Good morning and welcome to the Analyst Call to discuss the acquisition of Resco. My name is Drew and I'll be the operator on today's call. After today's formal presentation, we will begin the Q&A. To register a question, please press star followed by 1 on your telephone keypad. To withdraw your question, please press star followed by 2. At this time, I would like to turn the conference over to Stefan Borgas, Chief Executive. Please go ahead. Thank you, Drew. Good morning, ladies and gentlemen. Thank you for dialing in and being interested in our next transaction. This is about the acquisition of Resco Group in North America, which we announced last Friday evening. Ian Botha is with me today. He will get you the details of the numbers just in a few minutes from now. Let's start with two key messages that you should take away from today's announcement. First message, this is really an important step for us in our U.S. business. The U.S. business is currently our most profitable region. We are, however, with this transaction, closing a market segment gap that we had by adding a significant piece of industrial refractory business. This is a segment where we have previously been quite underrepresented in North America. So with this, the Resco deal is a complementary acquisition, and it's not so much a synergistic deal. Secondly, this acquisition will enhance significantly RHI Magnesita's local production capability in the US and Canada. We received feedback from many, many of our customers over a long period of time that they would really like to see refractories made in the USA to a much fuller extent than we did now, to the fullest extent possible, actually. And this transaction delivers now the possibility for us to do just that. We will be able to reduce RHI Magnesita's imports into the US, as well as converting finished goods that are currently imported by Resco into domestic US production. So from both sides, we can convert imports into domestic US production. There are also benefits, in addition to this, to raw material supply chains. They can now be diversified, again, from both sides towards RHI Magnesita sites in Brazil, Türkiye, and Europe. Let me describe a little bit more in detail the strategic rationale for this transaction. As you know, our M&A strategy is based on seeking growth in geographic or product markets in which we are still underrepresented. We're seeking to build a broad-based refractory business which can supply heat management products and heat management services to a wide range of customers in the steel and industrial sectors. This will then enable us to drive production network efficiencies and to offer full heat management solutions to our customers around the world. Resco's main strengths are in the petrochemical, cement, and aluminum industries, where RHI Magnesita has very little business thus far in North America. Resco's activities in steelmaking also are complementary to those of RHI Magnesita. Resco operates two raw material sites and seven refractory plants, with two plants located in the U.K. and in Canada. This transaction now rebalances the group's North American business towards the industrial segments and towards integrated steelmaking, whereas RHI Magnesita, until now, is much stronger in electric arc furnace-based steelmaking. The acquisition also offers progress in growing our alumina-based refractory offering, complementing our magnesite and dolomite-based refractories that we offer out of our U.S. production. When seeking to grow through M&A, companies are often looking for new customers to expand their footprint. In this case, however, we have listened and reacted to customer feedback regarding increasing our domestic footprint in the U.S. In making these acquisitions, we are living up to our customers' expectations, which is the number one of our core values at RHI Magnesita. Following the acquisition, RHIM will restructure the combined production footprint by onshoring production into the USA. This will require some additional investment in the first two years following the closing of the transaction, but it will fundamentally change the customer's experience in the short and in the midterm. Our customers will benefit from shorter lead times, more reliable and flexible supply chains, and from technology transfer from all over the world into North America. Let me hand over to Ian to give you more details on the financials before I come back. Ian? Thanks, Stefan. Good morning, ladies and gentlemen. As set out in the announcement, we are paying an enterprise value of up to $430 million. This corresponds to an EBITDA multiple of up to 9x before further investments and before the meaningful synergies which we expect to generate in the medium term. There was competitive tension in the deal negotiations, and this is reflected in the terms of the consideration payable, with the ticking fee intended to incentivize a speedy timetable to completion. The ticking fee is $2 million per month and would amount to $18 million if we completed on the 31st of December, 2024, or a maximum of $36 million if it takes the full 18 months to the long-stop date, which would be the 30th of September, 2025. The enterprise value that we announced of up to $430 million assumes a maximum payout of this ticking fee, being an 18-month completion process. It also includes our transaction costs. The assets that are the subject of the transaction generated revenue of $252 million in the year to 31 December 2023, with gross assets of $191 million. Goodwill is likely to arise on the acquisition, subject to a purchase price allocation process which will be concluded in due course. We expect the transaction to complete in the second half of 2024, with completion subject to normal approval processes, including merger control authority approval. We cannot make any detailed comment on the competition process at this stage, other than to say that at Resco, the business is focused on the industrial segment where we are underrepresented in the U.S. and there is limited product overlap. Based on our external guidance for 2024 full year and the impact of this Resco acquisition if it occurs in the second half of the year, we expect gearing to increase by approximately 0.3 times at the 2024 year-end to 2.6 times on a pro forma 2024 EBITDA basis. This compares to the 2.3 times level recorded on the 31st of December, 2023. This is slightly above our target range but in line with previous guidance on leverage for 2.5 times or slightly above for compelling M&A. There will be a benefit in the form of reduced working capital intensity once Resco is fully integrated into our production network as we shorten our supply chains into North America. We currently import around 50% of our sales volumes into the US, and that will reduce over time in line with our local-for-local production strategy. In our 2023 annual report that we published very recently, you can see the extent to which our regions are self-sufficient and how much product is imported. The full details are shown on page 5 of the annual report if you would like to go and look at more detail. Following the acquisition, one-time costs totaling EUR 60 million are expected to be incurred in the two years following completion. This comprises costs of restructuring the combined supply chain, including restructuring in non-U.S. plants, and integration costs. The acquisition will be funded by our existing cash resources and undrawn debt facilities, together with a new committed facility of EUR 200 million. The group had available liquidity of EUR 1.3 billion at the 2023 year-end and will continue to maintain a significant liquidity reserve going forward. I'll now hand you back to Stefan for a summary and some more details on how this acquisition fits into our overall growth strategy. Thanks, Ian. To sum up, let me put this transaction in context against our broader M&A progress over the last two years. Since December 2021, we have acquired 10 businesses as we continue to pursue our strategy to grow through M&A in the global refractory industry. Resco is the largest single acquisition we have agreed, and when completed, it will result in over EUR 1 billion of capital that had been allocated to M&A over that period of two years. We have been able to do this at a time of low demand for refractories, and therefore our strategy is kind of countercyclical. We are structurally strengthening the RHIM platform rather than simply targeting short-term gains through M&A synergies. We have utilized long-dated, low-cost debt financing to do this while maintaining significant liquidity headroom in order to be prepared for any eventuality and keeping gearing well controlled within the guided range that we're comfortable with. This package has enabled us to seize this opportunity and position us well for any future recovery in refractory demand from current low levels whenever it will occur. As we have described to you previously, we're highly selective when pursuing M&A, and there are many possible transactions which have been looked at closely but where we ultimately decided not to proceed and walk away. This particular addition to the RHIM network is the most customer-centric transaction yet, as it really primarily focuses on filling the clearly expressed needs of our customers in the U.S. The addressable market for a global leader in refractory products and solutions is large, and we continue to see excellent opportunities like this to grow our business in a value-accretive way. Sorry. I would like to mention that businesses are ultimately built on the foundation of their people, first and foremost. In this transaction, while we have been speaking, we have been seriously impressed by the quality and the caliber of the teams at Resco and also at Balmoral, the owner, with whom we have had close dealings during the negotiations and the diligence phase of this transaction. When we integrate, we always take a bottom-up and transparent approach to assessing how best to capture all the skills, experiences, and talents of the different teams and individuals who join us via M&A. The combination of our businesses in the U.S. is effectively a merger of two large organizations. We are keen to welcome the new colleagues of Resco into our group, to learn from them, listen to them, and to provide global career opportunities within our wider network all over the world. I'm confident that the combined team will set new industry standards and assist us in further developing and executing our strategy as an industry leader. After all, the whole team, especially North America, will delight our customers. We're happy now to take all of your questions. Thanks for listening. Thank you. We will now start today's Q&A session. If you would like to ask a question, please press star followed by 1 on your telephone keypad. To withdraw your question, please press star followed by 2. Our first question today comes from Jonathan Hearn from Barclays. Your line is now open. Please go ahead. Good morning, guys. Thanks for the presentation. Just a few questions from me, please. The first one was just in terms of the growth rate for Resco. Obviously, you've talked a little bit about profitability and where that sits, but can you just give us a feeling for how this business has kind of grown over the last few years? The second one was just in terms of the synergies. I wonder if you can sort of put a number to that. Obviously, you've stated there's a EUR 60 million cost in terms of creating the synergies and reorganizing the supply chain, but is that payback sort of one-for-one in terms of the benefits you're going to get from that? And then the third and final question was just in terms of the leverage. You'll see, like you say, pro forma 2.6 times at the end of this year. Does that kind of put any sort of future M&A ambitions on hold, at least for the near term? Thanks. All right. Let me start with the first and the third question, and then Ian can go on the synergies. Well, the growth rate. The Resco business went through a, let me say, from our due diligence up-and-down rollercoaster development over the course of the last 10 years. It's a traditional, long-standing, established, high-reputation refractory business in North America which grows with the North American growth rate. So it's a low-growth business in its basis. It's growing a little bit faster than the average because it has a very, very big industrial business, and the growth rate here is a little bit faster, but we're talking maybe half a turn or something like this. So it's a 1%-2% growth if you look at the market base. But Resco had, in the middle of the 2010 years, lost a bit of market share. The current management team, when it took over a few years ago, has done a marvelous job in stabilizing operations, bringing the plants back to a stable, customer-focused operating level, really good operational skills, and therewith also brought back some market share that they had lost over the years before. It's more or less now from a market share perspective where it was 10 years ago, but really, really good people in this business. That's why we were so impressed with them, and that's why I made this comment before. If you look forward now, the growth rate is maybe half a turn, 0.5-1 percentage points faster than the average refractory growth rate in a mature market such as North America, but this is not really the focus here. On the leverage side, yes, we're now just slightly above our guidance for sure, that will incentivize us not to do very major deals. We have, however, a number of smaller transactions that will not really materially affect leverage, and those, of course, we will continue to do because they help to round up the portfolio. So we're not going to a zero in M&A. You can never do this. You have to keep bringing deals into the company when they occur. So we're not going to zero, but there's nothing very sizable in the pipeline. So I think from a planning perspective, from an analysis perspective, the leverage is going to be at the end of the year, what Ian has indicated. Ian, any words on the synergies, please? Yeah. So Jonathan, we've guided in the past that we do M&A transactions where we can unlock meaningful synergies. We expect 30%-50% in a typical M&A transaction, and this transaction will not be an exception. The key synergies really come through from revenue growth, specifically on the industrial side. They come through from plant network optimization as we shift production into the US. We believe that we can increase the use of recycling. We can see important benefits around logistics where we can bundle inbound and outbound freight and rationalize our warehouses. We can also insource some of the production that Resco is currently reselling. And then, as we've seen in previous M&A transactions, the bundling of our purchasing volumes, the saving of commissions and general support functions. No, we would not expect a euro-for-euro against that EUR 60 million upfront cost. Probably for modeling, around a third would be the top end of what we would look at. There's another component here on the synergies, and this is the working capital optimization. Because of this ensuring that we will do, of course, we will shorten the finished goods supply chain. Customers will be able to get much, much faster reaction from the combined RHI Magnesita Resco offering because we will manufacture almost everything in North America with these finished goods. The meaning of this is that the import material flows will be converted from finished goods to raw materials, and of course, raw materials have lower value, so there's a working capital benefit that comes out of this. Also, the raw materials will not come from very far away anymore. They come from a little bit closer so that the transportation time here also goes down, and that adds to the working capital synergies. The material that Resco now imports, mostly from China, are products that Resco at the moment cannot, at least competitively, produce in North America in their plants. But with the combined volume of Resco and RHI Magnesita and with RHI Magnesita's production technologies, not in North America but in other parts of the world, we will be able to retrofit the Resco plants in North America, invest there, retrofit them, and then be able to make quite a few of those products that were previously imported from third parties and make them locally in the US. So all this adds to the synergies also that Ian described. That's very clear, guys. Thank you very much. Next question, please. Our next question today comes from Harry Phillips from Peel Hunt. Your line is now open. Please go ahead. Good morning, everyone. Just a few from myself, please. Just on the restructuring charge, you've just crudely assumed 1st of January just to make life easy. Just in terms of the cash sort of profile, is it an even split between the two years you suggest, or I'm guessing if there's transaction costs and what have you, it's sort of more front-end loaded? And I suppose then also the benefits in terms of the range you are suggesting. I'm guessing it's sort of back-ended, but just to make sure that is correct. Then just in terms of the split of the Resco business in terms of its end markets, is it sort of pretty even across the three segments beyond steel you outlined, or is there a particular bias? The statement itself talks more about refinery and petrochem. Then lastly, just to help me on the 9x EBITDA multiple, you've got $20 million of pre-tax profit. I'm guessing depreciation is probably about 4% of sales, so there's quite a hefty interest number in there by the look of it. Just some help around that would be appreciated, please. Ian, if you can take the first and the last question. Let me talk about the benefits scheduling. Like always, unfortunately, Harry, the charges will come relatively early, and the benefits only come afterwards. Why? Because the charges are mostly around investments in the U.S. network, in this new big production plant network that we'll have if we put the combined organization. There's more than 10 plants in North America, so they need to be upgraded. Of course, this requires CapEx, so this is a big piece of it. Another piece, a smaller piece, is restructuring, of course, in the RHIM network outside of the U.S., which actually part of it's also non-cash. So this is the restructuring charges. Then the benefits come once this is done, and customers have tested the products made in the local facilities, are happy with them, then actually we'll get the benefits. So the benefits come a little at the end, and the charges come more at the beginning. Market segment-wise, yeah, there are these industrial segments: petrochem, chemical industry, incineration plants, aluminum, where Resco is very strong. They have an admirable installer network, which we are keen to embrace and foster, give additional products to help that network to grow as well because this is the way to the market here. So that existing Resco dealer network, installer network should benefit a lot also from the combination. But of course, as RHIM, we have not that much experience in managing this, so here the Resco team will take the lead and continue to build out this network. That's one piece. If we talk about the steel business, though, the Resco offering, because of the product offering, has been very much focused around the integrated steel plants, especially the ironmaking, where RHIM has been very weak with a very low market share. And therefore, this is a very synergistic approach even in the steel or a synergistic deal even in the steel industry as well. Resco is not very much present in the electric arc furnace, but RHIM is very present in this area. So for customers also, this is not the elimination of another supplier, but it's a combination of two offerings that they were anyway having already in the past, which way they will continue to have and enjoy, actually strengthen each other. So it's a benefit here as well, but they're synergistic also. The overlap is actually surprisingly low, both from a customer segment perspective as well as from a product perspective. Therefore, of course, we engaged into this deal. Ian, the answer on the other two questions, please? Thanks, Stefan. Harry, on the first question, restructuring costs, if you assume 1st of January 2025, it would be 60/40 split between 2025 and 2026. And then as Stefan has confirmed, the benefits are indeed back-ended, and in particular, the working capital reduction only flows after the CapEx program has been completed. On your last question on the multiple, so the top end of the range, that simply takes $430 million of enterprise value divided by EBITDA of $48 million. That gives you a 9x multiple. If you assume the transaction completes after 9 months, it's $412 million enterprise value. That includes the ticking fee. It includes the transaction cost divided by $48 million. That's 8.6x. You are absolutely right that the current Resco business has high finance charges, having previously been or currently being owned by private equity. We would settle this debt. We would make use of our long-term, low-cost borrowing and markedly reduce the cost of that borrowing. We would expect our marginal fixed cost into this funding to be less than 4%. So assuming the very high interest, I mean, it looks like the EBITDA margin, it's currently well, in 2023, it's higher than you've been doing. That math is correct? That is correct. It's higher than the average of the group, but it is still lower than our North American business, and this is some of the potential that we see over time. Right. Okay. And so as you say, cruelly, sort of $48 million EBITDA is the sort of the start point to sort of work this off going forward. No, that's very helpful. Thank you very much indeed. Next question, please. Just as a reminder, if you would like to ask a question, please press star, followed by one on your telephone keypad. To withdraw your question, please press star, followed by two. Our next question today comes from Chetan Doshi from Tulsi Capital. Your line is now open. Please go ahead. Yeah. As I see, you are more into mergers and acquisitions, and that is how you want to grow your business. My first question is, in India, you have acquired two units. Your top line is growing very fast, but it is at the cost of bottom line. Now, if you acquire such a big unit in North America, is it going to hit your balance sheet? And second question is, are you still open to acquisition in India? What will be your focus in Asia when you want to improve your top line and bottom line? Okay. So if I may respectfully disagree, in India, our growth has not been at the cost of bottom line. Just if you take fourth quarter numbers, then there are many one-time effects included in the India number, but this is not a long-term trend. So the acquisitions in India are value-creating, and they will continue to be. There's still opportunity here. Otherwise, of course, in Asia, in the Middle East, as well as in Southeast Asia, we still have wide gaps, and we will continue to grow there also with acquisitions, not just with acquisitions, but also with acquisitions. But in quarter-on-quarter, there is degrowth in margins as far as your Indian operations are concerned. See, how parent company is going to support this? Because ultimately, globally, if you speak, your market share is much, much higher than the next competitor. Yeah. Same in India. Look, we can take the discussion on India offline and happy to have it with you more in detail. I think this call is about the Resco acquisition. So let's move on, please, with the next question, and then we will call you back and have a discussion in India. Shall we do that? Next question, please. We have no further questions at this time. That concludes the Q&A on today's call. I will now hand back over to Stefan Borgas for any final comments. Wonderful. Thank you very much for dialing in this morning. Again, two key messages from this acquisition. This is an important step forward for our U.S. business where we are closing market segment gaps and product gaps because we were underrepresented in this business. The second message, this acquisition will significantly enhance RHI Magnesita's local production in the U.S. and Canada. This was a long-raised wish request of our customers, of many, many of our customers in North America. We listened to this, of course, and with this acquisition, we're now able to implement what our customers are asking from us. This is a very significant step forward into localization in North America. Thank you very much for listening. We are looking forward to talking to you into the next days and weeks. Goodbye. Thank you all. Bye. That concludes today's analyst call to discuss the acquisition of Resco. You may now disconnect your line.