11 May 2012

Interim results at March 31, 2012

Cement and ready-mix volumes down 4.0% and 12.5% respectively

Cold winter, as opposed to the dry and mild one in Q1-11, penalized sale volumes in Central Europe and Italy

Net sales at €562.2 million (€569.4 million in 2011); EBITDA at €22.4 million (€42.7 million in 2011)

Outlook of operating results similar to the previous year confirmed

Consolidated data

Jan-Mar 12
Jan-Mar 11
% 12/11
Cement sales       m ton       5.3       5.6          -4.0
Ready-mix sales       m m3       2.8       3.3       -12.5
Net sales       €m       562.2       569.4       -1.3
EBITDA       €m       22.4       42.7       -47,6
Net profit (loss)       €m       (45.9)       (32.8)       -40,2
Consolidated Net profit (loss)       €m       (49.9)       (36.6)       -36,5
                Mar 12       Dec  11       change
Net debt       €m       1,204.6       1,143.1       (61.6)


The Board of Directors of Buzzi Unicem met on May 11, 2012 to examine the interim management report as of March 31, 2012.

In the first quarter of the year 2012, in the different countries where the group operates, cement and ready-mix concrete demand showed a slowdown from the same period a year earlier. Seasonality, with an extremely cold winter, especially during the month of February, had a negative impact mainly in Central Europe countries and in Italy. The sale volumes decline was sharpened by the unfavorable comparison with the same period 2011, which had enjoyed mild and dry weather. Conversely in the United States, the robust growth of deliveries was favored by an unusually warm winter as opposed to a harsh one in the first three months of the previous year. Sale volumes trend was positive also in Mexico and in Eastern Europe, except for the Czech Republic.

World economy in 2012 is expected to grow, but the speed will be very different in the main geographical areas: quite brilliant in BRIC countries, with China however slowing down; weak in the Eurozone, due to the high uncertainty on the development of the sovereign debt crisis; probably better than initially expected in the United States of America, thanks to decreasing unemployment. Inflationary pressures relaxed both in advanced and in emerging countries, but the trend especially in electricity costs is cause for concern.

Group’s cement volumes at 5.3 million tons were down 4.0% from the same period a year earlier. Volumes decrease affected mainly Italy and, to a lesser extent, Central Europe while the United States of America, Mexico and Eastern Europe performed rather well. Ready-mix concrete volumes showed a more marked decline and totaled 2.8 million cubic meters, down 12.5% from Q1-11.

Cement selling prices in local currency were higher than in Q1-11, except for Poland. Also in the ready-mix concrete, selling prices overall showed a favorable change compared with the same period a year earlier.

Consolidated net sales declined by 1.3% from €569.4 million to €562.2 million. The decrease stems from an unfavorable volume effect for €23.1 million, partly offset by a positive price effect for €15.9 million. Ebitda stood at €22.4 million, down €20.3 million from Q1-11. Changes in the scope of consolidation and foreign exchange fluctuation accounted for an increase in net sales of €1.7 million and €2.9 million respectively; impact on Ebitda was positive for €0.1 million and negative for €0.5 million respectively. On a like-for-like basis, net sales and Ebitda would have decreased by 2.1% and 42.9%. In this respect we remind that the Q1-11 figure included non-recurring gains for €7.1 million referring to the sale of an investment property in Luxembourg. Net of non-recurring items, Ebitda would have decreased by 32.2%. Moreover in Q1-11 Ebitda included €14.3 million of other operating revenues from the sale of CO2 emission rights, whereas in the first quarter of the current year income relating to the sale or trade of CO2 emission rights amounted to only €1.8 million. After amortization and depreciation for €56.5 million (€60.9 million in Q1-11) Ebit was negative for €34.1 million (-€18.2 million in 2011). Net finance costs stood at the same level as in the previous year (€27.9 million vs. €28.0 million in 2011). Due to the effects of the factors outlined above, the first quarter 2012 closed with a loss before tax of €64.5 million vs. a loss of €46.7 million at March 2011. After income tax expense, net loss for the period came in at €45.9 million, (€49.9 million being the share attributable to the owners of the company).

Cash flow was equal to €10.6 million (€28.2 million at March 2011). Net debt as at 31 March 2012 amounted to €1,204.6 million, up €61.6 million over year-end 2011. Investments accounted for a total of €35.3 million of the figure (€37.7 million in Q1-11), €12.8 million thereof referring to special projects. As at March 31, 2012, total equity, inclusive of non-controlling interest, stood at €2,791.2 million vs. €2,844.8 million as at December 31, 2011. Consequently debt/equity ratio was equal to 0.43 (0.40 at 2011 year-end).

The decrease in group’s sales was substantially in line with that of domestic consumption (-24.5%). Selling prices achieved a good rebound (+25.4%) from the very depressed levels of early 2011. The trend in the ready-mix concrete sector was very difficult, with sale volumes down 23.7% and only slightly higher prices. Overall, net sales came in at €113.4 million, down 13.9% from €131.7 million in Q1-11. Ebitda was negative for €4.8 million vs. a positive of €0.2 million in Q1-11. The 2011 figure however included other operating revenues equal to €6.4 million deriving from the sale of CO2 emission rights.

Central Europe
In Germany, very cold weather, especially in the month of February, penalized shipments in the first quarter of the year. Cement and ready-mix concrete volumes decreased by 14.1% and 6.8% respectively from the same period of 2011 which however had benefited from favorable weather conditions. Cement selling prices slightly increased (+1.9%). Overall net sales stood at €115.7 million vs. €130.9 million in Q1-11 and Ebitda was negative for €0.4 million from a positive of €13.9 million in the previous year. Other operating revenues from the sale of CO2 emission rights were equal to €1.8 million (€3.9 million in 2011).

In Luxembourg, mainly due to adverse weather conditions, our cement and clinker volumes reported a sizeable decrease (-17.3%) with slightly higher prices (+2.2%). Net sales at €23.4 million, were down 16.0% from €27.9 million in 2011. Ebitda declined to -€1.4 million from +€13.3 million in the previous year. However, the 2011 figure included other operating revenues equal to €4.9 million deriving from the sale of CO2 emission rights vs. nil in the current year and other non-recurring income for €7.1 million for gains on disposal of an investment property.

In the Netherlands, due to harsh climate and slowdown of economic activity, in the first three months, ready-mix concrete volumes sold decreased by 18.6% with lower prices. Net sales declined by 23.2% and Ebitda was negative for €1.8 million (-€0.4 million in 2011).

Eastern Europe
The beginning of the year was satisfactory for the cement industry and our sales volume that posted a sizeable increase in Poland (+16.7%), Russia (+11.8%) and Ukraine (+6.2%). Conversely, the Czech Republic’s performance was weak with volumes down 25.7%, also due to fewer exports. In Ukraine (+23.4%) and in Russia (+22.8%) the upward trend of prices in local currency which had begun in the second half of 2011 consolidated. In the Czech Republic (+0.9%) and in Poland (-3.3%) average unit revenue dynamics did not show any significant change from Q1-11. Ready-mix concrete volumes posted a marked decline mainly due to the difficult situation in the Czech Republic.

Overall net sales came in at €94.8 million from €86.4 million in 2011 (+9.7%). The Ebitda realized in the area more than doubled, from €2.4 million in 2011 to €5.0 million in 2012, inclusive of €0.3 million positive effect due to foreign exchange fluctuation.

United States of America
Thanks to very mild weather in the first three months of 2012 as opposed to the much colder one in 2011, our cement volumes sold were up 15.2%. Average unit prices in local currency improved by 3.2%. Ready-mix concrete output increased by 3.6% with prices on the rise. Overall net sales totaled €136.1 million vs. €113.7 (+19.7%). Foreign exchange effect was favorable for €5.7 million. The above described volume/price mix finally allowed for a turnabout in profitability downward trend; thus Ebitda was positive for €1.0 million (negative for €9.1 million in 2011).

Mexico (50% consolidation)
Moctezuma’s cement volumes sold increased by 11.0%, with favorable price effect (+5.6% in local currency). Similarly, ready-mix concrete sales posted a fair progress from the previous year (+5.6%), with slightly better prices. Net sales in euro increased by 10.5% from €58.7 million to €64.8 million. Ebitda equally improved (+10.4%) and came in at €24.8 million vs. €22.4 million in 2011. The Mexican peso depreciation (-3.1%) negatively impacted the translations of the results into euro. At constant exchange rate, net sales and Ebitda would have increased by 14.0% and 13.9% respectively.

The start of the first quarter 2012 was largely influenced by weather conditions, which were favorable in the United States and, on the contrary, adverse in Central Europe and Italy. The countries in which results might differ to a larger extent from the initial assumptions are Italy, in a negative way, and the United States, in a positive one. After having assessed the actual operating conditions in spring, it will be possible to define more precisely the development of the scenario assumed. Consequently, as of now, we deem it advisable to confirm for the full year 2012 our expectations of operating results similar to the ones posted in the previous year.

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.

Company contacts:
Investor Relations Assistant
Mariangiola Fiore
Phone. +39 0142 416 404