Amrize Ltd Ordinary Shares

a warm welcome to our Hafer 2023 results presentation. I am Benedicte Maier from the Investor Relations team, and I'm delighted to connect again with all of you today. Here with me at my side, I have our Chairman and CEO, Jan Janisch, and our CFO, Stefan Kindler. They will walk us through the company's highlight and performance of the last six months. After that, we will have the chance to take your questions. If you would like to ask your question, please click on the link which is visible on your screen and follow the instructions. If you're joining us by phone today, please press star one four if you would like to enter the queue. And if you would like to withdraw from the queue, press star one five. With that said, I will now hand it over to you, Yann. Please go ahead.

Good morning, everyone, and very welcome to have you all here for our half year report. Let me start with talking about some of the highlights of our strong performance in the first half before Stefan gives us more detail on the financials. The first half here was an excellent performance of Holcim. I'm very pleased that our organic growth has continued in the second quarter of the year with 7%, making more than 7% organic sales growth in the first half of the year. Then, as we promised in our outlook, we have an overproportional EBIT improvement by more than 13%, leading us to a new record EBIT margin of more than 21% in the second quarter of 2023. Very proud of this, and we will discuss many of the areas, how we can achieve now such a record-setting margin with our move into solutions and products, but also by decarbonizing our product range and receiving premiums for the products and getting into value selling, system selling. And this all shows now that the new Stronghold Sim will deliver much more increased margins now, but also in the future. We have continued with our speed in transformation. So we had 18 acquisitions in the first half of the year. Another eight acquisitions to strengthen our new platforms for solutions and products. And also 10 very value-accretive Boldon acquisitions to strengthen and grow our business segments in aggregates and ready-mix concrete. Our expansion in the most attractive North American market is continuing and we are on our way to make this region 40% of the group sales. On climate action, we have further accelerated. Very happy to report that our C2 per net sales has decreased by another 18% in the first half of this year. And also we have received further grants of the European Union Innovation Fund for our leading carbon capture utilization and storage plants, where we have now already five grants out of a total nine grants given to our sector. Overall, a very successful first half of the year and confirms our guidance for the full year where we are looking forward to have organic sales growth more than 6% and an EBIT growth of more than 10% and also delivering the cash flow and the other KPIs as promised and guided beginning of the year. Let's look into some of the details of our results. First, this is the overview now on the EBIT margin, where we achieved now a new level of performance, more than 21%. And we will continue here to set the benchmark here in billing materials when it comes to EBIT margin. We have on the acquisitions. I go to the second slide here. We have spent 1.8 billion Swiss francs in the first half of the year to continue our growth investments. Eight acquisitions for solutions and products, most prominently Duralast, one of the leaders in flat roofing systems. is already a member of the Holcim family as of April 1st, has started very well with also increased profitability in the first three months of being with Holcim and is completing our footprint in the U.S., We now have 30 production facilities to serve all the roofing needs from flat roof to residential housing, from insulation to spray from insulation. We have a complete range here of solutions for this very attractive roofing market in North America. We're also expanding the roofing segment in Europe. We could take over one of the leading manufacturers of thermoplastic roofing systems in Germany earlier this year. And in Latin America, we also enter the roofing, the waterproofing, but also the mortar market to build up also here strong growth platforms in solutions and products. Very happy that on the very value accretive bold on site, we had 10 acquisitions already in the first six months of the year. And you see the characteristics we look for. We treat those acquisitions as growth platforms, expect the minimum growth of more than 5% per annum. These local acquisitions are very highly synergistic. And the ROIC is already achieved within the first three years above 10 percent on group level. And all those acquisitions are value accretive from year one. The North American, a very interesting slide who shows our successful expansion. If you recall, four years ago, this was about 24% of Holcim. And now this is the biggest region, not only the biggest one, but also the region with a very positive outlook. We'll reach 40% of our group net sales. And you see here the fantastic balance we have among the four business segments. with solutions and products already being the biggest one, and then followed by cement, ready mix, and aggregates. And overall, we are one of the leading players now in North America, with expected net sales of around $12 billion already for 2023. We have a bit more details on North America on the next slide. You see our strong market positions. We are the number one in cement, already the number two in commercial flat roofing market. And also we are strong number five in the ready mix and the aggregate segment. What's very interesting here is we are best positioned now for all the upcoming growth in North America. While we have been already happy now with significant growth and margin expansion in North America, we have now all these new infrastructure bills coming in. We have the Infrastructure Investment and Jobs Act. the Inflation Reduction Act, and then not to forget, we have all these on-shoring investments from all those companies, from automotive to the white goods industry, from electronics to all the new industries, battery makers, Wind parks. We have a huge order book already of all these onshoring investments. And we are very happy to support our customers to make this happen over the coming years. All this extra momentum will just start now. Basically, we'll start next year or end of this year. And we have already secured more than 70 infrastructure projects. And we expect an additional boost of our organic growth by 5% per annum based on our targeting here those new growth opportunities. I talked about this. We have established now the leading roofing growth platform in the U.S. 30 production facilities here well-spent to serve all the mega cities, all the large metropolitan area in the U.S., covering from the residential market to the commercial market, from new build to especially refurbishment and to system selling. Going to have an exciting day ahead of us on September 21st. We're going to meet in Connecticut and want to show you more details on how this growth platform of roofing will be a big part of Holcim's future. And I hope many of you are able to join us in Connecticut, where we show you much more details on technologies, system selling, on geographies in the markets. And so on. You see this also on the second slide where you see that we have now the leading range of advanced roofing systems. And all this, you are very much invited to meet here the business and to meet our people in the field to do this every day. The innovation, the customers who are doing already 7 percent, 70 percent of the sales in a real roof, 80 percent in system selling. It's really exciting. And I hope many of you. will be able to join us in Connecticut on September 21st. We have the reduction in CO2. This is at the heart of our strategy of Wholesale Strategy 2025, accelerating green growth. You see here the very rapid reduction of CO2 per net sales, another reduction of 18%. We're doing this by decarbonizing our existing products and solutions, but also by introducing new low-carbon footprint solutions like our new brands, EcoPlanet, EcoPact. And of course, the new footprint we are having with more solutions and product sales helps us here to get a new profile of Holcim as the leader in decarbonizing buildings. You'll see some of the key initiatives here on the next page. I just want to mention maybe two or three aspects. I think the climate report is the leading roadmap in our industry, which describes how Holcim goes to net zero. I'm very happy we have this reporting and the roadmap in place, and our shareholders are supporting this strongly. They voted with more than 95% at our last annual General Assembly. We are in carbon capture. I think we become the leader in carbon capturing. We have another three projects selected by the EU Innovation Fund and makes a total of five projects. while only nine grants were given. So this is very promising. I think this shows our projects are very realistic. They have great roadmaps and have all the right characteristics here to be part of decarbonizing Europe and going for carbon capture utilization and storage. Lastly, I'm super proud of our branding. We have introduced the EcoPak brand, so the first global range of low-carbon concrete. We introduced that brand three years ago globally, and this is already a $1 billion brand in 2023. Very proud that we have been able to establish this lighthouse brand here for Holcim globally. We have on EcoPlanet, it's the same, at least a 30% CO2 reduction in cement. We've introduced the brand two and a half years ago, and this will already be a $2 billion brand in 2023. And this is fantastic. big part of the roadmap here of Holcim for sustainability, decarbonization, but also to achieve further margin improvements in our business. On the carbon capture I talked already about, we have more details in the slide deck. We're also going to do some capital market day here sort of in November. We want to show you this. So please also reserve some time. We want to show you those projects. going to most likely show you some recycling. We're going to be one of the biggest recycling companies in the world, building new from old. So literally taking all the construction demolition materials back and turning them back into products. And this is already happening today. We're very happy to share this with you later this year. With this, I'm very happy to hand over to Stefan for some more details.

Good morning, everybody. Very happy to be here and to present our very good half-year results to you. I'll start with the bridge on the net sales. What you see here is the bridge explaining the 7.4% organic growth. The acquisitions and divestments impact are mainly India. You remember we divested that last year, but also Brazil, which was divested last year. And acquisitions in solutions and products worth probably 450 million. The divestment of India is about 2 billion. Organic growth, you see here. The FX effect, this is translation effects from the ever-appreciating Swiss franc. About 60% of that effect here is from mature markets, about 40% from emerging markets. It's about 6% effect on FX, which seems to be what the global companies reporting in Swiss francs show. On the next page, I want to show you the EBIT growth. So overproportional EBIT growth of 13.4%. The explanations on the bridge from the reported to the organic are pretty similar to what I explained on the sales chart. It is India, it is Brazil, but it's also the acquisitions and solutions and products. And the FX effect here, similar story as on the chart before about 7%. This is the segmentation that we show you. We show the company in five segments. This is because Our five segments have different drivers of the business, different growth drivers and different dynamics in the markets. And we think the broad-based growth that this company shows, that Wholesome shows, is a real strength of this company. We are transforming this company, and we think this is part of the story we want to explain to you, how we drive growth and how we drive the transformation in the future. Now, what I would also want to say here is we're going to explain more of that in the two events that Jan already mentioned. We're going to have the solutions and products events in September, and we're going to have the decarbonization event in November. And I think it would be great if you can visit those events, because then you will also understand why we segment the company this way. Now let me go into a bit more detail on each of those segments. I'm starting with North America with an outstanding performance. We have almost 16% organic growth on sales and we have almost 26% organic growth on recurring EBIT. The strong demand in both the US and the Canada And Jan said it before, the growth is supported by onshoring activities and investments in the energy sector. There are several regions in the United States that are currently practically booming and where cement product is almost short. They have a significant overproportional organic EBIT growth here. And we also expect a good performance to continue into the second half. At least we built enough stock for that. Latin America, another quarter of profitable growth, almost 24% organic sales growth, 16% recurring EBIT growth. It is the 12th consecutive quarter of profitable organic growth with a broad-based performance. We have particularly strong performances in Mexico. I think we explained before that we have infrastructure projects. There's a big dam. There's a Maya train. There are refineries. There are industrial projects as well. And we participate in all of those. We have a significant improvement in alternative fuels and in low carbon solutions. And we also expect to continue the performance very strong into the second half of the year. Europe. Europe sees a strong increase in profitability. You see a net sales organic growth of 10 percent with a recurring EBIT growth of almost 33 percent. This is broad based across the countries in Europe. And we increase profitability across all key markets. We have a strong margin expansion, as you can see here, driven by high value solution and very disciplined cost management. We already completed seven bolt-on acquisitions in aggregates, ready mix and in recycling operations. And we expect a strong H2 with an acceleration in the progress in decarbonization. Hence also our event in November of this year. Asia, Middle East, and Africa, again, outstanding margin expansion, almost 10% organic growth on sales, with 15% organic growth on recurring EBIT. Profitable organic growth expansion with a margin expansion of 4.5 percentage points. The performance here was driven mainly by Australia and Nigeria. We announced the divestment of South Africa, which is signed, and we also continue the strong momentum into the second half. That brings me to roofing, where our destocking is completed and where we now have a solid outlook into the second half. We have a strong growth momentum in the residential roofing in Q2 already, and we completed the destocking in the commercial roofing, as I just said. We continued the expansion with eight acquisitions, and as I just said, we have a strong growth in roofing expected in H2. I want to go in the next page. I want to go in a slightly bit more detail. Why do I make the statement that we have a positive outlook? I would like first to focus on the left side of the chart, which shows you our Elevate business, formerly Firestone. And what you see here is the effects we saw in the second and third quarter of last year. You remember probably we already explained to you at that time raw materials for this business were short. Hence, finished product was short on the market. Hence, roofing companies and construction companies basically bought any product they could get. They stored it on construction site. They stored it in warehouses. And therefore, we saw elevated levels of sales in the second and third quarter of last year. When that ended, we saw in the fourth quarter and the first quarter of this year the opposite effect. But what you can also see in the right bar, that this is coming back. And when we look at the second quarter of this year, month by month, we would also see a strongly increasing trend. So we're convinced that this is complete. On the other side, on the right hand side of the chart, you see Malarkey with strong growth momentum in Q2 already. You see a very strong second quarter. And lastly, Duralast, our latest acquisition that we consolidate as of April. Strong order books, recurring EBIT of up to 20 percent. Very positive momentum in H1. Performer sales this year of about 540 million. Big synergies and an EBITDA multiple of 7.4% post the synergy. So we think roofing looks into a very good second half. This is a look at our P&L. Reported EPS growth by 15% from 1 Swiss franc 90 to 2 Swiss franc 19. When you look at the P&L, you see about 11% negative sales, 6% negative operating profit. Remind you, this is reported. So if you extract India divestment and Brazil divestment, you come back to the like-for-like numbers that we talked about before. Cash flow or cash flow stands at around 80 million. This is OK. As you know, our business is very seasonal as in terms of cash flow. And this is weighed very heavily towards the second half of the year. This has always been like that in the last year, in the years before. So we make almost all our cash flow in the second half. So being slightly positive in the first half is good. The chart, in order to really understand the chart, I should really exclude India in the first half of last year, because if I did that, you would see that the drivers for us being slightly below last year is higher stock levels in the United States in order to be able to supply the second half and a bit of anticipated cutbacks. That's it for me. With that, I would like to give back to Jan for the outlook and guidance.