Cemetir Holding

Good evening. This is the course called Conference Operator. Welcome and thank you for joining the Chairman-Tier Holding first nine-month 2025 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, everybody, and welcome to Chairman Searholding's 2025 nine-month results presentation. I am here with our Chairman and Chief Executive, Francesco Cartagirone, who is happy to take your question at the end of my short presentation. I will go through the presentation deck, which has been distributed, starting with page number two, with the key takeaways about our results. The first point is that the microeconomic scenario is still characterized by high uncertainty, driven by geopolitical and trade tensions, and further exacerbated by protectionist measures in the U.S. which are affecting actually the global economic growth rate. First nine months results were in line with our expectations with a third quarter showing improvement both in cement and in aggregate volumes. Revenues were broadly stable with slightly lower EBITDA compared to the same period of last year, mainly due to 12.5 million euro negative currency effect and 2.7 million euro net non-recurring charges. There were two non-recurring events which affected the operating performance in the period. First was a fire in the alternative fuel feeding system in Belgium, and the second were technical issues with the restart of the second production line in Egypt. Further details will be given later on. The 2025 guidance is confirmed with revenues of around 1.75 billion euro, EBITDA of around 415 million euro, and net cash of around 410 million euro a year end. This forecast excludes any non-recurring items and are determined on a like-for-like basis. If you can turn the page to page number three, just a few financial highlights. Revenue reached 1.227 billion euro, minus 0.7% year over year. Non-GAAP revenues was up 0.4% to 1.2324 billion euro. At constant 2024, exchange rate revenue would be now 5.6%. Cement volumes were up 2.4%, mainly thanks to Turkey, with a slight decline in Belgium and Denmark, whereas RMC volumes were stable and aggregate volumes were up by 5.2%. EBITDA was down 2.9% year-over-year to 287.3 million euros. Non-GAAP EBITDA was down only 1.8% year-over-year to 284 million. The lower EBITDA was mainly due to the negative exchange rate effect of 12.5 million mentioned before and non-recurring charges of 2.7 million euro. Non-GAAP EBITDA margin reached 23% versus 23.6% on the same period of last year. EBITDA was down 7% year-on-year. Non-GAAP EBITDA was down 6%. Net financial result was negative by 0.3 million, down from 18.1 million in the first nine months of 24, mainly due to higher foreign exchange gains recorded in 2024, linked to the over 50% devaluation of the Egyptian pound versus the euro. For this reason, profit before tax on a reported basis was down 17.4%, and non-GAAP pre-tax was down 14.2% year-on-year. Net cash position is very strong, 198.5 million euro, an improvement of over 118 million euro year-on-year, including 43.5 million of dividends by the parent company and 6 million of dividends to minorities. Let's go through the main geographies. If you turn to page four, Nordic and Baltic, which is the largest region, 47% share of our group EBITDA. In Denmark, gray and white domestic cement volumes were slightly down versus last year, with the residential sector still relatively weak. The ferment project volumes remain below forecast. Export were up 4%, mainly to higher deliveries in the region. RMC volumes were down 4%, whereas aggregate volumes were up by 18% with strong demand. EBITDA was up by 5.9%, mainly due to the positive contribution of cement and savings in fuel and electricity consumption. In Norway, RMC volumes were up 9%, supported by favorable weather conditions and the start-ups of major projects. They are signs of market recovery, although there is still a bit of overcapacity in price competition. EBITDA was up due to higher volumes and cost efficiency, and this despite the Norwegian krona depreciating by 1.1% versus the euro in the period. R&C volumes were slightly up, whereas aggregate volumes were slightly down due to the lack of new infrastructure projects. But EBITDA was actually up, driven by higher prices. Swedish krona revaluated by 2.7% versus the Euro average. Turning to page five, Belgium and France accounting for a quarter of our group EBITDA. The domestic cement volumes declined by around 7% in the first nine months due to weak demand. Exports also were down by around 6% due to a physiological market slowdown in France following the conclusion of the Paris Olympics. RMC volumes were stable, driven by continuation of major projects, with different trends between Belgium and France. Aggregate volumes were broadly in line with last year, with growth in Belgium and the Netherlands but a fall in France. EBITDA was up by 3%, including a now-recurring net charge of 2.7 billion due to the fire in the filling system of alternative fuels at the current plant, partially offset by a land sale gain. Recurring EBITDA for this reason would have been higher by 6.9% year-on-year, The cement segment was penalized by lower volumes and higher electricity costs, whereas RMC benefited from higher prices and additional services. Turning to page 6, Turkey accounting for 15% of Group EBITDA. Let's remind ourselves that Turkey has considered hyperinflationary since April 2022. So domestic cement volumes were up by 3% despite ongoing microeconomic challenges and mixed regional trends. Cement clinker and clinker export were up 5%. RMC volumes were slightly down, whereas aggregate volumes were up by 18%. Revenue and EBITDA declined by 1% and 12.9% respectively, penalized mainly by the Turkish Lira devaluation, which was around 23% in the period. With regards to the Kars plant sale, it is in progress, and the antitrust review is still pending. Turning to page seven, North America, accounting for 6% of Group EBITDA. Volumes remain in line. with last year, the residential market continues to be affected by high prices and high market rates with uncertainties regarding the tariff quality. Texas saw a sharp decline, impacted mainly by adverse weather and some gas supply interruptions. The York region experienced a mild drop, influenced by harsh weather, whereas California and Florida volumes recorded a moderate increase. EBITDA was down 4%, mainly due to higher transport and production costs, only partially offset by price increases and cost savings. In the period, the US dollar devaluated by around 2.9% versus the Euro average. Turning to page 8, Asia Pacific accounting for 4% of Group EBITDA. In China, revenue was down 9.6% due to lower selling prices in a context of stagnant demand and delayed effects from government stimulus measures. Volumes were slightly up, and EBITDA was down 26.3% affected by weak pricing despite cost savings. The renminbi devaluated by 3.2% versus the euro. In Malaysia, revenue was up by 3.3%, driven by higher field volumes, mainly clinker and cement exports. Total volumes increased by 16%, mainly due to larger clinker shipments to Australia. Domestic volume, although marginal, declined by 5% due to some delays in major projects and some ongoing trade tensions. Cement exports rose by 7%. EBITDA was down by around 8%, mainly due to US dollar and Australian dollar depreciation, with 80% of our export denominated in those two currencies, despite some cost savings and higher sales volumes. In the period, there was a 4% revaluation of the Malaysian ringgit versus the euro. Turning to the last region, Egypt, page number nine, accounting for 2% of group EBITDA, Revenue declined by 1.2%, mainly due to a significant depreciation of the Egyptian pound, around 17% versus the euro average, with a 15% increase in local currency. White cement volumes were up 6%, mainly driven by exports to the U.S., to Morocco, France, and Italy. Domestic cement volumes were down due to a soft market, high inflation, and currency devaluation and rising energy costs. The reactivation of the second production line, which has been idle for nine years, caused some production disruptions and clinker quality issues, leading to higher third-party purchase costs. These issues were solved by the end of June, but clinker purchases continued in July. EBITDA was done mainly due to currency devaluation and higher operating costs only partially offset by higher export volumes. Two words about our sustainability achievements. On page 10, we continue to receive a number of recognitions on our ESG efforts. We have been for the second consecutive year nominated by sustainability among the ESG industry top rated companies. We score with an A rating in climate change and A- in water for the third consecutive year. We are included since 2025 among Europe climate leaders, and we've been included also in 2025 by in the world most sustainable companies. We also are among, for the second time, CDP supplier engagement leaders, and we have improved the rating of both Sustainalytics and S&P Global in the period. Among the strategic initiatives on page 10, The 220 million grants agreement which was signed with early kid and the new innovation fund for the action project, our CCS project in Denmark. And we launched in the period, the D-card production line and product line in Malaysia. The first low carbon white cement brand with a 12% lower CO2 impact versus ordinary Portland. Turning to the last slide of my presentation, 2025 guidance unchanged with revenue expected to be 1.75 billion plus 6% versus last year EBITDA 415 million, 3% up from last year and net cash 410 million up 120 million from last year. This guidance refers to like-for-like ongoing operations, non-GAAP and excluding any no-recurring items. This ends my presentation, and I would like now to leave the floor for our Chairman Chief Executive, who is happy to take your questions.

This is the operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their 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 one at this time. The first question is from Matteo Bonizzoni of Kepler Chevro. Please go ahead.