Cementir : Board of Directors approves consolidated results as of 30 September 2020

PRESS RELEASE

Cementir Holding: Board of Directors approves consolidated results as of 30 September 2020

• Revenue: EUR 896.8 million (EUR 906.1 million in the nine months of 2019)
• EBITDA: EUR 178.1 million (EUR 181.8 million in the nine months of 2019)
• Profit before taxes: EUR 81.2 million (EUR 83.7 million in the nine months of 2019)
• Net financial debt: EUR 218.5 million (EUR 346.3 million at 30 September 2019)

Rome, 9 November 2020 - The Board of Directors of Cementir Holding N.V. today examined and approved the consolidated unaudited results for the first nine months and the third quarter of 2020.

Financial highlights

(Euro millions)	Jan-Sept	Jan-Sept	Change
2020	2019	%
Revenue from sales and services	896.8	906.1	-1.0%
EBITDA	178.1	181.8	-2.1%
EBITDA/Revenue from sales and services %	19.9%	20.1%
EBIT	97.7	103.4	-5.6%
Net financial income (expense) and share of net profits of	(16.4)	(19.8)	16.8%
equity-accounted investees
Profit before taxes	81.2	83.7	-2.9%

Sales volumes

('000)	Jan-Sept	Jan-Sept	Change
2020	2019	%
Grey, White cement and Clinker (metric tonnes)	7,702	6,922	11.3%
Ready-mixed concrete (m3)	3,123	3,061	2.0%
Aggregates (metric tonnes)	7,041	7,343	-4.1%

Net financial debt

(millions of euros)	30-09-2020	30-06-2020	31-12-2019	30-09-2019
Net financial debt	218.5	280.6	239.6	346.3

Cementir Holding N.V.	Share capital: € 159,120,000
Registered office: 36, Zuidplein, 1077 XV, Amsterdam, Netherlands	VAT number: 02158501003
T: [phone]	Tax number: 00725950638
Secondary and operational office: 200, Corso di Francia, 00191 Rome, Italy	Netherlands Chamber of Commerce number 76026728
T: [phone]
www.cementirholding.com

Group employees

30-09-202030-06-202031-12-201930-09-2019

Number of employees

3,009

3,000

3,042

3,065

"In the first nine months of 2020, despite the serious pandemic, the Group reported a 11.3% increase in cement volumes sold, marginally decreasing revenues and an EBITDA down by 2.1% compared to in the first nine months of 2019. Results significantly improved in the third quarter, with cement volumes sold up 19% and EBITDA up 12% on the third quarter of 2019 " commented Francesco Caltagirone Jr, Chairman and Chief Executive Officer.

During the first nine months of 2020, cement and clinker sales volumes, reached 7.7 million tonnes, up by 11.3% compared to the same period of 2019. The increase is mainly attributable to performance in Turkey.

Sales volumes of ready-mixed concrete, equal to 3.1 million cubic metres, were up by 2.0% mainly due to the increase in Turkey and, to a lesser extent, in Denmark and Sweden.

In the aggregates segment, sales volumes amounted to 7.0 million tonnes, down by 4.1% as a result of the performance in Belgium.

Group revenue reached EUR 896.8 million, down 1.0% compared to EUR 906.1 million in the first nine months of 2019.

At constant 2019 exchange rates, revenue would have reached EUR 921.1 million, up by 1.6% on the previous year.

Operating costs, equal to EUR 720.3 million, showed a decrease of 2.2% compared to 2019 (EUR 736.5 million in the first nine months of 2019). The contraction is due to cost containment measures implemented to deal with the impact of the pandemic.

The cost of raw materials reached EUR 341.4 million (EUR 346.6 million in the first nine months of 2019), down due to the reduction in the unitary cost of raw materials.

Personnel costs amounted to EUR 139.2 million, down compared to EUR 141.2 million in the first nine months of 2019.

Other operating costs totaled EUR 239.7 million, compared to EUR 248.7 million in the same period in 2019.

EBITDA reached EUR 178.1 million, down 2.1% on EUR 181.8 million in the first nine months of 2019. At constant exchange rates with the previous year, EBITDA would have reached EUR 178.4 million. This amount includes non-recurring charges for EUR 5.6 million related to the disposal of some equipment in Turkey and the execution of a settlement. Excluding non-recurring charges, EBITDA would have increased by 1% compared to 2019.

The EBITDA margin was 19.9% substantially in line with the 20.0% in the first nine months of 2019.

EBIT, taking into account EUR 80.4 million of amortization, depreciation, impairment losses and provisions (EUR 78.4 million in the first nine months of 2019), amounted to EUR 97.7 million, down 5.6% compared to EUR 103.4 million in the first nine months of the previous year. Amortization, depreciation, write-downs and provisions include EUR 0.4 million for fixed assets impairment and EUR 0.6 million for risk provisions. There are no inventory impairment losses or risks provisions as a consequence of the Covid-19 pandemic.

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At constant exchange rates with the previous year, EBIT would have reached EUR 96.3 million.

The share of net profits of equity-accounted investees was positive for EUR 0.3 million, unchanged from the first nine months of 2019.

Net financial expense was EUR 16.7 million (expense of EUR 20.1 million in the first nine months of 2019). The result includes both EUR 6.0 million negative impact from exchange rates compared to a EUR 3.4 million charge recorded last year and the impact of some hedging derivatives.

Profit before taxes was EUR 81.2 million, a decline of 2.9% on EUR 83.7 million in the first nine months of 2019.

Industrial investments in the period reached EUR 39.0 million (EUR 42.6 million in the first nine months of 2019), while investments booked in accordance with IFRS16 reached EUR 23.7 million (EUR 19.6 million in the first nine months of 2019).

Net financial debt as at 30 September 2020 was EUR 218.5 million, a drop by EUR 127.8 million compared to EUR 346.3 million as at 30 September 2019. The debt position due to accounting standard IFRS 16 was equal to EUR 85.2 million compared to EUR 83.1 million as at 30 September 2019. Excluding IFRS, net financial debt declined by EUR 129.9 million.

The decrease in net financial debt with respect to 31 December 2019 is equal to EUR 21.1 million. Such change was due to net working capital dynamics, dividend distribution for EUR 22.2 million as well as the settlement of previous transactions, as reported in the first quarter of the year.

Total equity as at 30 September 2020 amounted to EUR 1,153.6 million (EUR 1,181.6 million as at 31 December 2019).

Performance in the third quarter of 2020

In the third quarter of 2020, sales volumes of cement and clinker, equal to 3.1 million tonnes, were up 19.4%. The increase is mainly attributable to the performance in Turkey (+24.2%), a marked recovery compared to the same period of 2019.

Sales volumes of the ready-mixed concrete, equal to 1.2 million cubic metres, were up by 13.7% thanks to the positive trend in Turkey partly offset by the performance in the Nordic & Baltic region.

In the aggregates sector, sales volumes amounted to 2.4 million tonnes, in line with the same period last year.

Revenue from sales was EUR 326.4 million, up 3.9% compared to EUR 314.2 million in the third quarter of 2019. The trend was positive in the various geographical areas with the exception of Norway and a substantial stability in the United States, with marked growth in Turkey (+24.4%) and Denmark.

Operating costs amounted to EUR 245.6 million (EUR 242.4 million in the third quarter of 2019), up 1.3%.

EBITDA reached EUR 80.3 million, up 11.9% on the third quarter of 2019 (EUR 71.8 million). All geographical areas, with the exception of Norway and the United States, showed EBITDA growth, in particular Turkey, which achieved a positive result after a few quarters of loss.

EBIT amounted to EUR 54.5 million (EUR 46.0 million in the third quarter of 2019).

The share of net profits of equity-accounted investees was EUR 0.4 million (EUR 0.3 million in the same period of 2019).

Net financial expense was EUR 5.6 million (expense of EUR 4.5 million in the third quarter of 2019).

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Profit before taxes came to EUR 49.2 million, up on the third quarter of 2019 (EUR 41.7 million).

In the third quarter of 2020 industrial investments amounted to EUR 12.6 million (EUR 12.1 million in the third quarter of 2019), whilst investments booked according to IFRS16 amounted to EUR 8.0 million (EUR 12.1 million in the third quarter of 2019).

Performance by geographical segment

Nordic and Baltic

(EUR'000)		Jan-Sept		Jan-Sept	Change
	2020		2019	%
Revenue		418,087		425,622	(1.8%)
Denmark		289,506		279,118	3.7%
Norway / Sweden		126,884		146,737	(13.5%)
Others (1)
	44,588		44,693	(0.2%)
Eliminations		(42,981)		(44,926)
EBITDA		110,336		97,258	13.4%
Denmark		97,054		80,187	21.0%
Norway / Sweden		11,409		14,830	(23.1%)
Others (1)
	1,873		2,241	(16.4%)
EBITDA Margin %		26.4%		22.9%

1. Iceland, Poland, Russia and white cement operating activities in Belgium and France

Denmark

Sales revenues in the first nine months of 2020 reached EUR 289.5 million, an increase of 3.7% compared to EUR 279.1 million in the first nine months of 2019, mainly due to the increase in domestic cement sales (around 6%) while ready-mixed concrete was slightly up on 2019.

Thanks also to some significant infrastructure projects and favorable weather conditions in the first part of the year, the negative effects of the Covid-19 virus were contained and limited to the ready-mixed concrete sector, although some risk of activity contraction remains for the fourth quarter of 2020.

Export volumes of white cement, on the other hand, saw a limited fall of around 2% compared to 2019, due to different shipment timing to the United States and lower volumes to the United Kingdom offset by higher deliveries to Poland, Germany and Finland. Exports of grey cement were down 8% due to lower deliveries to Norway and Iceland, again here due to Covid-19 as well as the contraction in construction in Norway.

Volumes of ready-mixed concrete in Denmark increased moderately compared to the same period in 2019.

EBITDA in the first nine months of 2020 reached EUR 97.1 million (EUR 80.2 million in the same period of 2019), an increase of EUR 16.9 million. The increase is largely attributable to the cement business (over EUR 16 million), the result of which benefited from the positive impact of volumes, lower fuel and electricity costs, operating efficiencies and impact of green and digitization investments.

The improved result for ready-mixed concrete was determined to a limited extent by higher sales volumes and to a larger extent to higher prices.

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