Heidelberg Materials Ag

Ladies and gentlemen, welcome to the Heidelberg Materials full year results 2025 conference call. I am Sergan, the chorus call operator. I would like to remind you that all participants will be in listen-only mode and the conference being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to turn it over to Christoph Beumelburg. Please go ahead, sir.

Thank you, operator. Good morning, good afternoon, good evening to everyone listening into our full year 2025 conference call. Thanks for dialing in. As usual, we have Dominik and René with us, CEO and CFO, plus the IR team in the room. We have some prepared remarks. We're going to go through them relatively quickly, and then, you know, take the time for your questions. Over to you, Dominik.

Dominik Langevinkel Christ, thanks a lot. Hello, everybody. Sunshine in Heidelberg, 20 degrees. That's a good time to have a conference call. Great setting. Welcome. Let's go into the summary first page. Very good year for us. Yet another record year. I think all the key matrices go in the right direction. RCO reached a new record high at 3.4 billion euros. Aided down margin up. Important for us, you know, that we are very focused on improving the Structural profitability up to almost 22%. Also driven by a great success on the Transformation Accelerator Initiative that has already encountered 380 million euros of saving. Remember, the saving target is down the road 500 million by end of this year. I remember very well our Q3 conference call. Here you go. European margins increased to 20.5%. So very good performance out of Europe, especially also in Q4. So I think a fantastic entry point going into 2026. Free cash flow, Arrhenio will further go into it, a strong level of 2.1 billion euros, leverage stable at around 1.2 times. What is very good now is the ROIC that has surpassed comfortably the 10% mark. So 10.4% I think is the highest we ever had, and it's really well on track to our midterm guidance from the capital markets where we said we go up to 12%. Shareholder return up 10%, so even more than the profitability increase with a combination of progressive dividend and share buybacks, 1.1 billion euros. The second tranche has been done. and the acquired shares have been canceled. We are really continuing to make the difference, not only because we are the only global ones, not only because we are the heavy building materials guys, but also because we now turn this into superior differentiating products. EVO zero hits the market as the world's first carbon capture near zero cement, and the first customers are happily using it. And then last but not least, importantly, the outlook for this year. We are optimistic. We are going to increase our results with a range that you know from us is always cautious at the beginning of the year, 3.4 to 3.75 billion euros. RUIC, again, above 10%, and the CO2 emissions continue to decline. With that, I think next page is basically just repeating what I just said. I think we don't need to go through that other than, you know, it's green on basically all dimensions and the adjusted APS has also gone up. Reni will talk to you about that in a minute. So overall, I think a strong performance. Reni, you want to say something on the transaction in Australia?

Thanks so much. Hello, everyone. It's from my side. You've seen three weeks ago we have announced that we signed an agreement that we want to take over the construction materials segment of the Maas Group in Australia. And here you see some numbers. It's 40 aggregate quarries, and you can read it there. They have released their results. And it's a listed company, so it's 7 to 8 million tons of aggregates. It's a million cubes of concrete and has asphalt and the recycling operations. That complements our footprint on the East Coast very nicely. And important is to say that we stay in our strict financial framework. You see it, the transaction value is 1.7 billion Aussie. And after synergies, the multiple is 8.4, which fits to our, let's say, targets, what we have guided for. And you have seen probably two days ago, Mars announced their H1 result. We have put it here on the on the chart, and the revenue is up 43%, and the EBITDA increased by 36%, which is on track to what we have assumed even slightly better. So you see there's good potential in that acquisition. So the only one is what we need now is authorities from the regulators, which will come probably Q3, hopefully, and then we see how that goes.

Dominik, over to you. Thanks, Rene. On the back of that page five, I think we need to pause here for a moment because I think this is a super important slide. Underpinning strongly the 7% to 10% growth, the target we gave midterm on RCO, where does it come from? Organic and acquisitions side by side. On the left side, you see the organic development, and we really have to take a couple of seconds here to digest this. 2022 versus 2025, the RCO went from 2.5 billion euros to 3.4 billion. I would say, sorry guys, à la bonne heure, that's not a bad track record. It is solely driven... by the triangle management of price costs that includes both fixed and arrival costs and some M&A. So a good contribution, strong contribution on the end, but then you go back left to the volume side, and with the decline of the volumes in the past couple of years, we got a headwind, a headwind of 1 billion euro results, 1 billion euro results just driven by volume decline. Now, statistically, I said it this morning in the press conference here, statistically, after four years of volume decline, we are coming nearer to the point where this will turn, and I will give you some further indications down the road. Now, you can make the calculation yourself. If this only turns slightly, on the much better cost base. I tell you, we're going to have some fun when it comes down to the RCO development. So that's just the organic side. And then you put, you complement it with the acquisition side that goes on top of it. We've not been sitting on our hands, but we've told you we're going to accelerate. And Evgeny just showed you how we are accelerating already at the beginning of 2026 with a focus on all our key markets, North America, Australia, Morocco, Tanzania, Southeast Asia, and also Europe, including the recycling piece. So, every market is now really focused on a very strong M&A pipeline. The pipeline is clearly full, and you should see more M&A as we go through 2026, more than in 2025. Then, transformation accelerator initiative. I mentioned it already. We said, I think, in earlier calls, it's going to be back-loaded, 40-60, between 25 and 26. And look what we have done. It's been front-loaded quite significantly with a significant impact positively on the savings side. René will give you the impact that it also has on other financial metrics later on. But I think the $380 million are really strong. So from my seat, I am very convinced that we will surpass, well surpass the $500 million when it comes to the end of this year. So from my understanding, there is clear upside on the Thai savings. If you go to decarbonization, I think we are trying to stay on the floor and we're trying to be modest, but I think it's fair to say all the numbers that we've seen so far, we are now the clear leader, the clear leader in decarbonization of the traditional levers, long before we even come to carbon capture and storage. So on net CO2 emissions, on alternative fuels, on clinkering cooperation, on sustainable revenues, It's hard to beat us, so I think all are moving in the right direction. And look at the jump down in alternative fuel rates, 300 basis points in just one year, guys. I think this is a very strong track record that will eventually also turn into superior results. Talking about sustainability, I think it's clear that we want to make the difference on the back of this on the product side. In the end, every technology is only as good as it turns into an advantage for our customers. So we are very focused on setting at the very interesting margins both Evo Zero and EvoBuilds, including EvoBuilds Carbon Capture, to make sure that we carry the technical advantages that we have built also to the P&Ls of our customers and to the advantage of our customers. We are going to build out our near-zero leadership through CCS. We've done Breivik. Technically, it's running. CO2 gets captured. The product is in the market. Pacewood is the one that we have now kicked off. We are going to continue to push Pacewood, and you know that we have gotten the funding for other projects in the EU, but the framework needs to still be adjusted in order for us to FID any of these projects. I'm sure we'll come back to that point later on in your question. Now, what is important for me to understand, when you think about Heidelberg materials, it's not just about CCS. Sometimes when I get some of your feedback, everybody says, hey, yeah, yeah, it's CCS, but the rest, you know? Sorry, guys. CCS is well marketed, that's clear, and it's important for us for the future. It's the proof point that we get to near zero and net zero on concrete side, absolutely. But Heidelberg is not built on CCS only. As I showed you, it's built on a very solid decarbonization piece, and it's built on a very strong and ever being stronger digital automation and AI piece. And I just brought you this one example on autonomous trucks. I think we've shared with some of you already directly, and that is really now getting into being scaled up. We've completed the pilot. Before end of 2025, we have completed a 2 million ton haul package in our bridgeport, lake bridgeport quarry. And from there, we expect significant savings out of this. This is not Mickey Mouse, guys. This is a huge, abrasible cost base when we talk about both CAPEX and OPEX. You know, buying these trucks is very costly. Operating them is very costly, also because you need drivers, and not only one driver. You typically need two or three drivers if you run on a three shift system. And that means, you know, significant staff cost savings, significant savings on fuel and tires, significant savings on repair and maintenance costs. And by the way, also better productivity levels. If you put that all together, this has fantastic paybacks below two years. There's not a lot of projects where you can get two years. same mindset like in decarbonization. We do these things to bring it down to the bottom line. If it doesn't create value, we don't touch it. Don't assume that we are just investing into these things to make a big marketing splash about it. No, we make this to increase our margins, to accelerate our growth, and here's a good example. I could give you 10 more. You Followed also the partnership setup that we have created to also switch the industry into the cloud and to move the industry, so long beyond hydrogen materials into the cloud with a partnership ecosystem setup between Command Icon, Geotech, Pathways, and C60. That one is really going well. And with that, both using that setup internally and also for third parties. The drivers are clear. We want to increase the stickiness for our customers. We want to boost their and our revenue and margins with that setup. We want to really accelerate our Evo Zero and Evo Build sales by combining it with a very robust digital process. And obviously, we'll also use it to automate the EPD, so you don't get it only once a year, but you get it basically real time. Again, here only a couple of examples. On the operational side of things, I think important to note that Q4 was a good Q4, especially when it comes to EBITDA, EBITDA margins and RCO. I think a strong exit point out of 2025 going into 2026. Of course, there is winter here and there, so I think it's fair to say that in Europe and also in the U.S., you saw the blizzard in New York during this week. There is a little bit in these small months and small quarters. There is always the risk of winter. And once things are frozen today, you know, 20 degrees, as I said, sunshine in Heidelberg, so we are moving in the right direction. If you go to the full year, I think we've shared with you the results. I think for me that's okay. Let's go to the bridge on page. You see that the picture that we've seen for a while has not fundamentally changed. We see good price over cost, positive price over cost, even stronger than in Q3, I think. So Q4 had a better price over cost development than Q3. So you see the structural advantage of Q4. But a big volume hit again, so to my earlier remark, if that only turns flat, basically, that would be a significant advantage. If you go to the same page on page 15 for the full year, you see that price over cost is very positive, still a hit on the net volume side, but also to the very right you see some good contributions from M&A now kicking in, 65 million, so I think that's good. Then if you go to Europe, I think Europe convincing performance. And again, remember, in Q3, we had a little bit of a question and answer TikTok around what's going on in Europe. And René and I told you, hey, hold your breath, guys. from one quarter to the other. We said there were some extraordinary shifts over the quarter borderline, so here we go. So I think Europe, despite shaky weather, sorry, despite shaky weather, especially in December, I think Europe pulled off a very strong performance in Q4, and we're moving in the right direction, both in terms of EBITDA, but also in terms of EBITDA margin, and by the way, across all three business lines. North America, I think overall okay, but I wouldn't say something to celebrate too much. I think there is upside in North America. From my seat, I think we are working well on the EBITDA. I think that's okay, especially if you take the weather effect into account, because remember, our footprint is quite northern, so we have a big footprint in the northeast, Midwest, including Canada and in the northwest. And that's obviously in winter always a little bit, so Q4 and Q1 for us is always in North America is a little bit volatile. But I think on the EBITDA margins on aggregates, good performance. I think 33.3%. I would say there is still upside on cement and ready mix as we go into 2026. And the team has fully understood this as we have obviously discussed this internally. Then Asia-Pacific, I think okay, but I would say below my personal ambitions and expectations. I think, Ray, maybe you'll say something to Australia in a second, but I think overall margin moving up, that's good. That's a good sign that the structural profitability is moving. Cost management is being very good despite the markets being really sluggish. China, Hong Kong, Bangladesh. Indonesia, difficult. Thailand and especially India better volume growth. Malaysia getting better throughout the year. So overall, I think the markets are still somewhat sluggish. Nevertheless, the team has pulled off a good, very good margin performance. And with that structural profitability, as volumes come back, I think we should see also better result development. Maybe, Reni, you say something.

Australia Q4, I think, was 10% up in Q4, which was very good. And then the full year also up versus prior year, even due to the fact that the first six months were weak in Australia. But the market is coming back, and January, February confirms that the market is improving. So outlook for Australia should be okay.

Yeah, and then what do you want me to say? You enjoy this one on your own. What do you want to say? You know, I think fantastic top line growth in all dimensions in the right direction, EBITDA, RCO, look at the margin level, EBITDA margin in cement, 30%. I leave this for you to enjoy without a comment.

Africa, Middle East.

Sorry, I'm talking about 19, PESH 19, Africa, Mediterranean, and Western Asia.

Okay, with that, René, I turn over to you. Thanks, Dominic. Let me go on slide 21, just quickly the highlights. Adjusted earnings per share go up 4%, and they adjusted, as you know, we take the AOR out, and in previous, in prior year 24, we had a 65 million provision release in discontinued operations, which is, we also have purely one of it we've taken out, and that leads to a 4% increase. Free cash flow at 2.1 billion. We come later to that, why is this slightly going down. Cash conversion at 45%, which we set was the target for 25. Now we've, in the latest capital markets, we've moved this to 50, but I think with that number we are on track. ROIC, 10.4 at record level, as Dominic said. That tells you a little bit that we manage the company in a very disciplined way. Leverage at 1.2, no surprises below our midterm target. and then capital allocation, we said it, shareholder return went up 10%, and will also further go up in 2026 because we said progressive dividend plus we have the last branch of the share buyback, so that will go up further, and then is closed, and Mars we have signed, so that's just a repetition. Let's go to the next slide. The P&L, as we have discussed, AOR is 170 million beta, than last year, but still, you know, we have some impairments, some restructuring costs in the 264 million. And as you have outlined in the capital market today, we have, let's say, European master plan also, you know, and this needs to be prepared. And we have numbers in for restructuring and impairment, but the good thing is it's lower than in 24. Financial result, I think, very, very, very low for the size of the company, 193 million. I guess it's best-in-class number. Income taxes go slightly up, and you see our profits go up, so we have to pay taxes. Net result from discontinued operations, that's the minus 80. What I said, there's a 65 million in last year, so de facto it's nearly flat. And then non-controlling interest, you see, is 190. That goes 50 million up. Why is this? Because in Africa, we have... countries where we don't own 100%, like Morocco or Egypt, and then here the monologies go out. So we come to a reported group share profit of 1.94 billion, which is 160 million up. And if you take the one-offs out, let's say AOR, the big provision release, we go up by 50 cents per share, which is, I think, a very good result. If you go to the next slide, to the free cash flow, you see that here, 2.1 billion, 60 million lower. Two major, let's say, items. You see the CapEx goes up by 80 million, and Dominic alluded to that. We have here already some money in Q4 for Pacewood, which is good. We are building something that's very good, and you know that we get here also support from the UK government. And then another line is here non-cash items and other. You see here minus 152,000. and this is due to the fact that we have some cash out from provisions for the restructuring. Last year, we have built up the provision, and this year we have paid it out. There's for restructuring. There's obviously some bonuses if the company does record results, and there's one-to-one off payments for some litigations. So there's nothing – you know, we have very good transparency here. Obviously, there's nothing of concern. And you have seen the Thai project. Instead of 250 million, we have delivered 380. That comes, obviously, with some cost, but, you know, we should see some relief here because the big things have been done. If you then go to the next slide, NetDev development, you see NetDev is going up 400 million leverage. I say 1.2 to 1.2. That's flat. And how did we use the free cash flow? Net gross capital of 1.1 billion, which was then the biggest one was the giant investment in Tamala. That's roughly 800 million of this or 800 million of this. Dividends we have increased. Minorities also share by back 400, so 1.1 billion share in return, which is plus 10%. and then some other reducing liabilities in there, which we have every year. I think very solid number, 5.7 billion for the company comes to a leverage of 1.2. If we then come to the next slide, the earnings per share over a longer period, that moves up 12%, I guess it's a remarkable number, and obviously the plan for 26 is that this moves further up. And the ROIC now at 10.4. I alluded to that. It's a record number. RCO up, tax rate better, invested capital well managed. So all three dimensions very well managed leading to that number. Dominik, I hand over to you for the outlook.

Thanks, René. Then let me go through the outlook before we come to your questions. Let's go from left to right. Overall, North America, positive outlook as we have both good volumes and also pricing expectations for North America. Of course, residential is going to continue to stay a little bit soft, but I think, you know, data centers, but also, you know, the real estate sector is coming back when it comes to the commercial real estate sector. So, overall, I think quite positive outlook for North America. Africa, Mediterranean and Western Asia, same thing. We kept it short. Intact organic growth, good management performance on pricing and costs should lead to another good year out of AMDA. Europe I think overall continues to be strong, especially in Eastern and Southern Europe, but I also do see some light at the end of the tunnel now for this whole market here in Germany and also our Northern European market, which is very important for us that it comes back. And hopefully the same will then happen eventually in Benelux, France, and the U.K. Pricing we have deliberately not put on the slide here in Europe because, you know, this is very competitive sensitive. That's why we are staying here very diligent when it comes to competition. Asia Pacific, I think good market momentum in Australia, as you heard from Rene. and positive development in India, especially on the volume side. Hopefully Thailand will recover after the election now has been done. It was very quiet. I think this should lead to a stable government. And then Indonesia and China will remain probably a little bit challenging as they are trying to find their foothold in the new setup, both in China and in Indonesia. So that's the picture for us, and that then turns into a Positive guidance, we are confident on RCO. We'll grow our RCO between 3.4 to 3.75, as you know from other materials, both cautious and in larger range at the beginning of the year, and then we'll continue to go through 2026. We are confident that we can deliver again above 10% CO2 emissions should see a further slight reduction on the back of global leadership already. CapEx, as Lenny was alluding to, slightly higher than in 2025 for the reasons he gave, and then leverage should going to stay around 1.5 times in line with our midterm targets. That's it from our side, and then we'll get to your questions.

Thank you. Operator, can you start the Q&A process, please?

Yes, ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on your telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and 2. Questioners on the phone are requested to save the loudspeaker mode while asking a question. Anyone who has a question may press star and 1 at this time.

Okay, so we have quite a few people on the line, so please, as always, restrict your questions to two at a time, if you will. We start with Ben Rather-Martin from Goldman Sachs.

Hi, good afternoon. Dominic and René, thanks very much for the questions today. My first was just on the 2026 EBIT guidance. Wanda, can you talk through some of your assumptions when it comes to scope and effects? I noted you're talking about a better M&A year in 2026 versus 2025, but just so we understand what's driven by those two buckets and I guess what's organic. And then the second question would just be on the European ETS. I know we've seen a lot of uncertainty in the last few weeks, a range of outcomes. I'd be interested in I guess how you internally see the outcomes that are on the table and I guess if you're looking to incorporate any flexibility into your European cement planning at all just when it comes to clinker rationalisation, any investment. I know there's a lot of things being thrown up at the moment but it'd be valuable to touch on that topic. Thank you.

Ray, take the first one, and I'll do the second one, okay?

Hi, Ben. It's a deja vu here for me now. We had the same first question, I think, last year when we talked about our guidance. Guys, just for transparency, our guidance includes a three-digit million negative FX impact, which is roughly 3%. And then the rest, you can do the math. So if we add up organic and scope, we are coming to a growth of roughly 8%, which is fully in line with what we told you at the capital markets there. And the scope piece of this is probably rather on the 1.5% to 2% range. So that tells you something. So as Dominic said it, Let's see how it comes through the year. But I think an 8% growth, not considering FX, is a very, very reasonable number. And maybe there's something in it. If it gets better, we have upside here on the fixed side. If you look at the rates, maybe there's something. And in the scope side, Dominic said it, you want to grow. Mass is obviously not included in that guidance, for example. So I think there is some room if everything goes well.

Okay, René, thanks a lot. And then, Ben, on the ETS, you know, we are not the markets, but I can tell you I'm shaking my head a little bit. I think I really don't understand, quite frankly, what's going on there, because for us, you know, to your point, The EUATS system has been there for 20 years. Do you really believe that's going to get scrapped? Forget it. It's never going to happen. Are they going to make some adjustment? Maybe, but guys, you know, just remember, for Heidelberg, you asked about flexibility. Guys, we are daily able to shift between the different gears, and we have proven this for many years now, and I think it's clear to be specific to your point, rationalization of capacity will absolutely continue, because we, you know, with or without CO2, we want to be the cost leader, especially in Europe, but also in other parts of the world. So, and then you can put the CO2 thing on top, and that may create even more dynamics, but in the end, clear the rationalization will continue. On the investment side, the general part of the investments, also the traditional decarbonization will absolutely continue, obviously in line with returns. You know, if we have a decarbonization investment that depends on a CO2 price of 100 euros and we don't have that CO2 price right now, then we hold off with that investment. But that's nothing new for us. That's normal day-to-day business. And the same is true for CCS. You know, we always said we only FID these projects if there is a superior business case. And if the government spreads some uncertainty, we just sit on our hands and wait until we The framework is in a way that we can use it, and that was the effect in Breivik, and that was the effect in Pacewood. That's why we've done those two, but guess why we have nothing done in Europe yet? Maybe there is not enough stability in the framework and not enough funding from either Europe or the national governments, and then we do not move. That's also why we said in the capital markets, don't get so excited in May. We are the clear CCUS leader. We are going to be that for the next five years. There is no rush for us to go into anything crazy. We are going to stay financially disciplined. So I really don't understand all this noise. For me, I have to smile a little bit. Sorry. Very clear.

Thanks very much. Thanks, Ben. The next question comes from Louis Prato from Kepler Shepard.

Louis.

Louis, hello.

Hello. Hello, guys. Thanks a lot for taking my questions, too, from me today. The first one is, how have price increases started this year in the context of declining CO2 allowances? And also regarding this, when do we know more about benchmarks and how the industry is suffering or not from the lower allowances? And the second one, is surpassing the 500 million euro transformation accelerator savings targets when expanding included in your current guidance range that you just commented on?

Okay, Luis, let René take the last one, and I'll take the first two ones. On the price increases, guys, again, calm down. There is no change to what we have told you before. Price increases get implemented across the world. That's also true for Europe. Obviously, as I said, you know, given the winter setup in Q4 and Q1, there is always, there may be some delay as the business is just not moving at this point, but there is no change in terms of what we want to achieve in terms of pricing both in Europe and in the U.S. and in other parts of the world. When it comes to the benchmark, Luis, we are not the EU Commission or the EU Parliament. You know the timeline around this. They are trying to get their arms around this in this quarter or at the latest next quarter, and they will publish a benchmark. There are thousands of rumors around what the benchmark figure will be personally. and this is my personal opinion, don't quote me on this, I do not believe that the benchmark is going to be tightened to the very limits. It's going to be somewhere in the middle between where we are now and where the big speculation was in the past. So, I foresee that there may be some relief on the benchmark versus the very extreme approach that was maybe discussed half a year or a year ago, but it's, sorry, that's the normal, That's the normal review process that happens every year. But now everybody gets so excited about it. I don't know what's going on. Every couple of years you have this review cycle, and then they play around with the benchmark, and they do a little bit here and there. But that doesn't change anything fundamentally, guys. So that's where we sit on the benchmark discussion.

So, Louis, regarding Thai, just one in advance. You see our tie numbers clearly in tie savings in our P&L. We have reduced our fixed costs this year by 40 million Euro reported, even though we have 40 million negative inventory. So like for like 80 million Euro reduction. So that tells you that we see the net effect of the tie in our numbers. So that's number one. Number two, to your question, do we have more than 500 in our guidance? I would say obviously there is a big part in the guidance, but as we have written it on the slide, maybe there's some upside in that number also.

Excellent. Thank you.

Great. Next one comes from Elodie Rowe from JP Morgan. Elodie, hello. Hello.

Hi. Good afternoon. Thanks for taking my question, sir. My two questions would be, first of all, going back to European cement prices. I just wondered if you could just tell us if the discussions that have taken place or started to take place on the EUTS has impacted the outlook at all for you for European cement prices, and in particular the price-cost spread that you do expect to generate this year and next year, if there's any change to that in your view, and if a lower carbon price also impacts that. And second, on your guidance, it would be helpful if you can help us understand what takes you to the lower and higher end of the range in terms of pricing, volume, or other assumptions that you've made there. Thanks very much.

Thanks, Elodie. To your first question, no and no. So no change. And we are fully on track and also know whether there will be an impact to price over cost. From my perspective, no. The target will be again to deliver a positive price over cost scenario for 2026. So in both cases, no, no, which means yes, yes in the end. Okay.

Okay, regarding the guidance, first of all, lower end, Dominic said it, I think we, and you see it on the slide, we have assumed volume recovery in a few of our areas, and we were sitting here last year, and I said it also, for Europe, volume recovery for the West, and it didn't happen, but we still did deliver the result. So if the volume recovery does not happen, maybe we come to the lower end of the guidance, yeah? But if everything goes to plan, we can be probably a little bit better than the midpoint of the guidance. It's early in the year. I said it. We have some maybe tie-up side. There's a fix, maybe something. There's scope, maybe something. So this can lead us probably to the upper end, to the guidance. I hope that's enough.

Martin gets completely nervous with my no-no. And yes, yes, just to be very clear what, you know, you asked whether there is any change. on the pricing targets and the pricing implementation? No. Whether there is any negative impact on the price over cost dynamics? No. So that's why I said yes, yes, because both goes in the right direction in pricing and also in price over cost, just to be clear about it, no?

That's very clear.

Next on the line is from Bernstein.

Hi. Hey, thanks for taking my question. So one question is on the margin expectation for that's baked into your guidance for 2026. And could you provide a little bit of color around, you know, what range of margin expansion you're expecting, given, you know, the very strong margin expansion we saw last year, and then how this splits into maybe the TAI synergies, price cost, operating leverage or deleverage, and anything else? And could there be some regional differences? And I think my second question is around, again, going back to the ETF discussion and, you know, you've already invested in Brevik and you've started investing in Bateswood as well. And last year at the CMD, you gave a very good, you know, explanation of the excellent profitability and returns from Brevik. But supposing, you know, hypothetically, prices collapse, then could you provide of, you know, your returns or from these plants to, like, every inch in the carbon prices?

Okay, René, maybe you want to start with the margins, with the margin question first, and then I'll help a little bit with the EUATS, and maybe René can also add with the financial.

That's a very detailed here margin question. I have to say, so I'll give you a high level what should happen, obviously, what we said as well in the capital market. For Europe, our margins should move further up. You know, we do the, let's say, the plant optimization. The pricing should be reasonable, and if volumes come back a little bit, that is all obviously contributing to our margin, and you see this also in 25, so that works and should go further up. Then we go to North America. You see we have in cement, you have seen the number went slightly down in 25. That should obviously recover because the cement price increase in the U.S. should be more pronounced than we had it in 25. And also on the cost side, the U.S. colleagues have a very good cost target. And in aggregates, you know, there should be decent pricing also. So margins in the U.S. should move further up. And then, you know, in Asia or in APEC, the margins are already pretty at the bottom. So that depends on a little bit what does pricing do because cost management is very good. Let's see how that moves in APEC. For sure, Australia margins have to go up due to good cost and good pricing. And then for AMVA, you know, margin is already at 30%. So let's see how we move there. But overall, the sentiment here is also good. So overall, we should see the group margin obviously going up with all the measures we are taking.

Thanks, Puchuri. The next question comes from Tom Tsang from EOACS.

So on the EOACS, you know, first of all, there is no sign whatsoever that the demand for our EVO-built carbon capture or EVO-0 products is collapsing or even the prices are collapsing. Absolutely not. There is no impact whatsoever, just to be very clear. And I think that answers then also the question, What's your hypothetical approach to us? That hypothesis is not one that we follow at all. And as you know, just as a general remark, our equity is very limited. So we should try to get to the downside protection. Forget it's meaningless. That's all of what we said. You know, it needs to be a very, very profitable business case, and our skill in the game is not zero, but it is very, very small and reasonable. That's all true for Breivik and Facebook, so there is no impact for us from that end.

The only, if I may add, and we discussed it, the intensity overseas. If the price really drops to 30 or 50 euro, you know, the only thing what we will do then is there will be a very hard review of all the CapEx projects we are doing. New CapEx projects, which are purely based on CO2 prices, will obviously have it very difficult to get approved because in this case it just doesn't work. So if at all this happens, then you should see an improvement in our cash flow because the CapEx spending will somehow go down. So that will be because for the big projects we will then put the brakes on. and we said it today morning in the press conference also, uncertainty politically in a political environment is not helping that Heidelberg is speeding up investments. So that's very clear. And if at all, our cash flow would go up.

Thank you. Very clear. Then Tom from Barclays. Hey, Tom.

Hi, guys. Thanks for the opportunity. Maybe following on from your point around cash, actually, my first question was just You know, you just about hit the cash conversion target for above 45% this year. I understand there was quite a lot of restructuring cash out. Could you maybe talk about the phasing of that? Has the cash out restructuring, are we past the peak of that? Should that come off in 2026 now that the bulk of Transformation Accelerator is done? And do you have a view around, you know, can we get above 45% cash flow conversion next year, even though CapEx is going higher? And then the second question is just on your sharehold return policy. I suppose you talked quite a lot about M&A as a use for excess capital. Obviously, with the pullback in your share pricing, does that create an opportunity, I suppose, to either pull forward the third tranche, extend the third tranche? Yeah, I'd be curious of your thoughts on that side. Thank you.

Okay, Tom, thanks for the two questions. As a first, let's do the shareholder return policy question. You know, we will start the third tranche after the AGM, as we have done the second one, as we've done in 2025, so there's no change. And if you do the math, you know, we announced 1.2 billion for that program, and the third tranche will be the biggest. So that improves, let's say, moves the shareback already up in 2026.

That's an important point. I think it's overlooked a little bit. Because if we are going to stick to the 1.5 billion... And then you can do the math and you can calculate that the last tranche is deliberately the biggest. So in that respect, I think, I'm not sure everybody got that.

Yeah, it will be 450 million euro, the third tranche in this year. So that is a good increase. And as we said it also, from a dividend perspective, it's progressive. So that means it will go up. So you will see a nicely increased shareholder return also in 2026. And for now, you know, no change to our return policy. We increased it. We will increase it in 26 and then let's see how the year goes, what we then do the year after. In terms of free cash flow and cash conversion, yes, we reached the 45% and coming to your question about restructuring and cash out, Although I would say that we should be near the, we should have seen the peak, yeah? So the number in 2026 should be lower, material lower than we have seen in 2025, which should help obviously on the cash conversion. And then, as we said it, we want to come closer to the 50%. But also, we do CCUS Pateswood in 2026. But you see it in our CapEx numbers. We always state below our guidance. That is a little bit the thing. In the CapEx guidance this year, we have 1.2 to 1.3. And if we will be below the 1.3, which we've announced at the capital market, there's room for the cash conversion. So I think we are on track, Tom. There's the big one of this restructuring cost this year. So we should be okay in 2026.

Thanks, Tom. The next in line is Ephraim Ravi from Citigroup. Hi, Ephraim.

Hi, guys. So two quick questions. Firstly, on M&A, you say the pipeline is very full and you seem genuinely excited about it. Just to get to that 1.5 times net debt to EBITDA, you're talking about, you know, probably about 3.5 billion of cash had room for acquisitions and you've already spent about 1.3 billion on Mars. So are you looking more like 2.2, 2.3 billion sort of scale of acquisitions or are you also looking at acquisitions that may require issuing equity? So just in terms of the scale of how many that you're looking at. Second question, on your digital investments, obviously Command Alcon and those, a lot of the software companies or legacy software companies in the market have seeing their share prices halve or more because AI is going to basically replicate all of that. Do you think you've got the right suit of digital tools for the AI world rather than sort of the legacy, you know, software world in terms of your digital strategy? Thank you.

Efrem, thanks a lot for your question. On the very first one, zero equity raise for M&A. Just to be very clear, if there is any, speculation on your end. Sorry, guys. No equity raise for acquisitions. We never indicated that, and that's clearly off the table, just to be very clear. But, René, you want to make, and then I'll say something on the digital side.

And, Efrem, also, you must, I need to understand, because you said we have capacity of, what, 3.5 billion or something. So, our free cash flow is, let's pick a number, what we have this year, 2.1, and then we pay or let's say 1.1, 1.2 million shareholder return, dividends and share are back, then there's 1 billion left. And if I want to move the leverage 0.3 up, there's another 1.3 to come, so there's 2.4 billion left for a model. If I do that math, if I want to come to the net debt to EBITDA target, yes, there will be some EBITDA contribution also, but okay. And the MAS number, I need to correct, you said 1.3 billion. It's 1.6, 1.7 billion Aussie, which is 950 million Euro. Yeah, that's the MAS number. And as Dominic said it, you know, we have more capacity to do that. If we spend 1 billion, then the leverage would be still below 1.4. I did the MAS just right now. And, you know, the 1.5 is not a – it's our midterm target, you know. We can be maybe 1.6 or we can be 1.2. So that's our midterm target, which we will keep. But it's very clear we want to grow further, and there will be more in the day to come.

Okay. And then on the digital investments, Efrem? I think you're right from my perspective and you see what the capital markets have done in the last couple of weeks on the software side of things. Rest assured we've taken diligent reviews on exactly that point. And I think from our seat, it's clear that the software world will split a little bit with all that AI discussion into, I would say, the general software companies and those who are deeply intertwined with the workflow end-to-end with your customers. And those will rather profit from this whole discussion because we have a vast acceleration of product development and a much higher productivity in terms of coding, so the costs will lower, the time to market will be quicker, and you get a very sticky connection in the workflow. So, we have done this review also together with our partner, Toma Bravo, and we have no reason to believe that Command Alcon gets any hit from this. It's probably rather the opposite.

Thank you.

Yeah. The next question comes from Sida Ekblom from Morgan Stanley. Hi, Sida.

Sida, hi. Hello. Hi. Two questions from me. Can you talk about the North American business? We've now had four quarters of consecutive negative organic top line growth. And if I'm assuming that you had a little bit of positive pricing momentum in the fourth quarter, you're looking at sort of high single digit volume declines across all product categories in North America. So I'd like to get a sense of how we should be thinking about the development in this very important market for you in 2026. Are we actually seeing growth yet at a top-line perspective? And then secondly, on M&A, we've obviously debated a lot about the scope for M&A, which sounds very material. It sounds like you guys are really bullish on the growth opportunities. Can you just remind us about how we're thinking around sort of priorities, regionally, products, et cetera? That would be helpful. Thank you.

Thanks a lot. Let me take those two questions and then you jump in if you want on both. So North America top line growth, you're right. Top line was sluggish in North America for a while. I don't think we are on our own. So I think that tells you that the market, especially on the volume side, has not been our friend over the last couple of years, I would even say. I think the other point is that, you know, cost management has been good, but it needs to be super good because underlying inflation in North America is still fairly high. So I think there you have that one element. The relief on the energy cost side in North America you don't get as much as in other parts of the world. And then last but not least, when it comes to pricing, I think it differs quite market by market, quarter by quarter, and business line by business line. And as I indicated earlier, if you look to the last couple of quarters, we are not entirely happy with the development on the cement sites. I think there was some import pressure historically. that I think has balanced out a little bit under the whole tariff discussion. So we are more optimistic for pricing in cement in the U.S. That's what you saw in the guidance. And obviously, anyway, for aggregates, aggregate pricing performance was actually good. So we are, that's the picture from our side. Sida, you want to add to that?

Sida, you made the comment high single-digit volume reduction. That is absolutely not correct. In cement, it's even close to flat. In aggregates, it's low, low single-digit. That's not correct. I just want to say this because if you look at also the competition, and we went through the transcripts like for like, you know, we are the only one which is really better than everyone else is Martin. Okay, fair enough. But we don't need to hide from the other ones because from a voting perspective, we are on par with the other ones.

Okay, and then... Sorry, before we go on to M&A, so in the fourth quarter, you had minus 3.6. percent like-for-like negative organic at the top line. So if volumes are sort of flattish, that implies that you're... It was slimmed by ReadyMix. ReadyMix. Yeah, okay, fine.

It was slimmed by ReadyMix. ReadyMix. Fine.

So we don't have to be worried about pricing trends in cement or pricing in aggregate. No. We're quite comfortable with those pictures.

Okay, fine. Exactly. The biggest drop was in ReadyMix, Sita. Sim and egg is okay.

Okay, great. Thank you. And then on M&A? some color on targets, priorities, et cetera?

Yeah. Yeah, M&A, I mean, first of all, we want to stick to the core markets that we have announced and that you know very well. We're going to tighten the net. We're going to stick to the business lines that you know, so no endeavor into any other stuff like light size or anything. We're going to stick to the heavy upstream, downstream, that's what we've always done. And then from a geographic perspective, as you saw on the earlier map, all our core markets are on the radar screen and in the pipeline. That's true for North America. It's true for Africa. It's true for Asia. It's true for Australia. And it's true for Europe. So no exclusion from there. It's an opportunity-driven game. Wherever we have the best opportunity, we will jump. but all pipelines are being filled and compete against each other.

Thanks so much. Thank you. Thank you.

Next question comes from Julian Radlinger from UBS. Hey, Julian. Julian.

Yeah, thanks very much, guys. Hey. So two from me as well. So first of all, in Europe, so the European margins in Q4 were really strong, especially in cement. Can you talk about what drove that? In Q3, I remember you had a 10 to 15 million euro inventory phasing related one-off. Is that reversed now? Is that effect in there? Is there anything else that's kind of one-off, like CO2 allowance sales or anything like that? Is it a result of the transformation program? What drove that strength in Europe, organic EBIT in Q4? And then second question, just to come back to the M&A once more, please. So you said in the opening remarks that you expect more M&A in 2026 than in 2025 based on your pipeline. Not that you factored into the guidance, but based on what you're seeing. So in 25, you had 113 million EBIT contribution on, well, you had 113 million EBIT contribution. Does that mean you're, based on your pipeline, you think you could possibly surpass that number in 2026? And then in that context, can you remind us, please, what the multiples were on average that you paid in 2025 and what you would expect for 26. Thank you.

Okay. I'll have a quiet afternoon for a second. So, Ray, maybe you start with the Europe Q4 and are there any one-offs? Okay.

Europe Q4. What I said clearly in the Q3 call, everybody was disappointed of Q3 margins. I said, guys, calm down. It will move into Q4. There are some phasing effects, which we have now the positives In Q4, there's no one-off of CO2 sales or whatever. You know, why should we sell our valuable certificates? No, we don't. The good thing out of Europe in Q4 was there was good pricing and very good cost management. So that's in simple terms. That is the answer, and it came out what we said, margins in Q4 will be good, and they were good.

This is an important point, just to add to what René was saying. This is Thai. This is, you know, the plant adjustments, the capacity adjustments, the FTE reductions. We always said we are going to focus this on Europe. And you see clearly, by the way, you know, our year-over-year global fixed costs have come down in absolute terms. So I think that is really very strong and a good contribution, a strong contribution came from Europe, and you should expect more as we go along, because we are probably going to even accelerate the second wave of the master plan in Europe. So we are on it, and I can tell you there is more to come when it comes to margin expansion in Europe.

And when we come talk about a model, I don't know where you have the numbers from. On slide 30, there are the numbers. Scope for 2025 on EBIT RCO level slash RCO was 65 million on EBIT 115 or 113. And at the beginning, I said our guidance includes 1.5% to 2%. RCO scope, which you can do the numbers. It's probably between 50 and 60 million, 50 and 60 million. And, you know, additional scope is dependent on when do we close the acquisition. You know, the Mars acquisition is announced. That's great. but it's not in my hands when we get the regulator approval. So that depends a little bit. So to put now some estimations, I'm reluctant to do because it's not in my hands. We have something in the guidance, and if we do more M with A and the closing is at the right time, there will be more in there, but I can't tell you how much.

And maybe to your multiples, you know, just a general mark, we just closed the multiple on March, and i think it's clear we're going to stay very disciplined on on the mla side we are not going to do a 16 20 whatever time multiple after synergies that's crazy guys we are you know so you saw the math uh it's it's just above eight uh for for after synergies uh um And I think that's clearly the ballpark that we are using to commit or to stick in the framework that we have committed, because you know if you go outside of this to make eventually returns on M&A in our industry will be very difficult, and that's why we're going to stay very focused to stay in that ballpark.

All right.

Thanks a lot, guys.

Okay. Thanks, Julian. Thanks. Next one from Arnaud Lehmann from Bank of America.

Hello, thank you very much and good afternoon. My first question is about Europe, please. You mentioned your positive outlook for pricing and the fact that price increases are getting implemented. On the other side of that, is there any cost inflation to consider? We know that French electricity costs could go up. Are there other cost factors? that we need to account for, or do you expect the price increase to flow through in the bottom line? That's my first question. And my second question is coming back on your acquisition strategy. I appreciate you've made some comments, but looking at the business historically, it was US, US, US. We know at one point, maybe you wanted to do larger deals. That did not happen. The more recent past, You've clearly focused M&A on you've done smaller deals in Morocco, Indonesia, Australia. I think there was press articles about Turkey recently. I appreciate you've done giant as well in the U.S. We're still on the list. But what has changed in your M&A mindset to justify this, let's say, geographic diversification in your M&A strategy? Thank you.

I'll do the second one and let René do the first one on pricing.

Oh, hello. Also, regarding Europe, you were asking about cost. Yes, you are right. For France, the Arwen electricity support, let's say, is not as cheap anymore. It's gone. And now that hits us with additional cost. That is correct and no news. And then you asked about other costs. Obviously, there is certain... Inflation on salaries, it's clear there is salary increases for our employees in every country, which is probably, or whatever it should be, it's probably 2%, 3% wage increases. And then that's probably the big, let's say, cost movements. On the other side, you, Dominik, said it also, our wave two of our European cement plant optimization, let's say, is coming into play. We will have the Thai full effect on the cost side also. And then we have the price increases. So overall, as we said, the price over cost for Europe should be okay and positive. And overall, energy should be roughly flat. Obviously, January, February now was expensive because it was so cold. But the summer will come off again. So overall, for Europe, price over cost should be good, and margin should improve.

Okay, and then, Arno, on the acquisition side, just to sit back, sorry to correct you a little bit, but I can't see that we have lost the focus on U.S. We've done giant methods, big acquisition in the southeast. We've done Bernco, the assets of Bernco in the northwest. So that we are not executing on North American acquisitions, I cannot say. But it's not like it's U.S., U.S. and U.S. only. Sorry, we are a global company and we can also create good or even better returns in other parts of the world. And that's why we look at a global picture. And that's why you also see, you know, acquisitions in Africa. That's why you see acquisitions in Australia. And that's why you see also acquisitions in Asia and acquisitions in Europe. We are always set in our core markets. And obviously there's not only U.S., U.S., U.S. Plus, I think to be fair, also the U.S. market is challenging in acquisitions. It's very costly. And again, with the rigidity of our financial framework, we want to create the returns. That doesn't mean that we do anything in the U.S., guys. Very clearly, we are very, very focused and we look at everything that moves in the U.S. market. but we are very diligent about does it fit to our financial framework and you should see acquisitions in in north america and down the road absolutely but you should also see acquisitions in other parts of the world as they complement our existing footprint existing markets drive good synergies improve the market position and with that give us further growth potential organically and obviously margin potential when it comes to better synergies.

Thank you so much.

Thanks, Arnold. The second to last question now comes from Harry Dow from Rothschild and Redburn.

Hello, Harry. Hello. Good afternoon, everybody. Thanks for taking my questions, just two from me. Firstly, maybe if we just hone a bit back on Europe and recovery and kind of volumes of those comments, I was wondering if you could just give us some more colour on what you're seeing on the ground. I think the like for like in Q4, it was minus two at the top line. I suppose there's not significantly any great improvement as of yet, but you sound like you've got quite a lot of confidence, I suppose, that things are turning a corner. So maybe just in some of the core countries, it'd be great to hear sort of views on what you're seeing at the start of 2026. And then secondly, just around the comments on changing of clinker ratios and alternative fuels, I think obviously that's, seen as through the great lens of reducing carbon per term and overall. But I wonder whether you could comment also on maybe some of the economic benefits of that. I don't know how much some of those lower fossil fuels and lower clink ratios actually reduce costs, boost margins in your view, and maybe where regionally you see the most opportunity on that. I know the U.S. starts from a higher base, but maybe there's more pushback from customers, but anything on the economics of those changes.

Thanks. Yeah. Good question. Let me just answer both and then René chips in if he wants. So on the volume side in Europe, I think, you know, I think let's go country by country or let's say region by region a little bit. Southern Europe, absolute intact good volume developments expectation for 2026. Same is true for Eastern Europe. So that's, I think, one important part of Europe. Then we have, I would say, Germany and Northern Europe. I indicated earlier, I think we do expect recovery in both parts of that part of Europe for 2026. I think the ones that are lagging a little bit behind are Benelux, France, and UK. Let's wait and see how that volume develops in those markets. But in general, don't forget in Europe also, Q4 and Q1 are always winter quarters. This time we had winter, so you will see an interesting dynamic over the years now between the different quarters also in Europe, given the weather impact. But underlyingly, and that's importantly from a market perspective, I think we clearly see positive indications in some of our key markets. that things are moving in the right direction. I said it earlier, I think, in the Q4, for example, in Germany, we saw that the groundwork has really increased, so those companies who are working on the ground to lay infrastructure and everything, they have really a much better and more healthy order book and execute that order book, so that should also increase cement and concrete demand down the road. So the early indicators, let alone the permits that are going up on housing and everything, So I think there are some good indications for volume developments in Europe. Nothing is perfect everywhere, but I think this is the color. And then on clinker incorporation, very interesting question that we have also internally. Thank you for the question because I think it's important to clarify that again. Yes, we are the decarbonization leader, but we have combined this with superior financial performance, guys, which tells you the clear message internally, which I'm happy to share with you. We are doing the decarbonization on equal or better footing financially. If it's a worse footing and, for example, for whatever reason, the coal price would drop to minus where it's 10% or 20% cheaper, then we go for coal, sorry. We are a capital market-oriented company, and we don't throw money out the window. If there is an opportunity to make money that sits within our strategy but short-term needs to be sacrificed for operation and financial performance, then we have a clear mindset here to pull that advantage. So there you see also how we play with this. to create a full picture that you have seen here in the past hour or so.

Just as I may add here, just you asked for the economics. As Dominic said, alternative fuel, what does it do? Two things. In Europe, overall, it saves everywhere CO2, but in Europe, there's a price behind CO2, so we will save, in theory, that price if you are short. you would save to use part of a certificate, number one. Number two is you replace fossil fuels, which are normally more expensive, with a cheaper thing, or even in some countries we get a gate fee, so we will get paid to take alternative fuels. So we have a few plants in the group in Europe where we have positive costs from fuel because the alternative fuel is so high and we get a nice gate fee. Even also in, I'll give you another example, also in emerging markets, give you Indonesia, the example, I think the alternative fuel we are using bears half the price of coal. They're not paying for CO2, fine, but we save 50% of the coal cost. So this makes absolute sense to use alternative fuel to ramp it up. And this is core DNA. We know what to do, and we can do it. Then, thinking on cooperation, it's even more pronounced because, Saving the percentage of clinker incorporation saves you between 8 to 10 kilo CO2 per ton, which is very valuable in the CO2 context, especially in Europe. Plus, using SEMs to replace the clinker is, let's say, the next cost advantage because the clinker burning is the most expensive part of the cement production process. And this you replace with a cheaper product. So it makes all the sense of the world to hammer these two, let's say, KPIs like crazy, in which we have done. You see it. It's moving up, and we are number one in both of them, of the big ones, which publish. So that's for the economics.

And I think to build on what René has said, you know, clean-down cooperation next to alternative fuel is a good indication of future structural profitability. Why? If you take out that costly capacity like we do in Master Plan Wave 1 and 2, you build your cost position for the future because you get rid of both the most cost-intensive, most maintenance-intensive, and most CO2-emitting part of the – so it's a – in all positive directions, and that's why we are so focused to be the leader here, not only in Europe but globally. And we do this in a very well-balanced decision-by-decision tradeoff between CO2 impacts and financial impacts to the direct bottom line of the year. So I think that's well understood, Harry. Right, yeah.

Thanks very much. So we've got time for one more question that's coming from Isaac Occhio from On-Field Investment Research.

Hi, Isaac. Hi, can you hear me? Yes. Hello. Thanks for taking my question. So I have two. So first of all, any early indications that cement price increases are sticking both to US and Europe? So in Europe, maybe, are the mid-single-digit increases holding so far, and do you see them supporting margins through the year? And some of your US peers have guided towards low single-digit pricing growth in North America. Are you seeing similar trends? And on the CO2 pricing outlook, so maybe through the two scenarios, what would it mean for the long-term CCS strategy and cash generation growth if CO2 prices were closer to 30 to 40 per tonne? as recently suggested by President Macron versus the euro, you know, the 100 euro per ton assumption that was outlined at the Capital Markets Day. Thank you.

Thanks a lot for your question. Let me do the first and then René does the second. So, no early indication of any changes, as I said before. Pricing both in U.S. and Europe are moving in the targeted direction. We are not looking left or right. We take our independent pricing decision both in North America, and we've indicated that we are clearly moving pricing ahead in oil. key areas and all product lines in North America. And the same is true for Europe. And as you will know from the past discussions, we try to get out of the gate as early as even possible. Obviously, with the winter, this may shift a little bit back and forth. But overall, there is no change to the original plan, and we continue to execute on price. We really have a value before volume strategy that has not changed.

And then for the second question, I guess we've answered this already, but let's do it again. If the CO2 price goes to 30 euro, you know, there's no business case for CCUS plant. So that's what Dominik and I said the whole time. We do it only if there's a financially valid good business case, and you can do the math by yourself. It's 30 euros CO2. There's no good business case. So I think that answers the question.

Very good. Thanks. So let's close this call. Thanks for your good questions. Just to remind everyone, we are going to be on the road, you know, together with management and on IR. Next week we are going to go to the West Coast in the U.S. and to the East Coast. Then we're in London, Frankfurt, and Paris with Rene. Dominic, we are in London again at the BNP conference, and we also hit Vienna, Zurich, and Geneva. So if you want to see us, please let us know. And with that, have a nice day.

Dominic Barton- Great. Thanks for joining everyone. Thank you.

ladies and gentlemen the conference is now over you may now disconnect the lines goodbye