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Annual Report 2014

The Aalborg Portland Group: Strong results in 2014 as a result of foreign investment

In 2014, the Aalborg Portland Group reached net sales of EUR 858.4m against EUR 670.8m the previous year. Profit for the year was EUR 109.0m against EUR 76.2m the previous year.

The progress in 2014 is mainly related to the subsidiary Cimentas in Turkey that is represented in the consolidated financial statements for full-year 2014, whereas in 2013, Cimentas was only included from 1 October. Furthermore, Cimentas has achieved full capacity utilisation at three of four cement plants. The Aalborg Portland Group owns 85% of the Turkish cement company.

Massive investments have ensured the Aalborg Portland Group a strong international platform

75% of the Group’s net sales are related to activities outside Denmark. During the recent five years the Aalborg Portland Group has invested approx. EUR 470m in market and production facilities world-wide. In 2014, investments have been made in a doubling the capacity at the plant in Malaysia in order to increase sales of white cement in South East Asia and Australia.

Today, the Aalborg Portland Group has cement production in Egypt, Malaysia, China, USA and Turkey.

The progress in the Nordic market is mainly due to efficiency projects and slightly increasing export sales. At the domestic market in Denmark, sales have been unchanged and remains thus still affected by the impact of the financial crisis on building and construction activities. Still, a number of efficiency project has paid off.

“We have noted the improved outlook for the world economy, although great uncertainty still persists, and we expect a slight increase in the activities in the building market in Denmark, which remains the Aalborg Portland Group’s largest single market”, says Henning Bæk, CFO.

Danish special taxes still weaken competitiveness

The significant Danish tax pressure continues to weaken the competitiveness of Aalborg Portland’s production in Denmark in relation to foreign competitors.

In 2014, the Danish special taxes totalled EUR 7.9m, which corresponds to EUR 24,160 per employee per year.

“Both the NOx levy and the PSO levy burden Aalborg Portland, while the European companies, which Aalborg Portland is in fierce competition with, are not subject to these levies,” says Henning Bæk.

Close cooperation between research and production in Denmark pays

Innovation is a cornerstone of the Aalborg Portland Group’s business model and is vital for the company’s competitiveness. The company’s commitment to innovation includes i.a. the Aalborg Portland Group’s research centre, which is closely related to the cement production in Aalborg, as well as cooperation with customers, universities and other stakeholders in the construction industry and the Municipality of Aalborg.

The cooperation shall ensure, i.a., development of products and production processes with low energy consumption and minimal emission of i.a. CO2. The aim of the close cooperation is to exploit the synergies of a cooperation between a production company and the society which the company is a part of.

An example of interaction between industry and research is a cooperation on recycling of residual products from other companies and the development of alternative fuels. In 2014, 378,181 tonnes of alternative raw materials and 100,817 tonnes of alternative fuels were recycled.

Furthermore, the heat from production at Aalborg Portland is used for district heating delivered to households in Aalborg. These deliveries corresponded to the consumption of about 21,000 households in 2014.

Finally, the cold water in the artificial lake, that the excavation of chalk has created at Aalborg Portland’s area, can be used as cooling water for the coming super hospital in Northern Jutland. Remote cooling of the many devices at a hospital by using the cold water instead of using electrically powered ventilation ensures a significant environmental benefit.

Aalborg Portland contributes substantially to achieving climate targets

The company is planning the construction of a wind farm near the plant in Aalborg. The project is currently under consideration by the Municipality of Aalborg that attends the necessary hearing phases, etc.

Aalborg Portland continues to contribute significantly to achieving the climate targets set for the Danish society and has since 2010 invested EUR 24.8m in climate and environmental improvements.

Aalborg Portland creates value for Denmark

Aalborg Portland’s cement production in Denmark has a significant economic impact on the country. Value added in 2014 is estimated at just over EUR 107m, of which 32% went alone to society in the form of VAT, levies and taxes. 16% went to employees in the form of wages. 47% were transferred to equity and the remaining 5% for interest on loan capital.

In addition, social contribution is created through the subcontractors working at Aalborg Portland.

Contact:

Henning Bæk, CFO, Aalborg Portland,

Phone: +45 99 33 77 60 / +45 40 16 95 77