Displaying items by tag: Italy
Italcementi to fight Euro84m antitrust fine
09 August 2017Italy: Italcementi, part of Germany’s HeidelbergCement, has said that charges brought by Italy's antitrust authority are unfounded and it would appeal against the sanction at the Lazio court. Italcementi, along with other leading cement producers, is accused by the regulator of allegedly breaching competition rules for the period from June 2011 to January 2016.
In particular, Italcementi has said that it believes that the commercial decisions taken by the previous management to propose nominal price increases to its customers were dictated by autonomous, solid and logical business motives.
Italcementi also considers that the Euro84m fine, one of the highest ever imposed by the authority, is completely disproportionate to the turnover generated by the company in Italy.
Buzzi Unicem sees recovery in Europe in first half of 2017
04 August 2017Italy: Buzzi Unicem has reported a recovery in Central Europe, a positive change in Eastern Europe and an improvement in Italy thanks to increased exports. It also noted muted demand in the US, particularly during the first quarter. Its net sales rose by 7.3% year-on-year to Euro1.35bn in the first half of 2017 from Euro1.26bn in the same period in 2016. Its cement sales volumes increased by 2.3% to 12.5Mt from 12.2Mt. Earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 8.4% to Euro241m from Euro223m.
Italy: Cementir’s acquisition of Compagnie des Ciments Belges has propped up its sales revenue, volume and operating profit for the first half of 2017. Its sales revenue rose by 31.3% year-on-year to Euro631m in the first half of 2017 from Euro481m in the same period in 2016. However, on a like-for-like basis its sales revenue fell by 1.5%. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 68.5% to Euro85.1m from Euro72m but fell by 4.9% on a like-for like basis. Its sales volumes of cement rose by 34% to 6.37Mt from 4.75Mt but fell by 2.4% on a like-for-like basis. The group blamed its poor like-for-like performance on falling revenue in Turkey and Malaysia despite good results in Denmark, Norway, Sweden, China and Italy.
“Results in the first half 2017 were up thanks to the effect of the acquisitions concluded in the second half 2016, which added Euro16.6m to EBITDA, despite adverse changes in exchange rates. On a like-for-like basis, the improvement in EBITDA in Egypt, Italy, China and Norway partially compensated lower earnings in Turkey and, to a lesser extent, in Denmark and Malaysia, as well as the depreciation of foreign currencies against the Euro – mainly the Egyptian Pound and the Turkish Lira,” said Francesco Caltagirone Jr, Chairman and Chief Executive Officer (CEO).
Buzzi Unicem completes acquisition of Zillo Group
04 July 2017Italy: Buzzi Unicem has completed its acquisition of Zillo Group with its acquisition of the remaining 52.1% of the share capital of Cementizillo. Following the acquisition it now owns 100% of the company. The agreement was originally announced in mid-June 2017. Buzzi Unicem has paid Euro19m plus 450,000 shares in Buzzi Unicem for its purchase of the majority stake in Cementizillo. Further payments will follow with an additional variable payment of up to Euro21m depending on the average price of Buzzi Unicem cement in Italy from 2017 to 2020.
Italy: Buzzi Unicem says that a cyberattack on its information systems could delay its interim accounting closings and related financial disclosures. The attack, believed to be the Petya ransomware virus, which originated in the Ukraine where the producer operates two cement plants, has caused problems in managing and administrating its processes. Buzzi said that it is taking ‘all necessary measures’ to restore its systems but was unable to provide a recovery timescale.
Belgium: The European Commission has cleared a proposed merger between Brazil’s Magnesita and Austria’s RHI Group subject to the divestment of a number of production sites in Europe. Magnesita is required to sell its plant in Oberhausen, Germany along with its Oberhausen business in the European Economic Area (EEA). RHI is required to sell its dolomite business in the EEA including plants in Maroni, Italy, and Lugones, Spain. Magnesita and RHI said they are speaking to potential buyers at present.
“With today’s milestone, we have come significantly closer to the planned merger with Magnesita – and thus a globally leading company in the refractory industry which optimally combines the strengths of both companies,” explains Stefan Borgas, chief executive officer (CEO) of RHI and designated CEO of the future RHI-Magnesita Group.
Outstanding approvals required to complete the merger include that from the Brazilian Antitrust Authorities and the approval of the cross-border merger, of RHI AG with its subsidiary RHI MAG NV in the Netherlands, by the RHI General Meeting.
Italy’s cement sector continues to consolidate
21 June 2017Buzzi Unicem strengthened its position in Italy this week with a deal to buy Cementizillo. The agreement included Zillo Group’s two integrated cement plants at Fanna and Este in the northeast with a combined production capacity of 1.4Mt/yr. The sale price appeared to be low at a maximum of Euro104m plus 450,000 shares in Buzzi. However, the interesting part of this transaction is a variable portion of zero to Euro21m based on the average price of cement achieved by Buzzi in Italy between 2017 and 2020.
Buzzi hammered home the point in its acquisition statement that the local cement sector suffers from, “…significant surplus of production capacity coupled with permanently reduced sales volumes.” No doubt this was a prominent part of the deal negotiations given that, with a rough calculation of Euro10m for the shares, Buzzi has picked up the new cement production capacity at about Euro80/t or US$91/t. In July 2016 this column commented that Cementir’s purchase of Compagnie des Ciments Belges’ assets for Euro125/t seemed fairly low globally. Yet even this seemed high when Cementir picked up Sacci’s cement business, including five cement plants, for Euro125m or Euro38/t. Although it should be noted that Sacci was bankrupt at the time and being run by its liquidators.
As ever all these transactions were complicated by assets other than clinker production lines but the problems facing the Italian cement industry are clear. Following on from last week’s column about changing patterns of cement consumption in southern Europe, the cement intensity of the construction sectors in Italy and Spain has dropped significantly since 2000 suggesting that the mode of construction has moved from new projects to patching up old ones. Throw in the financial crash in 2007 and, strikingly, cement production in Italy fell from 49Mt in 2006 to 21Mt in 2015. Anecdotally, looking through the Global Cement Directory 2017, 13 of the country’s 56 integrated cement plants were listed as idled, mothballed or closed at the start of the year. Cembureau, the European Cement Association, reckons that consumption fell year-on-year by 4.7% in 2016 with a further drop of 3% forecast for 2017. Surprisingly though estimates from the Associazione Italiana Tecnico Economica Cemento (AITEC) suggest that cement exports have not increased dramatically since 2007. Since hitting a low of 1.6Mt in 2011 they rose to 2.5Mt, a similar figure to that of before the crash.
This kind of environment suggests consolidation and that’s exactly what has happened with Buzzi buying Cementizillo this week, Germany’s HeidelbergCement’s purchase of Italcementi in 2016 and Cementir’s purchase of Sacci in the same year. Earlier in 2014 Austria's Wietersdorfer & Peggauer picked up a plant in Cadola from Buzzi.
Financially, the story is in line with what the declining production and consumption figures suggest. Buzzi reported that its net sales in Italy fell by 16% to Euro375m in 2016 and Cementir said that its sales would have fallen by 14% had it not benefitted from the new revenue from Sacci.
HeidelbergCement presented Italy as a territory ripe for ‘substantial’ recovery potential at a shareholders event in the autumn of 2016. It highlighted opportunities in further rationalisation of the industry, recovery in cement consumption from a low base and optimisation of the country’s distribution and depot network. It probably will not be publicly released but if Buzzi Unicem pays out the full amount of its variable payment to Cementizillo then the industry may be picking up again. Until then expect more acquisitions.
Buzzi Unicem buys Zillo group
19 June 2017Italy: Buzzi Unicem has agreed to buy Cementizillo for Euro60m plus 450,000 shares in Buzzi Unicem. The agreement also foresees a variable payment of up to Euro21m, payable to majority shareholders in Cementizillo, depending on the average price of Buzzi Unicem cement in Italy from 2017 to 2020. Buzzi Unicem has purchased 47.9% of the share capital of Cementizillo directly from the minority shareholders. The remaining 52.1% is expected to be acquired in early July 2017, following the prior settlement of some non-core assets that do not lie in the interest of Buzzi Unicem.
Zillo Group operates two integrated cement plants at Fanna and Este and about 40 concrete batching plants in northeast Italy. It reported cement and clinker sales volumes of around 1.1Mt and ready-mix concrete sales of 440,000m3 in 2016. Its net sales was Euro90m and its earnings before interest, taxation, depreciation and amortisation (EBITDA) were Euro10m. However, it reported a net debt of Euro46m in December 2016.
Italy: Paolo Zugaro has been appointed as the General Manager of Cementir Holding. He has also become the group’s chief operating officer with effect from 1 May 2017. Zugaro, aged 52 years, holds a degree in electrical engineering from Tor Vergata University, Rome. He has worked in a variety of managerial roles for both Caltagirone Group and Cementir Group since 1997. Notably he has been the head of the Nordic & Baltic Region of Cementir Group, the chief executive officer (CEO) of Aalborg Portland and CEO of Unicon. In his recent posting as the head of the East Mediterranean Region, he was the CEO of Cimentas in Turkey, Vice President of Sinai White Portland Cement in Egypt and the CEO of Recydia, a company which operates in the waste and recycling management business in Turkey and the UK.
Rising sales for Buzzi Unicem
15 May 2017Italy: Buzzi Unicem’s first quarter sales rose by 8.9% year-on-year during the first quarter of 2017 to Euro588.5m. Cement sales volumes rose by 4.5%. Favourable currency impacts lifted Buzzi Unicem's top line by Euro16.8m, while like-for-like sales were up by 5.8%.
Sales were up in all geographical areas the group is present in, with the exception of Russia, in which sales were down by 1.3% in local currency terms. Buzzi Unicem said that its net debt rose to Euro979.9m at the end of the first quarter from Euro941.6m at the end of 2016.