Sales and profits grow in H1

Interim Results for the First Six Months of 2006 (H1) Show Strong Growth Across the construction industry. Revenues for 22 of the most significant construction equipment manufacturers, materials producers and contractors in Europe rose by an average of +18,9% during H1 2006 compared to the same period last year. Operating profits were also up, increasing by an average of +29,5% for the first six months of the year.

The contracting sector recorded the highest rise in average revenues at +31% but the average increase in profits at +28,8%, was significantly lower than those in the materials or equipment industries.

Acciona and Ferrovial saw the highest rise in revenues, thanks to recent acquisitions by both companies. This growth strategy is clearly working well for both, with profits rising and the highest operating margins in the sector - 15,9% for Acciona and 14,2% for Ferrovial.

However, operating profit growth was strongest among construction equipment manufacturers, with an average rise of +44%. Revenues in the sector were up +21,2% on average.

With the exception of Caterpillar, all the companies in the sector surveyed by CE achieved margins in excess of 10%, with Sandvik Mining & Construction leading the way at 16,6%. Terex enjoyed the biggest profit rise at +19,3%, and Caterpillar made the most money at US$ 1,89 billion (€ 1,47 billion).

The materials sector also saw good operating profits growth, with an average of +40,1%. Heidelberg Cement saw the beset improvement, with a +96% rise, and it also achieved the best operating margin at 16,5%.

Revenue growth in the sector was more subdued than the contracting or equipment markets, with a rise of +19,7% in the first six months of 2006. Saint-Gobain and Lafarge saw the best improvements here, with sales rising +21,8% and +21,3% respectively.

The outlook for the second half of 2006 also looks promising, with most companies reaffirming or increasing previous earnings guidance.