AlphaValue Corporate Services
This research has been commissioned and paid for by the company and does therefore not constitute an inducement caught by the prohibition under MiFID II

Cementir Holding

Bloomberg   CEM IM
Cement & Aggregates  /  Italy  Web Site   |   Investors Relation
Also operates in : Holding Companies
Positioned in a niche market
Upside 36.1%
Price (€) 9.96
Market Cap (€M) 1,585
Perf. 1W: 3.86%
Perf. 1M: 0.10%
Perf. 3M: 0.96%
Perf Ytd: 7.31%
10 day relative perf. to stoxx600: 5.40%
20 day relative perf. to stoxx600: -0.57%
Earnings/sales releases14/05/2020 11:57

Q1 20: lower result but good shareholder remuneration ahead

Cementir Holding announced its Q1 results. Revenue was almost flat due to the good performance in the Nordics and Turkey. EBITDA was impacted by a one-off payment of €2.5m, otherwise it would have been above the Q1 19 level. The group has delayed all unnecessary expenditures to prioritise a strong balance sheet. It has also called an EGM in July to initiate a share buy-back programme.


Key information
  • Revenue: €266.9m (vs €264.4m in Q1 19)
  • EBITDA: €32.2m (vs €33.7m in Q1 19)
  • PBT: €-5m (vs €-0.3m in Q1 19)
  • Non-necessary capex of €30m postponed
  • The Board to call an EGM to authorise share buy-backs up to €60m


Reported figures

Revenue stood at €266.9m, up 0.9% mainly due to the good performance in Turkey, Denmark, and Egypt. EBITDA stood at €32.2m, which was impacted by previous transactions’ final settlements. In the absence of these settlements, EBITDA would have been +3% compared to last year. PBT stood at €-5m vs €-0.3m in Q1 19.

Performance and outlook by division
  • Nordic and Baltic (revenue: €127.9m): Domestic markets were good but white cement exports to the US were down due to the cancellation of one shipment, yet the products are available in the US market. There was a negative effect of FX overall.
  • Belgium and France (revenue: €56.7m): Revenue was down by 4.9% and EBITDA down by 44.7%. The major reason being the closed borders. France represents 1/3rd of the market, and with the borders closed, this segment took a big hit. The borders are still closed but may probably open in a week or two.
  • North America (revenue: €36.4m): EBITDA increased significantly (32.9%) with LWCC recording an EBITDA of €4.9m (vs €3.7m in Q1 19) due to better pricing and tailwinds from lower raw material costs.
  • Turkey (revenue: €26.7m): Revenue in Turkey was up by 22.2% and EBITDA, though it remained in negative territory, was up by 27%. Business in Turkey saw a very good start to the year, continuing the momentum from the last few months of 2019, but then COVID-19 hit the activities and the devaluation of the lira gained pace (lira devaluated 20% against the euro). Management does not expect much recovery from this region, even if the activities are almost back to normal.
  • Egypt (revenue: €10.2m): While the domestic white cement volumes sold were down, overall sales held up due to higher export volumes. This was accompanied by the revaluation of the Egyptian pound versus the euro by 13.5%. These justified a 20.7% increase in revenue and a 48.6% increase in EBITDA to €2m.
  • Asia Pacific (revenue: €14.7m): Revenue was down by 17.4% (China: -29.7%, Malaysia: -3.3%) and EBITDA was down by 20.3% (China: -15.8%, Malaysia: -28.6%). In China, sales have recovered 90% of the budgeted sales and, if it sees no more waves of the pandemic, the market in the second half will recover to its previous pace. Malaysian plants export significantly to Australia and, while the plants were temporarily closed, Cementir’s products were still available in the Australian market. Hence, there was a modest impact to the Malaysian revenues.
  • Italy (revenue: €21.2m): This segment includes the parent company, the trading company, and other minor companies. Revenue was up by 50% due to higher trading volumes but EBITDA was down to €-3.6m. EBITDA was impacted by a €2.5m payment of a final settlement and management believes that by the end of the year the trading results will be positive due to a recovery in oil, electricity, and freight prices.
Strengthening financial position and high shareholder remunerations

The group is taking many steps to improve its financial position. It has postponed all its non-essential expenditures. It is delaying non-necessary capex worth €30m, which represents about 30% of its total expenditure planned for 2020 earlier. The group is unlikely to conduct any M&A activity for the next 12-18 months. If Cementir manages to keep up with its budget, it will proceed with its share buy-back programme (to be proposed at the extraordinary shareholders’ meeting on 4 July) which will be capped at €60m and will last until the end of 2021. (The free float is currently of 29% which may reduce to 22% after the share buy-back.) It is worth noting that this remuneration is on top of the dividend of €0.14/share to be paid in a week. A great return for shareholders.


Our numbers are under review.


10 Mar 21 Earnings/sales releases
FY20 results - a Turkish Delight

05 Feb 21 Earnings/sales releases
FY 20: performance beyond full-year guidance

10 Nov 20 Earnings/sales releases
9m 20: results in line with 9m19 but cautious gu...

29 Jul 20 Earnings/sales releases
H1 20: in for a Danish treat

14 May 20 Earnings/sales releases
Q1 20: lower result but good shareholder remu...

06 Mar 20 Earnings/sales releases
FY19: profits higher than our conservative proje...