Titan Cement International : 9months 2020 Results

Media Release

Regulatory Announcement

12 November 2020

Nine Months 2020 Results

Brussels, 12 November 2020, 08:30 CET - Titan Cement International SA (Euronext Brussels, ATHEX and Euronext Paris, TITC) announces the nine month 2020 financial results.

Earnings growth supported by operational resilience and volume recovery in key markets in Q3 2020

• Group revenue steady at €1,202m
• Increase of profitability, EBITDA up 10% to €229m benefiting from lower energy prices, cost control and resilience of pricing
• Strong cash flow generation; decrease of Group net debt by €74m vs end of 2019 and by €125m vs end September 2019
• Performance supported by underlying strength of the US, solid performance in Southeastern Europe and recovering Greek market while Egypt was disappointing
• Acceleration of de-carbonization efforts and first submission to CDP

In million Euros, unless otherwise stated	Nine months 2020	Nine months 2019	%yoy
Revenue	1,202.4	1,208.5	-0.5
EBITDA	229.4	208.4	10.1
Net Profit after Taxes & Minorities	58.0	45.2	28.1

Dimitri Papalexopoulos, Chairman of the Group Executive Committee:

''We are successfully addressing several challenges at the same time: taking care of our people and those around us, delivering improved operating results and accelerating progress against our sustainability ambitions. Despite the uncertain context, we remain confident in the solidity of our business model, based on the nature of construction activity, our track record in facing the pandemic and the resilience and dedication of our people.''

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Media Release

Regulatory Announcement

12 November 2020

TITAN Group - Overview of the nine months 2020

In the first nine months of 2020, TITAN Group recorded a stronger financial performance compared to the previous year supported by resilient sales volumes across most of our markets, as exhibited by the underlying strength of the US, a solid performance in Southeastern Europe, further signs of recovery in Greece, strong domestic and export growth in Turkey and improving demand in Brazil. Performance in Egypt was disappointing due to the persisting challenges of that market. Resurgent demand levels also underpinned solid pricing dynamics, which coupled with a very favorable energy cost environment and successful management of the Group's cost base, supported profitability.

Over the first nine months of 2020, Group consolidated Revenue at €1,202.4m posted a marginal drop of 0.5%. The impact of the Covid-19 pandemic on our Group was clearly less severe than what was initially feared. Following the suppression of activity in the second quarter of the year, construction activity rapidly came back once lockdown restrictions were eased, testifying to the underlying resilience of market fundamentals across geographies. Operating profitability (EBITDA) in the January-September 2020 period rose by a solid 10.1% to €229.4m benefiting from resilient revenues and pricing while lower operating costs and especially fuel costs resulted to cost savings. The Group 9M 2020 net result after taxes and minority interests was a profit of €58m compared to a profit of €45.2m in the same period of 2019, hence higher by 28.1%.

The Group generated robust operating free cash flow of €127.7m, an increase of €41.3m compared to the nine months of 2019. Cash flow generation benefited from higher EBITDA levels, tighter capital expenditures (€60.4m vs €75.5m in 2019) and contained working capital requirements. Group net debt at the end of September 2020 decreased significantly reaching €766m, lower by €74m from the end of 2019 and by €125m vs end September 2019. In July 2020 Titan Global Finance issued €250m notes due in 2027, with a 2.75 per cent coupon. The proceeds of the notes were used for the repayment of other debt.

In Q3 2020, Group Revenue decreased by 1.7% compared to last year reaching €416m. Group Revenue was up by 2.6% at constant exchange rates. Group EBITDA grew by 7.4% to €92.6m. Third quarter 2020 net result after taxes and minority interests was a profit of €35.5m compared to a profit of €31.9m in the same period of 2019, higher by 11.4%.

In million Euros, unless otherwise stated	Q3 2020	Q3 2019	%yoy
Revenue	416.1	423.1	-1.7
EBITDA	92.6	86.2	7.4
Net Profit after Taxes & Minorities	35.5	31.9	11.4

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Media Release

Regulatory Announcement

12 November 2020

Regional review of the nine months 2020

USA

RevenueEBITDA

€ 714.6 m€ 141.4 m

(2019: €721.6 m)	(2019: €137.0 m)

The US continued to exhibit dynamic underlying fundamentals. Construction activity was not severely affected by the pandemic. The residential segment, particularly single-family new homes, as well as infrastructure continued to drive the market while commercial/industrial has slowed down due to the macroeconomic conditions. Record low mortgage rates and a low stock of unsold houses drove strong demand for the residential segment.

In Florida and the Mid-Atlantic, while variances exist along different localities, the market situation remained healthy, underpinned by both the strong market conditions in residential as well as by infrastructure. At the same time, a strong performance was recorded in the aggregates business where the Group is capitalizing on its strategy of vertical integration.

Profitability in the third quarter was aided by careful cost management, amplified by Titan America's ability to flexibly adapt to market conditions. Titan America delivered solid performance in US$-terms. In the first nine months of 2020, revenue in the US was €714.6m, posting a marginal decline of 1% in Euro terms. EBITDA reached €141.4m, growing by 3.2%. EBITDA margin increased and reached 19.8% vs 19% in the same period last year.

Greece & W. Europe

RevenueEBITDA

€ 177.9 m	€ 16.4 m
(2019: €185.2 m)	(2019: €15.5 m)

The market in Greece staged a strong rebound following the easing of lockdown restrictions in May. A pick-up in activity continued in the third quarter underpinned by a healthy pipeline of smaller projects spanning both specific infrastructure segments as well as commercial/industrial buildings across the mainland and outside urban centers. Major infrastructure projects commenced but are still at their initial stages, while the long-awaited contract for the construction of Athens Metro line 4 has now also been awarded. Private building activity also exhibited positive momentum. Exports for the period were reduced reflecting a decision to decrease less profitable exports, taking a long-term view of CO2 requirements.

Coupled with the healthy performance of the Greek market, profitability was aided by prevailing lower thermal energy prices. Continuing progress in the utilization of alternative fuels in our Greek plants have contributed in reducing both costs and the Group's carbon footprint. In the first nine months of 2020, revenue in Greece and Western Europe was €177.9m, posting a 3.9% decrease. EBITDA reached €16.4m, growing by 5.9%.

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Media Release

Regulatory Announcement

12 November 2020

Southeastern Europe

RevenueEBITDA

€ 196.6 m	€ 72.7 m
(2019: €194.7 m)	(2019: €59.0 m)

Almost all domestic markets where the Group is present in the region rebounded strongly in the third quarter. Revenue in the first nine months of 2020 was €196.6m, posting a 0.9% increase, supported by pricing gains and overall resilient volumes. Activity in the region continued to be driven by a mix of residential and commercial works, as well as select infrastructure projects mostly regarding road works, depending on the specific market. The favorable energy cost side of the profitability equation contributed to the region's EBITDA, which reached €72.7m up by 23.4% in the nine months, compared to the same period last year.

Eastern Mediterranean

RevenueEBITDA

€ 113.2 m	€ -1.1 m
(2019: €107.0 m)	(2019: €-3.0 m)

In Turkey, despite severe macroeconomic challenges, the market recorded a sharp increase, fueled by private construction supported by the government's incentives and housing programme. June housing sales were the highest on record and housing stock has been sharply reduced, with new building development therefore expected to continue. Despite the Group's healthy performance, foreign exchange weakness penalizes translation into Euro. Adocim, the Group's subsidiary in Turkey benefited from buoyant local demand, which, supplemented by exports, led to strong revenue gains and a profitable operating performance.

In Egypt, market conditions remain challenging. The country suffers from overcapacity and 2020 has marked the fourth consecutive year of decline in demand. Domestic consumption in the nine months recorded a shrinkage of about 7%. The main reason for the decline has been the six-month suspension of licenses for private construction, partially lifted in October and recovering since. Pricing also remained anemic owing to the low capacity utilization rates affecting all producers in the market.

In the first nine months of 2020, revenue in the Eastern Mediterranean region was €113.2m, posting a 5.8% increase year on year. EBITDA, reflecting the disappointing conditions in Egypt, was negative by €1.1m.

Brazil (Joint venture)

The Brazilian market enjoyed growth for the second year in the row. Our business in Brazil has been growing with a rise in profitability, reflecting improvements both in volumes and prices. The market experienced a surge in demand witnessed even during the first wave of the pandemic. This was largely due to the spur in DIY and private activity instigated during the lockdown period. Market fundamentals remain solid; however, the standing uncertainty persists owing to the continuing surge of new cases of the pandemic in a vast and populous country.

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