Interim / Quarterly Report • Aug 7, 2013
Interim / Quarterly Report
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| Overview January to June 2013 | April - June | January - June | ||
|---|---|---|---|---|
| €m | 2012 1) | 2013 | 2012 1) | 2013 |
| Revenue | 3.781 | 3.799 | 6.580 | 6.560 |
| Operating income before depreciation (OIBD) | 696 | 734 | 907 | 953 |
| in % of revenue | 18,4% | 19,3% | 13,8% | 14,5% |
| Operating income | 493 | 524 | 505 | 540 |
| Additional ordinary result | -44 | 27 | -54 | -5 |
| Result from participations | 17 | 13 | 16 | 13 |
| Earnings before interest and income taxes (EBIT) | 466 | 565 | 467 | 548 |
| Profit before tax | 314 | 416 | 167 | 254 |
| Net income from continuing operations | 231 | 373 | 80 | 188 |
| Net income from discontinued operations | 14 | 96 | 6 | 96 |
| Profit for the period | 245 | 469 | 86 | 285 |
| Group share of profit | 180 | 410 | -27 | 175 |
| Investments | 169 | 302 | 332 | 720 |
1) Amounts restated
Due to rounding, numbers presented in the Half-Year Financial Report may not add up precisely to the totals provided.
The world economy continues to grow, albeit in a somewhat subdued manner. The economic development clearly differs from region to region: The national economies of Asia remain on course for growth, although the economic dynamics have weakened overall this year. The African countries south of the Sahara are continuing to record solid growth rates. In contrast, economic development in many European countries is heavily impaired by the debt crisis and governmental budgetary restrictions. In the US, economic recovery continues. The labour market has improved significantly in the last few months and residential construction is also on the upturn.
Sales volumes of our building materials recorded a two-track development in the first half of 2013. While construction activity in Europe and large parts of North America was hindered due to heavy rain and flooding in some areas following the long, cold winter, our cement deliveries benefited from the sustained growth in demand in our Asian and African markets as well as from the continued economic recovery in North America, especially in the southern states.
The Group's cement and clinker sales volumes remained relatively stable with a slight decline of 0.8% to 42.4 million tonnes (previous year: 42.7). The growth in sales volumes in the North America, Asia-Pacific, and Africa-Mediterranean Basin Group areas almost completely compensated for losses in European markets. North America achieved an overall strong growth in sales volumes despite disruptions caused by poor weather in Eastern and Northern America as well as in Canada. In the Asia-Pacific and Africa-Mediterranean Basin Group areas, the expansion of our cement capacities in India and the high increase in volumes in Ghana and Togo contributed, among others, to a slight increase in sales volumes. In contrast, cement sales volumes in Western and Northern Europe were still noticeably in decline at the end of the first half of the year due to the unfavourable weather conditions during the winter months. The harsh winter, coupled with difficult market conditions in most countries, also resulted in considerable losses in sales volumes in Eastern Europe-Central Asia.
Aggregates sales volumes decreased Group wide by 5.7% to 107.5 million tonnes (previous year: 114.1). Readymixed concrete deliveries increased slightly by 1.6% to 18.8 million cubic metres (previous year: 18.5). Asphalt sales volumes decreased by 4.0% to 3.5 million tonnes (previous year: 3.7).
| Sales volumes | April - June | January - June | ||||
|---|---|---|---|---|---|---|
| 2012 | 2013 | Change | 2012 | 2013 | Change | |
| Cement and clinker (million tonnes) |
24,5 | 24,3 | -0,8% | 42,7 | 42,4 | -0,8% |
| Aggregates (million tonnes) | 67,1 | 65,6 | -2,2% | 114,1 | 107,5 | -5,7% |
| Asphalt (million tonnes) | 2,3 | 2,3 | -1,1% | 3,7 | 3,5 | -4,0% |
| Ready-mixed concrete (million cubic metres) |
10,4 | 10,9 | 4,5% | 18,5 | 18,8 | 1,6% |
Group revenue in the period from January to June 2013 remained almost unchanged at €6,560 million (previous year: 6,580). The successfully implemented "PERFORM" and "CLIMB Commercial" initiatives to increase prices could not fully compensate the winter-related decline in sales volumes in the first quarter of 2013, particularly in the Western and Northern Europe and Eastern Europe-Central Asia Group areas. In contrast to the effects of the consolidation scope changes, the exchange rate effects had a negative impact. Excluding consolidation and exchange rate effects, Group revenue increased by 0.7%.
In the reporting period, material costs fell by 3.3% to €2,775 million (previous year: 2,870). This is primarily due to a decrease in expenses for energy (-6.5%) as well as for raw materials (-5.7%). Other operating expenses and income reached the previous year's level at €-1,688 million (previous year: -1,688). Personnel costs also remained relatively stable at €1,149 million (previous year: 1,147).
Operating income before depreciation (OIBD) improved by 5.1% to €953 million (previous year: 907). Operating income increased by 7.0% to €540 million (previous year: 505).
Additional ordinary results improved by €49 million to €-5 million (previous year: -54), which is primarily due to gains from the disposal of a minority participation in a precast concrete manufacturer in Saudi Arabia. The additional ordinary expenses principally include the addition to provisions totalling €32 million, owing to the Federal Court of Justice upholding the fine imposed by the Düsseldorf Higher Court in the German antitrust proceedings. The fine was paid in full in the second quarter of 2013. At €13 million (previous year: 16), results from participations remained nearly unchanged. Overall, earnings before interest and taxes (EBIT) increased by 17.5% to €548 million (previous year: 467).
Financial results improved by €6 million to €-294 million (previous year: -300).
The profit before tax from continuing operations rose by €87 million to €254 million (previous year: 167). Expenses relating to taxes on income decreased by €21 million to €66 million (previous year: 87). In particular, results from the capitalisation of deferred taxes had a positive impact on losses carried forward in North America, which were offset by tax expenses resulting from discontinued operations. Offsetting effects arose from tax refunds received in the previous year, which related primarily to North America. As a result, the effective tax rate decreased in comparison with the previous year, from 47.2% to 25.9%. Profit after tax from continuing operations thus amounts to €188 million (previous year: 80).
Profit after tax from discontinued operations rose by €90 million to €96 million (previous year: 6), which resulted principally from the set-up of receivables from insurers based on a current court ruling. Further comments are provided in the Notes.
Overall, a profit of €285 million (previous year: 86) was recorded for the period. The profit attributable to non-controlling interests fell by €3 million to €110 million (previous year: 113). The Group share therefore amounts to €175 million (previous year: -27).
Earnings per share – Group share of profit – in accordance with IAS 33 improved to €0.93 (previous year: -0.15). The statement of comprehensive income and the derivation of the earnings per share are shown in detail in the Notes.
The three-year programme for financial and operational excellence ("FOX 2013") has already led to an improvement of €139 million in cash flow in the first half of 2013 and is therefore ahead of schedule to achieve savings of €240 million in 2013. We are thus well on the way to achieving the targeted improvement of €1,010 million over the three-year horizon. In 2011 and 2012, the programme generated cash effective savings totalling €767 million.
The projects that were launched in order to improve margins – "PERFORM" for cement, "CLIMB Commercial" for aggregates, and "LEO" to reduce logistics costs – are progressing according to plan and have already contributed to improvements in margins in the second quarter.
| Business trend January to June 2013 | Consolidated statement of cash flows |
|---|---|
| Outlook | Consolidated balance sheet |
| Risk report | Consolidated statement of changes in equity |
| Consolidated income statement | Segment reporting/Notes |
| Consolidated statement of comprehensive income | Notes to the interim consolidated financial statements |
In the first half of 2013, operating business activities generated a cash outflow totalling €281 million (previous year: cash inflow of 71). This includes the one-off payment of €161 million for the legally confirmed penalty notice by the Federal Court of Justice in the second quarter of 2013 for antitrust violations in the years 1990 to 2002. Another reason for the increase in cash outflow was the €75 million rise in income tax payments to €249 million (previous year: 173), as well as the €6 million decrease in dividend payments to €8 million (previous year: 14). Positive effects arose from the €93 million reduction in interest payments, mainly due to different maturities compared with the previous year, as well as the continuous improvement in working capital by €50 million.
Net cash used in investing activities was €344 million above the previous year's level, totalling €616 million (previous year: 272), primarily owing to increased investments in other financial assets, associated companies, and joint ventures, including the acquisition of an additional 25% in the Australian cement company Cement Australia.
Financing activities generated a cash inflow of €859 million (previous year: cash outflow of 384) in the reporting period. Proceeds from and repayments of bonds and loans primarily include drawings as part of the syndicated facility agreement as well as the repayment of a US\$750 million bond and several debt certificates. In the same period of the previous year, a Eurobond with an issue volume of €300 million was issued and a bond of €1 billion that matured in January 2012 was repaid. The changes in short-term financial receivables and liabilities relate primarily to inflows from the issue of commercial papers. The cash outflow of €107 million (previous year: 1) from the increase in ownership interests in subsidiaries show an increase in the participation in the Russian cement company CJSC "Construction Materials" from 51% to 100%. Dividend payments led to a cash outflow of €166 million (previous year: 121), with dividend payments of HeidelbergCement AG making up €88 million (previous year: 66) of this figure.
Cash flow investments increased in the first half of the year to €720 million (previous year: 332). Investments in property, plant, and equipment, including intangible assets, which primarily related to optimisation and environmental protection measures at our production sites, but also expansion projects in growing markets, accounted for €358 million (previous year: 325) of this total. Investments in financial assets and other business units increased to €362 million (previous year: 7); this includes the acquisition of additional 25% of the share capital of the Australian cement company Cement Australia, the acquisition of the remaining 50% in the previously proportionately consolidated company Midland Quarry Products, United Kingdom, and further acquisitions to round off shareholdings.
The increased investing activities in the first half of the year are the result of a "timing effect". The overall restrictive investment policy remains unchanged.
The balance sheet total grew by €251 million to €28,259 million (previous year: 28,008) as at 30 June 2013.
Long-term assets fell by €6 million to €22,973 million (previous year: 22,979). The decrease of €192 million in fixed assets to €22,056 million (previous year: 22,248) is mainly due to exchange rate effects. The decrease in goodwill by €78 million to €10,531 million (previous year: 10,609) was, along with additions of €187 million, mainly characterised by currency exchange fluctuations of €-265 million. Additions of €364 million to property, plant, and equipment and changes to the scope of consolidation of €159 million were offset by depreciations totalling €397 million and currency exchange fluctuations of €-252 million. Other long-term receivables increased
by €229 million to €496 million (previous year: 267), mainly as a result of the capitalisation of receivables from insurers regarding liability for damages in connection with discontinued operations as well as the valuation of plan assets from defined benefit pension plans.
Short-term assets rose by €272 million to €5,286 million (previous year: 5,013). Inventories grew by €14 million to €1,640 million (previous year: 1,625). As a result of seasonal factors, trade receivables increased by €225 million to €1,643 million (previous year: 1,419). Cash and cash equivalents fell by €52 million to €1,423 (previous year: 1,475). The changes are explained in the Statement of cash flows section.
On the equity and liabilities side, shareholders' equity decreased by €428 million to €13,280 million (previous year: 13,708), which was primarily due to currency exchange fluctuations of €-589 million and dividend payments of €166 million overall. These factors were counteracted particularly by the €285 million profit for the period, actuarial gains of €138 million, and changes in the market values of cash flow hedges and available-for-sale financial instruments totalling €12 million. The consolidated statement of changes in equity is explained in detail in the Notes.
The increase of €1,116 million in interest-bearing liabilities to €9,689 million (previous year: 8,573) is primarily attributable to the offsetting effect of the repayment of a US\$750 million bond against loans taken out as part of the syndicated facility agreement. The decline in provisions by €272 million to €2,145 million (previous year: 2,417) mainly resulted from the €161 million payment of the German antitrust fine and the drop in pension provisions by €123 million. The decrease in operating liabilities by €85 million to €2,566 million (previous year: 2,651) mainly concerns other short-term operating liabilities and the current liabilities from income taxes.
On 22 February 2013, HeidelbergCement invoked its right to terminate the debt certificate issued on 20 December 2011 and redeemed at par the tranche of €115.5 million with floating interest rates and an original term ending on 31 October 2016 ahead of schedule on 30 April 2013. In the context of good liquidity development and more favourable refinancing conditions on the market, this measure serves to further reduce financing costs.
On 15 March 2013, HeidelbergCement repaid the US\$750 million bond 2003/2013 by using available liquidity or making use of credit lines.
According to the terms and conditions of all the bonds issued since 2009 and the debt certificate issued in December 2011, 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 €2,623 million and the consolidated interest expense of €686 million are calculated on a pro forma basis in accordance with the terms and conditions of the bonds. As at 30 June 2013, the consolidated coverage ratio amounted to 3.82.
Net debt increased by €82 million in comparison with 30 June 2012, amounting to €8,199 million (previous year: 8,117) as at 30 June 2013. The increase of €1,152 million in comparison with the end of 2012 is primarily due to the rise in working capital, related to seasonal factors, the acquisition of additional 25% of the share capital of the Australian cement company Cement Australia and further investments in financial assets and other business units as well as the payment of the fine imposed in the German antitrust proceedings.
The available liquidity from cash and cash equivalents, liquidable financial investments and derivative financial instruments, and unused credit lines amounted to €3.125 million as at the end of June 2013.
| Business trend January to June 2013 | Consolidated statement of cash flows |
|---|---|
| Outlook | Consolidated balance sheet |
| Risk report | Consolidated statement of changes in equity |
| Consolidated income statement | Segment reporting/Notes |
| Consolidated statement of comprehensive income | Notes to the interim consolidated financial statements |
Despite the dampening effects of the debt crisis in Europe, Germany and the Nordic countries of Sweden and Norway are continuing to experience solid economic growth. In Belgium and in the Netherlands, in particular, construction activity is suffering from the weak economic development. In the United Kingdom, signs of an economic recovery are increasing. Gross domestic product grew by 0.6% in the second quarter, after 0.3% in the first quarter. The construction industry saw an increase of 0.9%, mainly due to a recovery in residential construction.
While, by and large, the onset of winter only had an adverse effect on the construction industry in February during the first half of 2012, construction activity across the entire Group area suffered from the prolonged cold winter weather in the first half of 2013.
Due to disruption caused by inclement weather, our deliveries in the cement business line were below the previous year's level in all Group countries, with the exception of the United Kingdom. Successful price increases were implemented in Germany. However, after the long winter our cement deliveries were also adversely affected by the prolonged rainfalls and flooding in the second quarter. In Benelux, catch-up effects after the weak winter months led to a positive development in sales volumes in the second quarter, but construction activity still shows no signs of recovery, particularly in the Netherlands. In Norway and Sweden, the decrease in volumes caused by the winter weather was likewise not fully recovered. In contrast, our cement activities in the United Kingdom recorded a significant increase in sales volumes thanks to the incipient recovery in residential construction. Overall, our cement and clinker sales volumes in Western and Northern Europe fell by 5.5% in the first half of the year to 9.7 million tonnes (previous year: 10.2).
In the aggregates business line, the adverse weather conditions of the first quarter were particularly apparent: all countries, with the exception of the United Kingdom, recorded significant decreases in sales volumes. In the United Kingdom, we achieved a considerable increase in volumes in the second quarter, so that the total amount at the end of the first half of the year remained only slightly below the previous year's level. At the beginning of April 2013, we acquired the remaining 50% in the previously proportionately consolidated company Midland Quarry Products (MQP), United Kingdom. MQP operates a quarry at Whitwick (Leicestershire) and five asphalt plants. The Group area's deliveries of aggregates contracted by 11.0% overall to 32.0 million tonnes (previous year: 35.9). Excluding consolidation effects, the decline amounted to 12.4%.
In the ready-mixed concrete operating line, the growth in sales volumes in the second quarter could not quite compensate the losses in volumes of the first three months. Overall, ready-mixed concrete sales volumes fell slightly by 1.6% to 6.2 million cubic metres (previous year: 6.3) in the first half of the year. Excluding consolidation effects, the volume loss amounted to 1.1%. The sales volumes of the asphalt operating line were 13.3% below the previous year's level.
The building products business line, which consists primarily of the building products of Hanson in the United Kingdom and is heavily dependant on residential construction, is already benefiting from the recovery in private residential construction. While the sales volumes of concrete paving blocks were clearly in decline and the lightweight blocks remained at the previous year's level, the brick and precast products operating lines achieved pleasing increases in volumes and the deliveries of masonry blocks rose by more than 30%.
Revenue of the Western and Northern Europe Group area declined by 4.7% to €1,934 million (previous year: 2,029). Positive exchange rate effects were offset by negative consolidation effects.
Severe and prolonged winter weather hampered construction activity in large parts of the Group area. In addition, the construction industry is being adversely affected in some countries, such as Poland, the Czech Republic, Hungary, and Romania by the lack of financing for infrastructural projects.
In the cement business line, our deliveries in the first half of the year remained clearly below the previous year in the majority of countries because of the unfavourable weather conditions in the winter months and the weakened construction activity. Construction activity and cement consumption suffered particularly in Poland due to the limited demand from the infrastructure and industry sectors. Russia, in contrast, recorded a clear increase in sales volumes as a result of the sustained healthy development in construction activity as well as deliveries from the new Tula cement plant to the booming Moscow market. The Ukraine and Bosnia-Herzegovina achieved a slight increase in volumes. Overall, cement and clinker sales volumes in the Group area decreased by 11.8% to 6.9 million tonnes (previous year: 7.8) in the first half of the year.
In April 2013, we increased our stake in the Russian cement company CJSC "Construction Materials" from 51% to 100% as part of our strategy of low risk bolt-on acquisitions. CJSC "Construction Materials", located in Sterlitamak, has a cement capacity of 1.8 million tonnes and is the market leader in the Russian Republic of Bashkortostan. The construction of the new Caspi Cement plant in western Kazakhstan is progressing according to plan. The plant with a capacity of 0.8 million tonnes will strengthen our nationwide presence and allow us to supply the oil- and gas-rich region on the Caspian Sea more cost-effectively. We aim to produce the first cement there in 2014.
In the aggregates business line, our deliveries remained below the level of the previous year in all countries apart from Russia, where we achieved an increase in volumes of over 10%. Overall, our aggregates activities in the Group area recorded an 11.5% decline in sales volumes to 7.0 million tonnes (previous year: 7.9). Deliveries of ready-mixed concrete decreased by 7.2% to 1.5 million cubic metres (previous year: 1.6).
Revenue of the Eastern Europe-Central Asia Group area declined by 13.4% to €556 million previous year: 642); excluding exchange rate effects, the decrease amounted to 12.5%.
In the North America Group area, HeidelbergCement is represented in the USA and Canada. In the USA, economic recovery is continuing. The unemployment rate was unchanged in June, at 7.6%. However, more new jobs were created in the last few months than originally expected. Residential construction is further recovering: Housing starts in June were at an annual rate of 836,000. This is 9.9% below the previous month rate, but is 10.4% above the June 2012 rate. Building permits were 7.5% below the May rate, but were 16.1% above the June 2012 rate.
While the construction industry benefited from the mild winter weather in North America in the first half of 2012, construction activity and thus demand for our building materials in the first half of 2013 was adversely affected by the long, cold winter and the following rainy weather on the East Coast and in the Midwest of the USA. Canada likewise saw heavy rains and flooding in the second quarter, which had a negative impact on the sales volumes of building materials. In the western USA, however, our deliveries were supported not only by improved market conditions but also favourable weather conditions.
While the US cement market experienced a slight growth of 0.5% in the first half of the year, cement consumption in Canada remained 7.6% below the previous year. The cement sales volumes of our North American plants grew by 5.0% in the first half of the year to 5.7 million tonnes (previous year: 5.4). The highest increase in volumes was achieved by the South market region, which benefited from strong demand primarily in Florida and Texas. Deliveries also underwent a double-digit increase in the West and Canada regions. However, our deliveries in the North region could not quite reach the high level of the previous year due to the unfavourable weather conditions. The positive price development in all market regions and the successfully implemented cost reduction programmes contributed to a significant improvement in results.
| Business trend January to June 2013 | Consolidated statement of cash flows |
|---|---|
| Outlook | Consolidated balance sheet |
| Risk report | Consolidated statement of changes in equity |
| Consolidated income statement | Segment reporting/Notes |
| Consolidated statement of comprehensive income | Notes to the interim consolidated financial statements |
In the aggregates business line, the double-digit increase in volumes in the West and South regions offset the weather-related decrease in sales volumes in the North and Canada regions. Overall, the aggregates sales volumes fell by 4.0% in the first half of the year to 45.3 million tonnes (previous year: 47.2). In the ready-mixed concrete operating line, the Canada region benefited from the lively activity in the oil and gas industry as well as from commercial construction projects. The increase in sales volumes achieved in this region could not completely offset the decrease in volumes of the North, West, and South regions. Overall, ready-mixed concrete sales volumes declined by 4.9% to 2.8 million cubic metres (previous year: 2.9). Excluding consolidation effects, a small increase of 1.0% was recorded. The asphalt deliveries of 1.0 million tonnes (previous year: 1.1) remained 5.9% below the previous year; the growth in volumes in the West region could not compensate the losses caused by inclement weather in the North region.
In the building products business line, which is heavily dependant on residential construction, deliveries in the operating lines concrete pipes, precast concrete parts, and roof tiles were below last year's level. In contrast, the sales volumes of bricks rose slightly and the pressure pipes operating line achieved significant growth. Thanks to the cost reduction programmes and the split from the concrete paving blocks operating line in the past year, the business line's results have improved substantially in comparison with the previous year.
Total revenue in North America rose by 1.1% to €1,554 million (previous year: 1,538); excluding consolidation and exchange rate effects, it rose by 4.1%.
The emerging countries of Asia remain on course for growth, although the economic dynamics have weakened overall this year. The Chinese economy has cooled noticeably. In the second quarter, the increase in the gross domestic product amounted to 7.5%, following an increase of 7.7% in the first quarter. The Indian economy has not yet overcome its weak economic development. In contrast, Indonesia is recording robust general economic growth thanks to strong domestic demand. The general economic momentum in Australia is being curbed by the declining boom in raw materials.
During the first half of the year, cement and clinker deliveries of the Asia-Pacific Group area grew by 4.8% to 15.5 million tonnes (previous year: 14.8). Excluding consolidation effects, the rise amounted to 1.5%. In Indonesia, domestic cement consumption increased in the first six months of 2013 by 7.5% in comparison with the previous year. In contrast, Indocement's domestic sales volumes rose by only 0.5%. Indocement's lower growth was due to the entry of new cement capacities into the market, which was associated with discounts, and increased imports. Indocement decided to protect its margins rather than react with price reductions. In the first half of 2013, Indocement's sales prices were significantly higher than those of the previous year due to successful price increases. As Indocement is focusing on the strong domestic demand, low-margin export deliveries were minimised. Overall, Indocement's cement and clinker sales volumes rose slightly by 0.7%. In view of the promising growth prospects in Indonesia, Indocement is continuing to expand its cement capacity with the construction of an additional cement grinding facility at the Citeureup production site. The commissioning of the grinding installation with a capacity of 1.9 million tonnes is scheduled to be finished by the end of 2013. In addition, we intend to further expand the Citeureup site by building a new integrated production line with a cement capacity of 4.4 million tonnes, which is set to be completed by 2015.
In China, sales volumes of our joint ventures in the provinces of Guangdong and Shaanxi remained slightly below the previous year. The decreases in volumes resulted primarily from weak demand during the first quarter, the exceptionally long Chinese New Year celebrations, and excess capacities. While the cement prices in Shaanxi in the first half of the year remained only slightly below the previous year's level, the prices in Guangdong have decreased significantly. A price recovery for both provinces is expected in the second half of the year.
In India, construction activity and cement demand are adversely affected by the government's continued restraint with regard to infrastructural projects as well as by high interest rates. Nonetheless, deliveries of our Indian cements plant rose significantly by 21.5% in the first half of the year, primarily as a result of the expansion of our cement capacities in central India by 2.9 million tonnes. After carrying out successful test runs between November 2012 and January 2013, we officially commissioned the new facilities at our Damoh plant in the state of Madya Pradesh and at our Jhansi plant in the state of Uttar Pradesh in February 2013. HeidelbergCement now has a total annual cement capacity of 6.2 million tonnes in India.
In Bangladesh, our sales volumes remained below the levels of the previous year due to political unrest, numerous strikes, and early monsoon. However, price increases and cost savings led to a significant improvement in results. In Australia, the proportionately consolidated cement company Cement Australia recorded a slight increase in quantities despite the heavy rainfalls and flooding at the beginning of the year. In March, HeidelbergCement acquired an additional 25% of the shares in Cement Australia from Holcim via its subsidiary Hanson Australia, thereby increasing its stake in the largest Australian cement manufacturer to 50%. A new grinding station with a capacity of 1.1 million tonnes will be commissioned in Port Kembla in the current year.
Our deliveries in the aggregates business line exceeded the previous year's values in all Group countries; Indonesia, in particular, experienced a considerable increase in volumes. Overall, sales volumes of aggregates rose by 5.0% to 18.5 million tonnes (previous year: 17.6). In the asphalt operating line, strong demand from infrastructure construction in Malaysia led to an increase in sales volumes of 18.3%. Deliveries of ready-mixed concrete increased by 15.3% to 6.0 million cubic metres (previous year: 5.2), helped by Malaysia and in particular Indonesia, where Indocement benefited from the extension of its ready-mixed concrete business.
Revenue of the Asia-Pacific Group area rose by 5.6% to €1,748 million (previous year: 1,655); excluding consolidation and exchange rate effects, the increase amounted to 5.7%.
The African countries south of the Sahara are continuing to experience solid economic development and lively construction activity. In Turkey, the economy and the construction industry are recovering from a period of weakness in the previous year. However, high inflation and the weakening of the Turkish currency are reasons for concern. In Spain, the construction industry is still suffering as a result of the recession, the property crisis, high unemployment, and the government's budget cuts, which result in further heavy reductions in infrastructure expenditure this year.
In Africa, our cement deliveries recorded an increase of 4.4%. Our main market, Ghana, and Togo, made a particularly strong contribution to this growth, as did Liberia and the Democratic Republic of Congo.
In light of the positive growth prospects, HeidelbergCement is expanding its activities in Africa. In Liberia, we commissioned an additional cement mill with a capacity of 0.5 million tonnes in June 2013. We are also expanding our cement production capacity in Tanzania with the construction of a new cement mill at our Tanzania Portland Cement plant; the commissioning of the mill with a capacity of 0.7 million tonnes is scheduled for the end of 2014, bringing our total cement capacity to 2 million tonnes in Tanzania. In addition, a new cement grinding plant in Burkina Faso with a capacity of 650,000 tonnes is to be commissioned near the capital of Ouagadougou at the end of 2014. Following the expansion of the cement capacity at our Tema grinding facility in Ghana, which was completed in November 2012, we are carrying out a similar project at our Takoradi location. With the scheduled commissioning of a new cement mill with a capacity of 0.8 million tonnes at the Takoradi grinding plant at the end of 2014, we will have a cement grinding capacity of 4.4 million tonnes in Ghana. In Togo, we
| Half -Year Financial Repor t January to June 2013 |
|
|---|---|
| Business trend January to June 2013 | Consolidated statement of cash flows |
| Outlook | Consolidated balance sheet |
| Risk report | Consolidated statement of changes in equity |
| Consolidated income statement | Segment reporting/Notes |
| Consolidated statement of comprehensive income | Notes to the interim consolidated financial statements |
set up a new clinker plant with an annual capacity of 1.5 million tonnes near the town of Tabligbo, around 80 km to the northeast of the capital of Lomé. In addition, we are constructing a cement grinding facility with a capacity of 200,000 tonnes in the north of the country. Commissioning for both plants is planned for 2015. We are evaluating options for capacity expansions in other African countries.
The domestic cement sales volumes of our joint venture Akçansa increased by almost 20% in the first half of the year. In contrast, cement and clinker exports declined significantly. In total, Akçansa's cement and clinker sales volumes were 2.8% above the previous year's level. Overall, the cement and clinker sales volumes of the Africa-Mediterranean Basin Group area increased by 3.9% to 4.8 million tonnes (previous year: 4.6).
Deliveries in the aggregates business line fell by 14.4% overall to 6.2 million tonnes (previous year: 7.2). This decline is primarily attributable to the continuing weak construction activity in Spain. Israel also suffered significant decreases in sales volumes, while Turkey achieved a pleasing increase in quantities. The asphalt activities recorded a decrease of 11.9% in sales volumes. Deliveries of ready-mixed concrete fell by 5.7% to 2.4 million cubic metres (previous year: 2.5); while the sales volumes in Israel remained stable and were only slightly below the previous year's level in Turkey, our Spanish ready-mix activities recorded a considerable decline in quantities.
Revenue of the Africa-Mediterranean Basin Group area rose by 1.9% to €568 million (previous year: 557); excluding exchange rate effects, the growth amounted to 4.7%.
Group Services comprises the activities of our subsidiary HC Trading, one of the largest international trading companies for cement and clinker. The company is also responsible for purchasing and delivering coal and petroleum coke via sea routes to our own locations and to other cement companies around the world.
HC Trading's trading activities in cement, clinker, and other building materials such as lime and dry mortar increased by 15.8% to 6.1 million tonnes in the first half of the year (previous year: 5.3). Deliveries of coal and petroleum coke rose by 13.8% to 2.1 million tonnes (previous year: 1.8).
Revenue of the Group Services business unit rose by 6.2% to €419 million (previous year: 395); excluding exchange rate effects, revenue increased by 7.5%.
At the end of the first half of 2013, the number of employees at HeidelbergCement stood at 53,566 (previous year: 54,362). The decrease of 796 employees essentially results from two opposing developments: on one hand, just under 2,000 jobs were cut in the North America Group area, in the United Kingdom, in Benelux, in Spain, and some Eastern European countries in connection with efficiency increases in sales and administration, location optimisations, and capacity adjustments. On the other hand, we have hired more than 900 new employees in growing markets such as India and Indonesia. In addition, the number of our employees in Australia has grown by around 300 following the increase in the stake in the proportionately consolidated cement company Cement Australia and the acquisition of the remaining 50% in the previously proportionately consolidated company Midland Quarry Products, United Kingdom.
After the balance sheet date, there were no reportable events.
In its latest forecast, the International Monetary Fund (IMF) has once again slightly reduced growth rates for the world economy. The determining factors were the slowdown in growth in some key emerging countries as well as the protracted recession in the euro zone. For 2013, the IMF now expects merely stable economic growth compared with the previous year. However, this remains subject to the industrial countries in North America and Europe continuing unabatedly with their efforts to resolve the debt crisis and to achieve budgetary consolidation. The euro debt crisis, the high level of debt in the USA, and the armed conflicts in the Middle East continue to pose political risks to the development of the world economy.
In North America, HeidelbergCement still expects ongoing economic recovery and consequently a further increasing demand for building materials, especially from residential construction and the raw materials industry. A three-layered economic development is anticipated in Europe and Central Asia: The markets in Germany, Northern Europe, and the United Kingdom should continue to develop positively. Markets in central Asia should remain stable, and in Benelux and Eastern Europe a continuing weak development of the economy and demand for building materials is anticipated. In Asia and Africa, the Group still expects sustained positive demand.
In terms of costs, the Group anticipates a light to moderate increase in the cost base for raw materials and personnel. For energy costs, we expect stable or slightly declining development overall for 2013, following the slight decline in the first half of the year compared with the previous year. The objective remains to recover the margin loss that has arisen from the massively increasing energy costs in recent years. Price increases have top priority. To this end, the Group started two sales excellence programmes in 2012 – "PERFORM" for the cement business in the USA and Europe as well as "CLIMB Commercial" for the aggregates business line – with the objective of achieving a margin improvement of €350 million by 2015. The Group wants to realise a further €240 million of cash-relevant savings in 2013 as part of the "FOX 2013" programme, in comparison with the base year 2010. Furthermore, HeidelbergCement is following the "LEO" programme for optimising supply chains, which should reduce costs by €150 million over the coming years.
On the basis of these assumptions, the Managing Board is continuing with the objective of further increasing revenue and operating income in 2013 and significantly improving profit before tax.
Based on the increase in the stake of Cement Australia, Midland Quarry Products, and CJSC "Construction Materials", we will probably exceed our CapEx target of €1.1 billion and reach a level of about €1.35 billion. We nevertheless stick to the original target and will continue with our disciplined investment policy.
Considering the positive development in the second quarter, we confirm our earnings outlook for 2013. In view of the weakening economic development in some emerging countries and in large parts of Europe, we will continue unabatedly with our measures to improve margins. We will maintain our focus on increasing sales prices. For this purpose, we will intensify our implementation efforts for the "PERFORM" and "CLIMB Commercial" sales excellence programmes. At the same time, we will continue to drive our efforts to lower costs and increase efficiency with the "FOX 2013" and "LEO" programmes. Deleveraging with the aim to improve the decisive key financial ratios is still a top priority for us, in order to qualify for an investment grade rating. We will also remain on course with our successful strategy of targeted investments to expand cement capacities in emerging countries. With our global market leadership in the aggregates business line and our advantageous geographical positioning in attractive markets, we will do all we can to benefit over-proportionally from the continued economic growth.
| Business trend January to June 2013 | Consolidated statement of cash flows |
|---|---|
| Outlook | Consolidated balance sheet |
| Risk report | Consolidated statement of changes in equity |
| Consolidated income statement | Segment reporting/Notes |
| Consolidated statement of comprehensive income | Notes to the interim consolidated financial statements |
The Managing Board of HeidelbergCement has not seen evidence of developments beyond those mentioned in the previous paragraph that would suggest changes for the business year 2013 regarding the forecasts and other statements made in the 2012 Annual Report in the Outlook chapter on page 112 ff. on the expected development of HeidelbergCement and its business environment.
The expected future development of HeidelbergCement and the business environment over the course of 2013 is described in the outlook. 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 uncertainties and may therefore deviate significantly from the actual development. HeidelbergCement undertakes no obligation and furthermore has no intention to update the forward-looking statements made in this Half-Year Financial Report.
HeidelbergCement's risk policy is based on the business strategy, which focuses on safeguarding the Group's existence and sustainably increasing its value. Entrepreneurial activity is always forward-looking and therefore subject to certain risks. Identifying risks, understanding them, and reducing them systematically is the responsibility of the Managing Board and a key task for all managers. HeidelbergCement is subject to various risks that are not fundamentally avoided, but instead accepted, provided they are consistent with the legal and ethical principles of entrepreneurial activity and are well balanced by the opportunities they present. Opportunity and risk management at HeidelbergCement is closely linked by Group-wide planning and monitoring systems. Opportunities are recorded in the annual operational plan and followed up as part of monthly financial reporting. Operational management in each country and the central Group departments are directly responsible for identifying and observing opportunities at an early stage.
The Managing Board of HeidelbergCement AG is obliged to set up and supervise an internal control and risk management system. The Managing Board also has overall responsibility for the scope and organisation of the established systems. The Supervisory Board and its Audit Committee also review the effectiveness of the risk management system on a regular basis. HeidelbergCement has installed transparent regulations to govern competences and responsibilities for risk management that are based on the Group's structure. A code of conduct, guidelines, and principles apply across the Group for the implementation of systematic and effective risk management. The internal control and risk management system, standardised across the Group, comprises several components that are carefully coordinated 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.
In a holistic view of individual risks and the overall risk situation, there are, from today's perspective, no identifiable risks that could threaten the existence of the Group or any other apparent significant risks. Our control and risk management system standardised across the Group ensures that major risks, which, if they occurred, would lead to a considerable deterioration of the Group's economic position, are identified at an early stage.
Risks that may have a significant impact on our financial position and performance in the 2013 financial year and in the foreseeable future are described in detail in the 2012 Annual Report in the Risk report chapter on page 79 ff. and in the section "Estimates for 2013 and 2014 by Group management – risks and opportunities" on page 120 f in the Outlook chapter.
The risks arising from volatile energy and raw material prices as well as from exchange rates remain high. The International Monetary Fund (IMF) has slightly lowered the 2013 growth rate for the global economy in its latest forecast. The ongoing development is still subject to uncertainties and risks. In the industrialised countries, the most pressing task is to consolidate state finances, reform the financial sector and tackle unemployment. Significant uncertainties still remain with regard to the stability of the global financial system.
.
| Consolidated income statement | April - June | January - June | ||
|---|---|---|---|---|
| €m | 2012 1) | 2013 | 2012 1) | 2013 |
| Revenue | 3,780.9 | 3,799.3 | 6,580.4 | 6,559.8 |
| Change in finished goods and work in progress | -11.5 | -35.1 | 28.6 | 0.2 |
| Own work capitalised | 1.7 | 2.8 | 3.7 | 4.9 |
| Operating revenue | 3,771.2 | 3,767.0 | 6,612.7 | 6,565.0 |
| Other operating income | 110.9 | 70.0 | 174.8 | 143.3 |
| Material costs | -1,584.0 | -1,521.1 | -2,870.3 | -2,774.7 |
| Employee and personnel costs | -590.3 | -592.2 | -1,147.2 | -1,149.3 |
| Other operating expenses | -1,012.2 | -989.5 | -1,862.9 | -1,831.3 |
| Operating income before depreciation (OIBD) | 695.6 | 734.2 | 907.1 | 953.1 |
| Depreciation of property, plant and equipment | -196.6 | -201.9 | -387.2 | -396.7 |
| Amortisation of intangible assets | -6.0 | -7.9 | -15.4 | -16.4 |
| Operating income | 493.0 | 524.4 | 504.5 | 540.0 |
| Additional ordinary income | 0.1 | 42.4 | 0.7 | 46.9 |
| Additional ordinary expenses | -44.0 | -15.3 | -54.3 | -51.6 |
| Additional ordinary result | -44.0 | 27.1 | -53.5 | -4.7 |
| Result from associated companies 2) | 13.8 | 11.9 | 12.4 | 7.2 |
| Result from other participations | 2.9 | 1.5 | 3.2 | 5.7 |
| Earnings before interest and taxes (EBIT) | 465.6 | 565.0 | 466.5 | 548.2 |
| Interest income | 9.0 | 19.4 | 33.0 | 37.5 |
| Interest expenses | -153.9 | -145.4 | -313.1 | -296.8 |
| Foreign exchange gains and losses | 2.2 | -3.8 | 5.2 | -1.2 |
| Other financial result | -8.6 | -19.4 | -24.6 | -33.6 |
| Financial result | -151.3 | -149.3 | -299.5 | -294.2 |
| Profit before tax from continuing operations | 314.3 | 415.7 | 167.0 | 254.0 |
| Income taxes | -83.4 | -43.0 | -87.3 | -65.7 |
| Net income from continuing operations | 231.0 | 372.7 | 79.7 | 188.3 |
| Net income from discontinued operations | 13.8 | 96.2 | 6.0 | 96.1 |
| Profit for the period | 244.7 | 468.9 | 85.7 | 284.5 |
| Thereof non-controlling interests | 64.5 | 59.0 | 113.0 | 109.5 |
| Thereof Group share of profit | 180.3 | 409.9 | -27.3 | 175.0 |
| Earnings per share in € (IAS 33) | ||||
| Earnings / loss per share attributable to the parent entity | 0.96 | 2.19 | -0.15 | 0.93 |
| Earnings / loss per share – continuing operations | 0.89 | 1.67 | -0.18 | 0.42 |
| Earnings per share – discontinued operations | 0.07 | 0.51 | 0.03 | 0.51 |
| 1) Amounts restated | ||||
| 2) Net result from associated companies | 9.5 | 8.7 | 7.7 | 4.7 |
| Consolidated statement of comprehensive income | April - June | January - June | |||
|---|---|---|---|---|---|
| €m | 2012 1) | 2013 | 2012 1) | 2013 | |
| Profit for the period | 244.7 | 468.9 | 85.7 | 284.5 | |
| Other comprehensive income not being reclassified to profit or loss in subsequent periods |
|||||
| Actuarial gains and losses | -77.9 | 85.4 | -48.4 | 172.6 | |
| Income taxes | 26.1 | -14.0 | 15.4 | -34.3 | |
| -51.8 | 71.4 | -33.1 | 138.3 | ||
| Other comprehensive income to be reclassified to profit or loss in subsequent periods |
|||||
| Cash flow hedges – change in fair value | 1.0 | 1.6 | 4.0 | 2.1 | |
| Reclassification of gains / losses included in the income statement | -0.3 | 1.0 | -1.4 | 3.0 | |
| Income taxes | 0.1 | -0.4 | -0.4 | -0.9 | |
| 0.9 | 2.2 | 2.2 | 4.3 | ||
| Available for sale assets – change in fair value | -1.3 | 4.1 | 1.7 | 8.1 | |
| Income taxes | 0.1 | -0.2 | -0.1 | -0.4 | |
| -1.2 | 3.9 | 1.6 | 7.7 | ||
| Currency translation | 704.2 | -851.1 | 411.3 | -603.5 | |
| Income taxes | -1.2 | 10.3 | -5.0 | 14.3 | |
| 703.0 | -840.8 | 406.3 | -589.2 | ||
| Other comprehensive income | 650.9 | -763.3 | 377.1 | -438.9 | |
| Total comprehensive income | 895.6 | -294.4 | 462.7 | -154.5 | |
| Relating to non-controlling interests | 77.7 | 24.2 | 94.8 | 99.7 | |
| Relating to HeidelbergCement AG shareholders | 817.9 | -318.6 | 368.0 | -254.1 |
1) Amounts restated
Consolidated income statement Segment reporting/Notes
| Business trend January to June 2013 | Consolidated statement of cash flows |
|---|---|
| Outlook | Consolidated balance sheet |
| Risk report | Consolidated statement of changes in equity |
| Consolidated income statement | Segment reporting/Notes |
Consolidated statement of comprehensive income Notes to the interim consolidated financial statements
| Consolidated statement of cash flows | April - June | January - June | ||
|---|---|---|---|---|
| €m | 20121) | 2013 | 20121) | 2013 |
| Net income from continuing operations | 231.0 | 372.7 | 79.7 | 188.3 |
| Income taxes | 83.4 | 43.0 | 87.3 | 65.7 |
| Interest income/ expenses | 145.0 | 126.1 | 280.1 | 259.3 |
| Dividends received | 13.1 | 7.6 | 14.2 | 8.1 |
| Interest received | 37.4 | 34.5 | 67.7 | 64.8 |
| Interest paid | -192.8 | -184.3 | -431.4 | -338.4 |
| Income taxes paid | -73.7 | -157.6 | -173.3 | -248.6 |
| Depreciation, amortisation, and impairment | 238.4 | 210.2 | 443.7 | 411.7 |
| Elimination of other non-cash items | 52.4 | -115.7 | 158.6 | -130.2 |
| Cash flow | 534.2 | 336.5 | 526.6 | 280.6 |
| Changes in operating assets | -264.1 | -276.1 | -403.3 | -306.6 |
| Changes in operating liabilities | 284.8 | 240.3 | 49.9 | 2.9 |
| Changes in working capital | 20.7 | -35.8 | -353.4 | -303.7 |
| Decrease in provisions through cash payments | -50.1 | -210.4 | -102.3 | -257.6 |
| Cash flow from operating activities | 504.8 | 90.3 | 70.9 | -280.7 |
| Intangible assets | -9.2 | -2.2 | -11.0 | -5.3 |
| Property, plant and equipment | -154.7 | -228.5 | -313.9 | -352.3 |
| Subsidiaries and other business units | -39.4 | -60.4 | ||
| Other financial assets, associates and joint ventures | -4.6 | -32.1 | -7.3 | -301.9 |
| Investments (cash outflow) | -168.6 | -302.2 | -332.2 | -720.0 |
| Subsidiaries and other business units | 2.8 | 0.0 | 2.8 | 2.5 |
| Other fixed assets | 37.7 | 74.7 | 57.7 | 96.7 |
| Divestments (cash inflow) | 40.5 | 74.7 | 60.5 | 99.1 |
| Cash from changes in consolidation scope | 4.1 | 0.1 | 5.1 | |
| Cash flow from investing activities | -128.0 | -223.5 | -271.5 | -615.7 |
| Dividend payments - HeidelbergCement AG | -65.6 | -88.1 | -65.6 | -88.1 |
| Dividend payments - non-controlling shareholders | -52.2 | -75.9 | -55.6 | -78.3 |
| Increase in ownership interests in subsidiaries | -0.3 | -107.0 | -0.5 | -107.0 |
| Proceeds from bond issuance and loans | 102.1 | 506.9 | 460.8 | 1,225.5 |
| Repayment of bonds and loans | -124.7 | -418.7 | -1,188.7 | -1,019.5 |
| Changes in short-term interest-bearing assets and liabilities | -10.6 | 286.8 | 465.3 | 926.3 |
| Cash flow from financing activities | -151.4 | 103.9 | -384.3 | 858.9 |
| Net change in cash and cash equivalents | 225.4 | -29.3 | -585.0 | -37.5 |
| Effect of exchange rate changes | 23.0 | -41.9 | -10.3 | -14.0 |
| Cash and cash equivalents at the beginning of period | 1,026.1 | 1,494.5 | 1,869.8 | 1,474.8 |
| Cash and cash equivalents at period end | 1,274.5 | 1,423.3 | 1,274.5 | 1,423.3 |
1) Amounts restated
| Assets | |||
|---|---|---|---|
| €m | 30 June 2012 1) | 31 Dec. 2012 1) | 30 June 2013 |
| Non-current assets | |||
| Intangible assets | |||
| Goodwill | 10,962.4 | 10,609.4 | 10,531.3 |
| Other intangible assets | 335.1 | 302.0 | 292.6 |
| 11,297.4 | 10,911.4 | 10,823.9 | |
| Property, plant and equipment | |||
| Land and buildings | 5,637.3 | 5,289.5 | 5,197.4 |
| Plant and machinery | 4,391.1 | 4,315.3 | 4,343.3 |
| Other operating equipment | 301.3 | 334.8 | 322.5 |
| Prepayments and assets under construction | 803.2 | 859.2 | 788.1 |
| 11,132.9 | 10,798.8 | 10,651.3 | |
| Financial assets | |||
| Investments in associates | 392.6 | 379.7 | 385.9 |
| Financial investments | 69.2 | 68.1 | 89.6 |
| Loans to participations | 15.6 | 14.1 | 13.6 |
| Other loans and derivative financial instruments | 74.5 | 75.8 | 91.7 |
| 551.9 | 537.6 | 580.8 | |
| Fixed assets | 22,982.3 | 22,247.8 | 22,056.0 |
| Deferred taxes | 403.5 | 444.6 | 395.6 |
| Other non-current receivables | 392.1 | 266.6 | 495.6 |
| Non-current income tax assets | 27.2 | 19.8 | 26.0 |
| Total non-current assets | 23,805.0 | 22,978.7 | 22,973.2 |
| Current assets | |||
| Inventories | |||
| Raw materials and consumables | 758.6 | 725.8 | 720.3 |
| Work in progress | 191.4 | 193.1 | 202.2 |
| Finished goods and goods for resale | 698.4 | 685.4 | 686.3 |
| Prepayments | 27.7 | 21.2 | 31.0 |
| 1,676.0 | 1,625.4 | 1,639.8 | |
| Receivables and other assets | |||
| Current interest-bearing receivables | 91.6 | 93.5 | 93.3 |
| Trade receivables | 1,963.2 | 1,418.8 | 1,643.4 |
| Other current operating receivables | 377.1 | 353.3 | 388.9 |
| Current income tax assets | 61.6 | 41.6 | 73.9 |
| 2,493.6 | 1,907.2 | 2,199.5 | |
| Derivative financial instruments | 30.9 | 5.9 | 23.2 |
| Cash and cash equivalents | 1,274.5 | 1,474.8 | 1,423.3 |
| Total current assets | 5,475.0 | 5,013.3 | 5,285.7 |
| Disposal groups held for sale | 15.7 | ||
| Balance sheet total | 29,279.9 | 28,007.8 | 28,258.9 |
1) Amounts restated
| Business trend January to June 2013 | Consolidated statement of cash flows | |||
|---|---|---|---|---|
| Outlook | Consolidated balance sheet | |||
| Risk report | Consolidated statement of changes in equity | |||
| Consolidated income statement | Segment reporting/Notes | |||
| Consolidated statement of comprehensive income | Notes to the interim consolidated financial statements |
| Equity and liabilities | |||
|---|---|---|---|
| €m | 30 June 2012 1) | 31 Dec. 2012 1) | 30 June 2013 |
| Shareholders' equity and non-controlling interests | |||
| Subscribed share capital | 562.5 | 562.5 | 562.5 |
| Share premium | 5,539.4 | 5,539.4 | 5,539.4 |
| Retained earnings | 6,523.7 | 6,668.1 | 6,834.6 |
| Other components of equity | 319.6 | -160.8 | -728.8 |
| Equity attributable to shareholders | 12,945.1 | 12,609.2 | 12,207.7 |
| Non-controlling interests | 1,016.7 | 1,098.3 | 1,072.1 |
| Total equity | 13,961.9 | 13,707.5 | 13,279.8 |
| Non-current liabilities | |||
| Bonds payable | 6,532.1 | 6,509.2 | 6,513.1 |
| Bank loans | 737.4 | 529.8 | 1,519.9 |
| Other non-current interest-bearing liabilities | 110.2 | 109.2 | 113.1 |
| 7,379.6 | 7,148.2 | 8,146.1 | |
| Non-controlling interests with put options | 22.8 | ||
| 7,402.4 | 7,148.2 | 8,146.1 | |
| Pension provisions | 979.9 | 1,027.2 | |
| Deferred taxes | 708.8 | 659.1 | 579.0 |
| Other non-current provisions | 1,091.2 | 1,067.0 | |
| Other non-current operating liabilities | 264.1 | 89.0 | |
| Non-current income tax liabilities | 51.3 | 52.2 | |
| 3,095.4 | 2,894.5 | 2,598.8 | |
| Total non-current liabilities | 10,497.8 | 10,042.7 | 10,744.9 |
| Current liabilities | |||
| Bonds payable (current portion) | 718.6 | 708.8 | |
| Bank loans (current portion) | 690.5 | 461.4 | |
| Other current interest-bearing liabilities | 634.2 | 209.5 | 1,036.9 |
| 2,043.2 | 1,379.7 | 1,498.9 | |
| Non-controlling interests with put options | 21.7 | 45.1 | |
| 2,065.0 | 1,424.9 | 1,543.0 | |
| Pension provisions (current portion) | 87.8 | 87.4 | |
| Other current provisions | 195.3 | 235.5 | 180.5 |
| Trade payables | 1,411.8 | 1,372.3 | 1,358.6 |
| Other current operating liabilities | 942.6 | 989.8 | |
| Current income tax liabilities | 117.9 | 147.6 | |
| 2,755.4 | 2,832.7 | 2,691.3 | |
| Total current liabilities | 4,820.3 | 4,257.5 | 4,234.3 |
| Total liabilities | 15,318.1 | 14,300.3 | 14,979.2 |
| Balance sheet total | 29,279.9 | 28,007.8 | 28,258.9 |
| Subscribed share capital |
Share premium |
Retained earnings |
Cash flow hedge reserve |
|
|---|---|---|---|---|
| €m | ||||
| 1 January 2012 | 562.5 | 5,539.4 | 6,623.1 | -8.9 |
| IAS 19R (revised) | -3.8 | |||
| 1 January 2012 (restated) | 562.5 | 5,539.4 | 6,619.3 | -8.9 |
| Profit for the period | -27.3 | |||
| Other comprehensive income | -33.1 | 2.2 | ||
| Total comprehensive income | -60.4 | 2.2 | ||
| Changes in ownership interests in subsidiaries | -0.5 | |||
| Changes in non-controlling interests with put options | 29.5 | |||
| Other changes | 1.4 | |||
| Dividends | -65.6 | |||
| 30 June 2012 | 562.5 | 5,539.4 | 6,523.7 | -6.7 |
| 1 January 2013 | 562.5 | 5,539.4 | 6,673.5 | -3.7 |
| IAS 19R (revised) | -5.4 | |||
| 1 January 2013 (restated) | 562.5 | 5,539.4 | 6,668.1 | -3.7 |
| Profit for the period | 175.0 | |||
| Other comprehensive income | 138.2 | 3.6 | ||
| Total comprehensive income | 313.2 | 3.6 | ||
| Changes in ownership interests in subsidiaries | -58.9 | |||
| Changes in non-controlling interests with put options | -1.0 | |||
| Other changes | 1.2 | |||
| Dividends | -88.1 | |||
| 30 June 2013 | 562.5 | 5,539.4 | 6,834.6 | -0.1 |
| Business trend January to June 2013 | Consolidated statement of cash flows |
|---|---|
| Outlook | Consolidated balance sheet |
| Risk report | Consolidated statement of changes in equity |
| Consolidated income statement | Segment reporting/Notes |
| Consolidated statement of comprehensive income | Notes to the interim consolidated financial statements |
| Other components of equity | ||||||
|---|---|---|---|---|---|---|
| Total equity | Non-controlling interests |
Equity attributable to shareholders |
Total other components of equity |
Currency translation |
Asset revaluation reserve |
Available for sale reserve |
| 13,568.6 | 951.6 | 12,617.0 | -108.0 | -153.7 | 35.5 | 19.1 |
| -4.4 | -0.6 | -3.8 | ||||
| 13,564.2 | 951.0 | 12,613.2 | -108.0 | -153.7 | 35.5 | 19.1 |
| 85.7 | 113.0 | -27.3 | ||||
| 377.1 | -18.2 | 395.3 | 428.4 | 424.5 | 1.6 | |
| 462.7 | 94.8 | 368.0 | 428.4 | 424.5 | 1.6 | |
| -1.1 | -0.6 | -0.5 | ||||
| 56.6 | 27.1 | 29.5 | ||||
| 0.6 | 0.6 | -0.8 | -0.8 | |||
| -121.2 | -55.6 | -65.6 | ||||
| 13,961.9 | 1,016.7 | 12,945.1 | 319.6 | 270.8 | 34.7 | 20.7 |
| 13,713.4 | 1,098.8 | 12,614.6 | -160.8 | -213.5 | 34.0 | 22.3 |
| -5.9 | -0.5 | -5.4 | ||||
| 13,707.5 | 1,098.3 | 12,609.2 | -160.8 | -213.5 | 34.0 | 22.3 |
| 284.5 | 109.5 | 175.0 | ||||
| -438.9 | -9.8 | -429.1 | -567.3 | -578.7 | 7.7 | |
| -154.5 | 99.7 | -254.1 | -567.3 | -578.7 | 7.7 | |
| -108.6 | -49.7 | -58.9 | ||||
| 1.1 | 2.0 | -1.0 | ||||
| 0.6 | 0.6 | -0.6 | -0.6 | |||
| -166.4 | -78.3 | -88.1 | ||||
| 13,279.8 | 1,072.1 | 12,207.7 | -728.8 | -792.1 | 33.4 | 30.0 |
| Group areas January - June 2013 | Western and Northern Europe |
Eastern Europe Central Asia |
North America | |||
|---|---|---|---|---|---|---|
| €m | 2012 1) | 2013 | 2012 1) | 2013 | 2012 1) | 2013 |
| External revenue | 1,998 | 1,902 | 642 | 556 | 1,538 | 1,554 |
| Inter-Group areas revenue | 31 | 32 | 0 | |||
| Revenue | 2,029 | 1,934 | 642 | 556 | 1,538 | 1,554 |
| Change to previous year in % | -4.7% | -13.4% | 1.1% | |||
| Operating income before depreciation (OIBD) | 184 | 177 | 88 | 67 | 187 | 217 |
| as % of revenue | 9.1% | 9.1% | 13.8% | 12.1% | 12.2% | 13.9% |
| Depreciation | -129 | -127 | -51 | -61 | -124 | -115 |
| Operating income | 56 | 50 | 37 | 7 | 64 | 102 |
| as % of revenue | 2.7% | 2.6% | 5.7% | 1.2% | 4.1% | 6.5% |
| Results from associated companies | 9 | 5 | 1 | -1 | -2 | -3 |
| Results from other participations | 0 | 2 | 0 | 0 | 0 | 0 |
| Results from participations | 9 | 7 | 1 | -1 | -2 | -3 |
| Additional ordinary result | ||||||
| Earnings before interest and taxes (EBIT) | 65 | 56 | 38 | 6 | 61 | 99 |
| Capital expenditures 2) | 65 | 57 | 89 | 48 | 59 | 82 |
| Segment assets 3) | 6,935 | 6,500 | 2,261 | 2,208 | 8,409 | 7,932 |
| OIBD as % of segment assets | 2.7% | 2.7% | 3.9% | 3.0% | 2.2% | 2.7% |
| Number of employees as at 30 June | 13,635 | 13,244 | 9,971 | 9,594 | 13,011 | 12,085 |
| Average number of employees | 13,614 | 13,271 | 9,910 | 9,495 | 12,550 | 11,759 |
1) Amounts restated
2) Capital expenditures = in the segment columns: property, plant and equipment as well as intangible assets investments; in the reconciliation column: investments in financial fixed assets and other business units
3) Segment assets = property, plant and equipment as well as intangible assets
4) Includes corporate functions, eliminations of intra-Group relationships between the segments and additional ordinary result.
| Business trend January to June 2013 | Consolidated statement of cash flows | |||
|---|---|---|---|---|
| Outlook | Consolidated balance sheet | |||
| Risk report | Consolidated statement of changes in equity | |||
| Consolidated income statement | Segment reporting/Notes | |||
| Consolidated statement of comprehensive income | Notes to the interim consolidated financial statements |
| Asia-Pacific | Africa-Mediterranean | Group Services | Reconciliation 4) | Continuing | |||||
|---|---|---|---|---|---|---|---|---|---|
| Basin | operations | ||||||||
| 2012 1) | 2013 | 2012 1) | 2013 | 2012 1) | 2013 | 2012 1) | 2013 | 2012 1) | 2013 |
| 1,653 | 1,744 | 539 | 554 | 211 | 249 | 6,580 | 6,560 | ||
| 3 | 4 | 18 | 14 | 184 | 170 | -235 | -219 | ||
| 1,655 | 1,748 | 557 | 568 | 395 | 419 | -235 | -219 | 6,580 | 6,560 |
| 5.6% | 1.9% | 6.2% | -0.3% | ||||||
| 395 | 437 | 96 | 109 | 11 | 10 | -53 | -64 | 907 | 953 |
| 23.8% | 25.0% | 17.2% | 19.3% | 2.7% | 2.5% | 22.6% | 29.1% | 13.8% | 14.5% |
| -76 | -85 | -18 | -19 | 0 | 0 | -5 | -6 | -403 | -413 |
| 319 | 352 | 78 | 90 | 10 | 10 | -58 | -70 | 505 | 540 |
| 19.3% | 20.1% | 14.0% | 15.8% | 2.6% | 2.5% | 24.8% | 31.9% | 7.7% | 8.2% |
| 4 | 5 | 1 | 1 | 12 | 7 | ||||
| 1 | 2 | 2 | 2 | 0 | 3 | 6 | |||
| 5 | 7 | 3 | 2 | 0 | 16 | 13 | |||
| -54 | -5 | -54 | -5 | ||||||
| 324 | 359 | 80 | 92 | 10 | 10 | -112 | -75 | 467 | 548 |
| 90 | 128 | 22 | 43 | 7 | 362 | 332 | 720 | ||
| 4,063 | 4,032 | 725 | 766 | 38 | 38 | 22,430 | 21,475 | ||
| 9.7% | 10.8% | 13.2% | 14.3% | 28.0% | 27.5% | 4.0% | 4.4% | ||
| 14,271 | 15,268 | 3,417 | 3,318 | 58 | 58 | 54,362 | 53,566 | ||
| 14,156 | 15,251 | 3,429 | 3,320 | 58 | 58 | 53,716 | 53,154 | ||
The interim consolidated financial statements of HeidelbergCement AG as of 30 June 2013 were prepared on the basis of IAS 34 (Interim Financial Statements). All International Financial Reporting Standards (IFRSs), including the interpretations of the IFRS Interpretations Committee, 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 2012, with selected explanatory notes, was chosen. The accounting and valuation principles applied in the preparation of the interim financial statements correspond in principle to those of the consolidated financial statements as at 31 December 2012. Detailed explanations can be found on pages 156 f. in the Notes to the 2012 Annual Report, which forms the basis for these interim financial statements.
In accordance with IAS 34, the 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 as at 30 June 2013 were not subject to any audits or reviews.
The following new or amended IASB standards and interpretations were applicable for the first time in these interim consolidated financial statements:
| Half -Year Financial Repor t January to June 2013 |
|
|---|---|
| Business trend January to June 2013 | Consolidated statement of cash flows |
| Outlook | Consolidated balance sheet |
| Risk report | Consolidated statement of changes in equity |
| Consolidated income statement | Segment reporting/Notes |
| Consolidated statement of comprehensive income | Notes to the interim consolidated financial statements |
– IFRIC 20 (Stripping Costs in the Production Phase of a Surface Mine) describes the accounting of stripping costs during the production phase in surface mining and clarifies when production stripping costs should lead to the recognition of an asset and how that asset should be classified and measured both initially and in subsequent periods. The retrospective application of IFRIC 20 resulted in consolidated balance sheet reclassifications in earlier periods. The effects on the consolidated income statement were of subordinate importance.
The following tables show the impact of the retrospective application of IAS 19R and IFRIC 20 on the income statement, the statement of comprehensive income, the statement of cash flows, and the balance sheet in previous periods. The retrospective adjustment of shareholders' equity is shown in the statement of changes in equity.
| Income statement | January - June 2012 | ||
|---|---|---|---|
| €m | Before adjustment |
IAS 19R | Adjusted |
| Other operating expenses | -1,858.4 | -4.5 | -1,862.9 |
| Operating income | 509.0 | -4.5 | 504.5 |
| Other financial result | -22.1 | -2.5 | -24.6 |
| Profit before tax from continuing operations | 174.0 | -7.0 | 167.0 |
| Income taxes | -86.7 | -0.6 | -87.3 |
| Profit for the period | 93.2 | -7.6 | 85.7 |
| Thereof Group share of profit | -19.7 | -7.6 | -27.3 |
| Earnings per share in € | |||
| Loss per share attributable to the parent entity | -0.11 | -0.04 | -0.15 |
| Loss per share – continuing operations | -0.14 | -0.04 | -0.18 |
| Earnings per share – discontinued operations | 0.03 | 0.03 |
| Statement of comprehensive income | January - June 2012 | ||
|---|---|---|---|
| €m | Before adjustment |
IAS 19R | Adjusted |
| Profit for the period | 93.2 | -7.6 | 85.7 |
| Other comprehensive income not being reclassified to profit or loss in subsequent periods |
|||
| Actuarial gains and losses | -55.4 | 7.0 | -48.4 |
| Income taxes | 14.6 | 0.8 | 15.4 |
| -40.9 | 7.8 | -33.1 | |
| Other comprehensive income | 369.3 | 7.8 | 377.1 |
| Total comprehensive income | 462.5 | 0.2 | 462.7 |
| Relating to HeidelbergCement AG shareholders | 367.8 | 0.2 | 368.0 |
| Statement of cash flows | January - June 2012 | |||
|---|---|---|---|---|
| €m | Before adjustment |
IAS 19R | Adjusted | |
| Net income from continuing operations | 87.3 | -7.6 | 79.7 | |
| Income taxes | 86.7 | 0.6 | 87.3 | |
| Elimination of other non-cash items | 151.6 | 7.0 | 158.6 | |
| Cash flow | 526.6 | 526.6 |
| Balance sheet | 1 January 2012 | |||
|---|---|---|---|---|
| €m | Before adjustment |
IAS 19R | IFRIC 20 | Adjusted |
| Assets | ||||
| Other intangible assets | 345.9 | 3.8 | 349.6 | |
| Land and buildings | 5,296.7 | 15.5 | 5,312.3 | |
| Deferred taxes | 379.2 | 2.2 | 381.4 | |
| Other non-current receivables | 294.0 | -6.2 | 287.8 | |
| Total non-current assets | 23,394.9 | 2.2 | 13.1 | 23,410.2 |
| Other current operating receivables | 359.0 | -13.1 | 345.9 | |
| Total current assets | 5,625.4 | -13.1 | 5,612.3 | |
| Balance sheet total | 29,020.3 | 2.2 | 29,022.5 | |
| Shareholders' equity and non-controlling interests | ||||
| Retained earnings | 6,623.1 | -3.8 | 6,619.3 | |
| Non-controlling interests | 951.6 | -0.6 | 951.0 | |
| Total equity | 13,568.6 | -4.4 | 13,564.2 | |
| Non-current pension provisions | 832.6 | 6.6 | 839.2 | |
| Total liabilities | 15,451.7 | 6.6 | 15,458.3 | |
| Balance sheet total | 29,020.3 | 2.2 | 29,022.5 |
| Before adjustment |
IAS 19R | IFRIC 20 | Adjusted | ||
|---|---|---|---|---|---|
| 331.1 | 4.0 | 335.1 | |||
| 5,621.1 | 16.2 | 5,637.3 | |||
| 401.1 | 2.4 | 403.5 | |||
| 399.6 | -7.5 | 392.1 | |||
| 23,789.9 | 2.3 | 12.7 | 23,805.0 | ||
| 389.8 | -12.7 | 377.1 | |||
| 5,487.7 | -12.7 | 5,475.0 | |||
| 29,277.6 | 2.3 | 29,279.9 | |||
| 6,527.3 | -3.6 | 6,523.7 | |||
| 1,017.3 | -0.6 | 1,016.7 | |||
| 13,966.1 | -4.2 | 13,961.9 | |||
| 973.4 | 6.5 | 979.9 | |||
| 15,311.6 | 6.5 | 15,318.1 | |||
| 29,277.6 | 2.3 | 29,279.9 | |||
| 30 June 2012 |
| Consolidated balance sheet | 31 December 2012 | ||||
|---|---|---|---|---|---|
| €m | Before adjustment |
IAS 19R | IFRIC 20 | Adjusted | |
| Assets | |||||
| Other intangible assets | 297.7 | 4.3 | 302.0 | ||
| Land and buildings | 5,272.7 | 16.8 | 5,289.5 | ||
| Deferred taxes | 442.0 | 2.6 | 444.6 | ||
| Other non-current receivables | 275.4 | -8.8 | 266.6 | ||
| Total non-current assets | 22,963.9 | 2.6 | 12.3 | 22,978.7 | |
| Other current operating receivables | 365.6 | -12.3 | 353.3 | ||
| Total current assets | 5,025.6 | -12.3 | 5,013.3 | ||
| Balance sheet total | 28,005.2 | 2.6 | 28,007.8 | ||
| Shareholders' equity and non-controlling interests | |||||
| Retained earnings | 6,673.5 | -5.4 | 6,668.1 | ||
| Non-controlling interests | 1,098.8 | -0.5 | 1,098.3 | ||
| Total equity | 13,713.4 | -5.9 | 13,707.5 | ||
| Non-current pension provisions | 1,018.7 | 8.5 | 1,027.2 | ||
| Total liabilities | 14,291.8 | 8.5 | 14,300.3 | ||
| Balance sheet total | 28,005.2 | 2.6 | 28,007.8 |
A detailed description of the pronouncements adopted by the IASB but not applicable until a later date is given in the Notes to the 2012 Annual Report on pages 159 f.
In order to improve transparency, the presentation of proceeds from and repayment of bonds and loans in the consolidated statement of cash flows was amended to the effect that proceeds and repayments relating to the syndicated facility agreement are reported on a net basis within a reporting period. Furthermore, changes to short-term interest-bearing receivables and liabilities are now reported separately. The following table shows the adjustments to the previous period.
| Statement of cash flows | January - June 2012 | ||
|---|---|---|---|
| €m | Before adjustment |
Adjustment | Adjusted |
| Proceeds from bond issuance and loans | 932.4 | -471.5 | 460.8 |
| Repayment of bonds and loans | -1,194.9 | 6.2 | -1,188.7 |
| Changes in short-term interest-bearing assets and liabilities | 465.3 | 465.3 | |
| Cash flow from financing activities | -384.3 | -384.3 |
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.
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 | Exchange rates at reporting date Average exchange rates |
||||
|---|---|---|---|---|---|
| EUR | 31 Dec. 2012 | 3O June 2013 | 01-06/2012 | 01-06/2013 | |
| USD | USA | 1.3197 | 1.3010 | 1.2975 | 1.3131 |
| AUD | Australia | 1.2693 | 1.4238 | 1.2568 | 1.2953 |
| CAD | Canada | 1.3090 | 1.3689 | 1.3047 | 1.3335 |
| CNY | China | 8.2218 | 7.9850 | 8.2011 | 8.1262 |
| GBP | Great Britain | 0.8117 | 0.8556 | 0.8227 | 0.8506 |
| GEL | Georgia | 2.1863 | 2.1478 | 2.1364 | 2.1721 |
| GHS | Ghana | 2.5089 | 2.5883 | 2.2826 | 2.5458 |
| HKD | Hong Kong | 10.2227 | 10.0925 | 10.0699 | 10.1879 |
| IDR | Indonesia | 12,761.02 | 12,917.63 | 12,002.05 | 12,810.71 |
| INR | India | 72.4030 | 77.4525 | 67.5599 | 72.2250 |
| KZT | Kazakhstan | 198.7850 | 198.4500 | 192.2501 | 198.2502 |
| MYR | Malaysia | 4.0355 | 4.1105 | 4.0043 | 4.0373 |
| NOK | Norway | 7.3435 | 7.8959 | 7.5764 | 7.5232 |
| PLN | Poland | 4.0795 | 4.3250 | 4.2421 | 4.1755 |
| RON | Romania | 4.4453 | 4.4615 | 4.3904 | 4.3904 |
| RUB | Russia | 40.2910 | 42.7183 | 39.6832 | 40.7538 |
| SEK | Sweden | 8.5802 | 8.7152 | 8.8821 | 8.5323 |
| CZK | Czech Republic | 25.0815 | 26.0060 | 25.1582 | 25.6876 |
| HUF | Hungary | 291.3550 | 295.1600 | 295.2213 | 296.0685 |
| TZS | Tanzania | 2,145.42 | 2,173.76 | 2,083.72 | 2,182.71 |
| TRY | Turkey | 2.3546 | 2.5093 | 2.3380 | 2.3798 |
To strengthen the market position in the field of ready-mixed concrete, HeidelbergCement acquired the outstanding 50% share in the joint venture BLG Transportbeton GmbH & Co. KG (BLGT), Munich, on 1 January 2013. The purchase price amounted to €6.8 million and was paid in cash. Thus far the company has been proportionately included in the consolidated financial statements. The fair value of the previously held shares amounted to €6.8 million. The revaluation of the previous shareholding resulted in a profit of €2.4 million, which was recognised in the additional ordinary income. The purchase price allocation has not yet been completed. The valuation of tangible fixed assets and thus deferred taxes may be revised. The provisionally recognised goodwill of €6.1 million, which is not deductible for tax purposes, reflects the synergy potential arising from the business combination. As part of the acquisition, receivables were acquired with a gross value of €0.2 million, which are likely to be fully recoverable. The fair value of the receivables amounts to €0.2 million.
On 2 April 2013, HeidelbergCement acquired the remaining 50% of the shares in the joint venture Midland Quarry Products Limited (MQP), Whitwick, within the scope of a business combination, as well as two necessary operating quarries. The acquired company is one of the leading suppliers of aggregates and asphalt for the construction industry and rail industry in the United Kingdom. The purchase price amounted to €39.4 million and was paid in cash. Thus far the company has been proportionately consolidated. The provisional fair value of the previously held equity interest in the company amounted to €33.4 million as at the acquisition date. The revaluation of the shares resulted in a loss of €0.4 million, which was recognised in the additional ordinary expenses. The purchase price allocation has not yet been completed. The valuations of the acquired property, plant, and equipment, exploitation land, as well as the associated deferred taxes are essentially outstanding. The provisionally recognised goodwill as part of the preliminary valuation amounts to €6.3 million and is not deductible for tax purposes. Transaction costs of €0.5 million were recognised in the additional ordinary
| Half -Year Financial Repor t January to June 2013 |
|
|---|---|
| Business trend January to June 2013 | Consolidated statement of cash flows |
| Outlook | Consolidated balance sheet |
| Risk report | Consolidated statement of changes in equity |
| Consolidated income statement | Segment reporting/Notes |
| Consolidated statement of comprehensive income | Notes to the interim consolidated financial statements |
expenses. As part of the business combination, receivables with a fair value of €14.0 million were acquired. The gross value of the receivables is €14.3 million, of which €0.3 million is likely to be irrecoverable.
The following table shows the provisional fair values of the identifiable assets and liabilities of the business combinations as at the acquisition date.
| Preliminary fair values recognised as at the acquisition date | |||
|---|---|---|---|
| €m | BLGT | MQP | Total |
| Intangible assets | 0.1 | 0.1 | |
| Property, plant and equipment | 9.1 | 48.1 | 57.2 |
| Inventories | 0.3 | 6.8 | 7.1 |
| Trade receivables | 0.2 | 14.0 | 14.2 |
| Cash and cash equivalents | 1.0 | 8.3 | 9.3 |
| Other assets | 0.4 | 15.3 | 15.6 |
| Total assets | 11.1 | 92.5 | 103.6 |
| Provisions | 0.4 | 1.4 | 1.7 |
| Liabilities | 2.7 | 15.5 | 18.2 |
| Deferred taxes | 0.7 | 9.1 | 9.7 |
| Total liabilities | 3.7 | 26.0 | 29.7 |
| Net assets | 7.4 | 66.5 | 73.9 |
From the date of first-time consolidation to 30 June 2013, the business combinations contributed €34.8 million to revenue and €1.8 million to results. If the business combinations had taken place on 1 January 2013, contributions to revenue and results would be higher by €9.4 million and €0.2 million, respectively.
HeidelbergCement did not effect any business combinations in the first half of 2012.
HeidelbergCement did not effect any significant divestments in the first half of 2013, as in the first half of 2012.
| January - June 2013 | Cement | Aggregates | products | Building | Concrete service-other |
Intra Group eliminations |
Total | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| €m | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 |
| Western and Northern Europe |
830 | 812 | 426 | 392 | 231 | 207 | 865 | 827 | -323 | -304 | 2,029 | 1,934 |
| Eastern Europe-Central Asia | 530 | 460 | 50 | 42 | 103 | 91 | -41 | -37 | 642 | 556 | ||
| North America | 489 | 521 | 457 | 460 | 335 | 320 | 423 | 413 | -166 | -160 | 1,538 | 1,554 |
| Asia-Pacific | 987 | 1,067 | 276 | 288 | 14 | 13 | 555 | 597 | -177 | -217 | 1,655 | 1,748 |
| Africa-Mediterranean Basin | 401 | 412 | 45 | 44 | 150 | 152 | -39 | -40 | 557 | 568 | ||
| Group Services | 395 | 419 | 395 | 419 | ||||||||
| Inter-Group area revenue within business lines |
-9 | -8 | -9 | -8 | ||||||||
| Total | 3,229 | 3,264 | 1,254 | 1,226 | 580 | 540 | 2,490 | 2,499 | -746 | -758 | 6,807 | 6,771 |
| Inter-Group area revenue between business lines |
-226 | -211 | -226 | -211 | ||||||||
| Continuing operations | -973 | -969 | 6,580 | 6,560 |
The following table shows the composition of the results from discontinued operations.
| Net income from discontinued operations | January - June | |
|---|---|---|
| €m | 2012 | 2013 |
| Income | 172.3 | |
| Expenses | -22.4 | -4.9 |
| Income taxes | 28.4 | -71.2 |
| Net income from discontinued operations | 6.0 | 96.1 |
The results include income and expenses incurred in connection with operations of the Hanson Group discontinued in previous years and which are derived essentially from provisions for damages and environmental obligations. Further details on the obligations are explained in the Notes to the Annual Report 2012 on page 201 f. Due to current court rulings, the management has altered its estimate of reimbursements from insurers and set up a receivable in the amount of €172.3 million. The receivable was recognised in the income from discontinued operations.
| Earnings per share | January - June | |
|---|---|---|
| €m | 2012 | 2013 |
| Profit for the period | 85.7 | 284.5 |
| Non-controlling interests | 113.0 | 109.5 |
| Group share of profit | -27.3 | 175.0 |
| Number of shares in '000s (weighted average) | 187,500 | 187,500 |
| Earnings / loss per share in € | -0.15 | 0.93 |
| Net income / loss from continuing operations – attributable to the parent entity | -33.3 | 78.9 |
| Earnings / loss per share in € – continuing operations | -0.18 | 0.42 |
| Net income from discontinued operations – attributable to the parent entity | 6.0 | 96.1 |
| Earnings per share in € – discontinued operations | 0.03 | 0.51 |
The basic earnings per share are calculated in accordance with IAS 33 (Earnings per Share), by dividing the Group share of profit for the financial year by the weighted average of the number of issued shares. The diluted earnings per share indicator takes into account not only currently issued shares but also shares potentially available through option rights. The earnings per share were not diluted in the reporting period in accordance with IAS 33.30.
An impairment test on goodwill in accordance with IAS 36 (Impairment of Assets) is generally performed annually within the HeidelbergCement Group in the fourth quarter once the operational three-year plan has been prepared, or if there are indications of 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.
As at 30 June 2013, the management carried out an impairment review. The review indicated that no impairment needed to be recognised.
| Half -Year Financial |
Repor t January |
to June 2013 |
|
|---|---|---|---|
| Business trend January to June 2013 | Consolidated statement of cash flows |
|---|---|
| Outlook | Consolidated balance sheet |
| Risk report | Consolidated statement of changes in equity |
| Consolidated income statement | Segment reporting/Notes |
| Consolidated statement of comprehensive income | Notes to the interim consolidated financial statements |
The comprehensive income for the period decreased by €-617.2 million in comparison with the previous year to €-154.5 million (previous year: 462.7). The profit for the period increased by €198.8 million to €284.5 million (previous year: 85.7). Other comprehensive income decreased by €-816.0 million to €-438.9 million (previous year: 377.1). The actuarial gains and losses of €138.3 million (after income taxes) recognised in other comprehensive income are primarily due to changes in interest rates. In the same period of the previous year, the losses amounted to €-33.1 million. The positive changes in the cash flow hedge reserve of €4.3 million in the reporting period (previous year: 2.2) result primarily from currency swaps and commodities. The market valuation of available for sale assets resulted in gains of €7.7 million (previous year: 1.6). Foreign currency translation resulted in losses of €-589.2 million in the reporting period. The losses are due, in particular, to the appreciation of the euro against the Australian dollar and British pound since 31 December 2012. In the same period of the previous year, the foreign exchange gains amounted to €406.3 million and resulted primarily from the depreciation of the euro against the US dollar and British pound.
The non-controlling interests in the comprehensive income of €99.7 million are composed of the non-controlling interest of €109.4 million in the profit for the period, which results in particular from the positive contributions to profits made by our Indonesian and African subsidiaries, a negative result from foreign currency translation of €-10.5 million as well as changes in the cash flow hedge reserve of €0.7 million
As at 30 June 2013, the subscribed share capital amounts to €562.5 million – unchanged from 31 December 2012 – and is divided into 187,500,000 no-par value bearer shares, each representing a notional amount of €3.00 in the share capital. The share premium of €5,539.4 million (unchanged from 31 December 2012) was essentially created from the premium from capital increases. As at the balance sheet date, the company has no treasury shares.
At the balance sheet date, the retained earnings amounted to €6,834.6 million (previous year: 6,668.1). They were increased in the reporting period by the total comprehensive income of €313.2 million, which is composed of the profit for the period of €175.0 million and the actuarial gains and losses of €138.2 million recognised in other comprehensive income. The change in the ownership interests in subsidiaries amounting to €-58.9 million resulted mainly from the acquisition of the remaining 49% of shares in the Russian cement manufacturer CJSC "Construction Materials".
Dividends of €88.1 million (€0.47 per share) were paid to shareholders of HeidelbergCement AG. The other components of equity were reduced by a total of €-567.9 million, of which €-578,7 million related to foreign currency translation losses and €11.3 million to positive changes in the fair value of cash flow hedges and assets available for sale.
The non-controlling interests amounted to €1,072.1 million (previous year: 1,098.3) as at the balance sheet date. This rise resulted from the profit for the period attributable to non-controlling shareholders of €109.5 million and other comprehensive income totalling €-9.8 million, primarily due to the change in foreign currency translation. As at the balance sheet date, the non-controlling interests include foreign currency translation differences of €-68.4 million (previous year: -57.5). The acquisition of the remaining 49% of shares in our subsidiary CJSC "Construction Materials" led to a reduction of the non-controlling interests to the amount of €-49.7 million. In the reporting period, dividends totalling €78.3 million were paid to non-controlling shareholders. Major payments were made to the non-controlling shareholders of our Indonesian subsidiary PT Indocement and our African subsidiaries.
The actuarial gains and losses were adjusted on the basis of the interest rates for the key countries applicable at the reporting date. The rise in interest rates by around 0.3 percentage points led to a reduction in the provisions for pensions and similar obligations by €158.4 million.
The following table assigns the individual balance sheet items for the financial instruments to classes and valuation categories. In addition, the aggregate carrying amounts for each measurement category and the fair values for each class are shown.
Carrying amounts, measurement and fair values by measurement categories
| Category of |
Amortised cost |
Cost | Fair value with P/L |
Fair value without |
Carrying amount |
Fair value |
|
|---|---|---|---|---|---|---|---|
| €m | IAS 39 1) | effect | P/L effect | ||||
| 30 June 2013 | |||||||
| Assets | |||||||
| Financial investments − available for sale at cost | AfS | 64.3 | 64.3 | ||||
| Financial investments − available for sale at fair value | AfS | 27.4 | 27.4 | 27.4 | |||
| Loans and other interest-bearing receivables | LaR | 175.6 | 175.6 | 179.0 | |||
| Trade receivables and other operating receivables | LaR | 2,156.0 | 2,156.0 | 2,156.0 | |||
| Cash and cash equivalents | LaR | 1,423.3 | 1,423.3 | 1,423.3 | |||
| Derivatives − hedge accounting | Hedge | 1.2 | 1.2 | 1.2 | |||
| Derivatives − held for trading | HfT | 42.8 | 42.8 | 42.8 | |||
| Liabilities | |||||||
| Bonds payable, bank loans, and miscellaneous financial liabilities |
FLAC | 9,603.4 | 9,603.4 | 10,491.3 | |||
| Trade payables, liabilities relating to personnel, and miscellaneous operating liabilities |
FLAC | 2,203.5 | 2,203.5 | 2,203.5 | |||
| Liabilities from finance lease | FLAC | 15.5 | 15.5 | 15.5 | |||
| Derivatives − hedge accounting | Hedge | 5.6 | 5.6 | 5.6 | |||
| Derivatives − held for trading | HfT | 20.5 | 20.5 | 20.5 | |||
| Non-controlling interests with put options 2) | FLAC | 23.2 | 20.9 | 44.1 | 20.9 | ||
| 31 December 2012 | |||||||
| Assets | |||||||
| Financial investments − available for sale at cost | AfS | 49.4 | 49.4 | ||||
| Financial investments − available for sale at fair value | AfS | 18.7 | 18.7 | 18.7 | |||
| Loans and other interest-bearing receivables | LaR | 166.1 | 166.1 | 169.6 | |||
| Trade receivables and other operating receivables | LaR | 1,788.5 | 1,788.5 | 1,788.9 | |||
| Cash and cash equivalents | LaR | 1,474.8 | 1,474.8 | 1,474.8 | |||
| Derivatives − hedge accounting | Hedge | 0.3 | 0.3 | 0.3 | |||
| Derivatives − held for trading | HfT | 22.9 | 22.9 | 22.9 | |||
| Liabilities | |||||||
| Bonds payable, bank loans, and miscellaneous financial liabilities |
FLAC | 8,425.8 | 8,425.8 | 9,510.1 | |||
| Trade payables, liabilities relating to personnel, and miscellaneous operating liabilities |
FLAC | 2,308.3 | 2,308.3 | 2,308.3 | |||
| Liabilities from finance lease | FLAC | 17.2 | 17.2 | 17.2 | |||
| Derivatives − hedge accounting | Hedge | 4.8 | 4.8 | 4.8 | |||
| Derivatives − held for trading | HfT | 80.2 | 80.2 | 80.2 | |||
| Non-controlling interests with put options 2) | FLAC | 23.0 | 22.1 | 45.1 | 22.1 |
1) AfS: Available for sale, LaR: Loans and receivables, Hedge: Hedge accounting, HfT: Held for trading, FLAC: Financial liabilities at amortised cost 2) The non-controlling interests with put options accounted for at cost are not taken into account in the fair value data.
| Half -Year Financial Repor t January to June 2013 |
|
|---|---|
| Business trend January to June 2013 | Consolidated statement of cash flows |
| Outlook | Consolidated balance sheet |
| Risk report | Consolidated statement of changes in equity |
| Consolidated income statement | Segment reporting/Notes |
| Consolidated statement of comprehensive income | Notes to the interim consolidated financial statements |
Available for sale at cost investments are equity investments measured at cost, for which no listed price on an active market exists and whose fair values cannot be reliably determined. Therefore, no fair value is indicated for these instruments. Available for sale at fair value investments are measured at fair value on the basis of the stock market prices on the balance sheet date. Derivative financial instruments, both those designated as hedges and those held for trading, are also measured at fair value. In these items, the fair value always corresponds to the carrying amount.
The fair values of the long-term loans, other long-term operating receivables, bank loans, finance lease liabilities, and other long-term interest-bearing and operating liabilities correspond to the present values of the future payments, taking into account the interest parameters at the time of payment.
The fair values of the listed bonds correspond to the nominal values multiplied by the price quotations on the balance sheet date. For the financial instruments with short-term maturities, the carrying amounts on the balance sheet date represent reasonable estimates of the fair values.
The following overview shows the valuation hierarchies in which the financial assets and liabilities are classified in accordance with IFRS 13 and which are measured at fair value.
| Fair value hierarchy | 31 December 2012 | 30 June 2013 | ||
|---|---|---|---|---|
| €m | Hierarchy 1 | Hierarchy 2 | Hierarchy 1 | Hierarchy 2 |
| Assets | ||||
| Financial investments − available for sale at fair value | 18.7 | 27.4 | ||
| Derivatives | ||||
| Currency forwards | 0.0 | 1.1 | ||
| Foreign exchange swaps | 5.6 | 21.7 | ||
| Cross-currency interest rate swaps | 17.3 | 21.1 | ||
| Commodities | 0.3 | 0.1 | ||
| Liabilities | ||||
| Derivatives | ||||
| Currency forwards | 0.9 | 0.4 | ||
| Foreign exchange swaps | 70.2 | 12.2 | ||
| Currency swaps | 2.7 | 4.9 | ||
| Cross-currency interest rate swaps | 6.8 | 5.4 | ||
| Interest rate swaps | 0.9 | 0.5 | ||
| Commodities | 1.0 | 0.7 | ||
| Other interest rate and currency derivatives | 2.5 | 2.0 |
In hierarchy 1, the fair value is calculated using prices quoted on an active market (unadjusted) for identical assets or liabilities to which the company has access on the measurement date. For hierarchy 2, the fair value is determined using a discounted cash flow model on the basis of input data that does not involve quoted prices classified in level 1, and which is directly or indirectly observable.
No reportable transactions with related parties took place in the reporting period beyond normal business relations.
A description of the contingent liabilities and other financial commitments of HeidelbergCement Group can be found in the Notes to the 2012 Annual Report on page 213 f. There have been no major changes since 31 December 2012.
After the balance sheet date, there were no reportable events.
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 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 principal opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.
Heidelberg, 31 July 2013
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.
Group Communication Phone: +49 (0) 6221 481-13 227 Fax: +49 (0) 6221 481-13 217 E-mail: [email protected]
Phone: Institutional investors USA and UK: +49 (0) 6221 481-13 925 Institutional investors EU and rest of the world: +49 (0) 6221 481-39568 Private investors: +49 (0) 6221 481-13 256 Fax: +49 (0) 6221 481-13 217 E-mail: [email protected]
The Half-Year Financial Report January to June 2013 was published on 31 July 2013.
| 7 November 2013 |
|---|
| 7 May 2014 |
140 Years
HeidelbergCement AG Berliner Strasse 6 69120 Heidelberg, Germany www.heidelbergcement.com
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