Brussels, 10 May 2023, 18:30 CEST – Titan Cement International SA (Euronext Brussels, ATHEX and Euronext Paris, TITC) announces its summary financial results for the first quarter of 2023.
- A very strong start to the year, with sales reaching €588.1m, up 29.3%, thanks to increased demand in most of the Group's main markets, mild weather conditions and better price levels.
- Earnings before interest, taxes, depreciation and amortization (EBITDA) reached €107.1m, up 131% from a low first quarter in 2022. Profit margins widened thanks to increased sales , reducing costs thanks to the benefits of investments in factories, improving the energy mix with the increased use of alternative fuels and more favorable energy prices.
- Continued reduction of specific net CO2 emissions and further progress in digitization of production and supply chain.
- Positive outlook remains, thanks to strengthened demand levels, strengthened prices in the US and Europe and improved performance as more investments are completed.
TITAN Group – Review of first quarter results
The year started positively, as in the first quarter of 2023 demand increased across the Group's main product range and prices were set at higher levels, mitigating the effects of continuously higher production costs. High demand and good price levels were observed in the USA, increased sales continued to be recorded in Greece, while in Southeast Europe the existing trends of stability in the local markets were maintained. In Turkey, demand recovered but fell in Egypt. Sales volumes increased across all major product categories, with cement sales up 2%, reflecting strong US and European markets, which benefited from our strong market positions and mild weather conditions. Sales of aggregates and ready-mixed concrete also increased, by 8% and 7% respectively. Higher sales and increased prices in our products in the US and Europe, (~90% of Group sales) pushed total sales in the first quarter of 2023 to €588.1m, registering an increase of 29.3% over first quarter of 2022.
Profitability (EBITDA) increased for the fourth consecutive quarter, while in the last 12 months (April 2022-March 2023) it exceeded €390m. As a result of increased sales and cost improvements, including increased use of alternative fuels and as we begin to see the benefits of the Group's investment spending, profit margins returned close to pre-pandemic levels. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter of 2023 (107.1 million) were more than double compared to the first quarter of 2022. As a result, net earnings after taxes and minority rights ( NPAT) amounted to €44.3m, compared to €1.3m in the first quarter of 2022.
|In millions of euros, unless otherwise specified|| 1st Quarter
| 1st Quarter
|Earnings before taxes, interest and depreciation (EBITDA)||107.1||46.4||130.8%< /td>|
|Net profit after tax & minority rights||44.3||1.3|
The Group continued to vigorously implement its investment expenditure program, investing €50m in the first quarter of 2023, focusing mainly on the development perspective of the USA and Greece. In all areas of operation, investments are underway that bring economic as well as environmental benefits, focusing on further improving the energy mix/increasing the use of alternative fuels and on the increased use of cementitious raw materials by reducing the ratio of clinker to cement. The Group's net debt to EBITDA ratio improved further and decreased to 2.1x. Free cash flow recorded a seasonal outflow of €19.7m during the quarter, due to higher investment costs and a greater need for working capital as a result of increased sales. At the end of March 2023, the Group's net borrowing amounted to €837.6 million, higher by €40.4 million compared to December 2022.
The Group further accelerated its efforts to reduce its carbon footprint, with net specific CO2 emissions in the first quarter of 2023 reaching below 600 kg/ton of cementitious product, down 6.8% compared to the same period last year. Progress is also being seen in the field of digital transformation as digital production improvement systems are gradually being put into operation in more of the Group's factories, improving our performance.
On 17 March 2023 TCI (“TITC”) joined the FTSE Global MidCap and FTSE All-World indices.
Geographic sector performance for the first quarter of 2023
|In millions of euros, unless otherwise stated||1st Quarter 2023||1st Quarter 2022||%||< /td>||1st Quarter 2023||1st Quarter< strong> 2022||%||USA||362.9||265.5||*37%||66.3||20,9||217%|
|Greece & W. Europe||93.8||72.0||< em>30%||17.5||9.4|
|Eastern Mediterranean||47.5||53.4||-11%||5.4< /td>||5,4||-1%|
* 31% in US dollars ($)
The US economy continued to move upward at the beginning of the year. Titan America's sales and profitability reached higher levels continuing the trend of the previous two quarters. Markets in the Southeast and Mid-Atlantic States continued to grow at faster rates than the national average, reflecting locally resilient economic conditions and a positive investment climate. Also, favorable weather conditions in the first quarter helped boost cement sales. Particularly high levels of in-migration to Florida have both boosted household formation in a housing-deficient state and spurred activity in the commercial real estate market. Despite any slowdown in the single-family home sector in some areas, demand is shifting to the large housing complex sector, which is seeing growth. An increase is also recorded in the commercial real estate sector. The healthy economic condition of the states in which we operate in the US and the intensification of infrastructure projects are steadily driving cement demand growth and backlog growth.
Profitability growth continued with price increases helping to restore margins, responding to the challenges posed by higher cost prices. Logistics development projects at the two US import terminals are continuing as originally planned. Titan America benefited from improved production costs thanks to investments in digitizing cement production and optimizing logistics.
Greece & Western Europe
Greece recorded a very strong first quarter as sales and profitability increased significantly across all product categories, leveraging our vertically integrated operations in the country. Performance was also boosted by mild weather conditions and was favorable compared to the lows of the first quarter of 2022.
Demand was boosted by a large number of public projects and tourism-related investments, which traditionally increase as the tourist season approaches. The housing market and renovation work remained stable. Price increases took effect from the beginning of the year for all products in order for the Group to cover the increased costs of high energy, raw material and transportation prices. Most of the Group's cement exports were directed to Titan America and the Group's network of stations in Europe, recording a significant increase in sales and prices. The major investment of the calcification unit at the Kamari plant in Athens has been completed and it is estimated that the use of alternative fuels and raw materials will increase from the end of this month.
In the region of Southeast Europe inflation exceeded 10% affecting all production costs. However, demand remained high during a mild winter, allowing the Group to increase sales and recover margins. The good performance in the region is due to increased sales volumes and cost containment measures. The factors shaping demand varied across individual markets and ranged from small projects and renovations to major infrastructure projects and construction in the residential market, depending on the country. The operation of the Group's factories continued with great reliability, while thanks to the investments made we were able to increase the use of alternative fuels, thus improving the energy mix and reducing our costs.
Performance in the region remained strong at the start of the year despite the volatile environment.
Inflation in Egypt has reached even higher levels and reforms are being implemented at a slow pace. Although government regulation of the market still exists, private sector consumption has shrunk. Inadequate foreign reserves and significant cuts in government spending adversely affect the investment climate.
In Turkey, performance remained stable despite macroeconomic difficulties and the effects of hyperinflation. Both sales and profitability increased, thanks to favorable weather conditions that boosted construction activity, while hyperinflation was reflected in price levels. Consumption continues to draw a boost from private sector projects despite government investment cuts, with divergent trends seen across the country's various sub-markets.
The prolonged period of increased rainfall as well as persistently high levels of interest rates and inflation continued to adversely affect the cement industry. Cement consumption decreased by 1.2% in the first quarter of 2023 compared to the corresponding period in 2022, but cement consumption in the region in which the Group operates increased by 1.4%. Apodi's sales in the first quarter of 2023 amounted to €29.5 million, compared to €22.5 million in the first quarter of 2022, while EBITDA profits increased to €3.5 million, compared to €2.7 million. in the first quarter of 2022.
Global economic conditions appear to have partially stabilized and economic activity in both Europe and the US remains more resilient than initial estimates, indicating stronger than forecast demand. However, further restrictive monetary policy or maintaining existing measures for a longer period of time is possible. These factors are likely to affect investment and construction activity, so we remain relatively cautious about our forward-looking estimates.
The US economy has had a strong start to the year, confirming estimates that fundamentals are strong. The dynamism of the economy is reflected in the very low levels of unemployment and the subsequent increase in wages. Available homes remain below average while increased demand in the multi-family housing sector offsets the decline in the single-family housing market. Demand in the commercial real estate, hospitality and healthcare industries is healthy in the regions where we operate. Also, demand in the infrastructure sector is strong, while the benefits of the Infrastructure Investment and Jobs Act will start to become more apparent in the second half of 2023. The privileged geographical markets in which we operate, the strong positions we have achieved in our markets and cost optimization allow us to be optimistic about our performance in the US for 2023.
Greece seems to be maintaining its development path, thanks to public works, the country's strong tourism sector and the faster absorption of EU funds. Major infrastructure projects, including the major urban development of Ellinikos, are starting to increase sales volumes.
Performance in Southeast Europe is expected to continue at the levels of the last twelve months. The Group will continue to supply the market through its unique network of factories in the region, while demand is based on both residential projects and infrastructure projects, depending on the dynamics of the individual markets.
In Egypt, cement consumption is expected to remain relatively low for the foreseeable future, while intensifying macroeconomic difficulties put more pressure on the government to undertake structural reforms and stimulate the economy.
In Turkey, the needs of reconstruction, rehabilitation of the transport network and the implementation of infrastructure projects in the earthquake-affected areas, as well as the need to secure housing for the hundreds of thousands of displaced residents, are expected to have wider effects on cement consumption in the coming years.
The Group started the year strongly. The performance in the first quarter demonstrated the momentum of our products and geographic presence, benefiting from our network synergies and vertically integrated presence in our core markets in the US and Europe. Our goal is to continue to achieve growth and profitability on a broad basis, with sustainability, customer proximity and efficiency in the use of resources and means of production as the main pillars, while at the same time accelerating our growth investments.
|Summary of Interim Consolidated Statement of Results|
|(amounts in thousands of €)||For the quarter ended 3/31|
|Cost of Sales||-461,716||-395,338|
|Other net operating income||1,846||1,459|
|Administrative and disposal expenses||-56,912||-48,790|
|Financial operation income/expenses||-12,029||-8,380|
|Changes of the fair value of interest rate swaps||-1,970||1,443|
|Foreign exchange losses||-3,835||-2,902|
|Net Monetary Position Gains in Hyperinflationary Economies||2,743||< /td>||–|
|Participation in losses of related companies and joint ventures||-536||-627|
|Earnings before taxes||55,651||1,503|
|Income Tax||  ;||-11,252||-781|
|Profits after taxes||< strong>44,399||722|
|The net profits amount to :|
|Shareholders of the Company||44,271||1,311|
|Earnings after taxes per share – basic (in €)||0.6262||0.0181|
|Earnings after taxes per share – adjusted (in €)||0.6255||0.0181|
|Earnings before taxes, financial and investment earnings, depreciation and amortization (EBITDA)|
|(amounts in thousands of €)||For the quarter ended 3/31|
|Depreciation of tangible and intangible assets||35,853||34,445|
|Earnings before taxes, financial and investment results, depreciation and amortization (EBITDA)||107,131||46,414|
|Summary of Interim Consolidated Statement of Financial Position|
|(amounts in thousands of €)||31/12/2022|
|Tangible assets and investment properties||1,649,619||1,675,714|
|Intangible assets and goodwill||357,695||364,707|
|Investments in related companies and joint ventures||103,923||100,412|
|Other non-current assets||34,325||35,515|
|Deferred tax assets||5,730|
|Total non-current assets||2,148,643||2,182,078|
|Receivables, prepayments and other current assets||361,655||311,846|
|Cash available and equivalents||64,086||105,703|
|Total Current Assets||< /td>||802.982||812.221< /strong>|
|Equity and Liabilities|
|Total equity and reserves that attributable to shareholders of the parent Company||1,390,598||< /td>||1,394,533|
|Total Equity (a)||1,422,867||1,424,274|
|Long-term loan and lease obligations||792,423||763,598|
|Deferred tax liabilities||129,437||130,113|
|Other long-term liabilities||102,905||< /td>||102,466|
|Total long-term liabilities||1,024,765||996,177|
|Short-term loan and lease obligations||109,286||139,366|
|Payables to suppliers, income tax and other current liabilities||394,707||434,482|
|Total current liabilities||503,993||573,848|
|Total liabilities (b)||1,528,758||1,570,025|
|Total Equity and Liabilities (a)+(b)||2,951,625||2,994,299|
|Summary of Interim Consolidated Statement of Cash Flows|
|(amounts in thousands of €)||For the quarter ended 3/31|
|Cash Flows from Operating Activities|
|< strong>Profits after taxes||44,399||722|
|Depreciation of tangible and intangible assets||35,853||34,445|
|Interest and related expenses||11,586||8,253|
|Other non-cash adjustments||< /td>||24,337||11,595|
|Income taxes paid||-2,881||-2,118|
|Changes in working capital||-82,148||-50,546|
|Total inputs from operational activities (a)||27,590||2,351|
|Cash Flows from Investing Activities|
|Net payments for the acquisition of tangible and intangible assets||-49,090||-38,712|
|Net receipts from other investing activities||– 4,619||-1.276|
|Total outflows from investment activities (b)||-53,709||-39,988|
|Cash Flows from Financing Activities|
|Net payouts from own share transactions||-3,502||-6,714|
|Debit interest and related expenses paid||-10,808||-6,155|
|Net receipts from withdrawals/(repayments) of lines of credit and derivatives||2,096||42,858|
|Total (outflows)/inflows from financial activities (c)||-12,214||29,989|
|Net decrease in cash and equivalents (a)+(b)+(c)||-38,333||-7,648|
|Opening cash and equivalents< /td>||105,703||79,882|
|Effect of currency differences||-3,284||-1,875|
|Period End Cash and Equivalents||64,086||70,359|
|CapEx||Acquisitions/additions of intangible and tangible assets, rights of use and investment assets||Assists Group management in monitoring capital expenditures|
|EBITDA||Operating earnings plus depreciation and amortization of intangibles and property, plant and equipment and amortization of government grants||It is an indicator of operating profitability that allows operating segments to be compared consistently each fiscal year|
|Net borrowing||Sum of long-term loans and lease obligations and short-term loans and lease obligations (total gross debt), less cash and cash equivalents||Helps Group management in debt monitoring|
|NPAT||Net profit after taxes attributable to shareholders of the parent company||Allows for consistent comparison of total earnings each fiscal year|
|Free cash flow from operating activities||Cash flow from operating activities less payments for CapEx||Measures the Group's ability to convert profit into cash by managing operating cash flows and capital expenditures|
|Operating Profits||Earnings before taxes, participations in the profits/(losses) of associates and joint ventures and net financial operating expenses||It is an indicator of operating profitability that allows operating profits to be compared consistently from year to year|
|28 Iunion 2023
|June 292023||Determination of dividend beneficiaries|
|05 July 2023< /strong>||Dividend payment|
|July 27, 2023||Second quarter and A' results announcement semester 2023|
|November 9, 2023|
- This press release is available on the website of Titan Cement International SA via the link https://ir.titan-cement.com
- For more information contact the Investor Relations department, tel. +30 210 2591 257
- At 15:00 CEST (11/05/2023) the briefing of analysts and investors will take place via video conference: https://87399.themediaframe.eu/links/titan230511.html
DISCLAIMER:This report may contain forward-looking statements. Forward-looking statements relate to or are based on the current intentions, beliefs or expectations of the company's management regarding, among other things, TITAN Group's future results of business, financial condition, liquidity, prospects, growth, strategies or developmentsof the industry where we operate. By their nature, forward-looking statements are subject to risks, uncertainties and assumptions that may result in actual results or future conditions that differ materially from those expressed or implied by these statements. Such risks, uncertainties and assumptions may adversely affect the outcome and financial consequences of the plans or events described in the statements. Forward-looking statements contained in this report regarding trends or current operations should not be construed as if they were to remain as they are in the future. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. One should not place undue reliance on such forward-looking statements, which are valid only at the time of this report. The information contained in this report is subject to change without notice. No representation or warranty, express or implied, is made as to the fairness, accuracy, plausibility or completeness of the information contained herein and no reliance should be placed on it. In most of the tables in this report, the amounts are expressed in millions of € for the sake of transparency. There may be differences with the tables in the summary due to rounding of amounts. The summary was prepared in English and translated into Greek. In case of differences between the two texts, the text in the English version prevails.
About Titan Cement International SA < /strong>
The TITAN Group is an international company in the field of building materials for constructions and infrastructures that offers innovative solutions for a better world. With most of its activity in the US, it employs more than 5,000 people worldwide and has a presence in over 25 countries, with leadership in the US, Greece, the Balkans and the Eastern Mediterranean. It also has a joint venture in Brazil. With 120 years of history, the Group maintains a family culture that promotes entrepreneurial spirit, while working methodically with its clients to meet the modern needs of society, while promoting sustainable development with responsibility and integrity. Titan has set a target of zero carbon emissions by 2050, with its CO₂ reduction targets scientifically validated by the Science Based Targets Initiative (SBTi). The Group is listed on Euronext and the Athens Stock Exchange. For more information, visit our website at www.titan–cement< /u>.com.