Slide 1: Financial Results – First Quarter 2008
Titan Group Financial Results – First Quarter 2008 Analysts Conference Call Athens – 6th May 2008
Slide 2: Forward-looking statements
• This document contains forward-looking statements relating to the Group’s future business, development and economic performance. It also includes statements from sources that have not been independently verified by the Company. • Such statements may be subject to a number of risks, uncertainties a
Slide 3: Agenda
Agenda • Performance Highlights • Market Overviews • Group Financial Results • Outlook & Acquisitions Highlights
Slide 4: Agenda
Agenda • Performance Highlights • Market Overviews • Group Financial Results • Outlook & Acquisitions Highlights
Slide 5: Performance Highlights Q1 2008
Performance Highlights Q1 2008 • Turnover decreased by 1% to € 340m, EBITDA down 14% to € 76m (+5% and -11% before translation impact) • Net Profit after Tax and Minorities -16% to € 43m versus 2007 • Greek domestic cement volumes declined compared to a strong Q1 2007 • USA demand weakens further •
Slide 6: Agenda
Agenda • Performance Highlights • Market Overviews • Group Financial Results • Outlook & Acquisitions Highlights
Slide 7: Market Overview, Greece Region Q1 2008
Market Overview, Greece Region Q1 2008 ● Domestic volumes down versus a strong first quarter in 2007 (legislative changes, weather) ● Sharp increases in energy, raw material and freight costs only partly offset by better pricing ● Allocation of CO2 for 2008-2012 indicates a shortfall ● Acquisition i
Slide 8: Market Overview, USA Q1 2008
Market Overview, USA Q1 2008 ● Demand declines further, driven by weak housing market ● Significant translation impact due to devaluation of US Dollar ● Growing pressure on margins, especially in Florida ● TITAN Cement volumes supported by industry sales, Ready-Mix volumes by acquisitions, Fly Ash v
Slide 9: PCA Cement & Construction Market, USA 2008
PCA Cement & Construction Market, USA 2008 Weak market conditions in Florida continue, softer outlook in the Mid-Atlantic FLORIDA VIRGINIA N. CAROLINA USA (1) Cement Market Volumes Cement Consumption (PCA) YTD Feb '08 -22% -3% -14% -8% 12 Month 3 Month 12 Month 3 Month 12 Month 3 Month Average Avera
Slide 10: Market Overview, SE Europe Q1 2008
Market Overview, SE Europe Q1 2008 ● Volumes ahead of last year driven by continued buoyant market in Bulgaria and good performance in Serbia ● Political uncertainty in Western Balkans has no significant impact on demand (so far) ● Costs ahead of last year with regard to energy and raw materials, af
Slide 11: Market Overview, Eastern Med. Q1 2008
Market Overview, Eastern Med. Q1 2008 ● Demand continues to grow strongly. Volumes capacity constrained ● Prices ahead of previous year, compensating for higher energy costs ● Significant translation impact, as EGP weakens versus Euro 20 Turnover (€m) 10 Op. EBITDA (€m) 3,1 16,5 15,4 (2,0) 1,1 7,7 1
Slide 12: Agenda
Agenda • Performance Highlights • Market Overviews • Group Financial Results • Outlook & Acquisitions Highlights
Slide 13: Key Sales Volumes Q1 2008
Key Sales Volumes Q1 2008 Group volumes ahead of last year, except for Aggregates 4,97 4,45 3,57 3,68 07A 08A 1,31 1,39 +3% -10% +6% Cement (mt) (1)+(2) Aggregates (mt) Ready-mix (mm3) (1) Cement sales include clinker and cementitious materials (2) Includes Egyptian JV s at 100% 13
Slide 14: Financial Highlights Q1 2008
Financial Highlights Q1 2008 Higher input costs hit margins, as weaker markets and the Euro’s strength hold back Turnover Actual Var 08 Q1 2008 Actual 2008 2007 vs 07 Turnover 340,2 342,1 -0,6% EBITDA 76,2 88,9 -14,3% EBITDA Margin 22,4% 26,0% -3,6 pts EBT 45,9 62,7 -26,8% Net Profit after Taxes & M
Slide 15: Group Turnover and EBITDA Q1 2008
Group Turnover and EBITDA Q1 2008 Excluding the impact of translation, Group Turnover was up 5% and EBITDA, -11% versus last year Turnover €m EBITDA €m 400 100 342,1 (18,8) 340,2 350 21,0 90 88,9 (2,5) (4,1) (13,2) -2,8% -5,5% -1,2% 6,1% 80 76,2 300 3,0 70 -14,8% 3,3% 250 60 26% EBITDA Margin % 22%
Slide 16: Consolidated Sales & EBITDA by Region Q1 2008
Consolidated Sales & EBITDA by Region Q1 2008 Good performance in SEE & Egypt fails to compensate fully for slowing demand in key US and Greek markets EBITDA (€m) SALES (€m) 44% 151,2 -2% 50% 37,8 -20% GREECE GREECE 45% 153,8 53% 47,2 USA € 36% 121,1 -10% 17% 13,2 USA € -27% 40% 135,1 21% 18,2 185,1
Slide 17: Group Net Profit after Tax Q1 2008
Group Net Profit after Tax Q1 2008 Net Profit after Taxes was € 8m lower than last year, driven by lower operating performance and higher financing costs partially offset by lower taxes 60 8,9 (13,2) €m 50,7 (1,9) 50 (2,3) 0,7 (0,3) 0,1 42,7 Including one off tax 40 refund in Bulgaria € 4,4m 30 NPAT
Slide 18: Net Financing Costs Q1 2008
Net Financing Costs Q1 2008 The increase in financing costs represents increased debt to finance acquisitions and CAPEX (€ m) 2008 2007 Var Net Financing Costs -3 months (6,7) (5,2) (1,5) Explanation of variance: Interest Income/(Expense) (net) Greece (0,9) (0,7) (0,2) USA (3,5) (5,3) 1,8 SE Europe
Slide 19: Foreign Currency Rates Q1 2008
Foreign Currency Rates Q1 2008 The continued weakness of the US Dollar and EGP cause a translation impact both in P&L and Balance Sheet Actual Actual Variance BALANCE SHEET 31/3/2008 31/12/2007 31.03.08 vs 31.12.07 €1 = USD 1,58 1,47 -7% €1 = EGP 8,62 8,12 -6% 1USD=EGP 5,46 5,52 1% €1 = RSD 82,31 79
Slide 20: Net Debt as of 31.03.08
Net Debt as of 31.03.08 Q1 2008 No significant move in Net Debt since the beginning of the year 600 582 €m 562 569 565 550 529 524 494 498 498 494 500 475 466 455 450 414 414 411 417 394 392 400 Consolidated Net Debt 363 350 327 300 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2003
Slide 21: Sources & Uses of Cash Q1 2008
Sources & Uses of Cash Q1 2008 Debt decreases by € 4m, despite of Capex & Investments of € 43m and Share Buy-backs of € 21.7m 100 €m 76,2 (43,4) 80 Net acquisitions 7,1m 60 Capex 36,3m 40 (5,6) (37,6) 20 14,4 4,0 Buybacks 0 21,7m -20 EBITDA Q1 2008 CAPEX & Working Decrease in Int., Tax, Net FX Inves
Slide 22: Agenda
Agenda • Performance Highlights • Market Overviews • Group Financial Results • Outlook & Acquisitions Highlights
Slide 23: Egypt – Acquisition of remaining 50%
Egypt – Acquisition of remaining 50% interest in joint venture with Lafarge • Turnover: € 127,4m, EBITDA: 62,2m, NOPAT: € 34,3m in 2007 Beni Suef • 2 plants: Alexandria 1,8m tons and Beni Suef 1,5m tons • Beni Suef expansion project, expected completion by end of 2009, 1,5m tons • Total 2010 planned
Slide 24: Turkey – Acquisition of 50% interest in Adocim
Turkey – Acquisition of 50% interest in Adocim • Acquisition of 50% interest in Adocim Cimento with annual cement capacity 1,5m tons, consisting of a cement plant in Tokat, Black Sea (commissioned December 2007) and a grinding plant in Tekirdag, Marmara • Equity value € 85,1m • Consolidation as of A
Slide 25: 2008 Outlook
2008 Outlook • Uneven global slowdown. Uncertainties persist • Input cost inflation high • US demand expected to decrease further (PCA ’08 forecast: -11%) • Timing of Lakebelt issue resolution leads to uncertainty of US performance • Greek demand expected to decline slightly (soft housing, growing c