Financial year 2012 preliminary figures
Cement volumes at 27.3 million tons; ready-mix concrete at 13.6 million cubic meters
Consolidated net sales equal to €2,813 million (+0.9%)
Procedure initiated for the purchase of all outstanding Dyckerhoff shares from minority interests (squeeze-out)
|Dec 12||Dec 11||Change|
The Board of Directors of Buzzi Unicem met on February 8, 2013 to examine the preliminary figures for the year 2012.
During 2012, the construction sector featured again differing trends in the geographical areas of group’s operations. Through the year, the risks for the world economy mitigated thanks to the subsiding of financial tensions in the Eurozone and the improvement of growth prospects in the emerging countries, but economic activity continued to slow down also in the fourth quarter, since the effects of public budgets consolidation have spread to the soundest economies. In the United States the expansive monetary policy and the minimum accord to avoid the fiscal cliff have for the time being stabilized the economic trend, which however always featured a good resilience.
In Italy, a further contraction in domestic demand occurred and the industrial production continued to fall, leaving large and growing margins of unused capacity in the cement sector. In the United States, some recovery in residential building investments and the excellent trend in the exploration industry sector (shale gas) contributed to GDP expansion. In Central Europe countries, after a first quarter penalized by rather harsh weather conditions, the economy suffered from the growing negative effects stemming from the weaker EU zones, which caused a slowdown in building activities; in any case these are markets where domestic demand of building materials has reached the mature stage. In Eastern Europe, Russia has again showed record cement consumption, while demand appeared at a standstill in Ukraine and mainly in Poland, where the investments for the completion of the infrastructure works linked to the European Soccer Championship came to an end. The Czech Republic continued in its program of austerity and national budget consolidation, with a penalizing effect on the construction sector. Positive was the sales volume trend in Mexico, favored by economic growth and by public spending linked to the federal and state elections, mainly in the first half of the year.
Cement sales of the group totalled 27.3 million tons, -3.4% over 2011. Ready-mix concrete output at 13.6 million cubic meters also decreased from the previous year (-9.5%).
Consolidated net sales were up 0.9% from €2,787 million to €2,813 million. Foreign exchange rates positively impacted for €68.3 million. Changes in scope were favorable for €8.3 million. Like for like, net sales would have decreased by 1.8%.
Net debt as at December 31, 2012 amounted to €1,125 million, down €18 million over €1,143 million at year-end 2011. The improvement of net financial position was obtained thanks to cash flow from operations, control of capital expenditure and a cautious dividend policy, although purchases of equity interest for over €70 million were made.
In the third quarter 2012, GDP declined by 0.2% and a negative figure is expected also in the fourth quarter. Activity was weak in all major industrial segments, more conspicuously in durables, with household spending in further contraction, reflecting the persistent decrease of disposable income and the strong uncertainty. Housing transactions continued to plunge, reaching a twenty-year low. Hydraulic binders volumes decreased by 19.9%, despite some resilience in exports. Cement domestic consumption declined for sixth year in a row, falling to around 25 million tons (-46% from the 2006 all-time peak). Selling prices were higher by 13%, in an attempt to balance the diseconomies of scale linked to the frequent production shutdowns. In the ready-mix concrete sector, volumes trend was very negative (-24.7%) with prices slightly up (+4,6%). Overall net sales in Italy amounted to €479 million, down 15.7% over 2011.
The difficult economic situation currently affecting the common market, where GDP in the last quarter posted the third contraction in a row, hit also the more robust economies and in Germany the industrial production, in the two months of October and November, declined by 2.7%, which led to a growth estimate of 0.9% for 2012 as compared with 3% reached in the previous year. The construction sector, after having been negatively affected by a very harsh climate in the winter quarter, showed some progress in residential building, remained virtually stable in the commercial segment and was sluggish in the public sector. Our cement deliveries, penalized by a plunge in exports to neighbouring countries, were down 8.2%, in a slightly favorable price environment (+1.6%). Ready-mix concrete volumes fell by 1.5% while prices were flat (-0.7%) Thus overall net sales decreased from €637 million in 2011 to €604 million in 2012, down 5.1%. At constant scope of consolidation, a 6.4% decline would have been posted.
In Luxembourg, cement volumes sold, inclusive of internal sales, were also affected by export decrease and contracted by 7.7% with average unit revenue slightly down (-1.6%). Overall net sales came in at €104 million versus €113 million in the previous year.
In the Netherlands, in a context of economic sluggishness and disappointing development of building activities, our ready-mix concrete volumes sold decreased by 16.7% while average price level declined by 2.2%. Net sales, including also aggregates business, came in at €88 million, down from €110 million in 2011 (-20.2%).
In Poland cement sales showed a sharp turnabout concomitant with the performance of the UEFA Championship. However the country confirmed the soundness of its general economy, among the most dynamic in the European Union. Cement sales volumes decreased by 17.4%, with average prices in local currency on a downward trend (-4.5%). Ready-mix concrete volumes contracted by 25.7% with prices down by 2.3%. Net sales decreased from €144 million to €109 million, on which zloty devaluation negatively accounted for €1.7 million.
The Czech Republic featured a virtually stagnant macro-economic scenario during the year (GDP +0.2%) and building-related activities have not yet overcome the last two years’ difficulties. Starting from the second half of 2012 our group could no more rely on exports towards Poland, which in the recent past had represented a synergistic leverage, following the drop in demand occurred in that country. Thus our sales decreased by 11.9% while average prices in local currency were stable (-0.3%). The ready-mix concrete sector, which includes also Slovakia, showed a rather weak trend with volumes down 5.7% and prices lower by 2.3%. Consequently net sales decreased from €172 million to €150 million. The devaluation of the local currency negatively impacted net sales for €3.0 million.
In Ukraine economic growth was less sustained than in the previous year. Construction investments, which in the first half of the year had kept a good pace of progress, subsequently showed some weakness, also because the propelling phase linked to the UEFA Championship have faded out. Consequently cement volumes sold contracted (-6.1%) and ready-mix concrete output was at a standstill (+3,1%). Selling prices in local currency confirmed a positive development, closing with an increase of 18.1% and 20.8% respectively. Net sales thus stood at €134 million versus €113 million in 2011 (+19.5%). The translation of turnover into euro benefited from the appreciation of the local currency (+€9.1 million).
In Russia, economy maintained a favorable trend, with forecasts of GDP growth equal to 3.4% for the year 2012. Building was still a driving sector and our cement sales volumes were buoyant (+15.3%). The good trend in demand favored a steady progress of average selling prices which in local currency were 13.1% higher than in 2011. Net sales posted a significant increase, from €176 million in 2011 to €235 million (+33.7%). Net of negative foreign exchange effect, the increase would have been of 30.5%.
United States of America
GDP growth for the current year is estimated at 2.2%, in improvement from +1.8% realized in 2011. As for construction investments, residential building strengthened with resilience in home prices; however, in a relative sense, the best performance was achieved by the non-residential and commercial segments. Hydraulic binders sales, after a buoyant first quarter, favored by weather conditions, maintained a sustained pace of growth and closed the year up by 10.5%. Demand rebound, after some years of stagnation, translated into an improvement also of selling prices (+2.9% in local currency). In the ready-mix concrete sector, volumes trend was less dynamic (+2.7%) but price environment was more favorable (+6.3%). Overall net sales at €681 million were up 22.0% from €558 million in the previous year. The increase was amplified by the dollar strengthening: at constant exchange rate, a 12.6% improvement would have been posted.
Mexico (50% consolidation)
The country’s economy had a favorable start of the year, with a GDP growth of over 4% and kept a positive and constant pace of progress, coming in at 3.3% for 2012. The construction industry rose by about 4%, driven by some major projects of civil engineering and by the good performance of the residential segment. Corporación Moctezuma’s cement volumes, were up 6.2% with favorable prices in local currency (+4.3%). Ready-mix concrete output posted a more robust improvement (+11.7%), with selling prices higher by 2.6%. Net sales came in at €269 million, up 13.1% over 2011. The figure was favorably impacted by the revaluation of the Mexican peso, net of which net sales would have increased by 10.6%.
Based on the preliminary information available, we expect that the consolidated financial statements of the year 2012 will close with a recurring Ebitda of about €450 million, in line with the outlook already disclosed to the market in the previous releases.
The Board of Directors for the approval of the statutory and consolidated financial statements is scheduled to meet on March 28, 2013.
Moreover the Board of Directors, in its capacity as majority shareholder of the German subsidiary Dyckerhoff AG with an ownership interest equal to 96.64% of its share capital, resolved to initiate the squeeze-out procedure for the transfer of all outstanding ordinary and preferred shares still held by minority shareholders. Pursuant to German law, such a procedure shall be resolved upon by the Shareholders Meeting of Dyckerhoff AG expected to be held in July 2013. In compliance with law obligations, Buzzi Unicem shall offer an adequate cash compensation per each ordinary and preferred share, based on the opinion prepared by an accounting expert. The fairness of the determined cash compensation shall be examined by an expert auditor chosen and appointed by the court. We think that the whole procedure can be completed in 2013, with the delisting of Dyckerhoff AG from stock exchange.
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.
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