Cemetir Holding

Good afternoon. This is the course call conference operator. Welcome, and thank you for joining the Chementeer Holding first quarter 2023 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 first quarter 2023 results. I'm here with our Chairman and Chief Executive, Francesco Caltagirone, who is happy to take your question at the end. I will go through nine slides of our presentation deck, starting with page number two with the highlights. Revenues in the first quarter increased by 14.5%, reaching €414.8 million. On a non-GAAP basis, they increased by 14.2% to €413.8 million, driven mainly by price increases. Cement volumes were down by around 4%, mainly Nordic and Baltic, Belgium and the US, partially offset by growth in Turkey. Ready Mix volumes were down 9.7% due to a negative trend in every country except Turkey. And aggregate volumes were also down by around 18%. EBITDA reached €81.2 million, up 33.8% year-over-year. On a non-GAAP basis, EBITDA reached €85.6 million, up 41.1% year-over-year. The higher EBITDA is mainly Nordic and Baltic, Turkey, Belgium and Egypt, and the lower EBITDA was recorded in the US and Asia Pacific. EBIT was up 49.5% to 49.2 million euro. On a non-GAAP basis, it was up 70% to 56.2 million euro. Profit before taxes reached 63.9 million euro, up 50.7%. on a non-GAAP basis was up 61.1% to 68.3 million euro. Net financial debt reached 32.1 million, down by around 56.6 million euro year on year, including IFRS 16 impact and a 28 million euro dividend distribution. Moving to the largest division, that's Nordic and Baltic, accounting for 48% of Group EBITDA, Here in Denmark, cement volumes were down with domestic markets affected by unfavorable weather and a slowing demand due to high inflation and interest rates. Lower white cement exports were due to a decline in some export markets. Also, RMC and aggregate volumes were down. EBITDA increased thanks to a tight control of energy costs and selling prices. We return to a pre-COVID profitability level in the country. In Norway, aridemic sales volumes were down due to a slowdown of residential and commercial demand and some adverse weather conditions, and some delays in new infrastructure projects. EBITDA was down due to lower volumes and higher operating costs, and also the Norwegian krona depreciated around 10.7% versus the euro. In Sweden, Both ready mix and aggregate volumes were strongly down as a result of the general drop in demand, especially in the residential sector. Lower EBITDA was due to lower sales volumes and higher production costs. The Swedish krona also depreciated by around 7% versus the euro. Moving the page to number four, Belgium and France, accounting for about a quarter of our EBITDA. Here, cement volumes decreased with negative performance in Belgium and the Netherlands, a stable performance in France. The falling demand was due to unfavorable weather and the slowing construction activity. The same was true for ready mix and aggregates. EBITDA increased thanks to tight control of energy cost and selling prices. Moving to page five, North America, accounting for around 7% of group EBITDA here, while cement volumes declined in line with the residential market. Deliveries to Texas and California suffered from a stronger contraction due to competitive pressure from imports. EBITDA was down due to lower cement volumes and higher operating costs. There was a positive contribution from concrete products business V&E Pipe. Also, the dollar revaluated by around 4.4% versus the euro. Moving to page 6, Asia-Pacific, accounting for 4% of Group EBITDA. Here, revenue in China was down by 6%, driven by lower cement prices and despite volumes up by around 3%. Until January 2023, cement sales were affected by lockdowns and the Chinese New Year. EBITDA was down in China due to higher variable costs and lower prices, and also the renminbi depreciated by around 3.1% versus the Euro. In Malaysia, revenue was down by 3.4%, driven mainly by a drop in clean-core exports due to a different calendar for shipping and lower deliveries in some countries. Domestic volumes increased as a result of good recovery in the construction market. Overall, EBITDA in Malaysia grew as a result of higher prices and reduced fuel and freight costs. partially upset by higher variable costs and lower volumes. The Malaysian Ringgit was in line with the Euro. Moving to Turkey on page 7, accounting for around 9% of Group EBITDA, here the revenue improved by 82% in Euro terms. Domestic cement volumes increased with significant higher sales in northeastern Turkey and Marmara, driven by new projects and lower sales in the Anatolia region. due to the depletion of infrastructure projects. Cement exports were down to focus on the domestic market. Ready mix volumes increased in line with the market and EBITDA reached 7.8 million euro, driven by cement prices more than offsetting production cost increase and currency devaluation. The Turkish Lira in the period devaluated by around 29.3% versus the euro. Moving to the last geography, Egypt on page 8, here accounting for 4% of Group EBITDA. Revenue declined by 12.8% because of the strong devaluation of the Egyptian pound versus the euro. And while cement volumes declined moderately with higher deliveries on the domestic market and lower exports, EBITDA increased thanks to tight control of energy costs and selling prices, despite a 79% Egyptian Pound evaluation versus the Euro. The last slide on page 9 is the full year guidance, which is unchanged. We expect for the year to reach around 1.8 billion Euro of revenues. EBITDA range between 335 and 345 million Euro. reached a net cash position of over €200 million after a capex of around €113 million. This guidance refers to a like-for-like ongoing operations, non-GAAP, so excluding IAS 29, and excluding any extraordinary items. This ends my short presentation, and I will leave now the floor to Mr. Castagirone, who is happy to take your questions. Thank you.

excuse me this is the course called 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 touchtone telephone to remove your question from the question queue please press star and two please pick up the receiver when asking questions the first question comes from Matteo Bonazzoni of Kepler thank you good afternoon I have two questions the first one