1. business and industrial
2. company
3. merger and acquisition

Quarterly report at September 30, 2014
Contents
Quarterly report
Comments on operations
Summary of consolidated operations and net debt
Significant events
Comments on operations
Performance by geographical area
E-business
Net debt
Transactions with related parties
Disputes and pending proceedings
Significant events after September 30, 2014
Outlook
Compliance with simplified rules pursuant to arts. 70 and 71 of the Issuers Regulation
6
9
11
15
22
22
23
24
25
25
26
Financial statements
27
Notes
32
This financial report has been prepared in English for the convenience of international readers.
The original Italian documents should be considered the authoritative version.
November 7, 2014
Quarterly report at September 30, 2014
Italcementi S.p.A.
Via G. Camozzi, 124 - 24121 Bergamo - Italy
Share Capital € 401,715,071.15
Bergamo Companies Register
Company subject to management
and coordination activity by Italmobiliare S.p.A.
The illustrations in the report refer to i.nova, the new
Italcementi Group branding system based on an innovative
re-organization of the product offer into 11 performance
families targeting specific customer requirements, a
completely new approach in the worldwide construction
materials sector.
Italcementi S.p.A. Directors, Officers and Auditors
Board of Directors
(Until approval of financial statements at 12.31.2015)
Giampiero Pesenti
Pierfranco Barabani
Lorenzo Renato Guerini
Carlo Pesenti
Giulio Antonello
Giorgio Bonomi
Fritz Burkard
Victoire de Margerie
Federico Falck
Italo Lucchini
Emma Marcegaglia
Sebastiano Mazzoleni
Jean Paul Méric
Carlo Secchi
Elena Zambon
Paolo Santinoli
Board of Statutory Auditors
1
1
1-4-5-6-7
1-2
Chairman
Executive Deputy Chairman
Deputy Chairman
Chief Executive Officer-CEO
3-4-7
7
4-7
1-5-6-7
4-7
1
5-6-7
7
8
Secretary to the Board
(Until approval of financial statements at 12.31.2014)
Standing Auditors
Substitute Auditors
Maria Martellini
Luciana Gattinoni
Mario Comana
Chairman
Carlo Luigi Rossi
Luciana Ravicini
Fabio Bombardieri
Chief Operating Officer
Giovanni Ferrario
Manager in charge of the financial reports
Carlo Bianchini
Independent Auditors
(Until approval of financial statements at 12.31.2019)
KPMG S.p.A.
1
2
3
4
5
6
7
8
4
Member of the Executive Committee
Director responsible for supervising the Internal Control & Risks Management System
Lead independent director
Member of the Remuneration Committee
Member of the Control & Risks Committee
Member of the Committee for Transactions with Related Parties
Independent director (pursuant to the Code of Conduct and law no. 58 of February 24, 1998)
Secretary to the Executive Committee
Comments on operations
5
www.italcementigroup.com
The quarterly report as at and for the nine months ended September 30, 2014, has been
drawn up in compliance with article 154 ter, paragraph 5, of Legislative Decree no. 58 of
February 24, 1998, and subsequent amendments. It is also compliant with the
measurement and recognition criteria of the International Accounting and Financial
Reporting Standards (IAS/IFRS).
The changes in accounting standards and interpretations with respect to the financial
statements as at and for the year ended December 31, 2013, are set out in detail in the
notes. The main change relates to IFRS 11 “Joint arrangements”, which defines the various
types of joint arrangement (joint operations and joint ventures), in order to establish the
appropriate accounting treatment. Until December 31, 2013, the Group consolidated joint
ventures using the proportionate method, whereas the new IAS 28 (“Investments in
associates and joint ventures”) and IFRS 11 require joint ventures to be consolidated using
the equity method.
Although application of the new standards as from January 1, 2014, has had a limited
impact, in order to ensure a presentation consistent with the previous year, assets and
liabilities as at December 31, 2013, and income and expense for the first nine months of
2013 have been re-stated.
In the third quarter of 2014, the Group completed the plan to streamline the corporate
structure and strengthen the Group through the mandatory conversion of Italcementi
savings shares into ordinary shares, an increase in Italcementi’s share capital and a
voluntary public tender offer by Italcementi on Ciments Français minorities.
In the first quarter of 2014, Suez Cement Company SAE acquired the residual 50% of the
capital of International City for Ready Mix, a company in Saudi Arabia in which Italcementi
S.p.A. already held 50%. The Saudi company has been fully consolidated in 2014; in 2013,
it was consolidated using the proportionate method.
Since January 1, 2014, operations in Sri Lanka have been reclassified, in the operating
segment disclosure and related comparatives, from Trading to India.
Summary of consolidated operations and net debt
In the first three quarters of the year, world economic growth continued to be slower than
expected. Moreover, between the second and the third quarters, the divergences between
the main regions widened. Specifically, growth consolidated in the USA, whereas the
economic mood in the Eurozone remained weak, despite encouraging signs in leading
indicators in the first half of the year. These indicators worsened recently, reflecting the
unresolved difficulties of a number of countries (Italy, Greece, and also France), the
tensions between Russia and Ukraine and the crisis in the Middle East. All this is also
having adverse effects on the conditions of the more solid Eurozone economies, starting
with Germany. In this context, inflation has fallen to exceptionally low levels, with the
contained dynamic in commodity prices as an additional contributing factor; consequently,
the risk that a deflationary spiral could be triggered in a number of countries remains
significant. Monetary policy on the two sides of the Atlantic continued to reflect the cyclical
differences between the USA and the Eurozone. The US Federal Reserve is engaged in a
cautious strategy to withdraw from quantitative easing, while the European Central Bank
has intensified expansionary pressure, contributing to a phase of depreciation for the euro,
which, looking ahead, could stimulate a recovery in the Eurozone.
6
In the construction industry, divergences continued to widen in the results reported by
the regions where the Group operates, and by the individual countries in these regions.
Among the mature countries, the recessionary trend in Italy in particular was confirmed, if
at a more moderate pace, while the signs of weakening observed in France since the
beginning of the year intensified. Conversely, the improvement in the general domestic
economic situation had positive repercussions for the construction sector in Spain, where
an upturn in activity was reported thanks to the non-residential component. In North
America, the recovery accelerated in the summer quarter, although the pace was slowed
by the weakness of infrastructure investment. In the Group’s main emerging countries,
progress was reported in Egypt, India and Kazakhstan, but remained weak in Morocco,
where the continuing weakness of private demand had a negative impact on segment
performance.
Q3
Q3
2014
Recurring EBITDA
% of revenue
Non-recurring income (expense)
EBITDA
% change
Q3
2013
published
re-stated
(in millions of euro)
Revenue
Q3
2013
1,067.3
1,059.4
0.7
1,060.9
164.4
174.1
(5.5)
174.5
15.4
16.4
1.8
(8.0)
n.s.
(8.0)
166.3
166.1
0.1
166.5
4.3
(105.1)
16.5
15.6
15.7
(100.8)
(105.3)
Impairment
(4.4)
(30.2)
85.5
(30.7)
EBIT
61.1
30.5
>100.0
30.7
5.7
2.9
(27.9)
(40.8)
31.7
(40.8)
-
(5.9)
n.s.
(5.9)
6.5
4.4
47.7
4.3
39.8
(11.8)
n.s.
(11.7)
% of revenue
Amortization and depreciation
% of revenue
Net finance costs
Impairment on financial assets
Share of profit (loss) of equity-accounted
investees
Profit (loss) before tax
% of revenue
Income tax expense
Profit (loss) for the period
15.7
2.9
3.7
(1.1)
(23.9)
(25.1)
4.6
(25.2)
(1.1)
15.8
(36.9)
n.s.
(36.9)
0.7
15.2
(50.2)
13.3
n.s.
14.1
(50.1)
13.3
attributable to:
Owners of the parent
Non-controlling interests
n.s.: not significant
In the third quarter of 2014, Group cement and clinker sales volumes were slightly up on
the year-earlier period. However, there was a slowdown in ready mixed concrete and
aggregates, although this eased compared with the previous quarter.
Revenue (+0.7% on the third quarter of 2013) benefitted from the positive trend in sales
prices, to grow by 1.2% at constant exchange rates and on a like-for-like basis.
7
www.italcementigroup.com
Recurring EBITDA was down 5.5% on the third quarter of 2013, despite the positive price
effect (mainly driven by Egypt), largely due to an overall negative volume effect and the
increase in some operating expense arising from specific trends in Egypt. The exchangerate effect was negative, if contained, and contributed to the decrease in recurring EBITDA
when expressed in euro.
EBIT was 61.1 million euro, double the figure of the year-earlier period thanks to the
positive change in non-recurring items, lower amortization and depreciation and a decrease
in impairment.
The third quarter also reported lower net finance costs and income tax expense compared
with the third quarter of 2013. This generated a profit for the period of 15.8 million euro
compared with the loss of 36.9 million euro in the year-earlier third quarter.
Nine months ended September 30
Recurring EBITDA
% of revenue
Non-recurring income (expense)
EBITDA
% of revenue
Amortization and depreciation
Impairment
EBIT
% of revenue
Net finance costs
Impairment on financial assets
Share of profit (loss) of equity-accounted
investees
Profit before tax
Nine months
to 09.30.13
published
3,215.0
(3.1)
3,217.5
472.3
(0.6)
473.1
Nine months
to 09.30.13
re-stated
3,115.7
469.3
15.1
14.7
(in millions of euro)
Revenue
% change
Nine months
to 09.30.14
14.7
(0.1)
(13.0)
99.2
(13.0)
469.2
459.3
2.1
460.1
15.1
14.3
(299.3)
(317.0)
5.6
(317.8)
14.3
(9.0)
(33.7)
73.3
(34.2)
160.9
108.6
48.1
108.1
5.2
3.4
(102.9)
(85.9)
(19.8)
(85.7)
(26.8)
(14.9)
(80.7)
(14.9)
9.6
2.1
>100.0
2.4
40.7
10.0
>100.0
10.0
3.4
1.3
0.3
Income tax expense
(104.5)
(90.0)
(16.1)
(90.1)
Loss for the period
(63.8)
(80.0)
20.3
(80.1)
(112.6)
(135.2)
16.7
(135.2)
48.9
55.2
(11.5)
55.1
18,311
18,667
% of revenue
0.3
attributable to:
Owners of the parent
Non-controlling interests
Employees at period end (heads)
Net debt
18,617
September 30
2014
June 30
2014
December 31
2013
2,173.5
1,851.7
1,934.0
In the nine months to the end of September 2014, cement and clinker sales volumes were
stable compared with the year-earlier period, while a decrease was reported in ready mixed
concrete and aggregates.
Revenue was down 3.1% (-0.8% at constant exchange rates and on a like-for-like basis).
Revenue benefited from a globally positive evolution in prices, relating in the main to trends
on the Egyptian market.
8
Recurring EBITDA (-0.6%) was backed by the positive sales price effect and containment
of costs, which outweighed the negative volume effect and increase in some operating
expense, largely caused by specific conditions in Egypt. The comparison with the first nine
months of 2013 was penalized by a negative exchange-rate effect of 12.4 million euro,
counterbalanced by income of approximately 11.5 million euro on carbon emission rights
(not present in 2013).
EBIT (+48.1%) benefited from a positive change in non-recurring items, lower amortization
and depreciation and lower impairment. There was an increase in net finance costs,
impairment on financial assets and higher income tax expense compared with 2013. The
nine months to the end of September 2014 closed with a loss of 63.8 million euro
compared with a loss of 80.0 million euro in the year-earlier period.
Significant events
As illustrated in the previous interim report, in March the Italcementi S.p.A. Board of
Directors approved a plan to streamline the corporate structure and strengthen the
Group. The plan, consisting of the mandatory conversion of Italcementi savings shares into
ordinary shares, an increase in Italcementi’s capital, and a voluntary public tender offer by
Italcementi on Ciments Français minorities, was completed in July 2014. The operations
are summarized below; for full details, reference should be made to the press releases
issued over the period in question.
On June 2, mandatory conversion took place (0.65 ordinary shares for each savings
share) of all 105,431,378 Italcementi savings shares into 68,530,395 Italcementi ordinary
shares, with the same characteristics as ordinary shares outstanding at the date on which
conversion became effective. As from June 2, 2014, only Italcementi ordinary shares trade
on the Borsa Italiana S.p.A. electronic stock exchange (Mercato Telematico Azionario); at
that date, Italcementi share capital stood at 282,548,942 euro, consisting of 245,647,959
ordinary shares with no par value.
On July 3, at the close of the voluntary Public Tender Offer for all the shares of the
subsidiary Ciments Français S.A. (CF) at a price of 79.5 euro per share “ex dividend”,
Italcementi held 97.73% of capital (83.83% at the start of the operation) and 98.65% of CF
voting rights (91.03% at the start of the operation). Since the share still held by CF
minorities had decreased to below 5% of capital and voting rights, Italcementi applied the
squeeze-out procedure (retrait obligatoire). Under this procedure, on July 15, 2014, CF
shares were delisted from the Paris stock exchange (NYSE-Euronext Paris); the CF shares
subject to the squeeze-out were assigned to Italcementi S.p.A., which opened a time
deposit at the disposal of entitled parties.
To fund the public tender offer on Ciments Français S.A. minorities described above, on
June 5, 2014, the Italcementi S.p.A. Board of Directors approved a share capital
increase for 499,979,628.82 euro, including the share premium, with the offer to all
shareholders of 3 new shares for every 7 shares held, at a per-share price of 4.825 euro.
The increase closed on July 7 with the full subscription and payment of the 103,622,721
shares on offer, for an overall amount of 499,979,628.82 euro, of which 119,166,129.15
euro attributable to the nominal value. Since that date, the share capital of Italcementi
S.p.A. has therefore been 401,715,071.15 euro, represented by 349,270,680 ordinary
shares with no par value.
9
www.italcementigroup.com
Italcementi Finance S.A., the Group treasury company, arranged a 450 million euro
5-year syndicated revolving credit facility with a pool of 14 international banks. The new
facility replaced the existing 920 million euro syndicated facility due to mature in September
2015, which was cancelled.
At the end of July, after a review that began in March, the Moody’s rating agency
confirmed the Italcementi Ba3 corporate family rating with the outlook passing from
stable to positive, also in light of the positive outcome of the project to streamline and
strengthen the Group described above. An identical rating was confirmed for the EMTN
program and for the subsidiary Italcementi Finance. After the acquisition of full control of
Ciments Français and its subsequent delisting, Moody’s announced the withdrawal of the
rating for the company, while retaining the Ba2 rating on Ciments Français bonds maturing
in 2017.
The TX Active active principle was selected for the 2014 edition of the European Inventor
Award, the annual innovation “oscar” organized by the European Patent Office (EPO), for
the best European patents. In June, TX Active was one of the three finalists presented in
Berlin, and the only Italian nomination for 2014.
10
Comments on operations
Sales volumes and internal transfers
Q3*
Cement and clinker
Aggregates**
(millions of metric tons)
(millions of metric tons)
2014
% change vs. 2013
Historic
2014
Ready mixed concrete
(millions of m³)
2014
% change vs. 2013
Like-for-like
Historic
% change vs. 2013
Like-for-like
Historic
Like-for-like
Central Western Europe
3.6
(4.6)
(4.6)
7.1
(5.8)
(5.8)
1.8
(8.8)
(8.8)
North America
Emerging Europe, North Africa
and Middle East
1.4
10.3
10.3
0.4
4.9
4.9
0.2
7.6
7.6
3.2
11.6
11.6
0.4
(18.6)
(18.6)
0.6
2.9
(0.2)
Asia
2.7
0.5
0.5
n.s.
n.s.
n.s.
0.3
(8.1)
(8.1)
n.s.
0.9
23.7
23.7
-
-
-
n.s.
n.s.
Eliminations
(0.9)
n.s.
n.s.
-
-
-
-
-
-
Total
10.9
0.9
0.9
7.8
(6.2)
(6.2)
2.9
(5.4)
(5.9)
Cement and clinker trading
* Amounts refer to companies fully consolidated and proportionately consolidated
** excluding decreases for processing
n.s. not significant
In the cement and clinker segment, a contained increase was reported in sales volumes
compared with the year-earlier period. Performance was positive in Emerging Europe,
North Africa and Middle East, largely thanks to Egypt, in North America and in Trading. In
Asia, the growth reported in Kazakhstan and Thailand more than counterbalanced the
downturn in India. Central Western Europe saw declines in France-Belgium and in Italy,
offset only in part by the positive dynamics in Spain and Greece.
In the aggregates segment, the overall decrease in sales volumes arose largely from the
downturn in Central Western Europe, principally in France-Belgium. The effects of the
slowdown in Morocco were mitigated in part by the improvement in North America.
The decrease in sales volumes in ready mixed concrete arose from the performance of
Central Western Europe (penalized by performance in Italy and France-Belgium) and
Morocco. The trend was offset by the progress in Egypt and in North America.
11
www.italcementigroup.com
Nine months ended September 30*
Cement and clinker
Aggregates**
(millions of metric tons)
(millions of metric tons)
2014
Historic
Central Western Europe
North America
Emerging Europe, North Africa
and Middle East
2014
% change vs. 2013
Ready mixed concrete
(millions of m³)
2014
% change vs. 2013
Like-for-like
Historic
% change vs. 2013
Like-for-like
Historic
Like-for-like
10.9
(0.9)
(0.9)
21.2
(3.9)
(3.9)
5.4
(10.8)
(10.8)
3.3
1.2
1.2
0.9
(16.9)
(16.9)
0.6
1.5
1.5
(4.5)
10.1
3.0
3.0
1.1
(31.0)
(31.0)
1.9
(1.8)
Asia
8.3
1.9
1.9
n.s.
n.s.
n.s.
0.8
1.8
1.8
Cement and clinker trading
2.8
15.7
15.7
-
-
-
n.s.
n.s.
n.s.
Eliminations
(2.7)
n.s.
n.s.
-
-
-
-
-
-
Total
32.6
0.0
0.0
23.2
(6.3)
(6.3)
8.6
(7.2)
(7.8)
* Amounts refer to companies fully consolidated and proportionately consolidated
** excluding decreases for processing
n.s. not significant
In cement and clinker, sales volumes were stable compared with the first nine months of
2013. Despite reductions in France-Belgium and Italy, Central Western Europe reported
only a small decline, thanks to upturns in Spain and Greece. All the other main areas
reported progress, with the largest contributions coming from Egypt and Trading.
The decline reported in aggregates was the result of a general downturn with the
exceptions of Italy and Greece.
In ready mixed concrete, the fall in sales volumes was largely determined by the
contraction in Central Western Europe, where the Group has a larger presence, and in
Morocco. This decline was countered in part by the lively performances of the other
countries (Egypt, Thailand, Kuwait and North America).
Revenue and operating results
(sub-consolidated by area)
Q3
Revenue
(in millions of euro)
EBITDA
2014
2014
% change
vs. 2013
Central Western Europe
524.7
(8.2)
60.8
(15.6)
North America
Emerging Europe, North
Africa and Middle East
141.9
10.3
25.8
(0.8)
249.1
22.2
52.6
(0.9)
53.0
Asia
EBIT
% change
vs. 2013
2014
62.3
(3.5)
15.8
n.s.
25.8
(0.6)
8.9
(9.1)
(0.1)
28.2
0.0
63.6
2014
% change
vs. 2013
140.2
2.2
28.3
23.8
28.2
23.5
17.3
Cement and clinker trading
52.0
25.3
2.2
(12.6)
2.2
(13.3)
(1.9)
n.s.
Others
76.0
7.5
(5.3)
(>100.0)
(5.3)
(>100.0)
(7.1)
(70.0)
Interarea eliminations
(116.5)
n.s.
-
-
-
-
-
-
Total
1,067.3
0.7
164.4
(5.5)
166.3
0.1
61.1
>100.0
n.s. not significant
12
Recurring EBITDA
% change
vs. 2013
Revenue was 1,067.3 million euro (1,059.4 million euro in the third quarter of 2013), an
increase of 0.7% from the year-earlier period, determined by growth in business operations
(+1.2%) and a positive consolidation effect (+0.1%), net of a negative exchange-rate effect
(-0.6%).
Revenue performance was affected by the fall in sales volumes of ready mixed concrete
and aggregates, whose effect was more than counterbalanced by an overall positive sales
price dynamic, driven largely by Egypt despite the significant rise in operating expense.
At constant exchange rates, the strongest increases in absolute values were in Egypt,
North America and Trading, while the largest reductions were in France-Belgium and Italy.
The negative exchange-rate effect referred chiefly to the Egyptian pound and the Kazakh
tenge.
Recurring EBITDA was 164.4 million euro, down 5.5% from the third quarter of 2013. As
noted above, the negative exchange-rate effect was a contributing factor. The positive
trend in sales prices made up in part for the negative volume effect and unfavorable trend
in some operating expense, caused largely by the significant increase in fuel costs in
Egypt.
Looking at individual performance, the most significant progress in recurring EBITDA
compared with the third quarter of 2013 was in Kazakhstan (in part as a result of insurance
compensation received for prior-year claims), Italy, India and Spain, while the largest
decrease was in France-Belgium.
EBITDA was 166.3 million euro (166.1 million euro in the third quarter of 2013), benefiting
from net non-recurring income of 1.8 million euro (net expense of 8.0 million euro in the
third quarter of 2013).
EBIT was 61.1 million euro (30.5 million euro in the third quarter of 2013) after amortization
and depreciation expense of 100.8 million euro (105.3 million euro in the year-earlier
period) and impairment of 4.4 million euro (30.2 million euro in the third quarter of 2013).
Nine months ended September 30
Revenue
(in millions of euro)
2014
Recurring EBITDA
% change
vs. 2013
2014
EBITDA
% change
vs. 2013
2014
EBIT
% change
vs. 2013
2014
% change
vs. 2013
Central Western Europe
1,584.4
(6.6)
189.2
(0.1)
192.3
11.3
55.4
n.s.
North America
Emerging Europe, North
Africa and Middle East
326.9
(1.0)
19.7
(40.9)
19.7
(42.2)
(29.9)
(99.6)
762.0
7.5
192.2
(3.2)
192.7
(4.9)
113.0
(11.4)
Asia
399.7
(5.2)
66.2
6.7
66.2
5.7
34.4
39.5
Cement and clinker trading
153.8
14.4
7.7
17.5
7.7
17.1
2.4
(44.6)
Others
239.3
3.4
(6.7)
61.5
(6.7)
64.3
(11.8)
50.8
Interarea eliminations
(350.5)
n.s.
0.9
n.s.
(2.7)
n.s.
(2.6)
n.s.
Total
3,115.7
(3.1)
469.3
(0.6)
469.2
2.1
160.9
48.1
n.s. not significant
13
www.italcementigroup.com
Revenue was 3,115.7 million euro (3,215.0 million euro in the first nine months of 2013),
down by 3.1% from the year-earlier period, arising from a business downturn (-0.8%) and a
negative exchange-rate effect (-2.4%), against a marginally positive consolidation effect
(+0.1%).
Revenue reflected the decline in sales volumes, although this was mitigated by an overall
positive trend in sales prices, chiefly driven by Egypt.
At constant exchange rates and on a like-for-like basis, progress was reported in Egypt,
Thailand, North America and India, while the largest downturns were in Central Western
Europe (notably Italy and France-Belgium) and Morocco.
The negative exchange-rate effect arose largely from the depreciation of the Egyptian
pound, Thai baht and Indian rupee.
Recurring EBITDA, at 469.3 million euro, was substantially unchanged from the yearearlier period. The result arose from the fall in sales volumes, the increase in some
operating expense, mainly in Egypt, and the negative exchange-rate effect, as well as from
the positive sales prices effect, containment of overheads and income from carbon
emissions rights trading.
At constant exchange rates, the strongest progress in recurring EBITDA was in Italy and
Thailand; there were downturns in France-Belgium, North America and India.
After net non-recurring expense of 0.1 million euro (net expense of 13.0 million euro in
2013), EBITDA was 469.2 million euro, up 2.1% on the first nine months of 2013.
EBIT, at 160.9 million euro, rose by 48.1% from the year-earlier period (108.6 million euro).
The increase reflected lower amortization and depreciation (299.3 million euro against
317.0 million euro) and lower impairment (9.0 million euro against 33.7 million euro).
Finance costs and other items
Finance costs net of finance income amounted to 102.9 million euro, an increase of
19.8% from the year-earlier period (85.9 million euro). Net borrowing expense increased
from 92.9 million euro to 96.8 million euro. 2013 also benefited from positive derivatives on
hedging, not present in the current year.
Impairment on financial assets totaled 26.8 million euro (14.9 million euro in the first nine
months of 2013), and referred chiefly to the impairment on the equity investment in West
China Cement.
The share of profit (loss) of equity-accounted investees reflected profit of 9.6 million
euro (2.1 million euro in the first nine months of 2013), including 7.5 million euro for the
Asment company in Morocco.
Loss for the period
In the nine months ended September 30, profit before tax was 40.7 million euro (10.0
million euro in the year-earlier period). Income tax expense was 104.5 million euro, up
16.1% from the year-earlier period (90.0 million euro).
There was a loss for the period of 63.8 million euro (a loss of 80.0 million euro in 2013).
The loss attributable to owners of the parent was 112.6 million euro (a loss of 135.2
million euro); profit attributable to non-controlling interests was 48.9 million euro (55.2
million euro).
14
Total comprehensive income
In the nine months ended September 30, 2014, the Group posted other comprehensive
income of 148.2 million euro (other comprehensive expense of 141.9 million euro in the
year-earlier period). This arose largely from the increase in the translation reserve (+161.4
million euro) and fair value gains on available-for-sale financial assets (+13.3 million euro),
net of the increases in the net liabilities for employee benefits (-21.6 million euro) and fair
value losses on cash flow hedges (-14.2 million euro).
Considering the loss for the period of 63.8 million euro illustrated in the previous section,
and the items described above, the Group posted total comprehensive income of 84.4
million euro (expense of 2.8 million euro attributable to owners of the parent and income of
87.1 million euro attributable to non-controlling interests). This compared with total
comprehensive expense of 221.9 million euro in the first nine months of 2013 (expense of
209.3 million euro attributable to owners of the parent and expense of 12.6 million euro
attributable to non-controlling interests).
Amounts and comparative data are provided in the “Statement of comprehensive income”
in the section “Financial statements”.
Performance by geographical area
Central Western Europe
Q3
(in millions of euro)
Revenue
Recurring EBITDA
EBIT
2014
Italy
153.6
(7.5)
2.2
n.s.
4.2
n.s.
(15.2)
68.5
France / Belgium
342.1
(9.5)
57.0
(22.2)
56.9
(20.3)
34.4
(28.5)
Spain
Others (1)
Eliminations
Total
2014
% change
vs. 2013
EBITDA
% change
vs. 2013
2014
% change
vs. 2013
2014
% change
vs. 2013
27.2
5.9
2.0
>100.0
1.7
>100.0
(1.8)
86.4
7.3
(5.4)
21.1
n.s.
(0.4)
-
44.5
-
(0.4)
-
34.7
-
(1.6)
-
(19.7)
-
524.7
(8.2)
60.8
(15.6)
62.3
(3.5)
15.8
n.s.
n.s. not significant
(1) Greece
Nine months ended September 30
(in millions of euro)
Italy
France / Belgium
Spain
Others (1)
Eliminations
Total
Revenue
Recurring EBITDA
EBITDA
EBIT
2014
% change
vs. 2013
452.1
(9.7)
16.8
n.s.
20.9
n.s.
(34.7)
67.0
1,045.0
(6.1)
163.4
(18.5)
163.8
(17.0)
95.4
(25.6)
80.9
4.4
8.5
>100.0
7.9
n.s.
(1.5)
94.4
22.1
(15.6)
26.3
n.s.
0.5
-
n.s.
-
(0.3)
(0.1)
90.8
n.s.
(3.8)
(0.1)
24.8
n.s.
1,584.4
(6.6)
189.2
(0.1)
192.3
11.3
55.4
n.s.
2014
% change
vs. 2013
2014
% change
vs. 2013
2014
% change
vs. 2013
n.s. not significant
(1) Greece
15
www.italcementigroup.com
In Italy, in the third quarter the cement market continued to slacken, worsening compared
with the first half of the year, which benefited from better weather in the early months of the
year. The third quarter also suffered compared with the year-earlier period, which reported
a slight market upturn after the sharp contraction of the first five months of 2013. The
construction section has been experiencing a crisis for seven consecutive years and no
signs of a turnaround are to be seen. The recessionary economic situation, constraints on
public finance and the credit squeeze are hindering an upturn both in real estate and in
infrastructure investments.
In the third quarter of 2014, our overall cement and clinker sales volumes were down 2.2%
on the third quarter of 2013, generating a reduction of 1.7% for the nine months to the end
of September, a performance less negative than that of the market according to our
estimates.
Recurring EBITDA in the cement segment for the first nine months was penalized by the
negative volume and price effects, although these effects were almost entirely
counterbalanced by significant savings in variable and fixed costs, achieved through
energy cost cutting and the restructuring measures introduced under the “Progetto 2015”
program. Furthermore, the income from carbon emission rights drove an improvement in
recurring EBITDA compared with the year-earlier period.
The negative trend also continued on the ready mixed concrete market, which was severely
penalized by the contraction in the residential sector (with the exception of maintenance)
and by the significant downturn in public works, compounded by the difficulties in access to
credit for corporate borrowers.
In this context, in the third quarter, Group ready mixed concrete sales were down 16.8% on
the year-earlier period, with a reduction for the nine months to the end of September of
22.5%, with a larger downturn in major works. Conversely, aggregates sales volumes in the
third quarter rose by 30.7% and by 11.3% in the nine months, thanks to increased sales to
third parties.
In the first nine months of 2014, the ready mixed concrete and aggregates segment
reported negative recurring EBITDA, with a slight downturn compared with the year-earlier
period. The negative trend in sales volumes and increase in allowances for doubtful
receivables were mitigated only in part by the significant savings in overheads achieved
thanks to the current re-organization.
In France-Belgium, cement consumption in the third quarter of 2014 was down across all
segments of the construction sector.
Compared with the third quarter of 2013, overall Group cement and clinker sales volumes
in France (including marginal export volumes) were down 11.6% (-6.4% in the nine
months); in Belgium they were down 6.9% (+3.7% in the nine months).
In France, ready mixed concrete sales volumes in the third quarter fell by 6.2% (-5.9% in
the nine months), whereas Belgium reported an improvement of 5.5% (+3.5% in the nine
months).
In aggregates, there was a downturn of 9.0% in the France-Belgium area (-4.2% in the nine
months).
Overall, recurring EBITDA in the third quarter and the nine months was penalized by the fall
in sales volumes in the three segments and by fierce competition, especially in the cement
and ready mixed concrete segments.
16
In Spain, third-quarter cement consumption confirmed the signs of stabilization in the
construction sector already observed in the first half of 2014, after the sharp downturns
reported in previous years.
In this context, the Group kept the reduction in domestic cement sales volumes to 4.5%
(-3.9% in the nine months), while overall cement and clinker sales volumes showed a
significant improvement of 20.2% (+19.6% in the nine months), buoyed by important growth
in exports.
Sales volumes in ready mixed concrete and aggregates fell respectively by 15.5% (-32.6%
in the nine months) and by 18.8% (-36.1% in the nine months).
Operating results in the third quarter and the nine months showed a material improvement,
driven by export volumes and good control of operating expense. These effects outweighed
the negative impact of competitive pressure on domestic cement sales prices.
In the Other Countries, Greece confirmed the signs of recovery, supported by a number of
major infrastructure projects. Thanks to the healthy performance of the domestic market,
overall cement and clinker sales volumes rose by 22.7% in the quarter (+30.7% in the nine
months). A significant improvement was also reported in sales of ready mixed concrete
(+18.7% in the third quarter and +43.7% in the nine months) and aggregates (+22.1% in
the third quarter and +17.9% in the nine months). Recurring EBITDA was steady in the
third quarter and positive in the nine months to the end of September, thanks to higher
sales volumes, containment of costs and management of carbon emission rights.
North America
Q3
(in millions of euro)
Total
Revenue
Recurring EBITDA
EBITDA
EBIT
2014
% change
vs. 2013
2014
% change
vs. 2013
2014
% change
vs. 2013
2014
141.9
10.3
25.8
(0.8)
25.8
(0.6)
8.9
% change
vs. 2013
(9.1)
Nine months to September 30
(in millions of euro)
Total
Revenue
2014
% change
vs. 2013
326.9
(1.0)
Recurring EBITDA
2014
% change
vs. 2013
19.7
(40.9)
EBITDA
EBIT
2014
% change
vs. 2013
2014
19.7
(42.2)
(29.9)
% change
vs. 2013
(99.6)
In the third quarter of 2014, cement consumption on the Group markets showed important
progress, substantially offsetting the extremely unfavorable dynamic of the first half of the
year due to severe meteorological conditions and the continuing weakness of the Puerto
Rican market.
In this context, Group cement sales volumes in the third quarter were up 10.3% (+1.2% in
the nine months) with an increase in average revenue per unit compared with the yearearlier period.
17
www.italcementigroup.com
Ready mixed concrete and aggregates sales volumes in the third quarter rose by 7.6%
(+1.5% in the nine months). Sales of aggregates were positive in the third quarter
compared with the year-earlier period (+4.9%), but continued to fall sharply in the nine
months to the end of September (-16.9%), after the completion in the third quarter of 2013
of a major electric power plant project.
Recurring EBITDA in the third quarter was substantially stable compared with the third
quarter of 2013, since the increase in revenue driven by sales volumes and sales prices
was offset by an increase in some operating expense. Recurring EBITDA was down in the
nine months, in part due to the rescheduling of some maintenance operations compared
with 2013.
Emerging Europe, North Africa and Middle East
Q3
(in millions of euro)
Egypt
Morocco
Others (1)
Eliminations
Total
Revenue
Recurring EBITDA
2014
% change
vs. 2013
2014
% change
vs. 2013
144.1
46.4
13.1
76.0
(0.7)
29.0
-
0.0
-
249.1
22.2
EBITDA
EBIT
2014
% change
vs. 2013
2014
% change
vs. 2013
12.4
13.2
13.5
1.0
36.6
(1.8)
36.6
(1.8)
27.1
(2.3)
3.0
-
(29.4)
-
3.3
-
(22.4)
-
0.1
-
(97.0)
-
52.6
(0.9)
53.0
(0.1)
28.2
0.0
n.s.
n.s. not significant
(1) Bulgaria, Kuwait, Saudi Arabia
Nine months to September 30
(in millions of euro)
Revenue
2014
Recurring EBITDA
% change
vs. 2013
2014
% change
vs. 2013
EBITDA
2014
EBIT
% change
vs. 2013
2014
% change
vs. 2013
Egypt
436.6
18.2
76.7
(2.3)
76.7
(2.3)
40.6
6.2
Morocco
Others (1)
236.7
(4.5)
103.3
(5.2)
103.3
(8.4)
75.0
(10.4)
88.7
-
(3.2)
-
12.2
-
10.5
-
12.6
-
10.4
-
(2.6)
-
n.s.
-
762.0
7.5
192.2
(3.2)
192.7
(4.9)
113.0
(11.4)
Eliminations
Total
n.s. not significant
(1) Bulgaria, Kuwait, Saudi Arabia
In Egypt, the economic situation continued to be affected by the political unrest of the last
few years, which has created an ongoing need for financial support from other countries in
order to provide essential services for the Egyptian population. Fuel shortages are still a
severe problem, with evident repercussions for clinker and cement production. Moreover,
since September, the price of industrial fuel has risen compared with the end of 2013;
electricity prices have increased too, by about 20%.
During the third quarter under review, grey cement consumption increased according to
estimates, confirming the growth of the first half of the year, driven both by the residential
market, where important new projects began, and by the non-residential market.
18
Group overall cement and clinker sales volumes in the third quarter made important
progress (+21.6%), generating an improvement of 9.3% in the nine months, above all
thanks to domestic sales volumes.
Performance was also positive in sales volumes of ready mixed concrete, with growth of
22.0% in the third quarter and 7.3% in the nine months.
In the third quarter and the nine months to the end of September, recurring EBITDA, in
local currency, was up on 2013. The increases in variable costs (for clinker, fuel and
electricity purchases) and in employee expense and maintenance costs were outweighed
by the positive sales price and sales volume effects. Nevertheless, operating results in the
nine months expressed in euro were penalized by the depreciation of the local currency.
In Morocco, the fall in cement consumption reported in the first half continued in the third
quarter of 2014, due to the slowdown in private investment in social building and in public
works.
In this market context, Group domestic cement sales volumes in the third quarter were
down 1.7% (-3.3% in the nine months), although average sales prices confirmed the
positive dynamic of 2013. Overall cement and clinker sales improved by 4.9% (-1.1% in the
nine months), although this was supported by clinker exports where margins are smaller.
Sales volumes of ready mixed concrete and aggregates were strongly affected by fierce
competitive pressures and fell respectively by 27.8% (-27.2% in the nine months) and by
18.6% (-31.0% in the nine months).
Operating results in the third quarter and the first nine months of 2014 were slightly down
on 2013, due to the reduction in domestic sales volumes in the three segments, offset in
part by the favorable sales price dynamic in the cement segment.
Looking at the Other Countries, in Bulgaria, despite an estimated small decrease in the
third quarter, the construction market reported healthy growth in the nine months. Group
domestic cement sales volumes rose by 12.8% in the third quarter (+13.2% in the nine
months). Meanwhile, overall cement and clinker sales fell by 24.4% in the third quarter and
18.0% in the nine months due to the fall in exports, adversely affected by the crisis in
Russia. Recurring EBITDA decreased in the third quarter. The containment of operating
expense and positive effect of carbon emission rights drove an improvement in recurring
EBITDA in the nine months to the end of September.
In Kuwait, estimates show an increase in cement consumption, supported by infrastructure
investment. Group cement sales volumes rose by 9.5% in the third quarter, but were down
by 14.6% in the first nine months, owing to dry dock maintenance work (February-April),
which put a halt on unloading and storage operations. Ready mixed concrete sales
volumes improved by 4.2% in the third quarter and 5.9% in the nine months. The increase
in variable costs (cement purchases) generated a reduction in recurring EBITDA in both the
third quarter and the nine months.
19
www.italcementigroup.com
Asia
Q3
(in millions of euro)
Revenue
Recurring EBITDA
2014
% change
vs. 2013
Thailand
67.8
India
Others (1)
58.9
Eliminations
Total
2014
% change
vs. 2013
(4.7)
16.7
14.6
7.1
13.5
-
(8.2)
-
140.2
2.2
EBITDA
EBIT
2014
% change
vs. 2013
2014
% change
vs. 2013
(3.1)
16.7
(3.1)
11.5
1.3
55.5
7.1
57.3
2.8
n.s.
4.6
-
>100.0
-
4.4
-
>100.0
-
3.0
-
n.s.
-
28.3
23.8
28.2
23.5
17.3
63.6
n.s. not significant
Kazakhstan
(1)
Nine months to September 30
(in millions of euro)
Revenue
2014
Recurring EBITDA
% change
vs. 2013
2014
EBITDA
% change
vs. 2013
2014
EBIT
% change
vs. 2013
2014
% change
vs. 2013
Thailand
201.0
(1.9)
49.0
32.5
49.1
32.7
34.1
80.9
India
Others (1)
170.0
(3.7)
13.8
(42.6)
13.8
(43.9)
1.2
(88.1)
28.7
-
(28.4)
-
3.4
-
>100.0
-
3.3
-
>100.0
-
(0.9)
-
78.4
-
399.7
(5.2)
66.2
6.7
66.2
5.7
34.4
39.5
Eliminations
Total
(1) Kazakhstan
In Thailand, according to estimates, the cement market slowed in the third quarter
compared with the year-earlier period, and showed a marginal decrease in the nine
months.
Group domestic cement sales volumes in the third quarter were down 6.7%, with a
reduction in sales prices after two positive quarters, although growth of 2.0% was reported
for the nine months.
Thanks to healthy performance in exports, overall cement and clinker sales volumes were
up 1.2% in the third quarter and 3.2% in the nine months.
Ready mixed concrete sales volumes fell 6.2% in the third quarter, but were up 6.8% in the
nine months to the end of September.
In the third quarter, recurring EBITDA in local currency was substantially steady with the
year-earlier level. It showed strong growth in the nine months thanks to the impact of
volumes, prices and cost containment, and also to the investment in the second half of
2013 in a waste heat recovery system at the Pukrang cement plant. Despite a significant
negative exchange-rate effect, recurring EBITDA also showed important growth expressed
in euro.
In India, on February 6, the Indian Parliament approved the division of Andhra Pradesh,
where the Group operates, into two separate states. Both state governments have been
appointed, but to date not all legislative and fiscal questions have been settled in full.
20
Estimated cement consumption in southern Indian (the Group core market) fell in the third
quarter, limiting progress in the nine months.
Group domestic sales volumes were also affected by market performance, and were down
7.5% in the quarter (-1.1% in the nine months).
Considering cement exports and clinker sales, overall volumes fell 3.6% in the third quarter
and rose by 2.2% in the nine months.
Backed by the positive trend in prices, third-quarter recurring EBITDA was up on the yearearlier period, although the improvement was not sufficient to counter the negative trend of
the first half. Consequently, operating results at September 30 were down on the first nine
months of 2013, largely to due to the increase in operating expense.
In Kazakhstan, after the devaluation in February, in the nine months the local currency
depreciated by approximately 21% compared with the average exchange for the first nine
months of 2013. With demand continuing to increase, Group overall cement sales volumes
rose by 17.9% in the third quarter, but were down in the nine months (-10.7%). Limited
ready mixed concrete sales volumes fell 21.4% in the third quarter and 30.4% in the nine
months. Recurring EBITDA improved in the third quarter and the first nine months, in part
thanks to receipt of insurance compensations for prior-year claims.
Trading
Q3
(in millions of euro)
Total
Revenue
2014
% change
vs. 2013
52.0
25.3
Recurring EBITDA
2014
% change
vs. 2013
2.2
(12.6)
EBITDA
EBIT
2014
% change
vs. 2013
2014
2.2
(13.3)
(1.9)
% change
vs. 2013
n.s.
n.s. not significant
Nine months to September 30
(in millions of euro)
Total
Revenue
2014
% change
vs. 2013
153.8
14.4
Recurring EBITDA
2014
% change
vs. 2013
7.7
17.5
EBITDA
EBIT
2014
% change
vs. 2013
2014
7.7
17.1
2.4
% change
vs. 2013
(44.6)
Intragroup and third-party cement and clinker sales volumes increased by 23.7% in the
third quarter from the year-earlier period, generating an improvement of 15.7% over the
nine months.
Operating results were down in the third quarter, but improved in the nine months thanks to
the volume effect in trading operations and higher margins on some markets. These
positive effects were only partially offset by the gradual termination of ready mixed concrete
operations with the Tasiast mines.
21
www.italcementigroup.com
E-business
In the first nine months of 2014, the BravoSolution group reported growth in revenue and
EBITDA. Consolidated revenue in the nine months was 48.0 million euro (+9.2%); EBITDA
was 4.0 million euro (3.5 million euro in the year-earlier period), while EBIT was negative at
0.2 million euro (negative EBIT of 0.4 million euro in the year-earlier period).
For the full year, despite an unfavorable economic situation and still uncertain outlook, the
Group expects to report an increase in full-year revenue, together with higher earnings
compared with 2013.
Net debt
Net debt at September 30, 2014, was 2,173.5 million euro, an increase of 239.5 million
euro from December 31, 2013 (1,934.0 million euro). This was due to the seasonal trend in
working capital and to the fact that capital expenditure in the period was higher than cash
flow from operations. The increase of 321.8 million euro from June 30, 2014 (1,851.7
million euro) arose chiefly from the effect of completion in July 2014 of the outlays for the
public tender offer and subsequent squeeze-out on the entire share capital of Ciments
Français.
Capital expenditure in the first nine months of 2014 was 391.2 million euro, well above the
figure for the year-earlier period (238.0 million euro). Expenditure was largely for industrial
investments, relating in particular to current strategic projects in Italy, India, Bulgaria,
France-Belgium and Egypt.
Financial ratios
September 30, 2014
June 30, 2014
Net debt
2,173.5
1,851.7
1,934.0
Consolidated shareholders' equity
3,817.7
3,854.2
3,783.0
(absolute amounts in millions of euro)
"Gearing"%
Net debt
Recurring EBITDA
"Leverage"
Recurring EBITDA
Net finance costs*
"Coverage"
December 31, 2013
56.9
48.0
51.1
2,173.5
1,851.7
1,934.0
626.2
635.9
629.2
3.5
2.9
3.1
626.2
635.9
629.2
127.9
133.0
123.2
4.9
4.8
5.1
* Finance income/costs relating to financing and treasury management
“Leverage” and “Coverage” have been computed on 12-month rolling-year income
statement data.
22
Transactions with related parties
With reference to the Italcementi Group’s consolidated situation, transactions with related
parties referred to:
- the parent Italmobiliare S.p.A. and the companies in the Italmobiliare Group (subsidiaries,
as well as joint ventures and associates and their subsidiaries);
- subsidiaries of Italcementi S.p.A. not consolidated on a line-by-line basis;
- joint ventures and their subsidiaries;
- associates and their subsidiaries;
- other related parties.
Transactions with related parties reflect Italcementi S.p.A.’s interest in leveraging the
synergies within the Group to enhance production and commercial integration, employ
competencies efficiently and rationalize use of corporate divisions and financial resources.
All transactions with related parties, whether financial or relating to the exchange of goods
and services, are conducted at normal market conditions. In the Italcementi S.p.A.
consolidated financial statements, amounts for transactions with related parties are
immaterial.
Italcementi S.p.A. provides Italmobiliare S.p.A. and Italmobiliare’s subsidiaries with
personnel administration services, and receives and provides services for the efficient use
of the two companies’ capabilities and professional competences, in the interests of the
Group. It also provides Italmobiliare S.p.A. with a share-register management service and
administration services for shareholders' meetings.
On June 2, 2014, after the conversion of savings shares into ordinary shares, the
Italmobiliare S.p.A. equity investment in Italcementi S.p.A. was diluted to 45.03% of share
capital net of treasury shares, consequently interrupting the tax consolidation regime with
Italmobiliare S.p.A. as the consolidating company, in compliance with current laws. A new
national tax consolidation has therefore been formed for some Italcementi S.p.A.
subsidiaries, with Italcementi S.p.A. as the consolidating company. The new tax
consolidation is effective for the three years 2014/2016 and has adopted a “Regulation for
enactment of intercompany relations in connection with participation in the national tax
consolidation” substantially in line with the regulation formerly adopted by Italmobiliare
S.p.A..
Transactions with subsidiaries not consolidated on a line-by-line basis, with associates and
with the subsidiaries of joint ventures and associates are of a trading nature (exchange of
goods and/or services) and a financial nature.
In the first nine months of 2014, transactions with other related parties were with the
Italcementi Cav. Lav. Carlo Pesenti foundation, Finsise S.p.A., companies of the SIKA
group and the Gattai, Minoli & Partners law firm.
Italcementi S.p.A. disbursed 600,000 euro to the Italcementi Cav. Lav. Carlo Pesenti
foundation to cover management costs. Under the contract for the supply of administrativecorporate services and other services, Italcementi S.p.A. charged the foundation 117,000
euro, while CTG S.p.A. charged services for an amount of 19,000 euro. Finsise S.p.A.,
whose majority shareholder is director Italo Lucchini, provided administrative, financial,
contractual, tax and corporate re-organization consultancy services, for a consideration of
270,000 euro, under contractual arrangements. The Italcementi group supplied goods and
23
www.italcementigroup.com
services to companies of the SIKA group, owned by director Fritz Burkard, for
approximately 2.1 million euro and received goods and services for approximately 22.0
million euro. The law firm Gattai, Minoli & Partners, of which Italmobiliare S.p.A. director
Luca Minoli is a partner, provided legal services to Italcementi S.p.A. and other Group
companies for approximately 152,000 euro.
In the nine months to September 30, no atypical or unusual transactions took place.
Disputes and pending proceedings
An update is provided below on the developments in current disputes during the period.
Italy
On June 18, 2013, Italy’s Competition & Market Authority (AGCM) notified Calcestruzzi
S.p.A. that a procedure had begun for the redetermination of the fine of 10.2 million euro
imposed in 2004 and partially revoked by rulings of the Lazio Regional Administrative
Tribunal (TAR) and the Italian Council of State. On January 13, 2014, Calcestruzzi was
informed of the AGCM decision to re-determine the fine at 8,125,509 euro, and furthermore
to request payment of the additional sums pursuant to art. 27 paragraph 6 of law 689/81,
amounting overall, according to a preliminary estimate, to more than 7 million euro.
Calcestruzzi filed an appeal with the Lazio TAR requesting a suspension, which was
granted on February 13, 2014, when a hearing to discuss the merits of the case was also
scheduled for November 19, 2014. Acting for the AGCM, the Avvocatura di Stato
(Government Legal Service) lodged an appeal with the Council of State against the
suspension. On June 7, 2014, the Council of State partially upheld the Avvocatura appeal
by annulling the TAR ruling relating to the basic fine (8.1 million euro) and confirming the
TAR ruling with regard to the additional amounts (approximately 7 million euro), payment of
which is therefore not currently due. Calcestruzzi applied to the AGCM for the amount
currently due (8.1 million euro) to be paid in instalments pursuant to article 26 of law
689/81. The AGCM accepted the request, arranging for payment to be made over 30
months, with application of an annual legal interest rate of 1%. This is without prejudice to
the effects of the TAR ruling on the merits of the appeal presented by Calcestruzzi.
Spain
On May 14, 2014, after a petition was filed by a local association, the court of Malaga
annulled the integrated environmental authorization issued in 2007 for the Malaga
production plant of the Spanish subsidiary Financiera Y Minera (“FyM”), on the grounds
that the Regional Authority had issued the authorization erroneously in the absence of a
prior environmental impact assessment. FyM appealed against the ruling, and is also
considering whether to apply for a new authorization subject to execution of an
environmental impact assessment.
With regard to the other current disputes described in the Annual Report at December 31,
2013, and in the subsequent interim reports, no developments worthy of note have
occurred.
24
Significant events after September 30, 2014
In October, the start-up of the new kiln marked the entry into operation of the new
production plant of the Devnya Cement cement works. Devnya Cement is the Group’s
Bulgarian subsidiary, located near the port of Varna in eastern Bulgaria. This operation,
which flanks the project at the Rezzato plant in Italy, completes the strategic investment
program to strengthen the Group in Europe. It is one of the largest investments in Bulgaria
in the last 25 years, and will make it possible to respond adequately to both domestic
demand and demand in neighboring regions of Eastern Europe. The overall investment
amounted to more than 160 million euro; once the current test and commissioning phase
has been completed, the cement plant will be fully operational from the start of 2015. The
new state-of-the-art plant deploys a “dry” process, with the capacity to produce
approximately 4,000 metric tons of clinker a day, for an annual capacity of approximately
1.5 million metric tons, making it one of the largest facilities of its type in Europe. Particular
attention has been paid to energy efficiency, with the possibility to use alternative fuels, and
to environmental impact mitigation systems, enabling a significant reduction in carbon
emissions. The Group’s attention to sustainable development policies, which also underlie
this investment, has led to the recognition of Devnya Cement by the Ministry of the
Environment as “Green Business 2013”, as well as awards in the “Investor of the Year” and
“Investor in Human Capital” categories.
In early November, Italian Prime Minister Matteo Renzi officially switched on the new kiln
at the Italcementi cement plant in Rezzato, which has undergone an extensive revamp in
the last two years to become of the top-performing plants in Europe from the production
and environmental viewpoints. The Rezzato plant revamp, for an investment of
approximately 150 million euro, is part of the Pact for the Environment signed by
Italcementi and the Ministry in July 2009, which set out an investment program for the
renewal of the Italcementi S.p.A. industrial network and attainment of ambitious
environmental target. The commitment also includes Italgen, the Group company that
produces energy entirely from renewable sources. The start-up of the new Rezzato kiln
marks the start of operations at a revamped industrial location with an annual cement
production capacity of more than one million metric tons and significant environmental
benefits: a 75% reduction in emissions when the plant is fully operational, a 20% reduction
in power consumption, an 8% reduction in use of raw materials, application of catalytic
products that eliminate pollutants, on a surface area of 90,000 m2 (the largest such surface
for a production facility anywhere in the world).
Outlook
In an economic scenario featuring signs of a recovery on the North American market,
continuing weakness in demand in the main Eurozone countries and volatility in some of
the emerging countries, the Group confirms that it expects to report an improvement in fullyear recurring EBITDA compared with 2013.
After completion of the significant investments for the revamps of its strategic sites in Italy
and Bulgaria and commencement of the energy diversification program at its main cement
plants in Egypt, the Group expects to keep year-end net debt in line with initial projections.
25
www.italcementigroup.com
Compliance with simplified rules pursuant to arts. 70
and 71 of the Issuers Regulation
Italcementi S.p.A. has adopted the opt-out regime envisaged by the Consob Issuers
Regulation, exercising the right to derogate from the obligations to publish disclosure
documents required in connection with significant merger transactions, spin-offs,
acquisitions and disposals, capital increases by contributions in kind.
In compliance with this regime, the company provided appropriate disclosures to the
market.
Bergamo, November 7, 2014
For the Board of Directors
The Chairman
Giampiero Pesenti
26
Financial statements
27
www.italcementigroup.com
Income statement
Q3 2014
%
Q3 2013
re-stated
%
Change
%
Q3 2013
published
1,067,308
100.0
1,059,411
100.0
7,897
0.7
1,060,871
(in thousands of euro)
Revenue
Other revenue
6,226
10,191
10,245
Change in inventories
5,367
(2,479)
(2,497)
14,637
8,388
8,389
Raw materials and supplies
Internal work capitalized
(435,621)
(408,776)
(407,652)
Services
(265,058)
(265,228)
(267,268)
Employee expense
(206,280)
(206,733)
(206,812)
Other operating income (expense)
(22,135)
(20,671)
(20,762)
Recurring EBITDA
164,444
Net gains from sale of non-current assets
15.4
174,103
16.4
(9,659)
-5.5
174,514
1,316
1,893
1,893
Non-recurring expense for re-organizations
596
(8,109)
(8,108)
Other non-recurring income (expense)
(84)
(1,804)
(1,803)
EBITDA
166,272
Amortization and depreciation
Impairment
EBIT
Finance income
Exchange-rate differences and derivatives
Impairment on financial assets
Share of profit (loss) of equity-accounted
investees
Profit (loss) before tax
Income tax expense
15.7
189
0.1
166,496
(105,326)
(105,075)
(4,386)
(30,208)
(30,708)
5.7
30,549
2.9
30,560
100.0
30,713
5,918
3,877
3,925
(39,750)
(38,452)
(38,420)
5,940
(6,271)
(6,271)
-
(5,907)
(5,907)
6,545
4,430
4,281
39,762
3.7
(23,929)
Profit (loss) for the period
166,083
(100,777)
61,109
Finance costs
15.6
15,833
(11,774)
-1.1
51,536
n.s.
(25,092)
1.5
(36,866)
(11,679)
(25,196)
-3.5
52,699
n.s.
(36,875)
50,821 -101.3
(50,142)
Attributable to:
Owners of the parent
666
(50,155)
Non-controlling interests
15,167
13,289
n.s.= not significant
28
1,878
14.1
13,267
Nine months to
09.30.14
%
Nine months to
09.30.13
re-stated
%
Change
%
Nine months to
09.30.13
published
3,115,743 100.0
3,214,962
100.0
(99,219)
-3.1
3,217,517
(in thousands of euro)
Revenue
Other revenue
22,580
30,201
30,336
Change in inventories
(4,957)
(16,296)
(16,797)
Internal work capitalized
27,883
23,962
23,963
(1,240,605)
(1,280,121)
(1,276,972)
Services
(782,021)
(793,647)
(797,982)
Employee expense
(629,232)
(643,862)
(644,058)
Other operating income (expense)
(40,103)
(62,877)
(62,938)
Recurring EBITDA
469,288
Raw materials and supplies
15.1
472,322
14.7
(3,034)
-0.6
473,069
Net gains from sale of non-current assets
2,696
8,052
8,052
Non-recurring expense for re-organizations
(919)
(19,231)
(19,230)
(1,889)
(1,804)
(1,803)
Other non-recurring income (expense)
EBITDA
469,176
Amortization and depreciation
Impairment
EBIT
Finance costs
459,339
14.3
9,837
2.1
460,088
(299,302)
(317,018)
(317,808)
(9,003)
(33,671)
(34,171)
160,871
Finance income
15.1
5.2
108,650
3.4
52,221
48.1
108,109
18,181
32,461
32,730
(118,147)
(118,937)
(118,984)
Exchange-rate differences and derivatives
(2,976)
556
526
Impairment on financial assets
Share of profit (loss) of equity-accounted
investees
(26,844)
(14,854)
(14,854)
9,645
2,120
2,428
Profit before tax
40,730
Income tax expense
(104,499)
Loss for the period
(63,769)
1.3
9,996
0.3
30,734
>100
(89,975)
-2.0
(79,979)
9,955
(90,100)
-2.5
16,210
20.3
(80,145)
Attributable to:
Owners of the parent
(112,645)
(135,224)
22,579
Non-controlling interests
48,876
55,245
(6,369)
(135,212)
-11.5
55,067
29
www.italcementigroup.com
Statement of comprehensive income
Nine months to
09.30.14
%
Nine months to
09.30.13
re-stated
%
Change
(63,769)
-2.0
(79,979)
-2.5
16,210
(80,145)
(40,066)
18,494
(in thousands of euro)
Loss for the period
Other comprehensive income (expense)
Items that will not be reclassified to profit or loss
subsequently
Remeasurement of the net liability (asset) for
employee benefits
Remeasurement of the net liability (asset) for
employee benefits - equity-accounted investees
(21,573)
18,493
%
Nine months to
09.30.13
published
-
1
(1)
-
5,114
(1,739)
6,853
(1,739)
(16,459)
16,755
(33,214)
16,755
Translation reserve on foreign operations
Translation reserve on foreign operations equity-accounted investees
161,385
(165,572)
326,957
(165,611)
4,492
(5,968)
10,460
(5,929)
Fair value gains (losses) on cash flow hedges
Fair value gains (losses) on cash flow hedges - equityaccounted investees
Fair value gains (losses) on available-for-sale financial
assets
Fair value gains on available-for-sale financial assets equity-accounted investees
(14,213)
15,844
(30,057)
15,844
-
160
(160)
160
13,256
(3,389)
16,645
(3,389)
-
110
(110)
110
Income tax (expense)
Total items that might be reclassified to profit or
loss subsequently
(304)
131
(435)
131
164,616
(158,684)
323,300
(158,684)
Total other comprehensive income (expense)
148,157
4.8
(141,929)
-4.4
290,086
(141,929)
84,388
2.7
(221,908)
-6.9
306,296
(222,074)
206,590
(209,331)
Income tax (expense)
Total items that will not be reclassified to profit or
loss subsequently
Items that might be reclassified to profit or loss
subsequently
Total comprehensive income (expense)
Attributable to:
30
Owners of the parent
(2,753)
(209,343)
Non-controlling interests
87,141
(12,565)
99,706 ##
(12,743)
Condensed statement of changes in net debt
September 30,
2014
Cash flow from operating activities before change in working capital
274,497
September 30,
2013
re-stated
298,426
Change in working capital
(27,119)
(51,053)
Cash flow from operating activities
247,378
247,373
(328,962)
(224,692)
(58,633)
(8,501)
(in thousands of euro)
Investments in PPE, investment property and intangible assets
Change in liabilities for purchase of PPE, investment property, intangibles
Cash flows net of investments in PPE, investment property and intangible
assets
(140,217)
14,180
Financial investments (equity investments)
(3,398)
(4,814)
Proceeds from sale of non-current assets
14,878
19,501
Dividends paid
(82,106)
(83,701)
Change in share capital
488,688
-
Change in equity interests in subsidiaries
(458,115)
-
Others
Change in net debt
(59,242)
22,416
(239,512)
(32,418)
Financial position
September 30,
2014
June 30,
2014
December 31,
2013
(499,096)
(1,049,273)
(in thousands of euro)
Current financial assets
re-stated
Change
09.30.14
12.31.13
%
(544,983)
45,887
(8.4)
Current financial liabilities
538,222
770,383
418,044
120,178
28.7
Non-current financial assets
(89,408)
(78,256)
(94,061)
4,653
(4.9)
2,223,829
2,173,547
2,208,885
1,851,739
2,155,035
1,934,035
68,794
239,512
3.2
12.4
September 30,
2014
June 30,
2014
December 31,
2013
re-stated
Change
09.30.14
12.31.13
%
3,817,749
3,854,239
3,782,998
34,751
0.9
Non-current financial liabilities
Net debt
Equity
(in thousands of euro)
Total equity
Net debt at September 30, 2014, determined in compliance with Consob communication no. DEM/6064293 of
July 28, 2006 (i.e., excluding non-current financial assets) amounted to 2,262,955 thousand euro (2,028,096
thousand euro at December 31, 2013).
31
www.italcementigroup.com
Notes
Foreword
This quarterly report as at and for the nine months ended September 30, 2014, has been drawn up in
accordance with the provisions of article 154 ter, paragraph 5, of Legislative Decree no. 58 of February 24,
1998, and subsequent amendments. It has also been prepared in compliance with the measurement and
recognition criteria of the International Financial Reporting Standards (IFRS).
Basis of presentation
The consolidated financial statements are based on the accounts of the consolidated companies as at and for
the nine months ended September 30, 2014, adjusted where necessary to ensure alignment with the IFRScompliant classification criteria and accounting policies adopted by the Group.
The accounting policies used to prepare the quarterly report as at and for the nine months ended September
30, 2014, are consistent with those used to prepare the Group financial statements as at and for the year
ended December 31, 2013, and, in addition, with the policies and interpretations endorsed by the European
Union and applicable as from January 1, 2014.
x Amendments to IAS 32 “Financial instruments: presentation”, which require disclosure of offsetting rights
and related agreements (e.g., guarantees).
x IFRS 10 “Consolidated financial statements”. The new standard replaces IAS 27 “Consolidated and
separate financial statements” and SIC 12 “Consolidation – Special-purpose entities”. IFRS 10 introduces a
new control model, applicable to all entities in which an investment is held, based on the Group’s power
over the entities, its exposure or rights to variable returns arising from its involvement with the entities and
its ability to affect those returns through its power over the entities.
x IFRS 11 “Joint arrangements”. The new standard replaces IAS 31 “Interests in joint ventures” and SIC 13
“Jointly controlled entities – Non-monetary contributions by venturers”; it sets out the accounting policies for
entities taking part in joint arrangements. The standard provides for joint arrangements to be classified as
joint operations if the Group has rights to the assets and obligations for the liabilities relating to the
arrangement, or as joint ventures if the Group only has rights to the net assets of the arrangement.
Classification depends upon the structure of the arrangement, the legal status of any separate entities, the
terms of the contractual arrangement and other facts and circumstances.
x IFRS 12 “Disclosure of interests in other entities”, which organizes, strengthens and replaces disclosure
requirements concerning interests in subsidiaries, joint arrangements, associates and unconsolidated
structured entities.
x As a result of the introduction of the above standards, IAS 27 renamed “Separate financial statements”,
which deals exclusively with the preparation of separate financial statements, and the amendments to IAS
28 “Investments in associates and joint ventures” will come into force.
x Amendments to IAS 36 “Impairment of assets” to modify disclosure requirements relating to recoverable
amounts in cases where recoverable amounts are based on fair value less costs to sell and in cases where
an impairment loss is recognized.
x Amendments to IAS 39 “Financial instruments: Recognition and measurement” to govern the continuation of
hedge accounting in the event of novation of derivatives following the introduction of new
legislation/regulations.
The results of operations and financial position in 2013 used for the comparison with 2014 have been restated by applying IFRS 10, 11 and IAS 28 as from January 1, 2013.
32
Exchange rates used to translate the financial statements of foreign operations
Exchange rates for 1 euro:
at 09.30.14
Average rate
Full year 2013
at 09.30.13
September 30,
2014
Closing rate
December 31,
2013
Currencies
Albania lek
September 30,
2013
140.03258
140.29165
140.24368
139.42000
140.53302
Saudi Arabia riyal
5.08138
4.97905
4.93798
4.71974
5.17242
141.30690
5.06464
Australia dollar
1.47598
1.37571
1.34602
1.44420
1.54230
1.44860
Brazil real
3.10282
2.86477
2.78983
3.08210
3.25760
3.04060
Canada dollar
1.48192
1.36747
1.34778
1.40580
1.46710
1.39120
Dubai UAE dirham
4.97641
4.87640
4.83620
4.62160
5.06539
4.96032
Egypt pound
9.57441
9.12954
9.04490
9.00270
9.58716
9.31174
GB sterling
0.81182
0.84908
0.85182
0.77730
0.83370
0.83605
India rupee
82.26243
77.81509
75.65233
77.85640
85.36600
84.84400
241.94676
202.03991
199.62962
228.91800
212.43863
207.63300
Kuwait dinar
0.38300
0.37687
0.37428
0.36280
0.38954
0.38237
Libya dinar
1.68268
1.67945
1.67639
1.53887
1.70192
1.68691
Kazakhstan tenge
11.20520
11.16728
11.14837
11.02540
11.25385
11.19109
407.70479
399.27747
397.15626
382.06400
412.68878
410.75460
Mexico peso
17.77195
16.95204
16.69569
16.99770
18.07310
17.84620
Mozambique metical
41.33354
-
-
38.69270
-
-
4.93326
4.83385
4.79397
4.58237
5.02187
4.91746
Morocco dirham
Mauritania ouguiya
Qatar riyal
People's Repub.China renminbi
8.35441
8.16286
8.12103
7.72620
8.34910
8.26450
176.77415
171.46177
169.22070
164.14000
180.38636
178.27150
USA dollar
1.35487
1.32764
1.31669
1.25830
1.37910
1.35050
Switzerland franc
1.21801
1.23085
1.23133
1.20630
1.22760
1.22250
43.90713
40.79178
40.01738
40.80000
45.17800
42.26400
2.93310
2.52634
2.45182
2.87790
2.96050
2.74840
Sri Lanka rupee
Thailand baht
Turkey lira
Significant events and changes in the scope of consolidation
As illustrated in the half-year report as at and for the six months ended June 30, 2014, at a meeting on March
6, 2014, the Italcementi S.p.A. Board of Directors approved a plan to streamline the corporate structure and
strengthen the Group, envisaging:
-
the mandatory conversion of Italcementi savings shares into ordinary shares at a conversion rate of 0.65
ordinary shares for each savings share;
an increase in Italcementi share capital through a rights issue for a maximum amount of 499,979,628.82
euro including the share premium;
a voluntary public tender offer on Ciments Français minorities in order to delist Ciments Français shares
from the Paris stock exchange; the price was fixed at 79.5 euro per share.
33
www.italcementigroup.com
The following transactions were completed during the third quarter:
Share capital increase
On July 7, 2014, the Italcementi S.p.A. share capital increase was completed with the subscription of the
outstanding 1,394,330 rights; the operation saw the full subscription and payment of the 103,622,721 shares
offered, for an overall amount of 499,979,628.82 euro, of which 119,166,129.15 euro attributable to the
nominal value.
The share capital of Italcementi S.p.A. therefore stands at 401,715,071.15 euro, represented by 349,270,680
ordinary shares with no par value.
Voluntary public tender offer on Ciments Français
The offer period (June 13 – July 3, 2014) for the simplified public tender offer on Ciments Français shares
closed on July 3. At that date, Italcementi held 97.73% of the capital and 98.65% of the voting rights of the
French company.
Since CF minorities held less than 5% of the capital and voting rights, Italcementi applied to the AMF (the
French financial markets authority) for activation of the squeeze-out procedure.
The squeeze-out was completed on July 15, at the same price as that paid under the offer, i.e., 79.5 euro per
share, for a maximum of 808,794 shares representing 2.27% of Ciments Français capital. Italcementi opened a
bank deposit with BNP Paribas Security Services for an amount corresponding to the compensation due to the
shareholders who did not take up the offer; on the same day, Ciments Français shares were delisted from the
Paris stock exchange.
Italcementi S.p.A. is now the sole shareholder of Ciments Français.
Changes in the scope of consolidation
Suez Cement Company SAE purchased the residual 50% of the capital of International City for Concrete in
Saudi Arabia; the Saudi company is now 100% controlled and has been consolidated since January 1, 2014 (in
2013 it was accounted for with the proportionate consolidation method).
34
Revenue
Revenue amounted to 1,067,308 thousand euro in the third quarter of 2014 and 3,115,743 thousand euro in
the nine months ended September 30, 2014.
A breakdown of consolidated revenue by business segment and geographical area is set out below:
by business segment:
Q3
2014
%
Q3
2013
%
Cement and clinker
703,336
65.9
679,234
64.1
3.5
Ready mixed concrete and aggregates
299,534
28.1
319,272
30.1
-6.2
(in thousands of euro)
Miscellaneous
Total
(in thousands of euro)
Cement and clinker
% change
64,438
6.0
60,905
5.8
5.8
1,067,308
100.0
1,059,411
100.0
0.7
Nine months
09.30.14
%
Nine months
09.30.13
%
% change
-1.0
2,054,228
65.9
2,074,576
64.5
Ready mixed concrete and aggregates
878,455
28.2
947,422
29.5
-7.3
Miscellaneous
183,060
5.9
192,964
6.0
-5.1
3,115,743
100.0
3,214,962
100.0
-3.1
Q3
2014
%
Q3
2013
%
% change
Total
by geographical area:
(in thousands of euro)
Central Western Europe
499,212
46.8
552,401
52.2
-9.6
North America
Emerging Europe, North Africa and
Middle East
141,807
13.3
128,499
12.1
10.4
242,992
22.8
197,346
18.6
23.1
Asia
138,179
12.9
137,063
12.9
0.8
28,204
2.6
28,265
2.7
-0.2
Cement and clinker trading
Others
16,914
1.6
15,837
1.5
6.8
1,067,308
100.0
1,059,411
100.0
0.7
Nine months
09.30.14
%
Nine months
09.30.13
%
% change
1,507,832
48.4
1,637,369
50.9
-7.9
North America
Emerging Europe, North Africa and
Middle East
326,722
10.5
330,050
10.3
-1.0
736,490
23.6
683,883
21.3
7.7
Asia
394,969
12.7
421,276
13.1
-6.2
95,184
3.1
91,325
2.8
4.2
54,546
3,115,743
1.7
100.0
51,059
3,214,962
1.6
100.0
6.8
-3.1
Total
(in thousands of euro)
Central Western Europe
Cement and clinker trading
Others
Total
35
www.italcementigroup.com
Raw materials and supplies
Raw materials and supplies amounted to 1,240,605 thousand euro, as follows:
(in thousands of euro)
Nine months
09.30.14
Nine months
09.30.13
Change
Raw materials and semifinished goods
381,632
359,226
22,406
Fuel
271,994
268,492
3,502
Packaging, materials, machinery
184,104
183,763
341
92,863
96,605
(3,742)
304,947
345,041
(40,094)
5,065
26,994
(21,929)
1,240,605
1,280,121
(39,516)
Nine months
09.30.14
Nine months
09.30.13
Change
(2,030)
Finished goods
Electricity, water, gas
Change in inventories of raw materials, consumables, other
Total
Services
Services totaled 782,021 thousand euro, as follows:
(in thousands of euro)
External services and maintenance
254,013
256,043
Transport
354,618
353,468
1,150
26,036
28,281
(2,245)
Legal fees and consultancy
Rents
56,229
56,802
(573)
Insurance
25,978
27,301
(1,323)
Other
65,147
71,752
(6,605)
Total
782,021
793,647
(11,626)
Employee expense
Employee expense for the nine months to September 30, 2014, totaled 629,232 thousand euro, as follows:
(in thousands of euro)
Nine months
09.30.14
Nine months
09.30.13
Change
Wages and salaries
425,383
435,923
(10,540)
Social security contributions and pension fund provisions
132,186
134,700
(2,514)
71,663
73,239
(1,576)
629,232
643,862
(14,630)
Other costs
Total
Number of employees:
Nine months
09.30.14
Nine months
09.30.13
Number of employees at period end
18,311
18,667
Average number of employees
18,458
18,835
(heads)
36
Other operating income and expense
Other operating expense net of other operating income amounted to 40,103 thousand euro, as follows:
(in thousands of euro)
Nine months
09.30.14
Nine months
09.30.13
Change
Other taxes
57,184
58,717
(1,533)
Allowance for doubtful receivables
12,622
14,569
(1,947)
Provision for environmental restoration, quarries, other
33,207
27,494
5,713
(62,910)
(37,903)
(25,007)
40,103
62,877
(22,774)
Miscellaneous income
Total
“Miscellaneous income” in the first nine months of 2014 included net gains of 11.4 million euro from carbon
emission rights trading, which were absent in the year-earlier period.
Non-recurring income and expense
(in thousands of euro)
Nine months
09.30.14
Nine months
09.30.13
Net gains from the sale of non-current assets
2,696
8,052
Non-recurring expense for re-organizations
(919)
(19,231)
Other non-recurring income (expense)
Total non-recurring income (expense)
(1,889)
(1,804)
(112)
(12,983)
Impairment
This caption reflects an amount of 9.0 million euro, consisting largely of impairment losses on property, plant
and equipment for 7.8 million euro in Bulgaria and 3.5 million euro in Libya, net of impairment reversals of 5.3
million euro on industrial plant and land in Italy.
37
www.italcementigroup.com
Finance income costs, exchange-rate differences and derivatives
Finance costs net of finance income and exchange-rate differences and derivatives amounted to 102,942
thousand euro (85,920 thousand euro at September 30, 2013), as follows:
(in thousands of euro)
Interest income
Nine months 09.30.14
Income
Costs
15,079
Interest expense
1,617
Other finance income
1,485
18,181
21,410
2,920
1,555
(30,170)
(37,614)
(118,147)
Gains/(losses) on interest-rate derivatives
Net exchange-rate differences and derivatives
Total finance income (costs), exchange-rate differences
and derivatives
32,461
(118,937)
(1,600)
Gains/(losses) on exchange-rate derivatives
Net exchange-rate differences
(82,878)
1,451
Capitalized finance costs
Other finance costs
Costs
9,600
(90,897)
Dividends and other income from equity investments
Total finance income (costs)
Nine months 09.30.13
Income
(267)
(38,184)
(6,924)
36,808
7,747
-
(2,976)
556
-
-
(102,942)
-
(85,920)
“Other finance costs” includes net finance costs of 5,920 thousand euro on employee defined benefit plans
(5,041 thousand euro at September 30, 2013).
Impairment on financial assets
This caption reflects the reduction in value of 24.7 million euro with respect to the carrying amount on the
associate West China Cement, of which 13.4 million euro from the reclassification to the income statement of
the negative fair value reserve formed in previous years. The caption also includes an amount of 2.2 million
euro relating to the Syrian company Al Badia Cement, whose carrying amount has been written down in full.
Share of profit (loss) of equity-accounted investees
The share of profit (loss) of equity-accounted investees was as follows:
(in millions of euro)
Asment Cement (Morocco)
Vassiliko (Cyprus)
Ciment Quebec (Canada)
Innocon (Canada)
Others
Total
38
Nine months
09.30.14
Nine months
09.30.13
7.5
7.0
(0.3)
(6.1)
2.7
0.3
-
1.7
(0.3)
(0.8)
9.6
2.1
Income tax expense
Income tax expense for the period was 104,499 thousand euro, as follows:
Nine months
09.30.14
Nine months
09.30.13
Current tax
110,087
91,511
18,576
Deferred tax
(6,161)
(882)
(5,279)
(in thousands of euro)
Prior-year tax and net non-recurring tax items
Total
Change
573
(654)
1,227
104,499
89,975
14,524
Non-recurring transactions
The following table itemizes the most significant non-recurring transactions and their impact on the Group’s
equity, financial position and results of operations:
Nine months 09.30.14
Profit (loss) for the
period
Equity
(in thousands of euro)
amount
Carrying amounts
%
3,817,749
amount
%
(63,769)
Net debt
amount
%
2,173,547
Net gains from sale of non-current assets
2,696
0.1%
2,696
4.2%
Non-recurring expense for re-organizations
(919)
0.0%
(919)
1.4%
-
0.0%
(1,889)
0.0%
(1,889)
3.0%
-
0.0%
(112)
0.0%
(112)
0.2%
7,431
0.3%
Other non-recurring income (expense)
Total
Figurative amount without non-recurring transactions
3,817,861
(63,657)
7,431
0.3%
2,180,978
Nine months 09.30.13
Profit (loss) for the
period
Equity
(in thousands of euro)
amount
Carrying amounts
Net gains from sale of non-current assets
Non-recurring expense for re-organizations
Other non-recurring income (expense)
Total
Figurative amount without non-recurring transactions
%
3,856,358
amount
%
(79,979)
Net debt
amount
%
2,023,363
8,052
0.2%
8,052
10.1%
(19,231)
0.5%
(19,231)
24.0%
(1,804)
0.0%
(1,804)
2.3%
(12,983)
3,869,341
0.3%
(12,983)
(66,996)
16.2%
12,284
0.6%
-
0.0%
-
0.0%
12,284
2,035,647
0.6%
Net debt
Net debt at September 30, 2014, amounted to 2,173,547 thousand euro (1,934,035 thousand euro at
December 31, 2013). It reflected gross financial liabilities for 2,762,051 thousand euro and gross financial
assets for 588,504 thousand euro.
At September 30, 2014, non-current financial liabilities amounted to 2,223,829 thousand euro and included the
bonds issued on the European market by Italcementi Finance S.A. for an aggregate nominal amount of 1,250
million euro: a ten-year bond issued in 2010 for 750 million euro, 350 million euro issued on February 14, 2013,
and 150 million euro issued on May 14, 2013. The latter two issues mature on February 21, 2018.
Capital expenditure
Capital expenditure for the nine months to September 30, 2014, totaled 391.0 million euro, as follows:
(in millions of euro)
Investments in intangible assets
Nine months
09.30.14
Nine months
09.30.13
Change
6.3
8.1
(1.8)
322.7
216.6
106.1
58.6
8.5
50.1
Total expenditure on PPE, investment property, intangibles
387.6
233.2
154.4
Investments in non-current financial assets
Change in liabilities for purchases of non-current financial assets
Total expenditure on financial investments (equity investments)
Total
3.6
(0.2)
3.4
391.0
4.8
4.8
238.0
(1.2)
(0.2)
(1.4)
153.0
Investments in property, plant and equipment and investment property
Change in liabilities for purchases of PPE, investment property, intangibles
40
The manager in charge of preparing the company's financial reports, Carlo Bianchini, declares, pursuant to
paragraph 2 article 154-bis of the Consolidated Law on Finance, that the accounting information contained in
this report corresponds to the document results, books and accounting entries.
November 2014
Project of LSVmultimedia
Olginate - Lecco
Performance, not only cement
Classic
products
Professional
products
Ultra-resistant
products
Thermal
products
Quick-setting
products
Fluid
products
Acoustic
products
Special
products
for water
Aesthetic
products
Photocatalytic
products
Transparent
products
i.nova, the new Italcementi Group branding system based on an innovative re-organization of the product offer into
11 performance families targeting specific customer requirements, a completely new approach in the worldwide
construction materials sector.
italcementi S.p.A.
Via G. Camozzi, 124
24121 Bergamo - Italy
Tel: +39 035 396111
Fax: +39 035 244905
www.italcementigroup.com