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Heidelberg Materials AG
Quarterly Report • Aug 5, 2024
202_10-q_2024-08-05_89614b43-e7d8-43bd-9006-348250f0f4af.pdf
Quarterly Report
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Half-Year Financial Report January to June 2024
Revenue $-4.6 \%$
$€ 10.0$ bn
$\mathrm{RCO}^{11}+1.7 \%$
$€ 1,202 \mathrm{~m}$
Adjusted earnings per share ${ }^{21}+€ 0.63$
$€ 4.28$
Employees +234 FTE
51,726
people employed by Heidelberg Materials at the end of June 2024
Heidelberg Materials
half-year financial figures
Increase in results
despite declining volumes
Strong development in North America
Further margin improvement
Share buyback programme and Green Finance
First tranche of new share buyback programme started First Green Bond issued under the Green Finance Framework
CO $_{2}$ emissions -1.7\%
529 kg
specific net $\mathrm{CO}_{2}$ emissions per tonne of cementitious material (Scope 1)
Outlook for 2024 confirmed
RCO between $€ 3.0$ bn and $€ 3.3$ bn, ROIC at around $10 \%$,
slight reduction in specific net $\mathrm{CO}_{2}$ emissions expected.
Key financial figures
| January-June | ||||
|---|---|---|---|---|
| 2023 | 2024 | Change | Like-for-like ${ }^{\text {D }}$ | |
| Revenue | 10,473 | 9,994 | $-4.6 \%$ | $-4.6 \%$ |
| Result from current operations before depreciation and amortisation (RCOBD) | 1,787 | 1,828 | $2.3 \%$ | $2.3 \%$ |
| RCOBD margin in \% | $17.1 \%$ | $18.3 \%$ | $124 \mathrm{bps}^{\text {D }}$ | 124 bps |
| Result from current operations (RCO) | 1,189 | 1,202 | $1.1 \%$ | $1.7 \%$ |
| RCO margin in \% | $11.4 \%$ | $12.0 \%$ | 68 bps | 75 bps |
| Profit for the period | 783 | 624 | $-20.3 \%$ | |
| Profit for the period attributable to | ||||
| Heidelberg Materials AG shareholders | 719 | 574 | $-20.1 \%$ | |
| Earnings per share in $€^{D}$ | 3.86 | 3.16 | $-0.70$ | |
| Cash flow from operating activities | 25 | 56 | $+100 \%$ | |
| Net debt | 6,686 | 6,771 | 85 | |
| Leverage ratio | $1.67 x$ | $1.57 x$ | $-0.10 x$ |
[^0]
[^0]: 1) Adjusted for scope and currency effects.
2) Change in basis points (bps).
3) Attributable to Heidelberg Materials AG shareholders.
Interim Group management report
Fundamentals of the Group
Changes during the reporting period
Managing Board members and responsibilities
Since 1 January 2024, the majority of the Northern and Eastern Europe-Central Asia Group area has been combined with Western and Southern Europe to form the Europe Group area. Since then, member of the Managing Board Jon Morrish, previously responsible for Western and Southern Europe, has been responsible for this newly created Group area.
Managing Board member Hakan Gurdal, who was previously responsible for the Group area Africa-Eastern Mediterranean Basin, has also been responsible for Kazakhstan and Russia since January 2024. Since then, the Group area has been called Africa-Mediterrane-an-Western Asia.
Since January 2024, Roberto Callieri, previously General Manager Italy, has been the new member of the Managing Board responsible for Asia in the Asia-Pacific Group area. He succeeded Kevin Gluskie, whose term as a member of the Managing Board ended at the end of January 2024. Chief Financial Officer René Aldach has assumed additional responsibility for Australia in this Group area since January 2024.
Axel Conrads, previously President of the Midwest region in the USA, assumed the newly created Managing Board position of Chief Technical Officer in February 2024. Since then, he has been responsible for the three global technical Competence Centers: Cement (CCC), Aggregates \& Asphalt (CCA), and Readymix (CCR).
On 20 March 2024, the Supervisory Board extended the mandate of the Chairman of the Managing Board Dr Dominik von Achten, which expires at the end of January 2025, by three years until 31 January 2028.
Heidelberg Materials also announced in June that the Supervisory Board had appointed Dr Katharina Beumelburg as a new member of the Managing Board and Chief Sustainability \& New Technologies Officer effective 1 October 2024. Katharina Beumelburg will succeed Dr Nicola Kimm who will leave the company after completing her three-year term of office on 31 August 2024. Dr Katharina Beumelburg joins Heidelberg Materials from SLB, the world's largest global energy technology company, where she has been a member of the Executive Management team as Chief Strategy and Sustainability Officer since May 2021.
Changes to the Supervisory Board
With the conclusion of the Annual General Meeting on 16 May 2024, the term of office of the former Supervisory Board ended and that of the new Supervisory Board, elected by the Annual General Meeting and the employees respectively, commenced. Ms Birgit Jochens and the previous Deputy Chairman of the Supervisory Board, Mr Heinz Schmitt are no longer as employee representatives members of the Supervisory Board. Their successors are Ms Katja Karcher and Mr Markus Oleynik. Mr Gunnar Groebler, Chief Executive Officer of Salzgitter AG, was newly elected to the Supervisory Board as shareholder representative; he succeeded Prof. Dr Marion Weissenberger-Elbl, who was no longer available for re-election to the Supervisory Board. As before, Dr Bernd Scheifele remains Chairman of the Supervisory Board. Mr Werner Schraeder was elected as Deputy Chairman.
Economic report
Economic environment
The global economy has expanded at a moderate pace so far this year, and the marked differences in economic momentum previously observed have narrowed, particularly in industrialised countries. While the robust US economy lost momentum, the economy in Europe picked up noticeably after a period of stagnation. At the same time, production in emerging countries - and in China in particular - saw a much stronger increase than before. Overall, a slight upturn in global trade was recorded. Labour markets were surprisingly strong, and the decline in energy and food prices has eased inflationary pressures considerably. However, despite the gradual loosening of monetary policy, global inflation has barely fallen recently, primarily due to a persistent rise in the price of services.
Development of volumes
In the first half of 2024, volumes declined in all business lines, despite a slight recovery in the second quarter.
Overall, the Group's cement and clinker deliveries were slightly below the previous year's level, with variations in performance in the individual Group areas. While volumes declined noticeably in the Europe Group area, North America and Asia-Pacific recorded moderate and slight increases in volumes, respectively. In Afri-ca-Mediterranean-Western Asia, deliveries were at the previous year's level.
Deliveries of aggregates declined noticeably. While volumes in Europe remained only slightly below the previous year's level, the other Group areas recorded significant decreases in volumes.
Deliveries of ready-mixed concrete also declined in all Group areas, in some cases significantly, with the greatest decreases in volumes being recorded in North America.
Asphalt deliveries recorded a moderate decline. While volumes in Europe and Asia-Pacific remained almost stable, they fell significantly in North America.
Earnings position
Group revenue in the first six months of 2024 fell moderately by $4.6 \%$ in comparison with the previous year to $€ 9,994$ million (previous year: 10,473). The decline in revenue was primarily due to reduced volumes in all Group areas compared with the same period of the previous year. Excluding scope and currency effects, the decline also amounted to $4.6 \%$. Changes to the scope of consolidation of $€ 150$ million had a positive impact on revenue, while currency effects of $€ 155$ million had a negative impact. Sustainable products accounted for $42.8 \%$ of revenue in the cement business line.
In the reporting period, material costs dropped significantly by $8.9 \%$ to $€ 3,767$ million (previous year: 4,134). This decrease was due, in part, to a decline in energy costs. Excluding scope and currency effects, material costs were also $8.9 \%$ below the previous year's level. Other operating expenses decreased by $3.0 \%$ to $€ 3,049$ million (previous year: 3,143). Excluding currency and scope effects, the decline amounted to $3.2 \%$ and was mainly attributable to lower freight costs. Other operating income increased by $12.4 \%$ to $€ 260$ million (previous year: 231). Excluding scope and currency effects, the rise amounted to $7.5 \%$. At $€ 1,722$ million (previous year: 1,725), personnel costs were at the previous year's level. The result from equity accounted
investments (REI) rose by $9.9 \%$ to $€ 98$ million (previous year: 89). Adjusted for scope and currency effects, the rise amounted to $21.0 \%$.
The result from current operations before depreciation and amortisation (RCOBD) rose slightly by $2.3 \%$ to $€ 1,828$ million (previous year: 1,787). The increase was due in particular to the lower material costs and price adjustments, which partially offset the decline in volumes. Excluding scope and currency effects, the rise also amounted to $2.3 \%$. The RCOBD margin, i.e. the ratio of the result from current operations before depreciation and amortisation to revenue, increased by 124 basis points to $18.3 \%$ (previous year: 17.1).
The result from current operations (RCO) rose slightly by $1.1 \%$ to $€ 1,202$ million (previous year: 1,189). Changes to the scope of consolidation improved the result by $€ 19$ million, while currency effects had a negative impact of $€ 25$ million.
The additional ordinary result amounted to €- 204 million (previous year: 40) and mainly includes restructuring and impairment losses in connection with planned plant closures in Europe. In the previous year, the result was particularly influenced by income from the disposal of equity accounted investments. Earnings before interest and taxes (EBIT) fell accordingly by $€ 231$ million to $€ 998$ million (previous year: 1,229).
The financial result fell slightly by $€ 5$ million to $€-107$ million (previous year: -102) due to higher net interest expenses. Profit before tax from continuing operations decreased by $€ 236$ million to $€ 892$ million (previous year: 1,127 ).
Expenses for income taxes decreased by $€ 42$ million to $€ 263$ million (previous year: 305), in particular due to the lower profit before tax. Net income from continuing operations fell by $€ 193$ million to $€ 629$ million (previous year: 822).
The net loss from discontinued operations amounted to $€-6$ million (previous year: -40 ) and includes income and expenses incurred in connection with operations of the Hanson Group that were discontinued in previous years and result from provisions for damages and environmental obligations.
Overall, the profit for the period totalled $€ 624$ million (previous year: 783). The profit attributable to non-controlling interests decreased by $€ 15$ million to $€ 49$ million (previous year: 64). The profit attributable to Heidelberg Materials AG shareholders consequently amounted to $€ 574$ million (previous year: 719). Earnings per share attributable to Heidelberg Materials AG shareholders in accordance with IAS 33 fell by $€ 0.70$ to $€ 3.16$ (previous year: 3.86). Excluding the additional ordinary result, the adjusted profit attributable to Heidelberg Materials AG shareholders increased by $€ 100$ million to $€ 778$ million (previous year: 678) and adjusted earnings per share rose by $€ 0.63$ to $€ 4.28$ (previous year: 3.64 ).
Business trend in the Group areas
Europe
Volumes for the Europe Group area in the cement business line fell moderately in comparison with the previous year. This reflects continuing weak market demand in Western and Southern Europe as well as in some Nordic countries. Positive developments in the countries of Eastern Europe could not offset this completely.
In the aggregates business line, volumes were only slightly below the previous year's level. The volume increases in Eastern Europe could not fully offset the volume losses in Western and Southern Europe. In the Nordic countries, deliveries were at the previous year's level.
The ready-mixed concrete business recorded significant declines compared with the previous year. While volumes in Eastern Europe increased slightly, deliveries in Western and Southern Europe as well as Northern Europe remained significantly below the previous year's level. Volumes of the asphalt division in the United Kingdom declined slightly.
The restructuring of plants in Germany, Spain, and France was further advanced as part of the site optimisation. The company's recycling activities were strengthened through acquisitions (see Portfolio optimisation section). The groundbreaking ceremony for the carbon capture project of Linde and Heidelberg Materials was celebrated in Lengfurt (see Sustainability activities section).
Revenue of the Europe Group area decreased by $5.7 \%$ to $€ 4,573$ million (previous year: 4,846 ); excluding scope and currency effects, the decline amounted to $6.5 \%$. In all countries, sales prices were increased in all
business lines, but this did not fully offset the decline in volumes.
The result from current operations before depreciation and amortisation fell by $6.6 \%$ to $€ 808$ million (previous year: 864); on a like-for-like basis, the decline was $5.9 \%$. At $€ 551$ million (previous year: 611), the result from current operations was $9.7 \%$ below the previous year's level; on a like-for-like basis, the decline amounted to $8.7 \%$.
North America
Compared with the previous year, the volumes of our North American plants in the cement business line increased moderately in the first six months of the year. While volumes in the Midwest region grew significantly as a result of the modernisation of and capacity increase at the Mitchell cement plant, the Northwest region recorded a slight decline in volumes and the Northeast region a significant decrease. Deliveries in the Southeast region rose sharply due to the fly ash volumes of The SEFA Group, which was acquired last year.
Deliveries of aggregates declined significantly due to reduced construction activity in the Northwest, Midwest, and Northeast regions as well as unfavourable weather conditions in core markets of the Southwest region. The Southeast region recorded a moderate increase in volumes thanks to the continued high level of construction activity.
In the ready-mixed concrete operating line, deliveries declined significantly due to weaker construction activity in key vertically integrated markets in the Northwest, Northeast, and Southeast regions. Adverse weather conditions also had a negative impact on the core markets of the Southwest region.
In the asphalt operating line, deliveries fell as construction activity in key vertically integrated markets in the Northeast and Northwest regions slowed.
Cement volumes of our joint venture Texas Lehigh Cement declined slightly.
At $€ 2,403$ million (previous year: 2,434), revenue in North America was $1.3 \%$ below the previous year's level. Excluding scope and currency effects, the decrease amounted to $3.1 \%$. All North American business lines increased their prices significantly in the first half of 2024.
The result from current operations before depreciation and amortisation rose sharply by $28.2 \%$ to $€ 524$ million (previous year: 409). On a like-for-like basis, the increase amounted to $26.5 \%$. The result from current operations rose by $34.6 \%$ to $€ 350$ million (previous year: 260). On a like-for-like basis, the increase amounted to $34.1 \%$.
Asia-Pacific
During the first half of the year, the cement and clinker deliveries of the Asia-Pacific Group area were slightly above the previous year's level. Excluding scope effects, deliveries declined slightly.
In Indonesia, our cement and clinker deliveries increased significantly in the first six months due to the acquisition of the Grobogan plant in November 2023, which has significantly strengthened our position in Central Java. In India, our cement and clinker deliveries in the first half of the year were slightly below the previous year's level. This was largely due to excess capacities in South India, a situation that is further intensifying competition. Weak domestic demand for infrastructure projects and declining export markets
adversely affected deliveries from our plants in Thailand. In Bangladesh, our cement volumes fell significantly due to low construction activity as a result of the negative macroeconomic environment.
The increased use of alternative fuels contributed to the reduction in $\mathrm{CO}_{2}$ emissions.
In the aggregates business line, our deliveries were significantly below the previous year's level. Both Malaysia and Indonesia recorded lower volumes due to operational capacity issues. In addition, a weakening market and unsettled weather impacted our deliveries in Australia.
Deliveries of ready-mixed concrete declined slightly. While Malaysia and Indonesia benefited from the recovery in construction activity in the infrastructure sector and in large-scale projects, volumes in Australia remained moderately below the previous year's level. Deliveries from the asphalt operating line increased in Malaysia due to higher government spending on road construction; they declined in Australia.
In China, the cement deliveries of our joint ventures in the provinces of Guangdong and Shaanxi decreased slightly. In Australia, on the other hand, our joint venture Cement Australia recorded a moderate rise in volumes.
Revenue of the Asia-Pacific Group area fell by 6.6\% to $€ 1,691$ million (previous year: 1,811 ); excluding scope and currency effects, the decline amounted to $5.9 \%$.
The result from current operations before depreciation and amortisation decreased by $5.8 \%$ to $€ 270$ million (previous year: 287); on a like-for-like basis, the decline amounted to $11.3 \%$. The result from current operations fell by $7.8 \%$ to $€ 151$ million (previous year: 164); on a like-for-like basis, it dropped by $17.3 \%$.
Africa-Mediterranean-Western Asia
Overall, the cement and clinker volumes of the Afri-ca-Mediterranean-Western Asia Group area in the first half of the year were at the previous year's level. In some countries, construction activity weakened due to a difficult geopolitical and macroeconomic environment.
By adapting our product portfolio and introducing new products with a lower clinker content in various countries, we were able to reduce $\mathrm{CO}_{2}$ emissions compared with the previous year. Our project for the production of calcined clay with our partner CBI Ghana is on schedule. In Egypt, our heat recovery system will be put into operation in the next few months. With regard to renewable energies, we are currently analysing plans for further solar plants to supplement the existing systems in various countries, including Morocco and Tanzania. We are also planning a platform in Morocco to increase the use of alternative fuels.
Deliveries of aggregates dropped significantly compared with the same period of the previous year. In the ready-mixed concrete operating line, volume growth in Egypt only partially offset the decrease in volumes in Israel. The asphalt business in Israel saw a sharp downturn in the first half of 2024.
Our Turkish joint venture Akçansa succeeded in increasing both domestic deliveries and exports in the first half of 2024, resulting in a moderate rise in Akçansa's cement and clinker volumes overall. Deliveries of ready-mixed concrete were also above the previous year's level in the first half of 2024, whereas deliveries of aggregates fell slightly.
Revenue of the Africa-Mediterranean-Western Asia Group area fell by $9.9 \%$ to $€ 1,041$ million (previous year: 1,156 ) owing to severe currency devaluations; excluding scope and currency effects, revenue fell by $3.7 \%$.
The result from current operations before depreciation and amortisation fell by $13.4 \%$ to $€ 231$ million (previous year: 266); on a like-for-like basis, it dropped by $8.3 \%$. The result from current operations decreased by $19.0 \%$ to $€ 167$ million (previous year: 206); on a like-for-like basis, the result fell by $12.3 \%$.
Group Services
The Group Services business unit comprises the activities of Heidelberg Materials Trading - one of the world's largest trading companies primarily for cement, clinker, and secondary cementitious materials, but also for solid and alternative fuels as well as other building materials and additives.
The trade volume of Heidelberg Materials Trading increased significantly in the first half of 2024 due to increased demand for clinker and an expansion of coal trading.
Revenue of the Group Services business unit fell by $3.2 \%$ to $€ 699$ million (previous year: 723). The decline is attributable to lower prices due to intensified competition in the face of rather weak global demand.
The result from current operations before depreciation and amortisation rose by $38.5 \%$ to $€ 23$ million (previous year: 16). The result from current operations improved by $38.3 \%$ to $€ 22$ million (previous year: 16 ).
Statement of cash flows
As a result of the good operating business development, particularly in North America, a cash inflow from operating activities of $€ 56$ million (previous year: 25) was generated in the first half of 2024. Interest received grew by $€ 47$ million to $€ 127$ million (previous year: 79), mainly as a result of higher proceeds from interest rate swaps and short-term investments. Interest paid increased by $€ 23$ million to $€ 225$ million (previous year: 202), in particular due to higher interest payments for bonds. At $€-1,264$ million (previous year: $-1,265$ ), changes in working capital were at the level of the corresponding reporting period of the previous year, while payments from the utilisation of provisions fell by $€ 19$ million to $€ 93$ million (previous year: 112).
Cash outflow from investing activities increased by $€ 104$ million to $€ 644$ million (previous year: 540). Cash-relevant investments decreased by $€ 37$ million to $€ 749$ million (previous year: 785). Thanks to continued investment discipline, investments in property, plant and equipment and intangible assets, less subsidies received, totalled $€ 434$ million, $€ 23$ million below the previous year's figure. Payments for the acquisition of subsidiaries and other business units, less cash and cash equivalents acquired, amounted to $€ 288$ million (previous year: 277) in the reporting period and were primarily attributable to the acquisition of the Mick George Group and the B\&A Group in the United Kingdom and the ACE Group in Malaysia. In the corresponding reporting period of the previous year, payments were mainly related to the acquisition of the RWG Group and the SER Group in Germany and The SEFA Group in the USA. Cash-relevant divestments decreased significantly in the reporting period and amounted to $€ 105$ million (previous year: 246). This was largely due to proceeds from the disposal of financial assets, joint ventures, and associates reducing by $€ 150$ million to $€ 50$ million (previous year: 200). Proceeds in the corresponding reporting period of the previous year primarily resulted from the disposals of the joint venture in Georgia and the Chaney Group in the USA. In the reporting period, proceeds from the disposal of subsidiaries and other business units, less the cash and cash equivalents disposed of, totalled $€ 27$ million (previous year: 9) as a result of the sale of the French cement transport business Tratel S.a.s.
Financing activities led to a cash outflow of $€ 850$ million (previous year: cash inflow of 356) in the reporting period. The continuation of the progressive dividend policy at Heidelberg Materials AG resulted in a dividend payment of $€ 546$ million (previous year: 484). Dividend payments to non-controlling interests increased by $€ 12$ million to $€ 48$ million (previous year: 36). In the reporting period, the first tranche of the second Heidelberg Materials AG share buyback programme led to payments totalling $€ 90$ million. In addition, the cash-relevant changes in ownership interests in subsidiaries resulted in a cash outflow totalling $€ 17$ million, which was related to the acquisition of a $0.7 \%$ stake in PT Indocement Tunggal Prakarsa Tbk., Indonesia. The cash outflow arising from the net proceeds from and repayment of bonds and loans amounting to $€ 154$ million (previous year: cash inflow of 875) includes the issue of a bond with a volume of $€ 700$ million as well as the repayment of a bond of $€ 750$ million and of lease liabilities of $€ 113$ million. In the corresponding reporting period of the previous year, this item mainly recognised cash inflows from the issue of a bond with a volume of $€ 750$ million and of commercial papers amounting to $€ 330$ million as well as the repayment of the European Investment Bank-promoted loan of $€ 180$ million and of lease liabilities of $€ 113$ million.
Balance sheet
As at 30 June 2024, the balance sheet total decreased by $€ 125$ million to $€ 35,346$ million (previous year: 35,471) in comparison with 31 December 2023.
The following notes explain the significant changes in the balance sheet items.
Intangible assets increased by $€ 371$ million to $€ 9,056$ million (previous year: 8,685). Adjusted for positive currency effects of $€ 137$ million, the rise amounted to $€ 234$ million, which is primarily attributable to goodwill arising from the business combinations in the United Kingdom and Malaysia.
Trade receivables rose by $€ 614$ million to $€ 2,619$ million (previous year: 2,005) due to seasonal factors. In addition, other current receivables and assets increased by $€ 191$ million to $€ 798$ million (previous year: 607). Cash and cash equivalents decreased by $€ 1,463$ million to $€ 1,804$ million (previous year: 3,267). The change in cash and cash equivalents is presented in the Statement of cash flows.
On the equity and liabilities side, equity increased by $€ 176$ million to $€ 18,551$ million (previous year: 18,375). Total comprehensive income amounted to $€ 930$ million. In the reporting period, own shares of $€ 90$ million were acquired and dividends of $€ 546$ million were distributed to shareholders of Heidelberg Materials AG. The dividends distributed to non-controlling interests amounted to $€ 102$ million, of which $€ 48$ million had been paid as at 30 June 2024.
Trade payables decreased by $€ 256$ million to $€ 2,901$ million (previous year: 3,157) due to seasonal factors.
Net debt increased by $€ 1,477$ million to $€ 6,771$ million (previous year: 5,294). At the end of June 2024, the leverage ratio, i.e. the ratio of net debt to result from current operations before depreciation and amortisation over the last 12 months, stood at 1.57 x (end of June 2023: 1.67x).
Development of key performance indicators
In addition to the result from current operations, return on invested capital (ROIC) and specific net $\mathrm{CO}_{2}$ emissions are part of our key performance indicators.
ROIC is reported as scheduled once a year at the end of the business year. A quarterly reporting is not carried out.
In the first half of 2024, specific net $\mathrm{CO}{2}$ emissions decreased by $1.7 \%$ to 529 kg per tonne of cementitious material compared to 30 June 2023. In particular, the reduction of the clinker factor and the increase in the alternative fuel rate led to lower $\mathrm{CO}{2}$ emissions.
Portfolio optimisation
In January 2024, Heidelberg Materials sold its French cement transportation business Tratel S.a.s. to five regional transport specialists. The divestment of the cap-ital-intensive French transport business enables greater focus on Heidelberg Materials France's key activities and is part of Heidelberg Materials' ongoing portfolio optimisation focusing on its core business in promising market positions.
Furthermore, Heidelberg Materials announced in January 2024 that it would cease clinker production at its Hanover cement plant in the second half of 2024. The
Hanover site will continue to operate as a grinding facility. The adjustment comes after a substantial decline in cement volumes following weak construction demand in Germany due to the current economic environment as well as a stronger alignment of the company's cement portfolio towards low-carbon products, leading to the production of cement with reduced clinker content. As a result of the adjustment, the company strengthens the capacity utilisation of its neighbouring Westphalian cement plants, which will be supplying cement clinker to Hanover in the future.
In April 2024, Heidelberg Materials also announced a site optimisation in its French cement business. Driving its ambitious decarbonisation strategy, Heidelberg Materials France plans a restructuring that shall result in the closure of its sites in Beffes (Département Cher) and Villiers-au-Bouin (Département Indre-et-Loire) as of October 2025. This restructuring project also follows a stronger alignment of the company's cement portfolio towards low-carbon products which include reduced clinker content, putting a strong focus on investments in the green transformation. At the same time, Heidelberg Materials France is faced with a significant decline in cement volumes caused by weak construction demand due to the current market environment.
Heidelberg Materials will also continue to optimise its cement portfolio in Spain. In June 2024, the company decided to stop clinker production at its Aforga plant in northern Spain and to continue operating the site as a grinding plant. The clinker required to supply the markets in northern Spain and southwest France will be produced at the neighbouring Bilbao plant. This gives Heidelberg Materials Spain the opportunity to focus on the production of cement with a lower proportion of
clinker in order to offer customers in Spain and southwest France a wide range of sustainable products.
In the United States, Heidelberg Materials has successfully completed the conversion of its cement plant in Speed, Indiana, into a slag grinding facility. Following the opening of its new state-of-the-art cement plant in Mitchell, Indiana, last year, the company ceased portland cement production at the Speed plant and converted the facility to produce slag cement from locally sourced slag granules. Using slag cement in concrete production can reduce $\mathrm{CO}_{2}$ emissions significantly. This will enable Heidelberg Materials to better meet the increasing demand for sustainable products in the fast-growing Midwest market.
In May 2024, Heidelberg Materials acquired ACE Group, the largest supplier of pulverised fly ash in Malaysia. The aim of the acquisition is to strengthen the company's footprint in this growing market and meet the rising demand for fly ash in order to reduce the $\mathrm{CO}_{2}$ intensity of cement.
To strengthen its activities in the circular economy sector, Heidelberg Materials acquired B\&A Group, one of the leading construction soil and aggregates recycling companies in South West England, in May 2024. The company specialises in the supply of recycled and primary aggregates as well as site clearance, earthworks, land remediation, and sustainable land regeneration. The acquisition of the Mick George Group, which was announced at the end of 2022, was also completed in May 2024. The company is the market leader in the recycling of construction and demolition waste in the east of the United Kingdom and operates four recycling plants, eight waste handling stations, eleven aggregates quarries, and ten ready-mixed concrete plants.
With the acquisitions announced in July 2024 of Victory Rock, a producer of high-quality aggregates for concrete and asphalt in Texas, Highway Materials, one of the largest independent suppliers of aggregates, asphalt, and recycled materials in the Greater Philadelphia market, and Carver Sand \& Gravel, the largest aggregates producer in the Albany, New York, area, Heidelberg Materials is further expanding its presence in three core markets in the USA while also adding to its rapidly growing portfolio of circular solutions across North America. Further information on these three new acquisitions can be found in the Events after the reporting period section.
Financing
In the first half of 2024, Heidelberg Materials AG repaid a bond of $€ 750$ million at maturity, as scheduled.
On 19 June 2024, Heidelberg Materials AG issued its first Green Bond with an issue volume of $€ 700$ million and a term ending in 2034 under the $€ 10$ billion EMTN programme and the Green Finance Framework introduced in May 2024. The range of projects financed by this bond extends from the modernisation of plants, for example to increase the use of alternative fuels, to the expansion of carbon capture technologies.
Dividend announcement
For the 2023 financial year, the Annual General Meeting on 16 May 2024 resolved to issue a dividend of $€ 3.00$ per share (previous year: $€ 2.60$ ), corresponding to a dividend yield of $3.0 \%$. The total payout thus amounted to $€ 546$ million.
Second share buyback programme
In October 2023, Heidelberg Materials completed its share buyback programme, which was launched in 2021, and repurchased a total of around 16.3 million shares at a total price of around $€ 1$ billion. All shares acquired under this buyback programme were cancelled with a reduction in the subscribed share capital. Following the cancellation of the approximately 4.1 million treasury shares from the third and final tranche on 21 February 2024, the subscribed share capital of Heidelberg Materials AG amounts to $€ 546,204,360$ and is divided into 182,068,120 no-par value shares.
In order to allow its shareholders to continue participating in the company's success beyond the progressive dividend policy, Heidelberg Materials launched a new share buyback programme on 23 May 2024. The programme has a total volume of up to $€ 1.2$ billion and will run until the end of 2026. It is envisaged that the share buyback will be carried out in three tranches. The first tranche with a volume of $€ 350$ to $€ 400$ million is expected to be completed by 25 November 2024 at the latest. By 26 July 2024, a total of around 1.6 million treasury shares had been acquired via the stock exchange under the first tranche at a total price of around $€ 154.5$ million.
Sustainability activities
In the first quarter of 2024, Heidelberg Materials once again expanded its project portfolio for carbon capture, utilisation, and storage (CCUS).
In Bulgaria, the construction of a pilot $\mathrm{CO}{2}$ capture plant at Heidelberg Materials' plant in Devnya was successfully completed with $\mathrm{CO}{2}$ capture testing starting mid-May. In a first step towards full-scale implementa-
tion, the ANRAV.beta pilot project will demonstrate OxyCal capture technology on an industrial scale. Additionally, we will conduct performance tests using 100\% alternative fuels. Both are crucial preparatory work for the overall ANRAV project, which, as first project in Eastern Europe, is intended to encompass the entire CCUS value chain.
In North America, Heidelberg Materials was selected in March 2024 for funding of up to US $\$ 500$ million by the U.S. Department of Energy to advance industrial-scale CCUS at its new state-of-the-art cement plant in Mitchell, Indiana. The planned CCUS project will capture and prepare for storage or utilisation approximately 2 million tonnes of $\mathrm{CO}_{2}$ each year starting in 2030.
In mid-June 2024, six oxygen tanks for the oxyfuel kiln were installed at the Mergelstetten cement plant as part of the catch\&climate carbon capture project. In the oxyfuel process, pure oxygen is introduced into the kiln system instead of air. The oxyfuel facility, for which over $€ 120$ million will be invested, is expected to be commissioned in the first quarter of 2025.
Also in June 2024, Linde and Heidelberg Materials hosted a groundbreaking ceremony for the Cap2U-Car-bon-Capture-Project at the Lengfurt cement plant. The facility is expected to go into operation in 2025 with a planned storage capacity of 70,000 tonnes $\mathrm{CO}_{2}$ per year. Due to its purity, the processed gas will be suitable for use in both the food and chemical industries.
In its CCUS projects, Heidelberg Materials always benefits from the valuable experience gained from its pioneering project in Brevik, Norway. There, mechanical completion is scheduled for the end of 2024. In 2025, the first carbon-captured net-zero cement will be ready for delivery to customers in Europe, which was
presented under the evoZero ${ }^{\circledR}$ brand in November 2023. Among others, the Nobel Center project has decided to use evoZero for the construction of its new building in Stockholm. Furthermore, the Swedish construction company Skanska signed an agreement with Heidelberg Materials in June 2024 to order evoZero.
In addition to evoZero, Heidelberg Materials launched the evoBuild ${ }^{\circledR}$ brand in January 2024, under which the company's sustainable products, which are either low-carbon (cement and concrete), circular (concrete) or both, will be marketed in future.
In addition to its focus on $\mathrm{CO}_{2}$ reduction and circularity, Heidelberg Materials is focusing on numerous other sustainability aspects. Together with partner organisations, Heidelberg Materials aims to raise awareness of biodiversity associated with quarries and nature as a whole. In February 2024, our longstanding partnership with BirdLife International, the world's largest network of nature conservation organisations, was extended for a further three years, paving the way for ongoing cooperation.
In June, Heidelberg Materials launched the sixth edition of the Quarry Life Award, its nature-based competition, across more than 15 countries worldwide. Researchers, students, local communities, and NGOs can pitch ideas for sustainable quarry management. The Quarry Life Award is in line with Heidelberg Materials' commitment to working towards the Global Goal for Nature contributing to nature positive.
At the end of July, Heidelberg Materials has been selected for award negotiation to receive up to $\$ 5$ million in funding from the US Environmental Protection Agency
(EPA) to create a cloud-based tool that can help concrete, cement, aggregates, and asphalt producers to facilitate the creation of high-quality Environmental Product Declarations.
Employees
At the end of the first half of 2024, the number of employees at Heidelberg Materials stood at 51,726 (previous year: 51,492 ), based on full-time equivalents. The increase of around 230 employees essentially results from two opposing developments. On the one hand, around 1,900 jobs were cut across the Group as a result of portfolio optimisation measures, the realisation of synergies, efficiency gains in sales and administration, as well as location optimisations. On the other hand, around 2,130 employees joined the Group, largely due to the expansion of our range of circular materials in the United Kingdom and North America.
Change in forecast report
Outlook 2024
In its latest forecast from July 2024, the International Monetary Fund (IMF) anticipates global economic growth of $3.2 \%$ in the current year, compared with $3.3 \%$ in the previous year. At the same time, the IMF's experts note growing tensions in global trade and political risks. These are primarily geopolitical in nature and also result from the uncertainties associated with the US presidential election. For instance, an escalation of trade disputes would have a negative impact on global economic activity. This could cause inflation to accelerate again, due to higher prices for imports across
supply chains, for example. As a result of price increases in the services sector, which are slowing the overall decline in inflation, the IMF expects interest rates to also remain high.
While economic activity in emerging countries is largely stable, the economy in industrialised nations is still subdued. Economic growth in the eurozone is expected to increase by $0.9 \%$ in 2024. In Germany, the economy is predicted to grow by $0.2 \%$. For the USA, the IMF anticipates economic growth of $2.6 \%$ in the current year.
The market environment in the construction sector continues to be influenced by geopolitical tensions as well as high energy prices and inflation. In the light of the persistently tough economic environment, Euroconstruct's June forecast predicts that construction activity in Europe will decrease by $2.7 \%$ in 2024, slightly more than in the previous year. This negative trend is primarily due to significant challenges in new residential construction in most European countries. Other attenuating factors include persistently high prices and interest rates, high government budget deficits, and financing costs. These problems will also further impact building construction, while civil engineering activity is expected to increase in 2024. In the USA, construction activity is likely to continue to benefit from government economic stimulus programmes and infrastructure projects.
Forecast of key performance indicators
At the end of the first six months of 2024, Heidelberg Materials expects demand in the construction sector to stabilise at a low level on a global level, even though inflation and persistently high financing costs are likely to continue to have a negative impact on residential construction in particular. We continue to expect cost developments on the energy and raw materials markets to remain volatile. The focus will therefore continue to be on price adjustments and strict cost management.
As published in the Annual and Sustainability Report 2023, the Managing Board expects a result from current operations (RCO) of between $€ 3.0$ billion and $€ 3.3$ billion for the 2024 financial year.
ROIC is expected to be around $10 \%$.
For specific net $\mathrm{CO}_{2}$ emissions per tonne of cementitious material, the Managing Board expects a further slight reduction compared to 2023.
Risk and opportunity report
As one of the world's leading manufacturers of building materials and solutions, Heidelberg Materials is exposed to numerous risks and opportunities due to its international business activity. Heidelberg Materials' risk policy is based on the Group strategy, which focuses, among other things, on both sustainably preserving and increasing enterprise value. An effective risk and opportunity management system serves to identify these risks and opportunities at an early stage and to systematically assess and reduce them. Consequently, the risk management process represents a central element of the Group's value-oriented corporate governance.
At Heidelberg Materials, risks and opportunities are monitored and managed across the Group with the help of integrated planning and monitoring systems. Provided that the risks are consistent with the legal and ethical principles of entrepreneurial activity and are well balanced by the opportunities they present, they are classified as acceptable. Operational management in each Group country and in the central Group departments are directly responsible for identifying and addressing risks and opportunities at an early stage. Risks and opportunities are recorded in the annual operational plan and followed up as part of monthly financial reporting.
Risks and opportunities that may have a significant impact on our assets, financial, and earnings position in the 2024 financial year and in the foreseeable future are described in detail in the Annual and Sustainability Report 2023 in the Risk and opportunity report chapter on page 147 f .
Following a sharp decline from 2022 into 2023, prices on the raw materials and energy markets largely stabilised in the second half of 2023. In the first half of 2024, they were less volatile than in previous years and were slightly below the level of the second half of 2023. However, uncertainties remain concerning natural gas and electricity prices for the coming winter, as they are dependent on weather conditions and power plant availability in Europe. The oil price, in particular, has the potential to be significantly influenced by further geopolitical developments in the Middle East. The outlook for global economic growth in 2024 is cautiously optimistic, as inflation has fallen in many countries, paving the way for a reversal in interest rates despite the current restrictive financing conditions. Global supply chains are proving robust despite persistently high costs. We classify this as a general risk with a possible impact on the entire Group and, where applicable, rapid occurrence.
In a holistic view of individual risks and the overall risk situation, there are, from today's perspective, no identifiable risks that could jeopardise the company as a going concern.
[^0]
[^0]: 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 Heidelberg Materials. Such statements are naturally subject to risks and uncertainties and may therefore deviate significantly from the actual development. Heidelberg Materials undertakes no obligation and furthermore has no intention to update the forward-looking statements made in this Half-Year Financial Report.
Interim consolidated financial statements
Consolidated income statement
| January - June | ||
|---|---|---|
| 2023 | 2024 | |
| Revenue | 10,472.6 | 9,993.7 |
| Change in finished goods and work in progress | $-15.4$ | $-4.3$ |
| Own work capitalised | 10.3 | 20.3 |
| Operating revenue | 10,467.6 | 10,009.7 |
| Other operating income | 231.0 | 259.7 |
| Material costs | $-4,133.6$ | $-3,767.3$ |
| Personnel costs | $-1,724.5$ | $-1,721.9$ |
| Other operating expenses | $-3,142.7$ | $-3,049.4$ |
| Result from equity accounted investments (REI) | 88.9 | 97.6 |
| Result from current operations before depreciation and amortisation (RCOBD) | 1,786.7 | 1,828.4 |
| Depreciation and amortisation | $-597.8$ | $-626.0$ |
| Result from current operations | 1,188.9 | 1,202.4 |
| Additional ordinary income | 68.1 | 6.7 |
| Additional ordinary expenses | $-27.9$ | $-210.7$ |
| Additional ordinary result | 40.2 | $-203.9$ |
| Earnings before interest and taxes (EBIT) | 1,229.1 | 998.5 |
| Interest income | 29.6 | 53.4 |
| Interest expenses | $-96.3$ | $-130.5$ |
| Foreign exchange gains and losses | $-16.8$ | $-16.2$ |
| Result from other participations | 0.8 | 1.2 |
| Other financial result | $-18.9$ | $-14.5$ |
| Financial result | $-101.6$ | $-106.6$ |
| Profit before tax from continuing operations | 1,127.5 | 891.9 |
| Income taxes | $-305.1$ | $-262.7$ |
| Net income from continuing operations | 822.4 | 629.2 |
| Net loss from discontinued operations | $-39.8$ | $-5.6$ |
| Profit for the period | 782.6 | 623.7 |
| Thereof attributable to non-controlling interests | 63.9 | 49.3 |
| Thereof attributable to Heidelberg Materials AG shareholders | 718.7 | 574.3 |
| Earnings per share in $€$ - attributable to Heidelberg Materials AG shareholders | 3.86 | 3.16 |
| Earnings per share in $€$ - continuing operations | 4.07 | 3.19 |
| Loss per share in $€$ - discontinued operations | $-0.21$ | $-0.03$ |
Consolidated statement of comprehensive income
| January - June | ||
|---|---|---|
| 2023 | 2024 | |
| Profit for the period | 782.6 | 623.7 |
| Other comprehensive income | ||
| Items not being reclassified to profit or loss in subsequent periods | ||
| Remeasurement of the defined benefit liability (asset) | $-23.4$ | 36.9 |
| Income taxes | 7.0 | $-11.0$ |
| Defined benefit plans | $-16.5$ | 25.9 |
| Net gains / losses arising from equity accounted investments | 1.9 | $-4.6$ |
| Total | $-14.6$ | 21.2 |
| Items that maybe be reclassified subsequently to profit or loss | ||
| Cash flow hedges - change in fair value | $-60.0$ | $-0.3$ |
| Reclassification adjustments for gains / losses included in profit or loss | $-1.0$ | $-2.7$ |
| Income taxes | 15.1 | $-0.4$ |
| Cash flow hedges | $-45.9$ | $-3.4$ |
| Currency translation | $-195.3$ | 214.8 |
| Reclassification adjustments for gains / losses included in profit or loss | 0.5 | $-0.1$ |
| Income taxes | 7.5 | 20.3 |
| Currency translation | $-187.4$ | 235.0 |
| Net gains / losses arising from equity accounted investments | $-43.0$ | 53.5 |
| Total | $-276.4$ | 285.1 |
| Other comprehensive income | $-291.0$ | 306.3 |
| Total comprehensive income | 491.6 | 930.0 |
| Thereof attributable to non-controlling interests | 63.0 | 12.8 |
| Thereof attributable to Heidelberg Materials AG shareholders | 428.5 | 917.2 |
Consolidated statement of cash flows
| January - June | ||
|---|---|---|
| 2023 | 2024 | |
| Net income from continuing operations | 822.4 | 629.2 |
| Income taxes | 305.1 | 262.7 |
| Interest income / expenses | 66.8 | 77.0 |
| Dividends received | 97.6 | 82.4 |
| Interest received | 79.4 | 126.6 |
| Interest paid | $-201.6$ | $-224.9$ |
| Income taxes paid | $-313.8$ | $-308.8$ |
| Depreciation, amortisation, and impairment | 603.5 | 715.0 |
| Other eliminations | $-48.1$ | 65.2 |
| Cash flow | 1,411.2 | 1,424.3 |
| Changes in operating assets | $-970.3$ | $-856.4$ |
| Changes in operating liabilities | $-294.3$ | $-407.3$ |
| Changes in working capital | $-1,264.6$ | $-1,263.7$ |
| Decrease in provisions through cash payments | $-111.7$ | $-92.7$ |
| Cash flow from operating activities - continuing operations | 35.0 | 68.0 |
| Cash flow from operating activities - discontinued operations | $-10.2$ | $-12.3$ |
| Cash flow from operating activities | 24.7 | 55.7 |
| Intangible assets | $-12.3$ | $-34.2$ |
| Property, plant and equipment | $-510.6$ | $-423.5$ |
| Government grants | 65.4 | 23.5 |
| Subsidiaries and other business units | $-277.1$ | $-287.7$ |
| Other financial assets, associates, and joint ventures | $-50.6$ | $-26.8$ |
| Investments (cash outflow) | $-785.3$ | $-748.7$ |
| Intangible assets | 0.0 | |
| Property, plant and equipment | 36.6 | 27.9 |
| Subsidiaries and other business units | 9.3 | 27.0 |
| Other financial assets, associates, and joint ventures | 199.6 | 49.7 |
| Divestments (cash inflow) | 245.5 | 104.6 |
| Cash flow from investing activities | $-539.8$ | $-644.1$ |
Consolidated statement of cash flows
(Continued)
| January - June | ||
|---|---|---|
| 2023 | 2024 | |
| Capital increase of non-controlling interests | 0.7 | 4.4 |
| Dividend to Heidelberg Materials AG shareholders | $-484.1$ | $-546.2$ |
| Dividends to non-controlling interests | $-36.0$ | $-48.0$ |
| Acquisition of treasury shares | $-90.3$ | |
| Increase in ownership interests in subsidiaries | $-16.6$ | |
| Proceeds from bond issuance and loans | 750.2 | 700.5 |
| Repayment of bonds, loans and lease liabilities | $-346.9$ | $-893.1$ |
| Changes in short-term financial liabilities | 472.0 | 38.9 |
| Cash flow from financing activities | 356.0 | $-850.3$ |
| Net change in cash and cash equivalents - continuing operations | $-148.9$ | $-1,426.4$ |
| Net change in cash and cash equivalents - discontinued operations | $-10.2$ | $-12.3$ |
| Net change in cash and cash equivalents | $-159.1$ | $-1,438.7$ |
| Effect of exchange rate changes | $-32.8$ | $-24.3$ |
| Cash and cash equivalents at beginning of period | 1,454.1 | 3,266.5 |
| Cash and cash equivalents at end of period | 1,262.1 | 1,803.5 |
Consolidated balance sheet - Assets
| 30 June 2023 | 31 Dec. 2023 | 30 June 2024 | |
|---|---|---|---|
| Non-current assets | |||
| Goodwill | 8,426.1 | 8,341.7 | 8,690.1 |
| Other intangible assets | 201.7 | 342.9 | 365.9 |
| Intangible assets | 8,627.8 | 8,684.6 | 9,056.1 |
| Land and buildings | 6,673.4 | 7,131.2 | 7,014.6 |
| Plant and machinery | 4,233.8 | 4,988.2 | 5,127.1 |
| Other operating equipment | 864.1 | 858.8 | 845.9 |
| Prepayments and assets under construction | 1,809.0 | 1,171.4 | 1,209.5 |
| Property, plant and equipment | 13,580.3 | 14,149.6 | 14,197.0 |
| Investments in joint ventures | 1,591.3 | 1,698.4 | 1,732.4 |
| Investments in associates | 644.7 | 659.0 | 673.1 |
| Financial investments | 88.1 | 95.6 | 100.0 |
| Loans | 154.7 | 197.0 | 206.8 |
| Derivative financial instruments | 14.2 | 6.9 | 5.5 |
| Deferred taxes | 240.6 | 295.5 | 276.4 |
| Other non-current receivables and assets | 867.0 | 840.0 | 858.8 |
| Non-current income tax assets | 24.9 | 22.5 | 13.2 |
| Total non-current assets | 25,833.6 | 26,649.2 | 27,119.4 |
| Current assets | |||
| Raw materials and consumables | 1,356.2 | 1,273.7 | 1,334.3 |
| Work in progress | 387.8 | 378.3 | 386.4 |
| Finished goods and goods for resale | 881.9 | 989.6 | 987.6 |
| Prepayments | 39.0 | 28.7 | 32.3 |
| Inventories | 2,664.8 | 2,670.3 | 2,740.5 |
| Current interest-bearing receivables | 202.6 | 143.9 | 141.4 |
| Trade receivables | 2,732.4 | 2,005.2 | 2,618.8 |
| Other current receivables and assets | 725.7 | 606.9 | 797.6 |
| Current income tax assets | 94.8 | 53.9 | 68.6 |
| Current financial investments | 12.3 | ||
| Current derivative financial instruments | 114.7 | 39.9 | 56.2 |
| Cash and cash equivalents | 1,262.1 | 3,266.5 | 1,803.5 |
| Total current assets | 7,797.2 | 8,799.0 | 8,226.7 |
| Assets held for sale | 49.3 | 23.3 | |
| Balance sheet total | 33,680.1 | 35,471.5 | 35,346.1 |
Consolidated balance sheet - Equity and liabilities
| 30 June 2023 | 31 Dec. 2023 | 30 June 2024 | |
|---|---|---|---|
| Equity | |||
| Subscribed share capital | 579.3 | 558.6 | 546.2 |
| Share premium | 6,241.4 | 6,262.1 | 6,274.5 |
| Retained earnings | 11,036.6 | 11,854.0 | 11,607.5 |
| Other components of equity | $-1,018.1$ | $-1,135.5$ | $-813.9$ |
| Treasury shares | $-350.0$ | $-298.0$ | $-90.3$ |
| Total shareholders' equity of Heidelberg Materials AG | 16,489.1 | 17,241.3 | 17,524.0 |
| Non-controlling interests | 1,073.9 | 1,133.5 | 1,026.7 |
| Total equity | 17,563.0 | 18,374.8 | 18,550.8 |
| Non-current liabilities | |||
| Bonds payable | 5,270.0 | 5,389.9 | 5,075.3 |
| Bank loans | 57.2 | 46.6 | 46.4 |
| Other non-current financial liabilities | 1,009.2 | 1,022.9 | 1,028.0 |
| Pension provisions | 613.8 | 666.6 | 618.8 |
| Deferred taxes | 902.6 | 948.5 | 945.6 |
| Other non-current provisions | 1,353.2 | 1,370.9 | 1,459.0 |
| Other non-current operating liabilities | 56.2 | 70.3 | 93.0 |
| Non-current income tax liabilities | 188.3 | 196.5 | 144.3 |
| Total non-current liabilities | 9,450.5 | 9,712.2 | 9,410.5 |
| Current liabilities | |||
| Bonds payable (current portion) | 781.3 | 1,471.6 | 1,702.8 |
| Bank loans (current portion) | 171.1 | 243.7 | 277.2 |
| Other current financial liabilities | 788.5 | 444.7 | 506.4 |
| Pension provisions (current portion) | 94.2 | 97.2 | 95.3 |
| Other current provisions | 268.6 | 313.1 | 316.9 |
| Trade payables | 3,007.1 | 3,156.5 | 2,900.8 |
| Other current operating liabilities | 1,415.2 | 1,430.9 | 1,337.8 |
| Current income tax liabilities | 140.2 | 224.5 | 247.7 |
| Total current liabilities | 6,666.3 | 7,382.2 | 7,384.9 |
| Liabilities associated with assets held for sale | 0.2 | 2.2 | |
| Total liabilities | 16,117.1 | 17,096.6 | 16,795.3 |
| Balance sheet total | 33,680.1 | 35,471.5 | 35,346.1 |
Consolidated statement of changes in equity
[1 The accumulated currency translation differences included in non-controlling interests changed in 2024 by $€-32.7$ million (previous year: $3.4)$ to $€-288.4$ million
(previous year: -235.3 ). The total currency translation differences recognised in equity thus amount to $€-1,155.1$ million (previous year: -1,338.7).
Segment reporting/Notes
| Group areas January - June | Europe | North America | Asia-Pacific | Africa-Mediterra-nean-Western Asia | Group Services | Reconciliation ${ }^{1)}$ | Continuing operations | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | |
| External revenue | 4,842 | 4,566 | 2,434 | 2,403 | 1,794 | 1,675 | 1,087 | 981 | 316 | 369 | 10,473 | 9,994 | ||
| Inter-Group areas revenue | 5 | 6 | 17 | 17 | 68 | 60 | 407 | 330 | $-497$ | $-413$ | ||||
| Revenue | 4,846 | 4,573 | 2,434 | 2,403 | 1,811 | 1,691 | 1,156 | 1,041 | 723 | 699 | $-497$ | $-413$ | 10,473 | 9,994 |
| Change to previous year in \% | $-5.7 \%$ | $-1.3 \%$ | $-6.6 \%$ | $-9.9 \%$ | $-3.2 \%$ | $-4.6 \%$ | ||||||||
| Result from equity accounted investments (REI) | 3 | 6 | 10 | 14 | 50 | 60 | 22 | 13 | 3 | 5 | 89 | 98 | ||
| Result from current operations before depreciation and amortisation (RCOBD) | 865 | 808 | 409 | 524 | 287 | 270 | 266 | 231 | 16 | 23 | $-56$ | $-26$ | 1,787 | 1,828 |
| as \% of revenue (operating margin) | 17.8\% | 17.7\% | 16.8\% | 21.8\% | 15.8\% | 16.0\% | 23.0\% | 22.1\% | 2.3\% | 3.3\% | 17.1\% | 18.3\% | ||
| Depreciation and amortisation | $-254$ | $-256$ | $-148$ | $-174$ | $-123$ | $-119$ | $-60$ | $-64$ | $-0$ | $-0$ | $-12$ | $-13$ | $-598$ | $-626$ |
| Result from current operations | 611 | 551 | 260 | 350 | 164 | 151 | 206 | 167 | 16 | 22 | $-68$ | $-39$ | 1,189 | 1,202 |
| as \% of revenue | 12.6\% | 12.1\% | 10.7\% | 14.6\% | 9.0\% | 8.9\% | 17.8\% | 16.0\% | 2.2\% | 3.2\% | 11.4\% | 12.0\% | ||
| Additional ordinary result | 40 | $-204$ | 40 | $-204$ | ||||||||||
| Earnings before interest and taxes (EBIT) | 1,229 | 998 | 1,229 | 998 | ||||||||||
| Capital expenditures ${ }^{1)}$ | 196 | 239 | 191 | 121 | 34 | 47 | 33 | 19 | 5 | 8 | 328 | 314 | 785 | 749 |
| Segment assets ${ }^{1)}$ | 7,572 | 8,100 | 9,091 | 9,265 | 3,875 | 4,119 | 1,668 | 1,769 | 1 | 1 | 22,208 | 23,253 | ||
| RCOBD as \% of segment assets | 11.4\% | 10.0\% | 4.5\% | 5.7\% | 7.4\% | 6.6\% | 16.0\% | 13.0\% | $>100 \%$ | $>100 \%$ | 8.0\% | 7.9\% | ||
| Number of employees as at 30 June ${ }^{1)}$ |
23,556 | 23,227 | 8,627 | 9,030 | 12,017 | 12,131 | 7,196 | 7,219 | 96 | 119 | 51,492 | 51,726 | ||
| Average number of employees ${ }^{1)}$ | 23,574 | 23,271 | 8,282 | 8,647 | 12,024 | 12,192 | 7,234 | 7,203 | 97 | 116 | 51,212 | 51,428 |
1) Reconciliation includes:
a) intra Group revenues $=$ eliminations of intra-Group relationships between the segments
b) results from current operations before depreciation and amortisation / depreciation from corporate functions
c) additional ordinary result and earnings before interest and taxes
2) Capital expenditures = in the segment columns: cash effective investments in property, plant and equipment as well as intangible assets;
in the reconciliation column: cash effective investments in non-current financial assets and other business units
3) Segment assets = property, plant and equipment as well as intangible assets
4) Number based on full-time equivalents
Notes to the interim consolidated financial statements
Accounting and valuation principles
The interim consolidated financial statements of Heidelberg Materials AG as at 30 June 2024 were prepared on the basis of IAS 34 (Interim Financial Reporting). All International Financial Reporting Standards (IFRS), including the interpretations of the IFRS Interpretations Committee (IFRS IC), that were binding as at the reporting date and had been adopted into European law by the European Commission were applied.
In accordance with the regulations of IAS 34, a condensed report scope in comparison with the consolidated financial statements as at 31 December 2023, with selected explanatory notes, was chosen. The accounting and valuation principles applied in the preparation of the interim consolidated financial statements correspond in principle to those of the consolidated financial statements as at 31 December 2023. Detailed explanations can be found on page 195 f. in the Notes to the Annual and Sustainability Report 2023, which forms the basis for these interim financial statements.
In connection with the reorganisation of responsibilities within the Managing Board, which was approved in the third quarter of 2023 and came into effect on 1 January 2024, the Group areas were restructured and reporting was adjusted accordingly. Since 1 January 2024, the majority of the Northern and Eastern Eu-rope-Central Asia Group area has been combined with Western and Southern Europe to form the Europe Group area. Kazakhstan and Russia have been combined with the former Africa-Eastern Mediterranean Basin Group area. This Group area is now called Afri-ca-Mediterranean-Western Asia. Australia will continue to be shown as part of the Asia-Pacific Group area. The presentation and disclosure of the previous year have
been adjusted accordingly in the reporting, taking into account the above-mentioned changes.
In accordance with IAS 34, the expenses for income taxes in the reporting period were accrued on the basis of the tax rate expected for the whole financial year.
The interim consolidated financial statements were not subject to any audits or reviews.
Application of new accounting standards
The following new or amended IASB standards and interpretations were applicable for the first time in these interim consolidated financial statements:
- Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current
- Amendments to IAS 1 Presentation of Financial Statements: Non-current Liabilities with Covenants
- Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback
- Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements
These new regulations had no significant impact on the assets, financial, and earnings position of the Group. The new disclosures in connection with the amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements will be a requirement for the first time for the consolidated financial statements as at 31 December 2024, but are not required for the interim consolidated financial statements as at 30 June 2024.
Seasonal nature of the business
The production and sales of building materials are seasonal due to regional weather patterns. Particularly in our important markets of Europe and North America, business results for the first and fourth quarters are adversely affected by the winter months, whereas the warmer months contribute to higher sales volumes and profits in the second and third quarters.
Exchange rates
The following table contains the key exchange rates used in the translation of the separate financial statements denominated in foreign currencies into euro.
Exchange rates
| EUR | Exchange rates at reporting date | Average exchange rates | |||
|---|---|---|---|---|---|
| $\begin{gathered} 31 \text { Dec. } \ 2023 \end{gathered}$ | $\begin{gathered} 30 \text { June } \ 2024 \end{gathered}$ | $\begin{gathered} 01-06 / \ 2023 \end{gathered}$ | $\begin{gathered} 01-06 / \ 3024 \end{gathered}$ | ||
| AUD | Australia | 1.6206 | 1.6064 | 1.5999 | 1.6421 |
| CAD | Canada | 1.4606 | 1.4655 | 1.4564 | 1.4682 |
| GBP | Great Britain | 0.8669 | 0.8473 | 0.8763 | 0.8546 |
| INR | India | 91.9427 | 89.2992 | 88.8313 | 89.9921 |
| IDR | Indonesia | 17,018 | 17,592 | 16,222 | 17,341 |
| MAD | Morocco | 10.8963 | 10.6777 | 11.0202 | 10.8332 |
| NOK | Norway | 11.2239 | 11.4446 | 11.3180 | 11.4984 |
| PLN | Poland | 4.3430 | 4.3122 | 4.6260 | 4.3162 |
| SEK | Sweden | 11.1375 | 11.3547 | 11.3343 | 11.3984 |
| USD | USA | 1.1039 | 1.0713 | 1.0807 | 1.0810 |
Business combinations in the reporting period
With effect from 1 May 2024, Heidelberg Materials acquired 100\% of the shares in ACE Group. ACE Group is a supplier of pulverised fly ash in Malaysia and comprises three entities operating along the value chain: ACE Greencemt Venture (M) Sdn Bhd, a supplier of pulverised fly ash to the Malaysian building materials industry; Asas Asia (M) Sdn Bhd, a processor of coal ash; and AGP Logistics (M) Sdn Bhd, a logistics services company with 20 silo trucks. With the acquisition of ACE Group, Heidelberg Materials is strengthening circularity within the value chain in Southeast Asia and continuing to reduce its carbon footprint in another key market. The purchase price of $€ 53.7$ million is subject to purchase price adjustments and consists of a cash payment of $€ 35.6$ million and a liability for contingent consideration with a fair value of $€ 18.2$ million. The contingent consideration is based on a value derived from the EBITDA of the companies in 2026 and 2027 and was determined on the basis of probabilities. The range of results (undiscounted) is between $€ 0$ and $€ 56.4$ million. The provisionally recognised goodwill of $€ 42.6$ million represents synergy and growth potential and is not tax-deductible. The purchase price allocation is provisional, primarily because the measurement of property, plant and equipment and the contingent consideration has not yet been completed.
On 3 May 2024, Heidelberg Materials acquired 100\% of the shares in Mick George Limited, Cambridgeshire, United Kingdom, and its subsidiaries ("Mick George Group"). The Mick George Group specialises in bulk excavation and earthmoving services, demolition work, and environmentally friendly waste disposal. Recycling services and the supply of aggregates and concrete
complete the portfolio. The group operates four recycling plants, eight waste transfer stations, eleven aggregates quarries, and ten ready-mixed concrete plants. The acquisition strengthens Heidelberg Materials' range of circular materials and adds a comprehensive recycling platform to its portfolio. It will support the development of innovative technologies for processing and valorising waste as a valuable material in the construction cycle. Furthermore, as part of its commitment to conserving natural resources and promoting the circular economy through recycling and reuse and by reducing the use of primary raw materials, Heidelberg Materials acquired 100\% of the shares in Bristol \& Avon Group Limited and Balla Homes Ltd, Bristol, United Kingdom, and their subsidiaries ("B\&A Group") on 17 May 2024. The B\&A Group is one of the leading excavated material and aggregates recycling companies in South West England. The B\&A Group specialises in the supply of recycled and primary aggregates as well as site clearance, earthworks, land remediation, and sustainable land regeneration. The purchase price for the above-mentioned transactions, which is subject to purchase price adjustments, totals $€ 260.0$ million and consists of a cash payment of $€ 258.2$ million and a liability for contingent consideration with a fair value of $€ 1.8$ million. The contingent consideration is based on the EBITDA of the companies until 30 May 2026 and was determined on the basis of probabilities. The range of results (undiscounted) is between $€ 0$ and $€ 6.3$ million. The contracts also contain contingent payments to the sellers that are linked to their continued employment and are therefore treated as a separate transaction. Since the payments compensate for work performed after the business combination, they are recognised as personnel costs over the
agreed service period. The provisionally recognised goodwill totalling $€ 144.1$ million from the above-mentioned transactions represents synergy and growth potential and is not tax-deductible. The purchase price allocations are provisional, as the measurements have not yet been completed.
The following table shows the provisional fair values of the assets and liabilities as at the acquisition date.
Provisional fair values recognised as at the acquisition date (reporting period)
| Malaysia | United Kingdom | Total | |
|---|---|---|---|
| Intangible assets | 0.0 | 0.0 | |
| Property, plant and equipment | 5.8 | 166.4 | 172.2 |
| Financial fixed assets | 0.0 | 0.0 | |
| Deferred taxes | 0.0 | 0.1 | 0.1 |
| Inventories | 18.2 | 18.2 | |
| Trade receivables | 5.6 | 48.9 | 54.5 |
| Cash and cash equivalents | 5.0 | 25.1 | 30.1 |
| Other assets | -0.9 | 13.9 | 13.0 |
| Total assets | $\mathbf{1 5 . 5}$ | $\mathbf{2 7 2 . 6}$ | $\mathbf{2 8 8 . 1}$ |
| Deferred taxes | 0.6 | 18.1 | 18.7 |
| Provisions | 0.3 | 0.3 | |
| Non-current liabilities | 39.6 | 39.6 | |
| Current liabilities | 3.8 | 98.7 | 102.5 |
| Total liabilities | $\mathbf{4 . 4}$ | $\mathbf{1 5 6 . 7}$ | $\mathbf{1 6 1 . 1}$ |
| Net assets | $\mathbf{1 1 . 1}$ | $\mathbf{1 1 5 . 9}$ | $\mathbf{1 2 7 . 0}$ |
As part of the business combinations, receivables with a fair value of $€ 62.4$ million were acquired. These concern trade receivables amounting to $€ 54.5$ million and other operating receivables to the amount of $€ 7.9$ million. The gross value of the contractual receivables, totalling $€ 62.4$ million, is likely to be fully recoverable.
The business combinations have contributed $€ 26.5$ million to revenue and $€ 0.8$ million to the profit for the period since their acquisition. If the acquisitions had taken place on 1 January 2024, contributions to revenue and the profit for the period would have been $€ 108.3$ million and $€ 4.5$ million higher, respectively. Transaction costs of $€ 1.9$ million arose in connection with the business combinations described above and were recognised in the additional ordinary expenses.
Furthermore, Heidelberg Materials effected other business combinations in the reporting period that were of
minor importance for the presentation of the assets, financial, and earnings position of the Group.
Business combinations in the same period of the previous year
As part of the implementation of its circular economy strategy and in order to strengthen the Group's portfolio of recycled materials, Heidelberg Materials completed its acquisition of a 100\% shareholding in RWG I Holding GmbH and its subsidiaries ("RWG") on 9 January 2023. RWG is an integrated provider in the field of demolition and building materials recycling in the Berlin metropolitan area. The acquisition includes three modern recycling centres and a specialised demolition company. With this acquisition, Heidelberg Materials is strengthening its range of circular materials to meet the increasing demand for sustainable building materials. On 3 April 2023, Heidelberg Materials also completed the acquisition of the Heilbronn-based SER
Group, an integrated company in the demolition and building materials recycling business segments. The acquisition comprises 100\% of the shares in SER Hochund Tiefbau GmbH \& Co. KG and SER Sanierung im Erdund Rückbau GmbH, Heilbronn, as well as their subsidiaries. The SER Group operates in the Heilbronn metropolitan area of Germany with three modern recycling locations. The purchase price for the above transactions amounted to a total of $€ 122.7$ million and was paid in cash. The goodwill totalling $€ 99.6$ million from the above-mentioned transactions is not tax-deductible and represents synergy and growth potential.
On 1 May 2023, Heidelberg Materials acquired a 100\% shareholding in The SEFA Group, LLC, including its wholly-owned subsidiary SEFA Transportation, LLC, Lexington, South Carolina, USA. The companies are active in the field of fly ash recycling. The acquisition includes 20 locations with more than 500 employees. The purchase price of $€ 183.4$ million is subject to the usual purchase price adjustments and consists of a cash payment of $€ 165.2$ million and a liability for contingent consideration with a fair value of $€ 18.2$ million. The contingent consideration is based on the EBITDA of the companies until 30 April 2025 and was determined on the basis of probabilities. The range of results (undiscounted) is between $€ 0$ and $€ 18.2$ million. On 3 April 2023, Heidelberg Materials also acquired a quarry along with a fixed processing plant and five mobile crushing plants from RMS Gravel Inc., Central New York, USA, as part of an asset deal. The purchase price amounted to $€ 13.5$ million and was paid in cash. The purchase price allocations have been completed. In comparison with the values reported as at 31 December 2023, there were no adjustments. The final goodwill totalling $€ 12.7$ million from the above-described transactions is tax-deductible and represents synergy and growth potential.
The following table shows the fair values of the assets and liabilities as at the acquisition date.
Fair values recognised as at the acquisition date (previous period)
| €m | Germany | North America | Total |
|---|---|---|---|
| Intangible assets | 4.7 | 115.7 | 120.4 |
| Property, plant and equipment | 69.8 | 78.8 | 148.6 |
| Financial fixed assets | 3.0 | 3.0 | |
| Deferred taxes | 0.1 | 0.1 | |
| Inventories | 1.1 | 1.8 | 2.9 |
| Trade receivables | 14.4 | 18.6 | 33.1 |
| Cash and cash equivalents | 7.3 | 18.3 | 25.7 |
| Other assets | 12.7 | 17.7 | 30.4 |
| Total assets | 113.1 | 251.0 | 364.1 |
| Deferred taxes | 2.9 | 2.9 | |
| Provisions | 5.2 | 2.4 | 7.6 |
| Non-current liabilities | 64.6 | 36.3 | 100.8 |
| Current liabilities | 17.3 | 28.1 | 45.5 |
| Total liabilities | 90.0 | 66.8 | 156.9 |
| Net assets | 23.1 | 184.2 | 207.3 |
Furthermore, Heidelberg Materials effected other business combinations during the same period of the previous year that were of minor importance for the presentation of the assets, financial, and earnings position of the Group.
Divestments in the reporting period
As part of its portfolio optimisation programme, Heidelberg Materials signed agreements with various regional transport specialists in December 2023 to sell its French cement transport business Tratel S.a.s. The transactions were concluded in the first quarter of 2024. The sales prices totalled $€ 26.6$ million and were paid in cash. The divestment resulted in an overall gain of $€ 5.3$ million, which has been shown in the result from current operations.
As a condition of the acquisition of the Mick George Group, the United Kingdom's Competition \& Markets Authority stipulated that Heidelberg Materials must divest five ready-mixed concrete sites and two aggregates quarries. The sale was completed on 3 May 2024. Payment of the sales price totalling $€ 23.4$ million had not yet been effected at the time the interim consolidated financial statements were prepared. The divestment resulted in an overall gain of $€ 5.5$ million, which has been shown in the result from current operations.
The following table shows the assets and liabilities as at the date of divestiture.
Assets and liabilities as at the date of divestiture (reporting period)
| €m | France | United Kingdom | Total |
|---|---|---|---|
| Goodwill | 3.7 | 3.7 | |
| Property, plant and equipment | 19.2 | 15.3 | 34.5 |
| Inventories | 2.6 | 2.6 | |
| Other assets | 0.0 | 0.0 | |
| Total assets | 22.9 | 17.9 | 40.8 |
| Provisions | 1.6 | 1.6 | |
| Non-current liabilities | 0.0 | 0.0 | |
| Total liabilities | 1.6 | 0.0 | 1.6 |
| Net assets | 21.3 | 17.9 | 39.2 |
Incidental disposal costs of $€ 2.2$ million arose in connection with these divestments and were recognised in the result from current operations.
Furthermore, Heidelberg Materials effected other divestments in the reporting period that were of minor importance for the presentation of the assets, financial, and earnings position of the Group.
Divestments in the same period of the previous year
Heidelberg Materials effected no significant divestments in the same period of the previous year that are of importance for the presentation of the assets, financial, and earnings position of the Group.
Disposal of joint ventures and associates in the same period of the previous year
On 24 February 2023, as part of the portfolio optimisation programme, Heidelberg Materials signed a contract for the sale of its $45 \%$ participation in CaucasusCement Holding B.V., 's Hertogenbosch, Netherlands ("CCH"). CCH is the parent company of HeidelbergCement Georgia Ltd. and Terjola Quarry Ltd., Tbilisi. The joint venture comprised two cement plants, fourteen ready-mixed concrete plants, and two aggregates plants. The sale was completed on 20 April 2023. The divestment resulted in a gain of $€ 15.3$ million, which has been shown in the additional ordinary income.
Furthermore, Heidelberg Materials sold its 25\% participation in the Chaney Group, USA, on 5 June 2023. The sale comprised participations in seven companies that were included in the consolidated financial statements as associates. The divestment resulted in a gain of $€ 32.6$ million, which has been shown in the additional ordinary income.
The sales prices for the above-described transactions totalling $€ 178.5$ million were paid in cash.
Revenue development by Group areas and business lines
| January - June | Cement | Aggregates | Ready-mixed concrete-asphalt | Service-other | Intra-Group eliminations | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| €m | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 |
| Europe | 2,571 | 2,424 | 1,023 | 1,091 | 1,548 | 1,428 | 492 | 377 | $-787$ | $-747$ | 4,846 | 4,573 |
| North America | 1,030 | 1,037 | 977 | 975 | 529 | 492 | 153 | 126 | $-256$ | $-227$ | 2,434 | 2,403 |
| Asia-Pacific | 958 | 871 | 339 | 321 | 649 | 647 | 32 | 9 | $-167$ | $-157$ | 1,811 | 1,691 |
| Africa-Mediterranean-Western Asia | 995 | 908 | 46 | 36 | 187 | 158 | 20 | 17 | $-93$ | $-76$ | 1,156 | 1,041 |
| Group Services | 723 | 699 | 723 | 699 | ||||||||
| Inter-Group area revenue within business lines | 0 | $-0$ | 4 | 3 | 4 | 3 | ||||||
| Total | 5,554 | 5,340 | 2,385 | 2,423 | 2,914 | 2,725 | 1,424 | 1,231 | $-1,303$ | $-1,208$ | 10,973 | 10,410 |
| Inter-Group area revenue between business lines | $-501$ | $-417$ | $-501$ | $-417$ | ||||||||
| Total | $-1,804$ | $-1,625$ | 10,473 | 9,994 |
Earnings per share
| January - June | ||
|---|---|---|
| €m | 2023 | 2024 |
| Profit for the period | 782.6 | 623.7 |
| Thereof attributable to non-controlling interests | 63.9 | 49.3 |
| Thereof attributable to Heidelberg Materials AG shareholders | 718.7 | 574.3 |
| Number of shares in '000s (weighted average) | 186,186 | 181,936 |
| Earnings per share in $€$ | 3.86 | 3.16 |
| Net income from continuing operations - attributable to Heidelberg Materials AG shareholders | 758.4 | 579.9 |
| Earnings per share in $€$ - continuing operations | 4.07 | 3.19 |
| Net loss from discontinued operations - attributable to Heidelberg Materials AG shareholders | $-39.8$ | $-5.6$ |
| Loss per share in $€$ - discontinued operations | $-0.21$ | $-0.03$ |
Goodwill
An impairment test on goodwill in accordance with IAS 36 (Impairment of Assets) is generally performed annually within the Heidelberg Materials Group, in the fourth quarter once the operational three-year plan has been prepared or if there are indications for impairment. In this impairment test, the carrying amount of a group of cash-generating units (CGUs) to which
goodwill is allocated is compared with the recoverable amount of this group of CGUs. On 30 June 2024, the management carried out an impairment review, which indicated that no impairment loss needed to be recognised.
Consolidated statement of changes in equity
By resolution of 11 May 2023, the Annual General Meeting of Heidelberg Materials AG authorised the Managing Board, pursuant to section 71(1) no. 8 of the German Stock Corporation Act (Aktiengesetz, AktG), among other things, to cancel the treasury shares acquired on the basis of this authorisation with the consent of the Supervisory Board without further resolution of the Annual General Meeting. On 19 February 2024, the Managing Board of Heidelberg Materials AG resolved to exercise this authorisation to cancel 4,117,499 of the treasury shares thus acquired, reducing the subscribed share capital by $€ 12,352,497$. This corresponds to approximately $2.21 \%$ of the company's subscribed share capital before cancellation and capital reduction. Following the cancellation of the shares and the capital reduction, the subscribed share capital of Heidelberg Materials AG amounts to $€ 546,204,360$ and is divided into 182,068,120 no-par value bearer shares, each representing a national amount of $€ 3.00$ of the subscribed share capital.
On 21 February 2024, the Managing Board, with the consent of the Supervisory Board, resolved to launch a new share buyback programme with a total volume of up to $€ 1.2$ billion (excluding incidental acquisition costs) and a term no later than the end of 2026. It is envisaged that the share buyback will be carried out in three tranches. The first tranche began on 23 May 2024. As at the reporting date, 936,672 shares had been acquired for a total price of $€ 90.3$ million (excluding incidental acquisition costs).
The number of treasury shares as at 30 June 2024 is shown in the following overview:
Treasury shares
| Number | Shares |
|---|---|
| 1 January 2024 | $4,117,499$ |
| Cancellation of treasury shares | $-4,117,499$ |
| Share buyback | 936,672 |
| 30 June 2024 | 936,672 |
The change of $€ 325.0$ million in the currency translation reserve is essentially attributable to the appreciation of the US dollar against the euro.
The change in ownership interests in subsidiaries amounting to $€ 16.7$ million results in particular from the acquisition of a $0.7 \%$ stake in PT Indocement Tunggal Prakarsa Tbk., Indonesia, through the acquisition of treasury shares.
In the financial year, dividends of $€ 546.2$ million ( $€ 3.00$ per share) were paid to shareholders of Heidelberg Materials AG.
Pension provisions
The actuarial gains and losses, which are recognised directly in equity in other comprehensive income, were determined on the basis of the interest rates for the key countries applicable as at the reporting date. As at 30 June 2024, overall gains arising from the revaluation amounted to $€ 36.9$ million. These include actuarial gains relating to defined benefit obligations of $€ 149.3$ million, arising from an increase in the weighted discount rate of approximately 0.4 percentage points, as well as losses from the revaluation of the plan assets amounting to $€ 112.5$ million.
Disclosures on financial instruments
The following table shows the carrying amounts and fair values for the individual classes of financial instruments as well as the fair value hierarchies for the assets and liabilities that are measured at fair value in the balance sheet.
Carrying amounts and fair values of financial instruments
| Category of IFRS $9^{\text {1) }}$ | Carrying amount | Fair value | Thereof Level 1 | Thereof Level 2 | Thereof Level 3 | |
|---|---|---|---|---|---|---|
| 30 June 2024 | ||||||
| Assets | ||||||
| Financial investments | FVTPL | 35.7 | 35.7 | 13.6 | 22.1 | |
| Loans and other interest-bearing receivables | AC | 348.2 | 350.9 | |||
| Trade receivables and other receivables | AC | 2,262.5 | 2,262.5 | |||
| Trade receivables and other receivables | FVTPL | 631.5 | 631.5 | 631.5 | ||
| Cash and cash equivalents | AC | 1,698.8 | 1,698.8 | |||
| Cash and cash equivalents | FVTPL | 104.7 | 104.7 | 104.7 | ||
| Derivatives - hedge accounting | Hedge | 7.5 | 7.5 | 0.4 | 7.1 | |
| Derivatives - held for trading | FVTPL | 54.2 | 54.2 | 54.2 | ||
| Liabilities | ||||||
| Bonds payable, bank loans, and miscellaneous other financial liabilities | AC | 7,286.5 | 7,271.5 | |||
| Trade payables and miscellaneous operating liabilities | AC | 3,532.8 | 3,532.8 | |||
| Derivatives - hedge accounting | Hedge | 116.5 | 116.5 | 74.3 | 42.2 | |
| Derivatives - held for trading | FVTPL | 60.7 | 60.7 | 60.7 | ||
| Non-controlling interests with put options | AC | 81.3 | 81.3 | |||
| 31 December 2023 | ||||||
| Assets | ||||||
| Financial investments | FVTPL | 47.6 | 47.6 | 25.5 | 22.1 | |
| Loans and other interest-bearing receivables | AC | 340.9 | 349.8 | |||
| Trade receivables and other receivables | AC | 1,850.3 | 1,850.3 | |||
| Trade receivables and other receivables | FVTPL | 379.6 | 379.6 | 379.6 | ||
| Cash and cash equivalents | AC | 3,188.9 | 3,188.9 | |||
| Cash and cash equivalents | FVTPL | 77.6 | 77.6 | 77.6 | ||
| Derivatives - hedge accounting | Hedge | 9.1 | 9.1 | 0.6 | 8.6 | |
| Derivatives - held for trading | FVTPL | 37.7 | 37.7 | 37.7 | ||
| Liabilities | ||||||
| Bonds payable, bank loans, and miscellaneous other financial liabilities | AC | 7,256.7 | 7,275.6 | |||
| Trade payables and miscellaneous operating liabilities | AC | 3,857.5 | 3,857.5 | |||
| Derivatives - hedge accounting | Hedge | 120.2 | 120.2 | 74.3 | 45.9 | |
| Derivatives - held for trading | FVTPL | 74.7 | 74.7 | 74.7 | ||
| Non-controlling interests with put options | AC | 79.3 | 79.3 |
[^0]
[^0]: 1) AC: Amortised cost, FVTPL: Fair value through profit or loss, Hedge: Hedge accounting
For financial investments in level 1, the fair value is determined using the published price quotations as at the reporting date.
The financial investments in level 3 include participations on which Heidelberg Materials has no significant influence. The fair value measurement is mainly carried out using the multiplier method, which determines the proportionate enterprise value based on companyspecific variables using EBITDA or revenue multipliers. The revaluation through profit or loss is reported in the result from other participations. With respect to possible uncertainties regarding the determination of the fair value of these financial investments, we refer to the explanations on page 252 in the Notes to the Annual and Sustainability Report 2023. During the reporting period, there were no significant changes to these explanations.
The receivables in level 2 are receivables that are intended for sale in the scope of factoring transactions. The fair values are primarily determined using the prices of recent transactions.
Cash and cash equivalents in level 1 include highly liquid money market funds whose fair value was determined by multiplying the shares by the price quotation as at the reporting date.
The derivative financial instruments in level 2, both those designated as hedges and those held for trading, comprise interest rate, currency, and commodity derivatives. They are measured using recognised actuarial models based on observable input parameters. The
derivative financial instruments designated as hedges in level 3 are embedded derivatives from long-term power purchase agreements (PPAs) for solar and wind power plants. The fair values are determined by discounting the expected future cash flows, which are largely determined by future electricity market prices.
In order to reconcile the "Financial investments at fair value through profit or loss" class to the corresponding balance sheet item, participations in subsidiaries, joint ventures, and associates of minor importance totalling $€ 64.3$ million (previous year: 60.4) are to be added. The "Trade receivables and other receivables" and "Trade payables and miscellaneous operating liabilities" classes also cannot be immediately reconciled with the related balance sheet items, as these contain not only financial assets and liabilities but also non-financial assets to the amount of $€ 1,381.2$ million (previous year: $1,222.3$ ) as well as non-financial liabilities of $€ 798.8$ million (previous year: 800.2). Lease liabilities of $€ 1,091.1$ million (previous year: 1,088.5) should be taken into account for the reconciliation of the "Bonds payable, bank loans, and miscellaneous other financial liabilities" class with the related balance sheet items.
Detailed explanations on the procedure regarding the fair value measurement according to IFRS 13 can be found on pages 252 f. in the Notes to the Annual and Sustainability Report 2023. The assessment as to whether financial assets and liabilities that are accounted for at fair value are to be transferred between the levels of the fair value hierarchy takes place at the end of each reporting period. No reclassifications were carried out in the reporting period.
Related party disclosures
No reportable transactions with related parties took place in the reporting period beyond normal business relations.
Contingent liabilities
As at the reporting date, contingent liabilities amounted to $€ 136.5$ million (previous year: 181.9) and essentially concern risks related to taxes on income. The timing of the possible cash outflows for the contingent liabilities is uncertain because they depend on various external factors that remain outside Heidelberg Materials' control. The application of taxation regulations might not yet be determined at the time that tax refund claims and liabilities are calculated. The calculation of tax items is based on the regulations most likely to be applied in each case. Nevertheless, the fiscal authorities may be of a different opinion, which could give rise to additional tax liabilities.
Events after the reporting period
On 5 July 2024, Heidelberg Materials entered into a purchase agreement to acquire the significant assets of Victory Rock USA LLC, Orem, USA, a producer of high-quality aggregates for concrete and asphalt and other related products with two well-positioned quarries. On 15 July 2024, Heidelberg Materials signed a purchase agreement to acquire Highway Materials Inc., Flourtown, USA, one of the largest independent aggregates and asphalt producers in the Philadelphia metropolitan area. The acquisition comprises four gravel quarries, nine asphalt mixing facilities, two plants specialising in processing uncontaminated and unmixed recycled materials, a concrete recycling plant as well as a construction services company. On 18 July 2024, Heidelberg Materials signed a purchase agreement to acquire Carver Sand \& Gravel LLC, Coeymans, USA, a large aggregates producer in the Albany area, New York. This acquisition includes four quarries, three sand and gravel pits, a trucking business, two internal maintenance shops and two asphalt plants. The provisional purchase prices for the transactions described above amount to approximately $€ 450$ million and are subject to the usual post-closing purchase price adjustments. Through these acquisitions, Heidelberg Materials has further expanded its presence in three core markets in the USA while adding to its growing portfolio of circular solutions in North America. The initial accounting for these business combinations was incomplete at the time of publication of the interim consolidated financial statements. Measurements were not yet available for the preparation of the additional disclosures in accordance with paragraph B64 of IFRS 3.
Responsibility statement
To the best of our knowledge, and in accordance with the applicable accounting standards for interim reporting, the interim consolidated financial statements give a true and fair view of the assets, financial, and earnings position of the Group, and the interim Group management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the material opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.
Heidelberg, 30 July 2024
Heidelberg Materials AG
The Managing Board
Financial calendar
2024/2025
Contract
Group Communication
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Imprint
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Heidelberg Materials AG
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69120 Heidelberg, Germany
Concept and realisation
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This Half-Year Financial Report - in German and English - is only available electronically on the Internet: www.heidelbergmaterials.com.
The Half-Year Financial Report January to June 2024 was published on 30 July 2024.
Due to rounding, numbers presented in the report may not add up precisely to the totals provided.