documentation are also duly available on our website for shareholders to access. Both the notice of the agenda for the Annual General Meeting and our website will provide shareholders with the information they need to exercise their rights, and particularly their voting rights at the Annual General Meeting, also by way of proxy. The report given by the Chairman of the Managing Board to the Annual General Meeting will be made available on the Internet at the same time. After the Annual General Meeting is over, our website will be updated with the attendance details and the voting results of each agenda item.
As part of our investor relations work, we provide information to shareholders and other investors comprehensively and regularly on a quarterly basis to tell them about business development as well as the financial situation and earnings position, and also provide them with notifica-
tions concerning the German Securities Trading Law, analyst presentations, press releases, and information about the annual financial calendar. Details on our investor relations work can be found on the page 38 f.
Within the Group's management culture, strong emphasis continues to be placed on the compliance programme, which is now firmly anchored in the Group-wide management and supervisory structures.
One focal topic is concerned with the provisions of competition legislation. In this regard, the antitrust compliance system has undergone an audit by external advisors. The outcome of this audit was that all essential components for an orderly and effective antitrust compliance system were present. In addition to competition legislation, another focus continues to be occupational safety legislation and environmental law. This reflects the characteristics and specific features of a heavy industry that extracts and processes raw materials and markets homogeneous mass goods. Special efforts are also made to observe anticorruption regulations, capital market regulations, data protection regulations, and regulations on non-discrimination in dealings with employees.
Modern technologies and media, such as electronic learning platforms and learning programmes as well as Internet and telephone-based reporting systems support the compliance managers appointed for all geographical and functional units of the Group. These tools will be constantly subject to improvements and further developments during the continuous examination of the whole compliance programme.
Group-wide implementation of the compliance programme is monitored by means of specially organised half-yearly compliance reporting as well as via regular and special audits by Group Internal Audit. The Managing Board's report to the Supervisory Board is based on the compliance report. The Supervisory Board's Audit Committee investigates whether the compliance programme satisfies the legal requirements as well as recognised best practices.
The remuneration report contains three parts. The first part shows the remuneration system that was valid up until 31 December 2010 and the remuneration of the Managing Board members for 2010. The second part shows the new remuneration system valid from 1 January 2011 together with the prospects for remuneration of the Managing Board in 2011. The third part shows the remuneration for the Supervisory Board paid for the 2010 financial year.
The system and amount of remuneration of the Managing Board is determined by the Supervisory Board following a recommendation by the Personnel Committee. This amount is determined on the basis of the size and international activity of the Group, its economic and financial situation, its future prospects, the amount and structure of the Managing Board remuneration in comparable companies, and the remuneration structure used for the rest of the Group. In addition, the tasks and performance of the relevant member of the Managing Board, and of the entire Managing Board, are taken into account. The remuneration is calculated in such a way that it is competitive on the market for highly qualified senior managers and provides an incentive for successful work in a business culture with a clear focus on performance and results.
The remuneration is made up of fixed and variable components. In connection with this, we are consciously aiming for a large variable element as part of the total remuneration in order to reflect, in a clear and direct way, the collective and personal performance of the members of the Managing Board and the performance of the Group. The one-year variable bonus depends on the achievement of a specific financial goal set by the plenary session of the Supervisory Board at the beginning of the financial year (Group share of profit). The medium-term bonus previously awarded, last allocated for 2008/2009, was no longer awarded for 2010 due to the planned introduction of the long-term bonus from 2011.
In accordance with § 286, section 5 and § 314, section 2, sentence 2 HGB, the 2006 Annual General Meeting exercised its right to refrain from the obligation to publish the remuneration of each individual member of the Managing Board in the annual accounts and the Group annual accounts. The resolution of the Annual General Meeting from 2006 also still applies for 2010 and ends due to expiration. Upon the introduction of the new remuneration system in 2011, the total amounts of remuneration will be shown individually for each member of the Managing Board.
In 2010, the fixed remuneration of the Managing Board increased to EUR 4.3 million (previous year: 3.9). By contrast, the sum of variable remuneration elements, which only comprised a one-year bonus this year, decreased to EUR 8.1 million (previous year: 11.7). This reduction is essentially based on the omission of two special items: Firstly, the Managing Board was awarded a special bonus of EUR 5.0 million in the previous year in connection with the successful reorganisation of the capital and financing structure. Secondly, the earned tranche of the 2008/2009 medium-term bonus in the previous year amounted to EUR 2.9 million.
Other remuneration elements totalled EUR 1.2 million (previous year: 1.0). The other remuneration elements consisted of payments for committee activities at subsidiaries of HeidelbergCement AG, reimbursement of expenses, and non-cash benefits arising from the provision of company cars.
Total remuneration of the Managing Board in 2010 amounted to EUR 13.6 million (previous year: 16.6). Furthermore, in accordance with § 314 section 1 item 6 letter a) sentence 3 HGB, a sum of EUR 1.7 million must still be specified, which is primarily attributable to the deviation of the final attainment of the 2008/2009 medium-term bonus compared with the assumptions made at the time the 2009 Group annual accounts were established.
Allocations to provisions for pension obligations (current service cost) for current members of the Managing Board amounted to EUR 1.3 million (previous year: 1.3). Payments to former members of the Managing Board and their surviving dependants amounted to EUR 3.0 million (previous year: 2.3) in the reporting year. Provisions for pension obligations to former members of the Managing Board amounted to EUR 28.1 million (previous year: 26.1).
In 2010, no loans or advances were granted to members of the Managing Board of HeidelbergCement AG.
In the context of the Act on the Appropriateness of Managing Board remuneration, which came into effect on 5 August 2009, the Supervisory Board decided on a new Managing Board remuneration system. The new remuneration system came into effect on 1 January 2011 as standard for all members of the Managing Board and will, in accordance with § 120, section 4 of the German Stock Company Act (AktG), be presented to the Annual General Meeting for approval in May 2011.
The Supervisory Board consulted a renowned remuneration expert when developing the new remuneration system. The new system was then reviewed on behalf of the Supervisory Board by another independent renowned remuneration expert, which found the system to comply with the law and to be adequate to the market. The new remuneration system consists of a fixed annual salary, a variable annual bonus, as well as a variable long-term bonus, and has been geared even more than before towards the sustainable development of the Group. This requirement was fulfilled by:
The following refers to the remuneration system valid as from 1 January 2011 and shows the prospects of the new remuneration structure.
4
The amount of remuneration paid to the Managing Board comprises:
3
The following graph shows the relation between fixed and variable remuneration elements of total remuneration (without fringe benefits and pension promises) as well as a comparison of the amount of the individual variable components – assuming that 100 % of the target is met – compared to the fixed annual salary.
The fixed annual salary is a set cash payment relating to the financial year, which is based on each Managing Board member's area of responsibility and is paid on a monthly basis over the year. It amounts to around 38 % of the target remuneration.
The annual bonus is a variable remuneration element, which relates to the financial year and is 70 % of the fixed annual salary, assuming that 100 % of the target is met. It amounts to around 27 % of the target remuneration. As before, the Group share of profit will be used as the key performance indicator. In addition, individual targets will be agreed with the Chairman of the Managing Board and the Managing Board members.
At the start of the financial year, the plenary session of the Supervisory Board decides on the performance targets and, at the end of the financial year, determines the extent to which the target has been reached.
0 - 200 % (the maximum value of annual bonus is limited to 140 % of the fixed annual salary and total loss of the entire annual bonus is possible; the determination of the range refers to each individual key performance indicator)
The following table shows a sample calculation for the determination of the annual bonus with a fixed annual salary of EUR 700,000:
| Sample calculation annual bonus 1) | ||||||
|---|---|---|---|---|---|---|
| Target | EUR 490,000 (70 % of fixed annual salary of EUR 700,000) | |||||
| Performance period | 1 year | |||||
| Key performance indicators |
2/3 Group share of profit (EUR 326,667) 1/3 individual targets (EUR 163,333) |
|||||
| Range | 0 - 200 % | |||||
| Target achievement (example) |
Group share of profit 200 % (EUR 653,334) individual targets 100 % (EUR 163,333) |
|||||
| Example result | Group share of profit: + individual targets: = Cash payout |
EUR 653,334 EUR 163,333 EUR 816,667 |
The long-term bonus is a variable remuneration element based on the long-term, which is to be issued in annual tranches starting in 2011. It amounts to 90 % of the fixed annual salary, assuming that 100 % of the target is met. The long-term bonus makes up around 35 % of the target remuneration. The long-term bonus comprises two components. Each component represents half of the long-term bonus.
The first component ("management component" with a term of three years) considers the internal added value as measured by earnings before interest and taxes (EBIT) and return on invested capital (ROIC), and is arranged in the form of a bonus with cash payment. The bonus will be paid after the Annual General Meeting in the year following the three year performance period. The second component ("capital market component" with a term of four years) considers the external added value as measured by total shareholder return (TSR) – adjusted for the reinvested dividend payments and for changes in the capital - compared with the relevant capital market indices, using performance share units (PSUs). The PSUs are virtual shares, which serve the calculation of the capital market component exclusively.
At the start of every tranche, the plenary session of the Supervisory Board determines the performance targets for both components based on various key performance indicators, which, if they are achieved, affect the amount of the long-term bonus. After expiry of the respective performance period, the plenary session of the Supervisory Board will ascertain the extent to which the target has been reached.
The target for the management component is based on the Group's relevant three-year operational plan, which the Managing Board had presented to the Supervisory Board. The share-based capital market component is measured over a four-year period, on the basis of § 193 section 2, no. 4 of the German Stock Company Act (AktG).
For the capital market component, the number of performance share units (PSUs) initially granted are ascertained in the first instance: The number of PSUs is calculated from 45 % of the fixed annual salary divided by the reference price 2) of the HeidelbergCement share as at the time of issue. After expiry of the four-year performance period, the PSUs definitively earned are to be calculated in a second step according to the attainment of the target and paid in cash at the reference price of the HeidelbergCement share valid at that time – adjusted for the reinvested dividend payments and for changes in the capital.
3
1) The degrees of target achievement are ficticious and serve only as illustration.
Capital market component:
1/2 peer total shareholder return (TSR); calculation of TSR compared with DAX 30 Index 1/2 peer total shareholder return (TSR); calculation of TSR compared with MSCI World Construction Materials Index
– Target achievement range
Management component: target achievement ranges between 0 % and 200 %, i.e. the maximum value of the management component of the long-term bonus is limited to 90 % of the fixed annual salary and total loss of the management component is possible; the range applies separately for each key performance indicator EBIT and ROIC.
Capital market component: target achievement ranges from 0 % to 200 %, i.e. depending on the target achievement, the number of virtual shares can maximally double or reduce to 0 (total loss).
– Cap of performance of the HeidelbergCement share before payout
Maximum of 2.5 times the reference price, which was determined at the start of the performance period.
The following table shows a sample calculation for the determination of a long-term bonus with a fixed annual salary of EUR 700,000:
| Target | EUR 630,000 (90 % of fixed annual salary of EUR 700,000) | ||
|---|---|---|---|
| Basis | Management component: 50 % of EUR 630,000 = EUR 315,000 Capital market component: 50 % (EUR 315,000) will be converted into virtual shares; Ø share price of the last 3 months before the beginning of the plan EUR 50.00; EUR 315,000 / EUR 50 = 6,300 virtual shares |
||
| Performance period |
3 years (from 2011 to 2013) for the management component and 4 years (from 2011 to 2014) for the capital market component |
||
| Key performance indicators |
Management component: Capital market component: EUR 315,000 EUR 315,000 (6,300 virtual shares) 1/2 EBIT (EUR 157,500) Peer TSR: 1/2 ROIC (EUR 157,500) 1/2 DAX 30 Index (3,150 virtual shares) 1/2 MSCI World Construction Materials Index (3,150 virtual shares) |
||
| Range | 0 - 200 % | ||
| Target achievement (example) |
EBIT 200 % (EUR 315,000) ROIC 100 % (EUR 157,500) |
Relative TSR: DAX 30 Index 100 % (3,150 virtual shares) MSCI World Construction Materials Index 150 % (4,725 virtual shares) |
|
| Example result | e.g.: EUR 130; Cap at 250 % = maximum value EUR 125) = 7,875 virtual shares x EUR 125 = EUR 984,375 |
Management component: EUR 315,000 + EUR 157,500 = EUR 472,500 Capital market component: 3,150 + 4,725 = 7,875 virtual shares (Ø share price over the last 3 months before the end of the 4th year |
|
| Management component: EUR 472,500 + capital market component: EUR 984,375 = EUR 1,456,875 cash payout |
|||
| Sample calculation long-term bonus 1) | |||
|---|---|---|---|
The taxable fringe benefits of the members of the Managing Board remain unchanged after the introduction of the new remuneration system and comprise of the provision of company cars and driving and administration services as well as the usual mobile phone and communication resources, the reimbursement of expenses, and insurance benefits.
With the expiration of the resolution of the 2006 Annual General Meeting, pursuant to § 286 section 5, § 314 section 2, sentence 2 of the German Commercial Code (HGB), the fringe benefits for each individual member of the Managing Board will be listed from 2011.
The new remuneration system does not affect the existing pension promises. The retirement agreements of the German members of the Managing Board contain the promise of an annual retirement pension, which is calculated as a percentage of the pensionable income. The percentage rate depends on the term of the Managing Board membership. After five years of Managing Board membership, the rate is at least 40 % of the pensionable income and can increase to a maximum of 65 % of the pensionable income. The percentage rate for the Chairman of the Managing Board is 4 % of the fixed annual salary for each year of service or part thereof, but no more than 60 %. The pensionable income is equivalent to a contractually agreed percentage of the fixed annual salary of the Managing Board member.
The pension is paid monthly either
The retirement agreements include a survivor pension benefit. If a member of the Managing Board dies during the term of his employment contract, or after effectuating the pension benefit, the member's widow and dependant children receive a widow's/orphan's pension. The widow's pension is 60 % of the deceased's pension benefit. The orphan's pension is 10 % of the deceased's pension benefit as long as a widow's pension is being paid at the same time. If a widow's pension is not being paid at the same time, the orphan's pension is 20 % of the deceased's pension benefit.
The retirement provision for Mr Daniel Gauthier is based on the retirement scheme of Cimenteries CBR S.A., a wholly owned subsidiary of HeidelbergCement AG, based in Brussels, Belgium. The pension promise is comparable to the retirement provision for the German members of the Managing Board in terms of the amount, and also contains a survivor pension benefit.
With the expiration of the resolution of the 2006 Annual General Meeting, pursuant to § 286 section 5, § 314 section 2, sentence 2 of the German Commercial Code (HGB), the retirement promises for each individual member of the Managing Board will be listed from 2011.
With the introduction of the new remuneration system, the remuneration of each member of the Managing Board is shown on an individual basis. The fixed remuneration of the Managing Board will account for a total of EUR 4.8 million in 2011. The value of the variable remuneration (annual bonus and long-term bonus) will be EUR 7.7 million for the Managing Board, assuming that 100 % of the target is met.
Remuneration of the Managing Board members shall be compiled as follows from 1 January 2011:
| EUR '000s | Fixed remuneration |
Variable remuneration if 100 % of the target is reached |
||
|---|---|---|---|---|
| Fixed annual salary |
Annual bonus |
Long-term bonus with long-term incentive |
Total | |
| Dr. Bernd Scheifele | 1,320 | 924 | 1,188 | 3,432 |
| Dr. Dominik von Achten | 700 | 490 | 630 | 1,820 |
| Daniel Gauthier | 700 | 490 | 630 | 1,820 |
| Andreas Kern | 700 | 490 | 630 | 1,820 |
| Dr. Lorenz Näger | 700 | 490 | 630 | 1,820 |
| Dr. Albert Scheuer | 700 | 490 | 630 | 1,820 |
| Total | 4,820 | 3,374 | 4,338 | 12,532 |
Remuneration of the Managing Board members from 1 January 2011
There have been no changes to existing pension promises. The projected service costs for pension promises in 2011 total EUR 780,000 for Dr. Bernd Scheifele, EUR 236,000 for Dr. Dominik von Achten, EUR 126,000 for Daniel Gauthier, EUR 138.000 for Andreas Kern, EUR 286,000 for Dr. Lorenz Näger and EUR 141,000 for Dr. Albert Scheuer.
Fringe benefits made in 2011 are expected to total EUR 1.3 million. For posts and offices held with Group companies, it is expected that Dr. Bernd Scheifele will receive EUR 300,000, Dr. Dominik von Achten EUR 50,000, Daniel Gauthier EUR 120,000, Andreas Kern EUR 300,000 and Dr. Lorenz Näger EUR 300,000. These amounts are to be offset fully against total remuneration. Furthermore, Dr. Bernd Scheifele and Dr. Lorenz Näger receive annual compensation of EUR 50,000 for expenses relating to their service on supervisory boards within HeidelbergCement Group, and Dr. von Achten for his service as Managing Board member in charge of the North America Group area. Fringe benefits also relate to taxation of monetary benefits, which are expected to total EUR 19,000 for Dr. Bernd Scheifele, EUR 11,000 for Dr. Dominik von Achten, EUR 3,000 for Daniel Gauthier, EUR 23,000 for Andreas Kern, EUR 16,000 for Dr. Lorenz Näger and EUR 23,000 for Dr. Albert Scheuer.
The Supervisory Board still has the option of discretionary adjustment (administrative discretion) by ±25 % of the target value of the variable remuneration elements in order to account for the personal performance of the individual members of the Managing Board and/or for exceptional circumstances.
In accordance with § 87 section 2 of the German Stock Company Act (AktG), the Supervisory Board's right and obligation to reduce Managing Board remuneration to a reasonable amount remains unaffected, if the position of the Group worsens after the fixing to such an extent that it would be unfair for the Group if remuneration of the Managing Board continued to be granted unchanged.
To support the sustainable development of the Group, the Supervisory Board has decided upon a set of guidelines for the shareholdings of members of the Managing Board. Members of the Managing Board are obliged to invest part of their personal wealth to purchase a fixed number of HeidelbergCement shares and to hold these shares for the term of their membership on the Managing Board. The number of shares to be held by the Chairman of the Managing Board is set at 30,000 HeidelbergCement shares and at 10,000 HeidelbergCement for the other members of the Managing Board. In order to comply with the guidelines, half of the amount issued for the long-term bonus is to be used to buy shares in the company until the full individual investment is generated; the accumulation of the individual investment can thereby take several years. HeidelbergCement shares that are already held by Managing Board members are taken into account in the individual investment.
The members of the Managing Board are covered in the Group's existing D&O liability insurance. The agreed deductible corresponds to the minimum deductible pursuant to § 93 section 2, sentence 3 of the German Stock Company Act (AktG) in the respective version.
In accordance with the German Corporate Governance Code, when concluding new Managing Board agreements or extending existing Managing Board agreements, it must be ensured that payments to a member of the Managing Board – in the event of the early termination of a Managing Board membership – do not exceed the value of two annual remunerations (including fringe benefits) without serious cause and do not amount to more than the remaining term of the agreement. The redundancy pay cap is calculated based on the amount of the total remuneration for the past financial year and, if necessary, also on the amount of the anticipated total remuneration for the current financial year.
In accordance with the German Corporate Governance Code, when concluding new Managing Board agreements or extending existing Managing Board agreements, it must be ensured – in the event of the early termination of a Managing Board membership – that benefits promised as a result of a change in control do not exceed 150 % of the redundancy cap.
Corporate Governance
3
HeidelbergCement annual accounts
4
Additional information
Supervisory Board remuneration was re-established by the 2010 Annual General Meeting with effect from the 2010 financial year. It consists of fixed remuneration and attendance fees. Each member receives EUR 40,000, with the Chairman receiving two-and-a-half times this amount and his Deputy one-and-a-half times. The members of the Audit Committee additionally receive fixed remuneration of EUR 15,000, the members of the Personnel Committee EUR 7,500, and the Chairmen of the committees twice these respective amounts. In addition, an attendance fee of EUR 1,500 is paid for each meeting of the Supervisory Board and its committees that is personally attended. In addition to the fixed remuneration, each member of the Supervisory Board shall receive a variable remuneration component, which is EUR 58 for each EUR 0.01 earnings per share exceeding the base amount of EUR 2.50 earnings per share. What is decisive are the earnings per share determined in accordance with the International Financial Reporting Standards and reported in the Group annual accounts for the financial year in which the remuneration is paid. The Chairman of the Supervisory Board shall receive two-and-a-half times, his Deputy one-and-a-half times this amount. The variable remuneration thus determined shall be limited to the amount of fixed remuneration. The variable remuneration granted to all Supervisory Board members may not exceed the overall balance sheet profit of the company, less 4 per cent of contributions paid towards the lowest issue amount of the shares. No variable remuneration was paid in the 2010 financial year. Total Supervisory Board remuneration paid for the 2010 financial year amounted to EUR 815,432 (previous year: 499,895).
The employee representatives on the Supervisory Board remit a significant portion of their Supervisory Board compensation to the recuperation facility for the employees at Heidelberg-Cement AG and – with the exception of the representative of the senior managers – to the trade union-linked Hans Böckler Foundation.
The Supervisory Board remuneration paid for the 2010 financial year is divided as follows:
| EUR '000s (rounded off) | ||||
|---|---|---|---|---|
| Fixed remuneration |
Remuneration for committee membership |
Attendance fees |
Total | |
| Fritz-Jürgen Heckmann (Chairman) | 100.00 | 22.50 | 10.50 | 133.00 |
| Heinz Schmitt (Deputy Chairman) | 60.00 | 22.50 | 10.50 | 93.00 |
| Robert Feiger | 40.00 | 15.00 | 7.50 | 62.50 |
| Josef Heumann | 40.00 | 7.50 | 10.50 | 58.00 |
| Max Dietrich Kley | 40.00 | 13.35 | 7.50 | 60.85 |
| Hans Georg Kraut | 40.00 | 7.50 | 10.50 | 58.00 |
| Dr-Ing. Herbert Lütkestratkötter | 37.59 | 1) | 6.00 | 43.59 |
| Ludwig Merckle | 40.00 | 45.00 | 10.50 | 95.50 |
| Tobias Merckle | 40.00 | 6.68 | 9.00 | 55.68 |
| Alan Murray | 37.81 | 1) | 7.50 | 45.31 |
| Werner Schraeder | 40.00 | 15.00 | 7.50 | 62.50 |
| Frank-Dirk Steininger | 40.00 | 1) | 7.50 | 47.50 |
| Total | 555.40 | 155.03 | 105.00 | 815.43 |
The Supervisory Board remuneration paid for the 2010 financial year
1) no membership
In accordance with the Articles of Association, the Supervisory Board of HeidelbergCement AG consists of twelve members. Half of the members of the Supervisory Board shall be elected by the Annual General Meeting in accordance with the provisions of the German Stock Corporation Act and half by the employees in accordance with the provisions of the German Codetermination Law. The term of office for the Supervisory Board started with the conclusion of the Annual General Meeting of 7 May 2009 and ends according to schedule with the conclusion of the ordinary Annual General Meeting in 2014.
Chairman of the Supervisory Board Stuttgart; Business Lawyer Member since 8 May 2003 Chairman since 1 February 2005 Chairman of the Arbitration Committee and of the Nomination Committee and member of the Personnel Committee and the Audit Committee
Deputy Chairman Heidelberg; Controller; Chairman of the Council of Employees at the headquarters of HeidelbergCement AG Member since 6 May 2004 Deputy Chairman since 7 May 2009 Member of the Audit Committee, of the Arbitration Committee and of the Personnel Committee
Frankfurt; Deputy Chairman of the Federal Executive Committee, IG Bauen-Agrar-Umwelt Member since 2 January 2008 Member of the Audit Committee
Burglengenfeld; Kiln Supervisor; Chairman of the Council of Employees at the Burglengenfeld plant, HeidelbergCement AG Member since 6 May 2004 Member of the Personnel Committee
Heidelberg; Attorney Member since 6 May 2004 Member of the Audit Committee (since 10 February 2010)
Other Mandates: a) BASF SE SGL CARBON SE (Chairman)
Schelklingen; Director of the Schelklingen plant of HeidelbergCement AG Member since 6 May 2004 Member of the Personnel Committee and of the Arbitration Committee
4
Essen; Chairman of the Executive Board of HOCHTIEF Aktiengesellschaft Member since 23 January 2010
Other Mandates:
a) HOCHTIEF Concessions AG HOCHTIEF Construction AG HOCHTIEF Facility Management GmbH TÜV Rheinland Holding AG b) Leighton Holdings Limited
Ulm; Managing Director of Merckle Service GmbH
Member since 2 June 1999 Chairman of the Personnel Committee and of the Audit Committee and member of the
Other Mandates:
Nomination Committee
a) Kässbohrer Geländefahrzeug AG (Chairman) Württembergische Leinenindustrie AG (Chairman)
Leonberg; Managing Director of the association Prisma e.V. – Initiative für Jugendhilfe und Kriminalprävention Member since 23 May 2006 Member of the Personnel Committee, of the Nomination Committee and of the Arbitration Committee (since 10 February 2010)
Naples, Florida/US; former member of the Managing Board of HeidelbergCement AG Member since 21 January 2010
Other Mandates: b) International Power plc (Non executive Director)
Ennigerloh; Building Fitter; Chairman of the General Council of Employees of HeidelbergCement AG and Chairman of the Council of Employees at the Ennigerloh plant of HeidelbergCement AG Member since 7 May 2009 Member of the Audit Committee
Frankfurt; Specialist in Employment Law for the Federal Executive Committee of IG Bauen-Agrar-Umwelt Member since 11 June 2008
The above mentioned indications have the following meaning:
All indications refer to 31 December 2010.
Ludwig Merckle, Chairman Fritz-Jürgen Heckmann Josef Heumann Hans Georg Kraut Tobias Merckle (since 10 February 2010) Heinz Schmitt
Ludwig Merckle, Chairman Robert Feiger Fritz-Jürgen Heckmann Max Dietrich Kley (since 10 February 2010) Heinz Schmitt Werner Schraeder
Fritz-Jürgen Heckmann, Chairman Hans Georg Kraut Tobias Merckle (since 10 February 2010) Heinz Schmitt
Fritz-Jürgen Heckmann, Chairman Ludwig Merckle Tobias Merckle (since 10 February 2010)
At present, there are six members on the Managing Board of HeidelbergCement AG: the Chairman of the Managing Board, the Chief Financial Officer and four members of the Managing Board with regional responsibilities. The Managing Board organisation is characterised by dual management responsibility: The operating units in the Group areas fall under the line responsibility of individual members of the Managing Board. In addition, they have cross-area responsibility for specific corporate functions with great strategic importance for the Group.
Chairman of the Managing Board Area of responsibility: Strategy and Development, Communication & Investor Relations, Human Resources, Legal, Compliance, Internal Audit Chairman of the Managing Board since 2005
a) Verlagsgruppe Georg von Holtzbrinck GmbH (Deputy Chairman) Landesbank Hessen-Thüringen Girozentrale (member of the Board of Directors) b) Castle Cement Limited 1) ENCI Holding N.V. 1) Hanson Limited 1) Hanson Pioneer España, S.L. 1) HeidelbergCement Holding S.à.r.l. 1) HeidelbergCement India Ltd. 1) HeidelbergCement Netherlands Holding B.V. 1) PT Indocement Tunggal Prakarsa Tbk. 1) RECEM S.A. 1) TAMRO Oyj (Chairman of the Board of Directors)
4
Area of responsibility: North America, Purchasing, worldwide coordination of Competence Center Materials Member of the Managing Board since 2007
3
b) Castle Cement Limited 1)
HeidelbergCement Canada Holding Limited 1) HeidelbergCement UK Holding II Limited 1) Lehigh Hanson, Inc. 1)
Lehigh Hanson Materials Limited 1)
TITAL GmbH
Verlag Lensing-Wolff GmbH & Co. KG ("Medienhaus Lensing")
Area of responsibility: Western and Northern Europe (without Germany), Africa-Mediterranean Basin, Group Services, Environmental Sustainability
Member of the Managing Board since 2000
b) Akçansa Çimento Sanayi ve Ticaret A.S. (Deputy Chairman) Carmeuse Holding SA Castle Cement Limited 1) CBR Asset Management S.A. 1) (Chairman) CBR Asset Management Belgium S.A. 1) (Chairman) CBR Finance S.A. 1) (Chairman) CBR International Services S.A. 1) (Chairman) Cementrum I B.V. 1) Cementrum II B.V. 1) Cimenteries CBR S.A. 1) (Chairman) Cimenterie de Lukala "CILU" SARL 1) Civil and Marine Limited 1) ENCI Holding N.V. 1) (Chairman) Genlis Metal Hanson Building Products Limited 1) Hanson Pioneer España, S.L. 1) Hanson Quarry Products Europe Limited 1) HC Fuels Ltd. 1) (Chairman) HC Trading International Inc. 1) (Chairman) HC Trading B.V. 1) (Chairman) HC Trading Malta Ltd 1) HCT Holding Malta Limited 1)
HeidelbergCement Asia Pte Ltd 1) HeidelbergCement Holding HK Limited 1) HeidelbergCement Holding S.à.r.l. 1) HeidelbergCement Northern Europe AB 1) HeidelbergCement UK Holding Limited 1) Interlacs SARL 1) International Trading and Finance (ITF) B.V. 1) (Chairman) Lehigh B.V. 1) (Deputy Chairman) PT Indocement Tunggal Prakarsa Tbk. 1) RECEM S.A. 1) Scancem International DA 1) (Chairman) Scancem International a.s 1) (Chairman) Tadir Readymix Concrete (1965) Ltd 1) TPCC Tanzania Portland Cement Company Ltd. 1)
Area of responsibility: Eastern Europe-Central Asia, Germany, Sales and Marketing, worldwide coordination of secondary cementitious materials Member of the Managing Board since 2000 Mandates: a) Basalt-Actien-Gesellschaft Kronimus AG b) Carpatcement Holding S.A. 1) Castle Cement Limited 1) CaucasusCement Holding B.V. 1) (Chairman) Ceskomoravský cement, a.s., nástupnická spolecnost 1) (Chairman) Duna-Dráva Cement Kft 1) ENCI Holding N.V. 1) Górazdze Cement S.A. 1) (Chairman) Hanson Pioneer España, S.L. 1) HC Fuels Limited 1) HeidelbergCement Central Europe East Holding B.V. 1) (Chairman) HeidelbergCement Netherlands Holding B.V. 1) Joint Stock Company – Bukhtarminskaya Cement Company 1) (Chairman) Limited Liability Company Kartuli Cementi 1) Limited Liability Company SaqCementi 1) (Deputy Chairman) Lithonplus GmbH & Co. KG
Remuneration Report
NCD Nederlandse Cement Deelnemingsmaatschappij B.V. 1) OAO Cesla 1) Public Joint Stock Company "HeidelbergCement Ukraine" 1) RECEM S.A. 1) Tvornica Cementa Kakanj d.d. 1)
Area of responsibility: Finance, Group Accounting, Controlling, Taxes, Insurance & Corporate Risk Management, IT, Shared Service Center, Logistics Member of the Managing Board since 2004 Mandates: b) Castle Cement Limited 1) Cimenteries CBR S.A. 1) ENCI Holding N.V. 1) Hanson Limited 1) Hanson Pioneer España, S.L. 1) HeidelbergCement Canada Holding Limited 1) HeidelbergCement Holding S.à.r.l. 1) HeidelbergCement India Ltd. 1) HeidelbergCement International Holding GmbH 1) HeidelbergCement Netherlands Holding B.V. 1) HeidelbergCement UK Holding Limited 1) HeidelbergCement UK Holding II Limited 1) Lehigh B.V. 1) (Chairman) Lehigh Hanson, Inc. 1) Lehigh Hanson Materials Limited 1) Lehigh UK Limited 1) Palatina Insurance Ltd 1) PT Indocement Tunggal Prakarsa Tbk. 1) RECEM S.A. 1) TAMRO Oyj
Area of responsibility: Asia-Pacific, worldwide coordination of Heidelberg Technology Center Member of the Managing Board since 2007
b) China Century Cement Limited Cochin Cements Ltd. 1) Easy Point Industrial Ltd. Guangzhou Heidelberg Yuexiu Enterprise Management Consulting Company Ltd. HeidelbergCement Asia Pte Ltd 1) (Chairman) HeidelbergCement Bangladesh Ltd. 1) HeidelbergCement Holding HK Limited 1) HeidelbergCement India Ltd. 1) Jidong Heidelberg (Fufeng) Cement Company Limited Jidong Heidelberg (Jingyang) Cement Company Limited PT Indocement Tunggal Prakarsa Tbk. 1) (Chairman) Squareal Cement Ltd
The above mentioned indications have the following meaning:
Group mandates are marked with 1).
All indications refer to 31 December 2010.
4
Due to rounding, numbers presented in the Group annual accounts may not add up precisely to the totals provided.
| HeidelbergCement annual accounts | |
|---|---|
Group profit and loss accounts Group statement of changes in equity Group statement of comprehensive income Segment reporting / Notes to the annual accounts Group cash flow statement Notes to the 2010 Group annual accounts Group balance sheet Audit Opinion / Responsibility statement
| EURm | Notes | 2009 | 2010 |
|---|---|---|---|
| Turnover | 1 | 11,117.0 | 11,761.8 |
| Change in stock and work in progress | -244.3 | 2.1 | |
| Own work capitalised | 10.2 | 8.0 | |
| Operating revenue | 10,883.0 | 11,772.0 | |
| Other operating income | 2 | 411.5 | 453.8 |
| Material costs | 3 | -4,219.5 | -4,731.3 |
| Employee and personnel costs | 4 | -2,041.5 | -2,086.2 |
| Other operating expenses | 5 | -2,931.5 | -3,168.8 |
| Operating income before depreciation (OIBD) | 2,102.0 | 2,239.4 | |
| Depreciation of tangible fixed assets | 6 | -742.8 | -768.8 |
| Amortisation of intangible assets | 6 | -42.0 | -40.4 |
| Operating income | 1,317.3 | 1,430.3 | |
| Additional ordinary income | 7 | 144.1 | 32.0 |
| Additional ordinary expenses | 7 | -639.1 | -134.2 |
| Additional ordinary result | -494.9 | -102.2 | |
| Result from associated companies 1) | 8 | 34.1 | 35.3 |
| Result from other participations | 8 | 4.0 | -29.5 |
| Earnings before interest and taxes (EBIT) | 860.4 | 1,333.8 | |
| Interest income | 86.3 | 93.5 | |
| Interest expenses | -722.5 | -677.3 | |
| Foreign exchange losses | -9.2 | -12.7 | |
| Other financial result | 9 | -229.6 | -138.3 |
| Financial result | -874.9 | -734.8 | |
| Profit / loss before tax from continuing operations | -14.5 | 599.1 | |
| Taxes on income | 10 | 190.1 | -59.7 |
| Net income from continuing operations | 175.6 | 539.3 | |
| Net loss from discontinued operations | 11 | -8.0 | -28.4 |
| Profit for the financial year | 167.7 | 510.9 | |
| Thereof minority interests | 125.1 | 168.2 | |
| Thereof Group share of profit | 42.6 | 342.7 | |
| Thereof proposed dividend | 12 | 22.5 | 46.9 |
| Earnings per share in EUR (IAS 33) | 13 | ||
| Earnings per share attributable to the parent entity | 0.30 | 1.83 | |
| Earnings per share – continuing operations | 0.36 | 1.98 | |
| Loss per share – discontinued operations | -0.06 | -0.15 |
4
| EURm | 2009 | 2009 | 2010 | 2010 |
|---|---|---|---|---|
| Profit for the financial year | 167.7 | 510.9 | ||
| Actuarial gains and losses | -267.5 | 14.7 | ||
| Income taxes | 85.7 | -8.8 | ||
| -181.9 | 5.9 | |||
| Cash flow hedges – change in fair value | 1.2 | 7.1 | ||
| Reclassification of gains/losses included in the profit and loss accounts |
5.4 | |||
| Income taxes | -0.5 | -3.4 | ||
| 0.7 | 9.2 | |||
| Available for sale assets – change in fair value | 1.4 | 5.9 | ||
| Reclassification of gains/losses included in the profit and loss accounts |
8.7 | |||
| Income taxes | 2.4 | -3.6 | ||
| 3.8 | 11.0 | |||
| Business combinations | 48.5 | |||
| Income taxes | -13.9 | 0.2 | ||
| 34.7 | 0.2 | |||
| Other | 2.0 | |||
| Income taxes | 0.8 | |||
| 2.8 | ||||
| Currency translation | 576.0 | 1,394.4 | ||
| Income taxes | -9.6 | -12.2 | ||
| 566.4 | 1,382.1 | |||
| Other comprehensive income | 426.5 | 1,408.4 | ||
| Total comprehensive income | 594.2 | 1,919.3 | ||
| Relating to minority interests | 154.3 | 219.6 | ||
| Relating to HeidelbergCement AG shareholders | 439.9 | 1,699.6 |
Group profit and loss accounts Group statement of changes in equity
Group statement of comprehensive income Segment reporting / Notes to the annual accounts Group cash flow statement Notes to the 2010 Group annual accounts Group balance sheet Audit Opinion / Responsibility statement
| EURm | Notes | 2009 1) | 2010 |
|---|---|---|---|
| Net income from continuing operations | 175.6 | 539.3 | |
| Taxes on income | -190.1 | 59.7 | |
| Interest income/expenses | 636.2 | 583.8 | |
| Dividends received | 39.3 | 24.0 | |
| Interest received | 14 | 65.3 | 198.0 |
| Interest paid | 15 | -1,012.7 | -798.4 |
| Taxes paid | -219.4 | -152.9 | |
| Depreciation, amortisation and impairment | 1,278.9 | 890.2 | |
| Elimination of other non-cash items | 16 | 140.9 | 117.1 |
| Cash flow | 914.0 | 1,460.9 | |
| Changes in operating assets | 17 | 663.9 | -27.5 |
| Changes in operating liabilities | 18 | -106.7 | -27.9 |
| Changes in working capital | 557.2 | -55.4 | |
| Decrease in provisions through cash payments | 19 | -307.3 | -261.5 |
| Cash flow from operating activities | 1,163.9 | 1,144.0 | |
| Intangible assets | -24.8 | -19.2 | |
| Tangible fixed assets | -771.0 | -714.8 | |
| Subsidiaries and other business units | -113.9 | ||
| Other financial fixed assets | -24.4 | -23.8 | |
| Investments (cash outflow) | 20 | -820.2 | -871.6 |
| Subsidiaries and other business units | 58.5 | 2.0 | |
| Other fixed assets | 226.7 | 217.5 | |
| Divestments (cash inflow) | 21 | 285.2 | 219.4 |
| Cash from changes in consolidation scope | 22 | -4.5 | 4.0 |
| Cash flow from investing activities | -539.4 | -648.2 | |
| Capital increase after retention | 23 | 2,262.9 | |
| Payments regarding costs of capital increase | -30.2 | ||
| Dividend payments - HeidelbergCement AG | -15.0 | -22.5 | |
| Dividend payments - minority shareholders | 24 | -34.9 | -56.9 |
| Decrease in ownership interests in subsidiaries | 25 | 216.0 | 45.4 |
| Increase in ownership interests in subsidiaries | 26 | -1.3 | -4.8 |
| Proceeds from bond issuance and loans | 27 | 11,511.3 | 5,678.4 |
| Repayment of bonds and loans | 28 | -14,557.0 | -6,182.8 |
| Cash flow from financing activities | -648.2 | -543.2 | |
| Net change in cash and cash equivalents | -23.8 | -47.3 | |
| Effect of exchange rate changes | 34.5 | 63.5 | |
| Cash and cash equivalents at 1 January | 843.6 | 854.4 | |
| Cash and cash equivalents at 31 December | 854.4 | 870.5 | |
| Reclassification of cash and cash equivalents according to IFRS 5 | -0.8 | ||
| Cash and cash equivalents presented in the balance sheet at 31 December | 29 | 854.4 | 869.7 |
1) Prior year figures adjusted due to the amendment of IAS 7. Cash flows arising from changes in ownership interests in subsidiaries, that do not result in a loss of control, are classified as cash flows from financing activities.
5
| Assets | |||
|---|---|---|---|
| EURm | Notes | 31 Dec. 2009 | 31 Dec. 2010 |
| Non-current assets | |||
| Intangible assets | 30 | ||
| Goodwill | 9,804.2 | 10,561.3 | |
| Other intangible assets | 264.6 | 351.9 | |
| 10,068.8 | 10,913.2 | ||
| Tangible fixed assets | 31 | ||
| Land and buildings | 4,904.1 | 5,233.4 | |
| Plant and machinery | 4,412.4 | 4,584.9 | |
| Fixtures, fittings, tools and equipment | 236.3 | 240.1 | |
| Payments on account and assets under construction | 667.3 | 865.4 | |
| 10,220.0 | 10,923.9 | ||
| Financial fixed assets | |||
| Investments in associates | 32 | 349.4 | 367.5 |
| Financial investments | 33 | 79.3 | 63.8 |
| Loans to participations | 34 | 19.0 | 19.1 |
| Other loans and derivative financial instruments | 34 | 45.8 | 70.0 |
| 493.5 | 520.4 | ||
| Fixed assets | 20,782.4 | 22,357.4 | |
| Deferred taxes | 10 | 268.8 | 355.8 |
| Other long-term receivables | 34 | 183.3 | 305.3 |
| Long-term tax assets | 16.6 | 22.1 | |
| Total non-current assets | 21,251.0 | 23,040.7 | |
| Current assets | |||
| Stock | 35 | ||
| Raw materials and consumables | 595.3 | 649.1 | |
| Work in progress | 147.3 | 152.3 | |
| Finished goods and goods for resale | 601.0 | 659.2 | |
| Payments on account | 12.5 | 25.0 | |
| 1,356.1 | 1,485.6 | ||
| Receivables and other assets | 36 | ||
| Short-term financial receivables | 99.7 | 76.5 | |
| Trade receivables | 1,298.8 | 1,429.8 | |
| Other short-term operating receivables | 361.9 | 374.6 | |
| Current tax assets | 238.4 | 61.0 | |
| 1,998.7 | 1,941.9 | ||
| Financial investments and derivative financial instruments | 37 | 47.9 | 36.0 |
| Cash and cash equivalents | 38 | 854.4 | 869.7 |
| Total current assets | 4,257.1 | 4,333.2 | |
| Disposal groups held for sale | 39 | 2.8 | |
| Balance sheet total | 25,508.1 | 27,376.7 |
| HeidelbergCement annual accounts | |
|---|---|
| ---------------------------------- | -- |
Group profit and loss accounts Group statement of changes in equity Group statement of comprehensive income Segment reporting / Notes to the annual accounts Group cash flow statement Notes to the 2010 Group annual accounts Group balance sheet Audit Opinion / Responsibility statement
| Liabilities | |||
|---|---|---|---|
| EURm | Notes | 31 Dec. 2009 | 31 Dec. 2010 |
| Shareholders' equity and minority interests | |||
| Subscribed share capital | 40 | 562.5 | 562.5 |
| Share premium | 41 | 5,539.4 | 5,539.4 |
| Retained earnings | 42 | 6,166.5 | 6,481.6 |
| Other components of equity | 43 | -1,867.4 | -522.1 |
| Equity attributable to shareholders | 10,401.0 | 12,061.4 | |
| Minority interests | 44 | 602.0 | 822.8 |
| Total equity | 11,003.0 | 12,884.2 | |
| Non-current liabilities | 47 | ||
| Debenture loans | 4,898.9 | 7,023.9 | |
| Bank loans | 2,981.9 | 935.7 | |
| Other long-term financial liabilities | 278.4 | 267.3 | |
| 8,159.2 | 8,226.9 | ||
| Puttable minorities | 21.9 | 76.6 | |
| 8,181.1 | 8,303.5 | ||
| Provisions for pensions | 45 | 756.7 | 844.4 |
| Deferred taxes | 10 | 892.4 | 823.8 |
| Other long-term provisions | 46 | 1,023.8 | 1,051.3 |
| Other long-term operating liabilities | 204.4 | 223.6 | |
| Long-term tax liabilities | 79.8 | 90.7 | |
| 2,957.1 | 3,033.9 | ||
| Total non-current liabilities | 11,138.1 | 11,337.4 | |
| Current liabilities | 47 | ||
| Debenture loans (current portion) | 699.5 | 204.9 | |
| Bank loans (current portion) | 196.2 | 203.3 | |
| Other short-term financial liabilities | 270.6 | 416.6 | |
| 1,166.3 | 824.9 | ||
| Puttable minorities | 15.1 | 18.9 | |
| 1,181.3 | 843.8 | ||
| Provisions for pensions (current portion) | 45 | 115.1 | 94.4 |
| Other short-term provisions | 46 | 176.3 | 209.9 |
| Trade payables | 931.6 | 1,084.7 | |
| Other short-term operating liabilities | 763.1 | 779.7 | |
| Current income taxes payables | 199.5 | 138.9 2,307.6 |
|
| Total current liabilities | 2,185.6 3,366.9 |
3,151.3 | |
| Provisions and liabilities associated with disposal groups | 39 | 3.8 | |
| Total liabilities | 14,505.1 | 14,492.5 | |
| Balance sheet total | 25,508.1 | 27,376.7 | |
| Subscribed | Share | Retained | Cash flow hedge | ||
|---|---|---|---|---|---|
| EURm | share capital | premium | earnings | reserve | |
| 1 January 2009 | 375.0 | 3,470.9 | 6,317.0 | -14.2 | |
| Profit for the financial year | 42.6 | ||||
| Other comprehensive income | -178.1 | 0.9 | |||
| Total comprehensive income | -135.5 | 0.9 | |||
| Changes in consolidation scope | |||||
| Capital increase from issuance of new shares 1) | 187.5 | 2,068.5 | |||
| Dividends | -15.0 | ||||
| 31 December 2009 | 562.5 | 5,539.4 | 6,166.5 | -13.3 | |
| 1 January 2010 | 562.5 | 5,539.4 | 6,166.5 | -13.3 | |
| Profit for the financial year | 342.7 | ||||
| Other comprehensive income | 8.9 | 9.2 | |||
| Total comprehensive income | 351.6 | 9.2 | |||
| Changes in consolidation scope | |||||
| Changes in ownership interests in subsidiaries | 23.8 | ||||
| Changes in puttable minorities | -39.5 | ||||
| Other changes | 1.7 | ||||
| Dividends | -22.5 | ||||
| 31 December 2010 | 562.5 | 5,539.4 | 6,481.6 | -4.2 | |
1) The capital increase from issuance of new shares was reduced by net transaction costs of EUR 56.5 million in accordance with IAS 32.37. Included are income tax benefits of EUR 23.2 million.
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Other components of equity | ||||||
|---|---|---|---|---|---|---|
| Total equity | Minority interests |
Equity attributable to shareholders |
Total other components of equity |
Currency translation |
Asset revaluation reserve |
Available for sale reserve |
| 8,260.8 | 540.7 | 7,720.1 | -2,442.7 | -2,442.5 | 4.9 | 9.2 |
| 167.7 | 125.1 | 42.6 | ||||
| 426.5 | 29.3 | 397.2 | 575.3 | 536.0 | 34.7 | 3.8 |
| 594.2 | 154.3 | 439.9 | 575.3 | 536.0 | 34.7 | 3.8 |
| -58.1 | -58.1 | |||||
| 2,256.0 | 2,256.0 | |||||
| -49.9 | -34.9 | -15.0 | ||||
| 11,003.0 | 602.0 | 10,401.0 | -1,867.4 | -1,906.5 | 39.6 | 12.9 |
| 11,003.0 | 602.0 | 10,401.0 | -1,867.4 | -1,906.5 | 39.6 | 12.9 |
| 510.9 | 168.2 | 342.7 | ||||
| 1,408.4 | 51.5 | 1,356.9 | 1,348.0 | 1,327.6 | 0.2 | 11.0 |
| 1,919.3 | 219.6 | 1,699.6 | 1,348.0 | 1,327.6 | 0.2 | 11.0 |
| 59.6 | 59.6 | |||||
| 41.6 | 17.8 | 23.8 | ||||
| -58.8 | -19.3 | -39.5 | ||||
| -1.0 | -1.0 | -2.7 | -2.7 | |||
| -79.4 | -56.9 | -22.5 | ||||
| 12,884.2 | 822.8 | -578.9 -522.1 12,061.4 |
37.1 | 23.9 | ||
| Group areas | Western and Northern Europe |
Eastern Europe Central Asia |
North America | ||||
|---|---|---|---|---|---|---|---|
| EURm | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | |
| External turnover | 3,786 | 3,761 | 1,277 | 1,138 | 2,892 | 3,033 | |
| Inter-Group areas turnover | 62 | 50 | 5 | ||||
| Turnover | 3,848 | 3,811 | 1,282 | 1,138 | 2,892 | 3,033 | |
| Change to previous year in % | -1.0 % | -11.2 % | 4.9 % | ||||
| Operating income before depreciation (OIBD) | 687 | 683 | 361 | 299 | 340 | 448 | |
| as % of turnover | 17.9 % | 17.9 % | 28.2 % | 26.3 % | 11.8 % | 14.8 % | |
| Depreciation | -252 | -276 | -98 | -96 | -254 | -260 | |
| Operating income | 435 | 407 | 263 | 203 | 86 | 188 | |
| as % of turnover | 11.3 % | 10.7 % | 20.5 % | 17.8 % | 3.0 % | 6.2 % | |
| Result from participations | 18 | 18 | 1 | -12 | 5 | -9 | |
| Impairment | -55 | -25 | -14 | -1 | -349 | -2 | |
| Reversal of impairment | 2 | 2 | 4 | ||||
| Other additional result | |||||||
| Additional ordinary result | -53 | -25 | -12 | 3 | -349 | -2 | |
| Earnings before interest and taxes (EBIT) | 400 | 401 | 252 | 194 | -259 | 177 | |
| Capital expenditures 1) | 248 | 178 | 270 | 202 | 152 | 146 | |
| Segment assets 2) | 6,883 | 6,902 | 1,722 | 2,117 | 7,746 | 8,186 | |
| OIBD as % of segment assets | 10.0 % | 9.9 % | 21.0 % | 14.1 % | 4.4 % | 5.5 % | |
| Segment liabilities 3) | 2,277 | 2,279 | 307 | 334 | 1,738 | 1,753 | |
| Number of employees as at 31 December | 14,640 | 14,302 | 9,481 | 9,959 | 12,601 | 11,899 | |
| Average number of employees | 15,265 | 14,358 | 10,106 | 10,283 | 14,391 | 13,230 |
| Business lines | Cement | Aggregates | Building products | ||||
|---|---|---|---|---|---|---|---|
| EURm | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | |
| External turnover | 4,570 | 4,831 | 1,526 | 1,683 | 1,267 | 1,169 | |
| Inter-business lines turnover | 712 | 728 | 597 | 664 | 6 | 6 | |
| Turnover | 5,282 | 5,560 | 2,123 | 2,347 | 1,273 | 1,174 | |
| Change to previous year in % | 5.3 % | 10.6 % | -7.7 % | ||||
| Operating income before depreciation (OIBD) | 1,529 | 1,639 | 468 | 539 | 48 | 102 | |
| as % of turnover | 28.9 % | 29.5 % | 22.1 % | 23.0 % | 3.7 % | 8.7 % | |
| Capital expenditures 1) | 453 | 480 | 169 | 170 | 45 | 36 | |
| Segment assets 2) | 5,927 | 6,838 | 12,061 | 12,549 | 1,214 | 1,239 | |
| OIBD as % of segment assets | 25.8 % | 24.0 % | 3.9 % | 4.3 % | 3.9 % | 8.2 % |
1) Capital expenditures = in the segment columns: tangible fixed assets and intangible assets investments;
in the reconciliation column: financial fixed assets investments/acquisition of shares
2) Segments assets = tangible fixed assets and intangible assets
3) Segment liabilities = liabilities and provisions; the financial liabilities are recorded in the reconciliation column.
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Asia-Pacific | Basin | Africa-Mediterranean | Group Services | Reconciliation | Continuing operations |
|||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | |
| 2,171 | 2,582 | 804 | 901 | 187 | 347 | 11,117 | 11,762 | |||
| 40 | 27 | 33 | 37 | 288 | 362 | -429 | -476 | |||
| 2,211 | 2,609 | 837 | 938 | 475 | 709 | -429 | -476 | 11,117 | 11,762 | |
| 18.0 % | 12.0 % | 49.3 % | 5.8 % | |||||||
| 612 | 718 | 157 | 156 | 30 | 20 | -85 | -84 | 2,102 | 2,239 | |
| 27.7 % | 27.5 % | 18.7 % | 16.6 % | 6.2 % | 2.9 % | 18.9 % | 19.0 % | |||
| -114 | -132 | -31 | -35 | -35 | -10 | -785 | -809 | |||
| 498 | 586 | 126 | 121 | 29 | 20 | -120 | -94 | 1,317 | 1,430 | |
| 22.5 % | 22.5 % | 15.0 % | 12.9 % | 6.1 % | 2.8 % | 11.8 % | 12.2 % | |||
| 7 | 7 | 2 | 2 | 5 | 1 | 38 | 6 | |||
| -3 | -76 | -23 | -495 | -53 | ||||||
| 4 | 4 | |||||||||
| -4 | -53 | -4 | -53 | |||||||
| -3 | -76 | -23 | -4 | -53 | -495 | -102 | ||||
| 506 | 590 | 51 | 99 | 34 | 21 | -4 | -53 | 860 | 1,334 | |
| 96 | 174 | 28 | 34 | 25 | 138 | 820 | 872 | |||
| 3,151 | 3,837 | 751 | 755 | 36 | 40 | 20,289 | 21,837 | |||
| 19.4 % | 18.7 % | 20.9 % | 20.6 % | 83.1 % | 50.9 % | 10.4 % | 10.3 % | |||
| 554 | 606 | 212 | 305 | 54 | 68 | 9,362 | 9,147 | 14,505 | 14,493 | |
| 14,030 | 13,682 | 2,499 | 3,539 | 51 | 55 | 53,302 | 53,437 | |||
| 14,380 | 13,622 | 2,529 | 3,109 | 51 | 54 | 56,723 | 54,655 | |||
| Concrete-service-other | Reconciliation | Continuing operations |
|||
|---|---|---|---|---|---|
| 2009 | 2010 | 2009 | 2010 | 2009 | 2010 |
| 3,754 | 4,079 | 11,117 | 11,762 | ||
| 362 | 435 | -1,676 | -1,833 | ||
| 4,115 | 4,514 | -1,676 | -1,833 | 11,117 | 11,762 |
| 9.7 % | 5.8 % | ||||
| 142 | 46 | -85 | -86 | 2,102 | 2,239 |
| 3.5 % | 1.0 % | 18.9 % | 19.0 % | ||
| 128 | 48 | 25 | 138 | 820 | 872 |
| 1,087 | 1,211 | 20,289 | 21,837 | ||
| 13.1 % | 3.8 % | 10.4 % | 10.3 % |
4
HeidelbergCement AG is a public limited company based in Germany. The company has its registered office in Heidelberg, Germany. Its address is: HeidelbergCement AG, Berliner Strasse 6, 69120 Heidelberg.
The core activities of HeidelbergCement include the production and distribution of cement, aggregates, concrete and building products. Further details are given in the management report.
The Group annual accounts of HeidelbergCement AG were prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union and the additional requirements of German Commercial Law pursuant to § 315a, section 1 of the German Commercial Code. All binding IFRSs for the 2010 financial year adopted into European law by the European Commission, as well as the announcements of the International Financial Reporting Interpretations Committee (IFRIC) were applied.
The previous year's figures were determined according to the same principles. The Group annual accounts are prepared in euro. The annual accounts show a true and fair view of the financial position and performance of the HeidelbergCement Group.
In accordance with IAS 1 (Presentation of Financial Statements), the Group annual accounts contain a balance sheet as at the reporting date, profit and loss accounts, a statement of comprehensive income, a statement of changes in equity, and a cash flow statement in accordance with the principles of IAS 7 (Cash Flow Statements). The segment reporting is prepared in accordance with the regulations of IFRS 8 (Operating Segments).
For reasons of clarity, some individual items have been combined in the profit and loss accounts and in the balance sheet. Explanations of these items are contained in the Notes. To improve the level of information, the additional ordinary result is shown separately in the profit and loss accounts and in the segment reporting. The profit and loss accounts classify the expenses according to their nature.
The presentation of the financial position and performance in the Group annual accounts is dependent on estimates and assumptions made by the management, which affect the amount and presentation of the assets and liabilities, expenses and income, and contingent liabilities accounted for in the period. The actual values may differ from these estimates. The assumptions and estimates relate particularly to the necessity and calculation of impairment of goodwill, the recognition of deferred tax assets, and the measurement of provisions for pensions and other provisions.
A cash flow-based method in accordance with IAS 36 (Impairment of Assets) is used to determine the recoverable amount of cash-generating units as part of the impairment test for goodwill. Particular estimates are required here in relation to future cash flows of the cash generating units as well as to the discount rates used (discounted cash flow method). Further details are given on page 159 ff. A change in the influencing factors may have a significant impact on the amount of impairment.
To assess the future probability that deferred tax assets can be utilised, various estimates must be adopted, e.g. operational plans, periods of loss carried forward, and tax planning strategies. If the actual results deviate from these estimates, this may impact the financial position and performance.
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
The obligations arising from defined benefit pension plans are determined on the basis of actuarial methods, which are based on assumptions and estimates concerning the discount rate, expected income from plan assets, future salary increases, development of health care costs as well as other influencing factors. A change in the underlying parameters may lead to changes in the amounts recognised on the balance sheet. Further details are given under item 45 Provisions for pensions.
Provisions to cover liability for damages and environmental obligations are measured on the basis of an extrapolation of the claims and estimates of the development of costs. A change in the influencing parameters may have an impact on the profit and loss accounts as well as the amounts recognised in the balance sheet.
The recognition and measurement of the other provisions takes place with the aid of estimates of the probabilities of future outflow of resources and on the basis of empirical values and the circumstances known at the reporting date. The actual outflow of resources may differ from the outflow of resources accounted for at the reporting date and may have an impact on the recognition and measurement.
The presentation of liabilities in connection with reimbursements from insurance companies depends on the outcome of pending lawsuits.
The consolidation is performed using the acquisition method in accordance with IFRS 3 (Business Combinations). In this process, the acquirer measures the acquired identifiable assets and liabilities assumed at their fair values at the acquisition date. The acquiring entity's investment, measured at the fair value of the consideration transferred, is eliminated against the revalued equity of the newly consolidated subsidiary at acquisition date. The residual positive difference between the fair value of the cost of acquisition and the fair value of acquired assets and liabilities is shown as goodwill. A residual negative difference is recognised in profit or loss after further review. Minority interests can either be recognised with the proportionate net assets allocated to them or at fair value. This option can be applied separately for every business combination. Transaction costs relating to business combinations are recorded as expenses. Goodwill is tested for impairment according to IAS 36 (Impairment of Assets) at least once a year in the fourth quarter according to the current operational plan or upon the occurrence of significant events or changes in circumstances that indicate an impairment requirement. Business combinations achieved in stages are accounted for based on the regulations of IFRS 3.41 f. Differences between the carrying amount and the fair value of previously held shares are recognised in profit or loss, accordingly.
The Group annual accounts comprise the subsidiaries in which HeidelbergCement is able to govern the financial and operating policies. Normally, this is the case when more than 50 % of the shares are owned. If company law stipulates that a company can be controlled despite a shareholding of less than 50 %, this company is included in the Group annual accounts as a subsidiary. If a company cannot be controlled with a shareholding of more than 50 % as a result of contractual regulations, this company is not included in the Group annual accounts as a subsidiary.
The minority interests' share of equity and of the profit or loss for the financial year are shown separately. In the case of put options held by minorities as well as minority interests in German partnerships, the share of the period's overall profits proportionate to the minorities as well as the dividend payments to minority shareholders are shown over the course of the year as changes in equity. As at the reporting date, the liability from the put option is shown as a financial liability at the present value of the repayment sum. The excess of the present value of the liability over the carrying amount of the minority interests is recognised directly in equity. In the statement of changes in equity, this is reported in the line "Changes in puttable minorities".
Significant joint ventures of the HeidelbergCement Group are included in the Group annual accounts as proportionately consolidated companies (IAS 31 Interests in Joint Ventures). Using this method, the Group accounts for its share of the assets, liabilities, income, expenses and cash flows in the corresponding lines of the Group annual accounts.
5
Investments in associates, in cases where HeidelbergCement exerts significant influence on the operating and financial policies of the participation through a shareholding of between 20 % and 50 % are accounted for in accordance with the equity method (IAS 28 Investments in Associates) in the Group annual accounts. Initially, the acquired investments are recognised at cost, with the Group's share of profit or loss being recognised as an increase or decrease to the carrying value of the investment. In order to present the results from participations in a more meaningful way, the Group's share of income from associates is shown before taxes on income. The proportionate income tax expense is shown under taxes on income. The net profit from associated companies is shown separately below the profit and loss accounts.
Income and expenses as well as receivables and payables between consolidated companies are eliminated according to IAS 27 (Consolidated and Separate Financial Statements). Profits and losses from intra-Group sales of assets are eliminated.
The consequences of consolidation on income tax are taken into account by recognising deferred taxes.
In the 2010 financial year, HeidelbergCement applied the following revised standards and interpretations of the International Accounting Standards Board (IASB) for the first time.
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
Due to the revision of IAS 27, IAS 7 (Cash Flow Statement) was amended in such a way that the presentation of cash flows is based on whether control is thus attained or relinquished and accordingly whether it concerns equity transactions between shareholders. Cash flows resulting from the attainment or loss of control are shown in the cash flow statement as "investments in or divestments of subsidiaries and other business units" in cash flow from investing activities. Cash flows resulting from transactions with shareholders (no loss of control) are now shown in cash flow from financing activities as "increase or decrease in ownership interests in subsidiaries." As the amendment to IAS 7 was applied retrospectively, the values for the previous year were adjusted accordingly.
The IASB and IFRIC also adopted the standards and interpretations listed below, whose application was not yet mandatory for the 2010 financial year or have not yet been ratified by the European Commission as at the reporting date.
5
or loss. Furthermore, the option for at-cost valuation of derivative liabilities for unlisted equity instruments shall in future be omitted. IFRS 9 is to be applied for financial years beginning on or after 1 January 2013 (not yet adopted by EU law).
HeidelbergCement will not apply these standards and interpretations until the date when their application first becomes mandatory and after ratification by the EU Commission. The effects of IFRS 9 are currently being analysed. According to current estimates, the first-time application of the other standards will not have a significant impact on the financial position and performance of the Group.
The Group annual accounts are generally prepared using the historical cost principle. Exceptions to this are derivative financial instruments and available-for-sale investments, which are measured at fair value. The carrying amounts of hedged assets and liabilities, recognised in the balance sheet and hedged by fair value hedge relationships, are adjusted for changes in the fair value attributable to the risk being hedged. These assets and liabilities would otherwise be accounted for at cost. The fundamental recognition and measurement principles are outlined below.
According to IAS 38 (Intangible Assets), an intangible asset is an identifiable non-monetary asset without physical substance. The definition requires an intangible asset to be identifiable in order to distinguish it from goodwill.
158
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
An asset meets the identifiability criterion if it is separable or arises from contractual or other legal rights. Intangible assets are initially measured at cost. In subsequent periods, intangible assets with a finite useful life are measured at cost less accumulated amortisation and impairment, and intangible assets with an indefinite useful life are measured at cost less impairment. Intangible assets with a finite useful life are amortised using the unit of production method, in the case of quarrying licences, and otherwise using the straight line method.
Emission rights are shown as intangible assets in accordance with the IFRS regulations (IAS 38). Emission rights granted free of charge are initially measured at a nominal value of zero. Emission rights acquired for consideration are accounted for at cost and are subject to write-down in the event of impairment. The second national allocation plan (NAP II) for the allocation of CO2 emissions allowances (EUA) spans a period of five years (2008-2012). This period serves as a basis for assessing the deficit/surplus. Provisions are recognised if a deficit exists. In the reporting year, HeidelbergCement sold surplus emissions allowances over and above the emissions volume allocated for 2010. In addition, the Group has made a commitment to supply emission rights allowances (EUA) in exchange for certified emission reductions (CER) in a series of swaps. Swap transactions are capitalised as intangible assets and measured at fair value through profit or loss on the reporting date.
In accordance with IFRS 3 (Business Combinations), goodwill arising from business combinations is not amortised. Instead, an impairment test according to IAS 36 (Impairment of Assets) is carried out. In this impairment test, the carrying amount of a group of cash-generating units (CGUs) to which goodwill is allocated is compared to the recoverable amount of this group of CGUs. On the basis of the sales and management structure, a group of cash-generating units is defined generally as a country or region.
As soon as the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognised in profit or loss to reduce the asset to its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and its value in use. The fair value is the amount obtainable from the sale of an asset in an arm's length transaction. The value in use is calculated by discounting estimated future cash flows after taxes with a post-tax risk-adjusted discount rate (WACC).
Cash flow estimates are derived for a five year period after which a terminal value is applied. Detailed operational planning approved by management forms the basis of the estimate of the first three years, after which the cash flows are extrapolated for a further two years based upon an appropriate growth level to determine a steady state for the terminal value.
The WACC rates for the Group were calculated using a two phase approach, whereby a phase one WACC rate was used to discount the cash flows for the first five years and for the determination of the terminal value, a phase two WACC was applied. The difference between the two WACC rates results from the adjustment of the perpetual growth rate in phase two. The credit spread was derived from the rating of the peer group. The so determined terminal value was then discounted back to the valuation date with the phase one WACC.
The following key assumptions were used in the determination of the recoverable amount on the value in use basis, for each group of CGUs where the goodwill is either a significant proportion of the Group total or where impairment has been recognised or where a segment consists of an amalgamation of groups of CGUs with attributable goodwill that is not a significant proportion of the Group total.
4
| Assumptions made in the calcu lation of impairment of goodwill |
Carrying amount of goodwill in EURm |
Weighted average cost of capital after taxes 2) |
Perpetual growth rate | |||
|---|---|---|---|---|---|---|
| Group area / CGU 1) | 31 Dec. 2009 | 31 Dec. 2010 | 31 Dec. 2009 | 31 Dec. 2010 | 31 Dec. 2009 | 31 Dec. 2010 |
| Western and Northern Europe | 3,242.1 | 3,343.1 | 7.1 % - 11.2 % | 6.5 % - 9.5 % | 1.5 % - 2.0 % | 1.5 % - 2.0 % |
| United Kingdom | 2,068.3 | 2,145.3 | 8.0 % | 6.9 % | 1.5 % | 1.5 % |
| Eastern Europe-Central Asia | 585.3 | 618.0 | 8.1 % - 17.6 % | 7.8 % - 14.1 % | 1.5 % - 2.0 % | 1.5 % - 2.0 % |
| North America | 4,055.4 | 4,332.0 | 7.5 % | 6.6 % | 2.0 % | 2.0 % |
| Asia-Pacific | 1,599.5 | 1,913.7 | 6.3 % - 16.0 % | 6.5 % - 13.5 % | 1.5 % - 2.0 % | 1.5 % - 2.0 % |
| Australia | 1,168.4 | 1,435.5 | 9.2 % | 8.7 % | 1.5 % | 1.5 % |
| Africa-Mediterranean Basin | 290.2 | 318.5 | 7.9 % - 17.7 % | 9.2 % - 18.9 % | 1.5 % - 2.0 % | 1.5 % - 2.0 % |
| Spain | 68.6 | 45.9 | 7.9 % | 9.4 % | 1.5 % | 1.5 % |
| Group Services | 31.7 | 36.0 | 7.2 % | 6.5 % | 1.5 % | 1.5 % |
| Total | 9,804.2 | 10,561.3 |
1) CGU = Cash-generating unit
2) The weighted average cost of capital shown for 2010 is the second phase WACC, before adjustment for growth, used to calculate the terminal value. The phase one weighted average cost of capital is equal to the second phase WACC before adjustment for growth.
For the significant CGU groups identified above, the operational planning assumes that in the medium term the construction markets will recover from the effects of the financial and economic crisis and that the demand will return to a stable level as it was before the crisis. The sales volumes derived thereof are generally based on the assumption of constant market shares. Furthermore, it was assumed that the savings achieved in the scope of the Hanson integration and further cost reduction programmes ("Fitness 2009", "FitnessPlus 2010", "Fox 2013") will positively influence the operating margins. The perpetual growth assumptions reflect the estimated long-term growth over many cycles in the construction sector, which can be evidenced from external historical construction spending data.
As a result of the impairment testing procedures performed, the Group recognised a total impairment of goodwill of EUR 23.6 million. The impairment mainly relates to the CGU Spain whose recoverable amount calculated with the value in use method, described above, was lower than the amount of goodwill allocated. The impairment results, on the one hand, from the heavy increase in the credit spreads for the cost of debts in comparison with previous years, especially from November 2010 onwards. On the other hand, the management assumes that due to the debt crisis in Spain the construction materials industry will only recover slowly.
Furthermore, smaller impairments were recognised in the business area Western and Northern Europe amounting to a total of EUR 1.0 million.
In the previous year, the Group recognised a total impairment of goodwill of EUR 420.5 million. The impairment losses primarily related to the United Kingdom (EUR 11.9 million), Spain (EUR 59.9 million), Israel (EUR 14.0 million) and North America (EUR 332.1 million).
In the CGU Australia, the management has identified that a marginal change in the key assumptions (WACC and perpetual growth rate) would give rise to that unit's carrying amount to exceed its recoverable amount. The management does not rule out such development. The following table shows the excess of the recoverable amount over the carrying amount and changes of the key assumptions required for the recoverable amount to be equal to the carrying amount.
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Assumptions changes giving rise to recoverable amount equal to carrying amount | |
|---|---|
| CGU 1) Australia | |
| Excess of recoverable amount over carrying amount in EURm | 55.0 |
| WACC sensitivity 2) | 0.161 |
| Perpetual growth rate sensitivity 2) | -0.219 |
1) CGU = Cash-generating unit
2) Increase and decrease in percentage points
All other groups of CGUs remain unimpacted by a WACC increase of up to 0.497 percentage points or with a reduction of 0.812 percentage points in the perpetual growth rate.
Tangible fixed assets are accounted for according to IAS 16 (Property, Plant and Equipment) at cost less accumulated depreciation and impairment. The costs of conversion include all costs that can be attributed to the manufacturing process and appropriate amounts of production overheads. Costs for repair and maintenance of tangible fixed assets are expensed as incurred. Capitalisation takes place if the measures lead to an extension or significant improvement of the asset. Tangible fixed assets are depreciated on a straight-line basis unless there is another depreciation method more appropriate for the pattern of use. Borrowing costs that can be allocated directly or indirectly to the construction of large facilities with a creation period of more than 12 months (Qualifying Assets) are capitalised as part of the cost in accordance with IAS 23 (Borrowing Costs).
Stock is valued in accordance with IAS 2 (Inventories) at the lower of cost and net realisable value, using the weighted average cost method. Adequate provisions are made for risks relating to quality and quantity. Besides direct expenses, the costs for finished goods and work in progress include production-related indirect materials and indirect labour costs, as well as production-related depreciation. The overhead rates are calculated on the basis of the average operating performance rate. Borrowing costs are not recognised as part of the costs because the production period is less than 12 months. Spare parts for equipment are reported under stocks or fixed assets if purchased in connection with the acquisition of the facility.
Long-term service and construction contracts spanning a longer period of time are accounted according to the extent of completion (Percentage of Completion Method).
Provisions for pensions and similar obligations are determined in accordance with IAS 19 (Employee Benefits). For numerous employees, the Group makes provision for retirement either directly or indirectly through contributions to pension funds. Various retirement benefit systems are in place, depending on the legal, economic and tax framework in each country, which are generally based on employees' years of service and remuneration. The provisions for pensions include those from current pensions and from entitlements from pensions to be paid in the future.
At HeidelbergCement, the company pension schemes include both defined contribution and defined benefit plans. In defined contribution plans, the Group pays contributions into earmarked funds. After paying the contributions, the Group has no further benefit obligations. In defined benefit plans, the Group's obligation is to provide the agreed benefits to current and former employees. A distinction is made between benefit systems financed by provisions and those financed by funds.
The most significant retirement benefit plans financed by funds exist in Belgium, the Netherlands, the United Kingdom, the United States, Canada, Norway, India, and Indonesia. The retirement benefit system in Indonesia
consists of a statutory defined benefit plan and a company-based defined contribution plan financed by funds, the benefits from which may be set off against the statutory benefits. In Germany and Sweden, the retirement benefit plans are financed by means of provisions. HeidelbergCement also has a retirement benefit system financed by provisions to cover the medical care costs of pension recipients in Belgium, Indonesia, Canada and the US, and for early retirement commitments in Belgium.
The pension obligations and the available plan assets are valued annually by independent experts for all major Group companies. The pension obligations and the expenses required to cover this obligation are measured in accordance with the internationally accepted projected unit credit method.
The actuarial assumptions are dependent on the economic situation in each individual country and reflect realistic expectations. The interest rate is based on the interest rate level obtained on the measurement date for high-quality fixed interest-bearing securities/corporate bonds with a duration corresponding to the pension plans concerned in the relevant country. The expected income from the pension funds is determined using a uniform method based on long-term actual historical yields, the portfolio structure and the future yields expected in the long term.
Actuarial gains and losses may result from increases or decreases in the present value of the defined benefit obligations or the fair value of the plan assets. These may be caused by, for example, changes in the calculation parameters, changes in estimates of the risk experience of the pension obligations or differences between the actual and expected return on plan assets. HeidelbergCement records the actuarial gains and losses in retained earnings in accordance with IAS 19.93A with no effect on profit or loss and shows these in the statement of comprehensive income.
In addition gains and losses that have to be shown in profit or loss may arise from plan changes (curtailments or past service cost) or plan settlements. Curtailments and settlements have to be amortised immediately, while past service cost may be amortised over the period until they are vested.
Other provisions are recognised in accordance with IAS 37 (Provisions, Contingent Liabilities and Contingent Assets) if, as a result of past events, there are legal or constructive obligations towards third parties that are likely to lead to outflows of assets that can be reliably determined. The provisions are calculated on the basis of the best estimate, taking into account all identifiable risks.
Deferred tax assets and liabilities are recognised in accordance with the liability method (IAS 12 Income Taxes). This means that, with the exception of goodwill arising on capital consolidation, deferred taxes are recognised for all temporary differences between the IFRS accounts and the tax accounts regardless of the period of time within which these differences are likely to reverse. Furthermore, deferred tax assets are recognised on unused tax losses carried forward, to the extent that the probability of their recovery in subsequent years is sufficiently high. Deferred tax liabilities are considered in connection with undistributed profits from subsidiaries, joint ventures and associates, unless HeidelbergCement is able to control the dividend policy of the companies and no dividend distribution or disposal is anticipated in the foreseeable future. The deferred taxes are measured using the rates of taxation that, as of the balance sheet date, are applicable or have been announced as applicable in the individual countries for the period when the deferred taxes are realised. Deferred tax assets and liabilities are offset if there is an enforceable right to set off current tax assets and liabilities and if they relate to taxes on income levied by the same taxing authority and the Group intends to settle its current tax assets and liabilities on a net basis.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. The financial instruments include non-derivative and derivative financial instruments.
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
Non-derivative financial instruments are, in principle, measured at fair value when first recognised. These include non-current and current investments, loans and receivables granted and financial liabilities.
Financial assets or liabilities measured at fair value through profit or loss are (structured) financial instruments classified as held for trading.
Non-current and current investments that are categorised as "Available for sale" in accordance with IAS 39 (Financial Instruments – Recognition and Measurement) are regularly measured at fair value if it can be reliably ascertained. This class of instruments is referred to, in the following, as investments "Available for sale at fair value". The unrealised gains and losses resulting from the subsequent measurement are recognised directly in equity. The stock market price at the balance sheet date forms the basis of the fair value. Investments in equity instruments, for which no listed price on an active market exists and whose fair values cannot be reliably determined with justifiable expense, are measured at cost. This class of instruments is referred to, in the following, as investments "Available for sale at cost". This concerns other participations that are not listed on the stock exchange. If the fair values of available-for-sale investments fall below the cost and there is objective evidence of a significant or permanent impairment, the accumulated gains and losses previously recognised in equity are recognised directly in profit or loss. The recognition of reversals of impairment in profit or loss for equity instruments held is not permitted.
Loans and receivables are measured at amortised cost, using the effective interest method if applicable, provided that they are not linked with hedging instruments. This concerns long-term loans, interest-bearing receivables, trade receivables and other short-term operating receivables. In principle, the amortised cost in the case of short-term receivables corresponds to the nominal value or the repayment sum. If there is objective evidence of impairment of the loans and receivables, impairment losses are recognised in profit or loss. For trade receivables, the impairment losses are recognised through the use of a provision for doubtful debts account. Reversals are carried out if the reasons for the impairment losses no longer apply. In the past financial year, there were no financial assets (as in the previous year) whose terms have been changed which would otherwise have been overdue or impaired.
Non-derivative financial liabilities are recognised for the first time at the fair value of the consideration received or at the value of the cash received less transaction costs incurred, if applicable. These instruments are subsequently measured at amortised cost using the effective interest method. This includes trade payables, other short-term operating liabilities and short- and long-term financial debts. Long-term financial liabilities are discounted. In principle, the amortised cost in the case of short-term financial liabilities corresponds to the nominal value or the repayment sum.
The Group has not yet made use of the possibility of designating non-derivative financial instruments, when first recognised, as financial instruments at fair value through profit or loss. All non-derivative financial instruments are accounted for at the settlement date.
A derivative financial instrument is a contract whose value is dependent on a variable, which usually requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors, and which is settled at a later date. All derivative financial instruments are measured at fair value on the trade date when first recognised. The fair values are also relevant for the subsequent measurement. The fair value of traded derivative financial instruments corresponds to the market value. This value can be positive or negative. For derivative financial instruments, the fair value corresponds to the amount that HeidelbergCement would either receive or have to pay at the reporting date in the case of early termination of this financial instrument. This is calculated on the basis of the relevant exchange and interest rates on the reporting date. Average rates are used for the calculation.
In the HeidelbergCement Group, derivative financial instruments such as currency forwards, currency option contracts, interest rate swaps or interest rate options are, in principle, used to minimise financial risks. The focus is on hedging interest, currency and other market price risks. The market valuations are monitored regularly by the Group Treasury department. No derivative financial instruments are contracted or held for speculative purposes.
Contracts concluded for the purpose of receiving or supplying non-financial items in accordance with the company's expected purchase, sale, or usage requirements and held as such ("own use contracts") are accounted for as pending transactions rather than derivative financial instruments. Written options for the purchase or sale of non-financial items that can be cash settled are not classified as own use contracts.
Structured financial instruments consist of a non-derivative basic contract and an embedded financial derivative. The two components are legally inseparable. These are usually contracts with riders. Separate accounting of the embedded derivative and the basic contract is required if the economic characteristics and risks are not closely linked with the basic contract, the embedded derivative fulfils the same definition criteria as a derivative and the structured financial instrument is not measured at fair value through profit or loss. The contract of the structured financial instrument may also be measured in total at fair value through profit or loss unless the embedded derivative changes the resulting cash flows to an insignificant degree or separation of the embedded derivative is not permitted.
Hedge accounting denotes a specific accounting method that modifies the accounting of the hedged item and hedge of a hedging relationship so that the results of measuring the hedged item or hedge are recognised in the period incurred directly in equity or in profit or loss. Accordingly, hedge accounting is based on matching the offsetting values of the hedge and the hedged item.
For accounting purposes, three types of hedge exist in accordance with IAS 39, provided that the stringent conditions for hedge accounting are fulfilled in each individual case.
– Cash flow hedges
Where necessary, HeidelbergCement hedges the risk of fluctuation in future cash flows. The risk of interest rate fluctuations in the case of variable interest is hedged by means of swaps that convert variable interest payments into fixed interest payments. This method is also used for hedging currency risks of transactions to be executed in foreign currency in the future. The market value of the derivatives used for hedging is shown in the balance sheet. As an offsetting item, the other components of equity are adjusted to the amount of the effective portion, taking deferred taxes into account. They are only recognised in profit or loss when the hedged future cash flows are realised. The ineffective portion is recognised directly in the profit or loss for the period.
– Fair value hedges
The Group hedges against fluctuations in the fair value of assets or liabilities. In particular, the foreign exchange risk that arises when financial instruments are accounted for in a currency other than the functional currency is hedged. In addition, selectively the fair value of fixed interest-bearing liabilities by means of conversion to variable interest is hedged. In the case of hedging against fluctuations in the fair value of certain balance sheet items (fair value hedges), both the hedge and the hedged share of the risk of the underlying transaction are recognised at fair value. Changes in fair value are recognised in profit or loss.
– Hedging a net investment in a foreign operation
When acquiring foreign companies, the investment can, for example, be hedged with loans in the functional currency of the foreign company. In these cases, the currency risk arising on the subsidiary's equity through fluctuations in exchange rates (translation risk) is designated as a hedged risk. The loans are converted using the exchange rate
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
applicable at the balance sheet date. As an offsetting item, the foreign currency translation reserves in equity are adjusted. Consequently, translation differences are recognised directly in equity until the net investment is sold, and are recognised in profit or loss on its disposal.
Derivative financial instruments for which no hedge accounting is used nevertheless represent an effective hedge in an economic sense within the context of the Group strategy. In accordance with IAS 39, these instruments are classified for accounting purposes as held for trading. The changes in the market values of these derivative financial instruments recognised in profit or loss are almost offset by changes in the market values of the hedged items.
Assets held for sale and discontinued operations are shown separately in the balance sheet if they can be sold in their present condition and the sale is highly probable. Assets classified as held for sale are recognised at the lower of their carrying amount and fair value less costs to sell. According to their classification, debts directly connected with these assets are shown separately on the liability side.
For discontinued operations, the profit after tax is shown in a separate line in the profit and loss accounts. In the cash flow statement, the cash flows are broken down into continuing and discontinued operations. Likewise, the discontinued operations are shown separately in the segment reporting. For discontinued operations, the previous year's values in the profit and loss accounts, the cash flow statement and the segment reporting are restated. The Notes include additional details on the assets held for sale and discontinued operations.
Contingent liabilities and assets are current or possible obligations or assets arising from past events and whose existence is due to the occurrence or non-occurrence of one or more uncertain future events that are not within the Group's control. Contingent liabilities are recognised in the balance sheet at their fair value if they have been taken on as a result of a business combination. Contingent assets are only recognised in the balance sheet if they are virtually certain. In so far as an outflow or inflow of economic benefits is possible, details of contingent liabilities and assets are provided in the Notes.
Finance leases, for which all risks and rewards incident to ownership of the leased asset are transferred to the lessee, lead to capitalisation of the leased asset at the beginning of the term of the lease. The leased asset is recognised at the lower of its fair value and the present value of the minimum lease payments. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability so as to produce a constant rate of interest on the remaining balance of the liability over the term of the lease. The finance charge is recognised in profit or loss. Leased assets are depreciated over the useful life of the asset. If, however, there is insufficient certainty that the transfer of title to the Group will take place at the end of the lease term, the leased asset is depreciated fully over the shorter of the expected useful life and the lease term.
Lease payments for operating leases are recognised as an expense in the profit and loss accounts over the lease term on a straight-line basis.
Income is recognised if it is sufficiently probable that the Group will receive future economic benefits that can be reliably determined. It is measured at the fair value of the consideration received; sales tax and other duties are not taken into account. Turnover is recognised as soon as the goods have been delivered and the opportunities and risks have passed to the purchaser. Interest income is recognised pro rata temporis using the effective interest method. Dividend income is realised when the legal entitlement to payment arises.
4
The annual accounts of the Group's foreign subsidiaries are translated into euro according to IAS 21 (The Effects of Changes in Foreign Exchange Rates) using the concept of functional currency. In general, for operating companies, the functional currency is that of the country in which the subsidiary is based, since all foreign subsidiaries are financially, economically and organisationally independent in the conduct of their business. Assets and liabilities are converted using the closing rates at the balance sheet date, with equity, in contrast, using the historical exchange rates. The translation differences resulting from this are recognised directly in other components of equity until the subsidiary is disposed of. The share of equity of the foreign associates is translated using the same method. Income and expenses are translated using average annual exchange rates.
Foreign currency transactions in the companies' individual accounts are accounted for using historical exchange rates. Exchange gains or losses from the measurement of monetary items in foreign currency at the balance sheet date are recognised in profit or loss. Exceptions to the described translation method are exchange differences arising from foreign currency borrowings, to the extent that they are part of a net investment in a foreign operation. They are part of a net investment in a foreign operation if settlement is neither planned nor likely to occur in the foreseeable future. Translation differences are recognised directly in equity until the net investment is sold and are not recognised in profit or loss until its disposal.
| Exchange rates | Exchange rates at reporting date | Average annual exchange rates | ||||
|---|---|---|---|---|---|---|
| EUR | 31 Dec. 2009 | 31 Dec. 2010 | 2009 | 2010 | ||
| USD | US | 1.4316 | 1.3379 | 1.3945 | 1.3265 | |
| AUD | Australia | 1.5956 | 1.3081 | 1.7582 | 1.4410 | |
| CAD | Canada | 1.5058 | 1.3348 | 1.5902 | 1.3661 | |
| CNY | China | 9.7720 | 8.8173 | 9.5252 | 8.9774 | |
| GBP | Great Britain | 0.8862 | 0.8575 | 0.8901 | 0.8583 | |
| GEL | Georgia | 2.3846 | 2.3735 | 2.3180 | 2.3533 | |
| GHC | Ghana | 2.0674 | 1.9608 | 1.9844 | 1.9098 | |
| HKD | Hong Kong | 11.0995 | 10.3918 | 10.8089 | 10.3046 | |
| IDR | Indonesia | 13,457.04 | 12,029.06 | 14,441.58 | 12,041.97 | |
| INR | India | 66.4262 | 59.8190 | 67.3213 | 60.5601 | |
| KZT | Kazakhstan | 212.5497 | 197.2200 | 205.8507 | 195.4275 | |
| MYR | Malaysia | 4.8989 | 4.1252 | 4.9104 | 4.2671 | |
| NOK | Norway | 8.2938 | 7.7920 | 8.7607 | 8.0138 | |
| PLN | Poland | 4.0955 | 3.9630 | 4.3377 | 3.9971 | |
| RON | Romania | 4.2327 | 4.2355 | 4.2437 | 4.2160 | |
| RUB | Russia | 43.3932 | 40.9229 | 44.2312 | 40.2870 | |
| SEK | Sweden | 10.2505 | 8.9834 | 10.6529 | 9.5500 | |
| CZK | Czech Republic | 26.3085 | 25.0250 | 26.5105 | 25.2936 | |
| HUF | Hungary | 269.0835 | 278.2300 | 280.8815 | 275.5712 | |
| TZS | Tanzania | 1,899.49 | 1,966.51 | 1,839.68 | 1,872.73 | |
| TRY | Turkey | 2.1402 | 2.0612 | 2.1649 | 1.9973 |
The following key exchange rates were used in the translation of the companies' individual accounts into euro.
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
In addition to HeidelbergCement AG, the Group annual accounts include 909 companies that have been fully or proportionately consolidated, of which 58 are German and 851 are foreign.
A complete list of shareholdings of the HeidelbergCement Group as at 31 December is provided on pages 207 ff. This contains a concluding list of all subsidiaries that make use of the exemption from disclosure obligations in accordance with § 264b of the German Commercial Code (HGB).
The contributions of the proportionately consolidated joint ventures to the financial position and performance of the HeidelbergCement Group are shown in the table below:
| Impact of proportionately consolidated joint ventures | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Balance sheet | ||
| Non-current assets | 837.8 | 934.1 |
| Current assets | 313.9 | 335.1 |
| 1,151.7 | 1,269.2 | |
| Non-current liabilities | 237.9 | 290.3 |
| Current liabilities | 287.1 | 270.1 |
| 525.0 | 560.4 | |
| Profit and loss accounts | ||
| Turnover | 861.3 | 967.9 |
| Other income | 45.3 | 85.3 |
| Expenses | -764.5 | -903.2 |
| Profit for the financial year | 142.1 | 150.0 |
| Cash flow statement | ||
| Cash flow from operating activities | 166.3 | 149.9 |
| Cash flow from investing activities | -97.6 | -55.9 |
| Cash flow from financing activities | 1.9 | 13.5 |
On 13 May 2010, HeidelbergCement acquired the remaining 50 % of the shares in the joint venture Pioneer North Queensland Pty Ltd, thus further strengthening its activities in Australia. The purchase price amounted to EUR 11.4 million and was paid in cash. The company was previously accounted for using the equity method. The fair value of the equity participation amounted to EUR 11.4 million. The revaluation of the shareholding resulted in a loss of EUR 1.1 million, which was recognised in the additional ordinary expenses. The purchase price allocation has not yet been completed. The measurement of tangible fixed assets and thus deferred taxes may be revised. The provisionally recognised goodwill of EUR 8.4 million, which is not deductible for tax purposes, reflects the synergy potential arising from the business combination. Transaction costs of EUR 34,000 were recognised in the additional ordinary expenses. As part of the business combination, receivables with a fair value of EUR 3.8 million were acquired. The gross value of the receivables is EUR 4.3 million, of which EUR 0.5 million is likely to be irrecoverable.
In order to expand cement production capacity in the Democratic Republic of Congo, HeidelbergCement acquired 55 % of the shares in Cimenterie de Lukala S.A.R.L. (CILU), Kinshasa, and 70 % of the shares in Interlacs S.A.R.L., Lubumbashi, from the Forrest Group on 15 September 2010. The purchase price of EUR 62.2 million was paid in cash. As at the reporting date, the purchase price allocation has not yet been completed. The measurement of intangible assets and thus deferred taxes may be revised. The provisionally recognised goodwill of EUR 34.6 million, which is not tax-deductable, represents, in particular, the future market potential in the Democratic Republic of 4
Congo. The minority interests were measured at EUR 21.7 million on the basis of their proportionate interest in the fair value of the identifiable net assets. As part of the acquisition, receivables with a fair value of EUR 2.4 million were recognised. Their gross value amounts to EUR 2.5 million. EUR 0.1 million of this total is expected to be irrecoverable. The transaction costs amounted to EUR 0.1 million and were recognised in the additional ordinary expenses. The purchase agreement gives the Forrest Group an option to sell the remaining shares, which can be exercised at a specified time. The purchase price for the shares is calculated on the basis of earnings figures and will be settled with a fixed number of HeidelbergCement shares and by means of a cash payment.
As part of the expansion of the activities in Russia, HeidelbergCement acquired a total of 51 % of the shares in CJSC "Construction Materials", Sterlitamak/Russia, in several stages between 5 and 14 October 2010. The goodwill of EUR 14.8 million, which is not tax-deductible, arising on the difference between the purchase price of EUR 54.2 million and the proportionate net assets of EUR 39.4 million represents the strategic potential of the stateof-the-art cement plant acquired, which is located in one of the most important investment regions of Russia. The purchase price is made up of a cash payment of EUR 40.0 million and a purchase price liability with a present value of EUR 14.2 million. The USD purchase price liability amounts to a nominal EUR 15.9 (USD 22.5) million and is fixed in value. The cash outflow is linked to the registration of certain buildings and real estate in the name of CJSC "Construction Materials" and is expected by the beginning of 2013 at the latest. The transaction costs of EUR 0.7 million incurred during the reporting period were recognised in the additional ordinary expenses. Transaction costs of EUR 1.1 million occurring before 1 January 2010 were recognised directly in retained earnings. The purchase price allocation for the acquired assets and assumed liabilities is provisional. Adjustments may be made to the fair values of the intangible assets, tangible fixed assets and financial fixed assets as well as of the deferred taxes applicable to these assets and liabilities. The minority interests of EUR 37.8 million were measured on the basis of their proportionate interest in the fair value of the identifiable net assets. The acquired receivables primarily include short-term trade receivables with a fair value of EUR 1.1 million, calculated by deducting the receivables of EUR 0.2 million expected to be irrecoverable from the gross value of EUR 1.3 million.
The provisional fair values of the identifiable assets and liabilities of the first-time consolidated companies as at the acquisition date are shown in the following table.
| Australia | DR Congo | Russia | Total |
|---|---|---|---|
| 37.5 | 37.5 | ||
| 15.5 | 43.0 | 115.7 | 174.2 |
| 7.3 | 7.3 | ||
| 0.6 | 19.4 | 4.9 | 24.9 |
| 3.8 | 2.4 | 1.1 | 7.3 |
| 0.7 | 2.3 | 1.1 | 4.1 |
| 2.2 | 3.0 | 1.1 | 6.3 |
| 22.8 | 107.6 | 131.2 | 261.6 |
| 0.2 | 4.3 | 4.2 | 8.7 |
| 8.2 | 29.4 | 49.2 | 86.8 |
| 24.6 | 0.6 | 25.2 | |
| 8.4 | 58.3 | 54.0 | 120.7 |
| 14.4 | 49.3 | 77.2 | 140.9 |
Preliminary fair values recognised as at the acquisition date
The following table shows the companies' turnover and profit or loss since the acquisition date and the amounts which had occurred if the companies had been fully consolidated as at 1 January 2010:
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Turnover and profit or loss | ||||
|---|---|---|---|---|
| EURm | Australia | DR Congo | Russia | Total |
| Since acquisition date | ||||
| Turnover | 17.9 | 16.7 | 12.9 | 47.5 |
| Profit or loss | 1.5 | 0.8 | 0.7 | 3.0 |
| Since 1 January 2010 | ||||
| Turnover | 31.2 | 52.4 | 53.0 | 136.6 |
| Profit or loss | 0.4 | 1.9 | -2.4 | -0.1 |
In May 2010, HeidelbergCement and IFC, a member of the World Bank Group, and its financial partners signed an agreement to promote the expansion of infrastructure in the African countries south of the Sahara by increasing the local cement supply. IFC and its financial partners have undertaken to acquire a minority participation in HeidelbergCement's African activities and to put in up to USD 180 million. In return, HeidelbergCement will invest these funds in the expansion of its cement capacities in the countries south of the Sahara supported by the International Development Association (IDA). IFC paid the first tranche of USD 60 million (EUR 45.4 million) on 5 August 2010, thus acquiring around 6 % of the shares in the African activities of the Scancem International Group. Initially, this transaction resulted in an increase of EUR 25.0 million in the HeidelbergCement Group's shareholders' equity. The contractual regulations give IFC the right to tender the acquired shares to Heidelberg-Cement from a specified date. The liability arising from the right to tender was accounted for at the reporting date as a long-term put option liability at the present value of the repayment sum, which amounted to EUR 54.7 million. This reduced the shareholders' equity by EUR 36.2 million.
On 1 January 2009, Gralex S.A./Belgium, proportionately consolidated with a shareholding of 50 %, was divided between the joint venture partners by way of a partnership division. The assets and liabilities were transferred to the newly founded company Sagrex S.A. HeidelbergCement holds a 100 % share in Sagrex S.A. The partnership division was effected as a barter transaction in the form of a successive business acquisition without adjustment payments. The value of the consideration for the acquired 50 % was EUR 48.7 million. No goodwill arose on the transaction. For the 2009 financial year, Sagrex S.A. achieved a turnover of EUR 61.7 million and a profit of EUR 5.0 million.
The following table shows the fair values of the assets and liabilities of Sagrex S.A., which were included in the Group annual accounts on the basis of final figures.
| Fair values of the assets and liabilities of Sagrex at acquisition date | |
|---|---|
| EURm | 2009 |
| Intangible assets | 2.7 |
| Tangible fixed assets | 144.8 |
| Financial fixed assets | 0.3 |
| Stocks | 5.3 |
| Receivables and other assets | 23.2 |
| Cash and cash equivalents | 0.1 |
| Total assets | 176.4 |
| Provisions | 5.2 |
| Liabilities | 37.4 |
| Deferred taxes | 36.1 |
| Total liabilities | 78.7 |
| Net assets | 97.7 |
4
On 14 May 2009, HeidelbergCement sold its 50 % participation in the Australian joint venture Pioneer Road Services Pty Ltd, Melbourne. The assets and liabilities are shown in the following table.
| EURm | 2009 |
|---|---|
| Intangible assets | 2.1 |
| Tangible fixed assets | 25.1 |
| Financial fixed assets | 0.7 |
| Deferred taxes | 0.7 |
| Stocks | 2.8 |
| Receivables and other assets | 24.3 |
| Cash and cash equivalents | 3.4 |
| Total assets | 59.1 |
| Provisions | 1.9 |
| Liabilities | 30.3 |
| Total liabilities | 32.2 |
| Net assets | 26.9 |
In addition, Industry Petrobeton OOO, Saint Petersburg/Russia, was sold in December 2009. The net assets at the time of sale amounted to EUR 0.9 million.
The sale proceeds were shown in the investing activities section as cash inflow from divestments of subsidiaries and other business units in accordance with the revised version of IAS 7.
On 18 June 2009, HeidelbergCement sold 520.5 million shares in the Indonesian cement manufacturer PT Indocement Tunggal Prakarsa. This reduced the HeidelbergCement Group's shareholding by 14.1 % to 51.0 %. In accordance with the revised version of IAS 7, the proceeds were shown in cash flow from financing activities as a decrease in ownership interests in subsidiaries.
HeidelbergCement's segment reporting is based on the Group's internal division into geographical regions and business activities. It reflects the management organisation and divides the Group into geographical regions. In addition, a voluntary break down into business activities is made.
The segment reporting was reorganised with effect from the beginning of the 2010 financial year. The prior year Group area Europe was split up into the Group areas Western and Northern Europe and Eastern Europe-Central Asia. Germany was integrated into the Group area Western and Northern Europe. Besides Germany, this reporting segment includes the Benelux countries, Denmark, the United Kingdom, Norway, Sweden and the Baltic States. Bosnia-Herzegovina, Georgia, Croatia, Poland, Romania, Russia, the Czech Republic, Slovakia, the Ukraine and Hungary are part of the new Group area Eastern Europe-Central Asia. Also Kazakhstan, which was reported in the Group area Asia-Australia-Africa in the previous year, is now part of the Group area Eastern Europe-Central Asia.
The previously reported Group area Asia-Australia-Africa has also been split. Bangladesh, Brunei, China, India, Indonesia, Malaysia, Singapore, and Australia are now combined into the Group area Asia-Pacific. Africa and Turkey have been allocated to the new Group area Africa-Mediterranean Basin. Besides, this Group area comprises our activities in Israel and Spain, which were previously part of the Group area Europe.
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
As in the previous year, the Group area North America includes the US and Canada. Our trading activities are grouped together in the Group Services business unit.
In summary, HeidelbergCement is now geographically divided into the following six Group areas:
Besides, since the start of the 2010 financial year, HeidelbergCement has been divided into four business lines:
The main business lines cement and aggregates are now shown separately. The building products business line remains unchanged, while in the concrete-service-other business line, we report primarily on the downstream activities such as ready-mixed concrete and asphalt.
The previous year's values have been adjusted in accordance with the segments' new reporting structure. The same accounting rules are applied as described in the Group's accounting and valuation principles.
Turnover with Group areas or business lines represents the turnover between segments.
The following table shows a breakdown of the turnover with external customers and the non-current assets by country in accordance with IFRS 8.33:
| Information by country | Turnover with external customers | Non-current assets | |||
|---|---|---|---|---|---|
| EURm | 2009 | 2010 | 2009 | 2010 | |
| US | 2,302 | 2,255 | 7,271 | 7,662 | |
| United Kingdom | 1,326 | 1,345 | 3,697 | 3,728 | |
| Australia | 839 | 967 | 1,815 | 2,225 | |
| Germany | 1,042 | 970 | 1,134 | 1,113 | |
| Belgium | 391 | 388 | 871 | 858 | |
| Indonesia | 692 | 898 | 711 | 784 | |
| Canada | 590 | 778 | 472 | 525 | |
| Other countries | 3,935 | 4,162 | 4,318 | 4,943 | |
| Total | 11,117 | 11,762 | 20,289 | 21,837 |
Turnover is allocated to countries according to the company's country of origin.
| Turnover development by Group areas and business lines |
Cement | Aggregates | Building products |
Concrete service-other |
Intra-Group eliminations |
Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| EURm | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 |
| Western and Northern Europe |
1,594 | 1,618 | 734 | 770 | 523 | 433 | 1,554 | 1,560 | -556 | -571 | 3,848 | 3,811 |
| Eastern Europe-Central Asia |
1,001 | 865 | 121 | 125 | 256 | 241 | -96 | -92 | 1,282 | 1,138 | ||
| North America | 851 | 883 | 825 | 921 | 721 | 707 | 790 | 849 | -297 | -327 | 2,892 | 3,033 |
| Asia-Pacific | 1,281 | 1,547 | 355 | 446 | 28 | 34 | 782 | 881 | -235 | -299 | 2,211 | 2,609 |
| Africa-Mediterranean Basin |
555 | 647 | 88 | 85 | 258 | 274 | -65 | -68 | 837 | 938 | ||
| Total | 5,282 | 5,560 | 2,123 | 2,347 | 1,273 | 1,174 | 3,640 | 3,805 | -1,248 | -1,357 11,070 | 11,528 | |
| Group Services | 475 | 709 | ||||||||||
| Inter-Group area turnover | -429 | -476 | ||||||||||
| Continuing operations | 11,117 | 11,762 |
| Other operating income | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Income from sale of non-core products | 56.5 | 66.3 |
| Rental income | 30.5 | 31.6 |
| Income from reduction of bad debt provision | 8.0 | 5.6 |
| Gains from sale of fixed assets | 150.7 | 194.9 |
| Write back of provisions | 16.1 | 12.1 |
| Other income | 149.7 | 143.3 |
| 411.5 | 453.8 |
The gains from sale of fixed assets include income from the sale of excess emission rights amounting to EUR 147.1 million (previous year: 98.5). Losses of EUR 7.9 million, incurred in connection with the fair value measurement at the balance sheet date, were reported in the amortisation of intangible assets. Significant non-recurring transactions, occurring in the course of ordinary business activities, are shown in the additional ordinary income.
| Material costs | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Raw materials | 1,776.5 | 1,908.6 |
| Supplies, repair materials and packaging | 705.5 | 761.5 |
| Costs of energy | 1,122.0 | 1,244.1 |
| Goods purchased for resale | 477.8 | 658.8 |
| Miscellaneous | 137.7 | 158.3 |
| 4,219.5 | 4,731.3 |
Material costs amounted to 40.2 % of turnover (previous year: 38.0 %).
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Personnel costs | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Wages, salaries, social security costs | 1,891.9 | 1,991.3 |
| Costs of retirement benefits | 94.5 | 71.4 |
| Other personnel costs | 55.1 | 23.5 |
| 2,041.5 | 2,086.2 |
Personnel costs equalled 17.7 % of turnover (previous year: 18.4 %). The development of expenses for retirement benefits is explained in Note 45 Provisions for pensions.
| Annual average number of employees | ||
|---|---|---|
| Categories of employees | 2009 | 2010 |
| Blue-collar employees | 40,519 | 39,156 |
| White-collar employees | 15,794 | 15,219 |
| Apprentices | 410 | 280 |
| 56,723 | 54,655 |
The decline in the average number of employees is primarily attributable to capacity adjustments. The average number of employees in the proportionately consolidated companies amounted to 3,294 (previous year: 3,301).
| Other operating expenses | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Selling and administrative expenses | 849.2 | 886.8 |
| Freight | 1,062.6 | 1,182.2 |
| Expenses for third party repairs and services | 721.6 | 832.5 |
| Rental and leasing expenses | 167.5 | 155.1 |
| Other expenses | 97.7 | 74.2 |
| Other taxes | 32.9 | 38.0 |
| 2,931.5 | 3,168.8 |
Expenses of EUR 67.6 million (previous year: 63.6) for research and development are not capitalised according to the conditions stated in IAS 38 (Intangible Assets).
Significant non-recurring transactions occurring in the course of ordinary business activities are shown in the additional ordinary expenses.
Scheduled amortisation and depreciation of intangible assets and tangible fixed assets is determined on the basis of the following Group-wide useful lives:
5
| Years | |
|---|---|
| Standard software | 3 |
| SAP applications | 3 to 5 |
| Buildings | 20 to 40 |
| Technical equipment and machinery | 10 to 20 |
| Plant and office equipment | 5 to 10 |
| IT hardware | 4 to 5 |
Impairment losses are shown in the additional ordinary expenses.
The additional ordinary result includes transactions which, although occurring in the course of ordinary business activities, are not shown in operating income because they are non-recurring.
| Additional ordinary result | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Additional ordinary income | ||
| Income from the disposal of subsidiaries and other business units | 121.0 | 1.2 |
| Income from the disposal of other non-current assets | 18.3 | 0.3 |
| Reversal of impairment losses | 3.9 | 4.4 |
| Other non-recurring income | 0.9 | 26.1 |
| 144.1 | 32.0 | |
| Additional ordinary expenses | ||
| Expenses from the disposal of subsidiaries and other business units | -11.6 | -1.8 |
| Expenses from the disposal of other non-current assets | -6.2 | |
| Impairment of goodwill | -420.5 | -23.6 |
| Impairment of other intangible and tangible fixed assets | -74.1 | -29.8 |
| Restructuring expenses | -58.4 | -47.1 |
| Other non-recurring expenses | -68.3 | -31.9 |
| -639.1 | -134.2 | |
| -495.0 | -102.2 | |
The decline in additional ordinary income from EUR 144.1 million to EUR 32.0 million is primarily due to the decline in income from the disposal of subsidiaries and other business units. In the previous year, this item included the book profits from the disposal of 14.1 % of the shares in Indocement/Indonesia (EUR 73.8 million), from the partnership division of Gralex/Belgium (EUR 21.2 million), and the disposal of the shares in Pioneer Road Services/Australia (EUR 3.1 million).
Reversals of impairment losses to the fair value less cost to sell, amounting to EUR 2.6 million, were recognised for tangible fixed assets impaired in previous years.
The other non-recurring expenses include numerous individual items. The main item for the financial year relates to the release of deferred purchase price liabilities from the acquisition of subsidiaries amounting to EUR 18.0 million.
The decline in additional ordinary expenses from EUR 693.1 million to EUR 134,2 million is due to the impairment of goodwill in particular. Following the goodwill impairment test, impairment losses amounting to EUR 23.6 million (previous year: 420.5) were recognised in the reporting year. The impairment losses primarily relate to the goodwill in Spain. In the previous year, goodwill impairment was recognised in North America (EUR 332.1 million), Spain (EUR 59.9 million), Israel (EUR 14.0 million), and the United Kingdom (EUR 11.9 million). Detailed explanations of the impairment test can be found on pages 159 ff.
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
Impairment losses amounting to EUR 27.2 million (previous year: 54.3) were recognised on tangible fixed assets, of which EUR 20.7 million was impaired to the value in use and EUR 6.5 million was impaired to the fair value less cost to sell. Significant items were impairments of real estate and buildings as well as of technical equipment in Germany.
The other non-recurring expenses include numerous individual items, such as costs of EUR 1.1 million incurred in connection with business combinations as well as EUR 1.1 million from the revaluation of shares from business combinations achieved in stages.
| Result from participations | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Results from associated companies | 34.1 | 35.3 |
| Income from financial investments | 7.4 | 2.4 |
| Impairment of other participations | -5.0 | -32.4 |
| Reversal of impairment of loans | 1.6 | 0.5 |
| 38.1 | 5.8 |
The results from associated companies are measured using the gross amounts, i.e. they are shown before taxes on income. The Group's share of their tax expense is reported under Taxes on income. The net profit amounted to EUR 28.7 million (previous year: 28.0). The income from financial investments essentially includes profit distributions from corporations and partnerships. The increase in impairment of other participations in comparison with the previous year results essentially from the impairment of the Polish associate Podgrodzie Sp.z.o.o. and the financial investment US Concrete Inc., Delaware, of which a share of EUR 8.8 million was released from shareholders' equity to profit or loss.
| Other financial result | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Interest balance from defined benefit pension plans | -42.7 | -42.2 |
| Interest portion from the valuation of other provisions | -15.0 | -23.6 |
| Valuation result of financial derivatives | 7.5 | |
| Miscellaneous other financial result | -171.9 | -80.0 |
| -229.6 | -138.3 |
The miscellaneous other financial result contains finance charges of EUR 75.0 million (previous year: 131.1) in connection with the syndicated credit facility, expenses from the valuation of financial investments "held for trading" at fair value of EUR 0.0 million (previous year: 7.7), and other financial expenses.
| Taxes on income from continuing operations | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Current taxes | -6.2 | -288.3 |
| Deferred taxes | 196.3 | 228.6 |
| 190.1 | -59.7 |
The increase of EUR 282.1 million in current taxes is essentially attributable to the improvement in results in Indonesia, Sweden, and Ghana. The increase was also due to one-off effects in the previous year, resulting from the release of tax accruals and from losses carried back. Adjusted for tax back-payments and tax refunds for previous years, which amounted to EUR 1.9 million (previous year: 165.8), the current taxes increased by EUR 118.2 million. The proportionate tax expense of associated companies accounted for "at equity" and amounting to EUR 6.6 million (previous year: 6.1) is included in the current taxes.
Deferred tax assets created in previous years for losses carried forward fell by EUR 13.4 million (previous year: 43.3) during the reporting year. The reduction in the tax expense for deferred taxes as a result of tax losses not recognised in previous years amounted to EUR 53.2 million (previous year: 43.3) in the financial year. Upon first recognition of deferred tax assets of EUR 77.7 million in the US, which were not covered by deferred tax liabilities, the assessment regarding the recoverability of the losses carried forward until 2015 was considered in accordance with the forecast income and on the basis of the tax planning strategy.
Tax losses carried forward and tax credits for which no deferred tax is recognised amount to EUR 2,194.3 million (previous year: 2,286.9). The losses carried forward both in Germany and abroad have essentially vested. Unrecognised deferred tax assets amounted to EUR 597.4 million (previous year: 666.3) in the reporting year.
In 2010, EUR -26.8 million (previous year: 64.9) of deferred taxes, resulting primarily from the measurement of provisions for pensions in accordance with IAS 19 and from the measurement of financial instruments in accordance with IAS 39, were charged directly to equity. The deferred tax liability increased by EUR 26.1 million (previous year: 13.5) as a result of changes in the scope of consolidation; the increase was recognised directly in equity.
The long-term tax liabilities of EUR 90.7 million (previous year: 79.8) include contingent liabilities recognised in connection with the acquisition of the Hanson Group in accordance with IFRS 3.37.
In accordance with IAS 12, deferred taxes must be recognised on the difference between the share of shareholder's equity of a subsidiary recognised in the Group balance sheet and the carrying amount for this subsidiary in the parent company's tax accounts, if realisation is expected (Outside Basis Differences). On the basis of the regulations for the application of IAS 12.39, deferred taxes of EUR 11.1 million (previous year: 5.4) were recognised on planned future dividends. No deferred tax liabilities were recognised for outside basis differences from retained earnings of the subsidiaries of HeidelbergCement AG amounting to EUR 3.9 billion (previous year: 3.6), as no further dividend payments are planned.
To measure deferred taxes, an average income tax rate of 29.32 % is applied for the domestic companies.
| Tax reconciliation of continuing operations | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Profit before tax | -14.5 | 599.1 |
| Impairment of goodwill | -420.5 | -23.6 |
| Profit before tax and impairment of goodwill | 406.0 | 622.7 |
| Theoretical tax expense at 16,3 % (2009: 13,7 %) 1) | -55.6 | -101.7 |
| Changes to the theoretical tax expense due to: | ||
| Tax-free earnings (+) and non deductible expenses (-) | 94.7 | 4.0 |
| Effects from loss carryforwards | 1.2 | 36.9 |
| Not recognised deferred tax assets | -18.1 | -14.2 |
| Tax increase (-), reduction (+) for prior years | 165.8 | 1.9 |
| Changes in tax rate | 2.1 | 13.4 |
| Taxes on income | 190.1 | -59.7 |
1) Weighted average tax rate
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Deferred tax by type of temporary difference | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Deferred tax assets | ||
| Fixed assets | 62.0 | 72.2 |
| Other assets | 88.9 | 54.2 |
| Provisions and liabilities | 626.9 | 658.4 |
| Carry forward of unused tax losses and tax credits | 311.2 | 535.5 |
| Gross amount | 1,089.0 | 1,320.3 |
| Netting | -820.2 | -964.5 |
| 268.8 | 355.8 | |
| Deferred tax liabilities | ||
| Fixed assets | 1,508.5 | 1,576.7 |
| Other assets | 68.6 | 15.0 |
| Provisions and liabilities | 135.5 | 196.6 |
| Gross amount | 1,712.6 | 1,788.3 |
| Netting | -820.2 | -964.5 |
| 892.4 | 823.8 |
The following table shows the composition of the results from discontinued operations.
| EURm | 2009 | 2010 |
|---|---|---|
| Expenses | -13.6 | -44.1 |
| Income taxes | 5.6 | 15.6 |
| Net loss from discontinued operations | -8.0 | -28.4 |
The loss from discontinued operations includes the expenses incurred in connection with operations of the Hanson Group and maxit Group discontinued in previous years.
The Managing Board and Supervisory Board propose the following dividend: EUR 0.25 dividend per share. Based on 187,500,000 no-par value shares, entitled to participate in dividends for the 2010 financial year, the amount for dividend payment is EUR 46,875,000 (previous year: 22,500,000).
| Earnings per share | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Profit for the financial year | 167.7 | 510.9 |
| Minority interests | 125.1 | 168.2 |
| Group share of profit | 42.6 | 342.7 |
| Number of shares in '000s (weighted average) | 142,170 | 187,500 |
| Earnings per share in EUR | 0.30 | 1.83 |
| Net income from continuing operations – attributable to the parent entity | 50.6 | 371.1 |
| Earnings per share in EUR – continuing operations | 0.36 | 1.98 |
| Net loss from discontinued operations – attributable to the parent entity | -8.0 | -28.4 |
| Loss per share in EUR – discontinued operations | -0.06 | -0.15 |
5
The basic earnings per share are calculated in accordance with IAS 33 (Earnings per Share), by dividing the Group share in profit for the financial year by the weighted average of the number of issued shares. The diluted earnings per share indicator takes into account not only currently issued shares but also shares potentially available through option rights. The earnings per share were not diluted in the reporting period in accordance with IAS 33.30.
The cash flow statement shows how the Group's cash and cash equivalents changed through inflows and outflows during the reporting year. In accordance with IAS 7 (Statement of Cash Flows), a distinction is made between cash flows from operating, investing, and financing activities. The changes in the relevant balance sheet items cannot be directly derived from the Group balance sheet, as non-cash transactions – such as effects arising from foreign currency translation and changes in the consolidation scope – are adjusted.
The cash flow is calculated as net income from continuing operations adjusted for taxes on income, net interest, depreciation, amortisation, impairment losses, and other non-cash items. Cash flows from dividends received from non-consolidated companies, from interest received and paid and from taxes paid are also recognised. Changes in working capital and decrease in provisions through cash payments are taken into account when determining the cash flow from operating activities.
Cash flows from the acquisition or sale of intangible assets as well as tangible and financial fixed assets are recognised in the cash flow from investing activities. If these relate to the acquisition or sale of subsidiaries or other business units (gain or loss of control), the effects on the cash flow statement are shown in separate items.
The cash flow from financing activities mainly results from changes in capital, dividend payments as well as proceeds from and repayments of bonds and loans. In addition, cash flows from changes in ownership interests in subsidiaries that do not result in a loss of control are classified as financing activities. In the figures shown for the previous year, as a result of the change in the presentation method, the cash flow from financing activities was EUR 214.7 million higher and the cash flow from investing activities was reduced by the same amount.
The cash flows from foreign Group companies shown in the statement are generally converted into euro using the average annual exchange rates. By contrast, cash is converted using the exchange rate at year end, as in the Group balance sheet. The effects of exchange rate changes on cash are shown separately.
The significant individual items in the cash flow statement are explained below:
The increase in interest received is due to one-off effects from the settlement of interest rate swaps in particular.
The decline in interest paid in comparison with the previous year is essentially attributable to reduced refinancing costs.
The other non-cash items mainly include additions to and releases of provisions. Furthermore, the profits were adjusted for the book profits and losses from fixed asset disposals. The total amount earned from these disposals is shown under divestments in investing activities.
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
Operating assets consist of stock, trade receivables, and other assets used in operating activities.
Operating liabilities include trade payables and other liabilities from operating activities.
This item includes the cash outflow of provisions for pensions and other provisions.
The payments for investments differ from additions in the fixed-asset movement schedule, which shows, for example, non-cash items as additions, e.g. additions in connection with barter transactions or contributions in kind.
The significant payments for the acquisition of subsidiaries are listed below:
The investments in subsidiaries less acquired cash and cash equivalents amounted to EUR 109.9 million.
In the reporting year, investments of EUR 466.7 million (previous year: 505.3) were made in order to maintain capacities. Payments for measures to expand capacities amounted to EUR 404.9 million (previous year: 314.9).
The proceeds from the disposal of other fixed assets primarily include net proceeds from the sale of excess emission rights amounting to EUR 106.0 million. Proceeds from the sale of financial fixed assets amounting to EUR 14.9 million are also included.
This line shows the cash and cash equivalents acquired or disposed of in connection with a gain or loss of control over subsidiaries and other business units.
In the previous year, this item included the gross proceeds from the capital increase less the withheld transaction costs.
The item dividend payments to minority shareholders shows dividends paid during the financial year for minority interests.
This line shows the net cash of EUR 45.4 million (USD 60.0 million) from the sale of around 6 % of the African activities of the Scancem International Group to IFC and its financial partners. In the previous year, this item primarily included the payment of EUR 216.0 million received from the sale of 14.1 % of the shares in PT Indocement Tunggal Prakarsa/Indonesia.
4
This item shows cash flows from the increase of ownership interests in subsidiaries. The largest transaction was the acquisition of 26.6 % of the shares in Carrieres d'Antoing S.A., Antoing/Belgium for EUR 3.5 million.
This item essentially includes the proceeds from the syndicated credit facility of EUR 3 billion. In addition, three new bonds were issued, with the issue proceeds being used entirely for refinancing existing bank debts. The three bonds with a total volume of EUR 2.05 billion were issued in January and July and had terms of five years (EUR 650 million), ten years (EUR 750 million), and five and a half years (EUR 650 million).
In the previous year, this item essentially included the proceeds from the syndicated credit facility of EUR 8.7 billion in June 2009 and the three Eurobonds issued in October 2009 with a total issue volume of EUR 2.5 billion with terms of five, seven, and ten years.
This item includes the scheduled repayments of financial liabilities and the balance from the proceeds and payments for items with a high turnover rate, large amounts, and short terms from financing activities.
This includes the full repayment of the outstanding amount of the syndicated credit facility of EUR 8.7 billion, the repayment of the USD 750 million bond and the partial repayment of the syndicated credit facility of EUR 3 billion. Scheduled repayments of commercial papers also took place.
In the previous year, the item included the repayment of the EUR 300 million bond and the repayment of the syndicated acquisition financing (Hanson) as well as various bilateral lines. In addition, scheduled repayments were made for debt certificates and commercial papers.
Cash and cash equivalents with a remaining term of less than three months are included. EUR 22.3 million (previous year: 110.0) of the cash is not available for use by HeidelbergCement. The restrictions relate primarily to amounts pledged as collateral for local guarantee facilities and earmarked funds that can be used only for recultivation payments.
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Intangible assets | |||
|---|---|---|---|
| EURm | Goodwill | Other intangible fixed assets |
Total |
| Cost | |||
| 1 January 2009 | 10,530.1 | 444.2 | 10,974.3 |
| Currency translation | 298.5 | -2.5 | 296.0 |
| Change in consolidation scope | 137.4 | 4.1 | 141.5 |
| Additions | 0.6 | 43.2 | 43.8 |
| Disposals | -76.4 | -6.6 | -83.0 |
| Reclassifications | -0.2 | 15.6 | 15.4 |
| 31 December 2009 | 10,890.0 | 498.0 | 11,388.0 |
| Amortisation and impairment | |||
| 1 January 2009 | 649.2 | 174.1 | 823.3 |
| Currency translation | 16.6 | -0.7 | 15.9 |
| Change in consolidation scope | 0.7 | 2.0 | 2.7 |
| Additions | 42.0 | 42.0 | |
| Impairment | 420.5 | 19.8 | 440.3 |
| Disposals | -1.2 | -4.8 | -6.0 |
| Reclassifications | 1.0 | 1.0 | |
| 31 December 2009 | 1,085.8 | 233.4 | 1,319.2 |
| Carrying amount at 31 December 2009 | 9,804.2 | 264.6 | 10,068.8 |
| Cost | |||
| 1 January 2010 | 10,890.0 | 498.0 | 11,388.0 |
| Currency translation | 783.9 | 18.7 | 802.6 |
| Change in consolidation scope | -1.4 | 51.1 | 49.7 |
| Additions | 61.4 | 59.8 | 121.2 |
| Disposals | -7.9 | -17.7 | -25.6 |
| Reclassifications | 26.7 | 26.7 | |
| 31 December 2010 | 11,726.0 | 636.6 | 12,362.6 |
| Amortisation and impairment | |||
| 1 January 2010 | 1,085.8 | 233.4 | 1,319.2 |
| Currency translation | 63.0 | 10.1 | 73.1 |
| Change in consolidation scope | -1.2 | -1.4 | -2.6 |
| Additions | 40.4 | 40.4 | |
| Impairment | 23.6 | 2.6 | 26.2 |
| Reversal of impairment | -1.8 | -1.8 | |
| Disposals | -6.5 | -5.9 | -12.4 |
| Reclassifications | 7.3 | 7.3 | |
| 31 December 2010 | 1,164.7 | 284.7 | 1,449.4 |
Larger individual items of goodwill are connected with the acquisition of the Hanson Group, London/United Kingdom, S.A. Cimenteries CBR, Brussels/Belgium, Lehigh Hanson, Inc., Wilmington/US, HeidelbergCement Northern Europe AB, Stockholm/Sweden, Akçansa Cimento Sanayi ve Ticaret A.S., Istanbul/Turkey, and ENCI N.V., 's-Hertogenbosch/Netherlands.
4
Goodwill impairment tests are carried out annually in accordance with IAS 36 (Impairment of Assets). Impairment losses of EUR 23.6 million were recognised in the reporting year. This impairment is taken into account in the additional ordinary expenses and explained in more detail in Note 7.
In the previous year, the valuation of put options held by minorities led to a decrease of EUR 13.1 million in goodwill. As a result of the amendment to IAS 27, these effects are now recognised directly in revenue reserves and shown in the statement of changes in equity as changes in puttable minorities.
Quarrying rights, concessions, and software are shown under other intangible assets. Emission rights certificates acquired through emissions trading have been accounted for at cost, with a total of EUR 78.3 million (previous year: 38.9). Impairment losses of EUR 2.6 million (previous year: 17.5) for quarrying rights were recorded. Selfdeveloped intangible assets of EUR 0.1 million (previous year: 2.3) were capitalised. Development costs of EUR 0.9 million (previous year: 0.0) were recognised as intangible assets in the financial year.
Intangible assets with finite useful lives amounted to EUR 337.1 million (previous year: 250.5) and those with indefinite useful lives (trademark rights) to EUR 14.8 million (previous year: 14,1). The goodwill comprises acquired market shares that cannot be assigned to any other determinable and separable intangible assets.
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Tangible fixed assets | |||||
|---|---|---|---|---|---|
| EURm | Land and buildings |
Plant and machinery |
Fixtures, tools and equipment |
Payments on account and assets under construction |
Total |
| Cost | |||||
| 1 January 2009 | 6,402.2 | 8,898.6 | 742.7 | 775.9 | 16,819.4 |
| Currency translation | 188.4 | 253.0 | 15.0 | 0.8 | 457.2 |
| Change in consolidation scope | 68.4 | -32.9 | -0.3 | 7.0 | 42.2 |
| Additions | 75.0 | 160.2 | 28.5 | 541.7 | 805.4 |
| Disposals | -69.4 | -173.3 | -63.7 | -4.2 | -310.6 |
| Reclassifications | 165.4 | 490.1 | -17.0 | -653.9 | -15.4 |
| 31 December 2009 | 6,830.0 | 9,595.7 | 705.2 | 667.3 | 17,798.2 |
| Depreciation and impairment | |||||
| 1 January 2009 | 1,780.0 | 4,598.6 | 505.3 | 6,883.9 | |
| Currency translation | 35.0 | 133.7 | 9.4 | 178.1 | |
| Change in consolidation scope | -20.3 | -22.1 | -2.0 | -44.4 | |
| Additions | 152.1 | 534.2 | 56.5 | 742.8 | |
| Impairment | 29.9 | 24.3 | 0.1 | 54.3 | |
| Reversal of impairment | -3.9 | -3.9 | |||
| Disposals | -37.1 | -138.2 | -56.3 | -231.6 | |
| Reclassifications | -13.7 | 56.7 | -44.0 | -1.0 | |
| 31 December 2009 | 1,925.9 | 5,183.3 | 469.0 | 7,578.2 | |
| Carrying amount at 31 December 2009 | 4,904.1 | 4,412.4 | 236.2 | 667.3 | 10,220.0 |
| Cost | |||||
| 1 January 2010 | 6,830.0 | 9,595.7 | 705.2 | 667.3 | 17,798.2 |
| Currency translation | 405.4 | 589.9 | 29.0 | 46.5 | 1,070.8 |
| Change in consolidation scope | 67.3 | 88.0 | 29.6 | 6.1 | 191.0 |
| Additions | 34.4 | 73.5 | 17.3 | 597.5 | 722.7 |
| Disposals | -72.9 | -90.2 | -34.7 | -8.3 | -206.1 |
| Reclassifications | 116.1 | 273.9 | 27.0 | -443.7 | -26.7 |
| Reclassifications to current assets | -14.4 | -14.4 | |||
| 31 December 2010 | 7,380.3 | 10,516.4 | 773.4 | 865.4 | 19,535.5 |
| Depreciation and impairment | |||||
| 1 January 2010 | 1,925.9 | 5,183.3 | 469.0 | 7,578.2 | |
| Currency translation | 76.8 | 294.7 | 17.2 | 388.7 | |
| Change in consolidation scope | 1.2 | -16.3 | 25.3 | 10.2 | |
| Additions | 161.2 | 554.6 | 53.0 | 768.8 | |
| Impairment | 18.6 | 7.7 | 0.9 | 27.2 | |
| Reversal of impairment | -0.7 | -1.9 | -2.6 | ||
| Disposals | -30.4 | -76.9 | -31.7 | -139.0 | |
| Reclassifications | -5.7 | -1.2 | -0.4 | -7.3 | |
| Reclassifications to current assets | -12.5 | -12.5 | |||
| 31 December 2010 | 2,146.9 | 5,931.5 | 533.3 | 8,611.7 | |
| Carrying amount at 31 December 2010 | 5,233.4 | 4,584.9 | 240.1 | 865.4 | 10,923.9 |
Tangible fixed assets include EUR 22.9 million (previous year: 31.8) of capitalised lease assets, of which EUR 16.9 million relates to technical equipment and machinery, EUR 1.7 million to plant and office equipment, and EUR 4.4 million to buildings. Borrowing costs of EUR 12.9 million (previous year: 10.0) were recognised, relating in 4
particular to investments by Eastern European companies. The average capitalisation rate applied was 9 % (previous year: 12 %). Liens amounting to EUR 1.0 million (previous year: 6.9) were granted as security. In the reporting year, impairment losses of EUR 27.2 million and reversals of EUR 2.6 million were recognised; these are shown in the additional ordinary result and explained in Note 7.
The following table contains the summarised financial information concerning the investments in associates of the HeidelbergCement Group.
| Investment in associates | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Investments in associates - balance sheet | ||
| Assets | 677.9 | 734.3 |
| Liabilities | -301.1 | -329.6 |
| 376.8 | 404.7 | |
| Impairment | -32.1 | -45.5 |
| Net assets | 344.7 | 359.2 |
| Investments in associates - profit and loss accounts | ||
| Turnover | 791.9 | 758.4 |
| Profit | 27.9 | 27.9 |
| Unrecognised share of losses for the period | -2.0 | -1.3 |
| Unrecognised share of losses cumulated | -4.7 | -8.3 |
| Carrying amount of associates | 349.4 | 367.5 |
This item includes investments in equity securities acquired on the basis of long-term investment planning. As at the reporting date, the fair value of investments categorised as "Available for sale at fair value" amounts to EUR 23.4 million (previous year: 19.2). In the period, changes in the fair value of EUR 6.5 million (previous year: 4.2) were recognised directly in equity and EUR -8.8 million (previous year: -2.8) were released from equity to profit or loss in connection with impairments. A reduction in the fair value of the investments categorised as "Available for sale at fair value", amounting to EUR -2.3 million (previous year: -2.9), is attributable to impairments. The carrying amount of the investments classified as "Available for sale at cost" amounts to EUR 40.4 million (previous year: 60.1).
The following table shows the composition of the long-term receivables and derivative financial instruments.
| Long-term receivables and derivative financial instruments | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Loans to participations | 19.0 | 19.1 |
| Other loans | 45.8 | 65.9 |
| Derivative financial instruments | 4.1 | |
| Other long-term operating receivables | 157.5 | 158.2 |
| Other long-term non-financial receivables | 25.8 | 147.1 |
| 248.1 | 394.4 |
| Group statement of changes in equity |
|---|
| Segment reporting / Notes to the annual accounts |
| Notes to the 2010 Group annual accounts |
| Audit Opinion / Responsibility statement |
The long-term derivative financial instruments relate to commodities that do not fulfil the criteria for "own use contracts". The commodities are accounted for as hedging instruments in connection with cash flow hedges. The changes in fair values recognised directly in equity amount to EUR 4.1 million (previous year: 0.0); EUR 5.4 million (previous year: 0.0) was released to profit or loss. Additional information on the derivative financial instruments is provided on pages 199 ff.
Other long-term operating receivables particularly include claims for reimbursement against insurance companies for environmental and third-party liability damages. The other long-term non-financial receivables primarily include overfunding of pension schemes as well as prepaid expenses. The increase in comparison with the previous year mainly relates to the rise in the overfunding of pension schemes.
The following table shows the due term structure of the long-term financial receivables.
| Due terms of long-term financial receivables | participations | Loans to | Other loans | receivables | Other long-term operating |
Total | ||
|---|---|---|---|---|---|---|---|---|
| EURm | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 |
| not impaired, not overdue | 18.6 | 18.9 | 45.0 | 64.7 | 154.5 | 154.6 | 218.1 | 238.2 |
| not impaired, overdue 1 - 60 days | 0.2 | 0.1 | 2.9 | 0.3 | 2.9 | |||
| not impaired, overdue 61 - 360 days | 0.3 | 0.2 | 0.7 | 1.0 | 0.2 | |||
| not impaired, overdue > 360 days | 0.4 | 0.2 | 0.3 | 0.3 | 0.1 | 0.4 | 0.8 | 0.9 |
| impaired | 0.7 | 2.1 | 0.3 | 2.1 | 1.0 | |||
| 19.0 | 19.1 | 45.8 | 65.9 | 157.5 | 158.2 | 222.3 | 243.2 |
As at the reporting date, there are no indications that the debtors of the receivables shown as 'not impaired' will not meet their payment obligations.
In the reporting year, impairment losses on stock of EUR 19.4 million (previous year: 23.4) and reversals of EUR 11.4 million (previous year: 8.7) were recognised.
The following overview shows the composition of the receivables and other assets.
| Receivables and other assets | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Other short-term financial receivables | 99.7 | 76.5 |
| Trade receivables | 1,298.8 | 1,429.8 |
| Other short-term operating receivables | 266.6 | 255.6 |
| Non-financial other assets | 95.3 | 119.0 |
| Current income tax assets | 238.4 | 61.0 |
| 1,998.7 | 1,941.9 |
The other short-term operating receivables include, in particular, claims for damages as well as claims for reimbursement against insurance companies for environmental and third-party liability damages. Non-financial other assets, which do not fall within the scope of IAS 39, essentially include prepaid expenses.
4
| Due terms of short-term financial receivables | financial receivables | Other short-term | Trade receivables | receivables | Other short-term operating |
Total | ||
|---|---|---|---|---|---|---|---|---|
| EURm | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 |
| not impaired, not overdue | 95.9 | 72.5 | 809.1 | 894.5 | 219.4 | 232.8 | 1,124.4 | 1,199.8 |
| not impaired, overdue 1 - 60 days | 0.8 | 0.4 | 338.2 | 411.3 | 21.8 | 13.6 | 360.8 | 425.3 |
| not impaired, overdue 61 - 360 days | 0.6 | 0.4 | 106.4 | 101.9 | 19.5 | 4.3 | 126.5 | 106.6 |
| not impaired, overdue > 360 days | 1.6 | 0.5 | 14.5 | 21.2 | 5.2 | 2.8 | 21.3 | 24.5 |
| impaired | 0.8 | 2.7 | 30.6 | 0.9 | 0.7 | 2.1 | 32.1 | 5.7 |
| 99.7 | 76.5 | 1,298.8 | 1,429.8 | 266.6 | 255.6 | 1,665.1 | 1,761.9 |
The following table shows the due term structure of the short-term financial receivables.
As at the reporting date, there are no indications that the debtors of the receivables shown as "not impaired overdue" and "not overdue" will not meet their payment obligations.
The valuation allowances on trade receivables have developed as follows:
| Valuation allowances on trade receivables | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Valuation allowances at 1 January | 72.6 | 72.2 |
| Additions | 46.2 | 16.9 |
| Use and reversal | -45.0 | -36.7 |
| Currency translation and other adjustments | -1.6 | -7.2 |
| Valuation allowances at 31 December | 72.2 | 45.2 |
The valuation allowances are essentially based on historical default probabilities and due terms. They are primarily valuation allowances for collective impairments.
The short-term investments in the category "Available for sale at fair value" are measured at fair value and recognised directly in equity with an amount of EUR 0.0 million (previous year: 0.2). EUR 0.0 million (previous year: 0.1) was recognised directly in equity and EUR 0.1 million (previous year: -0.1) released to profit or loss.
The short-term derivatives with positive market values include currency swaps of EUR 18.0 million (previous year: 23.4), currency forwards of EUR 0.3 million (previous year: 0.9), interest rate swaps of EUR 17.4 million (previous year: 23.3), and commodities of EUR 0.3 million (previous year: 0.3). Of the effective portion of the change in the fair values of derivative financial instruments, accounted for as hedging instruments of fair value hedges, EUR -8.4 million (previous year: -7.0) was recognised in profit or loss in the hedging result and accrued interest of EUR 2.7 million (previous year: 30.1) was recognised in profit or loss in the interest income/expenses. The changes in the fair values of the derivatives accounted for as "held for trading" amount to EUR -6.0 million (previous year: -42.9) and were recognised in profit or loss. Additional information on the derivative financial instruments is provided on pages 199 ff.
Cash and cash equivalents include cash balances and deposits at banks with a first-class credit rating. Restrictions on cash are explained in Note 29.
The assets and liabilities of a proportionately consolidated company in the Mibau Group were classified as held for sale. The Mibau Group is allocated to the Western and Northern Europe Group area. The following table shows the main groups of assets and liabilities.
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Assets and liabilities held for sale | |
|---|---|
| EURm | 2010 |
| Disposal groups held for sale | |
| Non-current assets | 1.9 |
| Cash and cash equivalents | 0.8 |
| Other current assets | 0.1 |
| 2.8 | |
| Liabilities associated with disposal groups | |
| Non-current liabilities | 3.8 |
As at the balance sheet date 31 December 2010, the subscribed share capital amounts to EUR 562,500,000 – unchanged from the previous year – and is divided into 187,500,000 shares; the shares are no-par value bearer shares. The nominal value of each share is EUR 3.00, which corresponds to a proportionate amount of the subscribed share capital.
As at 31 December 2010, there were two authorised capitals; namely authorisation of the Managing Board and the Supervisory Board to increase capital by issuing new shares in return for cash contributions (Authorised Capital I), and authorisation of the Managing Board and the Supervisory Board to increase capital by issuing new shares in return for contributions in kind (Authorised Capital II). The authorised capitals are described as follows:
The Annual General Meeting held on 6 May 2010 authorised the Managing Board, with the consent of the Supervisory Board, to increase the company's subscribed share capital by a total amount of up to EUR 225,000,000 by issuing up to 75,000,000 new no-par value bearer shares in total in return for cash contributions on one or more occasions until 5 May 2015 (Authorised Capital I). The shareholders must be granted subscription rights. However, the Managing Board is authorised:
Furthermore, the Annual General Meeting of 6 May 2010 authorised the Managing Board, with the consent of the Supervisory Board, to increase the company's subscribed share capital by a total amount of up to EUR 56,100,000 by issuing up to 18,700,000 new no-par value bearer shares in total against contributions in kind on one or more occasions until 5 May 2015 (Authorised Capital II). Furthermore, the Managing Board is authorised to exclude, with the consent of the Supervisory Board, the subscription right, provided that the capital increase in return for contributions in kind is performed for the purposes of acquisition of companies, parts of companies, or of participations in companies, or of other assets. In addition, the Managing Board is authorised to exclude, with the consent of the Supervisory Board, the subscription right of shareholders in so far as it is necessary to grant
bearers of the warrants and convertible bonds issued by the company or its subsidiaries subscription rights for new shares to the extent to which they would be entitled after exercising the option or conversion rights and/or fulfilling the warrant or conversion obligation. The Managing Board is authorised to determine, with the consent of the Supervisory Board, the further details and implementation of the capital increase, particularly the content of the share rights and the terms of the share issue.
As at 31 December 2010, the authorisation to issue new shares in return for cash or contributions in kind forming the basis of the authorised capitals I and II had not been used.
Ultimately, the conditional share capital described below existed as at 31 December 2010: The Annual General Meeting of 7 May 2009 decided to conditionally increase the subscribed share capital by a further amount of up to EUR 187,500,000, divided into up to 62,500,000 new no-par value bearer shares (Conditional Share Capital 2009). The conditional capital increase is only carried out insofar as the bearers of option or conversion rights, or those obliged to exercise conversions or options in connection with warrant or convertible bonds, profit-sharing certificates, or participating bonds issued or guaranteed by HeidelbergCement AG, or a Group company of HeidelbergCement AG in the sense of § 18 of the German Stock Company Act (Aktiengesetz) in which Heidelberg-Cement AG directly or indirectly has a participation of at least 90 %, on the basis of the authorisation agreed by the Annual General Meeting of 7 May 2009 under agenda item 7, make use of their option or conversion rights or, if they are obliged to exercise conversions or options, fulfil their obligation to exercise conversions or options, or, if HeidelbergCement AG exercises an option to grant shares of HeidelbergCement AG in place of all or part of the payment of the monetary amount due, provided that a cash settlement is not granted and no treasury shares or shares of another listed company are used to service this right. As at 31 December 2010, the authorisation to issue warrant or convertible bonds forming the basis of the conditional share capital 2009 had not been used. Within the framework of a co-operation agreement, subject to the consent of the contractual partners, the company has undertaken as part of the capital increase for cash in September 2009 not to issue convertible bonds with the right to convert into new shares from the 2009 conditional share capital before April 2011.
As at the balance sheet date of 31 December 2010, the company has no treasury shares and there is no authorisation to acquire treasury shares.
The share premium was essentially created from the premium from capital increases. The development of share premium is shown in the following table.
| Share premium | ||
|---|---|---|
| EURm | 2009 | 2010 |
| 1 January | 3,470.9 | 5,539.4 |
| Cash capital increase | 2,068.5 | |
| 31 December | 5,539.4 | 5,539.4 |
In the previous year, the cash capital increase was reduced by net transaction costs of EUR 56.5 million in accordance with IAS 32.37. This included income tax benefits of EUR 23.2 million.
Retained earnings include profits earned by HeidelbergCement AG and its subsidiaries which have not yet been distributed, as well as changes in the provisions for pensions recognised directly in equity.
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
The other components of equity include foreign currency translation differences, changes of financial assets categorised as "Available for sale at fair value", cash flow hedges, and revaluation reserve. The changes in comparison with the previous year are explained in the Group statement of comprehensive income and the Group statement of changes in equity.
As a result of the first-time consolidation of Cimenterie de Lukala S.A.R.L., Interlacs S.A.R.L., and CJSC "Construction Materials", the minority interests rose by EUR 59.5 million. Foreign currency translation contributed to an increase of EUR 54.5 million.
The sum of all pension expenses in connection with defined contribution plans amounted to EUR 32.4 million (previous year: 28.8). In 2010, the contributions to the statutory pension insurance fund amounted to EUR 27.6 million (previous year: 19.6).
The actuarial assumptions on which the calculations are based are summarised in the following table (weighted presentation):
| Actuarial assumptions | ||
|---|---|---|
| 2009 | 2010 | |
| Discount rate | 5.69 % | 5.32 % |
| Expected return on plan assets | 5.84 % | 5.82 % |
| Future salary increases | 4.02 % | 3.88 % |
| Expected increase in health care cost | 7.81 % | 8.68 % |
According to IFRIC 14, the pension assets are being limited to EUR 17.5 million (previous year: 25.8) in the United Kingdom and to EUR 0.2 million (previous year: 0.0) in Belgium. The minimum funding requirements existing in Canada have vanished (previous year: EUR 0.4 million). Those pension assets were capped because overfunding cannot be recovered due to local funding rules.
In accordance with IAS 19 (Employee Benefits), detailed information concerning provisions for the pension plans and benefit plans for medical care costs, with obligations amounting to EUR 826.1 million (previous year: 867.7), is provided below, showing the funding of the plans and how they are accounted for in the balance sheet and profit and loss accounts.
| Types of retirement benefit plans | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Defined benefit pension plans | 664.6 | 605.4 |
| Plans for health care costs | 203.1 | 220.7 |
| 867.7 | 826.1 |
| Presentation in the balance sheet | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Long-term pension provisions | 756.7 | 844.4 |
| Short-term pension provisions | 115.1 | 94.4 |
| Overfunding in pension schemes | -4.1 | -112.7 |
| 867.7 | 826.1 |
In 2010, pension obligations amounting to EUR 3,652.8 million (previous year: 3,397.0) existed in the Group, which were essentially covered by outside pension funds. In addition, there were direct agreements of EUR 553.5 million (previous year: 464.9). Obligations in the US, Indonesia, Belgium, and Canada for medical care costs for pension recipients amounted to EUR 218.9 million (previous year: 201.1). The following table shows the financing status of these plans and their presentation in the balance sheet.
| Pension obligations and pension funds | Pension plans | Plans for health care cost |
Total | |||
|---|---|---|---|---|---|---|
| EURm | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 |
| Present value of funded obligations | 3,397.0 | 3,652.8 | 3,397.0 | 3,652.8 | ||
| Fair value of plan assets | -3,224.7 | -3,619.7 | -3,224.7 | -3,619.7 | ||
| Recognised limitation acc. to IAS 19.58 B | 26.1 | 17.7 | 26.1 | 17.7 | ||
| Fair value of plan assets after limitation acc. to IAS 19.58 B | -3,198.6 | -3,602.0 | -3,198.6 | -3,602.0 | ||
| Deficit (+) / surplus (-) | 198.4 | 50.8 | 198.4 | 50.8 | ||
| Present value of unfunded obligations | 464.9 | 553.5 | 201.1 | 218.9 | 666.0 | 772.4 |
| Total liability | 663.3 | 604.3 | 201.1 | 218.9 | 864.4 | 823.2 |
| Obligation in the balance sheet | 664.6 | 605.4 | 203.1 | 220.7 | 867.7 | 826.1 |
| Unrecognised past service cost | -1.3 | -1.1 | -2.0 | -1.8 | -3.3 | -2.9 |
The pension plans and the plans for medical care costs include actuarial losses as well as recognised limitations in accordance with IAS 19.58 B totalling EUR 486.8 million (previous year: 473.3), which have been recognised directly in equity. The increase of EUR 13.5 million (previous year: 273.0) in actuarial losses and recognised limitations according to IAS 19.58 B results primarily from the positive development of the funds' assets, losses from foreign currency translation, and the decrease in the discount rate on which the actuarial calculation is based. This decrease amounted to 0.37 percentage points (previous year: 0.31) and was significantly affected by the change of 1.20 percentage points (previous year: 0.0) in the Netherlands and Germany and of 0.3 percentage points (previous year: 0.1) in the United Kingdom.
The following table shows the development of the actuarial gains and losses.
| Actuarial gains and losses recognised in the statement of comprehensive income | ||||
|---|---|---|---|---|
| EURm | 2009 | 2010 | ||
| 1 January | 200.3 | 473.3 | ||
| Change during year | 267.5 | -14.7 | ||
| Exchange rate changes | 5.5 | 28.2 | ||
| 31 December | 473.3 | 486.8 |
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
In 2010, as a result of changes in fund balances (i.e. not as a result of the change in the actuarial assumptions on which the measurement is based), profits of EUR 166.2 million (previous year: loss 8.9) were accrued on the funds' assets and profits of EUR 85.3 million (previous year: 22.0) were accrued on the obligations.
The expenses for retirement benefits for the significant pension plans can be summarised as follows:
| Development in the profit and loss accounts | Pension plans | Plans for health care cost |
Total | |||||
|---|---|---|---|---|---|---|---|---|
| EURm | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | ||
| Current service cost | 51.0 | 50.8 | 1.6 | 1.5 | 52.6 | 52.3 | ||
| Interest cost | 207.3 | 223.8 | 12.3 | 12.1 | 219.6 | 235.9 | ||
| Expected return on plan assets | -176.9 | -193.7 | -176.9 | -193.7 | ||||
| Past service cost recognised | 2.8 | 1.7 | -1.9 | -0.4 | 0.9 | 1.3 | ||
| Curtailment or settlement gains/losses recognised | -2.1 | -28.5 | 0.2 | -1.9 | -28.5 | |||
| Expenses recognised in profit and loss accounts | 82.1 | 54.1 | 12.2 | 13.2 | 94.3 | 67.3 |
Of the total expenditure of EUR 67.3 million (previous year: 94.3), EUR 25.1 million (previous year: 51.7) is shown in personnel costs. The interest cost from the discounting of pension provisions and the expected return on plan assets of EUR 42.2 million (previous year: 42.7) are included in other financial result.
Curtailment gains of EUR 28.5 million (previous year: 2.1) from pension plans – primarily caused by the closing of pension plans in the United Kingdom by EUR 22.4 million (previous year: 2.8) as well as the closing of AFP-plans (early retirement plans) in Norway by EUR 5.7 million (previous year: loss 1.3) – were realised in the profit and loss accounts. In spite of the significant decrease in discount rate there is a decrease in the service cost to EUR 52.3 million (previous year: 52.6) which is an ongoing result of plan closing and replacement by defined contribution plans in the United Kingdom (impact of 2.5 million in 2010, ongoing decrease of 9.4 million from 2011 onwards, downward trend). This decrease of service cost will have to be mainly replaced by future contributions to the new defined contribution plans.
The actual return on the funds' assets amounted to EUR 363.9 million (previous year: 118.7), i.e. EUR 170.2 million higher (previous year: 58.2 lower) than the expected return on plan assets.
Developments in the cost of health care affect the profit and loss accounts and the pension obligations. The following table shows the effects of a one-percent increase or decrease in the expected cost of health care.
| Sensitivity analysis of the expected health care cost | Changes in health care cost by + 1 % by - 1 % |
|||
|---|---|---|---|---|
| EURm | 2009 | 2010 | 2009 | 2010 |
| Effect on the service cost and interest cost | 1.9 | 1.0 | -0.2 | -1.0 |
| Effect on defined benefit obligation | 15.3 | 15.1 | -13.5 | -14.2 |
The following table shows the development of pension obligations of EUR 4,425.2 million (previous year: 4,063.0) and the funds' assets of EUR 3,619.7 million (previous year: 3,224.7).
| Development of pension obligations and plan assets | Pension plans | Plans for health care cost |
Total | |||
|---|---|---|---|---|---|---|
| EURm | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 |
| Defined benefit obligation at 1 January | 3,438.3 | 3,861.9 | 198.9 | 201.1 | 3,637.2 | 4,063.0 |
| Change in scope of consolidation | 2.0 | 2.3 | 2.0 | 2.3 | ||
| Current service cost | 51.0 | 50.8 | 1.6 | 1.5 | 52.6 | 52.3 |
| Interest cost | 207.3 | 223.8 | 12.3 | 12.1 | 219.6 | 235.9 |
| Employee contributions | 8.8 | 7.4 | 8.8 | 7.4 | ||
| Actuarial gains/losses | 255.0 | 151.1 | 13.5 | 9.9 | 268.5 | 161.0 |
| Benefits paid by company | -38.1 | -36.5 | -18.9 | -19.3 | -57.0 | -55.8 |
| Benefits paid by fund | -193.2 | -194.1 | -193.2 | -194.1 | ||
| Expenses, taxes and premiums paid | -1.1 | -1.0 | -1.1 | -1.0 | ||
| Past service cost | 2.4 | 1.7 | -3.3 | -0.9 | 1.7 | |
| Plan curtailments | -2.1 | -28.5 | 0.2 | -1.9 | -28.5 | |
| Exchange rate changes | 131.6 | 167.4 | -3.2 | 13.6 | 128.4 | 181.0 |
| Defined benefit obligation at 31 December | 3,861.9 | 4,206.3 | 201.1 | 218.9 | 4,063.0 | 4,425.2 |
| Funded obligation | 3,397.0 | 3,652.8 | 3,397.0 | 3,652.8 | ||
| Unfunded obligation | 464.9 | 553.5 | 201.1 | 218.9 | 666.0 | 772.4 |
| Fair value of plan assets at 1 January | 3,037.7 | 3,224.7 | 3,037.7 | 3,224.7 | ||
| Change in scope of consolidation | 5.4 | 5.4 | ||||
| Expected return on plan assets | 176.9 | 193.7 | 176.9 | 193.7 | ||
| Actuarial gains/losses | -7.4 | 166.4 | -7.4 | 166.4 | ||
| Employer contributions | 70.1 | 80.5 | 70.1 | 80.5 | ||
| Employee contributions | 8.8 | 7.4 | 8.8 | 7.4 | ||
| Benefits, expenses, taxes and premiums paid | -194.4 | -194.1 | -194.4 | -194.1 | ||
| Exchange rate changes | 127.6 | 141.1 | 127.6 | 141.1 | ||
| Fair value of plan assets at 31 December | 3,224.7 | 3,619.7 | 3,224.7 | 3,619.7 |
HeidelbergCement paid EUR 55.8 million (previous year: 57.0) directly to the pension recipients and EUR 80.5 million (previous year: 70.1) as employer contributions to the funds. In 2011, we expect to pay EUR 113.8 million (previous year: 135.6), mainly due to reduced contributions in the United Kingdom.
The funds' assets originate primarily from North America, with 28 % (previous year: 29 %), the United Kingdom, with 59 % (previous year: 58 %), and the Netherlands, with 9 % (previous year: 9 %). The assets in the funds can be divided into the following categories on a percentage basis:
| Breakdown of the funds' assets | ||
|---|---|---|
| 2009 | 2010 | |
| Equities North America | 9 % | 9 % |
| Equities Western Europe | 12 % | 11 % |
| Equities other regions | 8 % | 8 % |
| Bonds North America | 20 % | 21 % |
| Bonds Western Europe | 42 % | 37 % |
| Bonds other regions | 1 % | 2 % |
| Others | 8 % | 12 % |
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
The development of the pension obligations and the funds' assets is shown in the following table.
| Five-year comparison: Continuing operations | |||||
|---|---|---|---|---|---|
| EURm | 2006 | 2007 | 2008 | 2009 | 2010 |
| Pension plans | |||||
| Present value of funded obligations for pension plans | 1,055.3 | 3,627.5 | 2,976.7 | 3,397.0 | 3,652.8 |
| Present value of unfunded obligations for pension plans | 537.0 | 471.0 | 461.6 | 464.9 | 553.5 |
| Present value of unfunded obligations for health care plans | 124.9 | 212.7 | 198.9 | 201.1 | 218.9 |
| Total present value of obligations | 1,717.2 | 4,311.2 | 3,637.2 | 4,063.0 | 4,425.2 |
| Fair value of funds' assets after limitation according to IAS 19.58 B | -976.2 | -3,668.6 | -3,004.4 | -3,198.6 | -3,602.0 |
| Deficit (+) / surplus (-) | 741.0 | 642.6 | 632.8 | 864.4 | 823.2 |
| Experience losses/gains on obligations | 29.8 | -7.6 | 0.6 | -22.0 | -85.3 |
| Experience losses/gains on assets | -11.7 | -47.2 | 260.3 | 8.9 | -166.2 |
| Expected development of obligations | 30.9 | 85.9 | 40.8 | 37.2 | 20.5 |
| Expected development of assets | 42.9 | 120.1 | 71.1 | 75.7 | 59.5 |
HeidelbergCement also participates in Multi-Employer Pension Plans (MEP), predominantly in the US, which award some unionised employees fixed benefits after their retirement. Multi-Employer Pension Plans are accounted for as defined contribution plans, as it is not possible to isolate the individual components of these plans. The contributions are determined on the basis of collective bargaining. The deficit and surplus of these plans have no significant impact on the Group annual accounts. Contributions of EUR 14.0 million (previous year: 14.0) were paid in 2010.
The following table explains the development of other provisions. The "Adjustment" line includes changes in the consolidation scope and foreign exchange differences as well as reclassifications from offsetting of obligations against corresponding claims for reimbursement.
| Provisions for dam ages and environ mental obligations |
Other environmental provisions |
Other | Total |
|---|---|---|---|
| 448.4 | 315.0 | 436.7 | 1,200.1 |
| -7.1 | 30.6 | 25.2 | 48.7 |
| -32.5 | -34.6 | -64.8 | -131,9 |
| -1.6 | -25.3 | -24.0 | -50.9 |
| 65.0 | 34.3 | 95.9 | 195.2 |
| 472.2 | 320.0 | 469.0 | 1,261.2 |
The maturities of the provisions accounted for in the 2010 financial year can be broken down as follows:
| Maturities | ||||
|---|---|---|---|---|
| EURm | Provisions for dam ages and environ mental obligations |
Other environmental provisions |
Other | Total |
| Maturity ≤ 1 year | 85.4 | 30.9 | 93.6 | 209.9 |
| Maturity > 1 year ≤ 5 years | 210.5 | 141.7 | 263.7 | 615.9 |
| Maturity > 5 years | 176.3 | 147.4 | 111.7 | 435.4 |
| 31 December 2010 | 472.2 | 320.0 | 469.0 | 1,261.2 |
4
The provisions for damages and environmental obligations relate to former and existing US participations held by the Hanson Group, acquired in 2007. The obligations are not linked to the continuing business activity of the HeidelbergCement Group. The provisions for damages relate to the sale of products containing asbestos in the period from 1973 to 1984. The environmental liability claims include remediation obligations in connection with chemical products sold by a former Hanson participation. The provisions are measured on the basis of reliable estimates of the development of costs. The provisions are offset by claims for reimbursement against environmental and third-party liability insurers amounting to EUR 167.6 million (previous year: 162.8), of which EUR 117.1 million (previous year: 118.2) is shown under other long-term operating receivables and EUR 50.5 million (previous year: 44.6) under other short-term operating receivables.
The other environmental provisions include recultivation, environmental, and restoration obligations. Recultivation provisions of EUR 208.7 million (previous year: 201.3) were recognised in connection with obligations to backfill and recultivate land used for the quarrying of natural resources. These provisions are accounted for in profit or loss in accordance with the progress of quarrying on the basis of the best estimate of the costs of fulfilling the obligation. Provisions for environmental obligations essentially include costs connected with the cleaning up of contaminated areas and remediation of quarrying damage. As at the balance sheet date, the obligations amounted to EUR 48.9 million (previous year: 54.4). Provisions for restoration obligations amounting to EUR 62.4 million (previous year: 59.3) were recognised. These provisions relate to costs arising in connection with the removal of installations (e.g. conveying systems at rented locations), so that a location can be restored to its contractually agreed or legally defined state after the end of its useful life.
Other provisions exist, in particular, for restructuring measures, process risks, and obligations arising for the Group in connection with occupational accidents. As at the balance sheet date, provisions of EUR 47.3 million (previous year: 41.7) had been recognised for restructuring measures (e.g. closure of plants or relocation of activities). Because of pending legal action against the Group, provisions for process risks, including those relating to pending antitrust proceedings, amounted to EUR 203.6 million (previous year: 204.8) and were recognised in the balance sheet. As at the balance sheet date, provisions of EUR 72.2 million (previous year: 63.3) had been recognised in connection with compensation obligations for occupational accidents. Other provisions were also recognised for a variety of minor issues.
Provisions are measured at their present value, which is determined on the basis of the expected payments and a risk-adjusted pre-tax interest rate. The unwinding of the discount increased the other environmental provisions by EUR 8.7 million (previous year: 6.5) and the other provisions by EUR 6.1 million (previous year: 5.8). Changes in the discount rate led to an increase of EUR 8.7 million (previous year: 2.7) in other environmental provisions.
| Group statement of changes in equity |
|---|
| Segment reporting / Notes to the annual accounts |
| Notes to the 2010 Group annual accounts |
| Audit Opinion / Responsibility statement |
The following table splits up the liabilities into interest-bearing and operating liabilities.
| Liabilities | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Interest-bearing liabilities | ||
| Debenture loans | 5,598.3 | 7,228.8 |
| Bank loans | 3,178.1 | 1,139.0 |
| Other interest-bearing liabilities | ||
| Miscellaneous interest-bearing liabilities | 509.8 | 613.0 |
| Liabilities from finance lease | 12.3 | 15.6 |
| Derivative financial instruments | 27.0 | 55.3 |
| 549.1 | 683.9 | |
| Puttable minorities | 36.9 | 95.5 |
| 9,362.4 | 9,147.2 | |
| Operating liabilities | ||
| Trade payables | 931.6 | 1,084.7 |
| Current income taxes payables | 279.3 | 229.6 |
| Liabilities relating to personnel | 209.8 | 233.6 |
| Other operating liabilities | 692.3 | 657.4 |
| Deferred income and non-financial liabilities | 65.4 | 112.2 |
| 2,178.4 | 2,317.5 | |
| 11,540.8 | 11,464.7 | |
The increase in bonds is essentially attributable to the issue of three bonds totalling EUR 2.05 billion by HeidelbergCement AG. In addition, a payment of EUR 0.6 billion was made to repay a USD bond becoming due in 2010. The decline in bank loans results principally from the repayment of EUR 2.1 billion of the syndicated acquisition facility. The other interest-bearing liabilities primarily include drawings under the Euro Medium Term Note programme and outstanding drawings under the Commercial Paper programme.
The derivative financial instruments with negative market values include currency forwards of EUR 1.1 million (previous year: 4.5), currency swaps of EUR 9,5 million (previous year: 18.7), interest rate swaps of EUR 44.7 million (previous year: 0.6), and commodities of EUR 0.0 million (previous year: 3.2). The change in the fair values of derivative financial instruments accounted for as hedging instruments in connection with cash flow hedges and recognised directly in equity amounts to EUR -3.2 million (previous year: 4.4), while EUR 0.0 million (previous year: 7.1) was released to profit or loss. Of the effective portion of the change in the fair values of derivative financial instruments, accounted for as hedging instruments of fair value hedges, EUR 43.9 million (previous year: 0.0) was recognised in profit or loss in the hedging result. The changes in the fair values of the derivatives accounted for as "held for trading" amount to EUR -12.4 million (previous year: 4.6) and were recognised in profit or loss. Additional information on the derivative financial instruments is provided on pages 199 ff.
Of the interest-bearing bank loans, EUR 125.4 million (previous year: 103.2) is secured by mortgages. The increase results essentially from borrowings made by joint ventures.
The following table gives an overview of the maturities of the interest-bearing liabilities.
| Maturities of interest-bearing liabilities | ||||
|---|---|---|---|---|
| EURm | < 1 year | 1 - 5 years | > 5 years | Total |
| 31 December 2010 | ||||
| Debenture loans | 204.9 | 3,862.2 | 3,161.7 | 7,228.8 |
| Bank liabilities | 203.3 | 884.8 | 50.9 | 1,139.0 |
| Other interest-bearing liabilities and put options | 419.8 | 224.0 | 64.7 | 708.5 |
| Liabilities from finance lease | 4.8 | 6.7 | 4.1 | 15.6 |
| Derivative financial instruments | 11.0 | 25.1 | 19.2 | 55.3 |
| 843.8 | 5,002.8 | 3,300.6 | 9,147.2 | |
| 31 December 2009 | ||||
| Debenture loans | 699.5 | 2,498.9 | 2,399.9 | 5,598.3 |
| Bank liabilities | 196.2 | 2,944.7 | 37.2 | 3,178.1 |
| Other interest-bearing liabilities and put options | 255.8 | 234.2 | 56.7 | 546.7 |
| Liabilities from finance lease | 6.5 | 5.8 | 12.3 | |
| Derivative financial instruments | 23.3 | 3.7 | 27.0 | |
| 1,181.3 | 5,687.3 | 2,493.8 | 9,362.4 |
The following table contains further details of the finance lease liabilities. It shows the reconciliation of the total future minimum lease payments at the balance sheet date to their present value.
| Minimum lease payments of finance leases | |||
|---|---|---|---|
| ------------------------------------------ | -- | -- | -- |
| EURm | < 1 year | 1 - 5 years | > 5 years | Total |
|---|---|---|---|---|
| 31 Dezember 2010 | ||||
| Present value of future minimum lease payments | 4.8 | 6.7 | 4.1 | 15.6 |
| Interest of future minimum lease payments | 1.2 | 2.7 | 3.9 | |
| Future minimum lease payments | 6.0 | 9.4 | 4.1 | 19.5 |
| 31 Dezember 2009 | ||||
| Present value of future minimum lease payments | 6.5 | 5.8 | 12.3 | |
| Interest of future minimum lease payments | 0.5 | 0.5 | 1.0 | |
| Future minimum lease payments | 7.0 | 6.3 | 13.3 |
The following table assigns the individual balance sheet items for the financial instruments to classes and categories. In addition, the aggregate carrying amounts for each measurement category and the fair values for each class are shown.
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Carrying amounts and fair values of financial instruments | 31 December 2009 | 31 December 2010 | ||
|---|---|---|---|---|
| EURm | Carrying amount |
Fair value |
Carrying amount |
Fair value |
| Assets | ||||
| Financial investments "Available for sale at cost" | 60.1 | 40.4 | ||
| Financial investments "Available for sale at fair value" | 19.2 | 19.2 | 23.4 | 23.4 |
| Loans and other interest-bearing receivables | 164.5 | 161.1 | 161.5 | 166.3 |
| Trade receivables and other operating receivables | 1,722.9 | 1,714.3 | 1,843.6 | 1,843.4 |
| Cash and cash equivalents | 854.4 | 854.4 | 869.7 | 869.7 |
| Derivatives – Hedge accounting | 23.1 | 23.1 | 21.8 | 21.8 |
| Derivatives – Held for trading | 24.8 | 24.8 | 18.3 | 18.3 |
| Liabilities | ||||
| Bonds, loans and other financial liabilities | 9,323.1 | 9,522.5 | 9,076.3 | 9,466.8 |
| Trade creditors and other operating liabilities | 1,833.7 | 1,829.0 | 1,975.7 | 1,976.9 |
| Liabilities from finance lease | 12.3 | 12.3 | 15.6 | 15.6 |
| Derivatives – Hedge accounting | 3.9 | 3.9 | 45.0 | 45.0 |
| Derivatives – Held for trading | 23.1 | 23.1 | 10.3 | 10.3 |
"Available for sale at cost" investments are equity investments measured at cost, for which no listed price on an active market exists and whose fair values cannot be reliably determined. Therefore, no fair value is indicated for these instruments. "Available for sale at fair value" investments are measured at fair value on the basis of the stock market prices on the reporting date. Derivative financial instruments, both those using hedge accounting and those held for trading, are also measured at fair value. In these items, the fair value always corresponds to the carrying amount.
The fair values of the long-term loans, other long-term operating receivables, bank loans, finance lease liabilities, and other long-term interest-bearing and operating liabilities correspond to the present values of the future payments, taking into account the interest parameters at the time of payment.
The fair values of the listed bonds correspond to the nominal values multiplied by the price quotations on the reporting date. For the financial instruments with short-term maturities, the carrying amounts on the reporting date represent reasonable estimates of the fair values.
The following overview shows the carrying amounts of the financial instruments aggregated by the categories given in IAS 39.
| Financial instruments according to categories of IAS 39 | |||||
|---|---|---|---|---|---|
| EURm | Loans and receivables |
Financial investments "Available for sale" |
Financial instruments "Held for trading" |
Financial liabilities |
Total |
| 31 December 2010 | |||||
| Fair value with profit or loss effect | 8.0 | 8.0 | |||
| Fair value without profit or loss effect | 23.4 | -73.2 | -49.8 | ||
| Cost / amortised cost | 2,874.8 | 40.4 | -10,994.4 | -8,079.2 | |
| 31 December 2009 | |||||
| Fair value with profit or loss effect | 1.7 | 1.7 | |||
| Fair value without profit or loss effect | 19.2 | -15.0 1) | 4.2 | ||
| Cost / amortised cost | 2,741.8 | 60.1 | -11,154.1 | -8,352.2 |
1) Shown under "amortised cost" in the previous year.
4
| Fair value hierarchy | 31 December 2009 | 31 December 2010 | ||
|---|---|---|---|---|
| EURm | Hierarchy 1 | Hierarchy 2 | Hierarchy 1 | Hierarchy 2 |
| Assets | ||||
| Financial investments "Available for sale at fair value" | 19.2 | 23.4 | ||
| Derivatives | ||||
| Currency forwards | 0.9 | 0.3 | ||
| Currency swaps | 23.4 | 18.0 | ||
| Interest rate swaps | 23.3 | 17.4 | ||
| Commodities | 0.3 | 4.4 | ||
| Liabilities | ||||
| Derivatives | ||||
| Currency forwards | 4.5 | 1.1 | ||
| Currency swaps | 18.7 | 9.5 | ||
| Interest rate swaps | 0.6 | 44.7 | ||
| Commodities | 3.2 |
The following table shows the fair value hierarchies of the financial instruments measured at fair value.
In hierarchy 1, the fair value is calculated using prices quoted on an active market (unadjusted) for identical assets or liabilities to which the company has access on the measurement date. For hierarchy 2, the fair value is determined using a discounted cash flow model on the basis of input data that do not involve quoted prices classified in level 1, and which are directly or indirectly observable.
The following table shows the net profits or losses from the financial instruments by category.
| Net gains or losses | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Loans and receivables | -45.4 | -36.6 |
| Financial investments "Available for sale" | -2.7 | -5.3 |
| Financial instruments "Held for trading" | -87.6 | 6.4 |
| Financial liabilities | 178.4 | 59.0 |
| 42.7 | 23.5 | |
The net results from loans and receivables include impairments of EUR -19.2 million (previous year: -46.9) and exchange rate effects of EUR -17.4 million (previous year: 1.5).
The measurement of the "Available for sale at fair value" investments resulted in a gain of EUR 6.5 million (previous year: 4.3) recognised directly in equity. EUR 8.7 million (previous year: 2.9) was released from equity. A profit of EUR 0.8 million (previous year: -0.5) arose from the disposal. A net loss of EUR -12.0 million (previous year: -2.9) is attributable to impairments. In addition, foreign exchange losses of EUR -0.6 million (previous year:-0.7) were incurred.
The net result from the subsequent measurement of the financial instruments "Held for trading" includes foreign exchange and interest rate effects. In financial liabilities, the net profit includes effects from foreign currency translation of EUR 59.0 million (previous year: 178.4).
The following table shows the total interest income and expenses for the financial instruments not measured at fair value through profit or loss.
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Total interest income and expense | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Total interest income | 84.7 | 93.5 |
| Total interest expense | -706.0 | -677.3 |
| -621.3 | -583.8 |
The impairment of financial assets by class is shown in the following table.
| Impairment | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Financial investments "Available for sale at cost" | -2.9 | -0.9 |
| Financial investments "Available for sale at fair value" | -11.1 | |
| Loans and other interest-bearing receivables | -0.3 | -1.3 |
| Trade receivables and other operating receivables | -46.6 | -17.9 |
| -49.8 | -31.2 |
Financial assets of EUR 2.2 million (previous year: 13.5) were pledged as collateral for liabilities and contingent liabilities.
The following table shows the nominal values and market values of the derivative financial instruments and commodities, which fall within the scope of IAS 39.
| Derivative financial instruments | 31 December 2009 | 31 December 2010 | ||
|---|---|---|---|---|
| EURm | Nominal value | Fair value Nominal value | Fair value | |
| Assets | ||||
| Cash flow hedges – Commodities | 4.4 | |||
| Fair value hedges – Interest rate swaps | 2,000.0 | 23.1 | 1) | 17.4 |
| Derivatives held for trading | ||||
| Currency forwards | 38.3 | 0.9 | 17.5 | 0.3 |
| Currency swaps | 837.5 | 23.4 | 997.9 | 18.0 |
| Interest rate swaps | 17.5 | 0.2 | ||
| Commodities | 0.3 | |||
| 2,893.3 | 47.9 | 1,015.4 | 40.1 | |
| Liabilities | ||||
| Cash flow hedges | ||||
| Currency forwards | 1.6 | 0.2 | 9.4 | 0.7 |
| Interest rate swaps | 17.5 | 0.6 | 19.1 | 0.4 |
| Commodities | 3.1 | |||
| Fair value hedges – Interest rate swaps | 2,650.0 1) | 43.9 | ||
| Derivatives held for trading | ||||
| Interest rate swaps | 17.5 | 0.4 | ||
| Currency forwards | 113.2 | 4.3 | 26.8 | 0.4 |
| Currency swaps | 582.7 | 18.7 | 553.8 | 9.5 |
| Commodities | 0.1 | |||
| 715.0 | 27.0 | 3,276.6 | 55.3 |
1) The nominal value relates to an interest rate swap with a negative market value of EUR -26.5 million, which was designated as a hedging instrument in a fair value hedge. The negative market value was shown on both the assets and liabilities sides because of the separation into long-term and short-term components of the interest rate swap.
The positive market values of EUR 0.3 million (previous year: 0.3) of the fuel derivatives relate to a supply quantity of 14.4 million tonnes (previous year: 7.2). The positive market values of EUR 4.1 million (previous year: -3.1) of the electricity derivatives relate to a supply quantity of 0.6 million MWh (previous year: 0.2).
The interest rate swap hedges the future interest rate risks of a variable interest-bearing loan. This swap with a market value of EUR -0.4 million (previous year: -0.6) matures in June 2012. During the reporting period, EUR 0.2 million was recognised directly in equity.
The currency forwards hedge the currency risks of future purchases of raw materials in USD. These forward contracts with a market value of EUR -0.7 million (previous year: -0.2) matures in the course of 2011. During the reporting period, EUR -0.5 million was recognised directly in equity.
The commodities of EUR 4.4 million (previous year: -3.1) hedge future electricity prices and mature from 2011. In the reporting year, valuation effects of EUR 7.2 million were recognised directly in equity. The release of electricity derivatives caused effects of EUR 5.4 million to be reclassified from equity to profit or loss.
There was no appreciable ineffectiveness in the cash flow hedges.
The interest rate swaps with a market value of EUR -26.5 million (previous year: 23.1) hedge the interest rate risks of fixed interest-bearing loans. The fair value of EUR 17.4 million is short-term. The fair value of EUR -25.2 million has a term of 1 to 5 years and the fair value of EUR -18.7 million has a term of more than 5 years. The fair value excluding accrued interest of EUR -59.3 million (previous year: -7.0) was recognised in profit or loss in the hedging result. Accordingly, a fair value adjustment of EUR 59.4 million (previous year: 7.0) was made for the loans, which was also shown in the hedging result. The accrued interest of EUR 32.8 million (previous year: 30.1) included in the market value was recognised in profit or loss in the interest income/expenses.
The derivatives with a market value of EUR 8.0 million, which were not accounted for as hedges in accordance with IAS 39, mature within a year.
As regards its assets, liabilities, firm commitments, and planned transactions, HeidelbergCement is particularly exposed to risks arising from changes in foreign exchange rates, interest rates, and market and stock market prices. These market price risks may have a negative impact on the Group's financial position and performance. The Group manages these risks primarily as part of its ongoing business and financing activities and, when required, by using derivative financial instruments. The main aspects of the financial policy are determined by the Managing Board. The Group Treasury department is responsible for implementation of the financial policy and ongoing risk management.
The Group Treasury department acts on the basis of existing binding guidelines, which determine the decision criteria, competences, responsibilities, and processes for managing the financial risks. Certain transactions also require the prior approval of the Managing Board. The Group Treasury department informs the Managing Board on an ongoing basis about the amount and scope of the current risk exposure and the current market development on the global financial markets. The Group Internal Audit department monitors the observance of the guidelines mentioned above and the corresponding legal framework by means of targeted auditing.
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
HeidelbergCement is exposed to credit risks through its operating activities and certain financial transactions. The credit risk is the risk that a contracting party unexpectedly does not fulfil, or only partially fulfils, the obligations agreed when signing a financial instruments contract. The Group limits its credit risk by only concluding contracts for financial investments and derivative financial instruments with partners with a first-class credit rating.
The rating agencies Standard & Poor's, Moody's, and Fitch Ratings assess the creditworthiness of Heidelberg-Cement as BB-/B (Positive Outlook), Ba2/Not Prime (Positive Outlook), and BB/B (Stable Outlook) as at the end of 2010. Any potential downgrading of the ratings awarded by the rating agencies could have a negative impact on HeidelbergCement's cost of capital and refinancing possibilities.
This item essentially comprises cash. The Group is exposed to losses arising from credit risks in connection with the investment of cash and cash equivalents if contracting parties do not fulfil their obligations. Heidelberg Cement manages the resulting risk position by diversification of contracting parties. Cash and cash equivalents are invested in selected companies, banks, and financial institutions following a thorough credit analysis. At present, no cash or cash equivalents are overdue or impaired as a result of failures. The maximum credit risk of the cash and cash equivalents corresponds to the carrying amount.
Trade receivables result mainly from the sale of cement, concrete, and aggregates. In operating activities, the outstanding debts are monitored on an ongoing basis. Credit risks are taken into account by means of individual valuation allowances and valuation allowances for collective impairments. The maximum risk position from the trade receivables corresponds to the carrying amount.
The credit risk position from other receivables and assets corresponds to the carrying amount of these instruments. HeidelbergCement regards this credit risk as insignificant.
Derivative financial instruments are generally used to reduce risks. In the course of its business activity, HeidelbergCement is exposed to interest rate, currency, and energy price risks. For accounting purposes, a significant portion of the derivatives are not accounted for as hedges in accordance with IAS 39, but as instruments in the category "held for trading". However, from a commercial perspective, the changes in the fair values of these instruments represent an economically effective hedge within the context of the Group strategy. The maximum credit risk of this item corresponds to the fair value of the derivative financial instruments that have a positive market value and are shown as financial assets at the balance sheet date. Interest rate swaps were contracted to hedge the fair value risk, and were designated as hedging instruments in accordance with IAS 39. In order to reduce the credit risk, the hedging transactions are, in principle, only concluded with leading financial institutions with a first-class credit rating. The contracting parties have very good credit ratings, awarded by external rating agencies, such as Moody's, Standard & Poor's, or Fitch Ratings. There are currently no past-due derivative financial instruments in the portfolio.
The liquidity risk describes the risk that a company cannot fulfil its financial obligations to a sufficient degree. To manage HeidelbergCement's liquidity, the Group maintains sufficient cash and extensive credit lines with banks, besides the cash inflow from operating activities. The operating liquidity management includes a daily reconciliation of cash and cash equivalents; the Group Treasury department, based in Heidelberg, acts as an in-house bank.
5
As at the end of the year, HeidelbergCement still has as yet undrawn, confirmed credit lines of EUR 2.6 billion available in order to secure liquidity, as well as available cash. A framework agreement for an unlimited period for the issue of short-term bearer bonds ("commercial paper") of EUR 1.0 billion is available to cover short-term liquidity peaks. The programme makes provision for individual tranches with different terms to be issued at different times depending on the market situation. As at the end of 2010, Commercial Papers totalling EUR 173.8 million were outstanding. Further information on liquidity risks can be found in the Management report, Risk report chapter, on page 88.
As the financial contracts of HeidelbergCement do not contain any clauses that trigger a repayment obligation in the event of the credit rating being downgraded, the maturity structure will remain unaffected even if the credit quality assessments change. Margin calls that could lead to an outflow of liquidity are not agreed in any of the fundamental financial instruments. All derivative financial instruments are contracted on the basis of existing framework agreements that contain netting agreements for the purpose of reducing credit and liquidity risks.
In order to further optimise the maturity structure, HeidelbergCement AG issued three Eurobonds to national and foreign institutional investors with a total issue volume of EUR 2.05 billion in 2010.
The following maturity overview shows how the cash flows of the liabilities as at 31 December 2010 affect the Group's liquidity position. The overview describes the progress of
The trade payables are assigned to short-term maturities (within a year). For variable interest payments, the current interest rate is taken as a basis. Payments in foreign currency are translated using the exchange rate at year end.
| EURm | Carrying amount 31 Dec. 2010 |
Cash flows 2011 |
Cash flows 2012 |
Cash flows 2013 |
Cash flows 2014 |
Cash flows 2015 - 2024 |
|---|---|---|---|---|---|---|
| Debenture loans | 7,728.8 | 506.4 | 1,506.4 | 976.2 | 1,400.9 | 5,574.8 |
| Bank loans | 1,139.0 | 215.8 | 455.4 | 378.2 | 159.8 | 56.3 |
| Other financial liabilities | 724.1 | 374.0 | 180.0 | 1.9 | 2.0 | 37.0 |
| Derivatives with positive market values |
||||||
| Cash flow hedges | 4.4 | 2.0 | ||||
| Fair value hedges | 17.4 | |||||
| Derivatives held for trading | 18.3 | 1,015.4 | ||||
| Derivatives with negative market values |
||||||
| Cash flow hedges | 1.1 | 8.7 | 0.6 | |||
| Fair value hedges | 43.9 | 176.5 | 176.5 | 176.5 | 165.1 | 181.7 |
| Derivatives held for trading | 10.3 | 581.1 | 0.4 | 0.4 | 0.4 | 0.9 |
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| EURm | Carrying amount 31 Dec. 2009 |
Cash flows 2010 |
Cash flows 2011 |
Cash flows 2012 |
Cash flows 2013 |
Cash flows 2014 - 2020 |
|---|---|---|---|---|---|---|
| Debenture loans | 5,598.3 | 914.6 | 362.8 | 1,461.3 | 796.2 | 4,350.2 |
| Bank loans | 3,178.1 | 356.4 | 2,481.1 | 347.3 | 237.5 | 177.4 |
| Other financial liabilities | 559.0 | 106.9 | 156.1 | 87.4 | 0.8 | 34.9 |
| Derivatives with positive market values |
||||||
| Fair value hedges | 23.1 | 109.1 | 109.1 | 109.1 | 109.1 | 213.8 |
| Derivatives held for trading | 24.8 | 876.5 | 0.8 | 0.8 | 0.8 | 2.4 |
| Derivatives with negative market values |
||||||
| Cash flow hedges | 3.9 | 2.7 | 1.1 | 0.6 | ||
| Derivatives held for trading | 23.1 | 695.9 |
The inflow of liquidity of EUR 993.5 million (previous year: 964.6) from interest rate swaps has not been taken into account in the table.
The undiscounted contractual cash flows of the finance lease liabilities are shown in a separate table on page 196.
Interest rate risks exist as a result of potential changes in the market interest rate and may lead to a change in fair value in the case of fixed interest-bearing financial instruments and to fluctuations in interest payments in the case of variable interest-bearing financial instruments. The Managing Board and Supervisory Board of HeidelbergCement AG have decided against hedging the variable interest-bearing financial instruments. This strategy is based on the historically strong correlation between increasing profits and rising interest rates. For financial instruments with fixed interest that are measured at amortised cost, interest rate risks have no impact on the results and equity.
The average share of variable interest-bearing financial instruments is 43 % (previous year: 66 %). If the market interest rate level had been 100 basis points higher (lower) on 31 December 2010, the interest cost of the HeidelbergCement Group would have risen (fallen) by EUR 38 million (previous year: 71).
The hedging of the bonds issued in October 2009 and July 2010 with interest rate swaps using fair value hedge accounting has resulted in effects on results from the basis adjustment of the hedged items (bonds – hedged risk) and from the measurement of the interest rate swaps. These effects on results were taken into account in the sensitivity analysis.
HeidelbergCement's currency risks result from its investing, financing, and operating activities. Risks from foreign currencies are primarily hedged in so far as they affect the Group's cash flows. By contrast, foreign currency risks that do not affect the Group's cash flows (i.e. the risks resulting from the translation of the assets and liabilities of foreign subsidiaries into the Group reporting currency) generally remain unhedged. However, if necessary, HeidelbergCement can also hedge this foreign currency risk. Currency forwards, currency swaps and, in isolated cases, currency options are used in the elimination of existing currency risks.
Through the in-house banking activities of HeidelbergCement AG, the borrowing and investment of liquidity of the subsidiaries leads to currency positions that are hedged by means of external currency swap transactions, which are appropriate in terms of maturities and amounts. Consequently, currency fluctuations in connection with the in-house banking activities would have no impact on results or equity.
4
The hypothetical result implications, considering the external financial instruments (primarily currency swap transactions) in isolation and in the event of a 10 % increase (decrease) in the value of the euro against all other currencies on 31 December 2010, would be as follows:
EUR/USD: EUR +11.8 million, EUR/AUD: EUR +49.2 million, EUR/SEK: EUR -4.9 million, EUR/GBP: EUR +6.0 million, EUR/NOK: EUR +11.1 million, EUR/CAD: EUR +21.1 million, EUR/DKK: EUR -0.8 million, EUR/CZK: EUR +1.2 million, EUR/RUB: EUR -25.2 million, EUR/ILS: EUR +4.3 million, EUR/PLN: EUR +0.4 million, EUR/HKD: EUR +2.7 million, EUR/LVL: EUR -0.4 million, EUR/INR: EUR -0.6 million, EUR/MYR EUR +0.7 million, IDR/USD: EUR -1.9 million, EUR/KZT: EUR -3.2 million, EUR/RON: EUR -6.0 million, CAD/USD: EUR -0.8 million, SEK/LVL: EUR -0.4 million, AUD/USD: EUR -0.4 million.
(On 31 Dec. 2009: EUR/USD: EUR +19.6 million, EUR/AUD: EUR +39.4 million, EUR/SEK: EUR -6.8 million, EUR/ GBP: EUR -29.7 million, EUR/NOK: EUR +7.0 million, EUR/CAD: EUR -0.5 million, EUR/DKK: EUR -0.7 million, EUR/CZK: EUR -2.4 million, EUR/RUB: EUR -12.2 million, EUR/EEK: EUR +2.7 million, EUR/ILS: EUR +1.8 million, EUR/PLN: EUR +0.6 million, EUR/HKD: EUR +2.4 million, IDR/USD: EUR +0.5 million, EUR/KZT: EUR -3.1 million, EUR/RON: EUR -4.3 million)
To ensure the sustainability of the Group's financial position and performance, the management primarily employs three instruments. The investments are aligned with HeidelbergCement's strategic and operational planning. For all investments, with the exception of replacement investments, the long-term contribution to results for the Group is measured and subject to a "contribution to results" test. Significant strategic investments with a volume exceeding EUR 10 million are subject to central testing and are presented individually to the Managing Board. The test centres on the impact of investments on the profit and loss accounts, balance sheet and cash flow statement of the Group.
HeidelbergCement also uses country-specific weighted average cost of capital after tax, which was between 6.5 % and 18.9 % for 2010 (previous year: between 6.3 % and 17.7 %). All decisions regarding the profitability of expansion investments are measured against the internal profitability goals on the basis of the weighted average cost of capital.
HeidelbergCement has a worldwide, results-related remuneration system for management. Clear goal agreements ensure a management approach that focuses on results and capital requirements. For all countries in the Group, the Managing Board defines the target profit and working capital required in order to obtain bonus payments.
Through quarterly meetings with all country managers, the Managing Board of HeidelbergCement discusses and follows up on agreed goals and countries' results and outlook, as well as the strategic orientation. An extensive discussion on operational planning at national level is held with all countries in the fourth quarter. In face to face meetings with the national management, the Managing Board establishes result goals, steering of specific activities and major investments.
The ratio of net financial liabilities to the operating income before depreciation (OIBD) is of fundamental importance in the monitoring of the Group's capital.
| Net financial liabilities / OIBD | ||
|---|---|---|
| EURm | 31 Dec. 2009 | 31 Dec. 2010 |
| Cash, financial investments and derivative financial instruments | 902.3 | 905.7 |
| Financial liabilities | 9,362.4 | 9,147.3 |
| Puttable minorities | -36.9 | -95.6 |
| Net financial liabilities | 8,423.2 | 8,146.0 |
| Operating income before depreciation (OIBD) | 2,102.0 | 2,239.4 |
| Net financial liabilities / OIBD | 4.01 | 3.64 |
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
In connection with credit agreements, HeidelbergCement agreed to comply with various financial covenants, which were all met in the reporting period. The most important key financial ratios are the ratio of net debt to EBITDA and the interest coverage ratio. The EBITDA key figure is derived from the credit agreements and therefore differs from the operating income before depreciation key figure as it takes elements of the additional ordinary result and adjustments from changes in the consolidation scope into consideration. Further explanations are given in the Management Report on page 88 f.
Within the framework of the Group planning, compliance with the credit agreements is monitored consistently, with notification issued to the creditors on a quarterly basis. In the event of a breach of the covenants, the creditors could, under certain conditions, accelerate corresponding loans irrespective of the contractually agreed terms.
Guarantees are potential future obligations to third parties, the existence of which depends on the occurrence of at least one uncertain future event outside HeidelbergCement's control.
At the reporting date, there are contractually provided guarantees of EUR 376.4 million (previous year: 366.4). These include obligations of EUR 303.4 million (previous year: 330.7), for which the probability of outflow is remote (IAS 37.28).
| EURm | 2009 | 2010 |
|---|---|---|
| Rental and leasing contracts | ||
| Total of all leasing payments mature within 1 year | 84.8 | 98.6 |
| Total of all leasing payments mature within 1 to 5 years | 227.1 | 246.5 |
| Total of all leasing payments mature after more than 5 years | 346.6 | 362.0 |
| 658.5 | 707.1 | |
| Other financial commitments for planned tangible and financial fixed asset investments | 216.4 | 270.7 |
Other financial commitments are listed with their nominal values. The future rental and leasing obligations refer primarily to property and other assets used by HeidelbergCement.
IAS 24 requires a statement concerning the most important relationships with related companies and persons that may exert a significant influence on HeidelbergCement AG. This applies also to companies accounted for as joint ventures or associates and key management personnel.
As at 31 December 2010, Mr Ludwig Merckle holds a share of 25.11 % in HeidelbergCement AG via companies that he controls. According to the notifications of 24 January 2011 available to us, these voting rights, primarily those of SC Vermögensverwaltung GmbH (formerly Spohn Cement GmbH), Zossen (24.06 %), were regrouped and concentrated into Spohn Cement Beteiligungen GmbH, Zossen (25.01 %). HeidelbergCement AG provided services amounting to the net value of EUR 574,100 (previous year: 42,000 to Spohn Cement GmbH) to PHOENIX Pharmahandel GmbH & Co KG, Mannheim, a company of the Merckle Group.
On 13 September 2009, HeidelbergCement AG reached a co-operation agreement with the following companies belonging to the Merckle group: SC Vermögensverwaltungs GmbH (formerly Spohn Cement GmbH), VEM Vermögensverwaltung GmbH, HC Treuhand GmbH, and VEM erste Treuhand GmbH. The agreement will expire on 30 June 2011.
Business transactions with associates include turnover and other sales amounting to EUR 22.9 million (previous year: 32.6), the procurement of goods and services amounting to EUR 9.0 million (previous year: 32.2), and services provided amounting to EUR 0.3 million (previous year: 0.5). In addition, loans of EUR 0.0 million (previous year: 1.0) were granted to associated companies and capital increases of EUR 2.4 million (previous year: 0.0) were carried out in 2010.
4
Intra-Group turnover and other sales with joint ventures amounted to EUR 66.1 million (previous year: 114.3). Raw materials, goods, and other services amounting to EUR 114.5 million (previous year: 284.0) were procured from these joint ventures. EUR 3.3 million (previous year: 7.8) was generated in financial and other services. In addition, Lehigh Hanson Materials Ltd participated in the capital increase of the joint venture Parsons Creek for an amount of EUR 1.1 million (previous year: 2.9). Receivables amounting to EUR 81.4 million (previous year: 118.2) and liabilities of EUR 39.2 million (previous year: 81.6) exist in connection with these activities and financial transactions. Guarantees of EUR 70.6 million (previous year: 59.9) were outstanding to joint ventures.
In addition, companies of the HeidelbergCement Group have not carried out reportable transactions of any kind with members of the Supervisory Board or of the Managing Board as persons in key positions or with companies in whose executive or governing bodies these persons are represented.
The statement of compliance with the German Corporate Governance Code required by § 161 of the German Stock Company Act (Aktiengesetz) was submitted by the Managing Board and the Supervisory Board of Heidelberg-Cement AG on 17 March 2010. The statement for 2011 was published on the website www.heidelberg cement.com on 10 February 2011.
In 2010, the independent auditors Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft received fees amounting to EUR 4.7 million (previous year: 8.4).
| Fees of the independent auditors | ||
|---|---|---|
| EURm | 2009 | 2010 |
| Audit services | 2.8 | 2.9 |
| Other assurance services | 4.8 | 1.0 |
| Tax services | 0.5 | 0.3 |
| Other services | 0.3 | 0.5 |
| 8.4 | 4.7 |
We refer to the details given in the Corporate Governance chapter of the management report (pages 124 ff.).
The fixed remuneration of the Managing Board increased to EUR 4.3 million (previous year: 3.9) in comparison with the previous year.
By contrast, the sum of variable remuneration elements, which only comprised a one-year bonus this year, decreased to EUR 8.1 million (previous year: 11.7). The reduction in the sum of variable remuneration elements is essentially based on the omission of two special items: Firstly, the Managing Board was awarded a special bonus of EUR 5.0 million in the previous year in connection with the successful reorganisation of the capital and financing structure. Secondly, the earned tranche of the 2008/2009 medium-term bonus in the previous year amounted to EUR 2.9 million.
Other remuneration elements totalled EUR 1.2 million (previous year: 1.0). The other remuneration elements consisted of payments for committee activities at subsidiaries of HeidelbergCement AG, reimbursement of expenses, and non-cash benefits arising from the provision of company cars.
Total remuneration of the Managing Board in 2010 amounted to EUR 13.6 million (previous year: 16.6). Furthermore, in accordance with § 314 section 1 item 6. letter a) sentence 3 of the German Commercial Code (HGB), a sum of EUR 1.7 million must still be specified, which is primarily attributable to the deviation of the final attainment of the 2008/2009 medium-term bonus compared with the assumptions made at the time the 2009 Group annual accounts were established.
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
Allocations to provisions for pension obligations (current service cost) for current members of the Managing Board amounted to EUR 1.3 million (previous year: 1.3). Payments to former members of the Managing Board and their surviving dependants amounted to EUR 3,0 million (previous year: 2.3) in the reporting year. Provisions for pension obligations to former members of the Managing Board amounted to EUR 28.1 million (previous year: 26.1).
The total Supervisory Board remuneration in 2010 amounted to EUR 815,432 (previous year: 499,895).
No reportable events took place after the balance sheet date of 31 December 2010.
The Group annual accounts were prepared by the Managing Board and adopted on 16 March 2011. They were then submitted to the Supervisory Board for approval.
List of shareholdings of HeidelbergCement Group and HeidelbergCement AG as at 31 December 2010 (§ 285 no. 11 in conjunction with § 287 resp. § 313 section 2 in conjunction with section 4 of the German Commercial Code (HGB))
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
|---|---|---|---|---|
| Subsidiaries | ||||
| Western and Northern Europe | ||||
| "Exakt" Kiesaufbereitung-Gesellschaft mit beschränkter Haftung & Co Kommanditgesellschaft *) |
Paderborn, Germany | 100.00 | EUR | 1 |
| A.R.C. (Western) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 6 |
| AB Gotlands Kalkverk | Stockholm, Sweden | 100.00 | SEK | 8 |
| Abetong AB | Växjö, Sweden | 100.00 | SEK | 243 |
| Alexandre Limited | Maidenhead, United Kingdom | 100.00 | GBP | 4 |
| Amey Group Limited (The) | Maidenhead, United Kingdom | 100.00 | GBP | 13 |
| Amey Roadstone International Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Appleby Group Limited | Maidenhead, United Kingdom | 100.00 | GBP | 75 |
| ARC Aggregates Limited | Maidenhead, United Kingdom | 100.00 | GBP | 3 |
| ARC Building Limited | Maidenhead, United Kingdom | 100.00 | GBP | -18 |
| ARC Concrete (Anglia) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| ARC Concrete Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| ARC Holdings Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| ARC Land Holdings Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| ARC Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| ARC Property Investments Limited | Maidenhead, United Kingdom | 100.00 | GBP | 39 |
| ARC Slimline Limited | Maidenhead, United Kingdom | 100.00 | GBP | -3 |
| ARC South Wales Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| ARC South Wales Mortar Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| ARC South Wales Quarries Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| ARC South Wales Surfacing Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| ARC Wales Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Aridos Martinez Garcia S.L. | Toledo, Spain | 100.00 | EUR | 1 |
| Aridos Sanz S.L. | Valladolid, Spain | 100.00 | EUR | 5 |
| Aridos Velilla, S.A. | Toledo, Spain | 100.00 | EUR | -1 |
| AS Abetong | Oslo, Norway | 100.00 | NOK | 5 |
| Attendflower Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1,000 |
| B.V. Betoncentrale De Schelde | Bergen op Zoom, Netherlands | 60.00 | EUR | -1 |
| B.V. Betonmortelcentrale 'BEMA' | Alkmaar, Netherlands | 66.67 | EUR | 0 |
| B.V. Bouwgrondstoffen A.G.M. | Amsterdam, Netherlands | 90.00 | EUR | 2 |
| B.V. Internationale Bagger- Scheepvaart- en Handel Maatschappij I | Amsterdam, Netherlands | 100.00 | EUR | 2 |
| Baltic Saule | Riga, Latvia | 100.00 | LVL | 1 |
5
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
|---|---|---|---|---|
| Banbury Alton Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Basalt Ibérica, S.A. | Madrid, Spain | 100.00 | EUR | 2 |
| Bath and Portland Stone (Holdings) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Baustoffwerke Dresden GmbH & Co. KG*) | Dresden, Germany | 51.00 | EUR | 1 |
| Beazer Insurance Services Limited | Douglas, Isle Of Man | 100.00 | GBP | 2 |
| Beazer Limited | Maidenhead, United Kingdom | 100.00 | GBP | 3 |
| Beforebeam Limited | Maidenhead, United Kingdom | 100.00 | GBP | 400 |
| Beforeblend Limited | Maidenhead, United Kingdom | 100.00 | GBP | 204 |
| Berec Holdings B.V. | Amsterdam, Netherlands | 100.00 | EUR | 188 |
| Berry's Electric Magicoal Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1 |
| Beton Baguette Marcel S.A. | Bruxelles, Belgium | 85.29 | EUR | 1 |
| Béton de Liège SA | Bruxelles, Belgium | 85.27 | EUR | 1 |
| BetonCenter Swinkels B.V. 1) | Helmond, Netherlands | 50.00 | EUR | -1 |
| Betong Sör AS | Oslo, Norway | 67.50 | NOK | 11 |
| Betongindustri AB | Stockholm, Sweden | 100.00 | SEK | 91 |
| Birchwood Concrete Products Limited | Maidenhead, United Kingdom | 100.00 | GBP | 159 |
| Birchwood Omnia Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1,013 |
| Bjerkli Betongpumping AS | Oslo, Norway | 75.50 | NOK | 0 |
| BLG Betonlieferungsgesellschaft mit beschränkter Haftung | München, Germany | 100.00 | EUR | 8 |
| Bonny Holding Ltd. | Irish Town, Gibraltar | 93.94 | USD | 0 |
| Boons Granite Quarries Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Brazier Aggregates Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2 |
| Bristol Sand and Gravel Company Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| British Agricultural Services Limited | Maidenhead, United Kingdom | 100.00 | GBP | 342 |
| British Ever Ready Limited | Maidenhead, United Kingdom | 100.00 | GBP | 24 |
| British Thermostat Company Limited (The) | Maidenhead, United Kingdom | 100.00 | GBP | 4 |
| Buckland Sand & Silica Company Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Building Material Holdings B.V. | Amsterdam, Netherlands | 100.00 | EUR | 0 |
| Bulldog Company Limited | St. Peter Port, Guernsey | 100.00 | USD | 65 |
| Butterley Aglite | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Butterley Brick Investments (No 2) Limited | Maidenhead, United Kingdom | 76.00 | GBP | 26 |
| Butterley Brick Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| C.B.R. Finance S.A. | Luxembourg, Luxembourg | 100.00 | EUR | 4 |
| Calumite Limited | Maidenhead, United Kingdom | 51.00 | GBP | 2 |
| Cantera El Hoyon, S.A. | Madrid, Spain | 100.00 | EUR | 5 |
| Canteras Mecánicas Cárcaba, S.A. | Oviedo, Spain | 100.00 | EUR | 12 |
| Carrieres d'Antoing S.A. | Tournai, Belgium | 100.00 | EUR | 13 |
| Carrieres Lemay S.A. | Tournai, Belgium | 100.00 | EUR | 12 |
| Castle Building Products Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Castle Cement (Chatburn) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Castle Cement (Clyde) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Castle Cement (Ketton) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 23 |
| Castle Cement (Padeswood) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 6 |
| Castle Cement (Pitstone) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 10 |
| Castle Cement (Ribblesdale) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 21 |
| Castle Cement Limited | Maidenhead, United Kingdom | 100.00 | GBP | 91 |
| Castle Lime Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| CaucasusCement Holding B.V. | 's-Hertogenbosch, Netherlands | 75.00 | EUR | 95 |
| CBR Asset Management Belgium S.A. | Bruxelles, Belgium | 100.00 | EUR | 9 |
| CBR Baltic B.V. | 's-Hertogenbosch, Netherlands | 100.00 | EUR | 0 |
| CBR International Services S.A. | Bruxelles, Belgium | 100.00 | EUR | 1,246 |
| CBR Portland B.V. | 's-Hertogenbosch, Netherlands | 100.00 | EUR | 74 |
| Cem Invest Ltd1) | Irish Town, Gibraltar | 46.97 | USD | 3 |
| Cementa AB | Stockholm, Sweden | 100.00 | SEK | 417 |
| Cementa Fastighets AB | Stockholm, Sweden | 100.00 | SEK | 0 |
| Cementrum I B.V. | 's-Hertogenbosch, Netherlands | 100.00 | EUR | 5 |
| Cementrum II B.V. | 's-Hertogenbosch, Netherlands | 100.00 | EUR | 1 |
| CGF Capital B.V. | Amsterdam, Netherlands | 100.00 | EUR | 0 |
| CHB Exeter Limited | Maidenhead, United Kingdom | 100.00 | GBP | 6 |
| CHB Group Limited | Maidenhead, United Kingdom | 100.00 | GBP | 415 |
| CHB P H R Limited CHB Products Limited |
Maidenhead, United Kingdom Maidenhead, United Kingdom |
100.00 100.00 |
GBP GBP |
-34 2,000 |
| Chemical Manufacture and Refining Limited | Maidenhead, United Kingdom | 100.00 | GBP | 5 |
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
|---|---|---|---|---|
| Chester Road Sand and Gravel Company Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| City of London Heliport Limited | Maidenhead, United Kingdom | 55.56 | GBP | -2 |
| Civil and Marine (Holdings) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 16 |
| Civil and Marine Limited | Maidenhead, United Kingdom | 100.00 | GBP | 262 |
| Civil and Marine Slag Cement Limited | Maidenhead, United Kingdom | 100.00 | GBP | 161 |
| Claughton Manor Brick Limited (The) | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Clyde Cement Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Coln Gravel Company Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Conbloc Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Cradley Special Brick Company Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2 |
| Creamix N.V. | Bruxelles, Belgium | 99.32 | EUR | 0 |
| Creative Land Developers Limited 1) | Maidenhead, United Kingdom | 50.00 | GBP | 0 |
| Crispway Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Cromhall Quarries, Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Cumbrian Industrials Limited | Maidenhead, United Kingdom | 100.00 | GBP | 20 |
| D. & H. Sand Supplies Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Delmorgal Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Desimpel Brick Limited | Maidenhead, United Kingdom | 100.00 | GBP | 3 |
| Devon Concrete Works, Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| DK Beton A/S | Ringsted, Denmark | 100.00 | DKK | 76 |
| DK Cement A/S | Copenhagen, Denmark | 100.00 | DKK | 36 |
| DUPAMIJ Holding GmbH | Kalkar, Germany | 100.00 | EUR | 2 |
| E & S Retail Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| E Sub Limited | Maidenhead, United Kingdom | 100.00 | GBP | 6 |
| Effectengage Limited | Maidenhead, United Kingdom | 100.00 | GBP | 264 |
| ENCI B.V. | Maastricht, Netherlands | 100.00 | EUR | 147 |
| ENCI Holding N.V. | 's-Hertogenbosch, Netherlands | 100.00 | EUR | 419 |
| Ensign Park Limited 1) | Maidenhead, United Kingdom | 50.00 | GBP | -2 |
| Exploitatiemaatschappij Australiëhaven B.V. | Amsterdam, Netherlands | 100.00 | EUR | 0 |
| F.C. Precast Concrete Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Fastighets AB Limhamns Kalkbrott | Stockholm, Sweden | 100.00 | SEK | 23 |
| Ferrersand Aggregates Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1 |
| Formpave Holdings Limited | Maidenhead, United Kingdom | 100.00 | GBP | 3 |
| Formpave Limited | Maidenhead, United Kingdom | 100.00 | GBP | 5 |
| Frederick Harker (Sack Hire) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Freshhove Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1 |
| Fruitbat Company | Maidenhead, United Kingdom | 100.00 | AUD | 1,321 |
| Fulber Limited | St. Peter Port, Guernsey | 100.00 | GBP | 216 |
| Garkalnes Grants SIA | Riga, Latvia | 100.00 | LVL | 2 |
| Granor S.A. | Loos, France | 100.00 | EUR | 1 |
| Greenways Environmental and Waste Management Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Greenwoods (St. Ives) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2 |
| Guidelink | Maidenhead, United Kingdom | 99.99 | USD | 0 |
| Habfield Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Hanson (BHHL) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 369 |
| Hanson (BHL) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 278 |
| Hanson (CGF) (No.1) Limited Hanson (CGF) (No2) Limited |
Maidenhead, United Kingdom Maidenhead, United Kingdom |
100.00 100.00 |
GBP GBP |
2,835 3,994 |
| Hanson (CGF) Finance Limited | Maidenhead, United Kingdom | 100.00 | GBP | 859 |
| Hanson (CGF) Holdings Limited | Maidenhead, United Kingdom | 100.00 | GBP | 161 |
| Hanson (ER-No 10) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 254 |
| Hanson (ER-No 12) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Hanson (ER-No 14) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1 |
| Hanson (ER-No 5) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 45 |
| Hanson (ER-No 8) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Hanson (ER-No 9) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 3 |
| Hanson (FP) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Hanson (MR) Limited | Maidenhead, United Kingdom | 99.99 | GBP | 2,195 |
| Hanson (NAIL) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 5 |
| Hanson Aggregates (North) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 40 |
| Hanson Aggregates Belgium N.V. | Zebrugge, Belgium | 100.00 | EUR | 9 |
| Hanson Aggregates Holding Nederland B.V. | Amsterdam, Netherlands | 100.00 | EUR | 4 |
| Hanson Aggregates Limited | Maidenhead, United Kingdom | 100.00 | GBP | 82 |
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
|---|---|---|---|---|
| Hanson Aggregates Marine Limited | Maidenhead, United Kingdom | 100.00 | GBP | 96 |
| Hanson Aggregates Nederland B.V. | Amsterdam, Netherlands | 100.00 | EUR | 0 |
| Hanson Aggregates South Wales Holdings Limited | Maidenhead, United Kingdom | 100.00 | GBP | 7 |
| Hanson Aggregates South Wales Limited | Maidenhead, United Kingdom | 100.00 | GBP | 39 |
| Hanson Aggregates UK Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2,000 |
| Hanson Amalgamated Industries Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Hanson America Holdings (1) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1,902 |
| Hanson America Holdings (2) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 476 |
| Hanson America Holdings (3) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 471 |
| Hanson America Holdings (4) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 41 |
| Hanson Aruba Limited | St. Peter Port, Guernsey | 99.99 | USD | 1,473 |
| Hanson Bath and Portland Stone Limited | Maidenhead, United Kingdom | 100.00 | GBP | -2 |
| Hanson Batteries Limited | Maidenhead, United Kingdom | 100.00 | GBP | 46 |
| Hanson Blocks North Limited | Maidenhead, United Kingdom | 100.00 | GBP | 13 |
| Hanson Brick Ltd | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Hanson Building Materials Europe Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2,172 |
| Hanson Building Materials Limited | Maidenhead, United Kingdom | 100.00 | GBP | 3,219 |
| Hanson Building Products (2003) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1,515 |
| Hanson Building Products Limited | Maidenhead, United Kingdom | 100.00 | GBP | -53 |
| Hanson Canada Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Hanson Clay Products Limited | Maidenhead, United Kingdom | 100.00 | GBP | 15 |
| Hanson Concrete Products Limited | Maidenhead, United Kingdom | 100.00 | GBP | 52 |
| Hanson Crewing Services Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Hanson Devon Limited | Shannon, Ireland | 100.00 | USD | 5,009 |
| Hanson Devon Limited (Luxembourg Branch) | Luxembourg, Luxembourg | 100.00 | USD | 6 |
| Hanson Facing Bricks Limited | Maidenhead, United Kingdom | 100.00 | GBP | 248 |
| Hanson Finance (2003) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 502 |
| Hanson Finance (UK) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 85 |
| Hanson Finance Limited | Maidenhead, United Kingdom | 100.00 | GBP | 852 |
| Hanson Financial Services Limited | Maidenhead, United Kingdom | 100.00 | GBP | 264 |
| Hanson Fletton Bricks Limited | Maidenhead, United Kingdom | 100.00 | GBP | 32 |
| Hanson Foods Limited | Maidenhead, United Kingdom | 100.00 | GBP | 180 |
| Hanson FP Holdings B.V. | Amsterdam, Netherlands | 100.00 | USD | 444 |
| Hanson Funding (G) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 174 |
| Hanson Germany GmbH & Co. KG*) | Leinatal, Germany | 100.00 | EUR | -3 |
| Hanson Gerrard Limited | St. Peter Port, Guernsey | 100.00 | GBP | 0 |
| Hanson H4 Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1,549 |
| Hanson H5 | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Hanson Hedging (Dollars) (1) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 194 |
| Hanson Hedging (Dollars) (2) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Hanson Hispania, S.A. | Madrid, Spain | 100.00 | EUR | 99 |
| Hanson Holdings (1) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 37,637 |
| Hanson Holdings (2) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 736 |
| Hanson Holdings (3) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 829 |
| Hanson Holdings Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2,060 |
| Hanson Iceland EHF | Reykjavik, Iceland | 100.00 | GBP | 2,000 |
| Hanson Industrial (Engineering Holdings) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 5 |
| Hanson Industrial Limited | Maidenhead, United Kingdom | 100.00 | GBP | 143 |
| Hanson International Holdings Limited | Maidenhead, United Kingdom | 100.00 | GBP | 10,997 |
| Hanson Island Management Limited | St. Peter Port, Guernsey | 100.00 | GBP | 0 |
| Hanson Land Development Limited | Maidenhead, United Kingdom | 100.00 | GBP | -30 |
| Hanson LHA Limited | Maidenhead, United Kingdom | 100.00 | GBP | 25 |
| Hanson Limited | Maidenhead, United Kingdom | 100.00 | GBP | 5,637 |
| Hanson Marine Holdings Limited | Maidenhead, United Kingdom | 100.00 | GBP | 7 |
| Hanson Marine Limited | Maidenhead, United Kingdom | 100.00 | GBP | 49 |
| Hanson Overseas Corporation Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1,896 |
| Hanson Overseas Holdings Limited | Maidenhead, United Kingdom | 100.00 | GBP | 17,570 |
| Hanson Pacific Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1 |
| Hanson Peabody Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1,003 |
| Hanson Pioneer España, S.L. | Madrid, Spain | 100.00 | EUR | 83 |
| Hanson Quarry Products Europe Limited | Maidenhead, United Kingdom | 100.00 | GBP | 39,655 |
| Hanson Quarry Products Holdings Limited | Maidenhead, United Kingdom | 100.00 | GBP | 42 |
| Hanson Quarry Products Overseas Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2 |
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
|---|---|---|---|---|
| Hanson Quarry Products Trade Finance Limited | Maidenhead, United Kingdom | 100.00 | GBP | 22 |
| Hanson Quarry Products Transport Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Hanson Quarry Products Ventures Limited | Maidenhead, United Kingdom | 100.00 | GBP | 43 |
| Hanson RBS Trustees Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Hanson Recycling Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Hanson Retail Limited | Maidenhead, United Kingdom | 100.00 | GBP | 99 |
| Hanson Ship Management Ltd | St. Peter Port, Guernsey | 100.00 | GBP | 0 |
| Hanson Thermalite Limited | Maidenhead, United Kingdom | 100.00 | GBP | 42 |
| Hanson TIS Holdings Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Hanson TIS Limited | Maidenhead, United Kingdom | 100.00 | GBP | -2 |
| Hanson Tobacco Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2,127 |
| Hanson Trust Limited | Maidenhead, United Kingdom | 100.00 | GBP | 97 |
| Hanson Trustees Limited | Maidenhead, United Kingdom | 100.00 | GBP | 12 |
| Hanson Warwickshire Limited | Maidenhead, United Kingdom | 100.00 | GBP | 738 |
| Hanson Wiltshire Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2,100 |
| Harrisons Limeworks Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Hartsholme Property Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| HB Hotels Limited | Maidenhead, United Kingdom | 100.00 | GBP | -1 |
| HB Pacific Limited | Maidenhead, United Kingdom | 100.00 | GBP | 3 |
| HC Asia Holding GmbH | Heidelberg, Germany | 100.00 | EUR | 7 |
| HC Betons SIA | Riga, Latvia | 100.00 | LVL | 1 |
| HC Betoon AS, Estonia | Tallinn, Estonia | 100.00 | EEK | 5 |
| HC Central Asia B.V. | 's-Hertogenbosch, Netherlands | 100.00 | EUR | 83 |
| HC Fuels Limited | London, United Kingdom | 100.00 | GBP | 6 |
| HC Hanson Holding B.V. | 's-Hertogenbosch, Netherlands | 100.00 | EUR | 327 |
| HC Italia SRL | Rome, Italy | 100.00 | EUR | 2 |
| HC Materialen B.V. | Nieuwegein, Netherlands | 100.00 | EUR | 3 |
| HC Trading B.V. | 's-Hertogenbosch, Netherlands | 100.00 | EUR | 41 |
| HC Trading Malta Limited | St. Julian's, Malta | 100.00 | USD | 0 |
| HCT Holding Malta Limited | St. Julian's, Malta | 100.00 | USD | 95 |
| HeidelbergCement Baustoffe für Geotechnik GmbH & Co. KG *) | Ennigerloh, Germany | 100.00 | EUR | 4 |
| Heidelbergcement Canada Holding Limited | Maidenhead, United Kingdom | 100.00 | CAD | 4,376 |
| HeidelbergCement Central Europe East Holding B.V. | 's-Hertogenbosch, Netherlands | 100.00 | EUR | 979 |
| HeidelbergCement Danmark A/S | Ringsted, Denmark | 100.00 | DKK | 375 |
| HeidelbergCement Finance B.V. | 's-Hertogenbosch, Netherlands | 100.00 | EUR | 1 |
| HeidelbergCement Grundstücksgesellschaft mbH & Co. KG *) | Heidelberg, Germany | 100.00 | EUR | 18 |
| HeidelbergCement Grundstücksgesellschaft Wetzlar mbH & Co. KG *) HeidelbergCement Holding Coöperatief U.A. |
Heidelberg, Germany 's-Hertogenbosch, Netherlands |
100.00 100.00 |
EUR EUR |
2 1,125 |
| HeidelbergCement Holding S.à r.l. | Luxembourg, Luxembourg | 100.00 | EUR | 13,427 |
| HeidelbergCement Holdings Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2 |
| HeidelbergCement International Holding GmbH | Heidelberg, Germany | 100.00 | EUR | 6,807 |
| HeidelbergCement Mediterranean Basin Holdings S.L. | Madrid, Spain | 100.00 | EUR | 301 |
| HeidelbergCement Miljö AB | Stockholm, Sweden | 100.00 | SEK | 28 |
| HeidelbergCement Netherlands Holding B.V. | 's-Hertogenbosch, Netherlands | 100.00 | EUR | 694 |
| HeidelbergCement Northern Europe AB | Stockholm, Sweden | 100.00 | SEK | 5,160 |
| HeidelbergCement Northern Europe Pumps & Trucks A/S | Ringsted, Denmark | 100.00 | EUR | 0 |
| HeidelbergCement Norway a.s. | Oslo, Norway | 100.00 | NOK | 1,469 |
| HeidelbergCement Shared Service Centre AB | Stockholm, Sweden | 100.00 | SEK | 374 |
| HeidelbergCement Sweden AB | Stockholm, Sweden | 100.00 | SEK | 7,022 |
| HeidelbergCement UK Holding II Limited | Maidenhead, United Kingdom | 100.00 | USD | 12,810 |
| HeidelbergCement UK Holding Limited | Maidenhead, United Kingdom | 100.00 | EUR | 5,067 |
| HeidelbergCement UK Limited | Maidenhead, United Kingdom | 100.00 | GBP | 79 |
| Heidelberger Beton Donau-Naab GmbH & Co. KG *) | Burglengenfeld, Germany | 85.00 | EUR | 2 |
| Heidelberger Beton GmbH | Heidelberg, Germany | 100.00 | EUR | 25 |
| Heidelberger Betonelemente GmbH & Co. KG *) | Chemnitz, Germany | 83.00 | EUR | 5 |
| Heidelberger Betonpumpen Rhein-Main-Nahe GmbH & Co. KG *) | Frankfurt/Main, Germany | 93.77 | EUR | 0 |
| Heidelberger Kalksandstein GmbH | Durmersheim, Germany | 100.00 | EUR | 15 |
| Heidelberger Kalksandstein Grundstücks- und Beteiligungs- GmbH & Co. KG *) | Durmersheim, Germany | 100.00 | EUR | 22 |
| Heidelberger Kieswerke Niederrhein GmbH | Essen, Germany | 100.00 | EUR | 1 |
| Heidelberger Kieswerke Rhein-Ruhr GmbH | Essen, Germany | 100.00 | EUR | 3 |
| Heidelberger KS Beteiligungen Deutschland GmbH & Co. KG *) | Heidelberg, Germany | 100.00 | EUR | 5 |
| Heidelberger Sand und Kies GmbH | Heidelberg, Germany | 100.00 | EUR | 74 |
| Heidelberger Weserkies GmbH & Co. KG *) | Bremen, Germany | 100.00 | EUR | 0 |
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
|---|---|---|---|---|
| HIPS (Trustees) Limited | Bedford, United Kingdom | 100.00 | GBP | 0 |
| HK Holdings (No 2) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 64 |
| HK Holdings (No.1) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 28 |
| HKS Hunziker Kalksandstein AG | Aargau, Switzerland | 66.66 | CHF | 10 |
| Holms Sand & Gravel Company (1985) (The) | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Holms Sand & Gravel Company Limited (The) | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Homes (East Anglia) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Hormigones y Aridos, S.A. | Bilbao, Spain | 100.00 | EUR | 7 |
| Housemotor Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1,544 |
| Houseprice Limited | Maidenhead, United Kingdom | 100.00 | GBP | 586 |
| Houserate Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1,071 |
| HPL Albany House Developments Limited 1) | Maidenhead, United Kingdom | 50.00 | GBP | -1 |
| HPL Estates Limited | Maidenhead, United Kingdom | 100.00 | GBP | 4 |
| HPL Investments Limited | Maidenhead, United Kingdom | 100.00 | GBP | 403 |
| HPL Properties Limited | Maidenhead, United Kingdom | 100.00 | GBP | 40 |
| HPL Property Limited | Maidenhead, United Kingdom | 100.00 | GBP | 39 |
| HPL West London Developments Limited1) | Maidenhead, United Kingdom | 50.00 | GBP | 0 |
| Hurst and Sandler Limited | Maidenhead, United Kingdom | 100.00 | GBP | 5 |
| Imperial Group Limited | Maidenhead, United Kingdom | 100.00 | GBP | 16 |
| Imperial Potted Shrimps Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Imperial Seafoods (Gulf) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2 |
| Imperial Seafoods Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Inter-Beton SA | Bruxelles, Belgium | 99.82 | EUR | 13 |
| International Trading and Finance (ITF) B.V. | 's-Hertogenbosch, Netherlands | 100.00 | EUR | 10 |
| Irvine - Whitlock Limited | Maidenhead, United Kingdom | 100.00 | GBP | 16 |
| J A Crabtree & Co Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| J. Riera, S.A. | Barcelona, Spain | 100.00 | EUR | 2 |
| James Grant & Company (West) Limited | Edinburgh, United Kingdom | 100.00 | GBP | 2 |
| Joseph Wones (Holdings) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Judkins Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| K.M. Property Development Company Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| KalininCement Holding B.V. | 's-Hertogenbosch, Netherlands | 74.90 | EUR | 1 |
| Kalko B.V. | 's-Hertogenbosch, Netherlands | 100.00 | EUR | 0 |
| Kerpen & Kerpen GmbH & Co. KG *) 1) | Ochtendung, Germany | 30.00 | EUR | 0 |
| Ketton Cement Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Kieswerk Maas-Roeloffs GmbH & Co KG | Kalkar, Germany | 100.00 | EUR | 1 |
| Kieswerk Maas-Roeloffs Verwaltungsgesellschaft mbH | Kalkar, Germany | 100.00 | EUR | 0 |
| Kieswerke Andresen GmbH | Damsdorf, Germany | 100.00 | EUR | 1 |
| Kingston Minerals Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Kivel Properties Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Kommanditbolaget Cementen Kunda Nordic Cement Corp. |
Stockholm, Sweden Kunda, Estonia |
100.00 75.00 |
SEK EEK |
205 2,040 |
| L.B. (Stewartby) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 50 |
| Leamaat Omikron B.V. | Amsterdam, Netherlands | 100.00 | EUR | 12 |
| Leca (Great Britain) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1 |
| Lehigh B.V. | 's-Hertogenbosch, Netherlands | 100.00 | EUR | 5,966 |
| Lehigh UK Limited | Maidenhead, United Kingdom | 100.00 | GBP | 11,781 |
| Lindum Information Systems Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Lindustries Limited | Edinburgh, United Kingdom | 100.00 | GBP | 45 |
| Llan Concrete Products Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1 |
| Localdouble Limited | Maidenhead, United Kingdom | 100.00 | GBP | 644 |
| London Brick Company Limited | Maidenhead, United Kingdom | 100.00 | GBP | 22 |
| London Brick Engineering Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2 |
| M E Sub Limited | Maidenhead, United Kingdom | 100.00 | GBP | 18 |
| Maatschappij tot Exploitatie van Betoncentrale De Zilvermeeuw MATOZ v.o.f. 1) | Rotterdam, Netherlands | 50.00 | EUR | 0 |
| Magnatool AB | Malmö, Sweden | 75.00 | SEK | 0 |
| Malmö-Limhamns Järnvägsaktiebolag | Stockholm, Sweden | 100.00 | SEK | 1 |
| Mantle & Llay Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Marnee Limited | Maidenhead, United Kingdom | 100.00 | GBP | 54 |
| Marples Ridgway Limited | Maidenhead, United Kingdom | 100.00 | GBP | -4 |
| Marples Ridgway Overseas Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Mebin B.V. | 's-Hertogenbosch, Netherlands | 100.00 | EUR | 44 |
| Mebin Leeuwarden B.V. | Leeuwarden, Netherlands | 79.79 | EUR | 1 |
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
|---|---|---|---|---|
| Meppeler Betoncentrale B.V. | Drenthe, Netherlands | 66.67 | EUR | 0 |
| Milton Hall (Southend) Brick Company Limited (The) | Maidenhead, United Kingdom | 100.00 | GBP | 1 |
| Minerals Resource Management Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Minster Quarries Limited | Maidenhead, United Kingdom | 100.00 | GBP | -1 |
| Mixconcrete Holdings Limited | Maidenhead, United Kingdom | 100.00 | GBP | 4 |
| Mixconcrete Limited | Maidenhead, United Kingdom | 100.00 | GBP | -2 |
| Mold Tar Macadam Co.Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Morebeat Limited | Maidenhead, United Kingdom | 100.00 | GBP | 123 |
| Motioneager Limited | Maidenhead, United Kingdom | 100.00 | GBP | 213 |
| National Brick Company Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2 |
| National Star Brick and Tile Holdings Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2 |
| National Star Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Norbetong AS | Oslo, Norway | 100.00 | NOK | 479 |
| Norcem á Islandi ehf | Reykjavik, Iceland | 100.00 | NOK | 1 |
| Norcem AS | Oslo, Norway | 100.00 | NOK | 375 |
| Nord-fosen Pukkverk AS | Steinsdalen, Norway | 60.00 | NOK | 21 |
| Norstone AS | Oslo, Norway | 100.00 | NOK | 133 |
| Oswald Tillotson Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1 |
| P. & B. J. Dallimore Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Paderborner Transport-Beton-Gesellschaft mit beschränkter Haftung & Co. K.-G. *) Paderborn, Germany | 87.50 | EUR | 1 | |
| Padyear Limited1) | Maidenhead, United Kingdom | 50.00 | GBP | 0 |
| Palatina Insurance Ltd. | Sliema, Malta | 100.00 | EUR | 46 |
| Paperbefore Limited | Maidenhead, United Kingdom | 100.00 | GBP | 269 |
| Pencrete Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Penfolds Builders Merchants Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Perstrup Beton Industri A/S | Kolind, Denmark | 100.00 | DKK | 70 |
| Peter Pell Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1 |
| Picon Overseas Limited | Guernsey, Guernsey | 100.00 | GBP | 181 |
| Piedras y Derivados, S.A. | Barcelona, Spain | 100.00 | EUR | 22 |
| PILC Limited | Guernsey, Guernsey | 100.00 | USD | 23 |
| Pinden Plant & Processing Co. Limited (The) | Maidenhead, United Kingdom | 100.00 | GBP | 6 |
| Pioneer Aggregates (UK) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 4 |
| Pioneer Asphalts (U.K.) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Pioneer Concrete (U.K.) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Pioneer Concrete Development Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Pioneer Concrete Holdings Limited | Maidenhead, United Kingdom | 100.00 | GBP | 115 |
| Pioneer International Finance (UK) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 8 |
| Pioneer International Group Holdings Limited | Maidenhead, United Kingdom | 100.00 | GBP | 885 |
| Pioneer International Investments Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Pioneer Overseas Investments Limited | Guernsey, Guernsey | 100.00 | USD | 144 |
| Pioneer Willment Concrete Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Pluswelcome Limited | Maidenhead, United Kingdom | 100.00 | GBP | 225 |
| Porfidos de Guadarrama, S.A. | Madrid, Spain | 100.00 | EUR | -17 |
| Premix Concrete Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Protenna AB | Stockholm, Sweden | 75.00 | SEK | 249 |
| Queens Buildings (Manchester), Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Recem S.A. | Luxembourg, Luxembourg | 100.00 | EUR | 3 |
| Red Bank Manufacturing Company Limited | Maidenhead, United Kingdom | 100.00 | GBP | 12 |
| Redshow Limited | Maidenhead, United Kingdom | 100.00 | GBP | 107 |
| Renor AS | Aurskog, Norway | 100.00 | NOK | 36 |
| Rezincote (1995) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Ribblesdale Cement Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2 |
| Roads Reconstruction Limited | Maidenhead, United Kingdom | 100.00 | GBP | 9 |
| Roewekamp GmbH & Co Kommanditgesellschaft *) | Gelsenkirchen, Germany | 100.00 | EUR | 1 |
| S Sub Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| S.A. CBR Asset Management | Luxembourg, Luxembourg | 100.00 | EUR | 0 |
| S.A. Cimenteries CBR | Bruxelles, Belgium | 100.00 | EUR | 682 |
| Sabine Limited | St. Peter Port, Guernsey | 100.00 | GBP | 216 |
| Sagrex B.V. | 's-Hertogenbosch, Netherlands | 100.00 | EUR | -1 |
| Sagrex Holding B.V. | 's-Hertogenbosch, Netherlands | 100.00 | EUR | 18 |
| Sagrex Productie B.V. SAGREX S.A. |
's-Hertogenbosch, Netherlands Bruxelles, Belgium |
100.00 100.00 |
EUR EUR |
4 29 |
| Sailtown Limited | Maidenhead, United Kingdom | 100.00 | EUR | 276 |
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
|---|---|---|---|---|
| Saint Hubert Investments S.à r.l. | Luxembourg, Luxembourg | 100.00 | USD | 488 |
| Samuel Wilkinson & Sons Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Sand- & Grusaktiebolag Jehander | Stockholm, Sweden | 100.00 | SEK | 118 |
| Sand Supplies (Western) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Sandwerke Biesern GmbH | Penig, Germany | 100.00 | EUR | 10 |
| Saunders (Ipswich) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Scancem Central Africa Holding 1 AB | Stockholm, Sweden | 100.00 | SEK | 749 |
| Scancem Central Africa Holding 2 AB | Stockholm, Sweden | 100.00 | SEK | 1 |
| Scancem Central Africa Holding 3 AB | Stockholm, Sweden | 100.00 | SEK | 3 |
| Scancem Central Africa Holding 4 AB | Stockholm, Sweden | 100.00 | SEK | 1 |
| Scancem East OY AB | Helsinki, Finland | 100.00 | EUR | 8 |
| Scancem Energy and Recovery Limited | Maidenhead, United Kingdom | 100.00 | GBP | 18 |
| Scancem International a.s | Oslo, Norway | 100.00 | NOK | 1,140 |
| Scancem International DA | Oslo, Norway | 93.94 | NOK | 1,069 |
| Scancem International Limited | Maidenhead, United Kingdom | 100.00 | GBP | 18 |
| Scancem Recovery Limited | Maidenhead, United Kingdom | 100.00 | GBP | 17 |
| Scancem Supply Limited | Maidenhead, United Kingdom | 100.00 | GBP | -2 |
| Seagoe Concrete Products Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Second City Properties Limited | Maidenhead, United Kingdom | 100.00 | GBP | 12 |
| Shanon Limited Partnership | Edinburgh, United Kingdom | 99.99 | USD | 2 |
| Shapedirect Limited | Maidenhead, United Kingdom | 100.00 | GBP | 5,829 |
| Signgrid Limited | Maidenhead, United Kingdom | 100.00 | GBP | 38 |
| SILO PLUS Internationale Speditions GmbH | München, Germany | 100.00 | EUR | 1 |
| SJP 1 Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| SJP 2 Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2 |
| Slotcount Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1,053 |
| Small Lots (Mix-It) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 11 |
| Solrec Limited | Maidenhead, United Kingdom | 100.00 | GBP | 9 |
| Solvent Resource Management Limited | Maidenhead, United Kingdom | 100.00 | GBP | 15 |
| Speedypaper Limited | Maidenhead, United Kingdom | 100.00 | GBP | 8 |
| SQ Corporation Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2,426 |
| SQ Finance No 1 Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2,426 |
| SQ Finance No 2 Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2,501 |
| St Edouard S.a.r.l. | Luxembourg, Luxembourg | 99.99 | USD | 3,288 |
| St Jude S.a.r.l. | Luxembourg, Luxembourg | 100.00 | GBP | 2,000 |
| ST LUKE S.a.r.l. | Luxembourg, Luxembourg | 100.00 | EUR | 14 |
| St Marius S.a.r.l. | Luxembourg, Luxembourg | 100.00 | EUR | 146 |
| St Nicolas S.a.r.l. | Luxembourg, Luxembourg | 100.00 | EUR | 156 |
| St Pierre S.a.r.l. | Luxembourg, Luxembourg | 99.99 | USD | 1 |
| St Yvette S.a.r.l. | Luxembourg, Luxembourg | 100.00 | USD | 0 |
| Stahlsaiten Betonwerke GmbH | Ennigerloh, Germany | 74.00 | EUR | 0 |
| Stephen Toulson & Sons Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Stewartby Housing Association, Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Structherm Holdings Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1 |
| Structherm Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2 |
| Supamix Limited | Maidenhead, United Kingdom | 100.00 | GBP | 6 |
| Svenska Cementföreningen UPA | Stockholm, Sweden | 100.00 | SEK | 0 |
| TBG Transportbeton Kurpfalz GmbH & Co. KG *) | Eppelheim, Germany | 51.11 | EUR | 4 |
| TBH Transportbeton Hamburg GmbH & Co. KG *) | Hamburg, Germany | 85.00 | EUR | 0 |
| The Purfleet Ship to Shore Conveyor Company Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Thistleton Quarries Limited | Maidenhead, United Kingdom | 100.00 | GBP | -1 |
| Tillotson Commercial Motors Limited | Maidenhead, United Kingdom | 100.00 | GBP | -19 |
| Tillotson Commercial Vehicles Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Tilmanstone Brick Limited | Maidenhead, United Kingdom | 100.00 | GBP | 7 |
| Timesound | Maidenhead, United Kingdom | 100.00 | EUR | 1 |
| TLQ Limited | Edinburgh, United Kingdom | 100.00 | GBP | 0 |
| TMC Pioneer Aggregates Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Transformers (Watford) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1 |
| Trawlers Grimsby Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Tunnel Cement Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| U.D.S. Holdings B.V. | Amsterdam, Netherlands | 100.00 | EUR | 613 |
| UAB Gerdukas | Vilnius, Lithuania | 70.00 | LTL | 5 |
| UAB Heidelberg Cement Klaipeda | Klaipeda, Lithuania | 100.00 | EUR | 0 |
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
|---|---|---|---|---|
| UDS (Head Office) Limited | Maidenhead, United Kingdom | 100.00 | GBP | -8 |
| UDS (No 10) | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| UDS (No 3) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 6 |
| UDS Corporation Limited | Maidenhead, United Kingdom | 100.00 | GBP | 365 |
| UDS Finance Limited | Maidenhead, United Kingdom | 100.00 | GBP | 41 |
| UDS Group Limited | Maidenhead, United Kingdom | 100.00 | GBP | 110 |
| UDS Holdings (1) Limited | Maidenhead, United Kingdom | 100.00 | GBP | 187 |
| UGI Group Limited | Maidenhead, United Kingdom | 100.00 | GBP | 90 |
| UGI Meters Limited | Maidenhead, United Kingdom | 100.00 | GBP | 1 |
| UGI Smith Meters Limited | Maidenhead, United Kingdom | 100.00 | GBP | 5 |
| United Gas Industries Limited | Maidenhead, United Kingdom | 100.00 | GBP | 12 |
| UralCement Holding B.V. | 's-Hertogenbosch, Netherlands | 51.00 | EUR | -1 |
| V.E.A. Limited | Guernsey, Guernsey | 100.00 | GBP | 158 |
| V.O.F. 'Bouwdok Barendrecht' | Barendrecht, Netherlands | 60.01 | EUR | 0 |
| Verwaard Handelsonderneming B.V. | Brielle, Netherlands | 100.00 | EUR | 0 |
| Viewgrove Investments Limited | Maidenhead, United Kingdom | 100.00 | GBP | 6,391 |
| Visionfocus Limited | Maidenhead, United Kingdom | 100.00 | GBP | 360 |
| Visionrefine Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| Walhalla Kalk GmbH & Co. KG *) | Regensburg, Germany | 79.91 | EUR | 8 |
| Welbecson Group Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 |
| West of England Sack Holdings Limited | Maidenhead, United Kingdom | 100.00 | GBP | 2 |
| WIKA Stade GmbH u. Co. KG *) | Stade, Germany | 100.00 | EUR | 4 |
| Wiles Securities Limited | Maidenhead, United Kingdom | 100.00 | GBP | 169 |
| Wineholm Limited | Maidenhead, United Kingdom | 100.00 | GBP | -2 |
| Subsidiaries | ||||
|---|---|---|---|---|
| Eastern Europe-Central Asia | ||||
| BayKaz Beton LLP | Almaty, Kazakhstan | 99.00 | KZT | -1,234 |
| BEKTAS Group LLP | Almaty, Kazakhstan | 99.00 | KZT | -108 |
| Betonpumpy a doprava SK a.s. | Bratislava, Slovakia | 100.00 | EUR | 0 |
| BETOTECH, s.r.o. | Beroun, Czech Republic | 91.50 | CZK | 21 |
| Bialostockie Kopalnie Surowców Mineralnych sp. z o.o. | Bialystok, Poland | 99.99 | PLN | 10 |
| BT Poznan Sp. z.o.o. | Poznan, Poland | 74.99 | PLN | 4 |
| BT Topbeton Sp. z.o.o. 1) | Zielona Góra, Poland | 50.00 | PLN | 26 |
| Calumite s.r.o. | Ostrava, Czech Republic | 51.00 | CZK | 110 |
| Carpat Agregate S.A. | Bucharest, Romania | 98.51 | RON | 32 |
| Carpat Beton S.R.L. | Bucharest, Romania | 99.03 | RON | 92 |
| Carpat Beton Servicii Pompe SRL | Bucharest, Romania | 99.03 | RON | 7 |
| Carpat Cemtrans S.R.L. | Bucharest, Romania | 99.03 | RON | 12 |
| Carpatcement Holding S.A. | Bucharest, Romania | 99.03 | RON | 1,026 |
| CaspiCement Limited Liability Partnership | Shetpe, Kazakhstan | 100.00 | KZT | 6,736 |
| CaspiNerud Limited Liability Partnership | Aktau, Kazakhstan | 75.10 | KZT | 2,455 |
| Ceskomoravsky beton, a.s. | Beroun, Czech Republic | 100.00 | CZK | 985 |
| Ceskomoravsky cement, a.s., nástupnická spolecnost | Mokra, Czech Republic | 100.00 | CZK | 5,272 |
| Ceskomoravsky sterk, a.s. | Mokra, Czech Republic | 100.00 | CZK | 1,752 |
| Closed Joined Stock Company "Construction Materials" | Sterlitamak, Russian Federation | 51.00 | RUB | 2,331 |
| Ekocem Sp. z o.o. | Katowice, Poland | 99.99 | PLN | 140 |
| Górazdze Beton Sp. z o.o. | Opole, Poland | 99.99 | PLN | 102 |
| Górazdze Cement S. A. | Opole, Poland | 99.99 | PLN | 793 |
| Górazdze Kruszywa sp. z.o.o. | Opole, Poland | 99.99 | PLN | 106 |
| Heidelberg Vostok-Cement LLP | Almaty, Kazakhstan | 100.00 | KZT | 857 |
| Joint Stock Company - Bukhtarminskaya Cement Company | Oktyabrskiy village, Kazakhstan | 100.00 | KZT | 9,476 |
| Kamenivo Slovakia a.s. | Bytca-Hrabove, Slovakia | 100.00 | EUR | 2 |
| Limited Liability Company "HeidelbergBeton Ukraine" | Kryvyi Rih, Ukraine | 99.97 | UAH | 51 |
| Limited Liability Company "KSL" | Busheve, Ukraine | 100.00 | UAH | 53 |
| Limited Liability Company "Rybalsky Quarry" | Dnepropetrovsk, Ukraine | 100.00 | UAH | 17 |
| LLC "HeidelbergGranit Ukraine" | Kryvyi Rih, Ukraine | 99.79 | UAH | 32 |
| LLC 'HeidelbergBeton Georgia' | Tbilisi, Georgia | 100.00 | GEL | 3 |
| LLC 'HeidelbergCement Rus' | Podolsk, Russian Federation | 100.00 | RUB | -21 |
| LLC 'Kartuli Cementi' | Tbilisi, Georgia | 70.00 | GEL | -8 |
| LLC 'SaqCementi' | Tbilisi, Georgia | 75.00 | GEL | 28 |
LLC 'Terjola-Quarry' Tbilisi, Georgia 100.00 GEL 2
HeidelbergCement annual accounts
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
|---|---|---|---|---|
| OAO Cesla | Slantsy, Russian Federation | 96.70 | RUB | 1,846 |
| OAO Voronezhskoe Rudoupravlenije | Strelica, Russian Federation | 79.60 | RUB | 116 |
| OOO "Norcem Kola" | Murmansk, Russian Federation | 100.00 | RUB | 6 |
| OOO KaliningradCement | Kaliningrad, Russian Federation | 74.90 | RUB | 39 |
| Open Joint Stock Company Gurovo-Beton | Novogurovskiy, Russian Federation | 100.00 | RUB | 19 |
| Precon Polska Sp.z.o.o. | Warsaw, Poland | 100.00 | PLN | 6 |
| Public Joint Stock Company "HeidelbergCement Ukraine" | Kryvyi Rih, Ukraine | 99.73 | UAH | 823 |
| Recyfuel SRL | Bucharest, Romania | 99.03 | RON | 1 |
| TBG BAK s.r.o. | Trutnov, Czech Republic | 70.04 | CZK | 64 |
| TBG BETONMIX a. s. | Brno, Czech Republic | 66.00 | CZK | 330 |
| TBG BETONPUMPY MORAVA s.r.o. | Brno, Czech Republic | 84.90 | CZK | 19 |
| TBG Plzen Transportbeton s.r.o. | Beroun, Czech Republic | 50.10 | CZK | 61 |
| TBG SEVEROZAPADNI CECHY s.r.o. | Chomutov, Czech Republic | 66.00 | CZK | 107 |
| TBG Vysocina s.r.o. | Kozichovice, Czech Republic | 59.40 | CZK | 52 |
| TBG ZNOJMO s. r. o. | Dyje, Czech Republic | 66.00 | CZK | 50 |
| Tulacement - Limited Liability Company | Novogurovskiy, Russian Federation | 100.00 | RUB | 29 |
| ZAO Roscem | St. Petersburg, Russian Federation | 100.00 | RUB | 16 |
| Subsidiaries | |
|---|---|
| North America | ||||
|---|---|---|---|---|
| Allied Ready Mix Concrete Limited | Richmond, Canada | 100.00 | CAD | 0 |
| Amangani SA | Panama City, Panama | 100.00 | GBP | 0 |
| Amcord, Inc. | Dover, USA | 100.00 | USD | 41 |
| Anche Holdings Inc | Panama City, Panama | 100.00 | USD | 2,111 |
| Asian Carriers Inc. | Panama City, Panama | 100.00 | USD | 44 |
| Astravance Corp. | Panama City, Panama | 100.00 | GBP | 44,027 |
| Beazer East, Inc. | Dover, USA | 100.00 | USD | -2,357 |
| Cadman (Black Diamond), Inc. | Olympia, USA | 100.00 | USD | 11 |
| Cadman (Rock), Inc. | Olympia, USA | 100.00 | USD | 15 |
| Cadman (Seattle), Inc. | Wilmington, USA | 100.00 | USD | 51 |
| Cadman, Inc. | Olympia, USA | 100.00 | USD | 17 |
| Calaveras Materials Inc. | Sacramento, USA | 100.00 | USD | 116 |
| Calaveras-Standard Materials, Inc. | Sacramento, USA | 100.00 | USD | 40 |
| Campbell Concrete & Materials LLC | Austin, USA | 100.00 | USD | 65 |
| Cascapedia Corporation | Panama City, Panama | 100.00 | GBP | 0 |
| Cavenham Forest Industries LLC | Wilmington, USA | 100.00 | USD | 17 |
| Civil and Marine Inc. | Wilmington, USA | 100.00 | USD | -63 |
| Commercial Aggregates Transportation and Sales LLC | Wilmington, USA | 100.00 | USD | 1 |
| Constar LLC | Wilmington, USA | 100.00 | USD | 278 |
| Continental Florida Materials Inc. | Tallahassee, USA | 100.00 | USD | 127 |
| Cowichan Corporation | Panama City, Panama | 100.00 | GBP | 1,997 |
| Essex NA Holdings LLC | Wilmington, USA | 100.00 | USD | 53 |
| Ferndale Ready Mix & Gravel, Inc. | Olympia, USA | 100.00 | USD | 22 |
| HACM, Inc. | Wilmington, USA | 100.00 | USD | 14 |
| HAMW Minerals, Inc. | Wilmington, USA | 100.00 | USD | 9 |
| Hanson Aggregates LLC | Wilmington, USA | 100.00 | USD | 1,027 |
| Hanson Aggregates BMC, Inc. | Harrisburg, USA | 100.00 | USD | 284 |
| Hanson Aggregates Davon LLC | Columbus, USA | 100.00 | USD | 138 |
| Hanson Aggregates East LLC | Wilmington, USA | 100.00 | USD | 82 |
| Hanson Aggregates Mid-Pacific, Inc. | Wilmington, USA | 100.00 | USD | 310 |
| Hanson Aggregates Midwest LLC | Frankfort, USA | 100.00 | USD | 210 |
| Hanson Aggregates New York LLC | Albany, USA | 100.00 | USD | 328 |
| Hanson Aggregates Pacific Southwest, Inc. | Wilmington, USA | 100.00 | USD | 397 |
| Hanson Aggregates Pennsylvania LLC | Wilmington, USA | 100.00 | USD | 217 |
| Hanson Aggregates Southeast LLC | Wilmington, USA | 100.00 | USD | 705 |
| Hanson Aggregates WRP, Inc. | Wilmington, USA | 100.00 | USD | 81 |
| Hanson BC Limited | Hamilton, Bermuda | 100.00 | GBP | 1,035 |
| Hanson Brick East, LLC | Wilmington, USA | 100.00 | USD | 234 |
| Hanson Brick Ltd. | Burlington, Canada | 100.00 | CAD | -11 |
| Hanson Building Materials America LLC | Wilmington, USA | 100.00 | USD | 1,011 |
| Hanson Canada Acquisition #1 Ltd. | Toronto, Canada | 100.00 | CAD | 59 |
| Hanson Canada Acquisition #2 Ltd. | Toronto, Canada | 100.00 | CAD | 33 |
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
|---|---|---|---|---|
| Hanson Green Limited | Hamilton, Bermuda | 100.00 | GBP | 0 |
| Hanson Hardscape Products LLC | Wilmington, USA | 100.00 | USD | 51 |
| Hanson Holdings Esker, Inc. | Wilmington, USA | 100.00 | USD | 259 |
| Hanson Marine Finance, Inc. | Sacramento, USA | 100.00 | USD | 1 |
| Hanson Marine Operations, Inc. | Sacramento, USA | 100.00 | USD | 9 |
| Hanson Micronesia Cement, Inc. | Wilmington, USA | 100.00 | USD | 5 |
| Hanson Permanente Cement of Guam, Inc. | Sacramento, USA | 100.00 | USD | 42 |
| Hanson Permanente Cement, Inc. | Phoenix, USA | 100.00 | USD | 324 |
| Hanson Pipe & Precast LLC | Wilmington, USA | 100.00 | USD | 618 |
| Hanson Pipe & Precast Quebec Ltd. | Ontario, Canada | 100.00 | CAD | 39 |
| Hanson Pipe & Precast, Ltd. | Toronto, Canada | 100.00 | CAD | 100 |
| Hanson Pressure Pipe Inc. | Montreal, Canada | 100.00 | CAD | 104 |
| Hanson Pressure Pipe, Inc. | Columbus, USA | 100.00 | USD | 68 |
| Hanson Roof Tile, Inc. | Wilmington, USA | 100.00 | USD | 82 |
| Hanson Structural Precast, Inc. | Los Angeles, USA | 100.00 | USD | 71 |
| HBMA Holdings, LLC | Wilmington, USA | 100.00 | USD | 4,200 |
| HC Trading International Inc. | Nassau, Bahamas | 100.00 | USD | 50 |
| HNA Investments | Wilmington, USA | 100.00 | USD | 2,052 |
| Indocement (Cayman Island) Ltd. | George Town, Cayman Islands | 51.00 | IDR | 1,108 |
| Kaiser Gypsum Company, Inc. | Olympia, USA | 100.00 | USD | 17 |
| KH 1 Inc. | Dover, USA | 100.00 | USD | 259 |
| Lehigh Cement Company LLC | Wilmington, USA | 100.00 | USD | 1,258 |
| Lehigh Hanson Materials Limited | Alberta, Canada | 100.00 | CAD | 1,170 |
| Lehigh Hanson, Inc. | Wilmington, USA | 100.00 | USD | 2,217 |
| Lehigh Northwest Cement Company | Olympia, USA | 100.00 | USD | 182 |
| Lehigh Northwest Marine, LLC | Wilmington, USA | 100.00 | USD | 3 |
| Lehigh Portland Holdings, LLC | Wilmington, USA | 100.00 | USD | 0 |
| Lehigh Portland Investments, LLC | Wilmington, USA | 100.00 | USD | 44 |
| Lehigh Realty Company | Richmond, USA | 100.00 | USD | -1 |
| Lehigh Southwest Cement Company | Sacramento, USA | 100.00 | USD | 360 |
| Lehigh White Cement Company | Harrisburg, USA | 51.00 | USD | 54 |
| Les Placements Domenico Miceli Inc. | Montreal, Canada | 100.00 | CAD | 0 |
| Material Service Corporation | Wilmington, USA | 100.00 | USD | 45 |
| Mayco Mix Ltd. | British Columbia, Canada | 100.00 | CAD | 0 |
| Mays Landing Sand & Gravel Company | Trenton, USA | 100.00 | USD | 20 |
| Mill Run Associates | Harrisburg, USA | 100.00 | USD | 7 |
| Mineral and Land Resources Corporation | Wilmington, USA | 100.00 | USD | 37 |
| Mission Valley Rock Co. | Sacramento, USA | 100.00 | USD | 111 |
| Navastone USA, Inc. | Albany, USA | 100.00 | USD | -1 |
| Navastone, Inc. | Lansing, USA | 100.00 | USD | -1 |
| Newbury Development Management, LLC | Pennsylvania, USA | 100.00 | USD | 0 |
| Ocean Marine Towing Services Limited | Victoria, Canada | 100.00 | CAD | 2 |
| PCAz Leasing, Inc. | Phoenix, USA | 100.00 | USD | 11 |
| Pioneer International Overseas Corporation | Cardiff, British Virgin Islands | 100.00 | GBP | 171 |
| Rempel Bros. Concrete Ltd. | British Columbia, Canada | 100.00 | CAD | 0 |
| Rimarcal Corporation | Panama City, Panama | 100.00 | GBP | 2,203 |
| Sherman Industries LLC | Wilmington, USA | 100.00 | USD | 104 |
| Sinclair General Corporation | Panama City, Panama | 100.00 | GBP | 7,101 |
| South Valley Materials, Inc. | Sacramento, USA | 100.00 | USD | 21 |
| Standard Concrete Products, Inc. | Sacramento, USA | 100.00 | USD | 21 |
| Vestur Insurance (Bermuda) Ltd | Hamilton, Bermuda | 100.00 | USD | 0 |
| Wire Products Investment Company | Lansing, USA | 100.00 | USD | 0 |
| Subsidiaries | ||||
|---|---|---|---|---|
| Asia-Pacific | ||||
| Apex Quarries Pty Ltd. | Victoria, Australia | 100.00 | AUD | 0 |
| Bitumix Granite Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 12 |
| Butra HeidelbergCement Sdn. Bhd. | Bandar Seri Begawan , Brunei Darussalam | 70.00 | BND | 19 |
| CGF Pty Limited | New South Wales, Australia | 100.00 | AUD | 341 |
| Christies Stone Quarries Pty Ltd | South Australia, Australia | 100.00 | AUD | 0 |
| Clemco Ltd. | Hong Kong, Hong Kong | 100.00 | HKD | 125 |
| COCHIN Cements Ltd. | Kottyam, India | 98.72 | INR | -2 |
| Consolidated Quarries Pty Ltd. | Victoria, Australia | 100.00 | AUD | 0 |
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
|---|---|---|---|---|
| Excel Quarries Pty Limited | Queensland, Australia | 100.00 | AUD | 0 |
| Gerak Harapan Sdn Bhd | Kuala Lumpur, Malaysia | 70.00 | MYR | 5 |
| Hanson Australia (Holdings) Proprietary Limited | Victoria, Australia | 100.00 | AUD | 3,066 |
| Hanson Australia Cement Pty Limited | New South Wales, Australia | 100.00 | AUD | 12 |
| Hanson Australia Funding Limited | New South Wales, Australia | 100.00 | USD | -34 |
| Hanson Australia Investments Pty Limited | New South Wales, Australia | 100.00 | AUD | 31 |
| Hanson Australia Pty Limited | New South Wales, Australia | 100.00 | AUD | 1,334 |
| Hanson Building Materials Cartage Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | -1 |
| Hanson Building Materials Industries Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 0 |
| Hanson Building Materials Laboratory Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | -1 |
| Hanson Building Materials Malaysia Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 57 |
| Hanson Building Materials Manufacturing Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 8 |
| Hanson Building Materials Production Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 78 |
| Hanson Building Materials Services Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 0 |
| Hanson Building Materials Transport Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 0 |
| Hanson Building Materials-KTPC Sdn Bhd | Kuala Lumpur, Malaysia | 65.00 | MYR | 1 |
| Hanson Building Materials-KTPC-PBPM Sdn Bhd | Kuala Lumpur, Malaysia | 67.50 | MYR | 4 |
| Hanson Building Materials-PBPM Sdn Bhd | Kuala Lumpur, Malaysia | 70.00 | MYR | 1 |
| Hanson Concrete (M) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | -5 |
| Hanson Construction Materials Pty Ltd | Queensland, Australia | 100.00 | AUD | 67 |
| Hanson Finance Australia Ltd | Australian Capital Territory, Australia | 100.00 | AUD | -33 |
| Hanson Holdings (M) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | -2 |
| Hanson Holdings Australia Pty Ltd | Victoria, Australia | 100.00 | AUD | 4,026 |
| Hanson Investment Holdings Pte Ltd | Singapore, Singapore | 100.00 | SGD | 43 |
| Hanson Landfill Services Pty Ltd | Victoria, Australia | 100.00 | AUD | 7 |
| Hanson Mauritius Pty Ltd | Port Louis, Mauritius | 100.00 | SGD | 0 |
| Hanson Pacific (S) Pte Ltd | Singapore, Singapore | 100.00 | SGD | -11 |
| Hanson Precast (S) Pte Limited | Singapore, Singapore | 100.00 | SGD | 9 |
| Hanson Precast Pty Ltd | New South Wales, Australia | 100.00 | AUD | -2 |
| Hanson Pty Limited | Victoria, Australia | 100.00 | AUD | 4,026 |
| Hanson Quarries Victoria Pty Limited | New South Wales, Australia | 100.00 | AUD | 0 |
| Hanson Quarry Products (Asphalt) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 0 |
| Hanson Quarry Products (Batu Pahat) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 1 |
| Hanson Quarry Products (Bricks) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 0 |
| Hanson Quarry Products (EA) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 6 |
| Hanson Quarry Products (Holdings) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 232 |
| Hanson Quarry Products (Kluang) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 0 |
| Hanson Quarry Products (Kuantan) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 14 |
| Hanson Quarry Products (Kulai) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 20 |
| Hanson Quarry Products (Land) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 19 |
| Hanson Quarry Products (Masai) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 3 |
| Hanson Quarry Products (Northern) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 10 |
| Hanson Quarry Products (Pengerang) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 0 |
| Hanson Quarry Products (Perak) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 7 |
| Hanson Quarry Products (Premix) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 3 |
| Hanson Quarry Products (Rawang) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 5 |
| Hanson Quarry Products (Segamat) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 1 |
| Hanson Quarry Products (Tempoyak) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | -1 |
| Hanson Quarry Products (Terengganu) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 7 |
| Hanson Quarry Products (Transport) Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 2 |
| Hanson Quarry Products Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 198 |
| HCT Asia Services Pte. Ltd. | Singapore, Singapore | 100.00 | SGD | 1 |
| HeidelbergCement Asia Pte Ltd | Singapore, Singapore | 100.00 | SGD | 8 |
| HeidelbergCement Bangladesh Limited | Chittagong, Bangladesh | 60.66 | BDT | 4,356 |
| HeidelbergCement Holding HK Limited | Hong Kong, Hong Kong | 100.00 | HKD | 517 |
| HeidelbergCement India Ltd. | Ammasandra, India | 68.55 | INR | 7,833 |
| Hymix Australia Pty Ltd | New South Wales, Australia | 100.00 | AUD | 125 |
| Hymix Holding Company Pty Ltd | New South Wales, Australia | 100.00 | AUD | 0 |
| Meghna Energy Limited | Dhaka, Bangladesh | 100.00 | BDT | 1,227 |
| Pioneer Concrete (Hong Kong) Limited | Hong Kong, Hong Kong | 100.00 | HKD | 435 |
| Pioneer Concrete (NT) Pty Ltd | Northern Territory, Australia | 100.00 | AUD | 0 |
| Pioneer Concrete (Tasmania) Proprietary Limited | Tasmania, Australia | 100.00 | AUD | 8 |
| Pioneer Concrete (WA) Pty Ltd Pioneer Gravels (Qld) Pty Ltd |
Western Australia, Australia Queensland, Australia |
100.00 100.00 |
AUD AUD |
0 0 |
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
|---|---|---|---|---|
| Pioneer Group Holdings Pty Ltd | New South Wales, Australia | 100.00 | AUD | 27 |
| Pioneer International (Labuan) Ltd | Labuan, Malaysia | 100.00 | USD | 1 |
| Pioneer International Holdings Pty Ltd | New South Wales, Australia | 100.00 | AUD | 1,521 |
| Pioneer North Queensland Pty Ltd | Queensland, Australia | 100.00 | AUD | 22 |
| Pioneer Petroleum Australia Pty Ltd | Northern Territory, Australia | 100.00 | AUD | 0 |
| Plentong Granite Industries Sdn Bhd | Kuala Lumpur, Malaysia | 70.00 | MYR | 29 |
| PT Bahana Indonor | Jakarta, Indonesia | 51.00 | IDR | 51,453 |
| PT Dian Abadi Perkasa | Jakarta, Indonesia | 51.00 | IDR | 249,185 |
| PT Gunung Tua Mandiri 1) | Bogor, Indonesia | 26.01 | IDR | 48,164 |
| PT Indocement Tunggal Prakarsa Tbk. | Jakarta, Indonesia | 51.00 | IDR 12,875,605 | |
| PT Indomix Perkasa | Jakarta, Indonesia | 51.00 | IDR | 53,283 |
| PT Mandiri Sejahtera Sentra (MSS) | Jakarta, Indonesia | 51.00 | IDR | 67,990 |
| PT Mineral Industri Sukabumi | Sukabumi, Indonesia | 51.00 | IDR | 13,624 |
| PT Multi Bangun Galaxy | Lombok, Indonesia | 51.00 | IDR | 1,518 |
| PT Pionirbeton Industri | Jakarta, Indonesia | 51.00 | IDR | 6,045 |
| PT Sari Bhakti Sejati | Jakarta, Indonesia | 51.00 | IDR | 13 |
| Rajang Perkasa Sdn Bhd | Kuala Lumpur, Malaysia | 60.00 | MYR | 2 |
| Realistic Sensation Sdn Bhd | Kuala Lumpur, Malaysia | 70.00 | MYR | 4 |
| Sofinaz Holdings Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | 1 |
| South Coast Basalt Pty Ltd | New South Wales, Australia | 100.00 | AUD | 2 |
| Tanah Merah Quarry Sdn Bhd | Kuala Lumpur, Malaysia | 100.00 | MYR | -16 |
| Valscot Pty Limited | New South Wales, Australia | 100.00 | AUD | 0 |
| Waterfall Quarries Pty Limited | Victoria, Australia | 100.00 | AUD | 0 |
| Subsidiaries | ||||
|---|---|---|---|---|
| Africa-Mediterranean Basin | ||||
| Calcim S.A. | Cotonou, Benin | 93.94 | XOF | 3 |
| Cimbenin SA | Cotonou, Benin | 52.51 | XOF | 2,410 |
| Ciments du Togo SA | Lome, Togo | 93.59 | XOF | 6,141 |
| Cimgabon S.A. | Libreville, Gabon | 70.46 | XAF | 5,000 |
| Ghacem Ltd. | Accra, Ghana | 87.46 | GHS | 116 |
| Hanson (Israel) Ltd | Ramat Gan, Israel | 99.97 | ILS | 371 |
| Hanson Quarry Products (Israel) Ltd | Ramat Gan, Israel | 99.97 | ILS | 491 |
| HC Trading B.V. - Turkey Branch | Istanbul, Turkey | 100.00 | TRY | -10 |
| Interlacs S.A.R.L. | Lubumbashi, The Democratic Republic of the Congo |
70.00 | CDF | 1,734 |
| La Cimenterie de Lukala S.A.R.L. | Kinshasa, The Democratic Republic of the Congo |
55.00 | CDF | 10,271 |
| Liberia Cement Corporation Ltd. | Monrovia, Liberia | 59.00 | USD | 4 |
| Pioneer Beton Muva Umachzavot Ltd | Ramat Gan, Israel | 99.97 | ILS | 1 |
| Scantogo Mines SA | Lome, Togo | 93.94 | XOF | 10 |
| Sierra Leone Cement Corp. Ltd. 1) | Freetown, Sierra Leone | 46.97 | SLL | 39,117 |
| Tadir Readymix Concrete (1965) Ltd | Ramat Gan, Israel | 100.00 | ILS | 0 |
| TPCC Tanzania Portland Cement Company Ltd. | Dar Es Salaam, Tanzania | 65.05 | TZS | 168,329 |
| West Africa Quarries Limited | Accra, Ghana | 87.46 | GHS | 0 |
| Proportionately consolidated companies | ||||
|---|---|---|---|---|
| Western and Northern Europe | ||||
| Betong Öst AS | Kongsvinger, Norway | 50.00 | NOK | 19 |
| BLG Betonlieferungsgesellschaft mbH Freising-Erding 2) | Freising, Germany | 57.30 | EUR | 1 |
| BLG Transportbeton GmbH & Co. KG2) | München, Germany | 61.75 | EUR | 6 |
| ENCI Zand en Grind B.V. | 's-Hertogenbosch, Netherlands | 50.00 | EUR | 7 |
| GriVaLim S.A. | Bruxelles, Belgium | 50.00 | EUR | -3 |
| Heidelberger Beton Aschaffenburg GmbH & Co. KG2) | Aschaffenburg, Germany | 70.95 | EUR | 0 |
| Heidelberger Beton Rhein-Nahe GmbH & Co. KG2) | Bad Kreuznach, Germany | 74.00 | EUR | 0 |
| Heidelberger Beton Schwandorf GmbH | Schwandorf, Germany | 42.59 | EUR | 0 |
| Heidelberger Beton Zwickau GmbH & Co. KG2) | Zwickau, Germany | 60.00 | EUR | 1 |
| Heidelberger Betonelemente GmbH & Co. KG2) | Baden-Baden, Germany | 89.89 | EUR | 2 |
| Lithonplus GmbH & Co. KG2) | Lingenfeld, Germany | 60.00 | EUR | 9 |
| Mibau Holding GmbH | Cadenberge, Germany | 50.00 | EUR | 26 |
| Midland Quarry Products Limited | Whitwick, United Kingdom | 50.00 | GBP | 59 |
| Reederei Hans Jürgen Hartmann MS 'Beltnes' GmbH & CO KG | Cadenberge, Germany | 50.00 | EUR | 9 |
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
|---|---|---|---|---|
| Reederei Hans-Jürgen Hartmann 'MS Bulknes' GmbH & Co. KG | Cadenberge, Germany | 50.00 | EUR | 10 |
| Sola Betong AS | Tananger, Norway | 33.33 | NOK | 19 |
| Specialstabilisering i Stockholm AB | Stockholm, Sweden | 50.00 | SEK | 0 |
| TBG Transportbeton Franken GmbH & Co. KG2) | Fürth, Germany | 51.00 | EUR | 1 |
| TBG Transportbeton GmbH & Co. KG Naabbeton | Nabburg, Germany | 50.00 | EUR | 1 |
| TBG Transportbeton Mainfranken GmbH & Co.KG. 2) | Sand am Main, Germany | 57.00 | EUR | 1 |
| TBG Transportbeton Oder-Spree GmbH & Co. KG | Wriezen, Germany | 50.00 | EUR | 2 |
| TBG Transportbeton Saalfeld GmbH & Co. KG2) | Saalfeld, Germany | 56.67 | EUR | 0 |
| Trapobet Transportbeton GmbH Kaiserslautern Kommanditgesellschaft | Kaiserslautern, Germany | 50.00 | EUR | 2 |
| UTE "Ave la Seda" 2) | Barcelona, Spain | 60.00 | EUR | 2 |
| Wetterauer Lieferbeton GmbH & Co. KG2) | Bad Nauheim, Germany | 57.50 | EUR | 1 |
| WIKING Baustoff- und Transport GmbH & Co. Kommanditgesellschaft | Soest, Germany | 50.00 | EUR | 0 |
| Proportionately consolidated companies | ||||
|---|---|---|---|---|
| Eastern Europe-Central Asia | ||||
| Brnenske pisky a.s. | Nemcicky, Czech Republic | 48.00 | CZK | 27 |
| Duna-Dráva Cement Kft. | Vác, Hungary | 50.00 | HUF | 67,216 |
| PISKOVNY MORAVA spol. s.r.o. | Brno, Czech Republic | 50.00 | CZK | 41 |
| TBG Doprastav, a.s. | Bratislava, Slovakia | 50.00 | EUR | 11 |
| TBG METROSTAV s.r.o. | Praha, Czech Republic | 50.00 | CZK | 449 |
| TBG SWIETELSKY s.r.o. 2) | Ceske Budejovice, Czech Republic | 51.00 | CZK | 25 |
| Tvornica cementa Kakanj dionicko drustvo | Kakanj, Bosnia-Herzegovina | 45.58 | BAM | 171 |
| Vltavske sterkopisky s.r.o. | Chlumin, Czech Republic | 50.00 | CZK | 117 |
| Proportionately consolidated companies | ||||
|---|---|---|---|---|
| North America | ||||
| China Century Cement Ltd. | Hamilton, Bermuda | 50.00 | HKD | 689 |
| Texas Lehigh Cement Company LP | Austin, USA | 50.00 | USD | 29 |
| Proportionately consolidated companies | ||||
|---|---|---|---|---|
| Asia-Pacific | ||||
| Alliance Construction Materials Ltd | Hong Kong, Hong Kong | 50.00 | HKD | 236 |
| Cement Australia Holdings Pty Ltd | New South Wales, Australia | 25.00 | AUD | 500 |
| Cement Australia Partnership | New South Wales, Australia | 25.00 | AUD | 45 |
| Cement Australia Pty Limited | Victoria, Australia | 25.00 | AUD | 0 |
| Easy Point Industrial Ltd. | Hong Kong, Hong Kong | 50.00 | HKD | 1 |
| Jidong Heidelberg (Fufeng) Cement Company Limited | Baoji, China | 48.11 | CNY | 744 |
| Jidong Heidelberg (Jingyang) Cement Company Limited | Xianyang City, China | 50.00 | CNY | 789 |
| Lytton Unincorporated Joint Venture | Queensland, Australia | 50.00 | AUD | 0 |
| Squareal Cement Ltd | Hong Kong, Hong Kong | 50.00 | HKD | -11 |
| Proportionately consolidated companies | ||||
|---|---|---|---|---|
| Africa-Mediterranean Basin | ||||
| Akçansa Çimento Sanayii Ve Ticaret A.S. | Istanbul, Turkey | 39.72 | TRY | 838 |
| Hanson Yam Limited Partnership2) | Ramat Gan, Israel | 50.98 | ILS | 2 |
| Karcimsa Cimento San.Ve Tic.A.S. | Karabük, Turkey | 20.26 | TRY | 23 |
| Associated companies | ||||
|---|---|---|---|---|
| Western and Northern Europe | ||||
| Bauelementewerk Hertweck GmbH & Co. KG | Baden-Baden, Germany | 32.62 | EUR | 2 |
| BetonMarketing Nord GmbH 3) | Hannover, Germany | 50.00 | EUR | 0 |
| Betonpumpendienst Simonis GmbH & Co. KG2) | Ubstadt-Weiher, Germany | 56.12 | EUR | 3 |
| Betonpumpen-Service Niedersachsen GmbH & Co. KG3) | Hannover, Germany | 50.00 | EUR | 0 |
| Betotech GmbH & Co. KG2) | Heidelberg, Germany | 100.00 | EUR | 0 |
| Betotech GmbH, Baustofftechnisches Labor 2) | Amberg, Germany | 60.96 | EUR | 0 |
| Betotech GmbH, Baustofftechnisches Labor 2) | Eppelheim, Germany | 58.62 | EUR | 0 |
| betotech München GmbH & Co. KG2) | München, Germany | 62.50 | EUR | 0 |
| BÜG Beton-Überwachung GmbH2) | Leimen, Germany | 100.00 | EUR | 0 |
| BVS Beton-Vertrieb-Südbayern GmbH & Co. KG2) | Rohrdorf, Germany | 61.75 | EUR | 2 |
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Condroz Béton S.A. 2) Bruxelles, Belgium 66.92 EUR 1 Donau Kies GmbH & Co. KG2) Plattling, Germany 75.00 EUR 7 DONAU MÖRTEL - GmbH & Co. KG3) Neuburg a. Inn, Germany 50.00 EUR 0 Ernst Marschall GmbH & Co. KG Kies- und Schotterwerke Kressbronn, Germany 20.50 EUR 4 Fertigbeton (FBU) GmbH & Co Kommanditgesellschaft Unterwittbach 2) Unterwittbach, Germany 57.14 EUR 0 Fredy Lemke Baustoffhandel Spedition und Reederei GmbH & Co. KG2) Berlin, Germany 100.00 EUR 0 Gebrüder Willersinn Industriesandwerk GmbH & Co. KG Raunheim, Germany 33.33 EUR 1 GENAMO Gesellschaft zur Entwicklung des Naherholungsgebietes Misburg-Ost mbH3) Hannover, Germany 50.00 EUR 0 H.H. & D.E. Drew Limited New Milton, United Kingdom 49.00 GBP 11 Hafenbetriebsgesellschaft mbH & Co KG Stade 3) Stade, Germany 50.00 EUR 1 Heidelberger Beton Donau-Iller GmbH & Co. KG Elchingen, Germany 50.48 EUR 1 Heidelberger Beton GmbH & Co Stuttgart KG Remseck a. N., Germany 33.33 EUR 0 Heidelberger Beton Grenzland GmbH & Co. KG3) Marktredwitz, Germany 50.00 EUR 1 Heidelberger Beton Nesselwang GmbH & Co. KG2) Nesselwang, Germany 60.00 EUR 0 Heidelberger Fließestrich Südwest GmbH2) Eppelheim, Germany 56.76 EUR 0 Hessisches Bausteinwerk Dr. Blasberg GmbH & Co. KG Mörfelden-Walldorf, Germany 47.08 EUR 4 Humber Sand and Gravel Limited 3) Egham, United Kingdom 50.00 GBP 0 ID Beton N.V. 3) Zeebrugge, Belgium 50.00 EUR 0 ISAR-DONAU MÖRTEL-GmbH & Co. KG Passau, Germany 33.33 EUR 0 Kalksandsteinwerke Birkenmeier Gesellschaft mit beschränkter Haftung Breisach am Rhein, Germany 40.00 EUR 3 KANN Beton GmbH & Co. KG3) Bendorf, Germany 50.00 EUR 2 Kieswerk Langsdorf GmbH 2) Langsdorf, Germany 62.45 EUR 2 Kieswerke Flemmingen GmbH 2) Penig, Germany 54.00 EUR 1 Kronimus Aktiengesellschaft Iffezheim, Germany 24.90 EUR 20 KVB Kies- Vertrieb GmbH & Co. KG Karlsdorf-Neuthard, Germany 24.90 EUR 0 MDB Mörteldienst GmbH & Co. KG Berlin-Brandenburg 2) Berlin, Germany 90.00 EUR 0 MDF Mörtel- und Estrich-Dienst Franken GmbH & Co. KG Nürnberg, Germany 26.52 EUR 0 Meier Betonwerk GmbH u. Co KG3) Claußnitz, Germany 50.00 EUR 0 Meier Betonwerk GmbH u. Co KG3) Teuchern, Germany 50.00 EUR 0 Mendip Rail Limited 3) Markfield, United Kingdom 50.00 GBP 3 MERMANS BETON N.V. Arendonk, Belgium 49.91 EUR 1 Misburger Hafengesellschaft mit beschränkter Haftung Hannover, Germany 39.66 EUR 1 Mittelschwäbische Transport- und Frischbeton- Gesellschaft mit beschränkter Haftung & Co. Kommanditgesellschaft Thannhausen, Germany 30.23 EUR 0 MM MAIN-MÖRTEL GmbH & Co.KG2) Aschaffenburg, Germany 59.74 EUR 0 NCD Nederlandse Cement Deelnemingsmaatschappij B.V. Nieuwegein, Netherlands 36.88 EUR 1 Nederlands Cement Transport Cetra B.V. 3) Amsterdam, Netherlands 50.00 EUR 2 North Tyne Roadstone Limited3) Wolverhampton, United Kingdom 50.00 GBP 1 OVRC NV Bruxelles, Belgium 49.91 EUR 0 Peene Kies GmbH Jarmen, Germany 24.90 EUR 4 Peters Cementoverslagbedrijf B.V. Den Hout Breda, Netherlands 33.33 EUR 2 Purfleet Aggregates Limited3) Maidenhead, United Kingdom 50.00 GBP 0 Raunheimer Sand- und Kiesgewinnung Blasberg GmbH & Co. KG Raunheim, Germany 23.53 EUR 1 Rederij Cement-Tankvaart B.V. 2) Terneuzen, Netherlands 66.66 EUR 6 Renor Loop Service AS 3) Björkelangen, Norway 50.00 NOK 2 Rhein-Neckar-Mörtel GmbH & Co. KG i.L. Bruchsal, Germany 23.03 EUR 0 S.A. Cimescaut Tournai, Belgium 34.02 EUR 27 SAFA Saarfilterasche-Vertriebs-GmbH & Co. Kommanditgesellschaft. Baden-Baden, Germany 30.00 EUR 1 SBU Sandwerke Dresden GmbH Dresden, Germany 24.00 EUR 2 Schwaben Mörtel GmbH u. Co.KG Stuttgart, Germany 30.00 EUR 0 Smiths Concrete Limited Oxford, United Kingdom 49.00 GBP 7 SMW Sand und Mörtelwerk GmbH & Co. KG2) Niederlehme, Germany 100.00 EUR 1 Südbayerisches Portland-Zementwerk Gebr. Wiesböck & Co. GmbH Rohrdorf, Germany 24.99 EUR 242 Tangen Eiendom AS 3) Brevik, Norway 50.00 NOK 17 TBG Bayerwald Transportbeton GmbH & Co. KG3) Straubing, Germany 50.00 EUR 0 TBG Deggendorfer Transportbeton GmbH Deggendorf, Germany 33.33 EUR 1 TBG Ilm-Beton GmbH &Co. KG2) Arnstadt, Germany 55.00 EUR 1 TBG KANN Beton Guben GmbH & Co. KG3) Guben, Germany 50.00 EUR 0 TBG Lieferbeton Karlsruhe GmbH & Co. KG Karlsruhe, Germany 38.00 EUR 1 TBG Pegnitz-Beton GmbH & Co. KG Hersbruck, Germany 28.00 EUR 0 TBG Rott Kies und Transportbeton GmbH Kelheim, Germany 20.40 EUR 1 TBG Saale-Beton GmbH & Co. KG Hammelburg, Germany 29.07 EUR 0 TBG Transportbeton Aue-Schwarzenberg GmbH & Co. KG2) Schwarzenberg, Germany 54.00 EUR 0 |
Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
|---|---|---|---|---|---|
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
|---|---|---|---|---|
| TBG Transportbeton Bad Mergentheim GmbH & Co KG | Bad Mergentheim, Germany | 38.00 | EUR | 0 |
| TBG Transportbeton Caprano GmbH & Co. KG3) | Pirmasens, Germany | 50.00 | EUR | 0 |
| TBG Transportbeton Elsenz GmbH & Co. KG2) | Bammental, Germany | 51.11 | EUR | 0 |
| TBG Transportbeton Elster-Spree GmbH & Co. KG2) | Cottbus, Germany | 60.00 | EUR | 0 |
| TBG Transportbeton Gesellschaft, Eck-Beton, Eck GmbH & Co. KG | Bad Windsheim, Germany | 28.50 | EUR | 0 |
| TBG Transportbeton Glöckle GmbH & Co. KG | Grafenrheinfeld, Germany | 31.35 | EUR | 0 |
| TBG Transportbeton GmbH & Co. KG Betonpumpendienst 2) | Nabburg, Germany | 52.54 | EUR | 1 |
| TBG Transportbeton GmbH & Co. KG Lohr-Beton 3) | Lohr a. Main, Germany | 50.00 | EUR | 0 |
| TBG Transportbeton Meier GmbH & Co. KG3) | Wilkau-Haßlau, Germany | 50.00 | EUR | 0 |
| TBG Transportbeton Mittweida GmbH & Co KG | Mittweida, Germany | 40.00 | EUR | 0 |
| TBG Transportbeton Pfaffenhofen GmbH & Co. KG | Pfaffenhofen, Germany | 35.61 | EUR | 0 |
| TBG Transportbeton Reichenbach GmbH & Co. KG2) | Reichenbach, Germany | 70.00 | EUR | 1 |
| TBG Transportbeton Rhein-Donau-Raum GmbH & Co.KG | Singen, Germany | 36.90 | EUR | 0 |
| TBG Transportbeton Schleiz GmbH & Co. KG3) | Schleiz, Germany | 50.00 | EUR | 0 |
| TBG Transportbeton Selb GmbH & Co. KG | Selb, Germany | 33.33 | EUR | 0 |
| TBG Transportbeton Werner GmbH & Co. KG | Dietfurt a.d. Altmühl, Germany | 42.50 | EUR | 0 |
| TBM Transportbeton-Gesellschaft mbH Marienfeld & Co. Kommandit gesellschaft 2) |
Marienfeld, Germany | 64.69 | EUR | 0 |
| Trans CBR S.A. 2) | Bruxelles, Belgium | 100.00 | EUR | 1 |
| Transbeton Gesellschaft mit beschränkter Haftung & Co Kommandit gesellschaft |
Löhne, Germany | 26.81 | EUR | 1 |
| Transportbeton - Gesellschaft m.b.H. 'Garant' & Co., Kommanditgesellschaft Bad Salzuflen, Germany | 30.00 | EUR | 1 | |
| Transportbeton Bad Waldsee GmbH & Co. KG2) | Bad Waldsee, Germany | 64.00 | EUR | 0 |
| Transportbeton Beuschlein GmbH & Co. KG | Würzburg, Germany | 28.50 | EUR | 0 |
| Union Beton Werke GmbH | Söchtenau, Germany | 43.54 | EUR | 2 |
| WEIDEMANN GmbH | Beckum, Germany | 22.00 | EUR | 2 |
| Westfalia Transportbetonunion GmbH & Co. KG | Werl, Germany | 25.00 | EUR | 0 |
| WTG Walhalla Transportbeton GmbH | Regensburg, Germany | 28.33 | EUR | 0 |
| Zement- und Kalkwerke Otterbein GmbH & Co. KG | Müs, Germany | 38.10 | EUR | 1 |
| Eastern Europe-Central Asia | ||||
|---|---|---|---|---|
| BETONIKA plus s.r.o. | Luzec nad Vltavou, Czech Republic | 33.33 | CZK | 85 |
| CEMET S.A. | Warsaw, Poland | 42.91 | PLN | 52 |
| Centrum Technologiczne Betotech Sp. z o.o. 2) | Katowice, Poland | 99.99 | PLN | 4 |
| Gorazdze Trans Sp z o.o. w likwidacji 2) | Opole, Poland | 99.99 | PLN | 4 |
| Open Joint Stock Company "Mineral Resources Company" | Ishimbay, Russian Federation | 25.50 | RUB | 759 |
| Podgrodzie Sp. z o.o. 2) | Wroclaw, Poland | 100.00 | PLN | 14 |
| PREFA Grygov a.s. 2) | Grygov, Czech Republic | 53.73 | CZK | 70 |
| SP Bohemia, k.s. 2) | Kraluv Dvur, Czech Republic | 75.00 | CZK | 233 |
| TBG Betonove stavby Klatovy s.r.o. | Beroun, Czech Republic | 25.05 | CZK | 42 |
| TBG Louny s.r.o. | Louny, Czech Republic | 33.33 | CZK | 34 |
| TBG PKS a.s. | Zdar nad Sazavou, Czech Republic | 29.70 | CZK | 29 |
| TBG Wroclaw Sp. z o.o. 3) | Wroclaw, Poland | 50.00 | PLN | 7 |
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
|---|---|---|---|---|
| Associated companies | ||||
| Asia-Pacific | ||||
| M&H Quarries Partnership3) | Victoria, Australia | 50.00 | AUD | -1 |
| Metromix Pty Limited 3) | New South Wales, Australia | 50.00 | AUD | 24 |
| Penrith Lakes Development Corporation Limited | New South Wales, Australia | 20.00 | AUD | -299 |
| PT Bhakti Sari Perkasa Abadi 2) | Jakarta, Indonesia | 51.00 | IDR | 13 |
| PT Cibinong Center Industrial Estate | Jakarta, Indonesia | 25.50 | IDR | 35,980 |
| PT Lentera Abadi Sejahtera 2) | Jakarta, Indonesia | 51.00 | IDR | 4 |
| PT Makmur Abadi Perkasa Mandiri 2) | Jakarta, Indonesia | 51.00 | IDR | 13 |
| PT Pama Indo Mining | Jakarta, Indonesia | 20.40 | IDR | 33,449 |
| West Australian Landfill Services Pty Ltd3) | Victoria, Australia | 50.00 | AUD | 3 |
| Western Suburbs Concrete Partnership3) | New South Wales, Australia | 50.00 | AUD | 6 |
| Associated companies | ||||
|---|---|---|---|---|
| Africa-Mediterranean Basin | ||||
| Alrashid Abetong Company Ltd | Riyadh, Saudi Arabia | 45.00 | SAR | 120 |
| Fortia Cement S.A. | Lome, Togo | 46.97 | XAF | 7,646 |
The following companies are reflected in the consolidated financial statements at cost ("Available for sale at cost") due to their immateriality.
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
Net in come in million |
|---|---|---|---|---|---|
| Immaterial subsidiaries a) | |||||
| Western and Northern Europe | |||||
| ACOM Prefa sarl - Agence Commercial Prefa sarl | Brumath, France | 89.89 | EUR | 0 | 0 |
| B.V. Mortel Installatie Assen 'M.I.A.' | Assen, Netherlands | 66.67 | EUR | 2 | 1 |
| Bausteinwerk Bott - Blasberg G.m.b.H. & Co. Kommanditgesellschaft | Heppenheim (Bergstrasse), Germany | 61.58 | EUR | 1 | 0 |
| Betonpumpendienst Simonis Verwaltungsgesellschaft mbH | Ubstadt-Weiher, Germany | 56.07 | EUR | 0 | 0 |
| betotech München Verwaltungs GmbH | München, Germany | 62.50 | EUR | 0 | 0 |
| Betotech Verwaltungs-GmbH | Heidelberg, Germany | 100.00 | EUR | 0 | 0 |
| BLG Beteiligungen GmbH | München, Germany | 61.75 | EUR | 0 | 0 |
| BVS Beton-Vertrieb-Südbayern Verwaltung GmbH | Rohrdorf, Germany | 61.75 | EUR | 0 | 0 |
| Donau Kies Verwaltungs GmbH | Plattling, Germany | 75.00 | EUR | 0 | 0 |
| Etablissement F.S. Bivois SARL | Strasbourg, France | 60.00 | EUR | 0 | 0 |
| Feroc Ver- und Entsorgungshandelsgesellschaft mbH | Seesen, Germany | 76.00 | EUR | 0 | 0 |
| Fertigbeton (FBU) GmbH | Unterwittbach, Germany | 57.14 | EUR | 0 | 0 |
| FML Restoration Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 | 0 |
| Hanson Aggregates Verwaltungs-GmbH | Leinatal, Germany | 100.00 | EUR | 0 | 0 |
| HeidelbergCement Baustoffe für Geotechnik Verwaltungs-GmbH | Ennigerloh, Germany | 100.00 | EUR | 0 | 0 |
| HeidelbergCement Grundstücksgesellschaft Wetzlar Verwaltungs-GmbH | Heidelberg, Germany | 100.00 | EUR | 0 | 0 |
| HeidelbergCement Grundstücksverwaltungsgesellschaft mbH | Heidelberg, Germany | 100.00 | EUR | 0 | 0 |
| HeidelbergCement Malta Prima Limited | Valletta, Malta | 100.00 | EUR | 0 | 0 |
| HeidelbergCement Shared Services GmbH | Leimen, Germany | 100.00 | EUR | 0 | 0 |
| HeidelbergCement Technology Center GmbH | Heidelberg, Germany | 100.00 | EUR | 0 | 0 |
| Heidelberger Beton Aschaffenburg Verwaltungs-GmbH | Aschaffenburg, Germany | 70.74 | EUR | 0 | 0 |
| Heidelberger Beton Donau-Iller Verwaltungs-GmbH | Unterelchingen, Germany | 50.46 | EUR | 0 | 0 |
| Heidelberger Beton Donau-Naab Verwaltungsgesellschaft mbH | Burglengenfeld, Germany | 85.00 | EUR | 0 | 0 |
| Heidelberger Beton Nesselwang Verwaltungs-GmbH | Nesselwang, Germany | 60.06 | EUR | 0 | 0 |
| Heidelberger Beton Rhein-Nahe Verwaltungs-GmbH | Bad Kreuznach, Germany | 74.04 | EUR | 0 | 0 |
| Heidelberger Beton Zwickau Verwaltungs-GmbH | Zwickau, Germany | 60.00 | EUR | 0 | 0 |
| Heidelberger Betonelemente Verwaltungs-GmbH | Baden-Baden, Germany | 89.89 | EUR | 0 | 0 |
| Heidelberger Betonelemente Verwaltungs-GmbH | Chemnitz, Germany | 83.00 | EUR | 0 | 0 |
| Heidelberger Betonpumpen Rhein-Main-Nahe Verwaltungs-GmbH | Frankfurt/Main, Germany | 93.74 | EUR | 0 | 0 |
| Heidelberger Energie GmbH | Heidelberg, Germany | 100.00 | EUR | 0 | 0 |
| Heidelberger Kalksandstein Grundstücks- und Beteiligungs-Verwaltungs-GmbH | Durmersheim, Germany | 100.00 | EUR | 0 | 0 |
| Heidelberger KS Beteiligungen Deutschland Verwaltungsgesellschaft mbH | Heidelberg, Germany | 100.00 | EUR | 0 | 0 |
| Heidelberger Sand und Kies Handel & Logistik GmbH | Essen, Germany | 100.00 | EUR | 0 | 0 |
4
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
Net in come in million |
|---|---|---|---|---|---|
| Heidelberger Sand und Kies Handels- und Vertriebs-GmbH | Heidelberg, Germany | 100.00 | EUR | 0 | 0 |
| Heidelberger Weserkies Verwaltungs-GmbH | Bremen, Germany | 100.00 | EUR | 0 | 0 |
| Kalksandsteinwerk Amberg GmbH & Co. KG | Ebermannsdorf, Germany | 50.10 | EUR | 2 | 0 |
| Kalksandsteinwerk Amberg Verwaltungs-GmbH | Ebermannsdorf, Germany | 50.10 | EUR | 0 | 0 |
| Kazakhstan Cement Holding B.V. | 's-Hertogenbosch, Netherlands | 100.00 | EUR | 0 | 0 |
| Kieswerke Kieser GmbH & Co. KG | Gotha, Germany | 51.00 | EUR | 1 | 0 |
| Kieswerke Kieser Verwaltungs-GmbH | Gotha, Germany | 51.00 | EUR | 0 | 0 |
| L e m k e & Co. Baustoffhandel, Spedition und Reederei, Gesellschaft mit be | |||||
| schränkter Haftung | Berlin, Germany | 100.00 | EUR | 0 | 0 |
| Lieferbeton Gesellschaft mit beschränkter Haftung | Bad Nauheim, Germany | 57.60 | EUR | 0 | 0 |
| Lithonplus Verwaltungs-GmbH | Lingenfeld, Germany | 60.00 | EUR | 0 | 0 |
| Marmor-Industrie Kiefer GmbH | Kiefersfelden, Germany | 100.00 | EUR | 1 | 0 |
| Materiaux de Boran S.A. | Boran-sur-Oise, France | 99.84 | EUR | 0 | 0 |
| MDB Mörteldienst Verwaltungs-GmbH Berlin-Brandenburg | Berlin, Germany | 90.00 | EUR | 0 | 0 |
| MM MAIN-MÖRTEL Verwaltungsgesellschaft mbH | Aschaffenburg, Germany | 59.74 | EUR | 0 | 0 |
| NAAB Mörtel GmbH | Schwandorf, Germany | 53.51 | EUR | 0 | 0 |
| NedCem Holding B.V. | 's-Hertogenbosch, Netherlands | 100.00 | EUR | 0 | 0 |
| Paderborner Transport - Beton - Gesellschaft mit beschränkter Haftung | Paderborn, Germany | 75.00 | EUR | 0 | 0 |
| Pioneer Investments UK Limited | Maidenhead, United Kingdom | 100.00 | GBP | 0 | 0 |
| Quadro Bausysteme GmbH | Durmersheim, Germany | 80.00 | EUR | 0 | 0 |
| RLG Rohstoffe GmbH & Co. KG | Essen, Germany | 100.00 | EUR | 0 | 0 |
| RLG Rohstoffe Verwaltungsgesellschaft mbH | Mülheim a. d. Ruhr, Germany | 100.00 | EUR | 0 | 0 |
| Roewekamp GmbH | Gelsenkirchen, Germany | 100.00 | EUR | 0 | 0 |
| SBM Systembaumontagen GmbH | Chemnitz, Germany | 83.00 | EUR | 0 | 0 |
| SCI Bicowal | Strasbourg, France | 60.00 | EUR | 0 | 0 |
| SMW Sand und Mörtelwerk Verwaltungs-GmbH | Niederlehme, Germany | 100.00 | EUR | 0 | 0 |
| SPRL Ferme de Wisempierre | Saint-Maur-Ere, Belgium | 100.00 | EUR | 2 | 0 |
| SRS Rail Vehicles AB | Osby, Sweden | 100.00 | SEK | 1 | 0 |
| SRS Sjölanders AB | Stockholm, Sweden | 100.00 | SEK | 4 | -6 |
| Svabo Kaross & Hydraulservice AB | Stockholm, Sweden | 51.00 | SEK | 0 | 0 |
| TBG Ilm-Beton Verwaltungs-GmbH | Arnstadt, Germany | 55.00 | EUR | 0 | 0 |
| TBG Transportbeton Elsenz Verwaltungsgesellschaft mbH | Bammental, Germany | 51.11 | EUR | 0 | 0 |
| TBG Transportbeton Elster-Spree Verwaltungs-GmbH | Cottbus, Germany | 60.00 | EUR | 0 | 0 |
| TBG Transportbeton Franken Geschäftsführung GmbH | Fürth, Germany | 51.00 | EUR | 0 | 0 |
| TBG Transportbeton Kurpfalz Verwaltungsgesellschaft mbH | Eppelheim, Germany | 51.11 | EUR | 0 | 0 |
| TBG Transportbeton Mainfranken Geschäftsführungs GmbH | Sand am Main, Germany | 57.00 | EUR | 0 | 0 |
| TBG Transportbeton Reichenbach Verwaltungs-GmbH | Reichenbach, Germany | 70.00 | EUR | 0 | 0 |
| TBG Transportbeton Saalfeld Verwaltungs-GmbH | Saalfeld, Germany | 56.67 | EUR | 0 | 0 |
| TBG Transportbeton Schwarzenberg Verwaltungs-GmbH | Schwarzenberg, Germany | 60.00 | EUR | 0 | 0 |
| TBG WIKA-Beton Verwaltungs-GmbH | Stade, Germany | 100.00 | EUR | 0 | 0 |
| TBH Transportbeton Hamburg Verwaltungs GmbH | Hamburg, Germany | 85.00 | EUR | 0 | 0 |
| TBM Transportbeton-Gesellschaft mit beschränkter Haftung Marienfeld | Harsewinkel, Germany | 64.69 | EUR | 0 | 0 |
| TopCem Holding B.V. | 's-Hertogenbosch, Netherlands | 100.00 | EUR | 0 | 0 |
| Transportbeton Bad Waldsee Geschäftsführungs GmbH | Bad Waldsee, Germany | 64.00 | EUR | 0 | 0 |
| Verwaltungsgesellschaft Baustoffwerke Dresden mbH | Dresden, Germany | 51.00 | EUR | 0 | 0 |
| Walhalla Kalk Verwaltungsgesellschaft mbH | Regensburg, Germany | 80.00 | EUR | 0 | 0 |
| Immaterial subsidiaries a) | |||||
|---|---|---|---|---|---|
| Eastern Europe-Central Asia | |||||
| Bratislavské štrkopiesky, s.r.o. | Blatne, Slovakia | 75.00 | EUR | -1 | 0 |
| Budejovicke Sterkopisky, spol. s.r.o. | Budweis, Czech Republic | 73.50 | CZK | 21 | 2 |
| Bukhtarma TeploEnergo LLP | Oktyabrskiy village, Kazakhstan | 100.00 | KZT | -164 | -98 |
| Bukhtarma Vodokanal LLP | Oktyabrskiy village, Kazakhstan | 100.00 | KZT | -81 | -8 |
| CEMTECH akciova spolecnost v likvidaci | Mokra, Czech Republic | 100.00 | CZK | 1 | 0 |
| Center Cement Plus Limited Liability Partnership | Astana, Kazakhstan | 100.00 | KZT | 193 | 36 |
| Donau Kies Bohemia Verwaltungs, s.r.o. | Pilsen, Czech Republic | 75.00 | CZK | 0 | 0 |
| Donau Kies Bohemia, s.r.o. | Kraluv Dvur, Czech Republic | 75.00 | CZK | 17 | 1 |
| HeidelbergCement Services - LLP | Almaty, Kazakhstan | 100.00 | KZT | 12 | 9 |
| Klatovske sterkopisky s.r.o. | Pilsen, Czech Republic | 71.25 | CZK | -8 | 0 |
| Labske sterkopisky a beton s.r.o. | Litomerice, Czech Republic | 60.00 | CZK | -4 | 0 |
| LLC 'HeidelbergCement Caucasus Shared Services' | Tbilisi, Georgia | 100.00 | GEL | 0 | 0 |
| MIXT Sp. z o. o. | Opole, Poland | 99.99 | PLN | 4 | 1 |
| OOO StrelicaCement | Strelica, Russian Federation | 100.00 | RUB | 1 | -1 |
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
Net in come in million |
|---|---|---|---|---|---|
| Plzenske sterkopisky s.r.o. | Pilsen, Czech Republic | 60.00 | CZK | -3 | 4 |
| Polgrunt Sp. z o. o. | Opole, Poland | 99.99 | PLN | 1 | 0 |
| PZP Bohemia, k.s. | Kraluv Dvur, Czech Republic | 75.00 | CZK | 0 | 0 |
| ROBA sterkovny Nové Sedlo s.r.o. | Roztyly cp.3., Czech Republic | 75.00 | CZK | -12 | 4 |
| SABIA spol. s.r.o. | Bohusovice nad Ori, Czech Republic | 59.40 | CZK | 9 | 2 |
| Severoceske piskovny a sterkovny s.r.o. | Zatec, Czech Republic | 73.50 | CZK | 70 | 16 |
| TRANS-SERVIS spol. s.r.o. | Kraluv Dvur, Czech Republic | 100.00 | CZK | 78 | -1 |
| Udružene Pješcare i Šljuncare d.o.o., za istraživanje i iskorištavanje pijeska i | |||||
| šljunka, u likvidacije | Zagreb, Croatia | 100.00 | HRK | 0 | 0 |
| VAPIS stavební hmoty s.r.o. | Praha, Czech Republic | 51.00 | CZK | 1 | 0 |
| Immaterial subsidiaries a) | |||||
|---|---|---|---|---|---|
| North America | |||||
| Campbell Transportation Services LLC**) | Austin, USA | 99.00 | USD | 16 | 0 |
| Cementi Meridionali Ltd. | Tortola, British Virgin Islands | 100.00 | USD | 2 | 0 |
| Gypsum Carrier Inc | Panama City, Panama | 100.00 | GBP | 55 | 0 |
| Mediterranean Carriers, Inc. | Panama City, Panama | 100.00 | USD | -3 | 0 |
| Piedras y Arenas Baja SA de CV | Tijuana, Mexico | 100.00 | MXN | 0 | 0 |
| Immaterial subsidiaries a) | |||||
|---|---|---|---|---|---|
| Asia-Pacific | |||||
| HC Trading Office Shanghai - Liason office | Shanghai, China | 100.00 | CNY | 0 | 0 |
| Immaterial subsidiaries a) | |||||
| Africa-Mediterranean Basin | |||||
| HC Trading Dubai Liason office | Dubai, United Arab Emirates | 100.00 | AED | 0 | 0 |
The following associates and joint ventures are accounted for at cost ("Available for sale at cost") due to their immateriality
Immaterial associates and joint ventures a)
| Western and Northern Europe | |||||
|---|---|---|---|---|---|
| AB Stebo | Göteborg, Sweden | 50.00 | SEK | 0 | 0 |
| AB Strömstadsbetong | Göteborg, Sweden | 33.00 | SEK | 0 | 0 |
| AB Strömstadsbetong & Co Kommanditbolag | Göteborg, Sweden | 33.00 | SEK | 4 | 4 |
| Alzagri NV | Brugge, Belgium | 50.00 | EUR | 1 | 0 |
| Anton Beirer Hartsteinwerke GmbH & Co. KG | Pinswang, Austria | 30.00 | EUR | 1 | 0 |
| B.V. Autotransport Sint Pieter | Maastricht, Netherlands | 50.00 | EUR | 0 | 0 |
| B.V. Edese Beton Centrale E.B.C. | Arnhem, Netherlands | 12.00 | EUR | 22 | 1 |
| Baustoff- und Umschlags-GmbH | Mosbach, Germany | 38.14 | EUR | 0 | 0 |
| BEHAG Bauelemente Gesellschaft mit beschränkter Haftung | Baden-Baden, Germany | 31.54 | EUR | 0 | 0 |
| Betonmortel Grevelingen B.V. | Zierikzee, Netherlands | 50.00 | EUR | 1 | 0 |
| Betonmortelcentrale De Mark B.V. | Breda, Netherlands | 28.57 | EUR | 1 | 0 |
| Betonmortelfabriek Tilburg Bemoti B.V. | Tilburg, Netherlands | 38.67 | EUR | 0 | 0 |
| Betonpumpen-Service Niedersachsen Verwaltungs-GmbH | Hannover, Germany | 50.00 | EUR | 0 | 0 |
| Betuwe Beton Holding B.V. | Tiel, Netherlands | 50.00 | EUR | 6 | 1 |
| Beuschlein Verwaltung-GmbH | Randersacker, Germany | 28.50 | EUR | 0 | 0 |
| Cotrano B.V. | Rotterdam, Netherlands | 7.41 | EUR | 8 | 4 |
| Cugla B.V. | Breda, Netherlands | 50.00 | EUR | 5 | 3 |
| DONAU MÖRTEL-Verwaltungs-GmbH | Passau, Germany | 50.00 | EUR | 0 | 0 |
| Eemshaven Betoncentrale V.O.F. | Groningen, Netherlands | 33.16 | EUR | 0 | 0 |
| Eemsmond Betoncentrale B.V. | Veend, Netherlands | 50.00 | EUR | 2 | 0 |
| Europomp B.V. | Heer, Netherlands | 47.25 | EUR | 1 | 0 |
| Gebrüder Willersinn Industriesandwerk Verwaltungsgesellschaft mit beschränkter Haftung |
Raunheim, Germany | 33.33 | EUR | 0 | 0 |
| Gottåsa Fastighets AB | Grimslöv, Sweden | 50.00 | SEK | 4 | 4 |
| Greystone Ambient & Style GmbH & Co. KG | Lingenfeld, Germany | 45.00 | EUR | 0 | 0 |
| Greystone Ambient & Style Verwaltungsgesellschaft mbH | Lingenfeld, Germany | 45.00 | EUR | 0 | 0 |
| H S Hartsteinwerke GmbH | Pinswang, Austria | 30.00 | EUR | 0 | 0 |
| Hafenbetriebs- und Beteiligungs-GmbH, Stade | Stade, Germany | 50.00 | EUR | 0 | 0 |
5
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
Net in come in million |
|---|---|---|---|---|---|
| Hausgesellschaft des Vereins Deutscher Zementwerke mit beschränkter | |||||
| Haftung | Düsseldorf, Germany | 33.16 | EUR | 0 | 0 |
| Hormigones Mecanizados, S.A. | Palma de Mallorca, Spain | 25.00 | EUR | 0 | 0 |
| HSL Noord-Brabant 5-B v.o.f. | Oosterhout, Netherlands | 20.00 | EUR | 0 | 0 |
| ISAR-DONAU MÖRTEL-Verwaltungs-GmbH | Plattling, Germany | 33.33 | EUR | 0 | 0 |
| Joyce Green Aggregates Limited | Dartford, United Kingdom | 50.00 | GBP | 0 | 0 |
| KANN Beton Verwaltungsgesellschaft mbH | Bendorf, Germany | 50.00 | EUR | 0 | 0 |
| KVB Verwaltungs- und Beteiligungs-GmbH | Karlsdorf-Neuthard, Germany | 24.80 | EUR | 0 | 0 |
| Martin Milch Gesellschaft mit beschränkter Haftung | Ochtendung, Germany | 30.00 | EUR | 0 | 0 |
| MDF Mörtel-Dienst Franken Verwaltungs-GmbH | Nürnberg, Germany | 26.52 | EUR | 0 | 0 |
| Meier Verwaltungs GmbH | Claußnitz, Germany | 50.00 | EUR | 0 | 0 |
| Mittelschwäbische Transport- und Frischbeton Gesellschaft mit beschränkter Haftung |
Thannhausen, Germany | 20.00 | EUR | 0 | 0 |
| Mortel Produktie Vianen (MPV) B.V. | Utrecht, Netherlands | 50.00 | EUR | 0 | 0 |
| MWK Kies Verwaltungs-GmbH | Kressbronn, Germany | 20.00 | EUR | 0 | 0 |
| Nordhafen Stade-Bützfleth Verwaltungsgesellschaft mbH | Stade, Germany | 25.00 | EUR | 0 | 0 |
| NORMENSAND GMBH | Beckum, Germany | 48.37 | EUR | 2 | 1 |
| NSI-Holland B.V. | Wessem, Netherlands | 45.00 | EUR | 1 | 0 |
| Otterbein Gesellschaft mit beschränkter Haftung | Großenlüder, Germany | 20.00 | EUR | 0 | 0 |
| Recyfuel S.A. | Bruxelles, Belgium | 50.00 | EUR | 13 | 1 |
| Rhein-Neckar-Mörtel Verwaltungs-GmbH i.L. | Bruchsal, Germany | 23.04 | EUR | 0 | 0 |
| Roca Beton V.O.F. | Tilburg, Netherlands | 50.00 | EUR | 0 | 0 |
| Saarfilterasche-Vertriebs-Gesellschaft mit beschränkter Haftung | Baden-Baden, Germany | 30.00 | EUR | 0 | 0 |
| Schmitt Beton GmbH & Co. KG | Markt Schwaben, Germany | 27.79 | EUR | 1 | 0 |
| Schwaben Mörtel Beteiligungs GmbH | Stuttgart, Germany | 28.21 | EUR | 0 | 0 |
| Shire Business Park Limited | London, United Kingdom | 50.00 | GBP | 0 | 0 |
| Südkalk - Vertriebsgesellschaft mit beschränkter Haftung | Freiburg i. Breisgau, Germany | 50.00 | EUR | 0 | 0 |
| TBG Bayerwald Verwaltungs-GmbH | Straubing, Germany | 50.00 | EUR | 0 | 0 |
| TBG Eck Verwaltungsgesellschaft mbH | Bad Windsheim, Germany | 28.50 | EUR | 0 | 0 |
| TBG Gersdorfer Transportbeton GmbH & Co. KG | Gersdorf, Germany | 30.00 | EUR | 0 | 0 |
| TBG Gersdorfer Transportbeton Verwaltungs- und Beteiligungs-GmbH | Gersdorf, Germany | 30.00 | EUR | 0 | 0 |
| TBG KANN Beton Guben Verwaltungs-GmbH | Guben, Germany | 50.00 | EUR | 0 | 0 |
| TBG Pegnitz-Beton Verwaltungs-GmbH | Hersbruck, Germany | 25.61 | EUR | 0 | 0 |
| TBG Saale-Beton Verwaltungsgesellschaft mbH | Hammelburg, Germany | 29.07 | EUR | 0 | 0 |
| TBG Transportbeton Bad Mergentheim Verwaltungs-GmbH | Bad Mergentheim, Germany | 37.96 | EUR | 0 | 0 |
| TBG Transportbeton Caprano Verwaltungs-GmbH | Pirmasens, Germany | 50.00 | EUR | 0 | 0 |
| TBG Transportbeton Glöckle Verwaltungs-GmbH | Grafenrheinfeld, Germany | 31.35 | EUR | 0 | 0 |
| TBG Transportbeton Lohr Verwaltungsgesellschaft mbH | Lohr a. Main, Germany | 50.00 | EUR | 0 | 0 |
| TBG Transportbeton Meier Verwaltungs-GmbH | Wilkau-Haßlau, Germany | 50.00 | EUR | 0 | 0 |
| TBG Transportbeton Mittweida Verwaltungs-GmbH | Mittweida, Germany | 40.00 | EUR | 0 | 0 |
| TBG Transportbeton Oder-Spree Verwaltungs-GmbH | Wriezen, Germany | 50.00 | EUR | 0 | 0 |
| TBG Transportbeton Pfaffenhofen Verwaltungsgesellschaft mbH | Pfaffenhofen, Germany | 35.40 | EUR | 0 | 0 |
| TBG Transportbeton Schleiz Verwaltungs-GmbH | Schleiz, Germany | 50.00 | EUR | 0 | 0 |
| TBG Transportbeton Selb Verwaltungsgesellschaft mbH | Selb, Germany | 33.33 | EUR | 0 | 0 |
| TBG Transportbeton Verwaltungsgesellschaft mbH | Nabburg, Germany | 50.00 | EUR | 0 | 0 |
| TBG Transportbeton Werner Verwaltungsgesellschaft mbH | Dietfurt a.d. Altmühl, Germany | 42.50 | EUR | 0 | 0 |
| Tournai Ternaire S.A. | Tournai, Belgium | 50.00 | EUR | 0 | 0 |
| Transmix B.V. | Amsterdam, Netherlands | 50.00 | EUR | 1 | 0 |
| Transportbeton-Gesellschaft mit beschränkter Haftung Garant | Bad Salzuflen, Germany | 23.33 | EUR | 0 | 0 |
| Transportbetonunion Gesellschaft mit beschränkter Haftung | Werl, Germany | 25.00 | EUR | 0 | 0 |
| Van Zanten Holding B.V. | Zuidbroek, Netherlands | 25.00 | EUR | 2 | 0 |
| Verheul Westpoort B.V. | Amsterdam, Netherlands | 25.00 | EUR | 1 | 0 |
| Verwaltungsgesellschaft mit beschränkter Haftung TRAPOBET Transportbeton | |||||
| Kaiserslautern | Kaiserslautern, Germany | 50.00 | EUR | 0 | 0 |
| Vlissingse Transportbeton Onderneming B.V. | Middelb, Netherlands | 50.00 | EUR | 2 | 1 |
| Westland Beton B.V. | Vlaar, Netherlands | 50.00 | EUR | 1 | 0 |
| WIKING Baustoff- und Transport Gesellschaft mit beschränkter Haftung | Soest, Germany | 50.00 | EUR | 0 | 0 |
| Woerdense Betonmortel Centrale B.V. | Utrecht, Netherlands | 50.00 | EUR | 0 | 0 |
| HeidelbergCement annual accounts | |
|---|---|
| Group profit and loss accounts | Group statement of changes in equity |
| Group statement of comprehensive income | Segment reporting / Notes to the annual accounts |
| Group cash flow statement | Notes to the 2010 Group annual accounts |
| Group balance sheet roup sheet |
Audit Opinion / Responsibility statement |
| Company name | Corporate seat | Group owner ship % |
Cur rency |
Equity in million |
Net in come in million |
|---|---|---|---|---|---|
| Immaterial associates and joint ventures a) | |||||
| Eastern Europe-Central Asia | |||||
| ASDAG Kavicsbanya es Epitö Kft. | Janossomorja, Hungary | 48.68 | HUF | 1,202 | 78 |
| Asdeka Kft. | Hegyeshalom, Hungary | 24.34 | HUF | 16 | -12 |
| Bukhtarma Teplo Tranzit LLP | New Bukhtarma village, Kazakhstan | 20.00 | KZT | -30 | 0 |
| LOMY MORINA spol. s r.o. | Morina, Czech Republic | 48.95 | CZK | 363 | 0 |
| RS Czech Republic, s.r.o. | Kraluv Dvur, Czech Republic | 37.50 | CZK | 3 | 2 |
| Velkolom Certovy schody, akciova spolecnost | Tman, Czech Republic | 50.00 | CZK | 202 | 2 |
| Immaterial associates and joint ventures a) | |||||
| North America | |||||
| Cornerstone Partners I, LLC**) | Reno, USA | 50.00 | USD | 0 | 0 |
|---|---|---|---|---|---|
| CPC Terminals, Inc **) | Sacramento, USA | 50.00 | USD | 0 | 0 |
| Petreos del Pacifico, S.A. de C.V. | Tijuana, Mexico | 50.00 | MXN | -187 | -59 |
| Transportadora Maritima de Baja California, S.A. de C.V. | Tijuana, Mexico | 50.00 | MXN | 35 | -7 |
| Immaterial associates and joint ventures a) | |||||
|---|---|---|---|---|---|
| Asia-Pacific | |||||
| Diversified Function Sdn Bhd | Kuala Lumpur, Malaysia | 50.00 | MYR | 0 | 0 |
| Immaterial associates and joint ventures a) | |||||
| Africa-Mediterranean Basin | |||||
| Ras Al Khaimah, | |||||
| Union Cement Norcem C.o. (W.L.L.) | United Arab Emirates | 40.00 | AED | 4 | 21 |
*) The company makes use of the exemption from disclosure obligations in accordance with § 264b of the German Commercial Code.
**) Result before taxes, taxation takes place at Lehigh Hanson, Inc.
a) Amounts according to latest available financial statements.
1) Controlling influence through contractual arrangements and/or legal regulations
2) Absence of controlling influence through contractual arrangements and/or legal regulations
3) Absence of joint control through contractual arrangements and/or legal regulations
Heidelberg, 16 March 2011
HeidelbergCement AG
The Managing Board
4
We have issued the following opinion on the consolidated financial statements and the group management report:
"We have audited the consolidated financial statements prepared by the HeidelbergCement AG, Heidelberg, comprising the income statement, the statement of recognized income and expense, the cash flow statement, the balance sheet, the statement of changes in equity and the notes to the consolidated financial statements, together with the combined group management report of HeidelbergCement Group and HeidelbergCement AG for the fiscal year from 1 January to 31 December 2010. The preparation of the consolidated financial statements and the group management report in accordance with IFRSs as adopted by the EU, and the additional requirements of German commercial law pursuant to § 315a (1) HGB and supplementary provisions of articles of incorporation and bylaws are the responsibility of the parent company's management. Our responsibility is to express an opinion on the consolidated financial statements and on the group management report based on our audit.
We conducted our audit of the consolidated financial statements in accordance with § 317 HGB and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the consolidated financial statements in accordance with the applicable financial reporting framework and in the group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated financial statements and the group management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the annual financial statements of those entities included in consolidation, the determination of entities to be included in consolidation, the accounting and consolidation principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements and the group management report. We believe that our audit provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the consolidated financial statements comply with IFRSs as adopted by the EU, the additional requirements of German commercial law pursuant to § 315a (1) HGB and supplementary provisions of the articles of association and give a true and fair view of the net assets, financial position and results of operations of the Group in accordance with these requirements.
The group management report is consistent with the consolidated financial statements and as a whole provides a suitable view of the Group's position and suitably presents the opportunities and risks of future development."
Stuttgart, 16 March 2011 Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft
| Prof. Dr. Wollmert | Somes |
|---|---|
| Wirtschaftsprüfer | Wirtschaftsprüferin |
| (German Public Auditor) | (German Public Auditor) |
| HeidelbergCement annual accounts | ||
|---|---|---|
Group profit and loss accounts Group statement of changes in equity Group statement of comprehensive income Segment reporting / Notes to the annual accounts Group cash flow statement Notes to the 2010 Group annual accounts Group balance sheet roup Audit Opinion / Responsibility statement
To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the Group management report, which has been combined with the management report of HeidelbergCement AG, includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group.
Heidelberg, 16 March 2011
HeidelbergCement AG
The Managing Board
Dr. Bernd Scheifele
Andreas Kern
Dr. Dominik von Achten
Daniel Gauthier
Dr. Lorenz Näger
Dr. Albert Scheuer
Cement capacities and aggregates reserves (back cover)
| Group functions | |
|---|---|
| Böttcher, Henner | Director Group Treasury |
| Jordanoff, Plamen | Director Group Strategy & Development and Cementitious |
| Kozelka, Rolf | Director Group Tax |
| Russell, Matthew | Director Group Reporting, Controlling & Consolidation |
| Schaffernak, Dr. Ingo | Director Group Legal |
| Schaller, Andreas | Director Group Communication & Investor Relations |
| Schnurr, Andreas | Director Group Human Resources and Group Compliance |
| Schwind, Klaus | Director Group Shared Service Centers |
| Sijbring, Henk | Director Group Purchasing |
| Standhaft, Dr. Wolfgang | Director Group Information Technology |
| Vandenberghe, Marc | Director Group Insurance & Corporate Risk Management |
| Weingardt, Stefan | Director Group Internal Audit |
| Heidelberg Technology Center (HTC) | |
|---|---|
| Jelito, Ernest | Director HTC Global and Director Manufacturing & Engineering Central Europe-Central Asia and Head of HTC Central Europe-Central Asia |
| Tomlinson, Stuart | Senior Vice President Manufacturing & Engineering, President HTC North America |
| Fritz, Daniel | Director Manufacturing & Engineering Asia-Oceania and Head of HTC Asia-Oceania |
| Gupta, Akhilesh | Director Manufacturing & Engineering TEAM and Head of HTC TEAM |
| Competence Center Materials (CCM) | |
|---|---|
| Mühlbeyer, Gerhard | Director Global Competence Center Materials |
| Global Environmental Sustainability | ||
|---|---|---|
| Mathieu, Bernard | Director Global Environmental Sustainability |
Oerter, Gerald Director Global Sales & Marketing
| Additional Information | |
|---|---|
| Global functions and Country Managers | Imprint |
| Glossary and index | Cement capacities and aggregates reserves |
| Western and Northern Europe | ||
|---|---|---|
| Baltics/Denmark/Norway/Sweden | Syvertsen, Gunnar | General Manager Northern Europe |
| Belgium/Netherlands | Jacquemart, André | General Manager Benelux |
| Germany | Seitz, Gerhard | General Manager Germany until 31 August 2011 |
| Knell, Christian | General Manager Germany from 1 September 2011 | |
| United Kingdom | O'Shea, Patrick | Chief Executive Officer UK |
| Bosnia & Herzegovina | Muidza, Branimir | Country Manager Bosnia & Herzegovina |
|---|---|---|
| Czech Republic | Hrozek, Jan | General Manager Czech Republic |
| Georgia | Hampel, Michael | General Manager Georgia |
| Hungary | Szarkándi, János | General Manager Hungary |
| Kazakhstan | Kempe, Roman | General Manager Kazakhstan |
| Poland | Balcerek, Andrzej | General Manager Poland |
| Romania | Aldea, Dr. Florian | General Manager Romania |
| Russia | Knell, Christian | General Manager Russia until 31 August 2011 |
| Polendakov, Mihail | General Manager Russia from 1 September 2011 | |
| Ukraine | Oklestek, Karel | General Manager Ukraine |
| Harrington, Dan | Chief Executive Officer USA |
|---|---|
| Derkatch, Jim | Regional President Canada |
| Hahne, Clifford | Regional President South |
| Saragusa, Kari | Regional President West |
| Purcell, Jim | Regional President North |
| Capelli, Tom | President Building Products |
| China | Bogdan, Ludek | Chief Operating Officer China |
|---|---|---|
| India | Guha, Ashish | Chief Executive Officer India |
| Indonesia/Bangladesh/Brunei/Malaysia | Lavallé, Daniel | Chief Executive Officer South East Asia |
| Australia | Gluskie, Kevin | Chief Executive Officer Australia |
| Africa | Junon, Jean-Marc | Chief Operating Officer |
|---|---|---|
| Israel | Priel, Eliezer | Country Manager Israel |
| Mediterranean Basin/HC Trading | Adigüzel, Emir | Chief Operating Officer Mediterranean Basin & Middle East and HC Trading |
| Spain | Ortiz, Jesus | Country Manager Spain |
Aggregates in the form of sand, gravel and crushed rock are used principally for concrete manufacturing or for road construction and maintenance.
By-products or waste from other industries, whose chemical components make them suitable substitutes for natural raw materials. Alternative raw materials are used both in the production of clinker, the most important intermediate product in cement production, and as additives in cement grinding, in order to conserve natural raw material resources and reduce the proportion of energy-intensive clinker in cement, the end product. By using alternative raw materials and fuels, HeidelbergCement is actively contributing to the preservation of resources as well as to waste management and recycling.
Asphalt is manufactured from a mixture of graded aggregates, sand, filler and bitumen. It is used primarily for road construction and maintenance.
Biodiversity or biological diversity is the genetic diversity within species, diversity between species and diversity of ecosystems.
Finely ground, glassy by-product from steel production. Additive for cement.
Cement is a hydraulic binder, i.e. a finely ground inorganic material that sets and hardens by chemical interaction with water and that is capable of doing so also under water. Cement is mainly used to produce concrete. It binds the sand and gravel into a solid mass.
Cement grinding is the final stage of the cement manufacturing process. In cement mills, the clinker is ground into cement, with the addition of gypsum and anhydrite, as well as other additives, such as limestone, blast furnace slag or fly ash, depending on the type of cement.
HeidelbergCement is a founding member of the Cement Sustainability Initiative (CSI), an association of 23 leading cement manufacturers worldwide to promote sustainable development under the auspices of the World Business Council for Sustainable Development (WBCSD).
Intermediate product in the cement production process that is made by heating a finely-ground raw material mixture to around 1,450° C in the cement kiln. For the manufacture of cement, the greyish-black clinker nodules are extremely finely ground. Clinker is the main ingredient in most cement types.
Bearer notes issued by companies within the framework of a Commercial Paper Programme (CP Programme) to meet short-term financing needs.
Alternative fuels p. 52, 57, 59, 68, 92, 94, 97, 105 f., 109, 118 f. Combustible substances and materials used in place of fossil fuels in the clinker-burning process.
Additional Information
In composite cements, a proportion of the clinker is replaced with alternative raw materials, usually by-products from other industries, such as blast furnace slag or fly ash. Decreasing the proportion of energy-intensive clinker in cement is of critical importance for reducing energy consumption and CO2 emissions as well as for preserving natural raw materials.
Building material that is manufactured by mixing cement, aggregates (gravel, sand or crushed stone) and water.
An EMTN programme represents a framework agreement made between the company and the banks appointed to be dealers. HeidelbergCement has the option of issuing debenture bonds up to a total volume of EUR 10 billion under its EMTN programme.
Solid, particulate combustion residue from coal-fired power plants. Additive for cement.
A grinding plant is a cement production facility without clinker-burning process. Delivered clinker and selected additives, depending on the type of cement, are ground into cement. Grinding plants are particularly operated at locations where suitable raw material deposits for cement production are not available.
The sum of all non-current and current financial liabilities minus cash and cash equivalents, short-term investments and short-term derivatives. Synonyms: net debt, net indebtedness, net liabilities.
Classification of the credit standing of debt instruments and their issuers. Specialised agencies such as Standard & Poor's, Fitch Ratings and Moody's produce such ratings. Ratings range from AAA or Aaa as the highest credit standing to C or D as the lowest.
Concrete that is manufactured in a ready-mixed concrete facility and transported to the building site using readymix trucks.
Syndicated loan p. 28, 37, 50, 71 f., 74 ff., 80, 88 f., 114, 116, 175, 180, 195 Large-sized loan which is distributed ("syndicated") among several lenders for the purpose of risk spreading.
HeidelbergCement is a member of the World Business Council for Sustainable Development (WBCSD), a cooperation of around 200 international companies who have made a commitment to the idea of sustainable development on the basis of sustainable growth, ecological equilibrium and social progress.
Glossary and index Cement capacities and aggregates reserves
5
HeidelbergCement AG Berliner Strasse 6 69120 Heidelberg, Germany
Group Communication & Investor Relations HeidelbergCement ServiceDesign Werbeagentur GmbH, Heidelberg, Germany Target Languages GmbH, Dossenheim, Germany abcdruck GmbH, Heidelberg, Germany
HeidelbergCement photo archives
Translation of the Annual Report 2010. The German version is binding.
Copies of the 2010 accounts of HeidelbergCement AG and further information are available on request. Kindly find this annual report and further information about HeidelbergCement on the Internet: www.heidelbergcement.com
Phone: + 49 6221 481- 227 Fax: + 49 6221 481- 217 E-mail: [email protected]
Phone: Institutional investors USA and UK: + 49 6221 481-925 Institutional investors EU and rest of the world: +49 6221 481-9568 Private investors: + 49 6221 481-256 Fax: + 49 6221 481-217 E-mail: [email protected]
The Annual Report 2010 was published on 17 March 2011.
Printed on environmentally friendly PEFC certified paper. Promotion of sustainable forest management – more information under www.pefc.org
| Financial calendar 2011 | |
|---|---|
| Interim Report January to March 2011 | 5 May 2011 |
| Annual General Meeting | 5 May 2011 |
| Half-Year Financial Report January to June 2011 | 29 July 2011 |
| Interim Report January to September 2011 | 3 November 2011 |
| Cement capacities | Million tonnes |
|---|---|
| Western and Northern Europe | |
| Belgium | 4.2 |
| Estonia | 1.3 |
| Germany | 12.7 |
| Netherlands | 4.6 |
| Norway | 1.7 |
| Sweden | 3.2 |
| United Kingdom | 6.0 |
| 33.6 | |
| Eastern Europe-Central Asia | |
| Bosnia-Herzegovina 1) | 0.4 |
| Czech Republic | 2.2 |
| Georgia | 1.6 |
| Hungary 1) | 1.6 |
| Kazakhstan | 1.6 |
| Poland | 5.0 |
| Romania | 6.1 |
| Russia | 3.0 |
| Ukraine | 5.6 |
| 27.2 | |
| North America | |
| US 1) | 11.3 |
| Canada | 2.4 |
| 13.8 | |
| Asia-Pacific | |
| Bangladesh | 1.5 |
| Brunei | 0.4 |
| China 1) | 7.2 |
| India | 3.3 |
| Indonesia | 18.6 |
| Australia 1) | 1.1 |
| 32.1 | |
| Africa-Mediterranean Basin | |
| Benin DR Congo |
0.3 0.6 |
| Gabon Ghana |
0.4 2.6 |
| Liberia | 0.2 |
| Sierra Leone Tanzania |
0.7 1.4 |
| Togo | 0.7 |
| Turkey 2) | 3.0 |
| 9.8 | |
| HeidelbergCement total | 116.4 |
| Aggregates reserves 2) | Billion tonnes |
|---|---|
| Western and Northern Europe | 3.4 |
| Eastern Europe-Central Asia | 1.0 |
| North America | 13.2 |
| Asia-Pacific | 1.3 |
| Africa-Mediterranean Basin | 0.5 |
| HeidelbergCement total | 19.3 |
HeidelbergCement is member of:
World Business Council for Sustainable Development
HeidelbergCement AG
Berliner Strasse 6 69120 Heidelberg, Germany www.heidelbergcement.com
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.