Amrize Ltd Ordinary Shares

And welcome to the analyst and investor video conference for Holcim's first half year 2024 results. I'm Bernd Pommerin, head of investor relations, and it's a pleasure to welcome also our CEO, Miljan Gutovic, and our CFO, Stefan Kindler, for the presentation today. After the presentation, you will have the opportunity to ask your questions. To have a smooth flow, we ask you please to either join by phone or by webcast in order to ask your questions. If you join by webcast, please simply press the Q&A button and then follow the instructions to put your question to us. If you join by phone, please press star 14 to queue up for the line. If you want to cancel your question, please press star 15. With this, I hand over to Miljan. Miljan, please. Thank you, Bernd.

Good morning to all of you and thank you very much for joining us for our H1 update. We are very pleased to share with you that we have achieved a record profitable growth in H1 of 2024. As you can see, our EBIT is up 12.7% in local currency and also 8.1% in Swiss francs. We achieved net sales growth of 1.6%, and we are very pleased with our margin expansion. We achieved record recurring EBIT margin of 23.2%. We also grow our earnings per share by 10%, and we continue with our highly synergetic M&A activities. Because of all of this, because of our strong financial performance, from our absolute EBIT growth to our margin expansions, we are confident to upgrade our EBIT margin from 18% to above 18.5% for the full year. On the next slide, you can see probably the most exciting slide in my deck, new record Q2 recurring EBIT margin. We have grown 210 basis points of recurring EBIT margin in Q2. This was driven by our disciplined execution of strategic priorities. We are scaling up our sustainable building solutions. we are investing in decarbonization and circularity as a profitable growth drivers. We continue with our value accretive M&A with focus on the most attractive markets and also the most attractive segments. And we continuously work on improving our operational efficiency and also exercising strong cost discipline. On the M&A side, very pleased to share with you that we completed 11 acquisitions in H1 and four divestments. We bought four companies that are active in construction and demolition material recycling. in UK, Belgium, Germany and Switzerland, some of the most attractive markets when it comes to circular construction. We also expand our activities in solutions and products with three new acquisitions and we are constantly enhancing our footprint in aggregates and ready mix with acquisitions in US, Mexico, Poland, Germany and Switzerland. Very pleased to make significant progress on CO2 per net sales reduction of 7%. We are leading in sustainability from sustainable building solutions to circular constructions. And we want to have the best in class transparency about our initiatives. That's why we published our third climate report, which was fully supported by our shareholders in the recent AGM. On the circularity side, we are very excited about the progress we are making. We have bought four highly accretive acquisitions. These acquisitions will add another million tons of construction and demolition materials that we will recycle. And also, this will give us more than 100 recycling platforms in Europe and also another 40 outside the Europe. The demand for sustainable building solution continuously increases. As you can see from this slide, our EcoPact, the low carbon concrete, has reached 28% of the total sales in ReadyMix. And our low carbon cement, EcoPlanet, has reached 26% of the total sales in cement. And we are very pleased that we are scaling up sustainable building solutions across the world, advancing the energy transition, empowering AI and, of course, modernizing infrastructure. As you can see from this slide, we are supplying some high profile projects like a wind farm in Belgium, We are working with Amazon to supply our low carbon offering to data centers. There are 90 more of the data centers that will be built in the next four years, half in US and the rest in Europe and Australia. And Holcim is well positioned to capture this opportunity. And of course, we are working on the key infrastructure projects. Example is of Metro Tunnel in Melbourne, Australia. I will stop here and I'll hand it over to Stefan for financial highlights.

Good morning. Thank you very much, Milan. Good morning, everybody. Pleasure to be here today with you and present our financial highlights of the first half year of 2024. We grew sales in local currency by 1.6%. The organic sales growth was flat. We experienced a bit softer volumes, but our Portfolio of premium branded solutions driven by decarbonization and also driven by solutions and products helped us to continue with our approach to favor value over volume. What you see also here is that we had a contribution of net M&A of 1.9% and the FX headwind was at 3.5%, much less than last year where we had a headwind of 6.8%. So this moderated. When we look at the EBIT bridge, we reached 2.2 billion Swiss francs in EBIT in the first half. This is the highest we've ever had. We grew in local currency of 12.7%. But what is really important also in a world of appreciating Swiss franc, we grew in absolute by 8%. This is very important for us because it also helps us for the free cash flow later on. The FX moderated again here to 4.6% from the highs of last year. Our margin in the first half was at 17.2%, up 160 base points in the second quarter, as Miljan said, even up by 210 base points to 23.2%. Our margin is driven by our premium branded portfolio. by a value over volume strategy, by decarbonization and by solutions and products. This helps us to win on the commercial side and then strong focus on the cost side also where we look at from distribution cost over raw materials down to fixed cost. We control the controllables and keep those costs under control in order to drive margin. When we go and look at the regions, you see that we have overproportional EBIT growth across all segments, from North America, Latin America, Europe, over to solutions and products. Every one of our regions grew margins in the first half of this year. I quickly run through the regions with you to give you a bit of a flavor of where we are. North America reached a new level of profitability. We still got strong fundamentals in the market. We hear about weather. We hear about a short-term softness in volumes. We still believe in the strong fundamentals. We have 100-plus infrastructure projects already secured. And in the first half, we reached a margin expansion of recurring EBITDA. by 240 basis points to 19.4%. So we expect a strong performance to continue for 2024. Latin America, 16th consecutive quarter of profitable growth. We have an outstanding H1 recurring EBIT of 35.6%, up 120 basis points. I always remind that this is not just one country that's carrying, it's all our countries in Latin America that have this level of profitability. So it's a very good result here in the region. We have the most advanced distribution network with more than 2,000 retail stores, our Descensa branded stores network. This helps us to drive innovation into the market. Also, when we do acquisitions, we have an immediate leverage to drive volume of these products through our store network. And of course, nearshoring is driving infrastructure and commercial investments in the region that also drives our growth. Europe. Fantastic story in Europe, the seventh consecutive quarter of profitable growth. We have an expansion of recurring EBIT margin by 240 basis point to over 16%. We did six bold on acquisitions in the areas of aggregates, ready mix, construction, demolition materials, and recycling solutions. And we are convinced that the strong earnings momentum will continue going forward. Asia, Middle East, Africa, very good market dynamics in Northern Africa. Morocco and Algeria particularly. We have an expansion of the recurring EBIT margin by 240 basis points to 23.5%. We continued with our evolution of the portfolio and we closed three divestments in the first half of this year and also here we expect the earnings momentum to continue. Lastly, solutions and products. Strong net sales increase driven by the roofing systems. The margin expansion is based on that sales growth driven by the scale of 100 basis points. We did three acquisitions in this segment in Europe and in Latin America, and therefore also strong outlook for the rest of the year. If we look into the financials, the good results on the profitability are also reflected in the earnings per share. Our earnings per share before impairments and divestments are up by 10%, of course, driven by the record recurring EBIT in the first half and very tight control of all the cost items between EBIT and net profit. Free cash flow, nice expansion of our EBITDA by almost 170 million. This is what I mentioned before, important for us that we can grow in absolute, so nice expansion here. Working capital almost flat, some timing issues in financial payments and other payments down here, but mainly then CapEx. We spent a bit more CapEx in the first half this year than we did in the last half. So with a 48 million positive free cash flow, right around where we've been in the last years. This is seasonally the number where we usually are for the half-year mark, and we therefore feel that we're well on track to achieve our guidance for 2024. Lastly, I want to give a quick look at the debt level. Also here on the level that we usually are at this time of the year, you see last year we were at $11 billion. This year we are at $10.9 billion. the free cash flow that came in, net M&A, but then also very important, almost 2 billion Swiss francs returned to shareholders via dividends and share buybacks, and then some other items that are usually affecting our net debt level at this time of the year. Last but not least, the share buyback program. You might remember at the full year results conference, we announced a 1 billion Swiss franc share buyback program to be finished by the end of this year. As of yesterday, we had bought back shares worth 516 million. So we're halfway through the program, which is the right timing, we feel. So we're on good track to finish that program by year's end. This is in terms of an update on that. With that, I'm happy to give it back to Miljan for the outlook and the guidance.