Cemetir Holding

Good afternoon. This is the Coruscall Conference Operator. Welcome and thank you for joining the Cementir Holding First Half 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 and good morning to everybody. Welcome to Charity Holding half-year 2024 results. I'm here with our chairman and chief executive, Francesco Caltagirone. And I'm going to present very quickly, go through the presentation deck that has been sent by email and posted on our website. So going through the presentation deck of page two, the key takeaways for these results are that these results are in line with the management expectations. with overall volumes up year-on-year, lower revenues and EBITDA and higher net profits. Cement, RMC and aggregate volumes were in positive territory year-on-year. Both revenues and EBITDA were impacted by important infrastructure projects being delayed in Denmark and temporary ban on exports from Turkey to Israel. In the last 12 months, the cash flow was impacted by extraordinary investments of 24 million euro, a higher dividend distribution, the purchase of 12 million CO2 emission rights, higher capex mainly linked to Belgium K4 upgrade in line with our industrial plan. Excluding one of items, EBITDA for the first half of the year would have been higher the previous year. 2024 guidance on both EBITDA and net financial position at constant perimeter are confirmed. Revenue guidance is revised downwards from around 1.8 to 1.7 billion euro in line with last year. Going through page three, first half results highlight very quickly revenues reached 811.8 million euro up down 3.4% year-on-year, non-GAAP revenues were €803.3 million, down 7.5% year-on-year. Demand volumes were broadly flat, whereas RMC volumes were up 4%, and aggregate volumes were up 6%. Lower revenues were recorded in all regions, with the exception of Turkey and Egypt, which recorded an increase in local currency. EBITDA for the period reached 192.7 million euros, minus 3.9% year-on-year. Non-GAAP EBITDA was 181.9 million euros, minus 10.1% year-on-year. The lower EBITDA was mainly in Nordic and Baltic and Asia-Pacific. A better EBITDA was recorded in Belgium. A strong Forex headwind reduced EBITDA by almost 20 million euros. Excluding no recording charges and income, non-GAAP EBITDA was down 5.6% versus the first half of 2023. Non-GAAP EBITDA margin decreased from 23.3% to 22.6% due to adverse geographical mix. EBITDA was down 9.7% year-on-year. Non-GAAP EBITDA was down 16%. Group net profit reached 97 million euro plus 7.4% year-on-year. Non-GAAP group net profit reached 102.2 million euro minus 6.9%. Net cash position reached 55.4 million euro, an improvement of 44.5 million year-on-year, including 43.5 million euro dividend distribution by the parents, an extraordinary 14 million euro of dividend distributed signed subsidiaries to third parties, some extraordinary investments of 24 million euro, the purchase of CO2 emission rights for 12 million euro, and a higher CAPEX by a pressing impact of 82.1 million versus 77 last year. Going through the different regions, very quickly, page four of the presentation. Nordic and Baltic accounting for around 43 percent of our EBITDA. In Denmark, domestic cement declined due to harsh weather conditions in Q1 and a weak residential market. And Furman Belt, the largest infrastructure project which recently entered the operational phase but was behind schedule. Ready Mix volumes were up 2% while aggregate volumes declined by 6%. EBITDA declined due to lower volumes and average prices despite ceilings on main inputs. Norway, RMC sales declined by 23% due to demand slowdown and adverse weather conditions and delays on some infrastructure projects. EBITDA was down as well. The Norwegian Krona also depreciated by 1.5% versus the Euro. In Sweden, ready-mix sales volumes increased by 25% thanks to the contribution of major projects, while aggregate volumes were down 12%. EBITDA was up year-on-year, and the Swedish corner was broadly aligned with the Euro average. Moving to the next page, number five, Belgium and France, accounting for 27% of Group EBITDA. The domestic cement volumes were stable in the first half of the year with moderate growth in Q2. Exports to France and the Netherlands were down double digits, mainly due to adverse weather conditions and market weakness. ReadyMix volumes were down 15% with a more significant drop in France, while aggregate volumes were broadly flat in the first half of the year. EBITDA was up, driven by lower production costs compared to each one of 2023, which was penalized by higher extraordinary maintenance costs and the purchase of clinker from third parties due to temporary kiln shutdowns. Moving to page number six, 30-year accounting for 15% of new EBITDA. From April 22, Turkey is considered hyperinflationary. The reported figures are non-GAAP, therefore exclude the application of IAS 29. Domestic cement volumes were up 10% thanks to significantly higher sales in Eastern Anatolia and supported by post-earthquake reconstruction. Semana exports were up 10% although penalized by the lack of exports to Israel as a result of the embargo. RMC volumes increased by 24% and aggregate volumes were strongly up due to the opening of a new quarry in Eastern Anatolia. Revenues in Euro decreased by 1.1% because of Turkish devaluation versus Euro of around 58.7% versus the Euro average If we exclude €5 million of non-recurring capital gains income in 2023, EBITDA declined by 7.7% year-on-year due to higher operating costs, negative effects, partially offset by higher volumes and prices. Moving to page 7, North America, counting for 6% of our EBITDA. White cement volumes were slightly up in the period with deliveries to Texas impacted by harsh weather conditions and fewer working days, with a backdrop of a residential market still suffering from higher interest rates. In Florida, deliveries were stable, while in California, grew in all market segments. EBITDA was down 12% due to lower selling price, due to strong competition and higher cement purchases and higher fixed costs. The U.S. was broadly in line with the Euro average Moving to page number eight, Egypt accounted for 4% of Group EBITDA. In this geography, domestic white cement volumes declined by 12% due to a weak construction market and the postponement of major public projects. Export volumes were slightly down due to lower volume shipments to the U.S. because of a different timing of deliveries. Revenue local currency was up 22.8% But in Euro, they declined by 10.2% due to a 36.7% Egyptian pound devaluation versus the Euro average. EBITDA increased due to higher sale prices, partially offset by lower sales volumes and Egyptian pound devaluation. And lastly, on page nine, Asia Pacific accounting for 5% of Group EBITDA, China, In China, revenue decreased by 16%, with volumes down by 11% and a modest price reduction, plus around 4.2%, but it may be the valuation versus the euro. Volumes were affected by the real estate crisis, a harsh weather, and longer national holidays. EBITDA declined due to lower sales volumes and prices, higher transportation costs. If we include €2.5 million of non-recurring capital gains income in 2023, EBITDA decline was actually 11.9%. In Malaysia, domestic cement volumes were flat due to a weak residential sector and closures for religious holidays in April. Exports were moderately up, driven by higher shipments to the Philippines and Vietnam. The last couple of slides, number 10, the guidance. anticipated there is only a partial revision to revenues from €1.8 to €1.7 billion in line with last year. EBITDA guidance of €385 million is unchanged as the net cash position of around €300 million at constant perimeter. CAPEX also around 135 million euro for the year is unchanged. This guidance refers to like-for-like ongoing operations, non-GAAP, and excluding extraordinary items. The last line is the sustainability highlights. You can see that our decarbonization commitments continues with 24.7 million euro investments in sustainability in the period, mainly for KILFOR upgrade in Belgium, which will allow alternative fuel usage to increase to over 70%. Our objectives have been validated by science-based target initiatives, as well as our long-term climate targets, in line with the 1.5% 1.5 Celsius degrees scenario. SBTI has also proved our overall net zero emissions target by 2050. We have been included also in the European Climate Leaders 2024 ranking by the Financial Times and Statista. We have been confirmed as well as the leader in the ESG Identity Corporate Index for the second year in a row. Lastly, we have introduced a lineup of white cement low-carbon brand called DECAR launched in Europe with 15% lower CO2 emissions versus Albert White Portland Cement. And this ends my brief introduction, and I now leave the floor to Mr. Castagirone to take your question.

Thank you.