Profits up at HeidelbergCement

Company enjoys increased turnover, operating margin and net profit in 2010 results

AGAINST a backdrop of a challenging global economic environment, HeidelbergCement have achieved an increase in group turnover of 5.8% to €11.8 billion (11.1 billion) for the 2010 fiscal year. Operating income before depreciation (OIBD) for 2010 rose 6.5% to €2.24 billion (€2.1 billion), while operating income increased by 8.6% to €1.43 billion (€1.3 billion) during the full year. Net profit for 2010 rose 204.7% to €511 million (€168 million).

Part of the company’s successful 2010 financial results has been down to cost-cutting measures implemented at an early stage – in some cases even before the global economic crisis.

The completion of HeidelbergCement’s Fitness 2009 programme achieved savings of more than €550 million and the company reached further savings of more than €300 million in the following year with its FitnessPlus 2010 initiative.

These measures have helped the construction materials firm to sustainably reduce administration and distribution costs, as well as repair expenses in the cement business.

The outlook for 2011 is expected to see the global economy continue its recovery, although at a weaker level than in 2010. Asian and African markets are both anticipated to increase above those of the mature markets in North America and Europe.

On the cost side, HeidelbergCement expects a rise in energy and commodity prices, as well as soaring inflation. The company’s aim is to offset the rises in costs through more cost-saving measures and targeted price increases, including fuel surcharges in individual markets.

‘In view of the slow recovery in the mature markets and the rising costs and inflationary pressure, we are maintaining our focus on cash flow and stable margins in order to reduce our debt and further improve our key financial ratios,’ commented Dr Bernd Scheifele, chairman of the managing board of HeidelbergCement.

‘With our Fox 2013 programme launched in January this year, we are continuing our efforts to consistently reduce costs and increase efficiency. In particular, we want to achieve our aim of making HeidelbergCement not only the largest manufacturer of aggregates in the world, but also the most profitable.’