The impact of the coronavirus pandemic did not significantly affect construction activities in 2021 and thus demand for its building materials, according to HeidelbergCement. The positive market dynamics in many of HeidelbergCement’s key markets led to a good overall development of sales volumes. Deliveries increased compared with the previous year in all business lines.
Group revenue increased by 6.3% to €18,720 million (previous year: 17,606) in comparison with the previous year. On a like-for-like basis, the increase was 8.0%. Result from current operations before depreciation and amortization (RCOBD) increased by €168 million or 4.5% to €3,875 million (previous year: 3,707), on a like-for-like basis, the increase was 5.9%. Result from current operations (RCO) increased significantly by 10.6% to €2,614 million (previous year: 2,363), on a like-for-like basis, the growth amounted to 12.0%.
Dr. Dominik von Achten, chairman of the managing board of HeidelbergCement, said, “2021 was a very good year for HeidelbergCement, notwithstanding all challenges. We achieved excellent results in all key figures. 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 optimization of our portfolio.
“We achieved this excellent result together as global HeidelbergCement team. My thanks therefore go first and foremost to our 51,200 employees for their high level of commitment and outstanding dedication. They all performed exceptionally well last year.
“Our shareholders also benefit from the good results. In total, we spent almost €1 billion on dividends and share buybacks. This is a considerable figure which underlines our high focus on returns for our shareholders.
“In the area of sustainability, particularly in reducing CO2 emissions, we are very well on track to achieve our targets by 2025. In 2021, we reduced our specific net CO2 emissions by a further 2% to 565 kg CO2/t of cementitious material. The coming years will be a litmus test for ambitious climate protection. We are demonstrating in several lighthouse projects that we can scale the necessary technologies.
“We are optimistic about the further course of 2022. The world-wide infrastructure measures will successively contribute to the sales volumes growth of our products. The momentum in private residential construction will also remain high. On this basis, we expect a significant increase in revenue and a slight rise in result from current operations in the business year 2022,” von Achten concluded.
Due to 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, HeidelbergCement expects a significant increase in revenue, as well as a slight increase in result from current operations before depreciation and amortization (RCOBD) and in result from current operations (RCO), both before exchange rate and consolidation effects.
Based on the expected operating business development, the company 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 places climate change and its responsibility as a CO2-intensive company at the center of its strategy. The company is making good progress on the path to climate neutrality. The group already has products in its portfolio in many countries, some of which offer significant CO2 reductions.
In the 2021 business year, HeidelbergCement successfully continued its portfolio optimization 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 United States 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 United States.