Heidelberg Mterials S/Adr

Ladies and gentlemen, welcome to the Heidelberg Materials third quarter results conference call. I am Sandra, the course call operator. I would like to remind you that all participants have been listened only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Christoph Beumelburg. Please go ahead, sir.

Thanks, Sandra, and good morning, good afternoon, everyone listening in our Q3 result call. As always, we're here together with Dominik von Achten, our CEO, Rene Aldach, our CFO, and the IR team. We look forward to your questions later, but first we have prepared some remarks that Dominik and Rene will go through now.

Yeah, Chris, thanks a lot. Hello, everybody. Thanks for joining. I think exciting times. Thanks for joining despite the fact that the midterms are just being done. But with good news to share, I think we have another strong quarter for Heidelberg Materials. Thank you very much. RCO up 9%, mainly driven by a strong performance in Europe and also continued growth in North America. I think what's key is that the operational excellence initiatives continue to offset the cost inflation. I think that's a key point and on the back of that we are also extending our transformation accelerator initiative with a new savings target and a new savings wave creating additional potential for 2027 and 2028. The project is going to run until end of 2028. In times where the organic growth is sometimes not easy, we have also accelerated our acquisitive growth and announced the acquisition of NCC Industry in Northern Europe. which complements well our existing market footprint in Northern Europe. And we've also in the quarter completed three acquisitions, MaaS, Peru and Aksancha that will then going forward also contribute to the results of Heidelberg materials. And based on that performance, we also confirm our guidance for 2026 and remain confident that the mid- and long-term perspective is intact. Okay, if you then turn to the next page, which I think is your page three, and talk about the third quarter results, I think they demonstrate the resilience of our business model and, again, a very disciplined execution. The 10% growth on the top line is the first double-digit growth since the first quarter of 2023. So I think that's a good indicator that there is some energy coming back in that respect. Our earnings grew by 9% supported by positive pricing. Here and there improved volumes. and ongoing efficiency gains also contributing from our programs that I mentioned before on the Thai Wave 1 and Thai Wave 2. We continue to stay very focused on commercial excellence, operational performance anyway, and obviously that also includes very strict cost management. And at the same time, we continue to find the right balance between organic growth and acquired growth. I mentioned a couple of examples above. If you go to the next page, page four, and talk about the first nine months, I think they confirm the good momentum that's coming out of the business. You know that we had a slow start into the year, but since then, I think, delivered consistent earning growth for the first nine-month period, basically driven by good pricing in most markets, disciplined execution, especially also around the Cost side of things. Price over cost, you know, that's a very important indicator for us is moving in the right direction, staying positive for the first nine months. Efficiency gains contributed to that as well as portfolio moves that I described above. So overall, I think this nine months should be a solid foundation for the remainder of the year, but also going into 2027. If you then go to the Q3 Bridge in page 5, you see that the positive pricing and better volumes are coming together for a long time. This is now, I think, a nice picture where both the volumes increase, but also price over cost is positive at the same time, and that obviously is a good combination. The overall markets, I think, are intact on infrastructure and industrial, not so much yet on residential and commercial. I think in that respect, there is upside potential. Pricing remained disciplined in most markets and helped to offset cost inflation. In that respect, we are moving in the right direction. And the Thai program, as I said, continues to enhance efficiency. If you go to the nine months bridge, the picture doesn't look much different. You see price over cost with consistent execution stays positive and the efficiency gains come in as well as the scope effect that you see also to the right side of the picture that is almost 50 million in the first nine months of the year. If you then go to the specific areas, I think excellent quarter for Europe. showing really also now the effects of the master plan Europe and the portfolio optimization including the operation excellence focus that we put on Europe. I think clearly strong pricing discipline, price over cost is clearly positive in Europe and slightly improved volumes in some key markets. So it's not like Europe is flying high on volumes but slightly improved volumes in some key markets supported the profit growth. We continue with the efficiency initiatives and the footprint optimization to continuously improve our competitiveness. And we also continue to do the investments into decarbonization and modernization of our plant network in Europe in order to drive future growth. If you then turn the page to North America, I think good results out of North America supported by favorable infrastructure and also industrial non-residential demand. Main growth driver was aggregates continued to be strong across the regions. I think the very good focus of the team on the commercial side of things turned also in some Good performances on the pricing side in aggregates especially, but also in cement we stayed positive. So almost 2% price increase in North America in the quarter in local currency. And pricing, you know, I would say was below our expectation in cement. But as I indicated, mildly constructive if you want to paint it that way. In terms of being at least positive, it's clearly not enough to cover the cost inflation and that's why we aim to turn this around in 2027 to fight the margin erosion in cement that seems to be also pronounced in the industry at this point. Then turn the page to Asia, I think a strong quarter from Australia, moving clearly in the right direction despite headwinds. There was the latest interest rate hike again, I think the fifth hike in a very short period, but the team is really doing an excellent job to push ahead with the results in Australia, so a strong quarter from Australia. Across Asia, we see a mixed picture. Very strong operational execution, very disciplined cost management. Volumes start to grow in some key markets. Pricing, I think, has still upside potential. So that's the picture a little bit for Asia. If you then go to AMBA, I think it's fair to say that AMBA again delivered a strong growth quarter, obviously also supported by the acquisition of Aksansha. but clearly also showing the strength of a diversified portfolio. Pricing discipline remained good in AMWA, although there is obviously now a little bit of an impact quarter over quarter in the accounting with the impact of the Accenture acquisition. I'm sure we'll come back on that during the Q&A. I think the team has weathered the varying market conditions very well across the region and the perspective of growth in AMBA is clearly intact based on growth in urbanization and also infrastructure development. Then, next page, I think it's clear, you know, the markets remain volatile as I indicated before. We are very focused to do our homework. I think we've done a good job in our homework with the 500 million savings program to call it early on. You know, I think we are paid for proactive measures and in that respect we also build on the success of Thai. Now with the second wave, with a 300 million additional savings program going through 2028 that will focus clearly on operational excellence initiatives around the world. So it's a global focus on this operation excellence, but with a specific focus on overhead restructuring in Europe because it's a homegrown structure. That's also where our headquarters sits. So we are focused to also optimize that effect. We have clearly taken out FTEs on the operational side and we will also take FTEs out on the overhead side. So clear focus to further optimize our network and to be super competitive in our core home markets in Europe. Last but not least, just to also indicate what has happened in Europe. We talked about the master plan of Europe before. We've talked about Thai. We thought it would be a good idea on the next page 12 to show you a little bit what has happened over the past years. So significant impacts in Europe, both in terms of optimized clinker footprints. We've talked about this before, but all of these here are done. I think that's important for you to understand. And also on the left side, obviously, with the EU ATS scheme being in place, we are very focused on modernizing, upgrading and especially also decarbonizing our footprint in Europe. We've given you many of the examples that we have already done. There are many more to come. But I think it's also fair to say that a major part of the large investment projects in Europe have been largely completed. They're not fully completed, but largely completed. And also most of the closure costs of the things that you see here on the map have also been digested. So with that, I would say I hand over to Rene on the financial side.