Cement and ready-mix sales up 2.2% and 2.9% respectively
Consolidated net sales +9.1%, driven by Eastern Europe
Robust growth of full year 2007 net profit

 

Consolidated data								2007				2006				% 07/06
Cement sales				m ton				34.1				33.3				2.2
Ready-mix sales				m m3				17.0				16.5				2.9
Net sales				€m				3,496				3,205				9.1
								Dec  07				Dec  06				Change
Net debt				€m				621				609				12

 

The Board of Directors of Buzzi Unicem met on February 8, 2008 to examine the preliminary figures for the year 2007.

Cement sales total 34.1 million tons, +2.2% over 2006. The increase is attributable to the positive performance reported in most markets of operations except for the United States and Italy. Especially in Central-Eastern Europe countries and Mexico volumes sold benefited from quite favorable trading conditions.
Ready-mix concrete sales at 17.0 million cubic meters are up 2.9%, as a combined result of the inclusion in the scope of consolidation of the Dutch operations, the Eastern Europe positive contribution and the ongoing production expansion in Mexico.

Consolidated net sales come in at €3,496 million versus €3,205 million in 2006 (+9.1%); changes in scope positively impact for €122 million while foreign exchange accounts for a decrease of about €111 million. Like for like, net sales would have increased by 8.8%.
Net debt as of December 31, 2007 amounts to €621 million, up €12 million over €609 million at year-end 2006.

Italy
Cement volumes, exports included, are down 1.2%; the decrease stems from a positive first part of the year while in the third and especially in last quarter volumes decrease was sharp compared with the 2006 corresponding period which had been favored by extraordinary mild weather conditions. The demand slowdown is worse in the residential market and for the gradual completion of some public works. Conversely average unit revenues are slightly better, thus partially offsetting cost inflation and the more and more stringent environmental rules which require higher capital expenditure. Ready-mix concrete volumes are more negatively affected by the demand decline, recording a 10.9% slowdown also due to a downsize in scope.
Overall net sales in Italy amount to €961 million, down 4.2% over 2006.

Central Europe
In Germany, after a sizeable growth in the first half 2007, in the second part of the year the construction sector records a decline in cement demand, mainly in the residential market, partly due to the new Vat regime, the termination of government subsidies for new housing and the new capital gain regulation on real estate speculative purchases. Conversely commercial and industrial building is on the rise, as well as civil engineering works, sustained by investments in infrastructure maintenance. Considering the export volumes to the neighbouring countries, sales show a 4.1% growth with average prices increasing by about 7.7%. Ready-mix concrete volumes, driven only by domestic market consumption, show a 3.5% decline over 2006 with average prices improving by nearly 9%. Overall net sales increase from €480 million to €515 million, up 7.3%. At constant scope a 10.4% increase would have been posted.

In Luxembourg, construction investments stand at a similar level as in 2006; however sales overall trend benefits from growing cement and clinker exports, with volumes up 20,0% and a consequent average price upward adjustment of about 5.7%. Net sales come in at €92 million (€84 million in 2006, + 9.7%).

In the Netherlands, where the new 100% subsidiary Basal is active in the business of ready-mix concrete and aggregates, volumes reach 1 million cubic meters of ready-mix concrete and more than 5 million tons of aggregates, with net sales at €141 million.

Eastern Europe
The Eastern Europe markets confirm their growing trend, although at a slower pace than in the first nine months of the year.
In Poland, against a double-digit growth of the market, local sales are in line with the previous year’s ones, supplemented however by inter-group trading from Germany and the Czech Republic, with a consequent advantage of the latter which posts a 20.1% increase in cement sales versus a market growth of about 7%. In the Czech Republic and Slovakia, Zapa subsidiary’s ready-mix concrete volumes record a brilliant trend (+10.9%). In Poland ready-mix concrete operations increase their production volumes by 2.8%.
Poland net sales increase from €110 million to €143 million (+29.3%) thanks to resilient prices in local currency (+19.3%); at constant exchange rate net sales would have improved by 25.6%
The Czech Republic operations report net sales of €216 million (€182 million in 2006); the sales volumes positive trend is amplified by the 4.3% rise of prices in local currency and by a positive exchange effect of about 2%.

In Ukraine the construction market shows a very favorable development: cement sales increase by 12.4% while ready-mix concrete volumes are up 37.2%. Higher sales volumes combined with surging prices (+69.3%) lead to a 67.2% increase in net sales which come in at €179 million. Excluding the effect due to the weak local currency, a 82.4% positive change would have been posted.
In Russia the construction sector continues its dynamic development but tons sold are in line with the previous year’s ones, since, as known, the plant has attained full capacity. Average selling prices in local currency show a very strong rise (+68.8%), thus bringing net sales at €198 million, up 59.8% over 2006 (+64% at constant exchange rate).

United States of America
Volumes decline is less marked than in the first half of the year, mainly because in the second part of 2006 the housing sector had already showed very clear signs of slump.
Cement sales decline by 4.1%, with some geographical areas still showing an upward trend. The weak demand does not impact too much on prices, which in the last quarter of the year record only a slight decline compared with the first nine months. The average increase over 2006 is 5.1%.
Ready-mix concrete volumes are stable compared with the previous year (-0.4%) thanks to a favorable change in the scope of consolidation, with unit prices also in improvement (+5.2%).
Despite a turnover in dollars in line with the one posted in 2006, the translation into euro is penalizing with net sales coming in at €851 million versus €925 million in the previous year (-8.0%). Consequently the unfavorable foreign exchange effect due to the weak dollar accounts for about €78 million.

Mexico (50% consolidation)
The construction industry maintains a favourable trend throughout the year with a production value of the companies operating in the sector higher by about 7% over 2006.
Corporación Moctezuma cement sales are up 18.0%, while prices in local currency continue to show some weakness (-2.0%), being influenced by the gradual change in sales mix from bagged to bulk cement and distribution at a greater distance.
In the ready-mix concrete sector the activities expansion continues with volumes increasing by 12.3% and prices in line with the previous year’s ones.
Net sales stand at €212 million, up 7.6% over 2006. The currency effect accounts for a decrease of about €20 million.

Based on the preliminary information available, for the full year 2007 we can confirm our expectations for a robust growth of net profit.

The Board of Directors for the approval of the annual financial statements is scheduled to meet on March 27, 2008.

The manager responsible for preparing the company’s financial reports, Aldo Arri, declares, pursuant to paragraph 2 of Article 154 bis of the Consolidated Law on Finance, that the accounting information contained in this press release corresponds to the document results, books and accounting records.

Company contacts:
Investor Relations Assistant
Mariangiola Fiore
Phone. +39 0142 416 404
Email: mfiore@buzziunicem.it