HeidelbergCement says it returned a strong performance in 2021, despite high energy prices.
The building materials group says that all key figures improved in the 2021 business year, with group revenue up by 8%, result from current operations before depreciation and amortisation (RCOBD) increasing by 6%, and result from current operations (RCO) showing a 12% increase.
The group says the impact of the coronavirus pandemic did not significantly affect construction activities in 2021 and thus demand for its building materials. The positive market dynamics in many of HeidelbergCement’s key markets led to a good overall development of sales volumes, and deliveries increased compared with the previous year in all business lines.
Dr. Dominik von Achten, chairman of the managing board of HeidelbergCement, said 2021 was a very good year for the group, notwithstanding all challenges: “Despite the significant increase in energy prices and pandemic-related lockdowns in some key markets in Asia, we were able to increase revenue by 8% on a like-for-like basis and our result by 12%. We were able to further significantly improve HeidelbergCement’s capital efficiency and leverage ratio. In addition, we successfully continued the optimisation of our portfolio.”
Group revenue increased by 6.3% to €18,720m (previous year: €17,606m) in comparison with the previous year. On a like-for-like basis, the increase was 8.0%. Result from current operations before depreciation and amortisation (RCOBD) increased by €168m or 4.5% to €3,875m (previous year: €3,707m), on a like-for-like basis, the increase was 5.9%. Result from current operations (RCO) increased significantly by 10.6% to €2,614m (previous year: €2,363m), on a like-for-like basis, the growth amounted to 12.0%.
The additional ordinary result amounted to €481m (previous year: €-3,678m). This includes €466m in connection with the sale of the business activities in the West region in the USA. The financial result improved by €86m to €-201m (previous year: €-287m).
Profit for the financial year was €1,902m (previous year: loss of €-2,009m). The profit relating to non-controlling interests increased by €13m to €143m (previous year: €130m). As a result, the group’s share of profit amounts to €1,759m (previous year: group share of loss of €-2,139m). Excluding the additional ordinary result and non-recurring tax effects in the reporting and previous year, the group share increased by 14.3% to €1,561m (previous year: €1,365m).
Net debt decreased by around €1.9bn compared with 2020 to €5.0bn (previous year: €6.9bn), which HeidelbergCemeny says is due to the good operating business and disciplined investment policy. The leverage ratio decreased accordingly to 1.3x and was therefore below the target corridor of 1.5x-2.0x.
In the 2021 business year, the group says it successfully continued its portfolio optimisation as part of the ‘Beyond 2020’ strategy with important transactions. The focus is on simplifying the country portfolio and prioritising the strongest market positions. The company sold business activities in Greece, Kuwait, Sierra Leone, Spain, the West region in the USA, and the United Arab Emirates. To further improve the Group’s presence in existing, profitable markets with high returns, HeidelbergCement acquired business activities in Australia, Italy, Tanzania, the United Kingdom, and in the Northeast and Pacific Northwest of the USA.
HeidelbergCement says it is optimistic about the further course of 2022, with sales volumes being driven by global infrastructure measures and the continued good momentum in private residential construction. Due to the persistently high energy costs, the general conditions particularly in the first half of the year will nevertheless remain challenging. Strict fixed cost management and further price increases are intended to counteract this.
For the 2022 business year, the group expects a significant increase in revenue on this basis, as well as a slight increase in result from current operations before depreciation and amortisation (RCOBD) and in result from current operations (RCO), both before exchange rate and consolidation effects.
Based on the expected operating business development, HeidelbergCement anticipates a return on invested capital (ROIC) of around 9% for the current business year. The leverage ratio is expected to be within the long-term target corridor of 1.5x-2.0x.HeidelbergCement made a €1,902m profit in 2021, compared with a €-2,009m loss in the previous financial year
