Financial year 2010 preliminary figures
Cement sales volume at 26.6 million tons; ready-mix concrete at 14.4 million cubic meters
Consolidated net sales equal to €2,648 million (-0.9%)
| || |
|Cement sales||m ton||26.6||25.5||+4.0|
|Ready-mix sales||m m3||14.4||13.9||+3.5|
|Dec 10||Dec 09||Change|
The Board of Directors of Buzzi Unicem met on February 8, 2011 to examine the preliminary figures for the year 2010.
Cement sales totalled 26.6 million tons, +4% over 2009. During 2010, the construction industry continued to be penalized by the long-term negative repercussions of the international crisis, but, especially starting from the second half, stronger indications appeared of an economic improvement, a greater confidence in brighter scenarios and forthcoming cycles of growth. In the United States, despite the public infrastructure projects included in the stimulus packages, demand in non-residential building continued to suffer from the investment reductions carried out by the private sector and the residential segment failed to show clear signs of improvement. Central Europe countries were capable of getting the most from the benefits of the revival of foreign trade, especially towards newly industrialized countries and showed a promising trend in the economy. In Italy the moderate signs of economic recovery remained lower than average in the Eurozone and consequently still too weak to boost consumer spending and investments. The Eastern Europe emerging countries, except for the Czech Republic, whose industrial production is still far from the levels reached before the 2009 recession, showed good dynamics of economic growth which progressively strengthened in the second half of the year. Mexico, whose performance up to June had been negative, closed the year with improved sales volumes.
Ready-mix concrete output at 14.4 million cubic meters showed a positive trend, in line with cement volumes (+3.5%). Signs of recovery and growth appeared in all markets, expect for the Czech Republic and Italy.
Consolidated net sales were down 0.9% from € €2,672 million to €2,648 million. Foreign exchange positively impacted for €84 million. Equally, changes in scope were favorable for €36 million. Like for like, net sales would have decreased by 5.4%.
Net debt as of December 31, 2010 amounted to €1,267 million, up €58 million over €1,209 million at year-end 2009. The net debt increase was attributable mainly to capital expenditures referred to expansion projects which came to an end in the period, such as the increase of production capacity in Russia (Suchoi Log) and Mexico (Apazápan) and the completion of the new equipment to switch fuel from natural gas to coal in Ukraine.
Hydraulic binders’ volumes increased by 5.5%, mainly driven by exports and clinker sales. Domestic consumption declined for the fourth year running, posting a 5% drop over 2009. The residential and non-residential building, especially, recorded a sharp contraction; also public investments continued to suffer from the downsizing caused by the restrictive budget policy. Selling prices, due to a weak demand and a fierce competition, which sharpened in the summer months, fell by over 22%. In the ready-mix concrete sector, volumes trend was negative (-4.6%) but prices posted a lower decline than in the cement sector (-3.9%). Overall net sales in Italy amounted to €614 million, down 13.1% over 2009.
German economy began growing at a pace which had not been so strong for some years and also the construction sector showed the first signs of improvement, although the investment plans carried out by the corporations were still reduced and depressed industrial and commercial building. Our cement deliveries were virtually stable (-0.5%) and combined with a 3.1% fall in price average level. Thanks to the addition in the scope of consolidation of “Sibobeton” group, effective from July 1, ready-mix concrete volumes increased by 20.5%, while prices were down by 4.9%. Thus overall net sales increased from €528 million in 2009 to €548 million in 2010, up 3.9%. At constant scope of consolidation, a 2.5% decrease would have been posted.
In Luxembourg, also thanks to the new grinding capacity, cement volumes sold showed a positive development (+7.8%) and prices confirmed the favorable trend (+1.3%). Overall net sales came in at €92 million versus €83 million in the previous year.
In the Netherlands, ready-mix concrete volumes sold increased by 1.4% with prices slightly up (+0.4%). Net sales, including also aggregates business, came in at €113 million, virtually unchanged from the previous year (+0.5%).
In Poland, the public investments financed thanks to the EU funds for infrastructures and some major works referred to the forthcoming Soccer European Championship progressed. The country confirmed the soundness of its economy, growing at a pace of nearly 4%, favored also by a good industrial diversification. Cement sales volumes increased by 7.3%, with a high utilization of our production capacity. However prices in local currency decreased by 7.5% from the previous year, driven down by the first-half poor demand and by newly opened capacity. Also ready-mix concrete volumes progressed by 5.3% with prices falling by 10.1%. Net sales increased from €121 million to €129 million, on which zloty revaluation favorably accounted for €10 million.
The Czech Republic continued to face the difficulties of an economy growing less than 2%, with a remarkable slowdown in building activities. Our sales contracted by 8.3% for cement and 8.1% for ready-mix concrete, Slovakia included, while prices in local currency declined by 9.9% and 3.5% respectively. Consequently net sales decreased from €176 million to €159 million. The revaluation of the local currency positively impacted net sales for €6 million.
Ukraine showed good dynamics of economic growth, which strengthened in the second half. Lately the country has featured a high volatility and in 2010 cement and ready-mix concrete sale volumes were up 11.0% and 19.0% respectively. Since such an increase was posted in a market with a still low utilization of production capacity, selling prices in local currency showed weakness and decreased by 9.9% and 4.6% respectively. Net sales thus stood at €82 million versus €75 million in 2009. The translation of turnover into euro was favored by an appreciation of the local currency (+€4.3 million).
In Russia, in a buoyant economic context, cement sales volumes developed very positively, throughout the year (+35.1%). However prices in local currency were 17.6% lower than the 2009 average and only in the last quarter some turnabout began. Net sales posted a significant increase, from €99 million in 2009 to €124 million (+25.6%). Net of foreign exchange effect, the increase would have been of 14.6%. In August, the new production line at Suchoi Log, having a production capacity of 1.2 million tons/year, was inaugurated.
United States of America
The investments in residential building settled on the previous year’s quite depressed levels, while the commercial segment reported a further contraction. Infrastructure spending, spurred by the American Recovery and Reinvestment Act, had only a limited driving effect since many states, due to budget constraints, refrained from engaging in new investments. Cement sales declined by 1.3%, in line with the overall domestic market; however in the last five months shipments came in always higher than in the previous year. Poor demand continued to affect the level of selling prices (-8.8%). Ready-mix concrete volumes (+6.5%) benefited from some major projects acquired on the Texas market, while pricing trend remained weak also in this sector (-7.6%). Overall net sales at €601 million showed a slight decline from the previous year (-1.9%). The decrease was mitigated by the dollar strengthening. At constant exchange rate, a 6.8% contraction would have been posted.
Mexico (50% consolidation)
The country maintained positive macro-economic and structural indicators, a favorable inclination to consumer spending and a growth rate not far from 5%. Corporación Moctezuma’s cement volumes, thanks to a very favorable second half of the year, were slightly up (+2.1%) with stable prices in local currency (+0.3%). Ready-mix concrete output posted a more sizeable improvement (+11.0%), with selling prices virtually unchanged (-0.1%) Net sales came in at €213 million, up 18.3% over 2009. The figure was favorably impacted by the revaluation of the Mexican peso, net of which net sales would have increased by 5.3%. In November the new cement plant at Apazápan (Veracruz) having a production capacity of 1.3 million tons/year was officially inaugurated and came on stream.
Based on the preliminary information available, we expect that the consolidated financial statements of the year 2010 will close with a recurring Ebitda of around €400 million. Book net profit for the financial year, as already disclosed, is strongly influenced by the around €100 million non-cash write-down of the Oglesby, Illinois plant. In a still very uncertain macro-economic scenario, the last part of the year showed some signs of improvement, which we believe may be confirmed during 2011.
The Board of Directors for the approval of the statutory and consolidated financial statements is scheduled to meet on April 1, 2011.
The manager responsible for preparing the company’s financial reports, Silvio Picca, declares, pursuant to paragraph 2 of Article 154 bis of the Consolidated Law on Finance, that the accounting information contained in this press release corresponds to the document results, books and accounting records.
Investor Relations Assistant
Phone +39 0142 416 404