Heidelberg Mterials S/Adr

Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining the Heidelberg Materials Health Year Financial Report 2023. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, please make sure to dial in to the conference call via telephone. and press the star followed by one on your telephone keypad. Press the star key followed by zero for operator assistance. I would now like to turn the conference over to Mr. Christoph Boijenberg. Please go ahead, sir.

Thank you, operator, and welcome to our first half-year results call. Great that you're all here. It's been a busy day for all of us, also for you, with a lot of companies reporting, so We make it brief. Without further ado, I hand over to Dominic and René, who are in the room here. Over to you, Dominic.

Chris, thanks a lot. Hello, everybody on the call. Thanks for joining. I would suggest we go fairly quickly through the slides. You have seen the slides, and then we'll get to your questions, if you don't mind. So overall, for us, a strong operational performance in Q2 and also H1 of this 2023. Revenues up 5%, RCO up 18% like for like in Q2. Price over cost was positive. Despite significant volume pressure, we were able to increase the margins, so in that respect, all regions are well on their way. We have initiated the third tranche of our share buyback announced back in 2021. We always promised we're going to go for one billion in three tranches, and here we go. We stick to our promise and start the last tranche of the share buyback program in these days, and we will conclude it at the latest by end of this year. On the sustainability side, we make very good progress, 2.4% further reduction on CO2 emission. And I'll come to some more details in a minute. And then last but not least, drawing a line under all of this, we are very confident for the second half of the year. And that's why we significantly upgraded our outlook to 2.7 to 2.9 billion euros RCO. for the full year of 2023. If you then go to page four of our presentation, you see the operational performance. And I think it's fair to say it's a record Q2 quarter for us in EBITDA and EBIT performance. So beyond 1.2 billion EBITDA and almost 1 billion EBIT for the second quarter. Also, like-for-like revenues were up 5%. On page 5, if you see the full year, even better, operating EBITDA hits almost 1.8 billion and operating EBIT almost 1.2 billion, 38% up like-for-like to prior year. And you see also the comparison to 2021, which is a very strong comparison base. I think it shows you a little bit to put these numbers into perspective that I think it's fair to say this was not a bad start into 2023. Q2 operation performance on page six, you see also a driver for this. Clearly, there is a volume decrease, especially in those markets that are heavily exposed to residential, mainly the mature or developed markets. But we stay very focused on managing both our arrival costs and our fixed costs, and obviously also getting the right value for our products. So the price over cost bar remains very positive. That then leads to that significant increase of 18% like for like in the result, and it's pretty much stage one. If we then go to page 8 into the regions, you see the details for North America. Also North America is up in RCO versus prior year and also slightly above a good 2021. So we are also in North America well on our way. I would say there is still some upside from our perspective for the second half. You know that we are ramping up our new plant in Mitchell, which we have switched over during Q2. And I would say, again, this plant is running well, and we are very confident that it will be fully on steam in the second half for this year. Western Southern Europe performance, Nicely 214 in 21 RCO, then almost 250 and now almost 320. So I think we are moving in the right direction in WSE. Also notably the strong margin developments, significant step up in an RCO margin on the back of a good compensation of residential decline, but good infrastructure work, good industrial work. And again, all countries, and that's important for us, contribute to this good results development. If you then go to NECA, NECA is stabilizing on a very high level, around the 200 million mark for RTO. Margin, again, above 20%. And that, I would say, not easy. Market development volumes are coming down in some markets. We have... balanced very well, the price cost and volume balance in all of the markets in NECA. So we are very confident that also for the next half year, NECA will perform on a high level. APEC, you know that APEC has been a little bit of disappointment for the last couple of years because the emerging markets did not really get going. Also, our Australian performance level was not exactly where we wanted it to be. I think we've really worked with the local teams on improvements, and you see here also the turnaround versus prior year, so significant RCO improvement versus last year, almost getting close to the level of 2021. Also, margin is recovering on the back of a stronger performance, especially in Indonesia, which is a very important market for us, you know. and also on a better performance in Australia, despite the fact that the housing market in Australia is pretty much underwater. A lot of construction housing companies also going belly up. So I think in that respect, Australia is performing on a very good level, despite difficult market situations. Other parts of Asia also stabilizing. India coming back from lower levels. China remains difficult. But the other markets, Thailand, Malaysia, Bangladesh, are moving in the right direction. High hopes for APEC for the second half. I think the trend should be our friend in APEC. Africa coming down a little bit on RCO in Euro level. from past performances, but I think it's fair to say that there is a significant currency impact in there. Some of the, especially sub-Saharan currencies and the Egyptian pound, they are under devaluation pressure. I think things are stabilizing now in Q2. Q1 was very bad in that respect, but now we have a little bit of stabilization. So in that respect, in local currency, the picture doesn't look as bad. There is volume pressure in some markets. But overall, I think the management team in IEM is doing a very good job and stabilizing the margin around the 20% mark. And the RCO should also improve in the second half because we're going against a fairly weak comparison base in last year's second half.