Germany: HeidelbergCement has announced its unaudited results for the fourth quarter of 2013 and the full year of 2013.

The German multinational cement producer reported revenues of Euro13.94bn for 2013, a 3.4% increase on 2012 (like-for-like), although revenue was slightly down (by 0.6%) in absolute terms. Operating income before depreciation was also up in like-for-like terms (2.0%) but was down by 2.1% across all business at Euro2.42bn. Operating income was flat at Euro1.61bn in 2013, a 5.2% rise like-for-like and a 0.2% rise in absolute terms.

For the fourth quarter of 2013, HeidelbergCement took revenues of Euro3.48bn (up 6.9% like-for-like and down 0.3% in absolute terms), had an operating income of Euro661m (up by 1.8% like-for-like and down 5.3% in absolute terms) and had an operating income of Euro463m (up by 12.4% like-for-like and up by 2.4% in absolute terms.

HeidelbergCement reported that its cement sales volumes rose slightly year on year, driven by the positive development in sales volumes in its North America, Asia-Pacific and Africa-Mediterranean Basin regions, which more than offset the decline in demand elsewhere, particularly in eastern Europe. It sold 91.3Mt of cement, cement clinker and ground granulated blast furnace slag (GGBS) in 2013, a rise of 1.4% in like-for-like terms and a rise of 2.6% in absolute terms.

In the fourth quarter of 2013 it sold 23.6Mt of cement, cement clinker and GGBS, which was 6.3% more than in 2012 in like-for-like terms and 7.5% more in absolute terms. HeidelbergCement said that its fourth quarter sales volumes had benefited from milder than usual weather that led to an extended construction season in Europe.

Western and northern Europe

For 2013 as a whole, HeidelbergCement reported that its interests in western and northern Europe benefited from the emerging recovery in demand for building materials in the UK, which was driven by private residential construction and large infrastructure projects in London. Sales volumes of cement at its UK plants increased from low levels by a double-digit percentage. In Benelux and Northern Europe, sales volumes were steady or saw only a marginal decline. Sales volumes in Germany diminished, partly as a result of the long period of bad weather at the beginning of 2013.

Despite a slight overall decline in sales volumes in this region, revenue before exchange rate effects remained largely stable thanks to successfully-implemented price increases. Falling energy costs also had a positive impact on operating income and profit margins.

Revenue for northern and western Europe was Euro4.15bn, a real-terms fall of 1.3% (a 0.3% fall like- for-like). Operating income was Euro319m, a 4.9% increase in real terms over 2012 (a 5.6% fall like-for-like). Cement sales for the region came in at 20.9Mt, a 1.8% fall when compared to 2012.

Eastern Europe and central Asia

Over the course of 2013, HeidelbergCement had a difficult year in eastern Europe and central Asia. In the first half of 2013, construction activities were adversely affected by the long winter and demand for building materials saw a decline in many countries of eastern Europe due to weak economic development and low infrastructure expenditure. In addition, prices were under pressure in a number of markets, the result of the combination of low demand and increased competition. Increases in sales volumes in Russia due to an increase in the capacity of the Tula plant near Moscow and a slight volume increase in Georgia did not compensate for the weak demand.

The situation improved in the second half of 2013. Poland was the first country in eastern Europe to show signs of a recovery. The fourth quarter was also boosted by a sustained period of mild weather. As a result, revenue and operating income improved despite negative exchange rate effects.

Revenue for the region in 2013 came to Euro1.34bn, a 4.2% decline like-for-like and a 6.9% decline in absolute terms. Operating income was Euro150m, a 20% drop in like-for-like terms and a 21.8% dip in absolute terms. Cement, clinker and GGBS sales for the region were 16.7Mt in 2013, a 2.9% drop in both real and like-for-like terms compared to 2012.

North America

In 2013 the recovery of cement demand continued in North America, driven particularly by growth in residential construction. HeidelbergCement reported that revenue and results in North America had benefited from successfully-implemented price increases in 2013 but that these parameters were also adversely affected by the weakening of the Canadian Dollar in comparison with the Euro.

Revenue for North America was Euro3.41bn in 2013, a 3.4% rise in like-for-like terms and a 1% fall in real terms. Operating income was Euro378m, a 19.9% rise in like-for-like terms and a 17.4% rise in real terms. HeidelbergCement sold 12.5Mt of cement, clinker and GGBS in North America in 2013, a 6.8% rise in both like-for-like and absolute terms.

Asia-Pacific

Demand for HeidelbergCement's products remained very strong in its Asia-Pacific region, with construction activity stimulated by the economic growth in the region. Sales volumes also benefited from the increase of its share in Cement Australia from 25% to 50%. The Asia-Pacific Group area recorded the largest negative exchange rate effect as a result of the weakness of the Indonesian Rupiah and Australian Dollar against the Euro.

Revenue for HeidelbergCement in Asia-Pacific came in at Euro3.42bn in 2013 as a whole, a 5.2% like-for-like rise year-on-year and a 1.7% fall in real terms. Operating income for the year was Euro686m, a 0.7% rise like-for-like and a 6.3% fall in absolute terms. The company sold 31.9Mt of cement, clinker and GGBS in the region, a 3% rise in like-for-like terms and a 6.3% rise in absolute terms.

Africa and Mediterranean basin

HeidelbergCement reported a continuation of positive demand development in Africa in 2013. It said that it was able to increase its cement deliveries, partly as a result of new capacity. The building materials business in Turkey also developed positively and only the Spanish market remained in decline in this region. Although revenue and results in the Africa-Mediterranean Basin Group area were also impaired by negative exchange rate effects, HeidelbergCement reported that it was able to improve these figures thanks to strong operational development in Turkey and Israel.

Outlook for 2014

In North America, HeidelbergCement reports that it expects a continuing economic recovery and consequently a further increase in demand for building materials.

In eastern Europe, a stabilisation of the national markets is expected following the weak phase experienced during 2013. Poland should be the first country in this area to benefit from the emerging recovery. In central Asia, a further rise in demand for building materials is anticipated. In western and northern Europe, positive market development is expected in all countries. This is based on the healthy economic development in Germany and northern Europe as well as a recovery in the UK and Benelux. In Asia and Africa, HeidelbergCement still expects sustained growth in demand.

"Considering the positive outlook for the world economy and our advantageous geographical positioning, we are cautiously confident about the future," said Bernd Scheifele, CEO of HeidelbergCement. "However, substantial macro-economic risks still remain. The effect of the tapering of the Federal Reserve on the currencies in emerging countries represents a considerable uncertainty. The decline in exchange rates in the second half of 2013 will also impair our revenue and results, particularly in the first half of 2014."

"We will focus on what we can directly influence: the management of our operational business," continued Scheifele. "In 2014, we will once again work on further improving our margins by means of our ongoing programmes and a continued focus on reducing costs and increasing efficiency. Price increases will continue to be at the forefront of our efforts in 2014."

The complete consolidated financial statements of HeidelbergCement including a full outlook will be published on 19 March 2014.