Cemetir Holding

Good afternoon. This is the Chorus Call Conference Operator. Welcome and thank you for joining the Chimentir Holdings First Quarter 2024 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. Good afternoon, everybody. This is Marco Bianconi speaking. I'm here with our chairman and chief executive, Francesco Caltagirone. Good afternoon. We're here to take your question at the end of my short presentation. If you turn the presentation deck to page two, the key takeaways for this Q1 results are that results are in line with management expectations. Volumes of cement, ready mix, and aggregates are in positive territory year on year. Some important infrastructure projects have been delayed and are expected to kick in later in the year. Nordic and Baltic and Belgium performance was impacted by fewer working days, severe weather conditions, and still weak residential markets. The strong results in Turkey are impacted by currency devaluation, and the same for the Egyptian results, where the Egyptian pound devalued by over 53% in March 2024. Turning the page to page three, In terms of first quarter results highlights, revenues reached €368 million minus 11.2% year over year. Non-GAAP revenues were €367.1 million minus 11.3%. As mentioned before, cement volumes were up 2.3% due to the increase recorded in Turkey, which upset the reduction in volumes in other regions. ReadyMix volumes were up 3.7% and aggregate volumes were up 8.9%. And for unfavorable weather conditions, fewer working days due to Easter holidays and the negative exchange rate effect reduced revenues by around €50 million. EBITDA reached €66.5 million, minus 18% year-over-year. Non-GAAP EBITDA was 69.3 million euro minus 19% year over year. The lower EBITDA was recorded in Denmark and Norway and to a lesser extent in the US and Asia Pacific with a negative Forex impact of 9.7 million euro. Non-GAAP EBITDA margin decreased from 20.7 to 18.9% due to adverse geographical mix, meaning lower volumes in Europe only partially offset by higher sales in Turkey. EBIT reached €34.2 million, minus 30% year-over-year. Non-GAAP EBIT was €39.6 million, minus 29.6% year-over-year. Pre-tax was down 8.2%. Non-GAAP pre-tax was down 6.2%, to €64.1 million. net cash position reached €76.6 million, an improvement of €108.7 million year-on-year, including a dividend distribution of €34.2 million and including the IFRS 16 impact of €83.4 million. Turning the page to the largest region, Nordic and Baltic, accounting for around 39% of RUB EBITDA in Q1, In Denmark, domestic cement declined due to harsh weather conditions and fewer working days due to easter falling in Q1, and a residential market that is still not recovering. ReadyMix volumes were down 4%, while aggregate volumes increased slightly. EBITDA contracted due to lower volumes despite savings on main input costs. In Norway, ReadyMix Sales volume declined by 29% due to demand slowdown and adverse weather conditions and delays in some infrastructure projects. EBITDA contracted due to lower volumes, and the Norwegian krona depreciated by around 4% versus the Euro. In Sweden, ready-mix sales volumes increased by 13%, whereas aggregate volumes were down around 12%. but EBITDA improved versus last year. The Swedish krona was broadly in line with the Euro average. Moving to page five, Belgium and France. Here, domestic cement volumes declined by around 3% with exports to France and the Netherlands down double digits due to adverse weather and the general market weakness. Redemix volumes were down 20%, with a more significant drop in France, while aggregate volumes were broadly flat, versus Q1 of last year. EBITDA increased thanks to careful energy costs and selling price management. Moving the page to number six, Turkey, here, you know that from April 2022, Turkey is considered hyperinflationary, and therefore reported figures are non-GAAP and therefore exclude the application of YAS 29 and the evaluation of non-industrial property. In the country, domestic cement volumes increased by 22% thanks to significantly higher sales in Eastern Anatolia and in the Aegean region supported by post-earthquake reconstruction. Cement exports were up by 8% with ready mix volumes up by 31% and aggregate volumes strongly up due to the opening of a new quarry in Eastern Anatolia. Despite this very strong volume growth, revenue declined by around 2.6% because of the Turkish Lira devaluation. EBITDA reached 9.2 million euro driven by higher sales volumes and average cement prices despite a 65.8% Turkish Lira devaluation versus the Euro. Moving to page seven, North America. Here, in the United States, white cement volumes declined by around 4% as deliveries to Texas and New York were impacted by both harsh weather conditions and fewer working days with the backdrop of a residential market still suffering from high interest rates. In California, deliveries grew in all market segments. EBITDA was down due to lower cement volumes and selling prices due to strong competition and higher cement purchasing cost. There was also a minor 1.2% US dollar devaluation versus the Euro average. Moving to the next business unit, Egypt, on page eight. accounting for 5% of our EBITDA here, the domestic white cement volumes decreased by around 16% due to weak construction market and fewer working days, whereas export volumes increased. Revenue in local currency was up 17.4%, but revenue in euro declined by 1.7% because of a 53% devaluation of the Egyptian pound only in the month of March. EBITDA was down due to lower sales volumes, higher operating costs, and the EGP devaluation not upset by higher sales prices. Moving to the last business unit, Asia Pacific, page 9. In China, revenues declined around 17% with volumes down by around 10%, modest price reduction, and 6% revenue devaluation. volumes were affected by low temperature, early closure for Chinese New Year and a weak real estate demand. EBITDA was down due to lower sales volumes and prices. We recorded also a 6.3% currency devaluation versus the Euro. In Malaysia, on the other hand, cement volumes increased by 6% with domestic volumes down by nine due to very strong comparable figures than the previous year. exports were up, driven by higher shipments to the Philippines and Vietnam. Revenue and EBITDA were down due to a less favorable sales mix and Malaysian Ringgit devaluation. Also in Malaysia, there was a devaluation versus the Euro of around 8.9%. This brings me to slide number 10, the last one, where we confirm our 2024 guidance of revenues around €1.8 billion, and EBITDA around €385 million, net cash position of €300 million, and a CAPEX of around €135 million. This guidance refers to like-for-like ongoing operations, non-GAAP, and excluding any extraordinary items. With this, I would like to hand over the floor to Francesco, who is happy to take your questions.

Thank you.