Just like other cement players, Cementir benefited from higher cement volume sales (+11%) despite the pandemic, bringing the 9m sales and EBITDA almost to 9m FY19’s levels.

Revenue and EBITDA were 1% and 2.1% down respectively, while profit was down by 2.9% to €81.2m. Denmark, China, Egypt and Turkey were the main EBITDA growth drivers.

The results are in line with our expectations, hence no material changes to be made in our model.

  • Cement volumes up by 11.3%, thanks to a 44% increase in Turkey
  • Revenue down by 1% mainly due to the COVID-19 impact in Q2
  • EBITDA decreased by 2.1% to €178.1m, including a one-off of €5.6m
  • EBITDA margin was almost at the same level
  • EBIT down by 5.6%
  • PBT decreased by 2.9%

Reported figures

Despite the pandemic, Cementir Holding was able to maintain almost flat revenues and EBITDA compared to last year, thanks to high cement sale (+11%), especially in Turkey (+44%). EBITDA declined by 2.1% to €178.1m, including a €5.6m one-off impact from the settlement of previous transactions and some equipment disposals, in the absence of which EBITDA would have been up by 1%. EBITDA was supported by higher cement volumes in Denmark, higher sales prices and lower costs in China, but the highest percentage growth was registered in Egypt and Turkey. In Egypt, EBITDA was up by 40% due to higher exports and the revaluation of the Egyptian pound. In Turkey, domestic sales were up 27%, driven by infrastructural projects near Elazig and new projects in Trakya and Kars, also supported by subsidised rate loans. Exports nearly doubled due to the sharp devaluation of the Turkish lira.

Guidance and outlook

Cementir has reiterated its guidance of c.€1.2bn in revenues and €230-240m in EBITDA with no substantial changes to the workforce. It has only improved its net debt guidance from €180m to €160m. It was already looking forward to having a greenfield site in South-East Asia for a white plant, but does not intend to engage in M&A activities currently (especially in developed markets) due to high multiples and, ergo, is instead improving its capability at present to make future investments.

9M results in line, yet cautious outlook given

The 9M 20 result announced by the company was in line with that of last year, yet the company provided a lower EBITDA guidance of €230-240m, which translates into a decline of 7-11% yoy. The company is cautious because the second wave of the pandemic is quite big and may result in further lockdowns in addition to the countries of France and Belgium, which are already seeing an impact from the second wave. Since the guided cautious EBITDA is in line with our estimates, we can only expect a positive result if the pandemic has no further impact on the company’s activities.

Since the result was in line with our expectations, we will not make significant changes to our model. Hence, we are leaving our Buy recommendation unchanged.

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