At a meeting held on March 3 and chaired by Yves René Nanot, the Board of Directors of Ciments Français (Italcementi Group) examined and approved the statutory accounts and the consolidated financial statements for the year 2009.
In 2009, in a deteriorated global economic environment, Group sales volumes declined significantly in all three lines of business, but with a slower contraction in the fourth quarter. The decrease was most marked in Western Europe and North America, while Group sales volumes improved versus 2008 in some emerging countries.
The fall in volumes resulted in lower revenues and results, despite the steadiness in average sales prices. However, the cost-containment program adopted by the Group at the beginning of the crisis enabled the income ratio for 2009 to remain stable compared with 2008. The maintenance of operating cash flow and above all the reduction in working capital contributed to reduce the net financial debt by 159 million euros.
Actions carried out to strengthen industrial efficiency produced significant savings in terms of variable and fixed costs, equivalent to 170 million euros for 2009. In 2010, those measures together with cost monitoring should result in additional savings, although not as significant as in 2009.
Full-year sales volumes were down 8.9% on a comparable basis (-8.7% on a historical basis) at 46.5 million tonnes for cement and clinker. They decreased by 17.8% at 39.1 million tonnes for granulates, and by 21.5% (-19.2% on a historical basis) at 11.2 million cubic meters for ready mix concrete.
Cement sales volumes declined in all industrialized countries (particularly France, Spain and North America). The trend was more contrasted in the emerging countries: sales volumes were up in Egypt, China and Kazakhstan compared with 2008; in Morocco, they were in line with those of the year-earlier period.
Consolidated revenues for 2009 amounted to 4,215.4 million euros, down 11.7% on 2008 (-13.4% at comparable consolidation scope and exchange rates), despite steady sales prices. Revenues made healthy progress in some emerging countries, like Egypt, Morocco and China.
Operating results were affected by the significant volume effect but benefited from the uptrend in average sales prices, which slowed down in the second half of the year. Overall, operating cost management programs contributed to increase the recurring EBITDA/revenues ratio from 21.4% in 2008 to 21.6% in 2009.
Recurring EBITDA totaled 908.8 million euros (-11.0%). EBIT at 506.4 million euros (-16.6%) was weighted down by the depreciation of industrial assets primarily located in Thailand.
Finance costs amounted to -73.7 million euros as against -123.7 million euros in 2008 due to the decrease in interest expense on net financial debt, the rise in capitalized borrowing costs and the recognition in 2008 of other non-recurring net finance costs. The decrease in interest expense on net financial debt resulted from lower interest rates and from changes in the financing structure.
Net profit, after tax and finance costs, amounted to 337.3 million euros, down 4.2%. Net profit attributable to equity holders of the parent was down 11.9% at 234.3 million euros (266.0 million euros in 2008), after recognition of the share of profit attributable to minority interests, mainly in Egypt and Morocco.
In 2009, industrial and financial investments totaled 643.5 million euros as against 693.1 million euros in 2008; they mainly focused on revamping and expanding production facilities in North America (Martinsburg), Morocco (Ait Baha) and India (Yerraguntla).
Thanks to a rigorous management of cash flows, particularly the decrease in working capital, net financial debt as of December 31, 2009 dropped by 159.5 million euros at 1,562.3 million euros.
Total equity was up 139.2 million euros at 3,896.5 million euros and the gearing ratio (net debt/shareholders’ equity) was 40.1% (45.8% at the end of 2008).
The net profit of Ciments Français SA for 2009 amounted to 128.4 million euros (171.4 million euros in 2008).
It will be proposed to the General Meeting convened on April 13, 2010 the payment of a net dividend of 3 euros per share as from May 5, 2010 (identical to the dividend paid in 2008).
Q4 2009
The fourth quarter was impacted by lower sales volumes than in 2008 for all business segments. This decrease was however not as sharp as those in the first three quarters of 2009. Cement sales improved in emerging countries, with the exception of Bulgaria and Turkey.
Q4 revenues were down at 979.4 million euros, i.e. -13.9% on Q4 2008. Revenues improved in Egypt, Morocco and China. Recurring EBITDA penalized by declining volumes and sales prices decreased as against 2008 at 187.9 million euros. Its percentage on revenues was stable.
OUTLOOK
In 2009, in a very uncertain environment, the Group largely met the targets it had set itself, despite a strong decrease in sales volumes.
In 2010, the Group expects to benefit from the continuation of the efforts towards productivity and fixed-cost-containment initiated in 2008, and from the first positive effects from the start-up of new industrial facilities. On the other hand, the globally negative trend in market factors -- volumes and sales prices -- as well as the likely rise in the price of fuels should weigh down on income.
The efforts of the last two years will enable the Group to be in a position to benefit from the effects of the economic recovery as soon as its first signs will appear.
The statutory auditors have performed their audit on the consolidated financial statements. Their certification letter (“lettre de fin de travaux”) is currently being drawn up.