Good afternoon. This is the Chorus Call operator. Welcome, and thank you for joining the Buzzi Unicem Full Year 2021 Results Conference Call. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to send the conference over to Mr. Pietro Buzzi, Managing Director of Buzzi Unicem. Mr. Buzzi, you have the floor. Okay. Thank you. Welcome. Good afternoon to everyone. We would like to follow, let's say the presentation that was made available to you on the website, and go over the 2021 results that were just released earlier this afternoon. Follow up of course with the Q&A session. What are the highlights for 2021? I would say overall, quite a good year with growing, let's say indicators both for sales, profitability and the position. Some, let's say unfavorable variance, but they limited. We did have to face on the EBITDA margin in a sense that the pressure that we had to face, let's say during the second half of the year, due to the very steep rise of cost in general, energy cost in particular, brought, let's say the EBITDA margin to a somewhat lower level versus 2020. The same happened to the return on capital employed. We lost 130 basis points in one case, and 50 basis points on the other. Still, let's say the absolute level remain quite satisfactory. In the case of the ROCE, above our weighted average cost of capital. EPS on the other hand was growing also to the lower number of outstanding shares following the savings share conversion of last year. If you look at the net sales variance analysis, we notice that the increase was driven both by volumes, several countries actually, most of the countries where we operate were, I would say, successful in achieving, let's say, higher cement volumes during the year, and also by pricing. The two key components were overall favorable with some differences, region by region. The only region that showed a negative variance in volumes was the so-called Central European regions, the one that includes Germany and Luxembourg with a limited decline, but also in this a positive price effect almost offsetting entirely the unfavorable variance for volumes. In Eastern Europe, which includes both Poland and Czechia and Russia and Ukraine, the volume variance was quite significant, quite favorable, and mitigated to some extent by a negative foreign exchange effect, which was mainly driven by the ruble. Same thing in the U.S. Volumes are growing a little less compared to other areas. Pricing quite firm during the year. Unfortunately, some Forex effect that somehow worsen the overall, let's say, results in terms of revenue. As I said, we enjoyed during the year basically all our regions good performance both for volume and pricing. In terms of the EBITDA contribution, which is following page from the different countries, there is clearly a strong U.S. performance also relatively speaking. The overall contribution to total EBITDA, total consolidated EBITDA is above 55%. In the case of 2021, closer actually to 60% or 58% with let's say a specific profitability above average in the range of 32%-33% versus our 23% average. Italy performed better, let's say, compared to last year, suffering particularly in the second half from a higher, let's say, cost inflation versus other regions. Its contribution remains overall subdued versus the capacity and versus the sales volumes. Central Europe slightly down, as we mentioned, due mainly to weaker volumes. Eastern Europe performing well, remaining basically at the same contribution as last year, but with some favorable impacts from Forex exchange. On the EBITDA bridge, you notice that again, the improvement in results is coming mainly from volumes overall. Price effect was favorable last year, adding, let's say, some additional contribution to the results. The following, let's say, items are clearly showing the kind of let's say rising costs that we've been facing during the year. Clearly, the key components, variable costs really quite putting a lot of pressure, let's say, on the production cost, raw materials, fuel, power, quite a widespread trend with, again, some regional differences. In some countries, the pressure was much greater than others. This was, I would say, a general trend that affected our operations in particular in the second half. Fixed cost, yes, some negative variance, but much more, let's say, under control, I would say, you know, with a normal, let's say, inflation trend. Other items, flat. Additional CO2 cost, yes, due to the rising cost of CO2 during the year and the need to cover, let's say, a shortage which is now, let's say, structural for the ETS country, with the open market purchases. Actually, these CO2 costs do not represent impact because, as you know, I think we still have some, let's say, available rights from the previous period that pertain basically to Italy, which we did not sell, and we kept, let's say, as a way to offset the Italian shortage. Since these rights have been allocated for free, you don't see the cost, let's say, you don't see the cost going through the income statements, just a virtual or an opportunity cost. The FX effect was also negative at the EBITDA level, clearly. The impact amounted to EUR 19 million. We moved from 780, let's say, reported, which was EUR 785 recurring last year, to EUR 795, again reported, which is now EUR 796 recurring due to minor, let's say, minor non-recurring cost charge to the income statement during the year. In terms of, let's say, going a little closer to the regional performance, starting from page nine, you see for each, let's say, country or major region, the key figures that we were commenting before. They break it down by major country and region, and again, the respective EBITDA margin achieved during the year. We can say that the demand in Italy, also following, let's say, the lockdown period, the overcoming of the more significant difficulties associated with the COVID, remained quite strong during the entire year, driven by residential renovation and also some public works. The performance was, as I said, somewhat improving. It could have improved much more. I mean, if you look back at the first half results, basically they were at the same level or similar level to the nine month results, because in the second half, we started to feel a lot of pressure on the production cost when the energy and the fuel started to rise very, very significantly, and it was not possible to recover at least on the price side this kind of pressure. Of course, in part, the advance is related to comparison, which was relatively easy. 2020, with some months of idle production. Still, I would say, an overall performance which was, with the exception of the cost pressure in general on the market side, let's say, better than what we expected at the beginning of the year. In the United States, the business continued to perform very strongly. The residential sector is the one where most of the demand was coming from. We are operating also generally speaking at the high capacity utilization level. With, in theory and then in practice, maybe not necessarily, but in theory, the best possible, let's say, operating leverage. This translates, of course, into higher margin. Also due to the fact that anyway, in absolute terms, the U.S. pricing today is the highest in our group. We do have maybe countries which with a lower production cost, but the mix, let's say, between, again, sales prices and production costs, even when production costs are higher, like in the U.S., still is giving the higher level of profitability right now. And the fact of course, running at a high capacity utilization level is helping because we have achieved more or less the maximum amount of fixed cost. Also in the U.S., the profitability went slightly down in terms of EBITDA margin. Same reason, let's say, basically difficulties to fully offset higher energy costs, which in the case of the U.S. have been mainly fuels. Meanwhile, in Europe, we have been and we are still experiencing more issues and more, let's say, pressure from the electrical power. The negative impact from FX effects was also driving somewhat down the EBITDA, which could have been better in a like-for-like situation in terms of Forex. Central Europe again, a little weaker. But overall, as opposed to maybe some years ago, the factor of the industry inflation was helping and made it possible, let's say, to improve prices better, also slightly better than what we expected at the beginning of the year. There was also, as opposed to Germany, for example, in Luxembourg, which is a small part of the region, anyway, some recovery in volumes. The favorable trend in selling prices made it possible to basically match the EBITDA of last year. We came out very, very closely, both in terms of absolute values and also margins, so EBITDA margin. Clearly Central Europe as well as Eastern Europe, at least the European countries under this region, did have to face some additional pressure on the CO2 cost. What I mentioned before, the shortage and the fact that CO2 was really skyrocketing, let's say, during 2021. We still were able to somehow purchase at a relatively interesting level compared to the market during the year. It is clear that this kind of pressure is one of the reason for the difficulties, let's say, in achieving a better margin. In Eastern Europe, on the entire area, let's say, we show a nice improvement in volumes, particularly Czech Republic, Russia and also Ukraine. In Russia, the demand for oil well cement. We saw also here in general a nice growth of average selling prices. Maybe with the exception of Ukraine, because in the first part of the year, prices were not able yet to recover. In the second half, we were able to go up instead. CO2 costs in this case are affecting the results of Czechia and Poland, but they are less important or they do not exist basically in Ukraine and Russia that are not part of the ETS scheme. In euro terms, we came out at a level of profitability, which is very, very similar to last year. Some decline in a EBITDA margin, but still at an absolute level, which is above the group average. Particularly Russia was affected by unfavorable foreign exchange effects, with a result that at the same rate of last year could have been or would have been much better. I would say that also for Eastern Europe, we cannot really complain about the results for 2021. We should mention also or give a little bit of attention to our important joint ventures in North America and South America, because by the way, both countries, both companies' markets had a very solid 2021. Mexico, particularly strong in residential and public works during the year with volumes increasing quite significantly versus last year. Also, in this case, Moctezuma, let's say, working close to full capacity, and a nice, let's say, favorable variance for selling prices, although, let's say, needed to offset the fuel cost that in this case are fossil fuel only, purchased in dollars. Moctezuma uses 95% petcoke from U.S. origin, which was rising significantly during the year. This is the reason why, again, the performance was not as good as last year in terms of EBITDA margin. Always excellent, better than last year in euro terms, with some help from the Forex in this case, and slightly lower in terms of margin, but again, very, very satisfactory. Brazil, a little different situation because we had, of course, during the year, very significant growth, which was, anyway, partly driven by the change in scope. We don't see, let's say, in our consolidated figures because Brazil is accounted for under the equity method, so not line by line. Anyway, the construction industry had a good development, let's say, during 2021. Cement volumes, again, helped by the change in scope, grew significantly. Prices followed. Let's say they were starting from a very low level, really. It was, in a sense, easier to recover, let's say, some euro or dollar or reais, let's say, and then to bring them to a higher level. Still, we enjoy, let's say, strong performance there. Energy cost pressure also in Brazil. Total profitability, again, not fully comparable, but clearly better than last year. EBITDA margin, not the same, but this is mainly due to the contribution of the new plants, which were added to the, let's call it, overall joint venture. The new plants coming from the acquisition of the CRH assets are somewhat older than the previous, let's say, Cimento Nacional only. That's why their performance in terms of cost is not as good. But still, we are closing the year with a clear improvement. Also here, I would say, fully satisfactory result. We have some pages which are looking at recent, let's say, initiatives or let's say, projects that are also important, clearly, more for 2022 and going forward than 2021. We mentioned here on page 13 some announcements, the announcement related to an industrial partnership with Italgas, which will test the possible usage of a carbon capture system, which we are working on. It's clearly at the current stage more a research and development project than a real, let's say, industrial effort, but it is something that is going to start, and then it's going to be tested soon. Also the second bullet point, this is part of our, let's say, roadmap towards 2030 and 2050. We've been launching recently in a more official way, let's say, our program to reduce, let's say, low-carbon cement, which means basically to supply the market, to supply the customer with a different mix of product that is, we call it, let's say, C-Green, and which, let's say, follows the idea and the principle to have cement again with lower CO2, lower clinker content, but giving the same performance, the same reliability, and the same quality that the customers are looking for. T his type of transition is occurring not only in Europe with the, let's say, C-Green line of product, but also in the U.S., and this is coming actually probably earlier and faster than what we originally planned, which is also a good thing. Because we just announced that by the end of 2022, we will be able to implement in full the conversion both from the traditional Type I, let's say, Portland cement to so-called Type IL or Portland limestone cement. Which means a reduction of emissions between 10%-15%. It depends from plant to plant and from the plant mix versus the traditional cement. This is really quite a milestone for the U.S. cement industry, if you wish, because it has been strictly focused and strictly, let's say attached to the typical Portland cement for many, many years. It will be interesting. We are confident anyway that this will be a successful move, also for the customer, and the customer will accept it, will like it. Of course, most of the peers are following the same pattern, the same idea. Again, big change for the U.S. industry in this respect. We've been assessing lately what could be the performance in 2022, following the first two months, the first three months, basically almost. Unfortunately we are facing some challenges, some changes that we did not include originally in the budget. Our initial budget was relatively, let's say, optimistic. We were looking for stable or slightly, let's say, improving results with not big contribution from additional volumes, stronger pricing overall, particularly in some countries, the one more affected by cost inflation. In a rising cost environment, we were quite confident, let's say, back in October, November, to be able to offset with the price variance. Now what happened, particularly in Europe, U.S. is a bit country in itself with different dynamics, different trends. Particularly in Europe, the geopolitical tension, let's say the conflict between Russia has added to a lot of risk, a lot of uncertainties, additional uncertainties to the macroeconomic scenario and is making any meaningful, let's say, forecast much more difficult to calculate and to assess. What we're seeing for sure is a trend in raw materials shortage or prices and particularly, I would say electrical power prices that is going through the roof basically almost totally out of control. This is really making any kind of assessment and forecast much more difficult. It is clear that this kind of of trend particularly markets requires in one way or another additional and also significant, let's say, price increases if we want to be able to somehow offset it. We don't know if what could happen in the sense that first of all, we don't know if the market will accept it. Second, we don't know whether this will translate into some kind of slowdown of, let's say, building activity, which is likely in our opinion, also because not only cement is going up. I mean, it's a number of raw materials or building materials. Everything together, everything at a very, let's say, steep rate. We think that there is a risk of really projects or customer deciding to put on hold certain construction activities. On one side, we need to raise the prices. On the other, we don't know exactly what the impact is going to be on the demand, and we expect it to be unfavorable to some extent, at least. This for the countries that are, let's say, in a normal situation. Well, not normal for the cost, but let's say normal, at least from a political standpoint. In addition to that, we have, of course, the issue of Ukraine and Russia. Clearly more in Ukraine, where, starting from the end of February, basically, we have not been able to continue our activities. The production and sales are basically on hold until when, let's say, we don't know when there will be more. The possibility actually to move around the country, the people, with the right degree of safety, which is today, let's say, the priority for us. I think it's unlikely to imagine a solution in the very short term. We mentioned here the risk or the high probability that this will translate into, let's say, negative operating results for 2022. At the same time, Russia is not in the same situation as Ukraine because Russia plants are open. Let's say production is running in a normal way. We were able, fortunately, let's say, to complete also the winter maintenance schedule before the outbreak of the conflict. Russia presents a significant risk. First of all, due to the sanction, we expect the main macroeconomic indicators to really go down very steeply and also quickly. This would. It's likely to translate again into some significant decline in cement demand, which will mean, of course, lower profitability. At the same time, there is already quite a significant change in the ruble value. This is, if you wish, more an accounting impact than a, let's say, real operating impact. Still when you prepare your books and you translate the Russian results into Europe, the devaluation is very, very significant. We made an assessment more or less that considering both the likely downturn in the economy and the likely value of the ruble, the Russian results could be half of what they have been in 2021. Under this overall expectation and the risk that we are running in Europe for the cost pressure, the related pressure on margins and the likely or potential, let's say, impact on volumes, we assess that more or less the overall impact for the group as a whole could be in the range of 10% for the recurring EBITDA 2022, which is significant. On the other hand, not too much considering the situation and considering also that the results of 2021 were, I think, the highest in the last 10 years. We are anyway comparing to a level which was particularly good, particularly high. In general anyway, this is a preliminary assessment. We cannot of course. It's the best that we can express right now, and we hope that this will maybe not as much and ready to modify our view, our vision as soon as we have more visibility in the coming months. Unless we have again some more information, detailed information about volume, income statement. I don't know, maybe. What time is it? Yeah. No, I think we could move directly to the Q&A session. This would probably help in focusing on what you're more interested in. Again, you can always call our investor relations team or ask more questions through the Q&A specific about the financial statements, and anything else you may be interested. Yeah, please open the Q&A session. This is the Chorus Call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch tone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Elodie Rall of JP Morgan. Please go ahead. Hi. Good afternoon. Thanks for taking my question. My first question is on the guidance and specifically the impact that you expect in terms of decline from Russia and Ukraine alone. I mean, exposure to Russia/Ukraine, I think is in the magnitude of 10%, and your guidance is for a 10% cut in EBITDA. If you could actually remind us what the exposure is to Ukraine/Russia, and what is the expected decline to come from that region? What is left basically in the 10% decline guidance, like in terms of cost inflation and overall volume for the group? My second question is on the U.S. You mentioned specifically that demand is expected to remain lively and to support prices. What is driving this demand in your view in 2022? Are you not worried about a potential slowdown? My last question would just be on your expectation for CO2 costs in 2022. Thank you very much. Yeah. Sure. Well, the 10%, this is basically the maximum, let's call it exposure, maximum risk that we are running if you look at the balance sheet. If you take the value of the net assets in Ukraine and Russia and you assume that they will go down to zero for any reason, I don't know, damage or nationalization, whatever, which is clearly something that we consider unlikely, but still, the maximum risk will be about 10% of our net equity, so about EUR 400 and some million versus an equity of EUR 4 billion and some. In terms of income statement, it's not... Well, it's also as much if you go down to zero in full, but again, this is something that we consider somewhat unlikely. Now, we would think that it's likely, as I mentioned before, to see Ukraine going into a negative EBITDA or a negative operating results. Russia should not be the case. But clearly, both volume prices, etc., trend more volume. Likely negative volume trend and Forex negative impact could decrease quite significantly the Russian performance. You have the number for 2021. Again, from probably around 60 to something around 30 is quite likely. In addition to that, again, it's an estimate, is what we are trying to assess at best now, but the visibility is low and it's difficult to make forecasts that are, let's say, valid. We see definitely a risk in some of the European country. For sure, Italy, as mentioned in our income statement, in our press release, is the one that is suffering the most from the recent situation. We are currently facing some spot prices for electrical power in particular that are totally crazy. Unless, as I said before, we will be able to somehow reflect these prices into the sales price, we will go down. There is no doubt that we are going to lose in terms of profitability versus last year. The combined, let's say, impact of Ukrainian, Russian, and Italian situation is what is giving us this kind of view, which, again, is reasonable in our opinion, not certain. If the energy prices, electrical power prices in particular continue at this level, this kind of outcome in our opinion becomes likely. In the U.S., the situation is totally different because the inflation is more, if you wish, demand driven rather than supply driven. In Europe or in countries like Italy, we have an inflation that is clearly on the supply side and the production side. The demand has been okay in 2021, but it's more likely to go down in 2022. We have again prices rising and probably lower demand. In the U.S., it's slightly different. No, it's quite different because the demand, at least so far, has been good, has been strong. They are far, let's say, geographically also economically from the European situation. They are basically not in need; they're self-sufficient in terms of energy sources. Yes, fuel is going up, power is going up, but nothing similar in terms of the momentum or increase or absolute level versus what's happening, what has happened and what's happening in Europe. It's something that we can manage in an easier way. Also the kind of price improvements that are needed to offset such situation are much less significant. They occur in a moment where the industry is running, if not at full capacity, very close to full capacity, also where the pricing power of the producer is definitely greater than in other regions. Potential slowdown, we don't know. Less likely in our opinion, unless really. Well, the piece made a scenario, one scenario of extreme, how do they call it? The war, let's say, in case of war, a war that would have extended to Europe or other region. In such case, they're expecting some kind of downturn. The basic scenario is for again moderate growth of volume in 2022 for the country. CO2 cost, we have in the budget around EUR 50 million, I think, in total. Mm-hmm. Versus 41 this year. Fortunately, we have been able to secure, not in full, but almost in full, the volumes, the shortage, let's say for the full year, when was it? Mid-March, more or less. Yeah, when the prices, there was one day or two or three days when the prices went down 90-58. 57. 57, 58. During these days, we were able to almost cover, let's say, the entire shortage for the year 2022. In this respect, we are. It's one of the few cost items where we are better off than 2022 than the budget, but not 2021 necessarily, but yes, slightly better than the budget. We do expect, let's say, around, let's say, EUR 48 million-EUR 49 million in 2022. Okay. Thanks very much. You're welcome. The next question is from Yuri Serov of Redburn. You have the floor. Hi. Hello. Yeah, hello. Where do I begin? I have a number of questions. Can I ask one by one? Hopefully. Not too many. Listen, first of all, energy costs. If I look at your presentation and I play with your numbers, I can see that energy per unit, per ton in 2021 went up by about 23%. Yes. In your forecast, what are you expecting for 2022? It depends if we consider the current level something that is going to stay or not. 2021 is biased by a stable, let's say, six or seven months of stability. The second half, when things started to worsen very significantly. The megawatt as of today, if you buy spot, okay, depends one day from another, but can be, I don't know, EUR 400, EUR 500. Two years ago, it was EUR 40. We have been budgeting on the basis of the, let's say, cost end of 2021. Expected, let's say, forecast of 2021, which is well below the current levels. Are these levels going to stay, not going to stay? Will we be able to? If they're going to stay for some time, I think they will. Will we be able to increase prices more without affecting the demand? These are the question marks today. Clearly, you have a. If you look at the electrical power in Europe, you have a price that is 7x-8 x what it used to be, let's say, one year ago. Basically what I'm hearing from you is you created the budget where you assumed the cost from the end of 2021, and for now, given the crazy moves, you're not really calculating a new budget. No. I mean, in the figure that I mentioned before, the fact that Italy could be, for example, weaker in terms of profitability versus last year, we do include more pressure than. Because the original budget for Italy was positive, let's say. I mean, we were expecting a positive variance in terms of profitability, and now we're expecting a negative one. The average effect was scheduled in the budget. In the original budget, which meant that we had already a double-digit increase in energy costs already in the budget. Now, going from there to the forecast, we have additional costs, of course, but this was very much by country because sometimes we are hedged, sometimes we have already some fixed costs. Yeah. It's not something that we can answer for the whole group. It's rather country by country analysis. Overall, of course, there is an additional negative, quite significant additional effect on the group level regarding the recent weeks. Okay, I understand. Speaking about Italy, and tell me whether this is anywhere close to the reality. PPI indices that are reported across Europe show that cement prices in Italy in January were 28% higher than a year ago, which looks pretty crazy. Is that true? By how much did the prices increase early this year? It's true. It's basically true. Yeah. It's basically true, but it's not enough. No. I mean, as I said, even if we want to stay at last year level, they are not enough. I mean, we are far again from the budget, which, by the way, was based on this kind of increase and nothing more. Yeah. I mean, look, this is cement, right? This is not computer chips. I mean, prices going up by 28% is not something that is easy to preserve in this industry. Is this sustainable? Well, I mean, at the very end, it's a huge increase, but in my opinion, it was just the cement and not probably not enough to stop or really to. Of course, also, the building contractors, et cetera, they need to adjust, and there are some maybe bids that are on hold for this reason, and they will not maybe move forward unless they're able to introduce some kind of escalator, let's say, inside the contract. The cement in itself, yes, of course, it's much more expensive than it used to be, but still, I don't think it is the main reason to stop or to put on hold certain project. Yeah. Coupled with the remaining, let's say cost, which are also, I mean, for anyone, because what we are facing is what anyone is facing. No, I understand. My question is, do you expect the price to be at this level at the end of 2022, or do you think it will be lower or maybe higher? No, they need to be higher. No, not everywhere, but if you're asking about Italy, they need to be higher. In other countries, I think also higher, but to a lesser extent. I think. Okay the only way to remain more or less in the black. Okay, I understand. Can I just ask about Russia? Obviously we see companies announcing pretty much daily the decision to leave the country. I presume that you're not contemplating that. No, in a sense that we think that it will not be in any way a timely decision. We need to focus right now on the safety of the asset, of course, the integrity of the asset, which is currently not at risk in Russia. It's more, let's say, at risk in Ukraine. We need not to destroy. It does not make any sense, in our opinion, to destroy something that has been an important part of the group until now, where we have a customer relationship. We have even more important, let's say, staff relationships. These are people, large number of people, approximately 1,000, that have been loyal, let's say, to the company for many years. Why should we, let's say? I don't know what do they think about, but doesn't really matter. I mean, what do they think about the current decision by Russia and why we should put them, let's say, in trouble or on the road without a salary just because of this reason? In our opinion, would not make any sense. Clearly, we may have some, of course, some economic impact, as I mentioned before. Decision about, let's say, future plans are under, let's say, much more focus maybe than in the past. CapEx program will clearly, I think, show some kind of slowdown. Also I would say, yeah. You're talking about the CapEx program. Are you still planning to build a new kiln in Russia? We never really went for a green light to that. What we approved in the last budget was the so-called engineering part of it. This is underway, and I think it will be completed, let's say, the engineering portion of it will be completed also to have a better idea of the budget. What is giving us more difficulty is also in the light of future CapEx the fact that, as you know, let's say many parts, many components are coming also from the Western world in terms of supply, in terms of, let's say, technical assistance, et cetera. If you are not allowed anymore to have some help, let's say, the Western world is an additional reason why to, let's say, at least look very carefully at the project. More carefully at the project. Yeah. Since you're doing engineering, surely you don't want to do engineering and then drop the project. I mean, if it's ongoing, then sh- No, it could well be. It could well be because the profitability of the project was actually more associated with the potential increase in demand rather than lowering the cost. Yes, there is an advantage in lowering the cost when you switch from, let's say, wet to dry technology clearly, but it was not enough, let's say, necessarily to justify the project. The project was justified in particular under the assumption that we could move from a certain level of sales to another one, maybe 20, 30, 35% up. This being much less likely or maybe less likely in the short term. If you ask me, I don't know, three, four years down the road, possibly yes, but I believe there will be a time to reflect. I mean, not to move quickly into this direction like we expected before. Okay, I understand. Since we're talking about CapEx, can you just give us some sense as to how much you're planning to spend in total for the group in 2022? Consensus right now is showing about EUR 314 million for CapEx for you for the whole year. Is that about right? Yes. There are some countries like Italy, again, unfortunately, is always under scrutiny, where, for example, following this kind of very steep cost increases that we've been facing, a number of projects have been put on hold lately. We kept alive only the one, let's say, associated with the CO2 reduction and the so-called, let's say, roadmap for 2030-2050. In other countries, okay, maybe with the exception again of Russia and Ukraine clearly, we don't see really a reason to slow down. The expectations are for something that I think will be still somewhat higher than in 2021 because there is a number of projects we'll carry forward which we were unable to complete in 2021. Let's say EUR 280-EUR 290; this could be probably the likely capital spending for the full year. Okay. Also, just one last quick question. Your limestone cement in the U.S. Can you tell us what the prices are for that kind of cement and whether the profitability is any different? Oh, we absolutely selling at the same price. No changes because the product is presented and is also the way it is to the customer as a complete substitute, let's say, of the Portland Type I cement. Absolutely no changes. The advantage- The profit is higher because it's easier to produce it, cheaper to produce it. Sorry? Does that mean that the profit is higher? No, not much. Not much because anyway sometimes. For example, when you replace with slag, which is also not only with limestone, in part you replace with slag, not necessarily you spend less than clinker. Also you have to grind somewhat finer to achieve, let's say, the same performance. No, the main advantage is the possibility to have more grinding capacity at the end. To use by using less clinker, even if you grind somewhat finer, so some more hours, say, you still you. This is still a way to somehow free up some capacity, which is needed because if the market keeps going, let's say, strong with the pure Portland cement Type I, we would be, let's say, in some plants at least are not able to produce more. Instead by switching to Type IL, we will. You there? Yeah, you were, you went quiet. Yeah, thank you so much. Thanks for answering all my questions. You're welcome. The next question is from Yassine Touahri of On Field Investment Research. You have the floor. Yes. Good afternoon, gentlemen. I would have a couple of question. Have you announced a second price increase in Italy? Have you sent any letter to your clients? And similarly in the U.S., because of, or anywhere else in the world, have you sent letter to your clients about a second price increase so that you can offset the dramatic increase in energy price? If you have sent, Yes. Yes. No, no, sorry. I was going to answer, but please, go on. If you have sent any letter, it would be great if you could quantify the amount in US dollar per ton or in EUR per ton. Second price increase in Italy, as I said, we are in the need of it, so we are preparing, and we need to move forward. We will try. U.S., not really, because U.S., in some regions, let's say with the exception of Texas, prices went up already at the beginning of January, beginning of the year. For Texas, it's going to be basically now. Let's say beginning of April. Texas enjoyed, was the only region that enjoyed, let's say, two price improvement last year, so this was also related to the last year developments. The magnitude, as I said before, we need not so much in the U.S. I mean, they are greater than usual, but not so crazy. In a country like Italy, yes, we need to do much more. Second question, do you import cement in the U.S.? If so, could you quantify the order of magnitude? Is it 200,000 tons, 500,000 tons? Yeah. We have been importing since some years already. We have this, let's say, joint ownership of the terminal in Houston. We supply, for example, our Houston ready mix plants with imported cement. Yes, the volumes is more or less the one that you mentioned between 500,000-600,000. Yes. We've seen shipping rates have more than doubled since last year. The costs as well of importing cement from anywhere in the world, from Turkey or from the Mediterranean is increasing quite a lot after the war in Ukraine. Do you believe that you could lose a lot of margin on those imports? Slightly, but this is also helpful, of course, for the domestic price in the U.S. So in a way, it will force the independent importers, let's say, to sell cement at a greater price. I think there are already some problems in finding it because, for example, as you know, I mean, the Ukrainian situation is affecting Turkey quite significantly due to their supply or lack of supply of fuel of coal from the Black Sea to their plants. They are short, I think, or some of them are running the risk of being short of fuel, which means clearly not being able to produce. Both at the source, both because of the, let's say, ocean freight, there's clearly strong pressure on the cost of the imports and so also on the prices at the final customer in the U.S., and a strong reason to move up, which is of course helpful for the cement producer. It is adding, if you wish, pricing power to the domestic producer in those regions where the imports are more significant. For the time being, you don't see any second price increase in the U.S.? Second, no. We are not forecasting a second one at the moment. Again, with the exception of Texas, it is not really a second price increase for the year, but it is following a price increase which was made last year in the second half. In a sense, it is closer than usual. Maybe a last question in Mexico. Some of the largest company in Mexico suggested that the volume were a little bit difficult at the beginning of the year. Are you seeing any decline in volume? I think in your outlook, you're also suggesting that you might not be able to pass on cost inflation. If you could just give us a little bit of color of what's happening and why Mexico is a bit more difficult in 2022 than it was. Yeah. Yeah, yeah in previous years. Yes, we are experiencing the same kind of a trend, slightly weaker market versus last year in the first, let's say 2-3 months. We believe. I think the main reason is the trend of the public works, because some of the big, let's say projects launched by the administration, like the new or second airport of Mexico City has come to almost conclusion, it's a conclusion in terms of concrete, let's say, usage. Same thing, but this is more maybe specific to our company, for the so-called Dos Bocas refinery, which is well underway and we were supplying and then we decided to back off, because of pricing, basically profitability of the projects. On the cost pressure, it is mainly related to fuel right now. You know that the energy market, the electrical power market in Mexico has been undergoing some changes, so initially some kind of liberalization then with the new president again becoming more public with less, let's say, permits given to foreign players or any private players to produce and sell electrical power themselves. It's currently under some kind of, let's say, social regime. We've seen power prices not moving basically, which is, if you compare again to what's happening in Europe, it is totally different. I don't know how much this is sustainable for the country, for the monopolistic energy producer. So far at least, we have seen energy prices really steady, let's say, instead, again, fuel prices going up according to international, let's say trends or international indexes like the Argus for petcoke. That's why we are let's say a little skeptical about being able to keep this profitability at the same level. We see some difficulties on the volume side and significant pressure on the fuel cost. Overall, I mean, again compared to some other countries, it is a favorable situation. Because we hear that prices were up by more than 15% at the beginning of the year. Is it what you're seeing? Is it not enough to pass on the cost inflation in Mexico? The price increase was significant. We will need to wait for at least one more month to understand whether it will stick completely or not. There may be some, let's say, adjustment coming forward. The fuel has changed dramatically and we don't have any kind of basically ways to derive fuel or calorific substitution in Mexico. We are using 95%-96% petcoke with an Argus index that has gone from, I think, $60 average last year to some $100 and I don't know what is now, $180 or so. I think it's more, it's even 200. It's even 200. Definitely much, much higher. The price increase is closer to 10% at the beginning of the year than 15%. Is that correct? It might go to 15% in the next months. Is that how I can look at it? Let's see. It will depend on the market, I think, on the demand. Also, last year, some of the competitors, particularly one competitor, was losing, let's say some market share due to internal reason, let's say, not to, I think, lack of, let's say management, lack of directions. This could change during the year. If they want to recover, like I think they want to recover some of the lost market share, they could be more aggressive on pricing. Yes, I mean, the improvement is there, again, is needed, but it's more or less in line with our budget of being able, let's say, to offset the cost and remain at a similar level of EBITDA margin, at least in absolute terms. Maybe somewhat less in percentage of our revenues, but similar to last year in absolute value. Thank you. Thank you very much. You're welcome. The next question is from Alessandro Tortora of Mediobanca. You have the floor. Yes. Hi. Good afternoon, Mr. Pietro. Hello. I have three questions, if I may. The first one is related to, let's say, U.S. Can you give us, if I understood well, the assumption behind, let's say, these initial indication for the full year EBITDA? Can you give us an idea of at cost and currency, if you believe it is reasonable to assume the results of the U.S. overall stable? This is the first question. Also because I didn't, let's say, know what is the assumption on, let's say, the US dollar/euro exchange rate, okay, you made on your budget. Yeah, yeah. This is the first question. Now, on the budget, we were, let's say, conservative on the, or at least, this was the usual, let's say, Bloomberg reference that we are using just because you can, on the exchange rate, it's difficult to make an internal assumption. I think the original was 1.22 or so, the original budget figure. Now in the latest, let's say, forecast or- Mm-hmm. The number, we move it down to EUR 125. EUR 125. This is the current assumption. We should add positive, let's say, FX variance versus last year. We are losing some profitability on the ready-mix. This is clear versus last year. This was expected also because the plants are running basically at full capacity and we have a lack of drivers. We have a problem, let's say, with our, let's call it. Because capacity in ready-mix is driven more by the availability of trucks rather than the plant in itself. If you have the trucks but you don't have the driver, actually you're losing capacity. This is what's happening, particularly in Texas, around the San Antonio, Austin area. We are a little bit under pressure on the ready-mix profitability, which is something that we can accept, let's say, in a situation where we are already at full capacity for our cement sales. We could, in theory, sell more concrete, but to sell more concrete and buy cement from someone else doesn't seem to be the right tactics at the moment. For the rest, okay, depending on the kind of price improvement that we will be able to eventually accomplish, we should expect something not too different, let's say versus last year in dollar. We are basically targeting similar level in dollar with some reduction, again from ready-mix, which could be something like, I don't know, between $5 million and $10 million less. Okay. Let's say all in all, overall stable, let's say local currency plus, the benefit from, let's say the stronger US dollar. Okay. Okay. Plus or minus something, but this is okay also. Exactly. Your assumption. Okay. Then the second question is, again, in the U.S., considering that you are running at full capacity, that the CapEx in Russia is, let's say, on standby for, Yeah. Let's say, the reason we know. Yeah. If I remember well, there is an expansion plan you are thinking about or at least, let's say, network, railway network to be now a link to the plant. Are you making any reasoning in order to add capacity in the U.S.? Yes, in a sense that it's always the first topic in any kind of, let's say, management meeting locally. We have not come yet, let's say, to the decision in a sense that we are moving forward with some improvements in San Antonio that are formally, let's say, related to the capacity expansion permit. Mm-hmm. They are not, let's say, adding capacity yet. For example, the construction of the new clinker storage is related to the project, but okay, it's helping of course in managing the plant as it is, but it's not adding capacity yet. On the rail connection, again in San Antonio, no decision yet. We think we would like to see the impact of the switch to Type IL, how much it's giving us- Mm-hmm. The market where it's actually going. Because if we can't get another, let's say, 10%, for example, by switching to Type IL, I think it would make sense to still wait to really understand whether there's a structural change in the demand or, after so many years of positive trends, something changes. Because you never Okay. You never know. Mm-hmm. Mr. Pietro, very, very clear on this point. The third question is, let's say on Italy. If understood well, let's assume you are not able to make the second price increase. As of today, the indication you have is for an EBITDA lower in Italy. Just to understand better, let's assume again that you're going to make this second price increase. Italy should be, I don't know, stable or higher? Just to understand the extent and the impact of this potential second price increase. Okay. I don't know if we are successful. If we are fully successful, I think the best case would be to remain stable. If we are not fully successful, we will be lower. Okay. The last question is, sorry, it's on, let's say, on the- Yeah. accounting side, on the tax rate. Yeah. Tax rate this year was pretty low. Yes. I understood that there are some, let's say, non-recurring effect on this. Considering the geographical mix, considering that Italy probably will have a lower profitability. Yeah. Do we need to expect, let's say, higher tax rate this year, also considering deferred taxes and so on? Yeah, it's likely. It's likely because last year the impact is coming this year, I mean, 2021, is coming mainly from previous period. Mm. Which means basically last year it, well, maybe it's worth spending short time on this. It's coming mainly from the U.S. Last year we did not consider because we were not 100% certain, and you know that the tax return is always filed, let's say many months after the closing. We were not considering an advantage related to accelerated depreciation. This was one of the changes introduced also by Trump together with the lower tax rate. There are some benefits that you can take by, let's say, deducting your investment 100% in one year. We were not fully certain, let's say, about this possibility last year. This year, when we filed, let's say, the return, we decided that there was this, which was good, let's say it was available to us. We, in a sense, took this year an advantage that should have been booked already last year. That goes into the line, let's say, of the previous year taxes with a positive sign. As such, let's say it's reducing the overall tax rate. If you clear, let's say, everything from this non-recurring or special effects, you go back to a tax rate which is in the range of 21%. Okay. Very similar to the average of the previous years. Okay. Thanks, Mr. Pietro. Okay. The next question is from Gregor Kuglitsch of UBS. Please go ahead. Hi. Hello. Thank you for your perseverance. I wanted to sort of go back a little bit, if you could give us some detail on the energy bills. The little slide, I think that's just demand, but I guess it doesn't really matter. Roughly EUR 390 million, I think last year you had in terms of fuel and electricity. Yes. I guess I wanted to get two questions. One is, roughly, if you kind of calculate it all, how much of that do you think is sort of hedged, so you've already agreed the price? Yeah. Secondly, and I guess you called out Italy specifically as a major issue, but maybe let's talk about European electricity, because that is probably your biggest problem, if you summarize it. Yes. How much of this is European electricity? Kind of give us some sense how we can best calculate the risk. Kind of you mentioned some numbers, right? You know, what happens if it's at spot? What happens if it's back to normal? Just to kind of help us out what the risk is here on European electricity. Yeah. I would say that in general, the hedging, again, on electricity is about, it's pretty good, if you wish more, we would be much worse off without any kind. I mean, if you look at EUR, then for 2022 we can consider 30%-40% maybe. Europe, but talking about Europe, which is fine, and again, giving some more confidence for at least this year. Then when you look at 2023, it's very minor. It's some, probably as of today, maybe 10%, but no more. In terms of total, out of the 387. Okay, power is 220. If we look at the I have to just make a sum shortly. If you consider, let's say Italy plus Germany, Luxembourg plus Poland, Czech Republic. Yeah, no more. It's 140 out of 2,020. It's about, how much? More than half, clearly. Yeah. 50% of that is related to markets where, yes, we do have most of the pressure because actually, okay, Ukraine has always had a high energy cost, Russia relatively low, U.S. relatively low, let's say, compared at least to the European levels. Okay, that makes sense. The second question is, in terms of, I guess, Ukraine and to an extent Russia, I guess I want to understand your cost flexibility. Kind of in, say, the Ukraine, what's your kind of maximum loss, I guess, right? If the plants remain shut and- Yeah. I'm guessing in Russia similar, right? I mean, what sort of your fixed costs that you can't really take out? Well, Ukraine, it really depends on what we want to do, what we will decide to do, on the staff cost. Because until now, and I think at least for one more month, and then probably we will have to. We may take a different decision. We have been paying full price. No reduction at all. From then on, if the plant continues to be idle. Actually, we do have a little activity in the sense that at least the people that did not leave the country or did not move far from the plant, far from where they live or did not join the army, are able to go to the plant. They're not fully. And then they do something like, I don't know, minor maintenance, make sure that again there's some security around the plant. The plant manager is checking, let's say, periodically, what's going on. I think we may again continue like so. We have also some liquidity in the country to be able to continue this way for months by reducing also maybe to some extent the salary to a certain portion instead of 100%. It could be somewhat less than that. From then on, clearly without revenues or very small revenues, I would say no more than 8-9 months, something like so. I don't know, if I told you you'd do EUR 20 million loss, that's something possible or Uh, uh- You wouldn't let that happen? It may be too much. Yeah. Maybe 10 is more likely. Okay. Well, uh- Okay. Because then obviously if we sort of tally it together, right? We look at, you know, Russia halving, I think you said U.S. flat organically. Yeah. Ukraine at EUR 10 million loss. I guess the rest implies. I mean, the rest is essentially Italy plus sort of central Europe, which would imply like a 20% drop on that, which I guess is EUR 60-EUR 70 million. I wanna understand whether you sort of rounded down when you guided, and I appreciate there's so many uncertainties, but it didn't sound like Italy is about to go into a loss. We haven't spent a great deal of time on Germany and Luxembourg and the Czech Republic, but it sounds more stable. Yes. Yeah. If I interpret your guidance correctly. If there is a decline versus last year, it should not be too significant. We're talking about, I don't know. Okay. three, four, five. Yes, no, the big risk are of course in Ukraine, in Russia and in Italy with big uncertainties about the price level and the impact of the steep price increase on demand. Okay. That's helpful. Maybe the final question. I think you're almost done with your buyback, I think. Oh, yeah. Yes. Yeah. 110, maybe I calculate, you've done out of the 150. It looks like from the release you're now going for a larger approval than last year. Is that correct? In terms of- Correct. the authorization. Yes. We will propose to the AGM EUR 12 million instead of EUR 7 million. Mm-hmm. Yeah, we need the approval of the AGM. We assume that the AGM will give approval. From then on, I mean, we don't have necessarily to let's say execute it because this will require an additional let's say resolution by the board. It's let's say the AGM approval is the first step necessary, and then there is a second step by the board. The decision must be taken by the board in a following meeting. I mean, we thought it would be good, let's say, to have the flexibility, to have the possibility at least to decide upon it. I don't know what is the likelihood right now to really move quickly into this direction. Clearly, if the price continues to be quite depressed and we see also maybe, let's say, the overall situation turning somewhat better, I think we are maybe more likely to start again, let's say, the buyback if, which is of course appreciable overall, the share price goes back to, I would say, I don't know what is the right level really, but let's say better levels versus today, so there is no real need for, let's say, some kind of support. Then we will keep it as something, let's say, potential but not actual. Okay. All right. I appreciate your comments. Thank you very much for the You're welcome. The next question is from Harry Goad of Berenberg. You have the floor. Thanks. Good afternoon. Yes. Thanks for taking my questions. Two for me, please, on I guess more about sort of current trading activity, first in Europe, we've obviously talked a lot about the impact of cost inflation. Have you seen any indication of that, you know, whether it's the cost inflation or geopolitical issues impacting on actual demand for products, I guess, through March? Then if we think about the U.S., where I think you're sort of talking broadly flat-ish volumes, maybe a little bit of growth, can you give a little bit more granularity how that breaks down between, I guess, residential, non-residential, and infrastructure? I guess, you know, the sort of supplementary to that is at what point do you think we begin to see funds from the new infrastructure program actually hitting the ground? Thanks very much. Yes. We have seen some slowdown recently in March. Okay, it was a little strange, let's say, the first quarter because we've been coming from, let's say a very strong last quarter. With countries Italy and also Germany somehow customers increasing their stock in light of upcoming, let's say, price improvements. Very strong December, if you wish, and much weaker January. The two things, let's say, balanced out a bit. February was normal, I would say, on budget as expected. Good performance, let's say, in the U.S. March, yes, we start to see some slowdown in Europe, Italy, Germany. A little less than that in Poland and Czech Republic. Eastern Europe at least until, let's say, end of February, good performance in terms of sales both in Russia and in Ukraine. In the U.S., lately, okay, February, the comparison base was a little was easier because you may remember the freeze that was affecting particularly the southern state last year, so we were kind of idle for two weeks or so. Again, comparison is not really fully consistent. In three months, it's a little short period to really give a judgment. The impression is that overall we see a strong demand in the U.S. No impact so far from the cost inflation and also, let's say, the weather. Instead, demand trending somewhat lower, let's say in Europe, 4%-5% less than what we expected. Your second question was about... Please remind. Just give me a little bit more detail on the demand pattern in the U.S. Oh, yeah, yes. For sure. There was a recent update by the PCA, which basically confirms the trend that was already in our planning. They see forecast cement consumption up by 1.2% approximately with rising interest rates starting to affect the residential market, which has been the main driver in the last, let's say, two years or one and a half year. They consider the possibility of a slowdown on the residential because also home prices are going up very quickly. There is a lot of also financial interest on selling and buying homes, possibly as in a very short timeframe. A little bit of speculation or financial, as I said, interest on the residential market. They consider the residential market probably coming to a peak in 2022 and starting to decline in 2023. Yes, there should be the support from the infrastructure plan with not much visible yet in 2022, and more evident from 2023 to 2026. This is the general view. Again, overall cement market, probably the demand it would be even higher in the underlying demand. There are constraints, as I said before, for example on the ready-mix for the driver. This is an issue we have, but everybody has basically. If you are not able to have enough driver to pour concrete on the job site, you inevitably reduce your production activity. It's very tight actually, both the capacity at the plants and the capacity at the ready-mix in the sense of, let's say, drivers. Thank you. The next question is from Pierre Rousseau of Barclays. You have the floor. Yes, thank you for taking my questions. You're welcome. First question would be on the oil well cement market specifically. Could you help us a little bit understand your exposure and also in terms of current trend, if you see some pickup already, or if it's too early? The second question would be on Central and Eastern Europe. You gave lots of detail about price cost in Italy. Could you give the same for Germany and Eastern Europe, where presumably there is some cost inflation as well? You know, what was the first round of price increases? Will you need a second round? The last question would be on carbon specifically. We've heard from some players, particularly in France, that they were coming to the market with a carbon-negative cement or CO2 equivalent. Would you have any view on how this is done and if it is something that could be replicated on your end? Thank you very much. Yeah. Well, we can start from the last point. Yeah, I mean, this is technically feasible. It's not something impossible and can be replicated. But the issue is the availability of the materials or the substitute, the third material that you need to achieve this kind of. I think that if you consider the volumes of this kind of cement that is being produced or sold, you come to a level which is absolutely minimal. I mean, it's not really something that could flood the market or becoming something mainstream. There is no real magic in our opinion. If you're strictly focused on this product and you're covering, let's say, a niche, and you're able to receive enough raw material for your production, that is not limestone, which is because at the end, the big part of the CO2 is coming from the chemical reaction of the limestone. You can produce zero carbon or negative, let's say, zero carbon cement, but it cannot be considered something that will actually can replace, let's say, the existing ordinary or Portland or whatever limestone cement market. On the oil well, yes, in the U.S., it's clearly has been performing, let's say, well last year. This year, again, it should because with in general, let's say, rising oil prices, oil and gas, we do have a positive impact on our oil well cement sales. It still represents, let's say, a relatively minor part of our sales in the U.S. It is about 5%. I think the highest year we achieved maybe 6% of our sales. We cannot really produce much more because actually it would mean to let's say put a ceiling to our gray cement customers, which are in general also less volatile. If you decide not to supply or to reduce supply to a traditional, let's say, gray cement customer and give a preference or priority to oil cement sales, it could be good for your profitability in one year. In the year, because in general, oil cement has a higher margin versus ordinary, let's say, gray cement. But you may break, let's say, certain customer relationship, which is then could be difficult to adjust or to reestablish later on. There is any way a certain limit, a certain ceilings we would prefer to set for oil and gas sales. Perfect. Thank you. The last question was about pricing in Germany and Central Europe. Yes. How much was this first round, and do you need another one in the light of current complications? We may not to the extent of the price that we need in Italy for two reasons. In Italy is the country where we are most exposed, let's say, to spot prices for energy. Meanwhile, I think I mentioned it before, but Germany and Poland and Czech have greater hedging, more months, let's say, of stable or more stable pricing going forward. Also because Germany, Poland, and Czech, and Luxembourg, they all have the advantage of a very high with fewer substitutions. They are, yes, suffering from the energy cost for the portion, let's say that it's not hedged, but they are much less suffering the increase of fuel cost because they burn up to 75%-80% of waste-derived fuel, where basically the price did not change. Or in some cases instead of a cost, it's even a revenue because you are, let's say, realizing a kind of service on waste in lieu of fuel. Currently, we see the need for a second price increase in Italy, as I mentioned before, but not necessarily for the other European countries, or maybe to a much lesser extent. Okay, thank you very much. You're welcome. Mr. Buzzi, there are no more questions registered at this time. Okay. Maybe some of you already left. I hope that the influence gave you, I mean, the required information, the necessary information. As I said previously, we remain available for more detail question as with our investor relation team. Thanks again for listening.