Ladies and gentlemen, welcome to the Q3 2022 results conference call. I am Sandra, the conference call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 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 hand over to Mrs. Svetlana Iodko, Head of Investor Relations. Please go ahead, madam. Thank you, Sandra. Good morning, ladies and gentlemen, and welcome to Holcim Q3 Trading Update Call. As usual, we start with the opening remarks by our CEO, Jan Jenisch, followed by more financial details by our CFO, Géraldine Picaud. Afterwards, we'll take time for your questions. The call is limited to one hour and therefore to give everybody the opportunity to ask a question, please limit yourself to two questions only. Now, without any further ado, I would like to hand over to our CEO, Jan. Go ahead. Good morning, everyone, and thank you for joining. I'm very excited today to share a bit more background information on our excellent results and then also to have a good discussion with you. You have seen the results already. We are very happy that we continue the excellent momentum of the first half into the year, also for the third quarter. We're achieving a new records for sales, for operating profit. I think we couldn't really ask for more. What is more is that a big part of this success is based on our transformation of Holcim, a transformation into the new fourth segment solutions and products, which is now already showing significant results and result contribution. Our successful transformation in the geography where we very fast expand in North America, which already makes 40% of our sales and even more on the profit side. The sustainability profile has changed very positively, and I will speak about this in a minute. All together, we are pleased. We have good order books. We don't see a decline in demand for Holcim also in the fourth quarter or for the start of the year. We are confident to do the upgrades in the outlook, which we did upgrade on the net sales, upgrade on the EBIT, then of course, the new exciting low level on the debt leverage. I'm very happy we could do that. Let me just point out a bit on a couple of the slides. I would just like to comment on slide 5, where you see this high activity level we have on the transformation of the company. With the first nine months of the year, we did 16 acquisitions, and we did the two significant divestments of India and Brazil. Also very remarkable how much speed we have on the expansion of solutions and products with another six acquisitions to further strengthen our roofing and insulation systems, but also to enter here into tile adhesives and into the sealant systems. On the other side, we did 10 so-called bolt-on acquisitions to further strengthen our business segments of aggregates and ready-mix concrete. Very happy to see that, and this will also be our focus for the future. We want to continue with this activity level. We have a super strong balance sheet and cash position, and we will continue here to acquire and to transform Holcim here for solutions and products and also for the geographic focus. We have on page seven, you see, how we progress. From originally 8%, solutions and products, we are now already at 25% in 2022, if you account for all the changes being made on a full year basis. We are, I would say, ahead of our target of 30% for 2025. I look forward to hopefully overachieve the strategic target when it comes here for the expansion of solutions and products. Most exciting for me is on slide eight, how this is already contributing. When you look at the four business segments, you see that a big part of our success is now based on solutions and products, or is based on the growth. The first nine months, we had an EBIT growth of CHF 390 million. That's fantastic to see that how fast this segment became already our second segment in the Holcim Group, after our business segment of Cement. This is, as you can see from the numbers, the reason why we have a growth in operating profit, even despite the strength in Swiss francs, we were able to have new records, and this is due to this transformation, more solutions and products, but also more North America. Talking about North America, we have on the next slide number nine, this impressive geographic transformation of Holcim. You see the numbers, how we were based in five different regions back in 2019 before the pandemic, and now through all the portfolio changes. Now North America is 40% of our company. Also Europe has improved to 32%, and then our super strong foothold in Latin America makes these three regions now more than 80% of Holcim, and this is what we want to see in the future here to have these regions where we have strong market shares and excellent earnings profile, which you see on the next slide number 10. You see the earnings profile, slightly over-proportionate in North America, largely over-proportionate in Latin America, and also the same picture, these three regions now make more than 80% of our earnings. That's very great. We could do this in such a rather fast period of time, and I'm happy that our strategy works also already into the numbers. On sustainability, a lot of excitement from a new science-based framework for 1.5-degree scenario. I'm personally the most excited about our green product range, ECOPact, ECOPlanet, with sales growth beyond our expectations. We have included a new slide for you, slide number 12, where you see now that the decarbonization of Holcim, but also the growth in solutions and products, leads to a totally new sustainability profile of the company. Where in this year we reduce our CO2 per dollar of sales by 30%. Very impressive, I think. I think with this background on transformation and a bit background on the results, I hand over to Géraldine, who gives us more details on the result and performance. Thank you, Jan, and good morning, ladies and gentlemen. We'll start with our Q3 net sales, which reached CHF 8 billion, up 16.3% like-for-like, compared to the same period last year. Cement, aggregates and ready-mix recorded a like-for-like growth of 14% attributable to 16% price increase. The negative scope effect mainly comes from Russia and the divestment of India and Brazil, which were closed at the beginning of September. Solutions and products recorded a huge growth of 46% attributable to both like-for-like growth of the roofing business and the acquisition of Malarkey, PRB, and other bolt-ons. Let's now move on to the nine months net sales bridge. Over the nine months, the like-for-like growth reached 13.9%, also driven by the outstanding performance of Elevate and the strong pricing on our cement aggregates and ready-mix business. In total, the scope effect amounted to a net positive of CHF 500 million as a consequence of the group transformation. Effectively, on the one hand, we have CHF 1 billion of acquisitions in roofing and specialty building solutions like mortars. And on the other hand, we have half a billion CHF of divestments in cement. We delivered a record Recurring EBIT of CHF 1.6 billion for the quarter, with a strong like-for-like growth of +7.7%. The Recurring EBIT of cement aggregates and ready-mix decreased by CHF 109 million, almost entirely due to the divestments. As in H1, we managed to achieve positive price over cost, reflecting our ability to offset inflation through strong pricing, successful sourcing strategies, and cost discipline. The Recurring EBIT of solutions and products grew by CHF 134 million, boosted by the outstanding performance of Elevate. The nine months Recurring EBIT waterfall shows the same trends as for the three months, with a positive price over cost in cement, aggregates, and ready-mix. Our JV contributions have declined under China's lockdowns. The outstanding performance of Elevate remains the number one driver of our EBIT like-for-like growth this year. Again, this demonstrates that our new solutions and products business segment, in which we invest, is already our number one growth engine. Before getting into more detail, this slide, the slide 18, provides an overview of the regional performance. All the regions grew in Recurring EBIT, except Asia Pac, which was impacted by high inflation in India, with limited ability to increase prices, and by the lockdowns in China. Let's begin with North America. The region continued to deliver an outstanding performance in the quarter. Market dynamics remained very positive. Our traditional businesses benefited from strong market growth, excellent price momentum, and continued positive market acceptance of our low carbon building products. Led by the strong growth of our roofing business and the recent acquisitions, solutions and products have now reached 38% share of net sales in the region. If we go next to Latin America, the region recorded another quarter of strong performance, with volume growth, especially in Argentina, Colombia, and El Salvador. The region achieved a positive price over cost led by strong pricing. We maintain an excellent pipeline of infrastructure projects in the region and in Mexico in particular, including the new projects refinery, Salina Cruz on the Pacific coast, and an additional section of the Tulum Airport. The region also advanced well with the expansion of ECOPact and ECOPlanet products. Significant investments were made in materials recycling, supporting further increase in the usage of alternative fuels. Let's now move on to Europe. The region delivered a resilient performance. We observed softer volumes on the back of project delays. Strong price trends continued and helped to contain the cost inflation, enabling the region to achieve a positive price over cost. The region made further progress in our sustainability journey with a significant increase in green CapEx, driving the increase in materials recycled and the usage of alternative fuels. Turning next to Middle East and Africa, the region recorded another quarter of profitable growth. Price over cost was positive in the quarter, driven by strong pricing, especially in Egypt and in Nigeria. We saw robust market trend in Nigeria and in Algeria. Egypt had a successful turnaround with good volume growth and a successful price management. The region improved margins, another quarter of clear achievement against the backdrop of high inflation. Let's now move on to APAC. The region continued to be challenged by the inflationary environment. We saw a significant negative price over cost in Q3 as price increases were not enough to negate inflation. We further observed a softer level of demand in China, largely due to COVID lockdowns. The successful divestments in India marked another milestone in our portfolio transformation, in line with our Strategy 2025, accelerating green growth. Finally, this slide focuses on solutions and products where strong momentum continued in Q3. Solutions and products now represent 25% of the group net sales on a pro forma basis. In North America, we accelerated growth with a successful acquisition of SES Foam and Polymers Sealants North America. That broadening our offerings in insulation, waterproofing, and coatings, which are highly complementary to our roofing business. In Europe, we acquired Cantillana, a leading specialty building solutions provider in Belgium to complement the recent acquisitions of PRB Group, PTB-Compaktuna, and Izolbet. In Q3, solutions and products EBIT doubled compared to the prior year, and our roofing business reached 20% EBIT margin, thanks to strong demand and improved raw material supply. Let's now go to our capital allocation strategy. As we just reviewed it, the group transformation continues to be executed successfully and remains our key priority. Solutions and products now represent 25% of the group net sales on a pro forma basis. The debt leverage is far below our 2025 commitment of 1.5x. Therefore, we are delighted to announce the launch of a share buyback program, which will allow our shareholders to share in our success. The program will start next month and run until May next year. Depending on market conditions, we expect to buy back shares for a maximum amount of CHF 2 billion. With this, I hand over to Jan Jenisch. Thank you, Géraldine. As this is a trading update, we only go down to the EBIT. We like to give you a bit more information on this one-time effects on profit and cash flow. You see this on slide 27. We also have a good situation here. We're gonna have an overall significant positive impact on the net income driven by this very value accretive divestment of Brazil and India. We'll have more than CHF 1.5 billion of extraordinary profit. Then we can balance off the resolution with the U.S. Department of Justice, the fine, and then also we can balance off a little bit of reduction we have from these divestments on the bottom line. A good situation. Overall, we are obviously very cash-rich at the moment, and we also have here significantly lower debt leverage of around 1x. Brings me to the outlook. Again, we have very good results and also now a very strong earnings profile. We're happy to upgrade the guidance here. On the net sales, we go from at least 10% growth to at least 12% growth. We believe the group will reach CHF 29 billion for the full year. On solutions and products, we also upgraded the outlook by another 10% growth from originally at least CHF 5 billion of sales to above CHF 5.5 billion. Bottom line EBIT, we guided at the beginning of the year. We will want to see a positive growth. Now we are more specific and believe we will end up in the mid-single-digit EBIT growth for the full year. Debt leverage, I mentioned, we're gonna be around 1x, this, even with the share buyback, and very important here, the share buyback is not a change of our profitable growth strategy. It's simply the fact that we have so much cash now from the divestment, but also from our strong cash flow profile, that we are happy now to continue with our attractive returns to shareholders. Nevertheless, even with the share buyback, we will continue with our acquisitions. We have already 16 acquisitions this year, so maybe we end up with 18-20 acquisitions, which is a new record. We also plan next year to be very active here to even further strengthen this transformation of Holcim. That's it for the outlook, and now I'm very excited to have your questions and comments, please. We will now begin the question and answer session. Anyone who wishes to ask a question or make a comment may press star and one on the touchtone telephone. You will hear a tone to confirm that you have entered a queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to only answer to asking a question. In the interest of time, please limit yourselves to two questions only. Anyone with a question may press star and one at this time. The first question comes from Paul Roger from BNP Paribas. Please go ahead. Yeah. Good morning, Jan, Géraldine, and team. Congratulations again on the results. I'll have two then. I guess starting with the buyback. I mean, obviously it's quite substantial. I mean, it's basically 15% of the market cap if you were to annualize it. I'm just wondering to what extent that's a one-off post of disposals, or could it be recurring? Second question, you obviously had a slightly positive price cost spread in the traditional businesses last quarter. How do you expect that to look in Q4 and maybe next year, given the planned price increases and recent cost moves? Thank you. Hi, Paul. Good morning. Yeah, look, for the buyback, I'm not sure if I've fully got the question right. I was just wondering, Jan, whether it's basically a one-off or whether it could be more of a recurring type program. Okay. Look, I think our first priority is to make our profitable growth happen. You see now that we can show the results of the move to North America, of the fast expansion in solutions and products. This will remain our number one priority. Nevertheless, you know, I think our share price is on a very low level, so I'm you know, for a share price level below 50 CHF, I'm personally very excited to buy back the share and then increase our profile also, earnings per share and so on. That's, I think, very attractive and that comes just probably with that we have so much cash at the moment that we want to put this to work. We continue the acquisitions, but also we can reserve now CHF 2 billion to show the shareholders that we care about the returns for them, and that's what we do. It's a one time for now, and let's see how it turns out, Paul. I'm excited to make both happen, actually. I think it's great that we can do that. Your question on price over cost, I think we are in a very good position. Look, we have originally, we all thought that the quarter two will be the toughest quarter of the year because if you remember last year, we still had a significantly lower cost base from energy and other third party. We thought that quarter two gonna be a decisive quarter for us, if we can make a new record year or not. Of course, we were successful in quarter two, and quarter three was then maybe even more challenging from that aspect. We also made it, right? We had you know high activity here to put forward the pricing, a bit of mitigation from energy and so on. Very happy to do that. Now, going forward, I think we are super well-positioned. We have our energy supply secured. We have the pricing on a level that we can even have another cost inflation coming in the first quarter or second, or first months of next year. I believe we are very well positioned to have a positive price over cost going forward, and I think, we don't give guidance today for next year, but we are very positive for next year. Perfect. Thank you very much. The next question comes from Elodie Rall from JPMorgan. Please go ahead. Ms. Rall, your line is open. Hi. Good morning, Jan and Géraldine. Yes, congratulations on the results. Yes, can you hear me? Yes, Elodie. Hello? I can hear you, Elodie. Hello? Hello, can you hear me? Oh, hi. Elodie, we can hear you. Yes. Can you hear me? Yes. I think we will proceed to take the next question with Matthias Pfeifenberger from DB. All right. Sorry about that. Don't know what happened. Mr. Pfeifenberger, your line is open. Please proceed with your question. Yeah. Okay. Thanks a lot. Hi, Géraldine and Jan, thanks for taking my questions. The first one is on dividends. You mentioned share buyback is a one-timer, but then also you have special effects on net profit. Will those be accounted for in determining the payout? You know where I'm getting at? Is there scope for a special dividend? On the CO2 targets, obviously a lot of relief from the disposals. Will you set a new absolute per ton CO2 target as well? And how low could that be? Thanks a lot. Hey, Matthias. Good morning. On the dividend, I think it's a bit early to answer the question precisely, but you know that we want to have attractive returns for the shareholders. I was personally very pleased the board decided to increase the dividend last year from CHF 2 - CHF 2.2. You know, and I hope we can continue with this trend, also helping if we have a reduced number of shares that will already be a technical increase of the dividend. Too early to answer, but I think we can have an attractive continuation of the dividend policy. On the CO2 target, it's important for us. We are fully committed to decarbonize the cementitious products, to decarbonize the processes of Holcim. We make good progress there. At the same time now, we are shifting the portfolio to be the leading company in building materials with solutions and products already accounting for 25% of our net sales. We will now also include different KPIs. For today, we show you the first time the CO2 per net sales. I think that's an important also KPI for investors, and that's of course our target to lower the absolute CO2 of the Holcim group. We will continue now to also report this and show the progress we are making. Thank you. The next question comes from Arnaud Lehmann from Bank of America. Please go ahead. Thank you very much. Good morning, Jan, Géraldine, and Svetlana. My first question is regarding your fine in the U.S. So the situation and all the comments. Can you confirm that beyond the $778 million fine, there are no other implications of you pleading guilty on this occasion in terms of being able to, for example, bid for U.S. public projects or potential other lawsuits that could come from your decision to plead guilty? That's my first question. Secondly, you announce a share buyback, and you know, obviously you haven't done that since you joined as CEO, Jan, so that's quite a big change. What does that tell us in terms of your M&A strategy? You've been very active with acquisitions in the last two, three years. Does that mean that you are now excluding a larger acquisition, or are you still being opportunistic with M&A? Thank you. Arnaud, thank you. No, we are ready for any deal coming. That's clear. We have been quite successful with the divestments for very high multiples. More $7.3 billion net cash back, plus the cash flow we generate. We simply think it's wise now to use the money for this, I would say, almost limited share buybacks. I'm happy to do that. I'm not a fan of capital increase or something. I think a company should always provide the capital for expansion, and we are just simply now in a position we have a lot of cash in the company. Doesn't change anything. I think we are super happy with a full pipeline of acquisitions. We have 16 already this year and we will continue with this, be assured. As you see the math, you know, with the new guidance on the debt leverage going down to 1, even with the share buyback, it just shows you we are in a very comfortable position here from the balance sheet. This is why we took this decision. Yeah, I'm very satisfied with this. On the fines, also here it's a significant fine. I'm not happy about the amount, but I'm very happy about the resolution because the resolution where the U.S. Department of Justice is confirming that in this legacy transactions, there were no U.S. employees or U.S. operations involved in this misconduct. Most importantly, they specifically confirm that Holcim has a state-of-the-art compliance system, and this is why they didn't ask us to have an independent monitor, so we are not here under further investigations. Instead, they tell us we run the compliance in a state-of-the-art fashion, and this is why we don't need a monitor going forward. I'm very happy with the wording of the resolution, and this also brings us then to your question of the collaterals. Of course, this is very good news, so we don't expect any collaterals from the customer side or from public projects. We also had positive reactions, I think, from financial institutions. I don't know if the Moody's report is public? Yes, it is. You can even read Moody's. Even wrote this is now A+. The resolution is a plus for our credit rating because it takes away the uncertainty, and we have received a lot of this positive feedback. Again, I'm not happy about the amount of the fine, but I'm very satisfied with the resolution that brings a closure to this U.S. Department of Justice inquiry. Now we can continue what we do best to grow the business and create the future for Holcim. Very clear. Thank you very much. The next question comes from Gregor Kuglitsch from UBS. Please go ahead. Hi. Good morning. Can you hear me? Hey, good morning, Gregor. Thanks for taking my questions. I've got two, please. The first one is on solutions and product, which obviously had a very strong first nine months. I think, as you said, the earnings doubled. I guess the question is, how comfortable or how convinced are you that that is sustainable? I don't know whether there's something specific going on in flat roofing membranes in the US, supply and demand. I don't know. If you could just tell us whether you think you can hold that. The second question is, I think you briefly mentioned it, but if I can just check. You were talking about that you already covered for energy. Did I understand that correctly? I guess what I'm getting at is I'm trying to figure out how much visibility you've got on the energy costs going into 2023, particularly, I guess, on power, but perhaps also more broadly. Thank you. Yes, thank you, Gregor. You know, solutions and products, I think we're just starting. If you look at the results now, they are impressive. Of course, we have this one slide in there, how much they contribute already, and you mentioned we are doubling the profit. Honestly speaking, it's just the start. We started the roofing systems in April last year, so just one and a half years ago with the acquisition of Firestone from Bridgestone. That went very successful. The start was not that seamless. We had issues on the raw material side and a couple of hiccups. Then after we sorted out everything, it really runs very well. Now we smartly added on. You know, we bought the Malarkey for residential roofing. We went into insulating foams with SES. Now we bought an adhesive company from ITW. Honestly speaking, we're just starting in solutions and products. The results you see now, I'm not asking my people if the result is sustainable. I'm asking them how long do you need to double it? Because it's just the start. We have benchmarks even better performing on margin than us. The market is good. The order books are extremely sold out at the moment. We're sold out in three months, in four months. So I, you know, I'm not even overly optimistic. I'm just saying we're just starting in solutions and products, and we're happy about this fast progress in just 18 months. You should ask us for more, not for sustainability on the results. On the energy side, you know, that was obviously a very challenging situation for everyone globally in our sector or in other sectors. I'm proud our people made this happen for us. You know, one thing is to have a positive price over cost, which obviously was very challenging. Another aspect is, of course, supply sustainability. Also here, we have secured safe energy supply also for the upcoming months for next year. I think on the cost side, we are very strong positioned now with the mitigation and the pricing we have in place. As I said earlier, we are also expecting positive price over cost for the months or even for next year. Thank you. The next question comes from Cedar Ekblom for Morgan Stanley. Please go ahead. Thanks very much. On costs, will you see lower sequential costs in the fourth quarter linked to energy, considering what's happened in the spot market? Or is lower costs more of a tailwind to the 2023 margin? And then can you just give us a little bit of color on the free cash flow impact from the divestments? I know in the slides it says that it's a CHF 400 million one-off impact. Is that on an annualized basis? Because that looks to be a bit lower than where that might have been 12 months ago, appreciating that the profitability of India has come down a lot. Just to try and understand what the free cash flow on a normalized basis for the remaining businesses. Thank you. Hey, Cedar Ekblom, good morning. I hand over the energy question to Géraldine in a moment. She loves to talk details about the monthly status and the quarter status. On the cash flow, I also like to clarify, so because we don't have the cash flow in the third quarter reporting, that's why we gave you this details before the outlook that we have this impact from the fine and the impact maybe from some missing business from the divestments in the last four months of the year. I think it's gonna be like a CHF 1.2 billion adjustment, but this is a one-time effect, and this is for the full year of 2022. We're still guiding the cash flow of CHF 3 billion or CHF 3+ billion, and then we are guiding now to have these two one-time effects on the cash flow. I'm of course hoping that we can do better than that, but we have these one-time effects which will not influence next year. That's also important to say. Given the second cash flow impact we have from the divestments, we're gonna make that up, of course, with the other businesses with the expansion you're seeing and now being a CHF 29 billion company, it's also, I think, an all-time high for us. You can expect from us that we will deliver on our cash flow conversion ratio also in 2023. Right. Good morning, Cedar. On the energy, you know, we are covered for Q4, mostly covered. That's all good. For uncovered portion, next year and end of this year, we're actually riding on the market correction, so all good from that standpoint. We feel that there are gonna be more tailwinds going into next year, from that standpoint. Thank you. The next question comes from Nabil Ahmed from Barclays. Please go ahead. Yes, good morning. Can you hear me? Yes, good morning. Good morning. Thanks for taking my questions, and congratulations for the good numbers. Actually, I had a question about China. It's obviously been a very challenging year. How do you think about 2023 at this point? Is there a chance for volume and pricing rebound perhaps, or that's too early to tell? Also, could you remind us how you think China sits from a strategic standpoint? Huaxin actually is obviously trading on very low multiples, but could you perhaps consider selling that business too at some point? The second one, I guess, is more a follow-up on the free cash flow question and more a clarification. When you talk about CHF 3 billion free cash flow before the DOJ resolution and divestment and then EUR 400 million impact on free cash flow from divestment, should we think about CHF 2.6 billion as a normalized starting point for free cash flow? Good. Hey, good morning, Nabil. You know, look, China is really, it's a tough market this year. We all see that. They are the only market still in lockdown compared to the rest of the world. Even ongoing lockdowns in certain parts. We just had a video call two weeks ago with one part of our business there, and they just came out of a three weeks lockdown. They still have these ongoing lockdowns. You know, they detect one corona case, and then they lock down the area. This is, I think it's pretty tough. It's while we are so satisfied with the volumes in all our key markets, China is the market really still disrupted. We have lower volumes, so it's a bit like a wave depending on the lockdown, so we are impacted. It's not a structural impact. The impact really is from these lockdowns. We are not depending on China really when you look at our results. For us, we watch it and we have our big contribution comes from North America, Latin America and Europe. For China, if you're interested, my personal opinion is this lockdown of the country will not be over this year. I expect this to go well into next year, maybe mid of the year or even in the second half before we get a normalized China from this COVID measures. That's not an easy market to navigate in. We are quite good. Again, it's the most impacted market for us. It's one key market where we have less profits. Even so, the profit are still on a very good level in our case because we have some good pricing and some good efficiencies going on. But it's a very tough market. I don't see this will be resolved in the next three months. Okay. On the free cash flow, Nabil, to clarify, so you remember we guided to be above CHF 3 billion of free cash flow. Of course, we have to adjust that with the one-time effect of the DOJ resolutions, which accounts for around CHF 4.8 billion. But we also had to correct it with the effect of the India, mainly the India divestment. You know, this CHF 400 million, that accounts for the months of Q3 and the three months in Q4 of the free cash flow. About the annual free cash flow, because you have a strong seasonality in India. I think the important message that we want to convey with Jan is that the new basis is not CHF 2.6 billion, it's still CHF 3 billion, because we have done superb acquisition with a strong cash conversion, as you know. That's why we want to make it clear that it's one-time, because again, we are going to deliver CHF 3 billion starting next year. That's very clear. Thank you. The next question comes from Luis Prieto from Kepler Cheuvreux. Please go ahead. Good morning. Thanks for taking my questions. The first one is, you obviously have grown more optimistic on 2022 at the end of the year, but could you orient us on how you would expect demand to pan out in 2023 in the context of a recessionary environment? Is there a scenario in which we should be worried about even pricing power? The second question is, you have stated in the past that premium pricing in green products is a fact, and I think that's clear. But could you update us on the latest developments in terms of client reception and most importantly, margin performance for eco products versus traditional cements and concretes? Thank you. Good morning, Luis. I mean, today we will not give a precise guidance for 2023, but nevertheless, I shared with you we have good order books. It's even for our regions, Latin America and North America, the growth in Q3 is above the growth in the first half of the year. This is also how our order books look like. I know a lot of people talk about potential recession and so on, but we at Holcim, we have to focus on what we see with our customers, and that looks good in Latin America and in North America. In Europe, we have a softening. You can also see that in our numbers. We're gonna have a demand decline of around 5% in Europe, and this is already for the past four months. We see that softening. It's not a frightening softening because we nevertheless have good pricing and good cost position in place in Europe. We don't see a further softening from there. What we see for the coming months, including the start of next year, we are quite confident in the demand, and we are of course confident also in our margins. Keep in mind, if we have a further slowdown in markets, this normally comes also with a decrease in cost in this third-party cost, and then will be rather margin accretive. On the premium pricing, your second question, we are very satisfied. I think we have one slide where we share how fast we are growing with this first global range in green concrete, ECOPact, that already makes a significant amount of our concrete sales now. I think we gave a target of 25% of entire concrete sales by 2025. It looks like we're gonna reach that already, maybe already next year. We're gonna be early with this strategic target and the pricing or the margin is good. Also keep in mind, we get some positive margin effects, but we want to make these decarbonized products our volume products. I think it's important to decarbonize construction, to decarbonize the way we build. We want to see the volume products going that way. That's why we don't put them in a niche and ask for double the price. You will see these products are maybe positioned for 5% premium or 10% premium, and that's how we position them to make them really our blockbuster products and not let them stay in the niche. Excellent. Thank you very much. The next question comes from Elodie from JPMorgan. Please go ahead. Elodie, can you hear us? Hi. Good morning. Can you hear me? Yes. Yes. You, can you hear me? Elodie, we hear you very well. All right. Sorry about that. No problem. My first question is on margin expectations into 2023. I mean, I know you're not gonna comment in detail, but is it fair to say that given you have issued positive commentary on price cost and on demand, and given you've divested emerging markets where margins have been under pressure this year on cost inflation, an increased rotation into businesses with stronger pricing power, is it fair to say that from here, we could expect margin to have troughed in 2022 and to increase from here? That's my first question. Second question, I heard the mandate of your chairman is coming to an end, I think. If you could remind us when that is happening, and what are the internal thoughts about his succession in due course? Thanks a lot. Yeah, Elodie. Maybe I take the last question first. We have, as you know, we have a very good, I think, leadership team, and also we have a very good board of directors, and there is no decision being made. I think we will communicate maybe end of February or in March on the new composition or who will be for election. You can expect there that we will have a good continuation, and we will make sure we have a strong board of directors, and nothing else I can comment at this point in time. On the margin, you have a tricky question here for me. I would say maybe differently that we have good drivers in place for next year. We talked about the energy situation where we are satisfied with securing the supply, but also securing the right margin level, cost level for us. You have seen now that we expand into the high margin solutions and products, the high margin North American business. I think we are in a good position for next year and. As of today, let's just assume the margin will be good next year. I cannot say I don't wanna speculate more, but I think we have this transformation you see from us now is very supportive of obviously strong results. We have seen that in quarter three now, and I expect this to continue. The next question comes from Lars Kjellberg from Credit Suisse. Please go ahead. Thank you. I just have one question left. The strong growth in your Solutions and Products, and, I guess you called out the, this has become the main growth engine for the company. How should we think about this? How does it make your business a better business in terms of returns, growth, and especially then considering where we are now in terms of the resilience in the business cycle? If you have any sort of big pictures, how we should think about this as we transition through the transformation phase, and you are indeed changing the portfolio. Again, in terms of returns, growth, opportunities, and cyclicality. Good morning, Lars. Yeah, that's what we try to do. We believe that Solutions and Products is a fantastic complementary segment for the traditional building materials we are doing. As you mentioned, we have even, I think, a slide in our presentation, I think it's page six, where we talk about why this is attractive for us. These are segments we have chosen which have excellent branding, good pricing power. We have innovation. For me, maybe the single most important part is that we have this resilient and growing demand from repair and refurbishment. The Solutions and Products businesses we acquired, they have between 50%-80% of the sales is in repair and refurbishment. This is a very resilient part. We have a large number of craftsmen, customers of contractors, specialized contractors like roofers, and they have a very resilient demand. This would, you know, if you have a negative or a recessionary cycle, usually in those segments you walk through. That's a great addition to our traditional building materials who are more exposed to new build. We adding now this repair and refurbishment segment that's. I think that's a super fit for us. Based on the innovation and, you know, all the insulation you have to do, all these energy concepts for solar roofs and green roofs, this of course helps us to increase the value or the sales per square meter or per building. We have a super increased value proposition for the customer. That's super exciting. In addition to these high returns, we have a low capital intensity. That business has maybe needs 2%-3% of investment on sales for a year. That also makes us look very good when it comes to return on invested capital or and such numbers. We're very excited and I think it's super complementary to what we have been doing in the past. That's great. We can now even talk more all these building standards now because obviously we have to build more for the growing world population and the urbanization. Beyond that, we have to build much better. We have to build sustainable now with low-carbon building materials, and we have to build now energy efficient buildings which are renovated, which are insulated, have proper roofing. All this will trigger a huge demand in repair and refurbishment. We see this now in Europe. The first market going strong for this is the French market, where we even have a law, how you have to insulate, how you have to change the energy sources for your housing to be able to rent it out or something. That's now a super roadmap for us to go there and very happy about it. We pick really the right segments and you have on slide six a bit of taste of why we selected these segments and why they are so attractive. A very quick follow-up. If that's also reflected in your resilience in the order books you talk about, because what we can see from the outside, of course, there's a lot of negativity going into both commercial and house building. Again, repair and refurbishment, is that coming through and is that why you're calling out a good order book? Is that the way to think about it? Yeah. You know, Lars, that's great. Yeah. A lot of people talk about North America. You have seen even our double-digit growth has even accelerated in Q3 because we're not depending on a single segment in the US market. A lot of people talk now about the slowdown in the classic residential housing or permits and so on. Also, here, you have to get first the long-term picture that the build rates are still too low in the US for residential. Nevertheless, rising interest, rising costs could be a slowdown. For us, that's not really decisive because we are big in infrastructure, we are big in the cities with the high-rises. Then even for residential, in residential, we actually do at the moment 90% of our business is repair and refurbishment. We only do 10% of reroofing of roofing new in residential, 90% is reroofing, and that's a super exciting market. Unfortunately, the weather impacts in the U.S. make this a big growth market. We have special products with more high performance roofing solutions for residential, so they are really sought after, and this is the reason why they are selected for reroofing and so we are less worried about the potential slowdown in new build for residential. Right, Lars. Thank you. The next question comes from Brijesh Siyani from HSBC. Please go ahead. Hi, good morning. I have two questions as well. The first one is on Europe. The 6% volume fall you had in Q3, could you split that into end market, how that is looking into residential, non-residential maybe, and into infra? The second question is more about the solution products. You answered previously, saying that solution products is kind of a complement to the heavy side business you have. My question is more about the structure you have put together, and keeping solution products as separate. So when we look at North America, would solution products have a separate head who will be reporting to North America regional head? Also, is it not right to have a country structure rather or regional structure rather than have product structure separately? Hey, Brijesh Siya. Good morning. Thank you. I start with the second question. We have a lot of synergies, especially going forward, so our ideas in the future, we want to make a sustainable building happen from the roof to the ECOPact concrete solution being used. We have a big potential for cross-selling of complementary solutions for sustainable housing, sustainable building, sustainable infrastructure. While this is so, we have a very high growth at the moment. We do first things first at the moment, and we have a separate leadership for solutions and products to make sure to make it happen. We talked earlier that we just started to build that up, the roofing systems 18 months ago. You can imagine, our people have a lot to do to integrate, properly set up the business and handle this growth, right? You can imagine how much more at the moment we need to produce, we need to make happen. We have a lot of synergies also from these different products and solutions businesses we acquired, right? We have so many synergies, and we focus a bit on first things first. That's why the ultimate goal to make a fully sustainable building happen with all our solutions, that's something I look forward to the future. At the moment, we need to make sure we have proper P&L leadership on these segments. Your first question is a bit tricky just to answer because we don't give the split now on end markets. Is it roofing? Is it infrastructure? Is it residential? Maybe for your benefit, I can just report a bit what we see on the volumes in general. I start with the Americas, where we had even an increase in demand. If you look at the Q3 sales or volumes compared to first half volumes, you see that we even had a strong growth first half of the year. It further accelerated and at the moment, we have no reason to expect lower volumes in Q4 because we have very good order books here, and we believe this will also go into next year. We then have the troubled markets. We talked about troubled markets in China. There we have a disrupted. The volumes are down, 10 or 15% or something, not because of structural demand issues, but, because simply the lockdowns which make it very, or more challenging to have construction work going on. This is a temporary thing in our view, but, nevertheless, I said earlier, this will maybe last well into 2023. It's not so decisive for us. We have then the European market here. We talked about we have a slowdown in volumes, for many reasons. For the reasons of cost inflation. We have here, of course, the biggest impact on the geopolitical and on the energy crisis situation we have. We also have scarce resources in construction on the labor market and so on. I'm not super pessimistic about Europe. I think, that's the 5% volume drop. I don't think this will be better next year, but I don't think it will be much worse. Which gives us a very good base to work with because we have so much excitement to add on top with our green product ranges, with our solutions and products business expanding. Even on Europe, I don't have a negative outlook for Holcim. This is a bit what I can share today on the volumes. Maybe next time we can talk more detailed on various segments of the market. Thank you very much. The next question comes from Tobias Woerner from Stifel. Please go ahead. Yes, good morning Géraldine, Jan, and team. Thanks for taking my questions too, as before. Number one, you mentioned your M&A pipeline, and you've also got a very strong net debt to EBITDA position now. If you were to find the right deal, sizable, where would you be willing to go to in terms of net debt to EBITDA? That's the first question. The second question relates again to your solutions and products division, where you've seen a real strong improvement in underlying margins or Recurring EBIT margin. You also alluded to the fact that you wanna double this, not the margin, but double the results there. The question here really relates to your heritage businesses in that division. Won't these hold you back, and wouldn't you consider selling some of those? While at the same time, can you give us a sense of what the potential could be in terms of Recurring EBIT margin? Thank you. Yeah, Tobias, on your first question, I didn't fully understand the acquisition. What was the question on what I would consider something? What you would consider as sort of the ceiling where you would want to see your net debt to EBITDA go to, in case you made a larger acquisition? All right. Okay. Thank you, Tobias. Look, obviously, Holcim never had a stronger balance sheet than at the moment. I think I was always clear that I like it this way, because simply to have entrepreneurial freedom to act when the opportunity comes is very important. If you have a, let's say, a net debt ratio of 2x, I think this is too high, clearly, for a company like us. We guided then already in the strategy that we believe 1.5x, that's our target for Strategy 2025. Now we had 1x. Obviously, we have a nice headroom also considering the ongoing strong cash flow generation. We feel in a very comfortable position to make, you know, any deal which makes sense for us. We will continue with our activity in M&A. You can expect from us to be value disciplined. I think we have shown that in the past, that we divest for good multiples, and we buy for reasonable multiples, and they can expect that. Don't expect a low activity level. We are excited to continue to transform for stronger Holcim. On the debt level, as I mentioned, I think we are now at a very strong balance sheet, and I'm very happy about it. Very happy about it. We guide 1.5. That gives us already a bit of a margin there, and then the cash flow is coming in next year again. That's my answer, I think, on the debt or on the capital structure. On the solutions and products, you have to see that we have very nice roadmaps for all our products. We are very excited to decarbonize the cementitious products. We are very excited to have some of the concrete products which are part of solutions and products. They have huge potential going forward for modular building elements and so on. You can expect from us that we will take all these organic growth opportunities, very with strong focus. When we divest, we divest the country. We don't divest segments. This is something you can expect from us. We will not divest product lines or something. We are very satisfied with the four business segments, cement, aggregates, ready-mix concrete, and then the new solutions and products. We want to, we believe we have great growth opportunity in all those segments. Thank you. The last question for today's call comes from Martin Hüsler from Zürcher Kantonalbank. Please go ahead. Yes, good morning, everyone. Thank you for taking my two questions. First of all, to the announcement of your organizational changes. Can you maybe just elaborate a bit? Miljan are now taking over operational excellence with a main focus, if I understand this, on sustainability, decarbonization as well. How does this really differ from Magali's task? That's the first question. Maybe I take the second one afterwards. Oh, super. Martin, good morning, and thank you for pointing that out. I think, first of all, I'm always happy to adapt the organization at the right time. When you look at the geographic focus we have now, it makes total sense to combine Asia and Middle East, Africa. Both regions are now together less than 20%. Nevertheless, we have very significant countries in there and significant assets. We ask Martin now to focus on these countries, Middle East, Africa, and Asia, where we have similar life cycles in construction and similar challenges. I think that's gonna be a very good for us to further develop. At the same time, we see that the decarbonization has the fastest pace in Europe. We have in Switzerland alone a hundred plus engineers working on the decarbonization. We are asking now that we want to accelerate the decarbonization site by site. You see we have more than 2,300 production sites at Holcim, and we need to decarbonize each of them. Miljan and all these engineers now they have the task to accelerate the decarbonization of individual sites. Also digitalize them. We call it Plants of Tomorrow. We're gonna have from autonomous electric trucks to automation to robots. There's a whole range of new technology we want to apply for the plant. It goes beyond decarbonization. This is the new task now, and we're very happy we can focus the approach on Europe, where we have the most advanced technologies in place, and we need more of those technologies. That's why we combine Europe leadership together with this operational excellence. Oh, okay. Not really an overlap with the head of sustainability's job? No, it's not an overlap, Martin. The second one. Maybe if I look at Latin America, and I look at the volume trends, and I mean, cement roughly +1%, however, aggregates and ready-mix up 20% or even 30% and more. What's really the difference behind that development? Yes, Martin, that's, I think, well observed. We have, especially in those markets, a big push for these new product ranges. ECOPact, I think, we have the highest ECOPact sales ratio already in Latin America, and this is something they are now focusing very hard on to make the shift towards more value-added products. That's why you see here a higher growth in ready mix, a higher growth in aggregates. This is also due to our focus and also the investments we have been making. Okay. You know, can give you many examples. We have in aggregates great opportunities even for greenfield, for new quarries, like in Mexico. We have other areas where we also could make quarry expansions. Then especially on ECOPact in concrete, that's a new bestseller for us in Latin American markets, so you can expect more to come here from us. Thanks a lot. Super. Hey, thank you so much. I think we are already 10 minutes or something late. Sorry for this, but nevertheless, thank you so much for your feedback and for the good discussion. I really hope we see each other soon in person, latest for the full year results or something, because we have enough telephone conversations, I think, in the last pandemic times. I very much look forward to see you all on a road show or at an event very soon. Until then, all the best and have a nice weekend. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.