Ladies and gentlemen, welcome to the Holcim Half Year 2021 Results Conference Call. I am Sandra, the Chorus Call operator. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Swetlana Iodko, Head of Investor Relations. Please go ahead, madam. Good morning, ladies and gentlemen. On behalf of Holcim, very warm welcome to our First Half Year Results Earnings Call. With me in the room are Jan Jenisch, the CEO of our company, and Géraldine Picaud, the CFO of our company. As usual, we will start with the presentation of our results by our CEO and go into more financial aspects by our CFO afterwards, and then we will take some time for your questions afterwards. Now it's my pleasure to hand over to Mr. Jan Jenisch, the CEO of our company. Jan, go ahead. Yes. Good morning, everyone, and thank you very much for joining our call about the half year results 2021. You can see I'm very excited to share, I think, the record results and also share some more insights with you on our progress regarding our Strategy 2022. I will start and give you some of the highlights. Géraldine will go through the details of the regions and the business segments. Then, we are closing with our guidance and outlook before we have our Q&A session. Again, we had a record first quarter of the year. Now we top that with another record quarter in the second quarter. I'm extremely pleased that we have such a strong first half of 2021. Also considering that we have the record results last year, especially when it came to free cash flow. I'm very happy to see that we continue here and can even improve this financial performance. I think you look at the results. We did our homework. You remember last year, we have launched our HEALTH, COST & CASH action plan in the pandemic as early as in March 2020. Our aim back then was, of course, to safeguard the business through the crisis, which means safety first for our people, our customers, our communities, but then also safety first for our business in focusing on the cash flow. The second target of the program was really to become stronger and become the most competitive Holcim here out of this pandemic. We have achieved it, as the numbers are proving. We have record margins, so we did a great job on the cost side to really make sure we are as efficient as we can be. Our people also did a great job on the pricing side to make sure we get paid as good as possible. On top of that, we had many also exciting product introduction, especially the new ECOPact green range of concrete and now the new ECOPlanet green range of cement. Very pleasing results. I'm even more excited about the progress we make regarding our strategy. You have seen there was a very active first half of the year when it comes to M&A. We had a record number of seven bolt-on acquisition, especially to strengthen our aggregates and concrete business. That was, I think, very pleasing. We really found seven good local companies and could welcome them to the Holcim family. Of course, on top of everything, we made this transformational acquisition of Firestone Building Products. We had a call at beginning of the year where we shared the great fit we have for that business and our ambition to become the global leader in flat roofing systems. Now we just closed the business end of March, and we had now one full quarter with Firestone, and it has been really overwhelming results. We have, I think, one chart in the presentation. The volumes grew 21% in Q2. You can imagine how happy we are that we not only had a seamless start of the business with no disruption, and we already are full in growth here. We have great demand from the customer side. On the other hand, we've already started the expansion into Latin America with the liquid applied waterproofing product range, which is now present in our Disensa retail outlets. Exciting with Firestone, I always shared with you what a great innovator that is for flat roofing systems, bringing all these functional roofing systems for being insulated, being green, being solar. Here we push now very hard to make our membranes self-adhering, to make work on the roof faster, safer, but also of higher quality. We apply adhesive already in the factory, you can easily bond the membrane on top of the roof. Very exciting new products here going forward. I think also when you look at divestments, we made some steps here. We have signed the divestment agreements for Zambia, for Malawi, and for the Indian Ocean, which is the island group of Madagascar, Mauritius, and La Reunion. We're very happy here. We found good owners, we also found very value-accretive divestment values for those businesses. I'm also happy that our portfolio development goes forward here also in this direction. I think when it comes on sustainability, that's very key for us. We also made good progress. I'm sure you're following our ESG rating, which keep improving. I think more than ESG, I'm excited about this green product initiative we started 12 months ago with ECOPact, now available globally in 24 markets. Now we just launched ECOPlanet, also a range of cement with at least 30% lower carbon footprint. We have huge demand for those products. This is going to be a big part of our future, and we do everything here to introduce these products and also make sure that the supply chain will be scaled up so that we can use as much recycling material as possible, that we can play a big part in using construction waste, demolition waste into our new products. On the technology side, we made a big progress on 3D printing. I think that's going to be a big part in construction in the future. You have might seen some of our projects. We just had the most stunning 3D-printed bridge, which we exhibit in Venice at the architectural exhibition. We have other projects. We are printing schools in Malawi together with an exciting innovation partner, and one of the most exciting projects is to print windmill towers together with General Electric. You will see this more and more, and 3D-printed products, which can have a material saving of up to 80%, will be a big part of the future of modern and sustainable construction. Good. I think this is a bit the highlights I wanted to share with you and to start our discussions. Now I'm happy to hand over to Géraldine, who gives us more insights into the results and performance. Thank you, Jan. Good morning, ladies and gentlemen. After an excellent Q1, Q2 financial metrics, you can see on slide 10, have been very strong again, with high double-digit organic growth in both net sales and recurring EBIT. H1 sales have grown by 17% like-for-like versus the prior year, and by 5% like-for-like compared to H1 2019 before the crisis. This reflects the recovery in activity, as well as strong momentum in pricing. EBIT recorded huge and overproportional growth at 72% like-for-like when compared to H1 2020. If we compare to H1 2019 before the pandemic struck, like-for-like, EBIT growth reached 35%, demonstrating our ability to implement operational efficiencies and to mitigate the increases in energy prices which have been witnessed this year. EPS before impairment and divestment, as you can see, amounted to CHF 1.43 per share for the six months, increasing by 78% in total, even faster than the EBIT. Finally, we have also managed to beat last year's strong free cash flow by 9%, as we will review in detail during this presentation. Now let's start with the volumes. In cement, we recorded 13% like-for-like growth versus H1 2020, and all regions have contributed to the strong result. Emerging markets have recorded an outstanding growth, while mature regions have recorded good progress. North America cement volumes increased by 2% on average. These results primarily come from an excellent trend in Canada, which recorded a double-digit growth overall. The U.S., which had been severely impacted by the bad weather in Q1, was back to growth in Q2. Similarly to previous periods, LATAM recorded an outstanding performance, achieving a growth of 28% in H1. All countries have contributed to growth with the four major markets, Mexico, Brazil, Ecuador, and Argentina, recording high results. APAC achieved a huge growth of 28% in cement. Despite the restrictions due to the recent coronavirus wave in the country, India recorded a high growth benefiting from the stimulus programs in rural and urban residential construction. The Philippines also achieved a strong catch-up in the second quarter. Europe increased by 6% on average. Some Western European countries such as France, U.K., Spain, and Italy achieved a high growth back to full activity. Germany, Russia, and Poland recorded lower results, although they were back to growth in Q2 after soft market conditions in Q1. Middle East, Africa growth of 12% results from strong growth in Algeria, Iraq, and Kenya, while Nigeria and Egypt recorded a single-digit growth. Our aggregate volumes grew by 6% like-for-like, driven by good market trends in France, U.K., Canada, and China. Ready-Mix volumes increased by 14%, boosted by a good rebound in France. If we now look at our net sales, they stood at CHF 12,556 million, up 17.4% compared to H1 2020. The positive scope effect you can see amounted to CHF 561 million, and this is mainly attributable to the consolidation of Firestone Building Products from the beginning of the second quarter. It also includes the effect of bolt-ons acquired during the last 12 months. The like-for-like growth brought an additional CHF 1,770 million in net sales, an increase of +16.6% on 2020. This strong number results primarily from the volume recovery for 11.7%, as well as from our focus on pricing, which has contributed to growth for 4.3% on average. For the first half of the year, currency translation had a negative impact, albeit at a lesser rate than we saw last year. The impact you can see here is -4.4%, or CHF 468 million, stemming mainly from the Argentinian peso, the Nigerian naira, the U.S. dollar, and the Indian rupee. If we now move on to our Recurring EBIT, it has increased by 66% in total, mainly reflecting the like-for-like growth of 72%, or CHF 862 million. This record growth combines a significant volume effect of CHF 586 million and solid pricing. Such solid pricing has exceeded operating costs by CHF 255 million, despite energy inflation. This also reflects the continuous monitoring of our production cost, our drive for operational efficiencies. The contribution of our JVs increased by CHF 24 million. This is mainly due to good progress in Morocco. The currency translation that you can see here represents -11%, that's globally attributable to the same currencies I mentioned on the net sales slide. The effect on EBIT is mechanically larger than on sales. This is due to the countries impacted, which have a higher margin than the group's average. Finally, the scope effect has brought CHF 61 million of additional EBIT. Let's now look at the results of each business line, and you can see that they all recorded organic growth in sales that is overproportionate with the profitability growth. The cement sales grew by 20% like-for-like, mainly driven by a volume increase of 13.2% and an average price impact of +5.5%. This positive pricing, combined with the operational efficiencies, allowed the EBIT margin to progress by close to five percentage points. Aggregates recorded 6% volume growth like-for-like and an average pricing impact of 1.2%. Ready-Mix volume grew by 14% like-for-like, and the price impact was 2.5%. The profitability of both business lines improved significantly. Our solutions and product segment recorded a huge total growth of 74% in net sales, mainly due to the acquisition of Firestone. The existing business also recorded a strong like-for-like growth in net sales of 9%, with margin improvement driven primarily by the rebound of activity in the U.K. If we go to the next slide there, after the acquisition of Firestone, we felt it was useful to share more on our fourth pillar, the solutions and product business unit. In Q2, it recorded more than CHF 1 billion in sales for the Q2, which is about 15% of the group's total sales. In terms of activity, roofing systems represent close to half of the business unit sales. The rest of the existing business consists of concrete products, asphalt, and services that we provide across the countries. This business unit largely operates in metro markets with Europe and North America representing 91% of the sales of the BU. We see it as a solid and sustainable growth engine for the group. As you can see from the Q2 numbers indicated on this slide, the market trends are very good, around 20% growth in volumes, especially for the roofing systems business. This is also a green business offering sustainable products and solutions. We are very proud to be at the stage where we have built a strong platform for this fourth pillar. Additionally, the group has also a strong balance sheet, which means everything is in place to fuel this business line with both organic growth and acquisitions. Let's move on to the slide 16. It gives an overview of the results by region that I will now comment into more detail. Let's start with North America. The good momentum continued there, and the region delivered a solid set of results in Q2. Net sales up 6.6% like-for-like. Recurring EBIT increased by 18.3% like-for-like, over proportionally to net sales. The region recorded volumes growth across all business segments in the quarter, driven by strong demand in the U.S., Canada East, and a good recovery in Canada West. Positive pricing, rigorous cost controls have allowed us to achieve strong operating leverage. Latin America recorded another quarter of exceptional performance with net sales up 72.5% like-for-like and recurring EBIT increased by 92% like-for-like. Volumes were up by strong double digits across all business segments in the quarter, boosted by demand from housing and iconic infrastructure projects in Mexico. The start of the new grinding station in Mexico will enable us to capture strong market growth. Excellent price traction and strong operational performance allowed the region to deliver very good recurring EBIT margin improvement. Additionally, we started the global expansion of our roofing systems platform in Latin America. We successfully launched our range of liquid applied membrane products, GacoFlex, Techo Protec, in Mexico. Further expansion into Colombia, Ecuador, and Argentina is planned for the second half of the year. If we now move to Europe, the region delivered a good progress in the quarter with net sales up 24% like-for-like, and a recurring EBIT increased by 53.9% like-for-like. We benefited from solid market demand in France and continuous growth in Eastern European countries. The U.K. market also experienced a strong recovery. Our volumes were substantially up across all business segments, despite some unfavorable weather impacts in the quarter. The region recorded significant over-proportional recurring EBIT growth, thanks to excellent pricing and our continuing focus on cost. Middle East Africa now. The region achieved another quarter of strong profitability. The Recurring EBIT increased by 110.2% like-for-like, over-proportionally to the net sales growth of 27% like-for-like. Cement volumes were strong in the quarter, driven by positive demand in Nigeria and Iraq, while infrastructure projects gained traction in Kenya. Successful turnaround initiatives and positive pricing contributed to a record recurring EBIT margin expansion of 5.6 percentage points in the quarter. Let's now move to Asia Pacific, another region with very solid performance in the quarter. Net sales grew by 36.8% like-for-like, and recurring EBIT recorded growth of 53% like-for-like. Strong double-digit volume growth across all business segments was the key driver for the top-line improvement. Good performance in Australia, where we started to benefit from government stimulus programs. India delivered an outstanding recurring EBIT margin improvement of more than four percentage points in the quarter. This despite the impact of the second COVID-19 wave and some inflationary pressure. Further, the start of our Marwar Mundwa new cement capacity will allow us to participate in the market growth. As a result, the region recorded a strong margin improvement in the quarter. Asia Pacific was also the region with the highest margin expansion in H1. We'll now look at the P&L, excluding both impairment and the capital gains or losses on the divestments. The increase of the recurring EBIT has amounted to CHF 789 million or 66% as presented before, mainly coming from the excellent like-for-like growth of 72%. Restructuring, litigation, and other non-recurring costs have increased by CHF 137 million due to the cost relating to the Firestone acquisition and one-off litigation cost. Despite the cash spent for acquisitions, our financial expenses have continued to reduce thanks to financing and refinancing transactions. Our effective tax rate has remained unchanged at 26%. Finally, the good performance of our subsidiaries with minority shareholders, especially in India, has generated an increase of the net income attributable to non-controlling interest. As a result, the earnings per share, which amounts to CHF 1.43, has increased over proportionally by 78%. Let's now look at cash generation. This half year, yet again, we are pleased to report that the group's free cash flow has increased. This is primarily due to the recovery in business activity, which generated more EBITDA, which is mechanically partly offset by more working capital. Nonetheless, the numbers of days of working capital have improved compared to June 2020. We have incurred some non-recurring costs, as I mentioned before, and of course, paid more tax due to there being higher taxable profits. This has been partially mitigated by reduced financing cost and some favorable timing on dividends received from JVs. On CapEx, you may remember that we had drastically reduced our spending last year in order to preserve cash during the crisis. We are now investing in a disciplined manner in line with the need to fuel growth. In total, the group generated CHF 814 million of free cash flow in H1, 9% above last year. At the end of H1 2021, net debt amounted to CHF 12.4 billion. Over the 12 months, we have generated free cash flow for CHF 3.3 billion. We have spent CHF 3.4 billion to acquire Firestone and bolt-ons, and have paid CHF 1.5 billion of dividends in total. Out of this amount, CHF 1.2 billion went to our shareholders and CHF 0.3 billion to the minority shareholders of our controlled subsidiaries. As of June 30th, we reached a leverage of 1.8 x based on the last 12 months, which remains well below 2 x. This has been achieved despite the timing of the Firestone acquisition, which fully impacts the debt while we only have one quarter of results. Now, I hand back to Jan for the outlook. Thank you, Géraldine. Yes, I think excellent numbers and very broad-based from all regions, all business segments. Here we generate this convincing set of results. We are very confident now to upgrade our guidance for this full year. We see that the markets will continue to grow. Our momentum will continue in all regions. We expect in the second half of the year that all these various stimulus programs, which have been announced in basically all our key markets, will come to life, and we will start to have additional demand from those stimulus programs. We talked about Firestone already. We see here a great future. This business, Flat Roofing Systems, will already be well above $2 billion of sales in the first 12 months of ownership. This is, I think, a very satisfying trend. We will, all this together, we will see an EBIT for the full year of at least 18%. Of course, our other guidance of CapEx less than CHF 1.4 billion and a return on invested capital of above 8% is confirmed with this momentum we have at the moment. Overall, it's exciting to see that our strategy targets for 2022, we will already achieve all of them one year in advance, and then we can start to develop new and more challenging targets for the years to come. I think with this, I would like to turn over to you, and I am happy to open the question and answer session. The first question comes from Elodie Rall from JPMorgan. Please go ahead, madam. Hi, Jan and Géraldine. Good morning. Thanks for taking my questions. The first one will be obviously on the price cost. As we've seen for the sector in general, people are worried about cost inflation into H2. You've had a positive spread in H1. Actually, could you split that between Q1 and Q2? Potentially, that would be helpful, and give us your views on H2. The second question is more midterm on your ambition for the building and solution division in terms of percentage of revenue and EBIT in five years time, and then in 10 years time, how much do you want this division to contribute? Maybe give us a bit of flavor on where you are in term of the acquisition pipeline there. Thank you. Good morning, Elodie, and thank you for the questions. Price over costs, we were also positive in quarter two, not only in quarter one. We have certain areas we see cost inflation, most prominently in energy. We are able to offset those cost inflation by efficiency gains we have achieved through our health program, HEALTH, COST & CASH. We also see that for the second half of the year. All this comes with very good pricing. We are able in all key markets to get very solid pricing. Overall, we can confirm there is cost inflation, we are offsetting the inflation, we also expect our record margins to continue in the second half of the year. Regarding the fourth segment, solutions and products, well, that's very exciting. We could kickstart that segment with the Firestone acquisition. You saw the numbers just for Q2. We already have half a billion Swiss francs of sales with roofing systems. Again, with high growth numbers, 21% in volumes, it's even higher in Swiss francs or U.S. dollars. Very promising, and in Q2, this segment, solutions and products, is already 15% of our sales. That's just the start. As we announced earlier this year, the roofing systems we want to double as soon as possible. We said at least within the next five years. Half of this growth comes organically and the other half through other acquisitions. We are very excited to really make this a new column for the company, a new base, and looks now very good. Okay, thanks very much. The next question comes from Robert Gardiner from Davy. Please go ahead. Good morning, all. Thanks for taking my questions. I'll keep it to two as well. One, I was wondering, could you give us an update or some sense of exit rates in the business, in Q2 and into July? Just wondering in terms of, obviously Q2 is very strong. Has that continued, or do you expect it to continue? Secondly, just wondering in terms of some of the markets where you still have a lingering COVID-19 impact, can you give us some sense of what's going on in those markets, thinking in particular of India, but also recent lockdowns in Australia, how impactful are they and how has Holcim been affected? Thanks. Yeah. Good morning, Robert. I'll start with the second question, and I think Géraldine takes the first one. Yes, it has been an amazing time now with the coronavirus pandemic, and what we are now 50 months into that, and we had our disruption in, if you recall, in April, May, when also construction sites have been closed in many of our key markets. Since June last year, construction is running. It's really considered, I think from all governments, in all economies, as essential business. Fortunately, it's a locally supplied business with our products. It's open, it's running. All our key markets are running, well, obviously at good levels. We still have big lockdowns in the Philippines and other parts of the world. Nevertheless, even there now, construction fully came back and we have also in our business, I can proudly say that we always put the safety first and our people have fantastically learned how to live with this new environment, keep everyone safe, put all these hygiene rules in place, and be able to, at the end of the day, to support our customers in making great new buildings and infrastructure projects. The pandemic, as I see it now, will not have a negative effect on our volumes or on our demands. Also going forward, we see now there are certain waves that are coming. Still there's no free travel, but construction is local and Holcim is local, so we are in a good situation here when it comes to keep going with our business. Yeah. Your first question was about the integration of Firestone in this quarter, right? No. I was just wondering about exit rates in the business, at the end of Q2 and into July, and the momentum you're seeing today and in your order book. Oh, okay. No, Robert, it's very strong. The demand or the results you see now in the first two quarters has been very continuous ongoing. We had a very strong June, and we are going very strong in the second half of the year. Good order book, good activity level. All our operations are running, so we are in good shape. The next question comes from Lars Kjellberg from Credit Suisse. Please go ahead. Thank you. The Firestone question I'm coming with after on how integration is going, and of course, you recorded very strong growth in that business. Can you share any color also on the profitability of that business? If that's also a good operating leverage for that business. Stimulus is a topic, of course, that we all think a bit about. You kind of somewhat embed that into your guidance. What are you actually seeing now? You mentioned, of course, India, Mexico. Are you seeing any live projects today and have visibility how we should think about stimulus as a boost to your business in the balance of the year and heading into 2022? Thank you. Yes. Good morning, Lars. Obviously, we have a super volume trend, in our roofing system, 21% volume. The sales is even up much larger than that. We have very good margins in the business as well. Also some challenges with cost inflation. We have excellent pricing in place. Also now all the new products we are launching, like self-adhering membranes, they are fantastic and we're going to have a very good return on this new business we were able to acquire. On the stimulus, the way I see it, we have a never-seen-before number of stimulus programs and also amounts of stimulus programs. Obviously we like it very much. I think it's also fully aligned with the world needs to build better, but also needs to build more. We have huge demands for better living conditions, for better sanitary conditions for a large proportion of the population, together with population growth and urbanization, there's a huge demand for building an infrastructure going forward. I think the stimulus programs, they totally go into that direction. Many of them very smartly now combine the stimulus with sustainability, which is super for us because with our new products, that's exactly our home turf. With the stimulus, you always have to wait till it really becomes effective. Like in the U.S., I think they just passed the parliament and once it hits the market, that takes a bit of time. We said earlier this year, we're going to see some effects starting second half of the year. What is more important, the stimulus program, they're going to carry us for the next three to five years because that's not short-term projects. What the new president in the U.S. has announced, these are multi-year programs and again, all in our home turf to make better insulated housing, to modernize the infrastructure and all that. We're very excited, especially as we go into the second half with full order books and then the stimulus will start to begin in the second half and will basically fully come in the next three to five years. Just one quick question. You upgraded your guidance, of course, from more than 10 to at least 18. What has changed and why 18 as opposed to 20 or 25? I had the same question to Géraldine, but no. Look, we are trying to be conservative and you see our guidance, we always meet. That's why we said we are now confident it's going to be 18 or bigger and then we can have a discussion what you say is going to be 20 or is it going to be higher. Obviously we want to outperform 18% operating profit growth and nevertheless, we are still in the pandemic. We still have certain uncertainties. We didn't feel like making two positive announcements at the moment. Appreciate that and understanding. Thank you. The next question comes from Paul Roger from Exane BNP Paribas. Please go ahead. Hi, yeah. Morning, Jan, Géraldine, team. Congratulations on the results. Two questions then, both on strategy. On the M&A side, clearly Firestone's going well, balance sheet is good as well. Would you consider another transformational deal in the near term, potentially in something new like specialty chemicals? On the flip side, on disposals, obviously you've made no secret that you want to divest or you could divest some more assets in [EM] Cement. I thought it was very interesting. I think you're selling Malawi and Zambia to your own Chinese associate, Huaxin. Could that be a solution for some larger positions in Africa? Are you still considering divestments more broadly? Hey, Paul. Good morning. Yeah, thank you for the questions. Well, we are happy we could make the big deal with Firestone earlier this year and as you said, we have a balance sheet that we can do another Firestone when it comes, right? We are working on several projects. We have a big target list. However, availability is one constraint and the other one is our financial discipline that we don't do deals for any price and that we have to consider. We would love to make another Firestone deal, of course, for the fourth segment. That would be great. Again, we have to get the right target and for the right valuation. For the disposals, yes, I'm happy we have started. We were a little bit constrained, I would say, with COVID-19 last year. I'm happy now that we could sign the divestment of Indian Ocean, of Malawi and of Zambia. I think that's good. We got quite good values for the business and we have a small list of, I think, countries we would also actively look for a better owner. We do that. Yes, we are lucky that we are a major shareholder in the fifth largest Chinese cement maker, Huaxin. I think they want to actively go into very emerging markets like in Africa. They're already in other very emerging markets like Cambodia. I think that was a very sweet deal for both sides and what you're pointing is that a model to be used. Let's see. Obviously it's a model which has worked now very well for Zambia and Malawi and we are open to discuss with them other opportunities. Very interesting. Thank you very much. The next question comes from Cedar Ekblom from Morgan Stanley. Please go ahead. Thanks very much. Two questions from me. Can you give us a little bit of color in terms of how you're seeing volume growth in your ECOPact products? I appreciate that it's off a low base, but it would be quite helpful to understand how the reception of those products in the market is going. Then I see in the press that Holcim is being named as a potential acquirer of Boral's fly ash business in the U.S. I wouldn't expect you to make any comments on that asset specifically, but I'm asking more as it relates to your broader M&A strategy. Can you give us a little bit of understanding in terms of how you think about which types of assets you may be willing to acquire? Because it's a bit confusing to see Firestone Building Products, and then in the same breath see a fly ash business as potentially something you would look at. How do we get comfort around the ability to realize synergies and create value when it seems that there is a lot of different assets that you would potentially look at? I'm not so sure what the strategic fit is between all of these. Thank you. Hi. Good morning, Cedar. Thanks for the question, and I am happy to clarify a little bit our strategy going forward. First of all, with ECOPact, we just had a one-year anniversary of this new product line. It is running. It is really becoming a best seller. We will give more numbers later this year. Maybe just for now, if I can share one success story we have in Switzerland. We have launched the first recycling cement products. We call it Susteno. It contains already 20% demolition waste, which we recycle and put instead of virgin cement inside the product. This is, I think, the most amazing cement we can have today. That product is going to be a main product in the Swiss market. We launched it one and 1. 5 years ago, and within three years' time, that's going to be around 1/3 of our entire cement sales to Swiss customers. It's a great product. It has the performance, and at the same time, our customers are moving to those sustainable products very fast, and that's very exciting. Apologies, I don't have numbers for you today for ECOPact, but very happy to share that with you, I think, when we have a Capital Markets Day in November. We are very excited to give more insights how the scale-up of those products is going. On the M&A strategy, it's quite simple at the moment. You are hitting to Boral, and I know there is some media coverage on all sorts of interested parties and all sorts of high acquisition price. I have read that, I think Bloomberg or Reuters or something, but there's no substance behind. That's just maybe the selling bank got a bit excited to share their dreams with the world. Cedar, if you look what we have done now in the last three years, so we have done a couple of divestments, which are all emerging market cement from Southeast Asia now to parts of Africa, and that's our clear divestment avenue. On the acquisition side, we do two things. First, we have the disruption, our fourth segment Solutions and Products, where we bought Firestone and where we also will look for other roofing businesses to add to that or other applications which can be exciting for us and for the customer to build up the fourth segment for us. Thirdly, we have our bolt-on acquisition strategy, which is focusing on aggregates and the concrete. We have seen, we did seven deals first half of the year with very nice local companies, which are a beautiful fit to our business. That's a bit the strategy, and I totally understand that you would be, or you are critical about fly ash and other things, but that has not been part of the strategy in the past three years. Helpful. Thank you. The next question comes from Yuri Serov from Redburn. Please go ahead. Yes, good morning. I actually have just one question, it may end up being a fairly large discussion. I want to talk to you about your ECOPlanet cement, if that's okay. I know that you will give us more details in the Capital Markets Day, you made an announcement, I just want to explore that a bit. In the announcement, you say that it has a 30% lower carbon footprint, the footnote there says it's compared to ordinary Portland cement, which has a 95% of clinker. Your clinker ratio across the company is already 71%. I wonder whether this 30% lower carbon footprint compared to OPC is actually a big improvement. Hi, Yuri. Good morning. Hey, great question. The truth is somewhere in the middle. I think for us, it's now very important to focus, launch, and educate the customer about the most sustainable cement types, right? You're totally right. We can buy a cement with high clinker factor today and with lower clinker factor. We make big progress to even lower the clinker factor and use more minerals. It was just sharing before our Susteno, where we even have 20% of recycling materials straightforward inside the new product. Very exciting. It's important for us now really to launch this globally and make sure the customer is choosing already the next level of sustainable products in the market. At the moment, the market is not that educated, and cement is cement sometimes. For us, it's now very important to give it a name, and our name is ECOPlanet. We go with this, the customer suddenly realizes, "Hey, okay, I can take a much more sustainable product." It's not any greenwashing or other trick. It's really important for us to educate the market and focus on the most sustainable products. They develop further. We're going to go big time in circular economy into recycling, and that's going to be our future. Just further, the announcement talks about multiple technologies, which include calcined clays, recycled waste, alternative fuels. When you sell ECOPlanet, does every sale include all of them? Or do you have a selection of ECOPlanet cements? No, absolutely. Yuri, it's so different from market to market. We have certain markets, for example, one of the cement types I love most is, of course, with the recycling inside, and we're now trying to work in the European Union to get that product also approved in other markets than Switzerland. Building norms need to be adjusted accordingly. Very exciting. Also exciting to push much more for limestone cement, which is using just limestone up to 50% of the cement product. It varies a bit from market to market. Other markets, you have a big availability of slag or fly ash, where, of course, you want to use that kind of waste product. Our ECOPlanet is a big range and is customized for each of the local markets to make sure we are pushing the most sustainable solution to the customer. Top of that, what you said. We want to also go into calcined clay, wherever it's suitable to go on the next level of sustainability. Okay. Sounds like your ECOPlanet cement range also includes more traditional clinker substitutes like fly ash and slag as well, right? Yeah, you have to, because you want to reduce the CO2 footprint, and as long as these materials, I know not everyone loves them, but it's a waste product. If we are not using it's going to be on some depot and ruining the environment. That's maybe an intermediate step if you look long term, out in 10 years' time, maybe we are not using that mineral anymore. For the moment now, I think it's very smart to use when it's available. Of course, we have to work on other solutions, demolition waste recycling, limestone, calcined clay, the full range of opportunities. Okay. Can I ask just more specifically about calcined clays, please? Vicat recently announced the first in Europe industrial trial of calcined clays at one plant, and that will start production in 2. 5 years from today, at the end of 2023. You are talking about selling calcined clay cement in several countries already. Have we missed your industrial testing of this product? I think we didn't make a big announcement, but calcined clay is a known material and I know a couple markets where we're using it already as a mineral to use less clinker and use more sustainable minerals. Yeah, that's absolutely true. The next question comes from Arnaud Lehmann from Bank of America. Please go ahead. Thank you very much. Good morning, Jan. Good morning, Géraldine, and the IR team, of course. Two questions on my side. Firstly, you've already reached your 2022 strategy targets in 2021 or actually to expect to reach it this year. Does that impact what you're going to speak about in November at your Capital Markets Day? Should we expect a new medium-term target for the group? Are you going to wait for 2022? That's my first question. My second question is on the recent announcement by the EU, the Fit for 55 regulation, the Carbon Border Adjustment Mechanism, the reduction in free CO2 allowance. I know there's going to be still some negotiation going forward on this, but the initial announcement, how does it fit with your current efforts in Europe in terms of reduction in CO2 and pricing? Thank you. Good morning, Arnaud. Yes, I think these announcements are very encouraging and supportive for us. We always explain that we need a developing of the building norms to make more recycling material possible in our products. We also know that if we have more incentive to save CO2, that's a huge incentive for us to accelerate the investment. If a CO2 price is higher or more restricted, that's a good thing for us. We believe we run in front of the crowd with our improvements, so we will benefit a lot from those incentives and eventually from higher pricing for those type of sustainable products. With the targets, obviously, we are very excited. I'm super excited that we have a ROIC of above 8% now in 2021. I'm very excited now to define here with the team what is the new set of targets, and we basically come back to our set of KPIs. We want to see from growth to operating profit to cash flow to return on invested capital. We're going to come up with new targets for you. You propose to do it at the Capital Markets Day in November. If we are ready, we'll be happy to do that. Otherwise, I think we will latest do it beginning of the new year. Thank you so much. The next question comes from Sven Edelfelt from Oddo. Please go ahead. Yes. Good morning. Thank you for taking my question. My question relates to Firestone. I would be interested to have more flavor on your business plan there. How much CapEx will you be spending in the coming years to boost capacity. Given it's a low capital intensity business, doubling the size with growth CapEx would be more accretive for the ROIC and acquisition. Why going through acquisition? If my calculation is correct, going more into growth CapEx would imply the ROIC between 15%-20% for Firestone. Is this the kind of target you're contemplating? All right, great. Hey, Sven. Great question. Thank you. I'm a little bit overwhelmed almost by the start of Firestone. We knew it was a great business. As you say, it's low capital intense, it's in a growing market segment. we are growing more than 20% from the start, that's very encouraging. I would say the following. First of all, you are totally right that it's also very attractive to invest in further plans. At the moment, we operate, I think, 14 production sites with Firestone. We have defined a run rate. Why don't we do one new factory a year? Doing that will bring our depreciation up from, at the moment, below 2% to maybe 3%, 3.5% doing that. That's certainly something, as you say, that is very attractive, and that's also our number one focus here. I was just sitting with the Firestone people two days ago. They have already the first plant proposal, which is very exciting for one geography we currently don't cover. We're going to do that. However, the roofing market is still a fragmented market, so there are opportunities. We have nice additions for Firestone. We will also consider that and actively look if we can strengthen and accelerate our growth further through acquisitions. The next question comes from Gregor Kuglitsch from UBS. Please go ahead. Hi. Good morning. Gregor Kuglitsch. Thanks for taking my questions. I'm gonna ask one that I think you kind of answered, but I'm going to ask anyways. Can you hear me? Yes, Gregor. Go, please. Can you hear me? Yes, we hear you, Gregor. Yes, you can hear me? Okay. Excellent. Sorry about that. The question is on margins. I think in one of your responses, you said you thought you could hold margins in the second half. Did I understand that correctly? Or is it not that precise? Obviously, there's the cost price spread, et cetera, which is the challenge to see if you can hold that. That's kind of question one. The second question is maybe going back to the sustainability product. Can you just give us an I appreciate it, and still perhaps not scaled numbers, but in terms of the margins and the profitability of, say, Susteno, which you now think is a third of your business in Switzerland or ECOPact, are these higher margins or equal margins, lower margins? Just to give us an idea whether this is sort of profit accretive or not. Thank you. Yes, Gregor. Thank you. The margins for the sustainability products, what we are launching, they are above average. Which I think should be the case if you come with a new product, new range, you better have a good margin, and this is what we have. When we scale up the recycling properly, you have to imagine that the recycling is actually a product. We even have a positive contribution than just a cost. It's very exciting, and so our efforts is now to properly scale up our ability to take in a waste material, to recycle it, and then put it back in our products. To be precise on your question, ECOPlanet and ECOPact products have above average margins. To your first question, I'm very optimistic for the second half of the year. We have proven also in the quarter two where we had significant energy cost inflation. We have proven that we can offset such a steep inflation in energy, and again, we did a lot to become fitter, and we still have a lot to do. We are optimistic that we can hold these record high margins also second half of the year. The next question comes from Priya Andrews from On Field Investment Research. Please go ahead. Hello, can you hear me? Yes, we hear you. Hi. Great results. I just have two questions. The first one would be, how much energy cost inflation per ton of cement have you experienced in H1? How much do you expect for H2 based on the current energy prices? My second question would be, do you expect a negative price cost dynamic in H2? Thank you. All right. Priya, thank you so much for the question. Géraldine will just update us a bit more precisely on energy. As I just commented before, we are optimistic that we continue with the margins and we stay positive on price over cost also second half of the year. Yes. Hi, Priya. On the energy inflation, in fact, we have been impacted by CHF 143 million on H1, and we see another CHF 200 for H2. that would mean a CHF 3 40 million-CHF 350 million of pure energy inflation impact. As Jan said, we're fully confident to have a price over cost that will remain positive in H2. The next question comes from [Sandra Augustine] from Stifel. Please go ahead. Yes, it's actually Tobias Woerner here. I think that's the wrong number. Good morning, Jan, Géraldine, and team. Three questions if I may. Number one, you've seen a good improvement in your margins in the aggregates and RMC side also against 2019. Absolute margins, however, still lower compared to its peers. Could you give us a sense where you're going with that? The same applies to India. You've had some good improvements there, you're still lagging the likes of Shree and UltraTech. A sense there would be great. Number two, maybe one for Géraldine very quickly. The scope impact in sales and the Recurring EBIT line. Can you strip out Firestone Building Products there, please versus the others? Just lastly, Africa, Middle East surprised on the upside, at least me. What are we seeing there is sort of the oil price impact driving demand in these economies? I think Algeria is still difficult, but a bit of a sense there whether we should see a sustained recovery in Africa and Middle East. Thank you. Hi, Tobias. I take the last question, then Géraldine will inform us in more detail on the first two questions. Middle East, Africa is, I think we shared with you, we made quite a bit of restructuring and turnaround, making the plants more efficient. The demand is there. Everyone was worried that the pandemic is hitting Middle East, Africa stronger than other regions, and this is not the case. We have construction activity on very good levels in our key markets, and also we see that going forward. There's obviously a big demand on infrastructure and housing in those markets, and our order book is quite well booked in those markets. I'm happy that our regional management and our teams in the countries are able to transfer that also in healthy margins and very good improvements. Tobias, you ask about the scope composition. I think I've said in the comments that most of it is coming from Firestone. I think if you take these numbers, you get the Firestone portion. On the sales, you have a detail. You see it's CHF 500 million that relates to Firestone for the quarter and the EBIT portion, you have it also on the scope. You can imagine it's Firestone for the very big part of it, right? As Jan said, very good margins and we're very pleased of the start of Firestone for Q2. Let's start up first with India. You mentioned India. India is catching up and showing impressive margin. We have reached UltraTech profitability level when we look at Ambuja. ACC is also progressing and going in the right direction. If you look at both press release, Ambuja and UltraTech, you'll find that we have fully catch up UltraTech level, and we're very proud about it. We continue improving on aggregate margins. That is shown on this slide. Also for Ready-Mix, we've done a strong improvement. Yeah, we continue and we see the trend continuing in terms of margin and EBIT margin progression for H2, for aggregate and our Ready-Mix business. We had a very strong rebound in France. We see that continuing for Ready-Mix as boosting the margin in terms of mix. In aggregates also, we see a favorable trend as far as our margins are concerned for H2. Thank you. To press you a little bit further, when you look at your best in class in the U.S., is that something you'd aim for in terms of targets on the X side? Absolutely, Tobias. We shared with you when we launched our strategy 2022 that we have a nice catch-up potential when you look at these two obviously very well-performing businesses in the U.S. you referred to. That gives us some interesting targets. I'm glad now this year that we make progress again towards those benchmarks. Thank you very much. Next question comes from Harry Goad from Berenberg. Please go ahead. Yeah, good morning. Thanks very much for taking my questions. I've got two, please. Firstly, on pricing, which has obviously been very robust this year. I guess one of the benefits of that has been we've been in a market where demand for the product has been very high, and in some areas there's been product shortages. When you think about pricing power for the product over the medium term, what gives you the confidence that you can maintain the sort of pricing resilience you're seeing now into periods where maybe the demand profile is not quite as so strong? The second question would be coming back to the point on your new range of products, whether it's ECOPlanet, ECOPact, Susteno, et cetera. What does this all mean for carbon capture when we think about the decade ahead? Is there a possibility that the sort of chemical and technological developments that are undergoing now will mean that carbon capture isn't needed? Do you think carbon capture is definitely needed in addition to whatever is happening at the moment? Thank you. Yes. Good morning, Harry Goad. Well, again, we have good confidence on the pricing. I joined the company four years ago. I think we have since then emphasized the pricing very much, and we have received, I think, good results in our key markets, and now even on a better level, maybe than before, last year and this year. Here, our target is that with our range of more sustainable solutions, that will also help our pricing tremendously. We all have to remember that products like cement or concrete or aggregates, they are very inexpensive building materials, and there's a very high flexibility for higher prices without harming the volume. That's what we aim for. The ultimate step then, if you go for net zero emission, is the carbon capture, as you mentioned. We have five exciting projects with very strong partners in Europe and in North America to pilot this technology and then eventually to scale it up and use it in our plants. To be fair, that needs a proper innovation execution, it also needs more support from governments to make the right regulatory framework to incentivize for this final step. We're very excited also to go this direction. We have five projects. I think we mentioned them somewhere also in the presentation, we're very excited to go forward with carbon capture. Thank you. Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Jan Jenisch for any closing remarks. No. Thank you very much. I think it was exciting to share more insights with you, and also appreciate always the good discussions we are having. I hope very much we can see each other in person again, to discuss a bit more in detail. We have planned an exciting Capital Markets Day in November, where we want to show you more insight, especially in ECOPlanet and ECOPact. Going to plan to make the Capital Markets Day in Switzerland, it will be, of course, exciting if you can all come and experience the new building material solutions firsthand. Let's hope.