2011 Annual Report - Italcementi Group

Directors’ report
Following the adoption by the European Union of Regulation no. 1606 of 2002, Italcementi
consolidated financial statements for 2011, and the comparatives for 2010, have been
drawn up in compliance with the International Financial Reporting Standards (IFRS).
In accordance with the aforementioned Regulation, the principles to be adopted do not
include the standards and interpretations published by the International Accounting
Standards Board (IASB) and the International Financial Reporting Interpretations
Committee (IFRIC) at December 31, 2011, but not endorsed by the European Union at that
date. Furthermore, the European Union has endorsed additional standards/interpretations
that Italcementi S.p.A. will apply at a subsequent time, having decided not to elect early
application.
The main changes with respect to the financial statements at December 31, 2010, are set
out in detail in the notes, in the section “Statement of compliance with the IFRS”.
With regard to the scope of consolidation, the Calcestruzzi group has been
consolidated (on a line-by-line basis) as from January 1, 2011, while the Group operations
in Turkey headed by Set Group were deemed available-for-sale (application of IFRS 5) as
from the beginning of the year and subsequently sold at the end of March. In compliance
with IFRS 5 the gains or losses relating to discontinued operations have been presented
as a separate item on the income statement both for the period under examination and for
2010. A similar presentation has been adopted for cash flows. In December, Axim-branded
cement and concrete additives operations in Italy, France, USA, Canada, Morocco and
Spain were sold. Full details about the changes in the scope of consolidation are provided
in the notes (note 3).
Earnings indicators
To assist comprehension of its financial data, the Group employs a number of widely used
indicators, which are not contemplated by the IFRS.
Specifically, the income statement presents the following intermediate results / indicators:
recurring EBITDA, EBITDA, EBIT, computed as the sum of the preceding items. On the
face of the statement of financial position, similar considerations apply to net debt, whose
components are detailed in the specific section of the notes.
Since the indicators employed by the Group are not envisaged by the IFRS, their
definitions may not coincide with and therefore not be comparable to those adopted by
other companies/groups.
This report contains many financial and non-financial earnings indicators, including those
mentioned above. The financial indicators, taken from the financial statements, are used in
the tables summarizing the Group’s financial performance, in relation to comparative
amounts and other amounts from the same period (e.g., change in revenue, recurring
EBITDA and EBIT with respect to the previous year, and change in their return on
revenue). The use of amounts not directly apparent from the financial statements (e.g., the
exchange-rate effect on revenue and on earnings) and the presentation of comments and
assessments assist qualification of the trends in the amounts concerned.
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