Cemetir Holding

Good afternoon, this is the course call conference operator. Welcome and thank you for joining the Chairman Tier First Quarter 2026 Results Conference Call. 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 Marco Maria Bianconi, Chief M&A and IR Officer. Please go ahead, sir.

Thank you. Good evening and welcome to Chairman Tiroldi's first quarter 2026 results webcast. I'm here with our Chairman and Chief Executive, Francesco Caltagirone. Good afternoon. Who's happy to take your question at the end of my short presentation. So starting with the key takeaways on page two, Q1, 2026 results were impacted by marked seasonality and a different maintenance schedule. The harshest winter in the past 20 years in Europe and Turkey, together with a different maintenance schedule and a sharper than expected volumes and profitability decline in Turkey has impacted our results. Volumes were down across all business lines, cement minus 3.3%, ready mix minus 23.7%, aggregates minus 5.1%, mainly driven by weather disruption, a weaker demand in Asia Pacific, and lower activity in Turkey. Positive trends in Belgium and Egypt following the restarts of the second kiln, and a volume recovery was visible in March in some regions. Revenue, was down 7.1% year-on-year, driven by lower volumes across several regions and a negative FX impact of around 21.4 million euro, mainly due to Turkish lira and US dollar depreciation. EBITDA was down around 40.6% for the quarter, of which around 25 million euro relate to Nordic and Baltic and Turkey, reflecting lower volumes and different scheduling of maintenance activities while the FX impact was negligible. There was no significant direct impact from geopolitical conflict on our operations in the first quarter. Energy cost volatility has been largely mitigated through a structural risk management approach and hedging, while some pressure still persists on petco supply and logistics. The full year of 2026 guidance is confirmed despite a highly uncertain microeconomic and geopolitical environment and pending greater visibility on its evolution in the coming months. Turning to page three, a bit more granularity on the results. Revenues reached €345.9 million, some minus 6% year-on-year. Non-GAAP revenue reached €344.1 million, minus 7.1%. Lower volumes across several regions and a 21.4 million euro negative effects, mainly due to the Turkish shilling dollar depreciation. As mentioned, cement volumes were down 3.3%, mainly due to exceptionally adverse weather conditions, weaker demand in Asia-Pacific and lower activity in Turkey, partially offset by a stronger performance in Egypt and Belgium. RMC volumes were down 23.7%, aggregates were down minus 5.1%. EBITDA reached 38.8 million euro, minus 41.6%. Non-GAAP EBITDA was 41.4 million euro, minus 40.6%. 25 million of EBITDA decline was between Nordic and Baltic and Turkey, driven by lower volumes on top of a different annual maintenance schedule. Non-GAAP EBITDA margin stood at 12% as opposed to the 18.8% in the first quarter of last year. Pre-tax was 7.4 million and non-GAAP pre-tax was 14.8 million. Net cash reached 303.7 million euro, an improvement of 160.5 million euro year-on-year, including 51 million from the disposal of Carl Cimento, 19.7 million of insurance proceeds 18.6 million of the just transition funds and 52.2 million of dividends paid. Turning to page number four, focus on Nordic and Baltic, accounting for around 47% share of group EBITDA for the quarter. In Denmark, there were exceptionally adverse weather conditions, especially in January and February. leading great domestic demand down by around 10%, the coldest start of the year in the last 20 years. There was a partial recovery in March with a plus 6%, whereas white cement volumes were up 15% supported by stronger demand. Exports were down 7% due to lower deliveries to Norway and Iceland, partially offset by growth in the UK, France and Finland. RMC volumes were down 22%, aggregate volumes down 29%, with a partial recovery in March. EBITDA was down 44%, again impacted mainly by lower volumes and higher costs due to a different maintenance schedule. Norway, we have only RMC activity there, and sales volumes were down 13%, impacted by weak demand and some delays in infrastructure projects on top of adverse weather, marked with overcapacity and price competition. Lower EBITDA was due to lower volumes and higher variable costs, partially offset by pricing action. The Norwegian krona appreciated by around 2.3% versus the Euro average in the period. In Sweden, RMC volumes were down 10%, again due to harsh weather. There was a very strong rebound in March, plus 14%. and aggregate volumes were up 14% supported by the startup of several projects. March volumes were 60% up. EBITDA was impacted by lower RMC volumes and partly mitigated by aggregate performance and pricing. In the period, the Swedish kronor evaluated by around 4.8% versus the Euro. Turning to page five, Belgium and France, accounting for around 42% of group EBITDA in the period, Here, domestic cement volumes were up 8% supported by new customers and strong pickup segment despite adverse weather and weak residential demand. Exports were up 30% in France and the Netherlands driven by new customers and they were signs of recovery in the French construction sector. RMC volumes were up 4%. Aggregate volumes were up 4% as well, mainly in France and the Netherlands. EBITDA was down 12% mainly because of the cement segment due to higher costs related to a different business schedule only partially offset by higher volumes. RMC was impacted by lower volumes in Belgium and higher production costs. Turning to page number six on Turkey. I remind you that from April 22, Turkey has considered hyperinflationary and the reported figures are non-GAAP, i.e. they exclude the impact of hyperinflation and the valuation of non-industrial property. In Turkey, there was a highly challenging market environment impacted by hyperinflation, higher interest rates, and exceptionally adverse weather in January and February. There was also the impact of Ramadan seasonality and weaker post-earthquake reconstruction demand. As a consequence, domestic cement volumes were down 18% year on year, affected by severe winter conditions, weak macro, and the disposal of the karst plant. Exports were up 80%, mainly due to higher deliveries to Albania, Bulgaria, and other countries. RMC volumes were down 34% and aggregate volumes were down 30% on the quarter, impacted by weaker demand. Revenues were down 31.3%, also because of Turkish Lira devaluation. The EBITDA was negative, reflecting lower volumes and higher variable of fixed cost, only partially offset by price increases. The divestment of Car Cimento was completed on December 1st, 2025. I remind you that the Turkish Lira devalued by 34% against the Euro in the period. Turning to page seven, North America, accounting for 10% of Group EBITDA in the period. White cement volumes were up 4% in the US, showing a resilient performance, despite competitive pressure, adverse weather, and select pricing dynamics. Texas volumes were moderately down, due to a snowstorm in January and strong competition. In the York region, it was slightly down again due to harsh weather. California volumes were broadly flat, while Florida recorded a significant increase, supported by a dynamic market despite aggressive competition. EBITDA was down 1.7%, impacted by higher transport, cement purchase, energy, and maintenance costs, and some FX effect. Partially offset by higher volumes and prices. The new aggregate business contributed positively. In the period, the US dollar devalued by around 11.2% versus the euro. Turning to page number 8, Asia-Pacific accounting for 1% of Group EBITDA. In China, volumes were down 15%, impacted by stagnant demand, intense competition, and heavy snowfall in January, and a slowdown around the Chinese New Year. Market environment remains weak, despite the government stimulus. Revenues were down 24.7%, EBITDA was down 43.4%, and the renminbi devalued by around 5.8% in the period. In Malaysia, total volumes were down 30%, mainly due to timing difference in clinker shipments to Australia, while domestic volumes, though marginal, declined by 13% due to residential weakness. Semen exports were slightly down. Revenues were down 19%, while EBITDA had breakeven due to lower volumes, higher freight rates, and scheduled maintenance, despite better product mix. Malaysian Ringgit was up by 0.9% versus the Euro in the period. The last geography of page 9, Egypt, accounting for 6% of Group EBITDA. Revenues were up 41.5% despite an evaluation of the Egyptian Pound of around 7.7%. Domestic cement volumes were up 50%, also benefiting from the timing shift of deliveries from December, and the macro context, though, remains challenging with high inflation, current devaluation, and high energy costs. Export volumes were up 68%, supported by the restart of the second production line in 2025, strengthening presence in the U.S. and Western Europe. EBITDA was up 6.4%, driven by higher volumes, partly offset by lower average price due to destination mix and higher energy costs. Last slide, number 10, regarding guidance, which is confirmed for 2026. Despite a weak Q1 and the turbulent geopolitical scenario pending greater visibility on its evolution, we reiterate our full year guidance, which you can see here with revenues up from the pro forma of last year, 5% to 1.7 billion euro. EBITDA, between 400 and 420 million euro. Net cash, up 125 million euro to 590 million. This guidance refers to like-for-like ongoing operations, non-GAAP, and excluding any extraordinary items. This ends my short presentation, and now I leave the floor to Mr. Catagirone, who is happy to take your question. Thank you very much.

Before you start the question, I want to point out a few things because for sure this has been a difficult quarter and whatever went wrong went wrong and in a small quarter this exacerbates the number. But let's say that as Marco said, we reported 41 million of EBITDA and our budget that you are not aware of was 53 million. So anyway, 20, sorry, 16 million below last year. This means that today in our forecast, we see a delay of 12, the real delay is 12 million and is 100% linked to weather situation in Scandinavia and in Turkey. The other part of the delta with the previous year It is mainly due to the maintenance of the different, let me say, planning, and this should be reabsorbed during the week, the year. The second thing is that March, but even April, seems promising. We are seeing a picking up of demand mostly everywhere except for China. even as you know last year the weakest part of our perimeter was Belgium and France and even in this difficult situation Belgium and France performed quite well so now I am open to receive your questions please thank you this is the course call conference operator we will now begin the question and answer session

Anyone who wishes to ask a question may press star and 1 on the telephone. To remove yourself from the question queue, please press star and 2. Please pick up the receiver when asking questions. The first question is from Wim Hoss of KBC Securities.

Yes, good afternoon. Thanks for taking my questions. My first question would be on raw material and energy costs and your pricing actions. So I'm wondering, how much inflationary pressure are you seeing um for the various costs items and and can you also maybe elaborate on how you are adjusting pricing to to that and so that's the first question and then the second one on me would be an update on the the nimolo acquisition um are you still expecting closure there in the third quarter and can you maybe uh give us some updates on the uh the process and whether you see any antitrust issues popping up or do you expect that to be a smooth transaction? Those are my questions, thank you.

Okay, starting from your second question about NIMOLE, I can say that so far the communication with the antitrust are smooth and regular. We expect probably by end of June, early in July, an answer, and so far we don't see any kind of, let me say, issue. Regarding the cost pressure or inflation pressures, as, let me say, I said recently in a meeting in the Milan Stock Exchange, is that if the situation will continue as it is today with the sort of up and down in the energy prices, and Special Logistic Prices, we are going to book nearly 38 million of extra costs. And we have more or less, nearly all regions already asked to apply the new list price. As you know, there is a lag. But as I said, what I'm saying is that already in April, We are seeing that we are recovering most of this cost inflation. So this is our forecast as we see and now the things and with let me say the oil around 100. Then if the situation might change abruptly we have to design a different scenario. But so far let's say that this 38 million that are energy and especially logistic land and sea logistic can all together bring, let me say, the sum of the extra cost to 38 million.

Okay, very clear. Thank you very much.

The next question is from Emanuele Gallazzi, Equita.

Good afternoon, everybody. Thank you for taking my question. I have, let's say, I can start with two questions. The first one is on the volume side. You clearly mentioned some volume recovery in March and, let's say, a positive indication on April. Can you just discuss a little bit more on these, specifically on the Nordics and on the Turkish market? And still on the Turkish market, can you... The second one is on the guidance because basically the guidance is pointing to a flat EBITDA and you started the first quarter short of 30 million year on year or 12 million versus your budget. Can you guide us on how and when do you expect to recover these 12 million versus your budget? And if there is any specific country supporting this improvement in the remaining part of the year? Thank you.

In terms of volume recovery, we are seeing, continue to see some recovery in France, Belgium, let's say that Norway is still flat because let's say also the pickup in consumption in April we had also Easter holiday so to see the full recovery we might let me say check at the end of May but we are seeing recovery in France, Belgium and also in Turkey in Turkey in our budget we already discounted some lower volumes because of the end of some, let me say, big project for the earthquake. So in our, let me say, scenario and guidance was already booked that Turkey would have been a bit weaker this year. But let's say so far, besides, as I mentioned, the weather issue, we are not seeing other issue. other than let me say cost inflation but let's say we are recovering this cost inflation by let me say adjusting the list price almost everywhere and it seems let's say I cannot say that as you can imagine you can update the list price every week but for the gap that we saw for the first let me say, two months of this war, let's say we have, let me say, already aligned the price. So we think that we might recover, let me say, this cost inflation that is 38 million during the year. In terms of recovering the 12 million of gap weather, let's say, statistically, when you have this, let me say, harsh winter, more or less, you recover during the year, let's between two-thirds and the whole amount because, let's say, I cannot say that the weather in the next eight months will be beautiful, but let's say that usually you should recover around two-thirds to 75% of this gap. So this leaves, let's say, a gap of four or five million so far to be recovered, let me say, in the in the perimeter during the remaining eight months of the year. So, something that we see affordable now.

Thank you very much.

The next question is from Matteo Bonissoni, Capri Chevre.

Thank you. Good evening. I have two questions. The first one is related to Turkey. So, Turkey seems more than just weather-related, no? Because you have clearly said that there is this end of the earthquake reconstruction effect, which I think is going to last. So my question is, what is your budget assumption for volumes for Turkey this year? And the second question is, if to maybe help bridging the gap in meeting the bottom-end list of the guidance, which would be basically flat EBITDA this year, are you also implementing sort of a Cost actions. We know that for a cement company, I mean, apart, the key costs are energy costs, maybe maintenance, logistics, and so on. But maybe, are you implementing or not some targeted cost actions on other costs to maybe help to fill the gap? Thanks.

Starting from the second question, the first one will be answered by Marco. I can say that we are putting in place all the action that we can recover. As I said, today, let's say, we reported, as you know, 41 million against, let's say, around 400 for the full year. So this is the 10% of, let me say, our full year result. So what I'm saying is that Having the other 90% of the result that has to be deployed, I think, as I also said before, that we have more than reasons to believe that we can recover the gap. And also, if the war ends, let me say, as a few times also declared by the USA shortly, that the recovery might be also even larger. But today, it's difficult to forecast. We are doing whatever we can, and we see the possibility, as I say, that we can close this gap.

Thank you. On your first question, I mean, internally, our projection for volume growth in Turkey is negative 13, 1-3. So we're already budgeting for a double-digit decline in volumes for the reasons you just explained, which is the phasing out of a number of structural projects and the tailwind of earthquake reconstruction. So that was already in our internal numbers.

But if I can add one thing, the government just a few weeks ago asked all the companies in Turkey to curb the export because they see, because of Syria and other potential, let me say, reconstructions, that there is a potential big outflow of cement from Turkey, and this could create some, let me say, difficulty in finding the cement in some part of Turkey. So this seems bullish, because the same things have been asked more than two years ago, and they carve the export and they are trying to do the same now. So their expectation is that probably what is not, let me say, absorbing now the internal market can be more than, let me say, outbalanced with the export in the surrounding region.

Thank you.

The next question is from Igor Sonin, Alfa Value.

Hello, thank you for picking up my question. Sorry for torture once again with Turkey, but you said that your already mixed concrete volumes were down 34% and aggregate minus 30%, while cement was only down 18%. Probably it's a question from an amateur, but it seems to me that that's an unusual wide gap between cement and downstream products. Could you probably give some colors through what's driving this divergence? What's the difference between them? Is it a project mix, regional concentration, competitive dynamics or something else? Why did they do not fall equally, for example? Thank you.

But mainly, we don't serve by 100% our ready mix. So sometimes in some part, or even because it's more convenient to buy for logistics from other parts, so you see a wider gap in ready mix and a lower gap in cement because mainly some part of the cement is bought or has been bought even in the past from several of our ready mix plant from other competitors. we say we lost, let me say, from market point of view, part of this ready mix supply directly of our cement, but some it is suffered by other competitors.

Okay, thank you.

The next question is from Alessandro Tortora, Mediobanca.

Yes, hi, good evening to everybody. I have a question, okay, for me, The first one, sorry, is the clarification, the comment you made on the extra cost linked to fuel and the logistic cost. So the amount you mentioned, the 38 million, is it something you already accounted? Is it something that you forecasted? So just understand which kind of, let's say, assumption you made on this. also considering now that you implemented, you announced, I think, so just understand the assumption behind these, if understood well, you mentioned a brand price close to 100 euro, 100 US dollars, sorry. So just understand the assumption behind these and if this is basically an additional delta compared to your budget. This is the first question, thanks.

Also, I'll... You know, when I think everybody made the forecast for 2026, it was impossible to forecast the water. Now what we have forecasted is just that with, and you know, at the beginning of this, let me say, problem, there is a lot of volatility. So now the things are more, let me say, stable, even, let me say, with the oil around 90% 100, so electricity, oil, and especially the diesel for inland distribution is hitting a lot, I think, everybody. So our forecast is just saying that if the alcohol situation going forward by the end of the year, we will sum up Extra 38 million of costs. Now, with the extra, let me say, price hike in the various regions, we will recover most of this with a bit of a lag. But usually, you have a lag in the cleaning, but you then, when the situation, you should calm down. You, let me say, don't adjust, let me say, with the same speed the lease price. For sure, within the big project, you know, there is the list price for a normal, let me say, customer, and then there is the supply for the big project. For sure, the big project has been treated in a way where we say, okay, we don't know where the energy price will go up and down. We will charge you every week or every two weeks the extra cost. So as soon as they go up, we will charge you every, let me say, 1% increase, but as soon as they will go down, we will realign with 14 days of delay. So this is for the big projects. For the others, there is a price that is adjusted in monthly basis.

Okay, okay, thanks. And as you said before, this is basically pure logistics while electricity is Is it something that you mostly hedged? If I recall, I don't know what you said.

Yes, I think that most of the electricity and gas supply is hedged. Mainly the diesel and oil for distribution that is, let me say, most of this cost. You are the origin of this cost.

okay okay thanks then the second question so is uh is on denmark first i i read in the facilities know that there wasn't an update on the um denmark uh and for the energy division something like this okay regarding the um the grant or something like this you're going to get to production so if you can comment which kind of next step we are going to have into the project because if i if i um if i recover the This step was pretty important for you on the OPEC side and still linked to Denmark. Also, if you can help me understand which kind of volume, let's say, expectation we may have this year considering the negative starting Q1. Thanks.

Regarding our carbon capture project, you are right. Yesterday, the Danish government wrote us that we are fully committed This means that we can ask for the funds together with another, let me say, electric player. This means that when we will sign, and we are waiting to sign, let me say, the contract, because as probably you are aware, The project is divided in three parts. One is the capture inside the plant, then there is the pipeline, and then there is the sequestration site. So we need to have more visibility on the other two steps because, as you can imagine, we need to end up aligned. But this means, as I said, that there will be when the project will go, let me say, live, 2030, 2031, depending also on the other two parts of the project, that we might recover, I don't know, a few, let me say, let's say, from 50 to 80 million per year of OPEX.

Okay, I'm sorry. I'm just going to say the lateral question also on Denmark related to, let's say, the expectation for the full year on the volume side, because I know in the past, probably you comment on, let's say, a lower contribution from the public works. So if you can, let's say, give us an idea of your year-end expectation for Denmark.

Sorry, just to complete the previous question, answer. This amount is per year for 15 years. So it's quite an important amount if you, let me say, multiply from 2030 to 2045. Regarding your last question, Marco, please. Yes.

Our expectations for the year is that Nordic Baltic cement should grow in low single digits and that RMC should do the same, roughly, and the aggregates, again, between 0% and 5%. These are the central budget expectations. Now, clearly, Q1 has been very harsh, but we, as the chairman said, expect to recover. There are signals in March and April that there is a rebound, so this is the central budget piece in our numbers.

Yes, in April, just Nordic and Baltic recovered in volume to 6%.

Okay, thanks. And the last question, sorry, is on Egypt. I recall it last year, this huge volatility, also due to the second production line. In the end, in absolute terms, the BDA in Q1 was basically similar to the one we had last year. The reason why, let's say, we didn't have progress on the BDA side was is it due to a matter of energy cost, as you mentioned, because I recall it that you mentioned the expectation of having 17, 18 million BDA from Egypt. So just understand which kind of progression we should expect in Egypt. Thanks.

As you are saying, our forecast is this. This is, as for everybody, is the maintenance month, and so in, let me say, this part is charged. As you say, the result is similar to last year because, let's say, having two lines, we have, let's say, the double of the maintenance. But during the remaining part of the year, you will see that we will recover and the volume and the revenues are already taking up, taking consideration that during February, March, the Egyptian pound devaluated 12%. The average is 7.7% in the quarter, but just in the last month, devaluated 12%. So this will be recovered for sure, but let's say it is difficult to show the full potential of, let me say, the second line in action just in the first quarter. But let's say we are completely aligned with, let me say, the forecast that we have for Egypt for the full year.

Okay, okay. Thanks.

As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question is from Bruno Permutti in Teso San Paolo.

Yes, good evening, everyone. I wanted to ask about Belgium and France. I was a little bit surprised of the positive dynamic for volumes, for domestic volumes in the first quarter. So I'd like to understand if it is a challenging Sorry an easy year-on-year comparison that so or Also, you you mentioned new customers. So if you can elaborate a little bit above all for understanding if this can Impact in your budgeted volumes expectations for for for Benjamin France for the rest of the year or if it was already factory in your budget that and a second question concerns the pricing environment. I would like to understand if you are, what was on average the price environment in the first quarter of the year and if you plan pricing only as an instrument to offset eventual increase of costs, or if you have in mind any way that there could be room for further price increases in some areas independently of that, and perhaps also in relation to CBAM in Europe. So how do you see the price environment going forward?

For sure, the price environment at the beginning of the year was, let me say, slightly up in most of our region. Then, let me say, it arrived with headwinds of energies, and now we are readjusting. As you can imagine, to recover 38 million of cost or revenues of EBITDA, over 400 is likely nearly 10% on average. So in some areas it's a huge increase. So frankly speaking, I don't see the space to increase further because then there is also the issue about market absorption of this because what we are seeing in, let me say, various regions is that most of the customer, like probably most of us, are expecting a faster solution to this, let me say, war. And so they, what they are acting is that they postpone a few weeks, a few months, they start of the project because they say, okay, but in three months probably the cement or the cost of everything because cement is just part of the cost of infrastructure or real estate will come down. And so this is adding a little bit of headwind in the consumptions in some areas. So we don't want to exacerbate the relationship with the customers and with the reality. So frankly speaking, I don't see space because to increase further, probably, I mean, the best things that we can hope is that we will have, let me say, a slower unwinding of some of the price hike in some area that can, let me say, let us to recover more than what we suffered. But this is our best guess. The other question. The question.

Yes. Belgium and France. Yes.

Belgium and France, as you know, last year were quite depressed because of the end of the Olympics in 2024. So we were forecasting that there should have been a bounce. and new customer is just, let me say, because we are repositioning ourselves, especially in Northern France, because we served or supplied some of the big projects in the Paris area during the Olympics, and for sure, we need a bit of a time to, let me say, recover the... our portfolio of clients or different clients because some projects, as you can imagine, are one-off linked to the Olympics. So we see that if there are not other, let me say, issues, this trend should continue for France and Belgium.

Thank you.

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Excellent. So then thank you very much for your participation, your interest in Charity Holding, and we wish you a pleasant rest of your evening and day. Thank you. Thank you. Good evening. Bye-bye. Bye.

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