Cemetir Holding

Good afternoon, this is the Carus Call Conference Operator. Welcome and thank you for joining the Chairman's Holding First Alpha 2026 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 Marco Maria Bianconi, Head of M&A and Investor Relations of Cementir. Please go ahead.

Thank you and welcome to Cementir Holding First Off Results presentation. I'm here with our Chairman and Chief Executive, Francesco Caldavirone, who is happy to take your question at the end of my short presentation. I'll go through the presentation deck that has been distributed ahead of this meeting. starting with page two with the key takeaways on the results. There has been a significant improvement in the second quarter, despite the first quarter that was impacted by exceptionally adverse weather conditions. At constant perimeter, Q2 cement volumes were up 3.4%, non-GAAP revenue was up 5.3%, and EBITDA was up 12.9%, confirming a positive reversal compared to the weak start of the year. On a reported basis, consolidated volume declined across all business lines with cement minus 2.9%, ready mix minus 10.9%, and aggregate minus 2.6%. At cost and perimeter, though, excluding the disposal of car cemento, cement volumes were up 1.4% in the first half of the year. There was a positive trend in Belgium and Egypt following the restart of the second kill. Reported performance was affected by forex headwinds, mainly due to the depreciation of the Turkish lira and of the US dollar. This negative impact amounted to €37.4 million on a non-GAAP revenue and €2.6 million on non-GAAP EBITDA. EBITDA was also affected by lower volumes in Nordic, Baltic and Turkey due to weather conditions, whilst Egypt, Belgium and North America improved year on year. Again, there was a clear improvement in the second quarter, and there was no significant direct impact from geopolitical conflicts on our operations. Energy cost volatility has been largely mitigated through a structured risk management approach and our hedging, while some pressure still persists on petcoke supply and logistics. Our full year 2026 guidance is confirmed, despite the very uncertain microeconomic and geopolitical environments. On page three, a few highlights. I'm not going to read verbatim, but just to give you the highlights that revenue was up 0.2% year-on-year, non-GAAP was down 1.7, and our constant perimeter was flat. 37.4 million euro negative FX, mainly due to Turkish year-end US dollar. We talked about the cement volumes already and RMC volumes as well. On the EBITDA basis, The group reported €163.9 million, minus 5.5%. Non-GAAP EBITDA was minus 10% at €153.6 million and was down 9.5% at constant perimeter. The decline in EBITDA was mainly driven by Nordic and Baltic and Turkey, €26.6 million, lower volumes and negative FX impact of €2.6 million. Non-GAAP EBITDA margins stood at 19.3% versus 21.2% on the first half of last year. Group net profit was down 15.7% to 62 million. Non-GAAP net profit was down 18.9% to 66 million. Net cash at half year was 276.8 million, an improvement of 132.8 million euro. year-on-year, including 51 million of car cemento disposal, 19.7 million euro of insurance proceeds, 18.6 million of the Just Transition Fund, and 54.9 million of dividend distributions. We now go to page four, starting with the biggest division, accounting for 45% of Group EBITDA, Nordic and Baltic. In Denmark, the construction market remained relatively weak, especially the residential part, due to restrictive financing conditions and energy costs uncertainty and some projects postponement. Great domestic cement volumes were down 4% year-on-year, impacted by exceptionally harsh weather and delays to the ferment projects, although deliveries improved during the second quarter. White cement, was up 12% supported by stronger demand. Exports were down 16%, mainly due to lower deliveries to Norway and Iceland, partially offset by growth in Poland, France, and Finland. RMC and aggregate volumes were down 11% and 21%, respectively. EBITDA was down 21% year-on-year, impacted by lower volumes, higher CO2 taxes, and increased variable costs. In Norway, sales volumes were down 5% due to weak demand, lower activity on major projects, and some market overcapacity in price competition. EBITDA increased, driven by higher prices, partially offset by increased variable cost. The Norwegian krona was up 4.2% versus the Euro average. In Sweden, at ready-mix sales, volumes were up 10% driven by the recovery from March. with the restart of some postponed projects and several new contracts. Aggregate volumes were up 24% supported by new projects and a temporary closure of a competitor's quarry. Also EBITDA was up and the Swedish krona appreciated by 2.8% versus the Euro average. Moving to page five, Belgium and France accounting for around 32% of H1 EBITDA. Domestic cement volumes were up 5% supported by new customer and the major infrastructure projects in the Antwerp area. Despite adverse weather at the beginning of the year and unusually high temperatures in the second half of June. Exports were up 17%, mainly to France and Netherlands, driven by new customers and the major projects in Antwerp. Leading mix volumes were down 6% due to weaker performance in Belgium and adverse weather conditions, some Easter-related shutdowns, and a high comparison base in the first half of last year. In France, volumes were up 3%. Aggregate volumes were up 2%, mainly in France and the Netherlands, benefiting from stronger infrastructure and construction activity from March onwards. EBITDA was up 7%, reflecting higher cement volumes and lower raw materials and CO2 costs, partially offset by higher costs related to different maintenance schedules and lower RMC volumes and higher variable costs. Moving to page number six on Turkey accounting for 5% of Group EBITDA in the first half of the year. In this country, challenging operating environment continued, impacted by hyperinflation, high interest rates, and exceptionally adverse weather in the first quarter of the year, and weaker post-earthquake reconstruction demand. Domestic cement volumes were down 13%, 2.2% excluding the disposal of cars, mainly affected by adverse weather, gradual completion of major post-earthquake reconstruction projects, and mixed regional trends. with Aegean up 15, Marmara minus 2, and Eastern Anatolia minus 32%. Export was up 2%, whereas domestic RMC volumes were down 15%. Aggregates were down 26 due to a slowdown in the reconstruction activity, although June showed a strong recovery supported by some major infrastructure projects in the area of Izmir. Revenues were down 19% also because of the Turkish lira depreciation. EBITDA declined, reflecting lower volumes and higher variable and fixed costs, only partially offset by price increases. I remind you that we divested of Corsimento on December the 1st, 2025, in the period that the Turkish Lira devalued by around 27% versus the Euro average. Moving to North America, accounting for 7% of our group EBITDA, Volumes in the U.S. were broadly stable, demonstrating a certain resilience, despite a generally softer market environment and weak residential demand. Florida recorded a 10% increase, mainly from demand from new customers, whereas in Texas volumes were down 7% due to a general snowstorm and a competitive pressure from imports. In California, volumes were down 9% due to intense competition. EBITDA was up 1.8% with cement business impacted by higher variable costs from FX effect and only partially compensated by higher selling prices. The dollar in the period depreciated by around 6.8% versus the euro. Moving on to Egypt, accounting for 5% of group EBITDA in the period, revenues were up 57% despite a 7.3% depreciation of the Egyptian pound. Macro context remains challenging with high inflation, currency volatility, and rising energy costs. Domestic cement volumes were up 31%, supported by stronger commercial positioning and market share gains. Export volumes were up 78%, benefiting from deferred shipment from December of last year and the resolution of some technical issues following the restart of the second production line, particularly supporting sales to the U.S. EBITDA was up 43%, Driven by higher volumes, a more favorable geographic mix focused on higher margin export destination, which more than offset higher energy and production costs. Moving to page number nine on Asia Pacific, which is the last business unit we're going to talk about, 3% share of group EBITDA. In China, volumes kept declining, 6% year-on-year impacted by weak demand, Intense competition and adverse weather. There was also slowdown around the Chinese New Year. Market environment remains weak despite government stimulus. Revenues were down 10%, 10.5% year-on-year, reflecting lower volumes and average lower selling prices. EBITDA, as a reflection of the top-line decline, was down 21.4% due to lower volumes and prices and higher fixed costs, partially offset by variable cost savings. that may be depreciated by 1.1% versus the Euro average in the period. In Malaysia, on the contrary, total volumes were up 2%, with domestic volumes, although marginal, declining by 11% due to order timing effect and weaker retail demand. Semen exports grew 14%, supported by air deliveries to Australia, the Philippines, and Vietnam, while clinker exports declined by 24%, mainly due to shipment timing difference to Australia. Revenue was up 8.3%, supported by higher export volumes and more favorable product mix. EBITDA was down 55% due to higher variable and fixed costs, particularly distribution logistics expenses. The ringgit was up 2.8% in the period versus the euro. A few words about the acquisition of Nemole. Both on acquisition, the aggregate businesses Enhancing Vertical Integration, Securing a Stronger Nordic Platform. On July the 1st, we completed acquisition of 100% of the share capital of Niemolle Stein Industries with an enterprise value of Danish krona 900 million, which is equivalent to around 120 million euro on a cash and debt-free basis. The expected synergies are around Danish krona 30 million or 4 million euro within 24 months. through integration with existing Nordic and Baltic operation. Niemolle is the largest aggregate player in Denmark with around 10% share. It operates 26 land-based aggregate pours across Denmark and holds a well-developed reserve base. The full year results ending April 2026 are for revenues of Danish Krona 230 million pro forma EBITDA of 93 million. Moving to the last line of my presentation, guidance, which is confirmed. Despite the uncertain microeconomic and geopolitical environment, we reiterate our four-year guidance, which is for revenues to reach around 1.7 billion euro, and EBITDA range between 400 and 420 million, net cash position of around 590 million euro, after a CAPEX of around 128 million euros. As you know, our guidance refers to like-for-like, ongoing operation, non-GAAP, and excluding any extraordinary items. That said, thank you for your attention, and I'll now leave the floor to you for any questions to our chairman and chief executive. Thank you.

Excuse me. This is the chorus call operator. We will now begin the question and answer section. Anyone who wishes to ask a question may press the start and 1 on your touch tone telephone. To remove yourself from the question queue, please press the start and 2. Pick up the receiver when asking questions. Anyone who has a question may press the start and 1 at this time. The first question is from Wim Host of KBC Securities. Please go ahead.