Annual Report 2015 Financial highlights Figures in €m 2009 2010 2011 2012 2013 2014 2015 Number of employees as at 31 December 53,302 53,437 52,526 51,966 45,169 44,909 45,453 Sales volumes Cement and clinker (million tonnes) 79.3 78.4 87.8 89.0 78.1 81.8 81.1 Aggregates (million tonnes) 239.5 239.7 254.1 243.0 230.6 243.6 249.2 Ready-mixed concrete (million cubic metres) 35.0 35.0 39.1 39.1 34.9 36.6 36.7 Asphalt (million tonnes) 10.0 9.1 9.5 8.6 8.4 9.3 9.1 Income statement Total Group revenue 11,117 11,762 12,902 14,020 12,128 12,614 13,465 Operating income before depreciation (OIBD) 2,102 2,239 2,321 2,477 2,224 2,288 2,613 Operating income (OI) 1,317 1,430 1,474 1,604 1,519 1,595 1,846 Profit for the financial year 168 511 534 529 933 687 983 Group share of profit 43 343 348 285 736 486 800 Dividend per share in € 0.12 0.25 0.35 0.47 0.60 0.75 1.301) Earnings per share in € 0.30 1.83 1.86 1.52 3.93 2.59 4.26 Investments Investments in intangible assets and PP&E 796 734 874 831 861 941 908 Investments in financial assets 24 138 85 35 379 184 94 Total investments 820 872 959 866 1,240 1,125 1,002 Depreciation and amortisation 785 809 847 873 704 693 767 Free cash flow Cash flow from operating activities 1,164 1,144 1,332 1,513 1,167 1,480 1,449 Cash flow from investing activities -539 -648 -758 -582 -1,037 -973 493 Balance sheet Equity (incl. non-controlling interests) 11,003 12,884 13,569 13,708 12,514 14,245 15,976 Balance sheet total 25,508 27,377 29,020 28,008 26,276 28,133 28,374 Net debt 8,460 8,242 7,868 7,092 7,352 6,957 5,286 Ratios OIBD margin 18.9% 19.0% 18.0% 17.7% 18.3% 18.1% 19.4% OI margin 11.8% 12.2% 11.4% 11.4% 12.5% 12.6% 13.7% Net debt / equity (gearing) 76.9% 64.0% 58.0% 51.7% 58.7% 48.8% 33.1% Net debt / OIBD 4.02x 3.68x 3.39x 2.86x 3.31x 3.04x 2.02x 1) The Managing Board and Supervisory Board will propose to the Annual General Meeting on 4 May 2016 the distribution of a cash dividend of €1.30. Overview of Group areas Figures in €m 2009 2010 2011 2012 2013 2014 2015 Western and Northern Europe Revenue 3,848 3,811 4,318 4,201 3,779 4,012 4,196 Operating income before depreciation 687 683 734 578 524 562 672 Investments in property, plant, and equipment 248 178 193 177 178 188 249 Employees as at 31 December 14,640 14,302 13,693 13,438 11,882 12,441 13,818 Eastern Europe-Central Asia Revenue 1,282 1,138 1,392 1,435 1,243 1,182 1,097 Operating income before depreciation 361 299 327 319 259 230 207 Investments in property, plant, and equipment 270 202 240 181 122 95 93 Employees as at 31 December 9,481 9,959 9,693 9,435 8,696 8,453 8,177 North America Revenue 2,892 3,033 3,035 3,441 2,766 3,049 3,746 Operating income before depreciation 340 448 473 572 555 610 829 Investments in property, plant, and equipment 152 146 159 162 181 214 263 Employees as at 31 December 12,601 11,899 11,586 11,001 7,513 7,644 7,658 Asia-Pacific Revenue 2,211 2,609 2,957 3,477 2,877 2,818 2,775 Operating income before depreciation 612 718 711 887 778 743 719 Investments in property, plant, and equipment 96 174 215 231 245 322 247 Employees as at 31 December 14,030 13,682 14,039 14,686 14,133 13,482 13,029 Africa-Mediterranean Basin Revenue 837 938 1,023 1,135 949 910 1,008 Operating income before depreciation 157 156 164 204 195 213 260 Investments in property, plant, and equipment 28 34 67 80 135 122 56 Employees as at 31 December 2,499 3,539 3,460 3,349 2,885 2,811 2,690 Group Services Revenue 475 709 652 828 941 1,077 1,060 Operating income before depreciation 30 20 11 22 21 27 25 Investments in property, plant, and equipment Employees as at 31 December 51 55 55 57 61 79 81 Financial highlights | Overview of Group areas Urbanisation is one of the megatrends The growth of metropolitan areas is also of our century. The world’s metropol- very challenging for building materials itan areas are constantly growing; more producers and construction companies and more people are moving from the because concrete needs to be processed countryside to the cities. Metropolitan rapidly. The right quantity must be in the areas have limited space though, present- right place at the right time, notwithstand- ing big challenges to urban developers. ing urban traffic and congestion – and as The only way to meet the basic needs for environmentally friendly as possible, of accommodation, work, and mobility in course. Contracts are usually awarded to the future is through three-dimensional those companies who can best fulfil these growth. This includes bridges and tunnels requirements. Aware of this challenge, for transport and high-rise buildings for HeidelbergCement deliberately focuses offices and homes. All these construc- on vertical integration in metropolitan tions require a stable and long-lasting areas. Thanks to the networking of our own building material: concrete – made from raw material deposits with strategically a mixture of cement, water, sand, and located terminals and local production gravel – is the number one choice. It’s sites, as well as the IT-supported logistics not by chance that concrete is the second management, we consider ourselves to be most commonly used substance on our well positioned to benefit from the growth planet after water. in metropolitan areas. New York is known as the city that never New York since 1897, has played a sleeps. The population of New York is huge role in the growth of the city. Our growing by around 1% per year. With building materials were used for the roughly 19 million inhabitants, the city foundations of the Freedom Tower as is the largest metropolitan area in North well as for the third-highest skyscraper, America and ranks among the top 10 432 Park Avenue. Cement is delivered metropolitan areas in the world. The in an environmentally friendly way via architecture with its skyscrapers, bridges, ship to our terminal in Brooklyn. From and tunnels is world-famous. Heidelberg - there it is only a stone’s throw to the Cement is part of the past, present, and city’s construction sites. The use of future of New York through its North waterways is efficient and relieves New American subsidiary Lehigh Hanson. York’s road network of several thousand The company, which has operated in trucks each year. 19 million approx. 1 % per year 17,405 km2 390 km (underground) With 13.6 million inhabitants, London with rail connections, 12 ready-mixed is the largest metropolitan area in the concrete plants, 3 asphalt plants, and European Union. Its population is grow- 4 quay installations on the Thames and ing by around 1.7% per year. Several Medway, Hanson is fully integrated and striking skyscrapers have appeared therefore the preferred supplier for large- on the London skyline in recent years, scale projects, such as the underground and others are being built. Even below expansion. Innovative logistics concepts the surface there is a lot going on: the are also applied: A new record was already underground system is being extended, set in 2014 by pumping concrete over and a major new sewage tunnel is under a distance of 1.3 km to a construction construction. Our subsidiary Hanson is site. This is environmentally friendly and the leading building materials supplier relieves the metropolitan area of some in the metropolitan area. With 1 cement of its heavy traffic. terminal and 3 aggregates terminals 13.6 million approx. 1.7 % per year 8,382 km2 402 km (underground) Jakarta is the capital of Indonesia. What government has launched a gigantic many don’t know is that the Jakarta metro- infra structure programme. Heidelberg- politan area, also called Jabodetabek, is Cement is the leading supplier of building the second largest urban agglomeration materials in Jakarta. The Group’s largest in the world after Tokyo, with about 30 cement production site is located in the million inhabitants on an area smaller metropolitan area. From mid-2016, its than the Greater London area. And the capacity will increase to roughly 20 million population is continuing to grow by tonnes of cement per year. It is part of a around 3.6% per year. The infrastructure, vertically integrated production network however, is lagging behind this trend. with 1 aggregates plant, 10 storage sites, There is neither an underground nor and 16 ready-mixed concrete plants, of ring roads, and the average speed during which 3 are strategically located in the rush hour is less than 15 km/h. But there central business district.