Cemetir Holding

Good afternoon, this is the Coruscall Conference Operator. Welcome and thank you for joining the Cementir Holding 9 Months 2022 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. Good afternoon and good morning. Welcome to Chairman Tirol being 2022 first nine months results. My name is Marco Bianconi, and I'm here with our Chairman and Chief Executive, Francesco Cattagirone. Good afternoon. And I'm going to go through 10 slides of presentation deck that have been distributed. And at the end, we're happy to take any questions you may have. Starting with the presentation on page two, just a few financial highlights on the period. Revenues reached 1.25 billion euros, up 25% year over year. Excluding IAS 29, revenues reached €1.248 billion, up 24%, mainly driven by price increases. Overall, volumes were down in low single digits in cement due to negative trend in Turkey, Denmark, China, and Egypt, a mid-single-digit decline for RMC and aggregates. EBITDA reached €238.3 million, up 10.8% year-over-year, excluding IAS 29. EBITDA reached €252.9 million, up 17.6%. Positive results in Belgium, Denmark, Turkey, US and Egypt, and negative results in Asia-Pacific and Sweden. This EBITDA includes €10.7 million of Turkish non-industrial land revaluation. EBIT reached €145.1 million, up 8.8% year-over-year, excluding IAS 29. EBIT would have been €167.3 million, up 25.5%. Profit before taxes reached €160.5 million, up 32.5%. And then financial debt reached €29.9 million, a reduction of over €70 million year-on-year, including IFRS 16 impact and 28 million euro of dividend distribution. I'm going to skip page 3 just to highlight the fact that Turkey is reported according to IAS 29 and the main point to get across this slide is that there is a minor effect of revenues and EBITDA which is almost completely offset at the net financial income level. So the overall impact of the US-29 on pre-tax is almost negligible. But we can go into details if necessary. Moving on to the different geographies on page four, starting with the most important division, accounting for around 45% of Group Ibiza, Nordic and Baltic. Here you can see that Denmark cement volumes were up 10% due to increased market activity and favorable weather and new infrastructure projects. while cement exports declined due to a redistribution of two US exports and other group companies and lower sales in some European countries. Ready Mix volumes were down 7% due to a different commercial policy and aggregates also were down 26% due to difficult comparable figures. Overall, EBITDA increased by 9% in this region, Denmark, driven by cement business where stronger prices offset high raw materials and energy and logistics costs. In Norway, RMC sales volumes were up by 5%, mainly driven by new infrastructure projects with prices up. There was a higher EBITDA thanks to rising volumes and prices despite cost inflation. There was also a mild Norwegian krona revaluation versus the euro in the period. In Sweden, results were a bit lower as RMC sales volumes were down 12% and aggregate volumes were down 33% due to the completion of major infrastructure projects in the period. As a consequence, EBITDA was lower than last year. And there was also the impact of a mild Swedish krona devaluation versus the Euro. Moving to page five, Belgium and France, As you can see here, cement volumes were broadly unchanged, with average prices up. Ready mix volumes were down by around 4%, and aggregate volumes were up by 4%, driven by stronger demand for infrastructure and favorable weather, mainly in Belgium. Overall EBITDA increased by 18% in the period from last year, benefiting from higher prices, despite the sharp rise in fuel and electricity costs, as well as raw materials and fixed costs. Moving to page number 6, North America. Here, cement volumes growth was moderate, only around 2%, driven mainly by good trading in Texas and California. whereas in the York region and in Florida, there was a negative impact due to bad weather and some logistical problems. Overall, good cost control and higher cement prices were behind an EBITDA increase of around 31% from last year. There was also a positive impact from currency of around 12% US dollar revaluation versus the Euro in the period. Moving to the next slide on page seven, Asia-Pacific. Here, looking at China, revenue was actually up by 11.5%, driven by cement price increases, whereas the volumes were down 8% due mainly to lockdown in the region and logistics issues and some weather conditions. Overall, in China, EBITDA was down 9% due to increased variable cost and lower volumes despite higher average prices and a positive exchange rate impact. In Malaysia, revenue was up by 31%, driven both by pricing and volumes. EBITDA, though, declined by around 11% as a result of a higher fuel and freight cost to Australia. There was also a revaluation of 6.5% of the Malaysian ringgit versus the euro in the period Moving to page number 8, Turkey. Here, cement sales in Euro increased by 44.7%, driven by price increases, despite the 74% Turkish Lira devaluation versus Euro. Domestic cement volumes were down 13%, impacted by bad weather in Q1, and a short contraction in some regions like Eastern Anatolia. Cement exports were up by 10%, and RMC volumes were down, actually, by 10.5%, whereas aggregates were up 70% due to full ramp-up of the new aggregate business that was acquired in Q4 of last year. EBITDA includes 10.7 million euro of non-industrial property land revaluation, and like-for-like improvement was driven by cement price increases more than offsetting production costs. On page 9, in Egypt, You can see that white cement volumes declined by 5%, with domestic sales down by 7% due to inventory build-up by Egyptian customers and greater competition. Also, export was mildly down due to lower deliveries to certain countries. Overall, EBITDA increased by 24%, driven by higher prices despite rising fuel costs. There was a stable Egyptian pound currency exchange versus the euro. And the last slide, page 10, is the full year guidance, which has been unchanged, with revenues for the year expected to exceed €1.5 billion, an EBITDA range between €3.05 and €3.15 million, a net cash position of around €60 million, after a CAPEX of around €95 million. and clearly this is a guidance that has been given before the implementation of IAS 29. So now I'm opening up the floor to any questions you may have to our chairman and chief executive. Thank you.

Excuse me, this is the Coruscant Conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on your touch-tone telephone. To remove yourself from the question queue, please press star and 2. Please pick up the receiver when asking questions. Anyone who has a question may press star and 1 at this time. The first question is from Emanuele Gallazzi with Equita. Please go ahead, sir.