Cemetir Holding

Good afternoon. This is the College School Conference Operator. Welcome and thank you for joining the Tenanted 2025 First Half 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 make a signal and operate by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Marco Mario Bianconi, Head of MA and Investor Relations. Please, go ahead.

Thank you. Welcome, everybody, to Chairman Tirulli's first of 2025 results. I'm here with Francesco Caltagirone, our Chairman and Chief Executive, who would be happy to take your question at the end of my short presentation deck, which has been distributed So I will immediately go to page number two of the presentation, key takeaways. On the first half, 25 results, the first point is that they are in line with management expectations. With overall cement sales volumes stable, albeit accelerating in Q2, as far as cement and aggregates are concerned, slightly higher revenues, and lower EBITDA compared to the first half of last year, mainly due to negative currency impact and non-recurring charges. EBITDA improvement in the Nordic and Baltic region was offset by a reduction in all other regions and a 7 million euro negative exchange rate effect. Two non-recurring events affected healthier operating performance. The first was a fire in the alternative fuel feeding system at the Goran plant in Belgium. The second one, some technical issues during the restart of the second production line in Egypt and the postponement of some cement shipments. As far as the 2025 guidance, all targets are confirmed, excluding no recurring charges and despite a very uncertain commercial and geopolitical backdrop. Moving to page three with the main first-off results highlights. Revenue reached 796.7 million euro minus 1.9% year-over-year. Non-GAAP revenues were up 0.5% year-on-year to 807.1 million euro. There was a higher revenue in Nordic and Baltic, in Turkey and Malaysia. with some FX headwinds in both Turkey and Egypt and lower revenue in all the other regions. Cement volumes were broadly stable thanks to growth in Turkey and Nordic and Baltic and Malaysia and the general decline in the other regions. RMC volumes were up 1.5% driven by the positive performance of Turkey and Norway and Belgium while declined in Denmark and Sweden, whereas aggregate volumes were up by 4.8%. EBITDA reached €173.5 million, down 9.9% year-over-year. Non-GAAP EBITDA was €171.5 million, down 5.7%. Lower EBITDA was due mainly to negative exchange rate of €7 million and non-recording charges. Non-GAAP EBITDA margin reached 21.2% from 22.6% in the first half of 2024. EBIT was down 18.5% to €102 million. Non-GAAP EBIT was down 12.5% to €105 million. Financial result was €2.7 million, down from the €22.1 million recorded in the first half of last year which was due to a one-off lower net FX income. Group net profit was down 24.2% to 73.5 million euro. Non-GAAP group net profit was down 20.4% to 81.4 million euro. Net cash reached 144 million euro, an improvement of 88.6 million euro year-on-year, including 43.5 million euro dividends by the parent company, 6 million dividends to minorities and equity investments in Egypt of 30 million euro. Turning the page to number five, Nordic and Baltic accounting for roughly 50% of our group business. Here, Denmark is the most important country. Great domestic cement volumes were slightly down versus the first half of last year. with a more marked decline for white domestic cement, with a still weak residential sector. Exports were up 7%, mainly due to higher deliveries in Norway and Iceland. Ready mix volumes were down 4%, whereas aggregate volumes were up 16%, with demand remaining strong. EBITDA was up 5.2% year over year, mainly due to the positive contribution of cement, some savings in purchasing cost, fuel, and electricity consumption. Norway, ready-mix sales volumes were up 10% due to favorable weather conditions and the startup of some major projects. There were signs of a slight market recovery, although overcapacity and price competition impacted the results. EBITDA improved thanks to higher volumes and the Norwegian krona in the period depreciated by 1.5% versus Euro. In Sweden, revenue sales volumes were done moderately, while aggregate volumes were done around 4% due to the lack of new infrastructure projects and some excess production capacity. EBITDA was up from last year, and the Swedish krona revaluated by 3% versus the Euro average. Turning page to number five, Belgium and France accounting for some 27% of group share of group EBITDA. Domestic cement volumes in this region declined by around 8% in the first half due to persistently weak demand. Exports also fell by around 7% even though they showed an improvement over Q125 due to the slowdown in construction activity mainly in northern France and a temporary closure of a railway line. Ready Mix volumes were up 2% driven by the continuation of major projects and despite harsh weather conditions in January. Aggregate volumes were broadly flat from last year. EBITDA was down mainly due to the cement segment penalized by lower sales volumes, higher electricity costs, and non-recurring charges due to the fire in the alternative fuel feeding system at the current plant. Turning page to number six, Turkey accounting for 12% of our group EBITDA. From April 2022, you know that Turkey is considered hyperinflationary, so we're just looking at the non-GAAP figures. Domestic cement volumes were up by 5% with a strong rebound in Q2, despite ongoing macroeconomic challenges. Cement and clinker export were up 2%, despite the export ban to Israel, which is effective since the second quarter of last year. Ready Mix volumes were up 2%, supported by two new plants, and aggregate volumes were up by 19%. Revenue was up 5%, thanks to higher volumes and prices across all segments, despite the Turkish Lira devaluation. EBITDA was down 25% due to rising costs, particularly personal expenses, mainly driven by seasonal inflation-related wage dynamics, which led to a retroactive salary adjustment from the beginning of the year. Cars' planned sale is in progress, with closing expected by year-end. There was, in the period, around a 20% Turkish lira devaluation versus the euro average. Turning to page seven, or the median counting for around 7% of group EBITDA, volume, white cement volume went down around 3% with some improvement in the second quarter. The residential market remains under pressure due to high mortgage rates and persistent inflation. Texas saw the sharpest decline impacted by adverse weather and supply disruptions. The York region experienced a milder decline, mainly due to colder than average winter temperatures, while California and Florida posted moderate sales growth. EBITDA was down only slightly thanks to good cost control. In that period, the U.S. dollar devaluated by an average of 1% versus the Europe's. Turning to page 8, Asia-Pacific, accounting for 4% of group EBITDA, Revenue in China was down by 11.5% due to lower selling prices in a context of stagnant demand and delayed effects from government stimulus measures. EBITDA was down 31.9%, affected by weaker pricing despite only a slight decrease in volumes. The renminbi revalued by 1.6% versus the euro average. In Malaysia, On the contrary, revenue increased by 1.1%, driven by higher sales volumes, mainly exports. Total volumes were up 10%, mainly due to larger clinker shipments to Australia. Domestic volume, on the contrary, though marginal in volume, declined by 10%, also due to orders brought forward to December 24, and some delays in major projects. EBITDA declined by 18.1% due to lower export prices reflecting a different product and destination mix, despite some cost savings and higher volumes. In the period, the Malaysian Ringgit revalued by 6.5% versus the Euro average. The last region on page 9, Egypt, accounting for 3% of Group EBITDA, Revenue declined by 11%, mainly due to the 23% depreciation of the Egyptian pound, despite a 9% increase in local currency revenue. White cement volumes declined by around 2%, impacted by a weak second quarter, mainly due to lower export linked to the postponement of shipments for technical reasons. Domestic market was soft in early 25, but showed sign of recovery in June with still high inflation, currency devaluation, rising energy costs, and some pressure on manufacturing. EBITDA was down mainly due to high operating costs, only partially offset by a more favorable product mix and higher selling prices. No recording costs related to the reactivation of a second production line, ideal for nine years, caused production disruption at the Ellabrish plant. In the period, the Egyptian pound devalued by around 23% versus the Euro average. Just a few highlights about the non-financial aspects. Our decarbonization commitment continues. CO2 emissions per ton of great cement were down 3% to 616 kilograms. CO2 emissions per ton of white cement were slightly higher to 862 kilograms. We were recognized by Sustainalytics as an ESG industry top rated company for the second consecutive year. We achieved an A score in climate change by CDP and A- score in CDP water for the third consecutive year. In March 25, Trementir and Air Liquide officially signed a 220 million grant agreement with the European Innovation Fund for the ACCION carbon capture and storage project in Denmark. The project will enable the avoidance of 1.5 million tons of CO2 emissions per year once fully operational. We were included also in the Europe's Climate Leaders 2025 ranking by the Financial Times and Statista. Decarb, the first low-carbon white cement brand, was launched in Malaysia with a 12% lower CO2 emissions versus Albert Portland white cement. We were also included in the world's most sustainable company 2025 ranking compiled by Time and Statista. And we were recognized for the second time as a supplier engagement leader by CDP. That leads me to the last slide, number 11, regarding Our guidance for 2025, which is confirmed with a revenue of €175 billion for the year, an EBITDA of around €415 million, a net cash position of around €410 million, and a CAPEX of €98 million. This guidance refers to like-for-like ongoing operations, non-GAAP, and excluding any non-recurring items. With this, I end my presentation and I hand over to Mr. Cantagirone who's happy to take your question. Thank you very much.

Excuse me, this is the call school conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question, may press star and one on the touchtone 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 1 at this time. The first question is from Matteo Bonizzoni of Kepler Cheveux. Please go ahead.