2011 Annual Report - Italcementi Group

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the negative trend in sales volumes. The improvement in sales prices brought healthy progress in recurring EBITDA, which was also supported by management of CO 2 emission rights, valorization of energy efficiency credits (white certificates), income from power interruptability and savings on fixed costs as a result of measures already taken and due to continue in 2012. This was also achieved through a re-organization of HQ operations and the production and sales networks, providing for absorption of personnel surpluses with recourse to a series of welfare benefits. In connection with these measures, a net amount of 8.1 million euro was recognized in 2011 under non-recurring expense. Among negative effects, apart from the fall in sales volumes, there was an increase in variable costs, largely due to the rise in energy costs, counterbalanced by continuous efficiency improvements in production through use of alternative fuels, replacement raw materials and improvements in specific use. Overall operating results reflected the impact of the consolidation, as from the beginning of the year, of the ready mixed concrete and aggregates sector, with negative recurring EBITDA. The ready mixed concrete market has been experiencing a severe crisis for a number of years. In addition to the decline in demand, again a notable feature of 2011, other factors were the difficulties encountered by small and medium construction companies in obtaining credit. On a like-for-like basis, although Group sales recovered in the fourth quarter, they were down 2.7%, as a result of the general market decline, offset in part by the lively sales trend in major works. Trends in aggregates volumes were similar: a reduction of 4.1% for the year, with growth reported in the fourth quarter. In 2011, after regaining full control of operations, the Group drew up a plan to recover high levels of industrial efficiency and organizational effectiveness. To achieve this, a re-organization will begin in 2012 with the disposal of non-strategic plants, with recourse to welfare benefits to mitigate the impact on employees (recourse to state-subsidized layoff for a two-year period). Non-recurring expense was also provided for the ready mixed concrete and aggregates sector, for 14.6 million euro. France – Belgium In France and in Belgium cement consumption made good progress in 2011 thanks to very favorable meteorological conditions at the start and end of the year, and a healthy trend in residential building and public works. In France, Group overall cement and clinker sales volumes (including marginal export volumes) increased by 6.4%; in Belgium cement sales volumes grew by 10.0% (+8.4% including cement and clinker exports). Average sales prices fell slightly, in both France and Belgium, in part due to growing competitive pressures. Operating results in the cement sector slackened as operating expenses rose, especially for energy and maintenance, and as sales prices showed a slight decrease. These trends were offset only in part by the increase in sales volumes. In France Group ready mixed concrete sales volumes progressed by 10.5%, while aggregates were up 5.6%; in Belgium, on a like-for-like basis , ready mixed concrete sales volumes increased by 15.6%, while the rise in sales of aggregates was 2.7%. This positive trend fuelled the improvement in operating results. 46
2011 Annual Report Presentation 4 General information 15 Annual Report Consolidated Annual Report Directors’ report 28 Extraordinary session Italcementi S.p.A. Annual Report Consolidated financial statements 63 Spain In Spain the fall in cement demand continued in 2011, with another sharp reduction, stemming largely from the difficult situation in the residential sector and the difficult financial situation of the state administration, which had a negative impact on infrastructure. In these conditions, Group domestic cement sales volumes were down 16.3% on 2010. Exports, supported by Group Trading operations, made it possible to contain the reduction in cement and clinker sales at 6.8%. Average cement sales prices made good progress in southern Spain and fell slightly in the Basque Country. The crisis in the construction sector had a particular significant impact on sales volumes of ready mixed concrete and aggregates, which fell by 23.2% and 30.3% respectively. In a particularly difficult market, the Group proceeded with renewed energy with its support activities and measures to rationalize and improve the efficiency of industrial operations, which will continue during 2012. Overall operating results decreased due to the reduction in sales volumes and the rise in energy costs, counterbalanced only in part by measures to contain fixed costs and by the favorable sales prices trend on markets in southern Spain. Others In Greece, the economic crisis continued with no signs of a recovery. This was reflected in Group overall cement and clinker sales, which fell by approximately 40%. A significant reduction was also recorded in sales volumes in ready mixed concrete (-40.5%) and aggregates (-51.0%). Operating results, affected mainly by the large fall in sales volumes, declined sharply. NORTH AMERICA Total North America Full-cycle cement plants 6 Grinding centers 1 Quarries 3 RMC plants 33 Revenue Recurring EBITDA EBITDA Employees 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 To tal 405.1 415.3 16.3 25.4 23.0 21.7 (45.4) (48.2) 18.4 42.3 1,485 1,686 EBIT Capital expenditure In the USA, cement consumption on the Group markets improved in 2011, showing overall growth estimated at 2.8%, with a particularly positive performance in the fourth quarter thanks to good meteorological conditions and a recovery in the residential and commercial sectors. In this context, Group cement sales volumes improved by 5.1% from 2010, also helped by a gradual recovery of market share. Average revenue per unit slackened from 2010, due to more intense competition and higher logistic expenses. 47 www.italcementigroup.com
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Page 5 and 6: 2011 Annual Report Italcementi S.p.
Page 7 and 8: The Group has decided to take a fur
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Page 30 and 31: Directors’ report Following the a
Page 32 and 33: The Calcestruzzi group returned to
Page 34 and 35: Financial performance in 2011 Key c
Page 36 and 37: In cement and clinker, performance
Page 38 and 39: Revenue and operating performance C
Page 40 and 41: The loss relating to continuing ope
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Page 44 and 45: 4. Implementation of defined mitiga
Page 46 and 47: Financial disclosure risks The main
Page 50 and 51: Ready mixed concrete sales volumes
Page 52 and 53: ASIA Thailand India Others (1) Tot
Page 54 and 55: 70% by Fotowatio Italy, a subsidiar
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Page 58 and 59: Raw materials and alternative fuels
Page 60 and 61: Engineering, technical assistance,
Page 62 and 63: After a revenue decline in 2009 and
Page 64 and 65: Outlook The markets on which the Gr
Page 66 and 67: Financial statements Statement of f
Page 68 and 69: Statement of comprehensive income N
Page 70 and 71: Statement of cash flows Notes 2011
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Sensitivity analysis With reference
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Other equity investments at Decembe
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14. Share capital and Share premium
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Net liabilities determined on the b
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The table below sets out key data f
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of the favorable ruling obtained in
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22.1 Financial liabilities Financia
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No drawings had been made on the sy
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As a result of the Moody’s rating
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At December 31, 2011, lines of cred
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22.3.1 Fair value of derivatives Th
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22.4.1 Interest-rate risk hedging T
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With regard to financing for subsid
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In 2011, in view of the surplus acc
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26. Services Services amounted to 1
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28. Other operating income (expense
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The reconciliation between the tax
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35. Earnings per share Earnings per
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36. Transactions with related parti
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38. Statement of cash flows 38.1 Ca
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40. Audit fees (as per CONSOB Resol
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Annex 1 The following table has bee
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Company Registered office Share cap
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148
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Directors’ report Any changes in
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which remained the most dynamic com
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Statement of financial position, ca
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Dealings with subsidiaries, joint v
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Risks and uncertainties Italcementi
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Ratings risks The Group’s ability
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January 2011 entitled “Europe at
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Ciments Français S.A. profit for t
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INFORMATION ON OWNERSHIP STRUCTURE
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l) Laws applicable to the appointme
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- Selection of priority risks and d
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) implementing the guidelines defin
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A) ORGANIZATIONAL STRUCTURE Board o
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No limits to re-eligibility of dire
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* Mittel S.p.A. - Director Pierfran
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The Code provides for the Board of
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Lastly, the Board of Directors, in
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) a brief resume on the personal an
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) evaluate the proposals made by ex
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time to express their point of view
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In addition, the Chief Executive Of
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During 2011 the Internal control co
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TABLE 1 STRUCTURE OF THE BOARD OF D
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to be noted that CONSOB, the Italia
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* indicates the responsibilities, p
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consolidated financial statements.
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to apportion the profit for the yea
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Department of Human Resources and O
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A) VARIABLE COMPONENTS Under the Po
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This plan aims at: - tying the over
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The variable components are aligned
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With reference to the other offices
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The Board of Directors may also gra
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) Plan Management The corporate bod
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g) Any Support for the Plan by the
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position of the role of each benefi
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2) With respect to the stock option
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Name, surname Position Period durin
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Yves René Nanot Marco Piccinini At
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Monetary Incentive Plans in Favor o
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Participation of Governing and Supe
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3) Term of the authorization. The a
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specifically, with laws and regulat
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Each section shall list in progress
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238
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Financial statements Statement of f
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Statement of comprehensive income (
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Statement of cash flows (euro) Note
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Notes The Italcementi S.p.A. financ
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1.2. Accounting policies and basis
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1.7. Property, plant and equipment
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1.13. Inventories Inventories are m
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Past service cost Changes in liabil
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Interest income Interest income is
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2.1 Investment property Investment
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The list of investments in subsidia
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Current assets 6. Inventories (in t
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Equity 12. Share capital At Decembe
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Dividends paid Dividends approved i
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18. Deferred tax assets and deferre
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19. Net debt An itemized correlatio
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Main bank loans and drawn and avail
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At December 31, 2011, the average m
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19.3.1 Fair value of derivatives Th
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19.4.1 Interest-rate risk hedging T
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ELECTRICITY In 2011, Italcementi S.
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Income statement 23. Revenue Revenu
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Stock options The company has set u
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30. Finance income (costs), exchang
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Breakdown of receivables and payabl
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Commitments with related parties (i
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(Breakdown of revenue and costs wit
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(Breakdown of revenue and costs wit
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Impact of transactions with related
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34. Audit fees Pursuant to the CONS
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Annex 1 Highlights from the most re
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Report of the Board of Statutory Au
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On the other hand, the absence of a
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308
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Report of the Board of Directors Pr
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Current text ordinary and/or saving
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Current text In each list, the name
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Current text If there are no lists,
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Current text means of another perso
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Current text If a subject connected
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The proposed amendments do not gran
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• operate, in compliance with cur
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Corporate bodies resulting from the
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2011 Annual Report - Italcementi Group

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