2012 Annual Report - Italcementi Group

2012 Annual Report
Presentation 4
General information 14
Annual Report Consolidated Annual Report Directors’ report 30
Sustainability disclosure Italcementi S.p.A. Annual Report Consolidated financial statements 63
Extraordinary session 351
The consolidation effect arose largely from the sale at the end of 2011 of Axim operations
(additives for cement and ready mixed concrete) in a number of countries.
The positive exchange-rate effect arose from the appreciation of the US dollar, Egyptian
pound and Thai baht and the depreciation of the rupee against the euro.
The operating performance was penalized by the fall in sales volumes, the negative trend
in variable costs, largely as a result of the increase in prices, in some countries, in fuel and
electricity, and the smaller contribution from CO 2 emission rights. These effects were
counterbalanced in part by an overall positive trend in sales prices and by incisive
measures to recover efficiency on operating expense. The positive exchange-rate effect
was largely offset by a negative consolidation effect, especially with regard to the sale of
Axim.
Recurring EBITDA, at 632.4 million euro, was down 9.8% from 2011.
Net non-recurring expense was 17.5 million euro (net non-recurring income of 40.8
million euro in 2011) arising from corporate restructuring expense (56.1 million euro, mainly
in Italy), net of net gains from the sale of assets (38.5 million euro) also relating largely to
Italy, specifically the gains at Italcementi S.p.A. on the sale of Silos Granari della Sicilia
S.r.l. and the Pontassieve cement plant.
EBITDA, at 614.9 million euro, was down 17.1% from 2011.
After amortization and depreciation of 456.4 million euro (468.7 million euro) and
impairment losses of 309.4 million euro (134.3 million euro), EBIT was 150.9 million euro
(positive EBIT of 138.9 million euro). Impairment losses related almost entirely to goodwill
(243.9 million euro) and property, plant and equipment (64.2 million euro). To a large
degree, they were recognized as a result of impairment tests on the Group cash-generating
units, which, as illustrated in the notes, determined the main goodwill impairment losses in
Spain (156.2 million euro) and Egypt (83.7 million euro) and property, plant and equipment
impairment losses in Greece (35.0 million euro). For property, plant and equipment,
impairment losses were also recognized in connection with the current production reorganization
as a result of which use of the facilities is not foreseeable in the immediate
future (in Italy in particular).
Progress in recurring EBITDA was reported in North America and Thailand, while the
largest reductions were in France-Belgium, Spain, Morocco and Bulgaria.
Finance costs and other items
In 2012 net interest expense on net debt increased to 86.5 million euro (84.3 million euro in
2011).
Overall, finance costs net of finance income decreased from 99.6 million euro to 84.5
million euro (-15.1%).
This trend was also determined by net exchange-rate gains of 4.4 million euro (net
exchange-rate losses of 10.5 million euro in 2011) with a positive increase of 14.9 million
euro from 2011, and by net derivatives for hedges on CO 2 emission rights and Certified
Emission Reductions (CER) with a positive effect of 2.3 million euro.
The share of profit (loss) of equity-accounted investees, at 11.1 million euro, was down
by 40.4% from 2011 (18.6 million euro).
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