Global Cement: Strong Q1 due to Better Volumes and Pricing. Costs Increasing.

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  • Comparison of 15 global cement companies Q1 Results. This note compares the performance in the first quarter of 2021 of 15 of the largest cement companies globally. These include six global companies headquartered in the developed world (Buzzi, CRH, Heidelberg, LafargeHolcim, Titan and Vicat) and three headquartered in emerging markets (Argos, Cemex and Votorantim). The other six are major emerging market companies mainly operating in their home market; Anhui Conch, China Resources and CNBM (China), Ultratech (India), Semen Indonesia and Dangote (Nigeria).
  • Stronger than expected Q1 profitability. Of the 15 companies, 9 reported sufficient data for us to calculate their Q1 EBITDA and 12 their Q1 EBIT. Eight of the 9 reported an increase in their Q1 EBITDA and 11 of the 12 a higher EBIT. Votorantim reported the largest increase in percentage terms. Only Semen Indonesia reported a decline in its Q1 profitability.
  • Higher volumes. All 13 of the companies for which we have Q1 data reported an increase in their Q1 cement volumes, with China Resources (+65%) reporting the largest increase.
  • Increase in positive gap between prices and costs. This was shown in the waterfalls explaining the change in Cemex and Heidelberg’s Q1 EBITDA and LafargeHolcim’s recurring EBIT. The magnitude of the gap between prices and costs in Q1-2021 was more than double that in Q4-2020. As cost pressures continue to increase during the remainder of the year, particularly for coal and petcoke, further price increases are required and are being implemented. Eight of the nine companies reporting the data reported a decline in their General and Administrative costs as a percentage of sales in Q1.
  • Increased full-year guidance from LafargeHolcim and Cemex. Of the five companies that had provided full-year guidance, LafargeHolcim and Cemex changed it with their Q1 results announcements. LafargeHolcim increased its recurring EBIT estimate for 2021 by 3% and Cemex increased its EBITDA estimate by over 7%.