Revenue and results up at HeidelbergCement
Company remains on a solid growth path in first nine months of 2019 as cash flow rises to record level
HeidelbergCement say their solid growth path was maintained in the first nine months of 2019 with cash flow rising to a record level. Group revenue rose by 7% (4% like-for-like) to €14.3 billion from January to September 2019 (2018: €13.4 billion), while the result from current operations before depreciation and amortization (RCOBD) rose by 17% (4% like-for-like) to €2.6 billion (2018: €2.3 billion).
The result from current operations rose by 11% (7% like-for-like) to €1,597 million (2018: 1,437 million), while profit for the nine-month period was €866 million (2018: €1,016 million). As a result of the solid operational development, HeidelbergCement’s free cash flow for the last 12 months increased to around €1.7 billion, while net debt fell by around €1.1 billion to €8.5 billion and leverage ratio decreased from 3.1x to 2.8x.
‘HeidelbergCement remain on a solid growth path,’ said Dr Bernd Scheifele, chairman of the managing board of HeidelbergCement. ‘We were able to increase revenue and results in the third quarter of 2019, with price increases and strict cost discipline more than compensating for slightly weaker demand for our products in the quarter.
‘In Western and Southern Europe as well as in Asia, we were able to significantly increase our margins, and our business in North America developed well, although profitability was affected by positive one-time effects in the same quarter of the previous year. Group area Africa-Eastern Mediterranean Basin bottomed out and has reached its highest result for five quarters.’
Dr Lorenz Näger, chief financial officer of HeidelbergCement, added: ‘Our strong cash generation and strict capital expenditure discipline are the basis for the significant decrease in net debt. We expect this positive dynamic to continue in the fourth quarter. On this basis, we have adjusted our target to reduce net debt from €7.7 billion to €7.4 billion by end of this year.’
With the positive development of the first nine months expected to continue in the fourth quarter, HeidelbergCement say more favourable development of energy costs as well as solid development in Europe, North America, and Asia, especially in Indonesia and Thailand, should contribute positively to the Group’s result in 2019. The company also anticipates a rise in sales volumes for cement, aggregates, and ready-mixed concrete, and assumes a moderate increase in revenue, result and profit for the financial year.