Grupo Cementos Portland Valderrivas
Table of Contents
1. Executive Summary 3
2. Relevant Events 5
3. Group Results 6
4. Areas of Business 8
5. Investments 11
6. Stock Market Developments 11
7. Prospects for 2007 13
Annexes
1.- Results of the CPV Group, 1st quarter 2006 / 2007 14
2.- Balance Sheet of the CPV Group on December 31, 2006 and March 31, 2007 15
CONTACT INFORMATION, RELATIONS WITH ANALYSTS AND INVESTORS
General Manager of Administration and Finance: Jaime Úrculo Bareño
Address: C/ José Abascal 59. 28003 Madrid. España
Telephone: (+34) 91-396.01.98. Fax: (+34) 91-3960231
E-mail:
1.- EXECUTIVE SUMMARY
Financial figures in millions of euros
1Q 07 / 1Q 06 / %∆07/06Turnover / 471.7 / 278.2 / 69.6
Gross Operating Result (EBITDA) / 150.2 / 91.0 / 65.1
Result Before Taxes / 77.5 / 62.3 / 24.4
Result After Taxes / 55.0 / 41.2 / 33.5
Attributable Net Result / 43.0 / 40.0 / 7.6
Adjusted Attributable Net Result / 47.4 / 40.0 / 18.6
Net Resources Generated by Operations / 150.2 / 94.3 / 59.2
Note: In accordance with NIC rules
Physical amounts (aggregate sales)
1Q 07 / 1Q 06 / %∆07/06Cement and Clinker (millions of Tm) / 4.7 / 2.6 / 81.3
Concrete (millions of m3) / 2.1 / 1.3 / 62.3
Arids (millions of Tm) / 6.3 / 4.0 / 56.4
Dry mortar (millions of Tm) / 0.7 / 0.2 / 199.1
The developments in the Cementos Portland Valderrivas Group in IQ 07 have been very satisfactory, displaying significant increases in all of the economic figures, as demonstrated by the results which have been achieved.
The figures corresponding to 1Q 07 are in large part the result of the two important business operations carried out in 2006: the Public Acquisition Offer for Cementos Lemona, S.A. in March, and the acquisition of 51% of Corporación Uniland, S. A. through its affiliate Portland, S.L. in August.
The turnover figure amounted to 471.7 million euros with an increase of 193.5 million euros, equivalent to 69.6% with respect to the preceding year.
Of the total turnover figure, 79.4% was produced in Spain, while international business accounts for the remaining 20.6%. The 374.6 million at the national level represent growth of 69.6%, and the 97.1 million at the international level grew by 69.7% compared to 1Q 2006.
In the markets where the Cementos Portland Valderrivas Group does business, in general, the industry’s demand has remained quite steady. Only in the United States has a certain decrease been observed in the use of cement.
The EBITDA reached came to 150.2 million euros, or 65.1% more than that of 1Q 2006, as a result of the increase in sales volumes and average prices. The margin of EBITDA over turnover amounted to 31.8% in 1Q 2007.
The result before taxes was 77.5 million euros, surpassing by 24.4% the 62.3 million euros obtained in the same period of the preceding year. The increase in amortizations in the goodwill and in the financial costs resulting from corporate operations carried out in 2006 have brought the percentage over the turnover to 16.4%.
The lower tax rate in Spain, which has shifted from 35% to 32.5%, coupled with other effects, make the tax rate applied to the profits for 1Q 07 to be 29.0%, compared to the rate of 33.9% in 1Q 2006. Therefore, the before-tax profit in 1Q 07 amounted to 55.0 million euros, or 33.5% more than the amount obtained in the same period of 2006.
The minority interests figure, most of which comes from Uniland, amounted to 12.0 million euros, compared to the minority interests figure of 1. 3 million euros in 1Q 06, making the net profit attributable to the dominant Company reach the amount of 43.0 million euros.
Had the put option on the Uniland shares been executed in its entirety in the first quarter of 2007, the profit attributed to the dominant company, adjusted for this circumstance, would have come to 47.4 million euros, a figure 18.6% higher than the 40.0 million euros obtained in 1Q 06.
In terms of the resources generated by regular operations, they increased in 1Q 07 to 150.2 million euros, compared to the 94.3 million euros of 1Q 06, which means there was significant growth equal to 59.2%.
The investments made amounted to 98.9 million euros, of which: 71.6 corresponded to financial investments, of which 71.4 million euros were due to the partial execution of the sales put of Corporación Uniland; 25.1 million corresponded to investments in tangible fixed assets; and 2.2 million corresponded to intangible assets. In 1Q 06, investments came to 261.8 million euros, of which 234.2 million were used in the purchase of the Lemona shares which formed part of the Public Acquisition Offer (OPA).
The number of people working in the CPV Group as of March 31, 2007 was 5,056. The staff increased in number by 2,042 people compared to the same date in the preceding year, as a result of the addition of personnel from Corporación Uniland and the Lemona Group.
The Board of Directors of Cementos Portland Valderrivas is going to propose the payment of a complementary dividend of €2.08 per share to the General Shareholders. The dividend on the account of the results for the financial year of 2006, distributed as of November 15, 2006, was €1.08.
In terms of the net results obtained by the Cementos Portland Valderrivas Group in 2006, the dividend of €3.16 € means a pay-out of 50%, which is 26.4% greater than the amount given out in the preceding financial year, which was €2.50. The total disbursement will be more than 88 million euros.
The Group’s net debt on March 31, 2007 amounted to 1,485.0 million euros, compared to 1,474.5 million euros on December 31, 2006.
The total assets on March 31, 2007 were 4,296.5 million euros, a figure which indicates an increase of 63.4 million euros, compared to the 4,233.1 million of December 31, 2006.
The Cementos Portland Valderrivas Group’s sales in 1Q 07 in physical units amounted to: 4.7 million Tm of cement and clinker, or 81.3% more than in the same period of the preceding year; 2.1 million m3 in concrete, 62.3% more than those of 1Q 06; 6.3 million Tm of arids, with an increase of 56.4%; and 0.7 million Tm of dry mortar, which represents an important growth rate of 199.1%.
2.- RELEVANT EVENTS
In terms of the Public Acquisition Offer to Cementos Lemona, S.A. carried out in February 2006, the Company’s General Shareholders’ Meeting held on May 10, 2006 decided to change the system for representation of the shares into which its share capital is divided, through the reversion to nominal physical titles of the shares on account. On February 2, 2007, the required authorization was obtained from the Spanish National Securities Market Commission (CNMV) for the reversion of the form of representation of the shares.
In accordance with the open purchase order that Cementos Portland Valderrivas, S.A. has on the shares of Cementos Lemona, S.A., successive purchases have been carried out, the number of shares acquired up to March, 31, 2007 being 11,014,166 shares, a figure which represents 98.34% of the share capital of Cementos Lemona, S.A.:
In terms of the acquisition of the majority of the capital of Corporación Uniland carried out in August 2006, the purchase operation bore with it the commitment by Cementos Portland Valderrivas, S.A. to acquire up to 73.5% within a maximum term of 5 years, at the same price per share of 407 euros, by exercising a “PUT” sales option.
During this time, Cementos Portland Valderrivas, S. A., through the company in which it owns a share Portland, S.L., has been executing options corresponding to 289,690 shares representing 5.50% of the share capital of Corporación Uniland, S.A., and therefore the shareholding of Cementos Portland Valderrivas, S.A. in Corporación Uniland, S.A., through Portland, S.L., amounted to 56.55% as of March 31, 2007.
At a later time, on April 12, 2007, the purchase of 130,000 additional shares was carried out, representing 2.47% of the share capital of Corporación Uniland, and therefore the shareholding of Cementos Portland Valderrivas, S.A. in Corporación Uniland, S.A., through Portland, S.L., amounted to 59.02% as of that date.
The company Cementos Portland Valderrivas received a document dated February 2, 2007 from the Tax Collection Agency, whereby it was communicated the assigned Fiscal Group number, in accordance with that which was agreed to by the Extraordinary General Shareholders’ Meeting of Cementos Portland Valderrivas, S.A. held on November 21, 2006 in Pamplona (Navarre), which approved the application of the fiscal consolidation system for Cementos Portland Valderrivas and its Group. This fiscal consolidation affects all of its dependent companies which may taxes under the common system and in which Cementos Portland Valderrivas, S.A. possesses more than 75% of the share capital.
As of March 31, 2007, the company possessed 128,195 of its own shares, a figure which amounts to 0.46% of the total 27,837,818 Company shares.
3.- GROUP RESULTS
The developments in the Cementos Portland Valderrivas Group in 1Q 07 were quite satisfactory, displaying significant growth rates in all of the economic figures, as shown by the results achieved.
Cementos Portland Valderrivas Group - Financial figures in millions of euros
Data corresponding to the first quarter / 2007 / 2006 / %∆ 07/06Turnover / 471.7 / 278.2 / 69.6
Gross Operating Result (EBITDA) / 150.2 / 91.0 / 65.1
Result Before Taxes / 77.5 / 62.3 / 24.4
Result After Taxes / 55.0 / 41.2 / 33.5
Attributable Net Result / 43.0 / 40.0 / 7.6
Adjusted Attributable Net Result / 47.4 / 40.0 / 18.6
Result Before Taxes / 150.2 / 94.3 / 59.2
Investments Made / 98.9 / 261.8 / -62.2
Net Debt as of March 31 / 1,485.5 / 419.8 / 253.7
Own Resources / 1,123.2 / 1,078.5 / 4.1
Net Debt / Equity (%) / 132.2 / 136.7
Total Assets / 4,296.5 / 4,233.1 / 1.4
Note: In accordance with NIC rules
Data from 2006 balance sheet are as of December 31
The net turnover amount in 1Q 07 came to 471.7 million euros. This means there was an increase of 69.6% over the same period in the preceding year, which had amounted to 278.2 million. This is basically the result of the increases in sales volumes and the level of average prices.
The increase in the invoicing figure of 69.6% was caused in the most part by the corporate operations carried out in 2006. The national turnover went up by 69.6%, from 220.9 to 374.6 million euros; while the international figure rose by 69.7%, going from 57.2 to 97.1 million euros.
The increase in the international turnover figure was equal to 39.9 million euros, or 69.7%. In all of the countries where the Group does business internationally, except the US, which had a slight decrease, the turnover figure in euros went up compared to 1Q 06. The depreciation of the US dollar against the euro also contributed to the decrease in turnover in the US, despite the increase in prices that took place.
However, because the contribution of the turnover from the countries in which the Group did business for the first time, namely Argentina, Tunisia, Uruguay and Holland, increased compared to 1Q 06, they made the total international figure rise by 69.7%.
The EBITDA reached came to 150.2 million euros, or 65.1% greater than that of 1Q 2006, mainly as a result of the acquisitions carried out in 2006 and due to the increase in sales volumes and average prices. The margin of EBITDA over turnover came to 31.8% in 1Q 2007.
The before-tax result rose to 77.5 million euros, increasing by 24.4% compared to the 62.3 million in the same period of the preceding year. This figure entails a margin of 16.4% over the turnover of 2007, compared to the margin of 22.4% in 1Q 06, due to the amortizations of the goodwill and the financial costs due to interest, which are in line with the Group’s forecasts.
The increase in minority interests is due to the inclusion of the results of Corporación Uniland, with an increase of €11.2 million.
The net profit or result attributed to the “Dominant Company” came to 43.0 million euros, experiencing an increase of 3.0 million euros, equivalent to a 7.6% increase compared to the 40.0 million reached the year before.
Consolidated Balance Sheet of GCPV as of March 31, 2007
The total assets of GCPV as of March 31, came to 4,296.5 million euros, a figure which indicates an increase of 63.4 million euros compared to the 4,233.1 million euros as of December 31, 2006, equivalent to 1.4%.
The increase in intangible assets or intangible fixed assets was due mostly to the goodwill created by the successive purchase of shares in Corporación Uniland due to exercising part of the sales put.
The decrease in non-current financial assets was basically due to exercising part of the sales put on the shares of Corporación Uniland.
In terms of the current assets item, which grew by 88.1 million euros, the debtors item stands out, with an increase of 31.8 million euros, as well as cash and banks and equivalent items, which did so by 45.5 million euros.