Quarterly Report • Aug 9, 2010
Quarterly Report
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Half-Year Financial Report January to June 2010
| Overview January to June 2010 | April - June | January - June | ||||
|---|---|---|---|---|---|---|
| EURm | 2009 | 2010 | 2009 | 2010 | ||
| Turnover | 3,011 | 3,296 | 5,370 | 5,476 | ||
| Operating income before depreciation (OIBD) in % of turnover |
635 21.1 % |
693 21.0 % |
836 15.6 % |
865 15.8 % |
||
| Operating income | 446 | 492 | 457 | 474 | ||
| Additional ordinary result | 44 | -37 | 47 | -51 | ||
| Result from participations | 26 | 6 | 20 | 4 | ||
| Earnings before interest and income taxes (EBIT) | 516 | 461 | 524 | 427 | ||
| Profit before tax | 357 | 241 | 162 | 23 | ||
| Net income from continuing operations | 367 | 174 | 328 | 17 | ||
| Net loss from discontinued operations | -3 | -7 | -10 | -12 | ||
| Profit for the period | 364 | 166 | 318 | 5 | ||
| Group share of profit | 333 | 120 | 270 | -79 | ||
| Investments | 141 | 169 | 290 | 292 |
| Interim Group management report | 4 |
|---|---|
| Business trend January to June 2010 | 4 |
| Prospects | 10 |
| Risk report | 12 |
| HeidelbergCement interim accounts | 13 |
| Group profit and loss accounts | 13 |
| Group statement of comprehensive income | 14 |
| Group cash flow statement | 15 |
| Group balance sheet | 16 |
| Group statement of changes in equity | 18 |
| Segment reporting / Notes | 20 |
| Notes to the interim Group accounts | 22 |
The global economy is continuing its recovery, although the development dynamics still clearly differ from region to region. The emerging countries of Asia, with China and India leading the way, are recording solid growth. While the economy in the industrial countries of Europe and North America has recovered considerably following the severe winter, Eastern Europe is making only a very hesitant recovery so far.
While HeidelbergCement's development in the first quarter of 2010 was characterised not only by economic factors but also, to a considerable extent, by the long period of wintry weather, demand for our building materials recovered significantly in the second quarter. Thanks to sustained growth in Asia-Pacific and Africa, as well as recovering markets in North America, the sales volumes for cement, aggregates, and ready-mixed concrete in the second quarter were above the figures for the same quarter of the previous year.
In the cement business line, the increased demand in the growth regions Asia-Pacific and Africa-Mediterranean Basin largely offset the decline in the other Group areas. Overall, the cement and clinker sales volumes of Heidelberg - Cement decreased by 1.6 % to 37.1 million tonnes (previous year: 37.7). While sales volumes had fallen by 5.4 % in the first quarter, our deliveries experienced growth of 1.2 % in the second quarter. At 108.3 million tonnes (previous year: 108.3), sales volumes of aggregates reached last year's level, with an increase of 0.1 %. Ready-mixed concrete sales volumes declined by 2.0 % to 16.4 million cubic metres (previous year: 16.8). Asphalt deliveries decreased by 15.4 % to 3.7 million tonnes (previous year: 4.4).
Group turnover rose by 2.0 % in the first half of the year to EUR 5,476 million (previous year: 5,370). P ositive exchange rate effects in all Group areas, particularly in Asia-Pacific, contributed EUR 282 million to turnover. Excluding exchange rate and consolidation effects, turnover decreased by 3.8 %. While turnover declined in all Group areas except for Asia-Pacific in the first quarter, it increased everywhere except for Eastern Europe-Central Asia in the second quarter. As a result, the first half of the year s aw double-digit increases in turnover in Asia-Pacific and a welcome rise in Africa-Mediterranean Basin; on the other hand, turnover declines were recorded in the Western and Northern Europe and North America Group areas, in addition to a significant decline in Eastern Europe-Central Asia. Operating income before depreciation (OIBD) improved by 3.4 % to EUR 865 million (previous year: 836). The OIBD margin rose to 15.8 % (previous year: 15.6 %). Operating income increased by 3.7 % to EUR 474 million (previous year: 457). Excluding exchange rate and consolidation effects, the operating income fell by 6.4 %. In the first half of the year, savings of EUR 124 million were achieved through the "FitnessPlus 2010" programme.
The additional ordinary result decreased by EUR 97.8 million to EUR -51.1 million (previous year: 46.7). Reduced divestment activity and increased restructuring expenses, particularly in North America and Germany, had an impact on this figure.
The decline of EUR 16.3 million in resul ts from participations to EUR 3.8 million (previous year: 20.1) is, to a large extent, the result of changes in the consolidation scope and impairment of other participations.
The change of EUR -41.8 million in the financial result, which brought the figure to EUR -403.7 million (previous year: -361.9), is essentially attributable to one-off effects of EUR 57.8 million in the other financial result, arising from the syndicated loan taken out in June 2009 and refinanced on 27 April 2010.
The profit before tax from continuing operations amounts to EUR 23.1 million (previous year: 161.9). Taxes on income rose by EUR 172.4 million t o EUR 6.3 million (previous year: - 166.1). The change mainly relates to the reversal of provisions for tax risks in Australia and the United Kingdom last year following the conclusion of tax audits. Net income from continuing operations amounted to EUR 16.8 million (previous year: 328.0).
Overall, the profit for the reporting period amounts to EUR 4.6 million (previous year: 318.3). The increase in profit attributable to minority interests by EUR 35 million to EUR 83.3 million (previous year: 48.3) is largely a consequence of the improvement in results and the changed participation in Indocement. The Group share therefore amounts to EUR -78.7 million (previous year: 270.0).
For the first half of 2010, the balance sheet t otal rose by EUR 3.1 billion to EUR 28.6 billion (previous year: 25.5). The increase in fixed assets by EUR 2.1 billion to EUR 22.9 billion (previous year: 20.8) is mainly due to exchange rate effects. Trade receivables rose by EUR 0.6 billion to EUR 1.9 billion (previous year: 1.3) as a result of seasonal factors. The changes on the liabilities side of the Group balance sheet with regard t o equity are mainly caused by currency exchange fluctuations amounting to EUR 1.9 billion. A particular impact on liabilities was exerted by the increase in interest-bearing liabilities by EUR 0.7 billion to EUR 10.1 billion (previous year: 9.4) as well as the rise in provisions for pensions by EUR 0.2 billion to EUR 1.1 billion (previous year: 0.9).
Deutsche Börse included HeidelbergCement in the D AX with effect from 21 June 2010, which means that we are now among the 30 larges t listed companies in Germany. In being promoted to the German benchmark index, we achieved a major corporate goal for 2010. Inclusion in the DAX reflects HeidelbergCement's successful development over the preceding twelve months. With the help of strict cost and cash management, we reorganised the Group's capital and financing s tructure, placing it on a solid ba sis. As one of the leading building ma terials manufacturers worldwide, HeidelbergCement has a highly attractive product portfolio as well as strong international market positions in Europe, Nor th America, Africa, and A sia-Pacific. Being promo ted to the D AX further strengthens HeidelbergCement's profile in the capital markets and as an international employer.
The successful capital increase in the autumn of 2009 together with a replacement of existing shares set the stage for HeidelbergCement to become the first company in the construction and building materials sector to join the DAX. The company's inclusion was based on the fast entry rule, because the share fulfilled the criteria for fast entry in terms of both market capitalisation and order book turnover.
On 19 January 2010, we issued two Eurobonds to national 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 bonds have fixed interest rates 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 %, giving yields to maturity of 6.75 % and 7.75 % respectively. The bonds are unsecured and rank p ari passu with all other capital market debt. The proceeds from the issue were exclusively used for the partial repayment of the syndicated loan from June 2009.
To secure liquidity in the long term, HeidelbergCement arranged and concluded a new syndicated credit facility with a volume of EUR 3 billion, with a group of 17 banks, on 27 April 2010. The new credit line refinanced the remaining liabilities from the credit agreement concluded in June 2009 with 60 banks and a term ending in December 2011 . The new credit facility is mainly intended as liquidity back-up and has a maturity date of 31 December 2013. Heidelberg - Cement thereby strengthens its financial and operational flexibility. At the same time, the security package granted to the creditors could be reduced significantly compared with the old credit facility. The syndicated credit facility can be used for cash drawdowns as well as for letters of credit and guarantees.
For cash drawdowns, the initial credit margin amounts to 3.0 % and is clearly lower than for the existing syndicated credit facility, ranging from 3.5 % to 1.5 % depending on the ratio of net debt t o EBITDA. For letter of credits and guarantees, the margin is at 75 % of the applicable margin for cash drawdowns. The commitment fee is 35 % of the applicable margin. The upfront fee amounts to 100 basis points, which will be amor tised during the tenor of the credit facility.
On 22 June 2010, we placed a Eurobond with an issue volume of EUR 650 million and a term ending on 15 December 2015 with institutional investors in Germany and abroad under our EUR 10 billion EMTN programme. T he closing date was 1 July 2010. The bond has a fixed interest rate of 6.75 % p.a. The issue price was 99.444 %, giving a yield to maturity of 6.875 %. The bond is unsecured and ranks p ari passu with all o ther capital market debt. The proceeds from the issue of the bond were used to further improve our maturity profile.
Following the successful placement of the EUR 650 million 6.75 % Eurobond on 24 June 2010, Fitch Ratings once again upgraded HeidelbergCement's credit rating by one notch. The current ratings from Standard & Poor's, Moody's, and Fitch Ratings are now BB-/B, Ba3/NP, BB/B.
According to the terms and c onditions of the Eurobond issued in J uly 2010, the two Eurobonds issued in J anuary 2010, and the three Eurobonds issued in October 2009, with total issue volumes of EUR 650 million, EUR 1.4 billion, and EUR 2.5 billion, 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 2,099 million and the consolidated interest expense of EUR 891 million are calculated on a pro forma basis in accordance with the terms and conditions of the bonds. As at 30 June 2010, the consolidated coverage ratio amounted to 2.36.
The net financial liabilities decreased by EUR 2.2 billion in comparison with 30 June 2009, amounting to EUR 9.1 billion (previous year: 11.3) as at 30 June 2010. The increase of EUR 0.6 billion in c omparison with the end of 2009 is primarily due to the rise in working capital, related to seasonal factors, and the exchange rate effect from the USD liabilities.
In the first half of the year, cash flow investments remained around last year's level at EUR 292 million (previous year: 290). Investments in tangible fixed assets (including intangible assets), which primarily relate to optimisation and environmental protection measures at our production sites, but also expansion projects in growing markets, accounted for EUR 266 million (previous year: 274) of this total. The investments in financial fixed assets reached EUR 26 million (previous year: 16); in addition to smaller acquisitions to round off shareholdings, these primarily related to the acquisition of the remaining 50 % of the shares in our Australian joint venture Pioneer North Queensland Pty Ltd.
In the countries of the Western and Northern Europe Group area, economic activity partly recovered to a considerable extent following the unusually severe winter. In Germany and the United Kingdom in particular, the economy is achieving stronger growth than expected. Following the losses incurred at the beginning of the year as a result of the winter weather, construction activity and sales volumes of building ma terials progressively recovered over the course of the second quarter.
In the cement business line, our deliveries were s till noticeably below last year's level in almost all countries at the end of the first half-year. Nevertheless, the Benelux countries, Denmark, and the Baltic States recorded slight increases in the second quarter, while Norway achieved a rise of o ver 30 %. By the end of J une, we had almost achieved last year's quantities in Norway and Sweden, thanks to recovering domestic markets and strengthened export levels. In the United Kingdom, our cement shipments rose slightly; however, shipments of blast furnace slag remained signifi cantly below last year's figure. The sales volumes achieved by the German plants were adversely affected by declining exports and delays in some infra structural projects. Overall, our cement and clinker s ales volumes in Western and Northern Europe fell by 8.9 % to 9.4 million tonnes (previous year: 10.3).
After a considerable decline in the first three months, deliveries of aggregates recovered strongly in all countries during the second quarter. Altogether, sales volumes rose in the first half of the year by 4.7 % to 32.9 million tonnes (previous year: 31.4).
Ready-mixed concrete sales volumes also recorded an upward trend in the second quarter; at the end of the first halfyear, deliveries were still 5.4 % below last year, at 5.6 million cubic metres (previous year: 5.9). The sales volumes of the asphalt operating line were just below last year's level, experiencing a decline of 1.4 %.
In the building products business line, which essentially comprises Hanson's building products in the United Kingdom, the sales volumes of all operating lines in the first six months were once again below the previous year's level, with the exception of lightweight blocks, although the declines were noticeably smaller in the second quarter. Thanks to the promptly introduced c apacity adjustments and c ost reduction measures, the building produc ts business line achieved a considerable increase in earnings.
The turnover of the W estern and Northern Europe Group area fell by 2.9 % to EUR 1,807 million (previous year: 1,861); excluding consolidation and exchange rate effects, the decline amounted to 7.7 %.
In the countries of the Eastern Europe-Central Asia Group area, construction activity is still significantly impaired by the fact that only a hesitant economic recovery is in progress; the very severe winter also had a negative impact on the construction industry in the firs t quarter. Heavy rainfall and delays in infra structural measures meant that this Group area was the only one to suffer a further decline in sales volumes and turnover in the second quarter.
In the cement business line, sales volumes decreased in the majority of countries, by a significant percentage in most cases. In Poland and Romania, the floods in May had a negative impact on our deliveries, as did the weak demand caused by economic factors. In contrast, slight increases were achieved in Russia, Kazakhstan, and Georgia; in Ukraine, our deliveries almost reached last year's level, following a significant rise in the second quarter. Overall, cement and clinker sales volumes in the first half-year remained 18.1 % below last year's level at 6.1 million tonnes (previous year: 7.4). Excluding consolidation effects, the decline amounted to 13.0 %.
Deliveries of aggregates decreased by 10.4 % to 7.8 million tonnes (previous year: 8.7); excluding consolidation effects, they dropped by 10.7 %. Ready-mixed concrete sales volumes declined by 11.3 % to 1.6 million cubic metres (previous year: 1.8); excluding consolidation effects, the decline amounted to 5.2 %.
The turnover of the Eastern Europe-Central Asia Group area fell by 19.0 % to EUR 482 million (previous year: 595); excluding consolidation and exchange rate effects, it decreased by 19.1 %.
In North America, HeidelbergCement is represented in the US and Canada. In the US, the economic recovery continued; however, with the job market experiencing only a hesitant recovery, uncertainties remain over future developments. In Canada, the economy is benefiting from the strong demand in raw materials and the recovery of the construction industry; initial indications suggest that economic growth may have been more restrained in the second quarter than in the strong first quarter.
Following the heavy slump in demand in the first quarter of 2010, which was caused by the exceptionally hard winter in large parts of the US, our building material deliveries improved considerably in the second quarter. The impact of the government infrastructure programme is increasingly being felt; by June 2010, 37 % of the funds earmarked for highway projects under the American Recovery and Reinvestment Act (ARRA) (around USD 27 billion) had been paid out.
In the second quarter, the cement and clinker sales volumes of our North American plants achieved a considerable increase of 8.7 %. The Canada market region made a particularly strong contribution to this growth, benefiting from the lively activity in the oil industry. However, our deliveries also increased noticeably in the North and South regions. The only area that failed to achieve last year's quantity was the west coast. Overall, our cement and clinker sales volumes experienced a slight decline of 1.8 %, falling only just below last year's level at the end of the first half-year, at 4.6 million tonnes (previous year: 4.7).
Deliveries of aggregates also recovered significantly in all market regions in the sec ond quarter, with an overall increase of 2.2 % achieved in the first half of the year, bringing the figure to 46.2 million tonnes (previous year: 45.3). In the second quarter, deliveries of ready-mixed concrete remained only slightly below last year's level; at the end of the first half-year, they were 9.4 % below last year's figure at 2.6 million cubic metres (previous year: 2.8). The asphalt operating line benefited t o a particularly strong degree from the infra structural measures in the sec ond quarter, resulting in an overall increase of 10.4 % in asphalt deliveries to 1.2 million tonnes (previous year: 1.1) in the first half of the year.
In the building products business line, which is heavily dependent on housing construction, deliveries in all operating lines, with the exception of bricks and precast prestressed concrete parts, were still below last year's level. While sales volumes in the US are only making a gradual recovery, solid demand is being recorded in Canada. Thanks to the cost reduction programmes, results have improved significantly in comparison with last year.
The total turnover in North America decreased by 4.0 % to EUR 1,363 million (previous year: 1,420); excluding exchange rate effects, the decline amounted to 4.5 %.
The emerging countries of Asia remained on course for growth in the second quarter: driven by the massive government economic stimulus programmes, the Chinese economy also grew markedly in the second quarter of 2010. The general economic conditions are also maint aining momentum in Indonesia, India, and Bangladesh. T he Australian economy benefits from the strong demand for raw materials from China and the robust level of domestic demand.
During the first half-year, cement and clinker deliveries of the A sia-Pacific Group area grew by a t otal of 11.4 % to 13.1 million tonnes (previous year: 11.7). In Indonesia, our subsidiary Indocement benefited from the extremely lively
Notes
construction activity, despite the long period of rainfall. As a result of the strong domestic demand, Indocement reduced its export deliveries considerably; the cement and clinker sales volumes increased by 10.1 % overall. At the Cirebon plant, two new cement mills were c ommissioned in July 2010, with a total grinding capacity of 1.5 million tonnes; production is scheduled to start in the third quarter of 2010. Indocement will then have a cement capacity of 18.6 million tonnes. Two additional cement mills are also set to be constructed at the Citeureup plant, with a capacity of 2 million tonnes, by mid 2012. In China, the sales volumes of our joint ventures in the provinces of Guangdong and Shaanxi rose by 3.8 %. Deliveries from our Indian cement plants remained just below last year's level. Overcapacities in the South led to price pressure in the South and the West of the country. In Bangladesh, a considerable increase was achieved in sales volumes and earnings. In the second quarter of 2010, construction began on an additional cement mill with a capacity of 0.8 million tonnes at the Chittagong grinding plant; commissioning is scheduled for the end of 2011. Since the takeover of Hanson in 2007, we hold a 25-per cent participation in the Australian cement company Cement Australia.
Aggregates sales volumes dropped by 5.8 % to 15.4 million tonnes (previous year: 16.4). The asphalt business also showed a decline. After a significant rise in demand in the second quarter, particularly in Australia and Indonesia, deliveries of ready-mixed concrete increased by 4.7 %, reaching 4.2 million cubic metres (previous year: 4.1).
In May 2010, we further strengthened our activities in Australia by purchasing the remaining 50 % of the shares in our joint venture Pioneer North Queensland Pty Ltd. The company operates two quarrying sites for sand, two hard rock quarries, an asphalt plant, and a ready-mixed concrete facility in the north of Queensland.
The turnover of the Asia-Pacific Group area rose by 22. 1 % to EUR 1,251 million (previous year: 1,025); excluding the consolidation and exchange rate effects, the increase amounted to 2.3 %.
The majority of African countries south of the Sahara are experiencing an acceleration of economic development and lively construction activity. While the economy in Turkey has recovered strongly thanks to rising exports, the crisis is not yet over in Spain.
In Africa, our cement deliveries underwent a welcome increase of 6.7 %. Sierra Leone, Ghana, Tanzania, Liberia, and Togo made a p articularly strong contribution to this growth. HeidelbergCement and IFC, a member of the W orld Bank Group, signed an a greement in May 2010 to promote the expansion of infra structure in the sub- Saharan countries by increasing the local cement supply. IFC and its finance p artner will acquire a minority participation in HeidelbergCement's African activities, putting in up to USD 180 million. In return, HeidelbergCement ha s made a commitment to invest these funds in the expansion of its cement capacities in the sub-Saharan countries supported by the International Development Association (IDA).
In Turkey, cement and clinker sales volumes of our joint venture Akçansa grew by 27.7 % as a result of strong domestic demand and increased export deliveries. Overall, the cement and clinker sales volumes of the Africa-Mediterranean Basin Group area increased by 13.8 % to 4.1 million tonnes (previous year: 3.6).
The sales volumes for aggregates decreased by 9.3 % to 7.0 million tonnes (previous year: 7.7). The decline is essentially due to the continuing weak construction activity in Spain. The asphalt business also showed a decline. In c ontrast, ready-mixed concrete deliveries rose by 11.4 % to 2.5 million cubic metres (previous year: 2.2).
The turnover of the Africa-Mediterranean Basin Group area grew by 4.7 % to EUR 459 million (previous year: 439); excluding exchange rate effects, the growth amounted to 1.6 %.
In the first half of the year , the trade volume of our subsidiary HC Trading grew by 15.4 % to 5.0 million tonnes (previous year: 4.3). The considerable growth in the clinker trade volume more than offset a slight decline in cement deliveries.
The Group Services business line also comprises our subsidiary HC Fuels, which is responsible for the purchase of fossil fuels. Overall, the turnover of Group Services rose by 33.6 % to EUR 346 million (previous year: 259); excluding exchange rate effects, the growth amounted to 32.5 %.
At the end of the firs t half of 2010, the number of empl oyees at HeidelbergCement w as 53,572 (previous year: 56,811). This decrease by 3,239 empl oyees results essentially from the l ocation optimisations and capacity adjustments, particularly in North America and the United Kingdom, which were linked with job cuts.
On 6 May 2010, the Annual General Meeting elected Dr.-Ing. Herbert Lütkestratkötter and Alan Murray to the Supervisory Board; they had been ap pointed members of the Supervisor y Board as shareholder representatives by the Local Court (Amtsgericht) of Mannheim in J anuary. They replace the former Supervisor y Board members Eduard Schleicher and Gerhard Hirth, who had resigned from their positions at the end of 2009 in response to the changes in the shareholder structure of HeidelbergCement.
No reportable transactions with related companies or persons took place in the reporting period beyond normal business relations.
The OECD and IMF have raised the forecasts for global economic growth for this year as a result of the positive development in the first half of the year. Development dynamics still clearly differ from region to region. In Asia, continued growth is anticipated, although growth rates in China are expec ted to weaken slightly in the second half of the year. Economic activity in Western Europe and North America has experienced a significant recovery following the long, hard winter, while Eastern Europe is still grappling with the crisis. According to all forecasts, uncertainties still remain over the strength and timescale of the economic recovery because of the high level of unempl oyment and national debt in individual countries.
HeidelbergCement continues to expect a noticeable positive business devel opment in the A sia-Pacific and Africa-Mediterranean Basin Group areas. In North America, on the basis of the considerable increase in expenditure on road construction, the recovery is expected to continue in the second half of the year. The extent and rate will depend on the spending behaviour in the US states. Decrease in the unemployment rate remains a decisive factor for the upswing in private residential construction. In Western Europe, HeidelbergCement continues to expect residential construction to stabilise during the remainder of 2010, along with a noticeable decline in commercial construction, and positive development in infrastructure. On a regional level, we expect a positive trend in construction in Northern Europe and the UK, and a slight volume decline in Germany and Belgium. Construction market in the Netherlands is weakening considerably. The recovery in Eastern Europe and Central A sia has been somewhat delayed. While construction activities in Poland are further stabilising, the Czech Republic and Romania show only a slow recovery. Further development in Hungary is expected to be weak. Rising cement consumption from a low level and a recovery of prices are expected in the countries of the eastern part of Eastern Europe and in Central Asia.
HeidelbergCement's sales volumes improved significantly in the second quarter, particularly because of the successful implementation of the infrastructure projects in North America and Western and Northern Europe. However, uncertainties still remain over future developments because of the sustained high level of unemployment and the still unclear effects of budgetary consolidation on infrastructure expenditure in individual countries. Therefore, HeidelbergCement will consistently continue with its "FitnessPlus 2010" cost-saving programme and keep working towards its savings goal of EUR 300 million for 2010. Debt reduction remains an important area of focus. At the same time the Group will continue with its targeted investments in future growth, particularly in cement activities, in the emerging countries of Asia, Africa, and Eastern Europe. With its improved cost structures, operational strength, and leading market positions, HeidelbergCement believes it is well-equipped to benefit to an above average degree from an economic upturn in the course of this year and the next.
The Managing Board of HeidelbergCement has not seen evidence of developments that would suggest changes for the business year 2010 regarding the forecasts and other statements made in the 2009 Annual Report on the expected development of HeidelbergCement and its business environment.
The expected future development of HeidelbergCement and the business environment o ver the course of 2010 is described in the prospects. As such, please note that this Half-Year Financial Report contains forward-looking statements based on the information currently available and the current assumptions and forecasts of the Managing Board of HeidelbergCement. Such statements are naturally subject to risks and uncer tainties 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 Half-Year Financial Report.
Business activities are always future-oriented and therefore involve risks. HeidelbergCement is likewise subject to various risks in its business activities that are not fundamentally avoided, but instead accepted, provided they are well balanced by the opportunities they present. Identifying risks, understanding them and reducing them systematically is the responsibility of the Managing Board and a key task for all managers. The Managing Board of Heidelberg - Cement 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. The internal control and risk management system, standardised across the Group, comprises several components that are carefully co-ordinated and systematically incorporated into the structure and workflow organisation. It is based on the financial resources, operational planning, and the risk management strategy established by the Managing Board.
After evaluation of the overall risk situation, there are, from today's perspective, deemed to be no identifiable risks, either at present or for the foreseeable future, tha t could threaten the existence of the Group or o ther significant risks whose occurrence would lead to a considerable deterioration of the Group's economic position.
Risks that may have a significant impact on our assets, financial and earnings position in the 2010 financial year and in the foreseeable future are described in det ail in the 2009 Annu al Report. For remarks on the s yndicated credit agreement of 16 June 2009, which matures in December 2011, in the context of financial risks, see the information included in this interim Group management report under the section "Financing structure on a solid basis". With the new syndicated credit line established on 27 April 2010, the remaining liabilities under the credit agreement entered into in June 2009 were replaced. The risks arising from v olatile energy and raw material prices as well as from exchange rate effects continue to be high. Although the forecasts for global economic growth this year have been raised, ongoing development is subject to uncertainties and risks. In the industrial nations, the most challenging aspect will be the consolidation of the state finances and the efforts to combat unemployment.
HeidelbergCement interim accounts
Notes
Loss per share – discontinued operations
| Group profit and loss accounts | April - June | January - June | ||
|---|---|---|---|---|
| EUR '000s | 2009 | 2010 | 2009 | 2010 |
| Turnover | 3,010,534 | 3,296,310 | 5,369,930 | 5,475,963 |
| Change in stock and work in progress | -108,209 | -36,693 | -154,078 | -17,277 |
| Own work capitalised | 1,834 | 1,523 | 3,490 | 3,036 |
| Operating revenue | 2,904,159 | 3,261,140 | 5,219,342 | 5,461,722 |
| Other operating income | 70,114 | 87,189 | 133,810 | 154,404 |
| Material costs | -1,095,810 | -1,257,646 | -2,081,340 | -2,210,887 |
| Employee and personnel costs | -525,525 | -550,334 | -1,042,382 | -1,036,518 |
| Other operating expenses | -718,335 | -846,971 | -1,393,209 | -1,503,939 |
| Operating income before depreciation (OIBD) | 634,603 | 693,378 | 836,221 | 864,782 |
| Depreciation of tangible fixed assets | -182,688 | -193,605 | -366,431 | -376,547 |
| Amortisation of intangible assets | -6,250 | -7,557 | -12,848 | -14,182 |
| Operating income | 445,665 | 492,216 | 456,942 | 474,053 |
| Additional ordinary income | 84,452 | 7,318 | 106,182 | 11,422 |
| Additional ordinary expenses | -39,987 | -43,831 | -59,472 | -62,505 |
| Additional ordinary result | 44,465 | -36,513 | 46,710 | -51,083 |
| Result from associated companies 1) | 24,249 | 14,095 | 18,533 | 13,173 |
| Result from other participations | 1,747 | -8,424 | 1,597 | -9,338 |
| Earnings before interest and taxes (EBIT) | 516,126 | 461,374 | 523,782 | 426,805 |
| Interest income | 10,276 | 21,814 | 21,399 | 47,328 |
| Interest expenses | -164,122 | -174,368 | -312,014 | -344,448 |
| Foreign exchange losses | 18,605 | 1,397 | -11,078 | -1,326 |
| Other financial result | -24,059 | -69,357 | -60,234 | -105,256 |
| Financial result | -159,300 | -220,514 | -361,927 | -403,702 |
| Profit before tax from continuing operations | 356,826 | 240,860 | 161,855 | 23,103 |
| Taxes on income | 10,184 | -66,964 | 166,109 | -6,263 |
| Net income from continuing operations | 367,010 | 173,896 | 327,964 | 16,840 |
| Net loss from discontinued operations | -2,808 | -7,412 | -9,679 | -12,267 |
| Profit for the period | 364,202 | 166,484 | 318,285 | 4,573 |
| Thereof minority interests | 31,228 | 46,355 | 48,274 | 83,320 |
| Thereof Group share of profit | 332,974 | 120,129 | 270,011 | -78,747 |
| Earnings per share in EUR (IAS 33) | ||||
| Earnings / loss per share attibutable to the parent entity | 2.66 | 0.64 | 2.16 | -0.42 |
| Earnings / loss per share – continuing operations | 2.69 | 0.68 | 2.24 | -0.35 |
| 1) Net result from associated companies | 19,606 | 10,215 | 14,709 | 10,014 |
|---|---|---|---|---|
-0.03
-0.04
-0.08
-0.07
| Group statement of | April - June | April - June | January - June | January - June | ||||
|---|---|---|---|---|---|---|---|---|
| comprehensive income | ||||||||
| EUR '000s | 2009 | 2009 | 2010 | 2010 | 2009 | 2009 | 2010 | 2010 |
| Profit for the period | 364,202 | 166,484 | 318,285 | 4,573 | ||||
| IAS 19 Actuarial gains and losses | -116,876 | -18,806 | -75,196 | -181,706 | ||||
| Income taxes | 34,060 | 4,901 | 21,581 | 51,819 | ||||
| -82,816 | -13,905 | -53,615 | -129,887 | |||||
| IAS 39 Cash flow hedges | 2,854 | 4,548 | -6,148 | 6,233 | ||||
| Income taxes | -770 | -980 | 1,670 | -1,401 | ||||
| 2,084 | 3,568 | -4,478 | 4,832 | |||||
| IAS 39 Available for sale assets | 1,708 | 10,728 | -1,122 | 11,836 | ||||
| Income taxes | -32 | -3,520 | 1,215 | -3,295 | ||||
| 1,676 | 7,208 | 93 | 8,541 | |||||
| IFRS 3 Business combinations | 1,721 | 1,438 | 9,665 | |||||
| Income taxes | -482 | 88 | -3,182 | 88 | ||||
| 1,239 | 1,526 | 6,483 | 88 | |||||
| Other | -38 | -1,428 | -550 | |||||
| Income taxes | 32 | 662 | ||||||
| -6 | -1,428 | 112 | ||||||
| Currency translation | 134,936 | 1,129,489 | 491,933 | 1,925,055 | ||||
| Income taxes | 1,916 | 8,492 | ||||||
| 134,936 | 1,131,405 | 491,933 | 1,933,547 | |||||
| Other comprehensive income | 57,113 | 1,128,374 | 440,528 | 1,817,121 | ||||
| Total comprehensive income | 421,315 | 1,294,858 | 758,813 | 1,821,694 | ||||
| Relating to minority interests | 28,540 | 102,916 | 35,435 | 185,992 | ||||
| Relating to HeidelbergCement AG | ||||||||
| shareholders | 392,775 | 1,191,942 | 723,378 | 1,635,702 |
HeidelbergCement interim accounts
Notes
| Group cash flow statement | January - June | ||
|---|---|---|---|
| EUR '000s | 2009 | 2010 | |
| Net income from continuing operations | 327,964 | 16,840 | |
| Taxes on income | -166,109 | 6,263 | |
| Interest income/expenses | 290,615 | 297,120 | |
| Dividends received | 14,741 | 9,362 | |
| Interest paid | -545,863 | -433,878 | |
| Taxes paid | -93,687 | -40,885 | |
| Elimination of non-cash items | 395,090 | 663,314 | |
| Cash flow | 222,751 | 518,136 | |
| Changes in operating assets | 78,969 | -509,946 | |
| Changes in operating liabilities | -106,559 | 67,113 | |
| Changes in working capital | -27,590 | -442,833 | |
| Decrease in provisions through cash payments | -135,994 | -144,631 | |
| Cash flow from operating activities – continuing operations | 59,167 | -69,328 | |
| Intangible assets | -6,624 | -2,772 | |
| Tangible fixed assets | -267,403 | -263,034 | |
| Financial fixed assets | -16,254 | -26,045 | |
| Investments (cash outflow) | -290,281 | -291,851 | |
| Proceeds from fixed asset disposals | 338,924 | 68,670 | |
| Cash from changes in consolidation scope | -2,444 | 770 | |
| Cash flow from investing activities – continuing operations | 46,199 | -222,411 | |
| Dividend payments – HeidelbergCement AG | -15,000 | -22,500 | |
| Dividend payments – minority shareholders | -29,141 | -45,230 | |
| Proceeds from bond issuance and loans | 9,009,933 | 2,798,567 | |
| Repayment of bonds and loans | -8,456,451 | -2,447,362 | |
| Cash flow from financing activities – continuing operations | 509,341 | 283,475 | |
| Net change in cash and cash equivalents – continuing oper ations | 614,707 | -8,264 | |
| Effect of exchange rate changes | 17,759 | 120,107 | |
| Cash and cash equivalents at 1 January | 843,646 | 854,368 | |
| Cash and cash equivalents at 30 June | 1,476,112 | 966,211 |
| Non-current assets Intangible assets Goodwill 9,804,195 10,867,440 Other intangible assets 264,627 288,746 11,156,186 10,068,822 Tangible fixed assets Land and buildings 4,904,125 5,366,070 Plant and machinery 4,412,359 4,738,074 Fixtures, fittings, tools and equipment 236,280 243,661 Payments on account and assets under construction 667,271 815,465 10,220,035 11,163,270 Financial fixed assets Investments in associates 349,361 366,356 Financial investments 79,346 69,983 Loans to participations 19,020 20,969 Other loans and derivative financial instruments 45,781 136,786 493,508 594,094 Fixed assets 20,782,365 22,913,550 Deferred taxes 380,592 268,771 Other long-term receivables 183,262 238,745 Long-term tax assets 16,570 21,452 Total non-current assets 21,250,968 23,554,339 Current assets Stock Raw materials and consumables 595,331 666,411 156,628 Work in progress 147,254 Finished goods and goods for resale 601,002 663,223 Payments on account 12,499 27,609 1,356,086 1,513,871 Receivables and other assets Short-term financial receivables 99,671 99,124 |
Assets EUR '000s |
31 Dec. 2009 | 30 June 2010 | |
|---|---|---|---|---|
| Trade receivables 1,298,770 1,922,015 |
||||
| 430,389 Other short-term operating receivables 361,928 |
||||
| Current tax assets 238,380 85,897 |
||||
| 1,998,749 2,537,425 |
||||
| Financial investments and derivative financial instruments 47,914 51,482 |
||||
| Cash and cash equivalents 854,368 966,211 |
||||
| Total current assets 4,257,117 5,068,989 Balance sheet total 25,508,085 28,623,328 |
Notes
| Liabilities | ||
|---|---|---|
| EUR '000s | 31 Dec. 2009 | 30 June 2010 |
| Shareholders' equity and minority interests | ||
| Subscribed share capital | 562,500 | 562,500 |
| Share premium | 5,539,377 | 5,539,377 |
| Retained earnings | 6,166,476 | 5,936,432 |
| Other components of equity | -1,867,366 | -24,906 |
| Equity attributable to shareholders | 10,400,987 | 12,013,403 |
| Minority interests | 602,029 | 746,724 |
| Total equity | 11,003,016 | 12,760,127 |
| Non-current liabilities | ||
| Debenture loans | 4,898,865 | 6,536,511 |
| Bank loans | 2,981,880 | 1,657,067 |
| Other long-term financial liabilities | 300,317 | 249,746 1) |
| 8,181,062 | 8,443,324 | |
| Provisions for pensions | 756,712 | 1,007,324 |
| Deferred taxes | 892,367 | 900,804 |
| Other long-term provisions | 1,023,818 | 1,123,980 |
| Other long-term operating liabilities | 204,388 | 235,338 |
| Long-term tax liabilities | 79,798 | 88,792 |
| 2,957,083 | 3,356,238 | |
| Total non-current liabilities | 11,138,145 | 11,799,562 |
| Current liabilities | ||
| Debenture loans (current portion) | 699,467 | 770,182 |
| Bank loans (current portion) | 196,220 | 254,567 |
| Other short-term financial liabilities | 285,629 | 651,165 1) |
| 1,181,316 | 1,675,914 | |
| Provisions for pensions (current portion) | 115,139 | 140,945 |
| Other short-term provisions | 176,331 | 211,644 |
| Trade payables | 931,560 | 1,057,417 |
| Other short-term operating liabilities | 763,112 | 866,826 |
| Current income taxes payables | 199,466 | 110,893 |
| 2,185,608 | 2,387,725 | |
| Total current liabilities | 3,366,924 | 4,063,639 |
| Total liabilities | 14,505,069 | 15,863,201 |
| Balance sheet total | 28,623,328 | |
| 25,508,085 |
1) Includes puttable minorities with an amount of EUR '000s 35,353 (previous year: 36,938)
| Group statement of changes in equity | |||||
|---|---|---|---|---|---|
| Subscribed | Share | Retained | Cash flow hedge | ||
| share capital | premium | earnings | reserve | ||
| EUR '000s | |||||
| 1 January 2009 | 375,000 | 3,470,892 | 6,316,964 | -14,234 | |
| Profit for the period | 270,011 | ||||
| Other comprehensive income | -53,503 | -4,233 | |||
| Total comprehensive income | 216,508 | -4,233 | |||
| Adjustments consolidation scope | |||||
| and other changes | |||||
| Dividends | -15,000 | ||||
| 30 June 2009 | 375,000 | 3,470,892 | 6,518,472 | -18,467 | |
| 1 January 2010 | 562,500 | 5,539,377 | 6,166,476 | -13,339 | |
| Profit for the period | -78,747 | ||||
| Other comprehensive income | -129,887 | 4,832 | |||
| Total comprehensive income | -208,634 | 4,832 | |||
| Adjustments consolidation scope | |||||
| and other changes | 1,090 | ||||
| Dividends | -22,500 | ||||
| 30 June 2010 | 562,500 | 5,539,377 | 5,936,432 | -8,507 |
HeidelbergCement interim accounts
Notes
| 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 |
|
| 8,260,844 | 540,703 | 7,720,141 | -2,442,715 | -2,442,548 | 4,901 | 9,166 | |
| 318,285 | 48,274 | 270,011 | |||||
| 440,528 | -12,839 | 453,367 | 506,870 | 504,527 | 6,483 | 93 | |
| 758,813 | 35,435 | 723,378 | 506,870 | 504,527 | 6,483 | 93 | |
| 113,764 | 113,764 | ||||||
| -44,141 | -29,141 | -15,000 | |||||
| 9,089,280 | 660,761 | 8,428,519 | -1,935,845 | -1,938,021 | 11,384 | 9,259 | |
| 11,003,016 | 602,029 | 10,400,987 | -1,867,366 | -1,906,541 | 39,585 | 12,929 | |
| 4,573 | 83,320 | -78,747 | |||||
| 1,817,121 | 102,672 | 1,714,449 | 1,844,336 | 1,830,875 | 88 | 8,541 | |
| 1,821,694 | 185,992 | 1,635,702 | 1,844,336 | 1,830,875 | 88 | 8,541 | |
| 3,147 | 3,933 | -786 | -1,876 | -1,738 | -138 | ||
| -67,730 | -45,230 | -22,500 | |||||
| 12,760,127 | 746,724 | 12,013,403 | -24,906 | -75,666 | 37,935 | 21,332 |
| Group areas January - June 2010 | Western and Northern | Eastern Europe | |||
|---|---|---|---|---|---|
| EURm | Europe 2009 |
2010 | Central Asia 2009 |
2010 | |
| External turnover | 1,835 | 1,782 | 593 | 482 | |
| Inter-Group areas turnover | 25 | 26 | 2 | ||
| Turnover Change to previous year in % |
1,861 | 1,807 -2.9 % |
595 | 482 -19.0 % |
|
| Operating income before depreciation (OIBD) as % of turnover |
267 14.3 % |
226 12.5 % |
135 22.8 % |
95 19.7 % |
|
| Depreciation | -121 | -133 | -46 | -46 | |
| Operating income as % of turnover |
146 7.9 % |
92 5.1 % |
89 15.0 % |
49 10.1 % |
|
| Results from participations | 15 | 38 | -3 | ||
| Impairments | -21 | -1 | |||
| Reversal of impairments | 5 | 3 | |||
| Other additional result | |||||
| Additional ordinary result | -17 | 2 | |||
| Earnings before interest and taxes (EBIT) | 161 | 114 | 86 | 50 | |
| Capital expenditures1) | 70 | 62 | 113 | 87 | |
| Segment assets2) OIBD as % of segment assets |
6,948 3.8 % |
7,064 3.2 % |
1,741 7.8 % |
1,945 4.9 % |
|
| Number of employees as at 30 June | 14,925 | 14,282 | 10,448 | 9,355 | |
| Average number of employees | 15,044 | 14,299 | 10,452 | 9,324 |
1) Capital expenditures = in the segment columns: tangible fixed assets and intangible assets investments; in the reconciliation column: financial fixed assets investments
2) Segments assets = tangible fixed assets and intangible assets
HeidelbergCement interim accounts
Notes
| North America | Asia-Pacific | Africa-Med. Basin | Group Services | Reconciliation Overhead-Other |
Continuing operations |
||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 |
| 1,420 | 1,363 | 1,008 | 1,239 | 423 | 439 | 90 | 170 | 5,370 | 5,476 | ||
| 16 | 12 | 16 | 20 | 169 | 175 | -228 | -233 | ||||
| 1,420 | 1,363 -4.0 % |
1,025 | 1,251 22.1 % |
439 | 459 4.7 % |
259 | 346 33.6 % |
-228 | -233 | 5,370 | 5,476 2.0 % |
| 118 8.3 % |
147 10.8 % |
264 25.8 % |
361 28.8 % |
83 18.9 % |
77 16.8 % |
24 9.3 % |
9 2.7 % |
-55 24.2 % |
-50 21.4 % |
836 15.6 % |
865 15.8 % |
| -134 | -129 | -53 | -67 | -15 | -17 | -9 | 2 | -379 | -391 | ||
| -17 -1.2 % |
18 1.3 % |
211 20.6 % |
294 23.5 % |
68 15.5 % |
60 13.1 % |
24 9.2 % |
9 2.7 % |
-64 28.3 % |
-48 20.7 % |
457 8.5 % |
474 8.7 % |
| -13 | 6 | -23 | 1 | 2 | 20 | 4 | |||||
| -22 | |||||||||||
| 8 | |||||||||||
| 47 | -36 | 47 | -36 | ||||||||
| 47 | -36 | 47 | -51 | ||||||||
| -17 | 5 | 218 | 271 | 69 | 62 | 24 | 9 | 47 | -36 | 524 | 427 |
| 50 | 61 | 28 | 50 | 12 | 6 | 16 | 26 | 290 | 292 | ||
| 8,197 1.4 % |
8,933 1.6 % |
2,786 9.5 % |
3,663 9.8 % |
706 11.8 % |
676 11.4 % |
34 70.4 % |
38 24.7 % |
20,413 4.1 % |
22,319 3.9 % |
||
| 14,999 | 13,807 | 13,842 | 13,606 | 2,545 | 2,467 | 52 | 55 | 56,811 | 53,572 | ||
| 15,149 | 13,391 | 13,938 | 13,560 | 2,564 | 2,455 | 52 | 55 | 57,199 | 53,085 | ||
The interim Group accounts for HeidelbergCement AG as of 30 June 2010 were prepared according to the International Financial Reporting Standards (IFRS) for interim reporting as applicable in the European Union.
The same accounting and valuation methods were principally applied as in the preparation of the Group annu al accounts as of 31 December 2009, as well as IAS 34 "Interim Financial Reporting".
The announcements or amendments to announcements issued by the IASB listed below are applicable for the first time in the 2010 financial year:
The amendments relevant for the HeidelbergCement Group relate to the revised versions of IFRS 3 and IAS 27.
The revisions to IFRS 3 and IAS 27 have resulted in amendments to the accounting of business combinations.
The major changes from the previous version of IFRS 3 can be summarised as follows: Minority interests may now be shown either at fair value or as their proportionate interest in the net identifiable assets. Transaction costs connected with the acquisition of companies are expensed immediately as incurred. Contingent considerations are measured at fair value and recognised either as a liability or as shareholders' equity. Changes in the fair value after the acquisition date are no longer recognised as an adjustment to goodwill but are instead recognised in profit or l oss. The aforementioned amendments may affect the amount of goodwill, the minority interests, and the profit for the financial year.
For successive business combinations, a revaluation of the existing shareholders' equity ratios takes place at the acquisition date. Gains or losses arising from the revaluation are recognised in profit or loss.
The major amendments to IAS 27 relate to the accounting of changes in ownership interes ts as well as minority interests. Changes in the ownership interest that do not result in the loss of control are recognised as equity transactions between owners and do not lead to recognition of revenue, nor to any adjustment to goodwill. If there is a loss of control, the assets and liabilities of the subsidiar y are derecognised under consideration of their impact on profit or loss. Remaining shares are now recognised at fair value. Differences between the existing carrying amount and the fair value are recognised in profit or loss. Shares of losses are now attributable to minorities even if this means that the minority interests are negative.
The interim Group accounts as of 30 June 2010 were not subject to any audits or reviews.
Notes
The production and sales of building materials are seasonal due to the regional weather patterns. Particularly in our important markets in Europe and North America, business figures of the first and fourth quarters are adversely affected by the winter months, whereas the warmer months contribute to higher sales and profit numbers in the second and third quarters.
With effect from the beginning of the 2010 financial year, HeidelbergCement has reorganised its reporting structure. It is now geographically divided into six Group areas: Western and Northern Europe, Eastern Europe-Central Asia, North America, Asia-Pacific, Africa-Mediterranean Basin, and Group Services. The Western and Northern Europe area includes the Benelux countries, Denmark, Germany, the United Kingdom, Norw ay, Sweden, and the Baltic States. Bosnia-Herzegovina, Georgia, Kazakhstan, Croatia, Poland, Romania, Russia, the Czech Republic, Slovakia, the Ukraine, and Hungary are part of the Eastern Europe-Central Asia Group area. North America remains unchanged and is made up of the United S tates and Canada. Asia-Pacific consists of Bangladesh, Brunei, China, India, Indonesia, Mala ysia, Singapore, as well as Australia, and the Africa-Mediterranean Basin Group area comprises our activities in Africa, Israel, Spain, and Turkey. As in the past, our trading activities are bundled within the Group Services unit.
Our main activities, cement and aggregates, are reflected separately in the reporting segments. The building products business line remains unchanged, and in the Concrete, Service, and Others section we mainly report on downstream activities, such as ready-mixed concrete and asphalt.
The previous year's values have been restated accordingly.
An impairment test on goodwill is performed annu ally within the HeidelbergCement Group, in the four th quarter once the operational three-year plan has been prepared, or if there are reasons to suspect impairment. On 30 June 2010, management conducted sensitivity analyses with respect to the discount rates for those units that, as already indicated in the 2009 Annual Report, exhibit a less extensive scope for assessment. They did not necessitate the recognition of impairment.
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 11,434,000 and was paid in cash. The company was previously accounted for using the equity method. The fair value of the equity participation amounted t o EUR 11 ,434,000. The revaluation of the shareholding resul ted in a l oss of EUR 1,140,000, which was recognised in the additional ordinary expenses.
The purchase price allocation has not yet been completed. The provisional fair values of the identifiable assets and liabilities, which are based on the carrying amounts, are shown in the following table.
| Preliminary amounts recognised for assets and liabilities as of the aquisition date | |
|---|---|
| EUR '000s | 30 June 2010 |
| Intangible assets | 336 |
| Tangible fixed assets | 13,314 |
| Deferred taxes | 466 |
| Stocks | 610 |
| Trade receivables | 3,570 |
| Other short-term receivables and other assets | 1,637 |
| Cash at bank and in hand | 580 |
| Total assets | 20,513 |
| Provisions | 184 |
| Liabilities | 7,887 |
| Total liabilities | 8,071 |
| Net assets | 12,442 |
The provisionally recognised goodwill of EUR 9,275,000, which is no t deductible for tax purposes, reflects the synergy potential arising from the business combination.
Since the a cquisition date, Pioneer Nor th Queensland ha s contributed EUR 2,671,000 to the turno ver and EUR 334,000 to the profit for the financial year . If the business combination had taken place at the beginning of the year, the Group's turnover would have been EUR 11,764,000 higher and the profit for the financial year EUR 319,000 higher.
| Turnover development by Group areas and business lines January - June 2010 |
Cement | Aggregates | products | Building | Concrete Service Other |
Intra Group eliminations |
Total | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| EURm | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 |
| Western and Northern Europe | 790 | 765 | 313 | 367 | 265 | 210 | 769 | 741 | -277 | -276 | 1,861 | 1,807 |
| Eastern Europe-Central Asia | 475 | 372 | 49 | 48 | 113 | 101 | -42 | -38 | 595 | 482 | ||
| North America | 423 | 411 | 381 | 403 | 371 | 330 | 375 | 362 | -129 | -142 | 1,420 | 1,363 |
| Asia-Pacific | 546 | 758 | 163 | 198 | 16 | 14 | 385 | 417 | -87 | -136 | 1,025 | 1,251 |
| Africa-Med. Basin | 297 | 320 | 46 | 41 | 129 | 132 | -33 | -34 | 439 | 459 | ||
| Total | 2,531 | 2,626 | 952 | 1,056 | 652 | 554 | 1,771 | 1,754 | -568 | -627 | 5,339 | 5,363 |
| Group Services | 259 | 346 | ||||||||||
| Inter-area turnover | -228 | -233 | ||||||||||
| Continuing operations | 5,370 | 5,476 |
HeidelbergCement interim accounts
Notes
| Exchange rates EUR |
Exchange rates at reporting day | Average exchange rates | |||
|---|---|---|---|---|---|
| 31 Dec. 2009 | 30 June 2010 | 01- 06 / 2009 | 01- 06 / 2010 | ||
| USD | US | 1.4316 | 1.2234 | 1.3345 | 1.3276 |
| AUD | Australia | 1.5956 | 1.4566 | 1.8713 | 1.4861 |
| CAD | Canada | 1.5058 | 1.3019 | 1.6087 | 1.3731 |
| CNY | China | 9.7720 | 8.2965 | 9.1176 | 9.0618 |
| GBP | Great Britain | 0.8862 | 0.8185 | 0.8929 | 0.8704 |
| GEL | Georgia | 2.3846 | 2.2316 | 2.2101 | 2.3265 |
| GHC | Ghana | 2.0674 | 1.7534 | 1.8384 | 1.9042 |
| HKD | Hong Kong | 11.0995 | 9.5274 | 10.3447 | 10.3170 |
| IDR | Indonesia | 13,457.04 | 11,112.14 | 14,720.83 | 12,189.97 |
| INR | India | 66.4262 | 56.8147 | 65.6054 | 60.6852 |
| KZT | Kazakhstan | 212.5497 | 180.2680 | 193.4363 | 195.4591 |
| MYR | Malaysia | 4.8989 | 3.9663 | 4.7843 | 4.3852 |
| NOK | Norway | 8.2938 | 7.9448 | 8.9079 | 8.0263 |
| PLN | Poland | 4.0955 | 4.1351 | 4.4700 | 4.0095 |
| RON | Romania | 4.2327 | 4.3569 | 4.2289 | 4.1595 |
| RUB | Russia | 43.3932 | 38.2423 | 44.1264 | 39.9447 |
| SEK | Sweden | 10.2505 | 9.5090 | 10.8697 | 9.8052 |
| CZK | Czech Republic | 26.3085 | 25.6767 | 27.1284 | 25.7477 |
| HUF | Hungary | 269.0835 | 284.5628 | 289.4448 | 272.2061 |
| TZS | Tanzania | 1,899.49 | 1,704.87 | 1,752.24 | 1,799.63 |
| TRY | Turkey | 2.1402 | 1.9351 | 2.1524 | 2.0226 |
On 19 January 2010, HeidelbergCement issued two Eurobonds to national 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. T he bonds have fixed interest rates 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 %, giving yields to maturity of 6.75 % and 7.75 % respectively. The bonds are unsecured and rank pari passu with all other capital market debts. The proceeds from the issue were exclusively used for the repayment of the syndicated loan from June 2009.
To secure liquidity in the long term, HeidelbergCement arranged and concluded a new syndicated credit line with a volume of EUR 3 billion, with a group of 17 banks, on 27 April 2010. The new credit line refinanced the remaining liabilities from the credit agreement concluded in June 2009 with 60 banks and a term ending in December 2011 . Primarily intended as a liquidity reserve, the new credit line has a term ending on 31 December 2013. This increases HeidelbergCement's financial and operational flexibility. At the same time, it significantly reduced the lender's collateral in comparison with the previous credit agreement.
The actuarial gains and losses were adjusted for the material countries based on the discount rates applicable as at the closing date.
No reportable transactions with related parties took place in the reporting period beyond normal business relations.
Since 31 December 2009, there have been no significant changes in contingent liabilities.
On 1 July 2010, HeidelbergCement issued a Eurobond with an issue volume of EUR 650 million and a term ending on 15 December 2015 via its EUR 10 billion EMTN programme. The bond has a fixed interest rate of 6.75 % p.a. The issue price was 99.444 %, giving a rate of return of 6.875 %. The bond is unsecured and ranks pari passu with all other capital market debt. As with the Eurobonds issued in January 2010 and October 2009, the bond terms and conditions include a limitation on incurring additional debt. The proceeds from the issue of the bond were used t o further improve our maturity profile.
HeidelbergCement and IFC, a member of the W orld Bank Group, signed an agreement in May 2010 to strengthen and support HeidelbergCement's activities in the countries south of the Sahara. IFC and its finance p artner will acquire a minority participation in HeidelbergCement's African activities, putting in up to USD 180 million. The first part, with a volume of USD 60 million, will be completed at the end of July 2010.
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the interim management report of the Group includes a fair review of the development and performance of the business and the position of the Group , together with a description of the princip al opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.
Heidelberg, 30 July 2010
HeidelbergCement AG
The Managing Board
The Company has its registered office in Heidelberg, Germany. It is registered with the Commercial Register at the Local Court of Mannheim (Amtsgericht Mannheim) under HRB 330082.
Contact: Group Communication Phone: + 49 6221 481- 227 Fax: + 49 6221 481- 217 E-mail: info@heidelbergcement .com
Phone: Institutional investors: + 49 6221 481-925 Private investors: + 49 6221 481-256 Fax: + 49 6221 481-217 E-mail: [email protected]
Interim Financial Report January to September 2010 4 November 2010
Annual General Meeting 2011 5 May 2011
HeidelbergCement AG Berliner Strasse 6 69120 Heidelberg, Germany www.heidelbergcement.com
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