Quarterly Report • Nov 11, 2009
Quarterly Report
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September 2009
| Overview January - September 2009 | July - September | January - September | ||
|---|---|---|---|---|
| EURm | 2008 1) |
2009 | 2008 1) |
2009 |
| Turnover | 3,881 | 3,021 | 10,809 | 8,391 |
| Operating income before depreciation (OIBD) | 871 | 770 | 2,161 | 1,606 |
| in % of turnover | 22.5% | 25.5% | 20.0% | 19.1% |
| Operating income | 671 | 571 | 1,572 | 1,028 |
| Additional ordinary result | 17 | -35 | 44 | 11 |
| Result from participations | 17 | 27 | 51 | 48 |
| Earnings before interest and income taxes (EBIT) | 706 | 563 | 1,667 | 1,087 |
| Profit before tax | 513 | 281 | 1,092 | 442 |
| Net income from continuing operations | 359 | 209 | 818 | 537 |
| Net income / loss from discontinued operations | -10 | -6 | 1,261 | -15 |
| Profit for the financial year | 349 | 203 | 2,079 | 522 |
| Group share of profit | 310 | 149 | 1,985 | 419 |
| Investments | 274 | 128 | 799 | 419 |
1) Figures have been restated following the reclassification of the unwinding of discount to the other financial result
The deterioration of economic performance has slowed during the past months all over the world and seems to have bottomed out in numerous countries. Key indicators point towards a stabilisation but individual countries and markets develop differently and, with the exception of the Asian emerging countries, the overall recovery remains rather hesitant.
In the first nine months of 2009, cement and clinker sales volumes of HeidelbergCement reached 59.2 million tonnes (previous year: 68.5) and were 13.5% below the previous year's level. Sales volumes improved in the Asia-Australia-Africa Group area in the third quarter, driven by a strong demand in China and a favourable development in Bangladesh. Tanzania benefits from the successful capacity expansion. During the last few months, the development in sales volumes of individual Eastern European countries, e.g. Poland, indicates improving prospects. The sales volumes for aggregates decreased by 21.9% to 178.7 million tonnes (previous year: 228.9) in the first nine months. The reduction in deliveries of ready-mixed concrete also slowed down only slightly and the total volume of 26.1 million m3 (previous year: 33.7) meant a decrease of 22.5 % in the first nine months. The development of deliveries of asphalt, which fell by 8.8 % to 7.6 million tonnes (previous year: 8.3), continues to be supported by new activities in the infrastructure sector.
Group turnover reached EUR 8,391 million (previous year: 10,809) during the first nine months, a decline of 22.4% compared to the previous year. Excluding exchange rate and consolidation effects, turnover decreased by 21.8%. The increase in turnover in Asian emerging countries could not offset the decline in other Group areas. However, results developed more successfully and the effects of our comprehensive cost reduction programmes are now becoming increasingly apparent. The operating income before depreciation (OIBD) fell by 25.7% to EUR 1,606 million (previous year: 2,161) and the operating income dropped to EUR 1,028 million (previous year: 1,572), which corresponds to a decline of 34.6 %. OIBD margin for the third quarter of 2009 amounted to 25.5 % and was noticeably above the level of the previous year (22.5%).
The reduction in the additional ordinary result by EUR 32.4 million to EUR 11.4 million (previous year: 43.8) is primarily attributable to restructuring measures and the related depreciation. The results from participations of EUR 47.6 million (previous year: 51.0) remains almost unchanged.
The deterioration of the financial results by EUR 69.1 million to EUR -644.3 million (previous year: -575.2) is mainly the result of the reversal of capitalized financing costs. The reversal took place in connection with the reduction of net indebtedness after the capital increase. The decrease in interest expenses was offset by negative exchange rate effects to the amount of EUR 24.7 million.
The economy-induced decline in operating income with persistently high financing costs resulted in profit before tax from continuing operations to the amount of EUR 442.4 million (previous year: 1,091.6).
The liquidation of provisions, which was partly possible due to the conclusion of tax audits in Australia and the United Kingdom, yielded positive results amounting to EUR 94.8 million (previous year: -273.2) with respect to taxes on income. Profit after tax from continuing operations amounted to EUR 537.2 million (previous year: 818.4).
The profit for the financial year amounted to EUR 521.6 million (previous year: 2,079.2) for the first nine months. Last year's result was affected by the high book profit amounting to EUR 1,276.9 million from the sale of maxit Group. The Group share of profit amounted to EUR 419.3 million (previous year: 1,984.7).
In the first nine months, the balance sheet total fell by EUR 0.6 billion to EUR 25.7 billion. The decrease in fixed assets by EUR 0.2 billion to EUR 20.5 billion is largely due to exchange rate effects. In the context of our "Cash is king" initiative, stocks were decreased by EUR 0.3 billion to EUR 1.4 billion; the trade receivables remained almost unchanged at the amount of EUR 1.7 billion. Cash and cash equivalents amounted to EUR 0.7 billion. Net debt fell to below EUR 9 billion; apart from the proceeds from the capital increase conducted in September, the cost reduction programmes, the operating cash flow and the divestment of non-strategic business units have significantly contributed to the debt reduction.
After refinancing its bank liabilities in June 2009, HeidelbergCement successfully completed a rights issue together with a placement of existing shares in September. By making use of the authorized capital, the company's subscribed share capital has increased by 50 % through the issue of 62.5 million new shares in return for cash contributions. The subscription price for the new shares and the offer price for the previous, private placement of the new shares solely with institutional investors was set at EUR 37 per share. The company received net proceeds of EUR 2.25 billion from the rights issue, which were used to repay existing liabilities to banks. Until 30 September 2009, the company received EUR 1.98 billion; after the end of the subscription period, we obtained the outstanding amount of EUR 0.27 billion on 9 October. The share offering, which was oversubscribed several times, brought HeidelbergCement a number of qualified institutional investors, mainly from the US and the United Kingdom.
At the same time as the placement of the new shares, the company's majority shareholders, amongst others Spohn Cement GmbH and VEM Vermögensverwaltung GmbH as well as certain banks, sold 57.2 million existing shares solely to qualified institutional investors.
By the completion of the capital increase, free float rose to 75.6%. This includes investments of around 3.5% held by the state of Norway and of around 3% held by FMR LLC, Boston (USA) and Gartmore Investment Ltd, London (United Kingdom). According to information available to the company, Ludwig Merckle now holds 24.4% of the shares. The notifications on securities transactions we received in the course of the capital increase according to § 15a of the German Securities Trading Act (Directors' Dealings) are available on our website www.heidelbergcement.com under 'Investor Relations'.
As a result of the rights issue and the placement of existing shares, HeidelbergCement's free float market capitalisation and daily share trading turnover have increased significantly. Therefore there are good prospects for Heidelberg-Cement to be included in the German DAX 30 index in 2010.
In October, HeidelbergCement issued three Euro-Bonds to national and foreign institutional investors with a total issue volume of EUR 2.5 billion: One bond of EUR 1 billion with a term of 5 years, a second of EUR 1 billion with a term of 7 years and a third of EUR 500 million with a term of 10 years. The bonds were well received by investors and oversubscribed several times. The proceeds from the issue were exclusively used to partly repay the syndicated loan. Together with the proceeds from the capital increase, from disposals and the operating cash flow, the Group's bank debts have been reduced by more than EUR 4 billion; at the same time, the maturity structure of our liabilities has improved accordingly. The remaining maturities in 2011 and 2012 have been reduced to a manageable size and will further decrease through the operating cash flow, disposal of assets and capital markets activities in 2010 and 2011.
After the successful completion of the capital markets transactions, the rating agencies Standard & Poor's and Fitch increased their credit rating assessment of HeidelbergCement by two notches to B+ and BB- with a positive outlook.
| 30 September 2009 | 562,500 | 187,500,000 |
|---|---|---|
| Cash capital increase (22 September 2009) | 187,500 | 62,500,000 |
| 1 January 2009 | 375,000 | 125,000,000 |
| Share capital HeidelbergCement AG | Share capital EUR '000s |
Number of shares |
At the end of September 2009, the number of employees in HeidelbergCement's continuing operations was 55,796 (previous year: 64,638). The decrease in the number of employees by 8,842 results to a large part from the location optimisations and capacity adjustments in North America and the United Kingdom that were initiated at an early stage.
In the first nine months, cash flow investments in continuing operations were reduced by 48% to EUR 419 million (previous year: 799). Of this amount, EUR 401 million (previous year: 697) were accounted for investments in tangible fixed assets that were primarily related to maintenance, optimisation and environmental measures at our production sites. The investments in financial fixed assets amounted to EUR 18 million (previous year: 102); these were, in particular, smaller bolt-on acquisitions of shareholdings.
A degree of stabilisation in the economy was clearly noticeable in Europe in the third quarter, albeit at different levels in individual countries. Owing to the sharp decline at the beginning of the year, the economic research institutes' autumn reports now expect gross domestic product to shrink by 3.9% over the whole year.
The reduction in deliveries of cement and clinker slowed down further during the last few months, but in most countries, the overall sales volumes lay noticeably below those of the previous year. The slowdown of the decline was particularly noticeable in some Eastern European countries, such as Poland, Romania and Bosnia. In the United Kingdom, stabilisation trends on a low level are noticeable. Overall, our cement and clinker sales volumes in Europe fell by 18.7% to 27.2 million tonnes (previous year: 33.5).
Deliveries of aggregates decreased by 21.4% to 74.9 million tonnes (previous year: 95.3) in the first nine months. A slight improvement due to slowly increasing demand for aggregates can mainly be seen in the Czech Republic, Hungary, Poland, Benelux and Norway. The asphalt operating line's sales volumes of 3.2 million tonnes (previous year: 3.2) remained at the same level as last year, mainly due to the British Government's economic stimulus programme. Sales volumes of ready-mixed concrete shrunk by 22.5% to 14.3 million m3 (previous year: 18.4) by the end of September. However, deliveries of ready-mixed concrete in Germany are starting to increase again due to recently initiated infrastructural projects. In the course of the divestment programme of non-strategic business units, HeidelbergCement agreed to the sale of its activities in Israel, which includes the production of aggregates, readymixed concrete and asphalt. The transaction is expected to be completed by the end of this year.
In the building products business line, which mainly comprises Hanson's building products in the United Kingdom, the continuing weakness of the British residential construction sector resulted in a substantial decrease in volumes, particularly with regard to bricks and lightweight blocks. In Measham (Leicestershire), we have commissioned Europe's leading-edge brick plant. With this highly efficient installation, we are now fully prepared for a recovery in activities in the residential construction sector.
The turnover of the Europe Group area fell by 28.6% to EUR 4,006 million (previous year: 5,610); the operational decrease amounted to 20.6%. Whilst no significant consolidation effects were recorded, turnover was clearly affected by the development of exchange rates: The negative effect of the weakening of the British pound, the Swedish and the Norwegian crowns as well as the Eastern European currencies amounted to EUR 559 million.
In North America, HeidelbergCement is represented in the US and Canada. In the US, the growth of the gross domestic product in the third quarter points to an end of the downturn. The rise in the number of planning permissions and new housing is the first sign of an easing in the residential market. In addition, the housing prices recuperated slightly, although at low levels. However, the recovery process in the US and Canada is hampered mainly by the high unemployment rate and the deterioration of consumer climate that accompanies it.
The cement sales volumes of our North American plants fell by 26.7% to 7.8 million tonnes (previous year: 10.7) in the first nine months. This means that the decline has slowed down somewhat but there is no clear improvement trend discernable as yet. Nearly half the consumption of concrete in the US is generated by public building projects resulting from the economic stimulus programme. Owing to the delay in the allocation of public funds, numerous approved infrastructural projects have been postponed to the coming year.
The decrease in sales volumes also continued in the aggregates and concrete business lines in comparison with the previous year. The deliveries of aggregates fell by 25.7% and reached 78.2 million tonnes (previous year: 105.2) in the first nine months, whereas the sales volumes of asphalt dropped by 15.6% to 2.6 million tonnes (previous year: 3.1) and ready-mixed-concrete by 38.5% to 4.4 million m3 (previous year: 7.2).
Since the building products business line strongly depends on the residential construction sector, the sales volumes of roof tiles and bricks have been particularly affected during the reporting period. We prepared ourselves very early for these difficult market conditions with drastic capacity adjustments.
Total turnover in North America decreased by 24.1% to EUR 2,277 million (previous year: 3,000). Operationally, i.e. excluding exchange rate effects, the decline amounted to 31.9%.
The national economies in the Asia-Australia-Africa Group area are recovering faster than expected. Spurred on by massive government economic stimulus programmes, the growth of the Chinese gross domestic product accelerated to 8.9% in the third quarter, according to the national statistic office. India and Indonesia are exhibiting solid domestic figures and the Australian economy is also proving to be very robust.
The cement and clinker sales volumes in the Asia-Australia-Africa Group area fell by 0.6% to 24.2 million tonnes (previous year: 24.4) in the first nine months and thus dropped only slightly in comparison with the same period last year. Whilst the decrease still amounted to 1.4 % in the first half of the year, we observed a slight increase of 0.6% in the course of the third quarter. In Indonesia, cement demand recovered in the third quarter after a noticeable weakening during the first six months. Cement and clinker sales volumes of our subsidiary Indocement lay at the end of September markedly below the previous year's level. Thanks to significant cost reductions and a margin-oriented pricing policy, Indocement was able to achieve a considerable increase in results. In China, our joint ventures in the provinces Guangdong and Shaanxi profited from the strong demand resulting from the government infrastructural package. Sales volumes of our plants increased by 65%; this was, in part, also the result of the commissioning of two new production lines in Shaanxi at the end of 2008. The deliveries of our cement plants in India reached the previous year's level and results increased substantially. Because of the good growth prospects, we will expand our cement capacities in India by around 2.8 million tonnes to slightly above 6 million tonnes. In Bangladesh, both the sales volumes and the results increased satisfactorily. As a result of the declining market in Turkey, cement and clinker sales volumes of our joint venture Akçansa fell by 5.0% despite increased export deliveries. In Africa, Tanzania stood out particularly, where our subsidiary TPCC achieved an increase in sales volumes of 36%. In addition to the favourable market development, the completion of our new production line in our plant near Dar es Salaam also contributed to the result. Without taking into account the participations in Nigeria and Niger, which were sold in March 2008, sales volumes of our African cement plants fell only slightly below the previous year's level.
Aggregates sales volumes dropped by 10.0 % to 25.6 million tonnes (previous year: 28.4). The asphalt business also showed a decline. Ready-mixed concrete deliveries fell by 8.1% to 7.4 million m3 (previous year: 8.1).
The turnover of the Asia-Australia-Africa Group area only reached EUR 2,054 million (previous year: 2,109), a decline of 2.6 % compared with the previous year. Excluding consolidation and exchange rate effects, the decline amounted to 5.1%.
The trade volume of our subsidiary HC Trading decreased by 18.6 % to 6.4 million tonnes (previous year: 7.9) in the first nine months. Despite a significant increase in cement deliveries, the substantial decline in the clinker trade volume could not be offset.
The turnover of our subsidiary HC Fuels, which is responsible for the purchase of fossil fuels, sharply decreased as a result of falling prices and the lower demand for fuels. Overall, the turnover of Group Services fell by 30.7% to EUR 380 million (previous year: 548).
Key indicators point to a gradual stabilisation of the world economy and a slow recovery to which expansive economic policy measures substantially contributed. However, in the current year, economic performance in most European countries and North America will still noticeably lag behind that of last year. The economies in the large emerging countries of Asia begin to gain momentum. Overall, the recovery still remains fragile and it is difficult to assess the development for the coming months.
Therefore, HeidelbergCement will unremittingly continue with its comprehensive cost saving programmes. Cash flow orientation also remains a key issue and will be complemented with specific measures. Even after the successful steps taken in 2009, debt reduction still remains a main focus. The sale of non-strategic business units at acceptable conditions will continue.
HeidelbergCement expects turnover also for the last quarter of 2009 to decrease. The upturn in the Asian markets will not be able to offset the persistent weakness in the remaining Group areas. Operating income, which is supported by our massive cost saving measures, will also fall behind last year's results. We expect a further substantial reduction in total debt by the end of 2009.
With its significantly improved financing and cost structure, HeidelbergCement is well placed to emerge from the current economic crisis in a stronger position in 2010.
Heidelberg, 4 November 2009
Yours sincerely,
Dr. Bernd Scheifele Chairman of the Managing Board
| Group profit and loss accounts EUR '000s |
July - September 2008 2) |
2009 | January - September 2008 2) |
2009 |
|---|---|---|---|---|
| Turnover | 3,881,411 | 3,020,641 | 10,809,158 | 8,390,571 |
| Change in stock and work in progress | 10,844 | -45,737 | 17,440 | -199,815 |
| Own work capitalised | 1,280 | 2,419 | 2,477 | 5,909 |
| Operating revenue | 3,893,535 | 2,977,323 | 10,829,075 | 8,196,665 |
| Other operating income | 49,024 | 137,219 | 164,742 | 271,029 |
| Material costs | -1,575,531 | -1,124,807 | -4,282,627 | -3,206,147 |
| Employee and personnel costs | -572,898 | -493,650 | -1,744,316 | -1,536,032 |
| Other operating expenses | -922,637 | -726,077 | -2,805,520 | -2,119,286 |
| Operating income before depreciation (OIBD) | 871,493 | 770,008 | 2,161,354 | 1,606,229 |
| Depreciation of tangible fixed assets | -193,558 | -193,230 | -570,617 | -559,661 |
| Amortisation of intangible assets | -6,993 | -5,992 | -18,644 | -18,840 |
| Operating income | 670,942 | 570,786 | 1,572,093 | 1,027,728 |
| Additional ordinary income | 52,049 | -10,707 | 128,399 | 95,475 |
| Additional ordinary expenses | -34,794 | -24,646 | -84,637 | -84,118 |
| Additional ordinary result | 17,255 | -35,353 | 43,762 | 11,357 |
| Result from associated companies 1) | 15,714 | 25,979 | 44,623 | 44,512 |
| Result from other participations | 1,728 | 1,442 | 6,337 | 3,039 |
| Earnings before interest and taxes (EBIT) | 705,639 | 562,854 | 1,666,815 | 1,086,636 |
| Interest income | 16,489 | 15,986 | 43,377 | 37,385 |
| Interest expenses | -194,449 | -143,582 | -588,980 | -455,596 |
| Foreign exchange gains and losses | -219 | -13,615 | 7,206 | -24,693 |
| Other financial result | -14,646 | -141,142 | -36,818 | -201,376 |
| Profit before tax from continuing operations | 512,814 | 280,501 | 1,091,600 | 442,356 |
| Taxes on income | -154,175 | -71,277 | -273,176 | 94,832 |
| Net income from continuing operations | 358,639 | 209,224 | 818,424 | 537,188 |
| Net income / loss from discontinued operations | -10,005 | -5,950 | 1,260,781 | -15,629 |
| Profit for the financial year | 348,634 | 203,274 | 2,079,205 | 521,559 |
| Thereof minority interests | 38,224 | 53,970 | 94,461 | 102,244 |
| Thereof Group share of profit | 310,410 | 149,304 | 1,984,744 | 419,315 |
| Earnings per share in EUR (IAS 33) | ||||
| Earnings per share attributable to the parent entity | 2.46 | 1.15 | 16.00 | 3.31 |
| Earnings per share – continuing operations | 2.58 | 1.19 | 5.84 | 3.43 |
| Earnings per share – discontinued operations | -0.12 | -0.04 | 10.16 | -0.12 |
| 1) Net results from associated companies | 14,322 | 21,167 | 38,507 | 35,876 |
2) Figures have been restated following the reclassification of the unwinding of discount to the other financial result
| Group cash flow statement | January - September | ||
|---|---|---|---|
| EUR '000s | 2008 | 2009 | |
| Net income from continuing operations | 818,424 | 537,188 | |
| Taxes on income | 273,176 | -94,832 | |
| Interest income/expenses | 545,603 | 418,211 | |
| Dividends received | 32,648 | 18,955 | |
| Interest paid | -532,120 | -720,354 | |
| Taxes paid | -254,740 | -132,809 | |
| Elimination of non-cash items | 613,437 | 647,128 | |
| Cash flow | 1,496,428 | 673,487 | |
| Changes in operating assets | -821,929 | 148,844 | |
| Changes in operating liabilities | 53,402 | -173,240 | |
| Changes in working capital | -768,527 | -24,396 | |
| Decrease in provisions through cash payments | -191,957 | -162,982 | |
| Cash flow from operating activities – continuing operations | 535,944 | 486,109 | |
| Cash flow from operating activities – discontinued operations | -30,434 | ||
| Cash flow from operating activities | 505,510 | 486,109 | |
| Intangible fixed assets | -15,804 | -8,768 | |
| Tangible fixed assets | -680,528 | -391,743 | |
| Financial fixed assets | -102,341 | -18,056 | |
| Investments (cash outflow) | -798,673 | -418,567 | |
| Proceeds from fixed asset disposals | 2,248,685 | 404,245 | |
| Cash from changes in consolidation scope | -7,824 | -4,950 | |
| Cash flow from investing activities – continuing operations | 1,442,188 | -19,272 | |
| Cash flow from investing activities – discontinued operations | -5,891 | ||
| Cash flow from investing activities | 1,436,297 | -19,272 | |
| Capital increase | 512,500 | 1,984,807 | |
| Dividend payments – HeidelbergCement AG | -162,500 | -15,000 | |
| Dividend payments – minority shareholders | -26,042 | -36,913 | |
| Proceeds from bond issuance and loans | 2,880,671 | 9,035,492 | |
| Repayment of bonds and loans | -4,985,496 | -11,545,191 | |
| Cash flow from financing activities – continuing operations | -1,780,867 | -576,805 | |
| Cash flow from financing activities – discontinued operations | 40,802 | ||
| Cash flow from financing activities | -1,740,065 | -576,805 | |
| Net change in cash and cash equivalents – continuing operations | 197,265 | -109,968 | |
| Net change in cash and cash equivalents – discontinued operations | 4,477 | ||
| Net change in cash and cash equivalents | 201,742 | -109,968 | |
| Effect of exchange rate changes | -23,777 | 8,544 | |
| Cash and cash equivalents at 1 January | 845,736 | 843,646 | |
| Cash and cash equivalents at 30 September | 1,023,701 | 742,222 | |
| Reclassification of cash and cash equivalents according to IFRS 5 | -21,716 | ||
| Cash and cash equivalents presented in the balance sheet at 30 September | 1,023,701 | 720,506 |
| Assets | ||
|---|---|---|
| EUR '000s | 31 Dec. 2008 30 Sept. 2009 | |
| Long-term assets | ||
| Intangible assets | 10,150,990 | 10,054,486 |
| Tangible fixed assets | ||
| Land and buildings | 4,622,182 | 4,633,438 |
| Plant and machinery | 4,299,917 | 4,168,128 |
| Fixtures, fittings, tools and equipment | 237,434 | 241,147 |
| Payments on account and assets under construction | 775,944 | 694,090 |
| 9,935,477 | 9,736,803 | |
| Financial fixed assets | ||
| Investments in associates | 540,016 | 593,956 |
| Financial investments | 81,631 | 84,805 |
| Loans to participations | 48,631 | 49,430 |
| Other loans and derivative financial instruments | 24,198 | 24,830 |
| 694,476 | 753,021 | |
| Fixed assets | 20,780,943 | 20,544,310 |
| Deferred taxes | 129,489 | 153,148 |
| Other long-term receivables | 365,715 | 329,518 |
| Long-term tax assets | 18,410 | 16,733 |
| 21,294,557 | 21,043,709 | |
| Short-term assets | ||
| Stock | ||
| Raw materials and consumables | 734,766 | 604,220 |
| Work in progress | 183,294 | 142,591 |
| Finished goods and goods for resale | 788,254 | 633,326 |
| Payments on account | 24,706 | 21,235 |
| 1,731,020 | 1,401,372 | |
| Receivables and other assets | ||
| Short-term financial receivables | 160,222 | 143,909 |
| Trade receivables | 1,544,701 | 1,678,847 |
| Other short-term operating receivables | 382,168 | 356,455 |
| Current tax assets | 158,125 | 170,674 |
| Financial investments and derivative financial instruments | 2,245,216 | 2,349,885 26,013 |
| 173,679 | ||
| Cash at bank and in hand | 843,646 | 720,506 |
| 4,993,561 | 4,497,776 | |
| Disposal groups held for sale | 148,614 | |
| Balance sheet total | 26,288,118 | 25,690,099 |
| Liabilities | ||
|---|---|---|
| EUR '000s | 31 Dec. 2008 30 Sept. 2009 | |
| Shareholders' equity and minority interests | ||
| Subscribed share capital | 375,000 | 562,500 1) |
| Share premium | 3,470,892 | 5,268,199 1) |
| Profit and loss reserve | 6,316,797 | 6,678,419 |
| Currency translation | -2,442,548 | -2,300,371 |
| Equity attributable to shareholders | 7,720,141 | 10,208,747 |
| Minority interests | 540,703 | 736,188 |
| 8,260,844 | 10,944,935 | |
| Long-term provisions and liabilities | ||
| Provisions | ||
| Provisions for pensions | 651,973 | 716,553 |
| Deferred taxes | 966,569 | 844,653 |
| Other long-term provisions | 1,062,630 | 1,021,376 |
| 2,681,172 | 2,582,582 | |
| Liabilities | ||
| Debenture loans | 3,055,379 | 2,509,847 |
| Bank loans | 7,525,359 | 5,889,879 |
| Other long-term financial liabilities | 286,827 | 287,580 2) |
| 10,867,565 | 8,687,306 | |
| Other long-term operating liabilities | 196,014 | 183,640 |
| Long-term tax liabilities | 243,214 | 123,661 |
| 11,306,793 | 8,994,607 | |
| 13,987,965 | 11,577,189 | |
| Short-term provisions and liabilities | ||
| Provisions | 323,793 | 274,346 |
| Liabilities | ||
| Debenture loans (current portion) | 430,382 | 582,975 |
| Bank loans (current portion) | 1,017,629 | 205,274 |
| Other short-term financial liabilities | 317,563 | 292,973 2) |
| 1,765,574 | 1,081,222 | |
| Trade payables | 991,308 | 767,588 |
| Current income taxes payable | 198,078 | 213,822 |
| Other short-term operating liabilities | 760,556 | 789,949 |
| 3,715,516 | 2,852,581 | |
| 4,039,309 | 3,126,927 | |
| Provisions and liabilities associated with disposal groups | 41,048 | |
| Total liabilities | 18,027,274 | 14,745,164 |
| Balance sheet total | 26,288,118 | 25,690,099 |
1) Capital increase (see notes)
2) Includes puttable minorities with an amount of EUR '000s 51,087 (previous year: 50,251)
| Statement of recognised | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| income and expense | July - September | July - September | January - September | January - September | |||||
| EUR '000s | 2008 | 2009 | 2008 | 2009 | |||||
| Profit for the financial year | 348,634 | 203,274 | 2,079,205 | 521,559 | |||||
| IAS 19 Actuarial gains and losses | 4,904 | 4,904 | -75,196 | ||||||
| Income taxes | 984 | -20 | 984 | 21,561 | |||||
| 5,888 | -20 | 5,888 | -53,635 | ||||||
| IAS 39 Cash flow hedges | -17,465 | 3,732 | -1,065 | -2,416 | |||||
| Income taxes | 3,717 | -935 | -901 | 735 | |||||
| -13,748 | 2,797 | -1,966 | -1,681 | ||||||
| IAS 39 Available for sale assets | 545 | 5,268 | -11,655 | 4,146 | |||||
| Income taxes | 253 | -483 | 443 | 732 | |||||
| 798 | 4,785 | -11,212 | 4,878 | ||||||
| IFRS 3 Business combinations | -218 | -70 | -290 | 9,595 | |||||
| Income taxes | 1 | -33 | 28 | -3,215 | |||||
| -217 | -103 | -262 | 6,380 | ||||||
| Other | -1,731 | 959 | -1,051 | 409 | |||||
| Income taxes | 8 | 55 | -163 | 717 | |||||
| -1,723 | 1,014 | -1,214 | 1,126 | ||||||
| Currency translation | 606,754 | -323,892 | -347,972 | 168,041 | |||||
| Other comprehensive income | 597,753 | -315,419 | -356,738 | 125,109 | |||||
| Total comprehensive income | 946,387 | -112,145 | 1,722,468 | 646,668 | |||||
| Relating to minority interests | 64,507 | 92,434 | 112,860 | 127,869 | |||||
| Relating to HeidelbergCement AG shareholders |
881,880 | -204,579 | 1,609,608 | 518,799 |
| Reconciliation of changes in total equity |
EUR '000s | Subscribed share capital |
Share premium |
Retained earnings |
Cash flow hedge reserve |
AfS reserve |
Asset revaluation reserve |
Currency translation |
Equity attri butable to shareholders |
Minority interests |
Total equity |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 January 2008 | 360,000 | 2,973,392 | 4,720,729 | 9,734 | 26,567 | 4,946 | -1,098,404 | 6,996,964 | 521,861 | 7,518,825 | |
| Profit for the financial year |
1,984,744 | 1,984,744 | 94,461 | 2,079,205 | |||||||
| Other compre hensive income 1) |
4,999 | -2,335 | -11,212 | -262 | -8,810 | 45 | -8,766 | ||||
| Exchange rate | -189 | 143 | 46 | -366,326 | -366,326 | 18,354 | -347,972 | ||||
| Total compre hensive income |
1,989,554 | -2,192 | -11,166 | -262 | -366,326 | 1,609,608 | 112,860 | 1,722,468 | |||
| Changes in con solidation scope |
-40,038 | -40,038 | |||||||||
| Capital increase from issuance of new shares |
15,000 | 497,500 | 512,500 | 512,500 | |||||||
| Dividends | -162,500 | -162,500 | -26,042 | -188,542 | |||||||
| 30 Sept. 2008 | 375,000 | 3,470,892 | 6,547,783 | 7,542 | 15,401 | 4,684 | -1,464,730 | 8,956,572 | 568,641 | 9,525,213 | |
| 1 January 2009 | 375,000 | 3,470,892 | 6,316,964 | -14,234 | 9,166 | 4,901 | -2,442,548 | 7,720,141 | 540,703 | 8,260,844 | |
| Profit for the financial year |
419,315 | 419,315 | 102,244 | 521,559 | |||||||
| Other compre hensive income 1) |
-52,509 | -1,442 | 4,878 | 6,380 | -42,693 | -239 | -42,932 | ||||
| Exchange rate | 142,177 | 142,177 | 25,864 | 168,041 | |||||||
| Total compre hensive income |
366,806 | -1,442 | 4,878 | 6,380 | 142,177 | 518,799 | 127,869 | 646,668 | |||
| Changes in con solidation scope |
104,529 | 104,529 | |||||||||
| Capital increase from issuance of new shares 2) |
187,500 | 1,797,307 | 1,984,807 | 1,984,807 | |||||||
| Dividends | -15,000 | -15,000 | -36,913 | -51,913 | |||||||
| 30 Sept. 2009 | 562,500 | 5,268,199 | 6,668,770 | -15,676 | 14,044 | 11,281 | -2,300,371 | 10,208,747 | 736,188 | 10,944,935 |
1) Without currency translation
2) The capital increase from issuance of new shares was reduced by net transaction costs of EUR '000s 33,381 in accordance with IAS 32.37 (see notes)
| EURm | Europe | North America | ||
|---|---|---|---|---|
| 2008 | 2009 | 2008 | 2009 | |
| External turnover | 5,564 | 3,963 | 3,000 | 2,277 |
| Inter-Group areas turnover | 46 | 42 | ||
| Turnover | 5,610 | 4,005 | 3,000 | 2,277 |
| Change to previous year in % | -28.6% | -24.1% | ||
| Operating income before depreciation (OIBD) | 1,208 | 776 | 475 | 280 |
| as % of turnover | 21.5% | 19.4% | 15.9% | 12.3% |
| Depreciation | -301 | -271 | -186 | -201 |
| Operating income | 907 | 505 | 290 | 79 |
| as % of turnover | 16.2% | 12.6% | 9.7% | 3.5% |
| Result from participations | 28 | 24 | 2 | 3 |
| Additional ordinary result | ||||
| Earnings before interest and taxes (EBIT) | 935 | 529 | 292 | 82 |
| Capital expenditures1) | 374 | 271 | 136 | 74 |
| Segment assets2) | 9,700 | 8,469 | 8,063 | 7,878 |
| OIBD as % of segment assets | 12.5% | 9.2% | 5.9% | 3.6% |
| Number of employees as at 30 September | 28,873 | 24,703 | 17,970 | 14,671 |
| Average number of employees | 28,524 | 25,275 | 18,164 | 14,381 |
1) Capital expenditures = in the segment columns: tangible fixed assets and intangible assets investments; in the reconciliation column: financial fixed assets investments
2) Segments assets = tangible fixed assets and intangible assets
| Asia-Australia-Africa | Group Services | Reconciliation | Continuing Operations | Discontinued Operations | |||||
|---|---|---|---|---|---|---|---|---|---|
| 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 |
| 2,054 | 1,999 | 192 | 152 | 10,809 | 8,391 | 176 | |||
| 54 | 56 | 356 | 228 | -456 | -326 | ||||
| 2,109 | 2,054 -2.6% |
548 | 380 -30.7% |
-456 | -326 | 10,809 | 8,391 -22.4% |
176 | |
| 463 | 522 | 15 | 28 | 2,161 | 1,606 | 14 | |||
| 22.0% | 25.4% | 2.7% | 7.3% | 20.0% | 19.1% | 8.0% | |||
| -102 | -106 | 0 | -1 | -589 | -579 | -10 | |||
| 361 | 416 | 14 | 27 | 1,572 | 1,028 | 4 | |||
| 17.1% | 20.3% | 2.6% | 7.2% | 14.5% | 12.2% | 2.5% | |||
| 21 | 17 | 3 | 51 | 48 | 0 | ||||
| 44 | 11 | 44 | 11 | ||||||
| 382 | 434 | 14 | 30 | 44 | 11 | 1,667 | 1,087 | 4 | |
| 187 | 56 | 102 | 18 | 799 | 419 | ||||
| 3,476 | 3,408 | 34 | 36 | 21,273 | 19,791 | ||||
| 13.3% | 15.3% | 43.0% | 77.5% | 10.2% | 8.1% | ||||
| 17,739 | 16,372 | 56 | 50 | 64,638 | 55,796 | ||||
| 17,743 | 16,592 | 56 | 51 | 64,487 | 56,299 | ||||
The interim Group accounts for HeidelbergCement AG as of 30 September 2009 were prepared according to the International Financial Reporting Standards (IFRS) for interim reporting as applicable in the European Union.
The same accounting and valuation methods were principally applied as in the preparation of the Group annual accounts as of 31 December 2008, as well as IAS 34 "Interim Financial Reporting". The standards and interpretations of the IASB, to be applied for the first time in this financial year, did not bear any impact on the assets, financial and earnings position of the Group. The changes resulting from the revision of IAS 1 (Presentation of Financial Statements) and from the first-time application of IFRS 8 (Operating Segments) solely pertain to the presentation and to the extent of the information disclosed.
Results from participations comprise both income from other participations and amounts written off financial fixed assets.
The interim Group accounts as of 30 September 2009 were not subjected to any audits or reviews.
The production and sales of building materials are seasonal due to the regional weather patterns. Particularly in our important markets of 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.
An impairment test on goodwill is performed annually within the HeidelbergCement Group in the fourth quarter once the operating three-year plan has been prepared, or if there are reasons to suspect impairment. On 30 June 2009, management conducted sensitivity analyses with respect to the discount rates for those units that, as already indicated in the 2008 Annual Report, exhibit a less extensive scope for assessment.
HeidelbergCement sold 520.5 million shares of the Indonesian cement manufacturer PT Indocement Tunggal Prakarsa to international institutional investors on 10 June 2009. This equals a proportion of 14.1% of the former total percentage of shares of Indocement of 65.1%.
On 14 May 2009, HeidelbergCement sold its asphalt operating line in Australia. The 50% stake in the Australian joint venture Pioneer Road Service (PRS) and the Specialised Tanker Transport division of Hanson Australia Construction Materials Pty Ltd were acquired by Fulton Hogan, a civil contracting quarrying and asphalt producing company in Australia.
Proceeds of EUR 404 million were generated in connection with the sales of tangible fixed assets and company shares and rights.
On 30 July 2009, HeidelbergCement divested its activities in Israel. The company's operations there include production facilities for ready-mixed concrete, aggregates and asphalt. Until final closing, the assets and liabilities of the disposal group are classified as held for sale in the Group balance sheet, in accordance with IFRS 5.
In addition, the assets and liabilities of Industry Petrobeton OOO, St. Petersburg/Russia are classified as held for sale in the Group balance sheet, in accordance with IFRS 5.
| Turnover development by Group areas and business lines January to September 2009 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Aggregates | Building | Intra Group | ||||||||
| EURm | Cement | and concrete | products | eliminations | Total | |||||
| 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | |
| Europe | 2,709 | 1,960 | 2,691 | 1,944 | 539 | 408 | -330 | -306 | 5,610 | 4,005 |
| North America | 864 | 669 | 1,586 | 1,144 | 687 | 572 | -137 | -108 | 3,000 | 2,277 |
| Asia-Australia-Africa | 1,296 | 1,304 | 799 | 757 | 48 | 23 | -35 | -30 | 2,109 | 2,054 |
| Total | 4,869 | 3,934 | 5,077 | 3,845 | 1,273 | 1,002 | -501 | -444 | 10,718 | 8,337 |
| Group Services | 548 | 380 | ||||||||
| Inter-Group area turnover | -456 | -326 | ||||||||
| Continuing operations | 10,809 | 8,391 |
| Exchange rates | Exchange rates at reporting day Average exchange rates |
||||
|---|---|---|---|---|---|
| 31 Dec. 2008 | 30 Sept. 2009 | 01-09/2008 | 01-09/2009 | ||
| EUR | EUR | EUR | EUR | ||
| USD | US | 1.3978 | 1.4635 | 1.5219 | 1.3668 |
| AUD | Australia | 1.9762 | 1.6567 | 1.6684 | 1.8129 |
| CAD | Canada | 1.7004 | 1.5645 | 1.5500 | 1.5977 |
| CNY | China | 9.5365 | 9.9899 | 10.6358 | 9.3375 |
| GBP | Great Britain | 0.9557 | 0.9145 | 0.7816 | 0.8852 |
| GEL | Georgia | 2.3231 | 2.4416 | 2.2288 | 2.2705 |
| GHC | Ghana | 1.7256 | 2.1528 | 1.5642 | 1.9298 |
| HKD | Hong Kong | 10.8328 | 11.3415 | 11.8656 | 10.5944 |
| IDR | Indonesia | 15,305.91 | 14,168.14 | 14,032.60 | 14,555.97 |
| INR | India | 67.9051 | 69.8382 | 63.4100 | 66.7847 |
| KZT | Kazakhstan | 169.0499 | 220.8714 | 183.1331 | 200.8014 |
| MYR | Malaysia | 4.8224 | 5.0622 | 4.9587 | 4.8687 |
| NOK | Norway | 9.7081 | 8.4428 | 7.9966 | 8.8633 |
| PLN | Poland | 4.1389 | 4.1988 | 3.4301 | 4.3843 |
| RON | Romania | 4.0286 | 4.2191 | 3.6401 | 4.2313 |
| RUB | Russia | 42.6679 | 43.9395 | 36.6026 | 44.3794 |
| SEK | Sweden | 10.9175 | 10.1841 | 9.4178 | 10.7343 |
| CZK | Czech Republic | 26.7175 | 25.1795 | 24.8287 | 26.6534 |
| HUF | Hungary | 263.2057 | 268.7718 | 247.5584 | 283.6873 |
| TZS | Tanzania | 1,789.60 | 1,925.79 | 1,793.33 | 1,801.35 |
| TRY | Turkey | 2.1526 | 2.1699 | 1.8651 | 2.1510 |
The following reportable transactions with affiliated companies or persons occurred in the reporting period. Spohn Cement GmbH, Norderfriedrichskoog, currently holds a 24.06% share in HeidelbergCement AG. Heidelberg-
Cement prepared the Spohn Cement 2008 Group annual accounts and charged EUR 50,000 (gross) in return. On 8 September 2009, HeidelbergCement AG reached a co-operation agreement with the following companies that are affiliated with the Merckle Group: Spohn Cement GmbH, VEM Vermögensverwaltung GmbH, HC Treuhand GmbH and VEM erste Treuhand GmbH. The co-operation agreement was concluded to properly handle the placement of HeidelbergCement shares in connection with the capital measures of HeidelbergCement AG.
Since 31 December 2008, there have been no significant changes in contingent liabilities.
After refinancing its bank liabilities in June 2009, HeidelbergCement successfully completed a rights issue together with a placement of existing shares in September. By making use of the authorised capital, the company's subscribed share capital has increased by 50% through the issue of 62.5 million new shares in return for cash contributions. The subscription price for the new shares and the offering price for the previous private placement of new shares solely with institutional investors was set at EUR 37 per share. The capital increase was recorded in the commercial register on 22 September 2009. The net emission proceeds of EUR 2.25 billion were used to repay existing liabilities to banks. After deduction of EUR 33.4 million in net transaction costs, an inflow of EUR 1.98 billion was recorded by 30 September 2009. The outstanding amount of EUR 0.27 billion was received on 9 October 2009, after expiry of the subscription period.
In October 2009, HeidelbergCement issued three Euro-Bonds to national and foreign institutional investors with a total issue volume of EUR 2.5 billion: One bond of EUR 1 billion with a coupon of 7.5% p.a. and a term of 5 years, a second of EUR 1 billion with a coupon of 8.0 % p.a. and a term of 7 years and a third of EUR 500 million with a coupon of 8.5 % p.a. and a term of 10 years. The proceeds from the issue were exclusively used to partly repay the syndicated loan. Together with the proceeds from the capital increase, from disposals and the operating cash flow, the Group's bank debts have been reduced by more than EUR 4 billion; at the same time, the maturity structure of our liabilities has improved accordingly.
After the successful completion of the capital markets transactions, the rating agencies Standard & Poor's and Fitch increased their credit rating assessment of HeidelbergCement by two notches to B+ and BB- with a positive outlook.
| Financial calendar | ||||
|---|---|---|---|---|
| First financial highlights for the 2009 financial year | February 2010 | |||
| Press and analysts' conference on annual accounts | 18 March 2010 | |||
| Interim Report January to March 2010 | 6 May 2010 | |||
| Annual General Meeting 2010 | 6 May 2010 |
Berliner Strasse 6 69120 Heidelberg, Germany www.heidelbergcement.com
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