Cemetir Holding

Good afternoon, this is the Curriculum Conference Operator. Welcome and thank you for joining the Chairman Dear Holding First Half 2021 Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Marco Maria Bianconi, Head of M&A and Investor Relations. Please go ahead, sir.

Thank you, and welcome everybody to Chairman T. Holding's half-year results conference call. Good afternoon and good morning to everybody. You have received the presentation deck, so I will make a short presentation, go through the deck, and then leave the questions to Mr. Cantagirone, who is here with us today for any questions you may have. So starting with the highlights on page two, the results were positive. revenues reached €664.5 million, up 16.5% from last year, thanks to good performance in all geographies. Seven volumes were up 18.7%, driven by Turkey, Belgium and Denmark. EBITDA was up 36.6%, to €133.5 million, and there was a higher contribution from main geographies like Turkey, Belgium and to a lesser extent Asia Pacific and Egypt. EBITDA margin was up to 20.1% compared to the 17.1% of the first half of last year. 2020 figures were impacted by COVID-19 and there were also 5.6 million euro one-off on last year's figures. EBIT was up 83% to €79 million and net profits reached €47.9 million from €20 million of last year. This is after €9.7 million of financial charges and €6.9 million of taxes. Net financial debt reached €137.6 million, down over 51% over the 12 months from 142.9 million euro of last year. This includes 23 million euro of share buybacks and the dividends. Moving on to the different geographies, starting with the most important, page 3, Nordic and Baltic accounting for over 52% of our results. In Denmark, both grey and white cement volumes were up due to increased general market activity. White cement exports in particular were up over 22%, thanks to higher deliveries across the board in Europe, but also in the US. Great German exports were down 11%, mainly due to lower sales into Norway. RMC and aggregates were also up by 11% and 30% respectively from last year. EBITDA was slightly down by 2.5% in Denmark due to cost inflation, raw materials, electricity and other operating costs. Norway, RMC business was up 3% and there was a significant recovery from March onwards with the kickoff of some important projects. It's important to notice that the Norwegian krona appreciated around 5.5% of the Euro in the period. Sweden, the market was robust with favorable weather and a strong construction market where RMC and aggregates volumes were up 19.9% respectively from last year. Also in Sweden, the Swedish Krona appreciated 3.5% versus the Euro. Moving on to the second largest division, that's Belgium and France, on page 4. As you can see here, again, cement volumes were up around 10%. The positive trend was in Belgium and France, whereas the Netherlands and Germany were relatively weak, although much less important in terms of size. ReadyMix volumes were up 30% thanks to some important projects kick off and also aggregates were up 10% thanks to strong domestic demand and exports to France. Operating leverage and some maintenance costs being postponed during the quarter allowed the EBITDA to increase by 25.2% in the period to 29.1 million euros. There was a slight negative impact from higher raw material costs. Moving to page five, to North America. As you can see here, sustained volume growth also in the U.S. up 13%, especially in the areas of the state of Florida and the York region, but also thanks to a favorable base effect. There was also a 1.2% increase in revenue despite the currency translation impact, which was down on average in terms of the FX by 10% versus the euro. EBITDA was, however, up 8% thanks to good cost control. Moving on to Asia-Pacific, on page 6, as you can see here, China reported strong demand with white cement and clinker sales volumes up 16% in the period. EBITDA was up 22.6%. Here, wet cement sales were up almost 48%, whereas the domestic market was up 25%. In June, there was also a new lockdown in Malaysia, which negatively affected the activity both in the domestic and the export market. Export volumes were up 50%, and there were increased exports of cement and clinker to Australia, the Philippines, and Bangladesh. EBITDA overall was up 79%, despite the negative impact of increasing fuel and other fixed costs. Moving to Turkey, on page 7, as you can see here, grade cement volumes increased by around 29%, with domestic sales actually up 40%, with strong demand in the Marmara, Anatolia, and Aegean regions. Exports were down by 8%, and average cement prices were up in local currency, according to different local trends. RMC volumes were up strongly by 80% thanks to the start of new infrastructure projects and the opening on some new plants. In the period, we have to record 33% Turkish Lira devaluation versus the Euro. Overall, there was a strong turnaround in EBITDA and across the board, including RMC and the waste business. We have to remind that 2020 figures included €3.1 million of one-offs. The last area is Egypt, on page 8. You can see that here, again, white cement domestic volumes increased significantly by 30%. White exports were up by 20% and overall EBITDA was up by 41.7% thanks to operational leverage and good cost control. In the period, the Egyptian pound devalued by around 8.5% versus the Euro. The last slide is about the revised 2021 full year guidance. We are upgrading our guidance for the year. We expect now revenues of 1.35 billion euro from previous 1.3 billion and EBITDA range from 295 to 305 million euro from 285 to 295 with the previous guidance. and net debt unchanged to 30 million due to mainly a higher cash outlay than estimated due to the buyback. And then the CAPEX is unchanged at 95 million euro. Obviously, this forward-looking indication does not include any new outbreaks on the COVID-19 pandemic. This ends my very short presentation, and I will now leave the floor to our chairman and chief executive, Francesco Cantagirone, who's happy to answer any question you may have.

Excuse me, this is the course call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Matteo Bonizzoni of Kepler. Please go ahead.