Heidelberg Mterials S/Adr

Thank you, operator. Welcome to our Q3 conference call. As always, we have management in the room, Dominic, Rene, Robert, and Hosan from the IR team. We look forward to a lively discussion after our presentation. And with that, over to you, Dominic.

Chris, thanks a lot. Thanks a lot, everybody, for joining. Welcome to our Q3 result calls. You've seen the presentation, so I can go through this fairly quickly, and then we go into the Q&A. I think it's been a good quarter. Results are up 3% on EBITDA and RCO level. Also, margin is up beyond 25% EBITDA margin. Revenue is flat. I think in this environment, this is a good development. The performance has been good. carried by many parts of the organization, but especially by North America, also through the highly accretive M&A deals. I'm sure we'll go into some more details there. Going also into the next years, we have decided to launch the Transformation Accelerator Initiative. where we will chase 500 million result contributions by end of 26 on a yearly run rate. And that will be, we'll go into the details in just a minute. We will then cover the free cash flow discussion, good performance, 2 billion over the last 12 months. And then everybody is here working vividly on getting Breivik up and running. That looks really promising. and will come on stream then in the first half of 2025. On the back of all of that, we are confident for the remainder of the year. That's why we have raised our outlook by lifting the lower barrier of the bandwidth from 3 to 3.1 billion. So the new guidance on the RCOs sits between 3.1 and 3.3, and we should be around 10%. Then next page, page three, you see the development. So overall, flat like-for-like on the revenue side. As I said, EBITDA and EBIT are 3%, and the operating EBITDA margin at above 25%. You see also, if you look at the nine-month page next one, that the quarter is important for us when it comes to the trajectory and the trend lines. because you see that the quarter performance of Q3 compared to the nine-month performance, respectively the first half, is significantly better. You know, nine months is now down 3% like-for-like on revenues, 2% up on EBITDA and EBIT, but the Q3 performance is in all dimensions better than that, so you see that the trend line goes in the right direction. If you then look at the bridge, I think what's encouraging to see, okay, we still lose a little bit on currency. We win on scope. I think the scope adds almost $30 million. And then what's important for us to see, the negative impact from volume has slowed down in the Q3 versus the first half. So I think that's also encouraging. While the price over cost is still holding up very well, with good pricing and also a little bit of relief on the energy side of things. But overall, I think that's an encouraging picture and important for us to track that as we go into the remainder of the year. You see this now also compared to page six. There you see that the volume block is much bigger compared to the, despite the fact that in absolute terms, the third quarter is obviously much bigger than the first and the second quarter. So in that respect, really, you see the machine is running in the right direction. And you also see on the scope effect, you know, the nine months is $49 million, while alone for the Q3 quarter, we have $29. So you also see the ship is sitting right in the water, and I think that looks encouraging also going into the remainder of the year and going into 2025. If you then look at Europe, I think holding up on a high level, basically flat on the RCO line. And I think the demand recovery continues in Eastern Europe. I think Eastern Europe continues to be very strong from our perspective, while Western Europe is still a little bit sluggish volume-wise. I think that's not where it used to be that clear, far off its peak. But the good news is also there on the volume side, we see some flattening out in most markets. And that should give us clearly health going into the remainder of the year, but then also going into 2025. It's no secret that the Transformation Accelerator is a global program, but it also tweaks towards the European asset base. We have already announced the four Klinker Plan closures in Hannover and Jorga and in two French plants. That result contribution obviously flows into the transformation accelerator as one of the core pieces, but by far not the only piece. When you go to North America, really we're happy, very happy with the performance in North America. Also, relatively, I think this is a very good performance. Revenue is even up. RCO clearly applied for like 90 percent, and also the margin clearly improving in a combination of volume still being sluggish, also because of the weather events, especially in the south of the Carolinas and Florida, but results being driven by good resilient pricing performance and very disciplined cost management. So, I think in that respect, It goes in the right direction, and a significant amount of that $29 million in the scope effect comes already from North America. You know that we've done three acquisitions in this quarter in North America alone, and that really is a significant improvement also when I look towards the remainder of the year and going into 2025. Asia is maybe the one point where we are still waiting for a better dynamic to the upside. I think it's holding up well, despite sluggish performances on the volume side and partially also on the pricing side in some of the core markets. That's true for India. That's true partially for Indonesia and Thailand. But also there, we now see, as the latest developments, quite some hope at the end of the tunnel. That's true especially for Thailand and Indonesia, which are important markets for us. Africa, I've been traveling, as you may have followed, again in Tanzania, and great job by the local team with the latest acquisition of Tanga. goes in the right direction. And to deliver these results in a very difficult market environment in Africa, I think it's à la bonne heure. The team is doing an excellent job. The results are basically flat and even, sorry, up by a notch. And also the RCO margin goes up. So in that respect, I think the local team has, despite very difficult general circumstances in these markets, has done an excellent job. Then just briefly on the transformation accelerator, we basically target the 500 million that I already said by the end of 2026 in a yearly run rate. It does mean optimization of clinker and cement assets with a clear focus on clinker, with a clear focus on Western Europe. You know that there is overcapacity in the market. It always has been. You know that we are clearly targeting to be the undisputed cost leader also when it comes to fully loaded costs, including CO2 footprint. So in that respect, it's clear that we do our homework in Europe with a very targeted program. And for the first two years, this program is now baked into this framework. transformation accelerator. Next to that, we continue to work on the procurement side, clean further the back office and also some overhead topics. There's always room for improvement, and then obviously also with the new addition in the management team with Axel Conrad now, we put a significant focus on asset productivity and asset performance, and we chase some significant potential on technical KPIs and obviously try to also improve our alternative fuel position and our SCM position, so secondary cementitious materials. If you go to the sustainability side of things, as I said, we are working super hard. Again, it was a great week a couple of weeks ago. Everything looks very good. Mechanical completion will be done by December 1. That's our ambitious fighting target this year, so not by end of the year, but even a month earlier. And we then go into what we call the hot commissioning. That will be an exciting moment for the team and for all of us. And then we hope to see you also for the Capital Market Day in the first half of next year. And we are planning to do that in Breivik. So that would give all of you a chance also to take a look at what we are doing up there live. I can tell you from my own experience, it's really a fundamental milestone, not only for the company, but also for the industry. On the back of that, we are launching also the decarbonization project in Italy. You know, there were a lot of discussions about carbon capture work in Italy that the government supported. I think it's moving in the right direction. We are taking a cluster approach in Italy, similar to the one in Pacewood. So I think in that respect, in the UK, so I think in that respect, things are moving in the right direction, but it's early days on that. We work diligently on circularity and also low-carbon product solutions. We've made an interesting investment into one of the key tech startups, Enricor, in Canada, that has a very interesting reprocessing of recycled construction demolition waste. That is really a very interesting setup. It's one of many, but that's just one that we are chasing, that we've chased in this quarter. And then, you know, we talked about the project in Poland that is now fully up and running and is producing very encouraging results. We have a couple of technical optimizations going on, and we are working also on replacing aggregates and sand up to 100 percent in fresh concrete. That is technically looking very, encouraging, so we have a lot of hopes in that project down the road, and it's scaling up, obviously. With that, I'll leave it to René to go through the financial highlights with you.

Thanks a lot, Dominik. Hello, everyone. It's René from Microsoft. So the top one is adjusted earnings per share, which is without AOR, increased in the quarter by 14%. which tells you if RCO goes up 3% in our earnings per share 14, that below RCO the performance is really good. There are no big AOR items. Financial results are very good. Tax results are very good. And we had last year in the discontinued operation, we had an increase of a provision, which affected last year negatively. But overall, the performance below RCO is very good. Last 12 months, we cashed for $2 billion. That confirms what we said in the H1 call. We are traveling around the $2 billion and should hit that number as well for year-end. Leverage at $1.5 is a little bit up compared to September 23. Why? We've done, again, a shadow back end. Dominic mentioned that we did some acquisitions in Europe and in the U.S. and this confirms that we are at the lower end of our corridor, and I think that's very well placed. We've issued a second green bond with $500 million. The interest was very high, and the timing was very good. If you look now at interest, I think we did here a very good job, and then in the next few weeks, the first round of our second shadow bank will be also finalized. So overall, all financials are trending into the right direction. Dominik, over to you.