Heidelberg Materials announced revenue increases of 8.5% to €10,473 million and “improvement in result” of 37.5% to €1,189 million for the first half of 2023. CO₂ emissions were reduced by a further 2.4%.
“We have closed the first half of 2023 with a good result,” stated Dr Dominik von Achten, chairman of the managing board of Heidelberg Materials. “Even in a weaker market environment, with significant declines in sales volumes in some cases, we performed quite well. We remain confident about the second half of the year and are once again upgrading our outlook for 2023 significantly.
“We also continue to make good progress on sustainability,” he continued. “In the first half of 2023, we achieved a further reduction in our specific net CO₂ emissions through numerous measures. With the large number of our carbon capture, utilization, and storage (CCUS) projects, we are aiming at the full decarbonization of our products. Just recently, one of our pioneering CCS projects in Germany was approved to receive funding from the EU Innovation Fund. The continuous reduction of our carbon footprint and strengthening the circular economy are our most powerful levers to offer our customers climate-friendly products on a large scale.”
The downward trend in sales volumes continued in the second quarter of 2023. High inflation and a further increase in financing costs led to a drop in construction activity, especially in residential construction.
Revenue rose by 5.3% compared with the previous year to €10,473 million (previous year: 9,950). Excluding scope and currency effects, the increase amounted to 8.5%.
The result from current operations experienced a rise of 31.0% to €1,189 million (previous year: 908) or (+37.5% on a like-for-like basis). In addition to revenue growth, continuous cost management and the slight easing on the energy and raw materials markets in particular contributed to the positive development of results.
Profit for the period totalled €783 million (previous year: €597 million). Earnings per share adjusted for the additional ordinary result attributable to Heidelberg Materials AG shareholders increased by €0.49 to €3.64.
In the first half of 2023, the strong development of results resulted in a cash inflow from operating activities of €25 million (previous year: cash outflow of €138 million). As at the end of the first half of 2023, net debt amounted to €6.7 billion (previous year: €6.8 million). The leverage ratio was 1.67x (previous year: 1.85x) and thus within the target corridor of 1.5x to 2.0x.
Cement deliveries from its North American plants stayed largely stable in the first six months. While sales volumes in the Southeast Region increased with strong construction activity, both the Northwest and Midwest regions recorded slightly lower sales volumes.
In June 2023, Heidelberg Materials celebrated the opening of the modernized Mitchell cement plant in Indiana. The state-of-the-art facility will be the second largest cement plant in North America. The plant will reduce CO₂ emissions per tonne of clinker by almost 30%.
Compared with the previous year, deliveries of aggregates in North America rose slightly. The increase was particularly driven by the impact of significant highway infrastructure and large-scale manufacturing facility projects in the Midwest Region. Also, sales volumes in the Southeast and Southwest regions remained stable as heightened construction activity levels continued.
The company also upgraded its outlook for the rest of 2023. The good order situation for infrastructure projects and parts of the commercial construction sector should partly compensate for the decline in residential construction. Energy prices have eased in the first half of 2023, but they remain volatile and still well above previous years’ levels.
While Heidelberg Materials continues to expect a moderate increase in revenue (excluding scope and exchange rate effects) compared with the previous year, it now anticipates a result from current operations of €2.7 billion to €2.9 billion (Q1 2023 forecast: €2.50 billion to €2.65 billion; Annual and Sustainability Report 2022 forecast: €2.35 billion to €2.65 billion).