Good afternoon. This is the conference call operator. Welcome. Thank you for joining the Buzzi Unicem full year 2022 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 press signal an operator by pressing star and 0 on their telephone. At this time, I would like to turn the conference over to Mr. Pietro Buzzi, Managing Director of Buzzi Unicem. Please go ahead, sir. Hello. Thank you. Thank you. Welcome, everyone, to this annual conference that we usually carry out after the approval of the full year results. We did provide and made available presentation, which I think you should be able to find in your in our web, website, in the presentation section. The idea is to follow more or less the presentation and then open the Q&A session. Coming to that, 2022 as a financial year was a positive one with a stronger growth in our turnover, which closed at basically EUR 4 billion with meaning almost 10% up on a like-to-like basis. Even higher with the help of the currency exchanges, and particularly, the dollar, which represent for us a stronger component. At EUR 892 million, figure in nominal terms. This was due to a greater contribution in absolute terms, mainly from Italy and U.S., which was able to offset some weaker results in Central Europe and Eastern Europe. The profitability is below 2021. If you look at the development during the year, we were able to recover some in the second half due also to the, let's say, many areas, price increase, not only at the beginning of the year, but also later on. Together with some softening in energy prices in the last part of the year, again, the full year profitability came out yes, lower, but not as low as we maybe expected or as we showed at the end of the first 6 months. As opposed to turnover and operating results, we had cash generated from operation lower than last year, mainly due to working capital absorption and also higher CapEx. Nevertheless, we closed the year with Return on Capital Employed, which is still positive over the Weighted Average Cost of Capital. We particularly significant in our opinion because the Weighted Average Cost of Capital increased quite a bit with the rising interest rates and also rising risk in some of the countries where we operate. The board of directors approved the dividend by 13% at EUR 0.45 per share, which means also a payout ratio approaching roughly 20% of the EPS. We also achieved some interesting preferable results in the so-called sustainability domain, which means lower CO2 emission. The decrease year-over-year was 3.6% in the specific ratio, the so-called kilograms per ton of synthetic product. We also achieved the full result which we have been setting some years ago, so minus 5% versus 2017. This program, I mean the roadmap which was disclosed last year, may if I recall correctly, yes, was also right after, let's say, the full publication submitted to the judgment of the SBTi, which is the most reputable, let's say, denomination in this environment, in this subject. Was declared aligned to below 2-degree scenario, which is also something we can be proud of. I mean, it represents a further recognition of our commitment, in our, let's say, well thought program, to achieve certain targets by first of all, this half and later on 2050. Okay. Again, on page 2, the summary of the key figures. Net sales improvement, EBITDA improvement. EBITDA margin suffering some, it's almost mathematical when you have such a significant increase in turnover. Again, I think the degree was, yeah. The level achieved was eventually not as bad as maybe the first half was indicating. Good performance, particularly in the second half. Return on Capital Employed remains around better than in 2020 and 2021, around 10%. The net per share moving up to 12.5%. The cement volumes trend was not helping us. I mean, We achieved at least a favorable result in a situation where the volumes are being rather declining than increasing. This was clear already after the first 6 months, but it became even more visible in the second half because certainly some of the countries which are for us very significant, like the U.S., in the last part of the year, suffer from a clear slowdown in the shipments in the U.S., particularly related to the residential sector. Also other countries in Europe showed a fairly positive first 6 months and then enter into a weaker demand scenario. You can see here that only Central Europe, which means for us Germany, Luxembourg and the Netherlands, we were able to close the year with a positive variance. All other geographies went down. Eastern Europe, of course, is strongly affected by the Ukrainian situation, where the market declined very significantly. Our production suffered from the conflict and the war situation. It was very difficult to find, let's say, demand and also to produce. Similar trend also in the ready-mix concrete volumes. Only positive variance, favorable variance in the Central European market, and anywhere else, a decline in shipments. If you look at page 4, again, we notice that our increased turnover is coming mainly from the price effect, very, very little volume favorable impact, as we just mentioned. In addition to that, the foreign currency impact was also quite favorable, mainly in the US, due to the size of the business and also due to the size of the dollar revaluation, dollar strengthening during the year. Also other currencies like the ruble and the Czech koruna showed some strength against the euro and they allowed some positive impact in Eastern Europe. Moving to page 6. The EBITDA, the bridge from one year to another. Here you have, I mean, good signal in a sense. The good signal are that the price effect was able to offset the negative volumes and the negative variable cost. Almost fully also the food cost, let's say, unfavorable variance was fully offset by the price cost improvement overall in the scope of consolidation. Our benefit or our gain over the previous year came mostly from other items. For sure, we have to outline a strong help from the inventory changes, which are within the column, let's say Other variable costs. In this column, they represent the variance, positive variance. They, I mean, we have other items that are negative that plays in this column, but the main contribution is really coming from the inventory changes, which is related not to, let's say, the quantity that we have by year-end. In our, to a little extent, let's say, due to the quantities of clinker or cement remaining in inventory at year-end. Driven really mainly by the value, by the unit value of this goods, product or semi-finished goods in inventory, which went up due to the cost, I mean, due to the cost increase. The same cost inflation that you see here in variable, mostly variable, and also fixed, was according to the accounting rules applied to the unit value of our inventories. This was really a complete change as at EDF and also for prices. complete change versus what we were used to as inventory valuation in the past years. Forex also was giving us quite a significant output with EUR 72 million. The currency that gain against the euro are the same that I mentioned before. For us, mainly the dollar, Czech koruna, and the ruble. When we go to page 7, you have an idea of what I was mentioning about the rising cost, applying also to our inventory value. We, here we focus on the energy relating to the cement business. Which means electricity, power, electrical power, and fuel. We have more than double cost of more than double versus 2020. There, which used to be more, let's say, historically 15%, 16% of our revenues, now become more than 20%. On the right, bar graph, you notice that the main burden came from electricity overall, but also fuels, been showing quite a significant rebound. In some markets, we, Italy suffer more from the fuel trend, for example, in U.S. In some other, like Italy, we suffer more from the electrical power. It depends on each country and their, let's call it, the importance or also the fuel substitution rate. Anywhere where the fuel substitution rate is higher, the trend of the cost of fuel is affecting less. Also depends on the market structure for electrical power. It's clear that this has been in the last three years, and particularly 2022, a big change to our cost structure. The main reason for the prices to go up. The need to go up to offset such a significant cost increase. When we move to the trends by major market areas. First of all, US, which is US in page 9. Good performance of US in EUR, certainly very favorable. Like almost everywhere, lower margins due to again, rising costs and also rising turnover, so difficult to continue to keep the same profitability with pricing strongly increasing. We mentioned already, the fact that cement demand has been going down in the last in the second part of the year. We also had to face some I don't know, let's say, hurdles or difficulties, particularly from a logistics standpoint, due to low water level in the Mississippi River in the during the mainly the Q3. Yes, some further price increases in the last part of the year, we were able to rebalance the profitability versus the first half in a positive way for us. Margins as we mentioned have been more under pressure than in the previous year. Some of the costs and let's say the industry inflation was more evident clearly this year than in the past. I refer in particular to services. In the maintenance services, we had a very significant cost increase in our maintenance programs. In part due to the inflation, in part also due to some of the unexpected shutdown and issue, technical issues which we had to face during the summer. This translated into definitely not only higher, let's say, variable cost, like fuel and power, but also greater fixed cost, mainly for maintenance. In Italy, the results are much better than last year. This is coming from two, three main reasons. One, not the volumes, clearly, because the volumes have been declining more than in other countries, well, with the exception of Ukraine. Ukraine has been one of the weakest country in terms of volume. The pricing effect, on the other hand, was probably the strongest across the scope of consolidation, following the continuous rise of particularly electrical power during the year, and the need to adjust several times during 2022 our pricing level. In a, in a, in a market where domestic consumption has been going down, we are doing better because of all the sequential price increases which allow us to compensate the inflation. Also we have, we must remember, let's say, the significant advantage or benefit coming from the energies, electrical power subsidies, granted by the government in the form of a tax credit, which we can use to offset basically any kind of tax payment. This specific benefit amounted in 2022 to EUR 38 million approximately. On a in a, in a, in a total EBITDA of EUR 91 versus EUR 41 last year, you have to consider that EUR 38 is coming from these subsidies. Also looking forward, let's say, for the, for the, let's say, the outlook of Italy, if and how we will be able to continue to receive this kind of subsidies and to which extent, it's clearly a very significant variable in terms of the potential outcome, potential, potential results. Anyway, for 2022, it was there. We also performed better in our logistics business. In, in general, there were for sure a good management of the situation and some external help. Altogether, the change in the, in the result has been very, very positive. In Central Europe. Yes, favorable, slightly favorable, volumes even though the trend has been better again in the first half than in the second one. In part, this was also due to colder winter, beginning of the winter in Q4, so less favorable weather, let's say situation. In the development of selling prices was also nice, let's say in 2022. The fact that the cost pressure was not as much as we faced in other countries, the need, let's say, to increase prices was less evident. We had a stable, let's say, profitability in Germany, very close to last year, and instead some decline in the Benelux, again, mainly due to fixed cost maintenance and, let's say, an operating performance of the Luxembourg plant, which was by year-end, somewhat below expectation. You see the decline in wide decline, let's say, in EBITDA, driven mainly by the Benelux countries, not so much from Germany. Some reduction in profitability, which I will mention already. It is a bit greater than in other regions, but still due to the same reasons. In Eastern Europe, clearly, there's been a big difference among countries. If we, if we focus first on the European Union countries, meaning Czech Republic and Poland, the performance has been overall, let's say, favorable. In Czech we were able to improve our results versus last year. In Poland, no, but, let's say that there is a similar or if you, if you take the two countries together, you get a very, very, a result which is very close to the previous years. Instead, clearly, Ukraine suffering from difficult operating environment. With one plant basically remaining idle. The one in the south. Fortunately, we did not suffer any damage at our production facility. We had a hard time, clearly getting also the electrical power supply and being able to operate in a regular way, finding customer, particularly in the south. The northern plant can run with normally, I would say. With lacking demand and the southern plant open from sales only when there is a need. When there is actually some demand for cement in the region, which is not very high, due to the fact that the plant is close to the to the conflict line. Clearly in Ukraine high inflation due to the due to the difficult economic situation, typical of a war period. Rising cost, also prices, I mean, favorable development, but at the end, sales volume not enough, not sufficient to achieve a breakeven point. We are having lost about 60% of our sales. Our capacity utilization is too low to be able to achieve a breakeven point. We have to continue to stay there, to hold on, to minimize the losses. Which we, I think, done fairly well. Difficult to imagine a turnaround until the situation stabilize. In Russia instead, the result has been favorable. Not so much in terms of volumes. Declining volumes, but limited one, at least, so far. Good development in prices and costs that are more under control than in other regions. Because they are less, they've been less impacted by the, let's call it, the international, geopolitical crisis or gas cost and indirectly power cost, et cetera. The Russian profitability remains pretty high. In addition to that, the translation effect was favorable. The ruble has been gaining about 15% of its value, H22 versus H21. Let's say, an accounting benefit coming from the FX changes. I think it's important to take a look also at our joint venture. They represent, even if they don't. Are not consolidated line by line, they do represent a very, a very major part of our business. Fortunately, they are also strong companies and with a nice operation and good profitability overall. As you can see, Mexico was not better than last year in terms of volume. The decline in our sales ton let's say, was limited to minus 4, minus 5. We did have in Mexico also the inflation rate much, much greater than in Europe. On the other hand, energy cost, for example, I mean, electrical power remain stable because of a political decision, local political decision to keep it fully under control. Fuel instead went up quite a bit because we buy also petcoke, mainly petcoke for Mexico in the international market, and also in dollar. We pay in dollar. Pricing fairly strong thanks to the weather. Quite resilient, let's say, demand trend. We do kept a good momentum of our price improvement also in the second half. Overall, as you can see, in Euro terms, the better EBITDA outcome for. Which is 8.2% in EUR. Minus 3%, so very close to last year in local currency. The Mexican Peso also is one of the currency that performed better during the year versus the Euro. We do have also some accounting advantage, accounting favorable change coming from the FX. EBITDA margin remains very high. Unfortunately, they've been dropping. Again, this is a general trend, I think for us and for the industry due to the situation obviously the last 2 years. The Mexican business continue to perform in a very satisfactory way. Moving to Brazil, also getting more and more important for us due to the size of the business, which has been increasing in 2021 after the acquisition of and the fact that Brazil is gradually recovering, gradually coming up or out of a, let's say, no, not particularly favorable economic period. One of the advantages of the Brazilian situation is that energy costs are coming mostly from renewable sources and very, or much lower than what we are used to today in Europe. Fuel is different because even though they had a relatively high fuel substitution rate, which is helping the weighted average cost for this supply, they also depend on petcoke, for example, Mexico to a large extent. They are subject to the petcoke international market in USD. We did have, yes, in Brazil, similarly, I would say, to Mexico, a decline in our EBITDA margin. The pricing effect was particularly favorable, starting also from a much lower level. You see the EBITDA was also without foreign exchange impact much better than last year, and around 30% in terms of margin. For the current year, the year that began 3 months ago, we are showing, let's say, or communicating an outlook, which is a bit mixed, in the sense that we have some concern, I think, like everyone. We believe that generally speaking, construction investments and cement consumption, so cement sales, will tend to be lower in 2023 versus 2022, both in U.S. and in Europe, keeping apart the Ukraine, Russia, and also Mexico and Brazil. Our, let's say, core markets are likely to see a decline in cement demand. How big? It's a little difficult to really give a clear indication. Probably single digits, probably not double digits. That need to be seen. Energy prices are stabilizing. We have seen also some decline versus the peak of, let's say, the third, Q4 of 2022. We are able, well, today, in many countries to buy, let's say, electrical power at a level which is below the one of the end of 2022. This is giving, clearly some relief after many months of continuous need and worries about how to cope with the volatility of energy costs. This is definitely a good news. Hopefully, and we don't know, but hopefully, will pay also for the coming months. We have budgeted, anyway, an upward trend in selling prices, which is coming, to a large extent, from a carryover effect, because most of the countries where we operate had more than 1, price increase, during the year. We are entering 2023, with a level that is, much better than the one of the beginning of the last year. We are also applying some additional price improvement, not everywhere, but in countries where the cost structure, change, significantly also year-over-year. We think that this is necessary, and we're trying to do that to be able to maintain, let's say, the same margins, at least in absolute term also in 2023. A little more detail about the countries. U.S., we mentioned spending, construction is going to decline, likely thanks to the fact that anyway we will remain close to full capacity utilization. Pricing power should be there to be able to offset the increasing costs, which we are still seeing to a large extent in many cost items. Hopefully, the infrastructure spending will somehow offset the decline in original. The, this infrastructure spending is not entering the market very clearly yet, but it should moving on in the next few months. This is the brief scenario which does not discount or does not consider a clear recession or some other stronger economic difficulties again, which may also occur but are not the base scenario. In Italy also, we will see the market trending slightly down again. The commercial sector affected, less, also, subsidies to renovation, available to the private individuals and slow implementation of the how is it called in English? I don't remember. NextGenerationEU plan, which is, I read a newspaper every day, not too easy to implement and open the job site related to this money, which is theoretically available, but not easy to be able to spend it in a short time or quick way like someone would expect or would have thought initially. In terms of Europe, including Poland and Czechia, so the European countries, similar outlook for the volumes. Some public support to infrastructure residential renovation should be able to offset what is likely to go down in construction investment. Here, for example, in Germany, we must be focused on the prices because our cost structure dramatically changed due to the fact that last year energy was hedged at a very, very low level, let's say, compared to the market. The hedges have come to an end, and they have expired. Yes, we know already what is going to be the price. We have new hedges for the 2023 prices, but they are at a total different level versus 2022. The Americas, a more favorable situation. We see Mexico to remain robust in terms of demand. There's a lot of activity related to the so-called nearshoring. More stable energy prices also there. The outlook is not. For now we see results in our outlook, we can see results improving there, thanks to, again, stronger demand, better prices, and more cost stability. Brazil, probably not necessary positive sign or favorable sign in demand. Yes, not even negative or if negative, slightly negative. Price improvements are expected also there. The performance should be should close with a plus sign versus last year there too. We do not make any assumption about Russia, which has been actually a strong contributor to the 2022 results, because we don't have enough information. Even with the current government structure, we have to wait for actual results. We actually do not have an outlook for the full year. implicitly, let's say, in an implicit way, we assume that at least in ruble terms, the results could be the same as last year. We don't know. When we say that we expect our group or consolidated results to remain favorable versus 2022, we have again an implicit assumption about Russia, but actually we don't have a precise outlook on that market. We think that, again, beside that market, assuming that market remains stable, also the rest, with some differences, some year better, some year, let's say, less, not as good as 2022, should perform in a very similar way. The main concern, if you wish, is the trend of volumes, which we do assume negative, if it turns out to be more negative than expected, we may suffer more in the operating results. This is a bit of a question mark, it will become more clear, let's say, going forward after the Q1. Actually, I think by midyear we will have a better visibility on the volumes for the full year. We have a section then related to profitability, which was already mentioned before. Basically, we confirm on page 18 that our target internal target has been achieved. There was definitely a significant reduction of clinker factor during the year. Our changes in product mix applied by every country are going well. There is a stronger commitment by every division to really make the best out of the roadmap and according to plans. We are moving forward also with increased alternative fuel rate. There will be another step in 2023. We are confident that it is going to come. In countries like Italy, where traditionally we have and we continue to face some difficulties, there are good news in the sense that we are able to overcome some obstacles. We have a new plant which is starting to burn alternative fuel, adding up to the existing one. We are, let's say, fairly optimistic on our target for next year. The validation by SBTi is also a very important step. I think again, it's something that shows that our plan is serious. It reflects the so-called, let's say, scientific scientific how can I say? I I mean, the. What typically is supposed to be done for an industry like ours from a technical standpoint, to be able to stay within a certain target, which is, you all know, is what described in our roadmap publication. Yes, it is in line not only with the best industry standards, but also with what the external, let's say, market or the external assessment are usually looking at for a company like ours, which is clearly into the category of the hard to abate industries. We have more information in the appendix, more detailed information, maybe we should move. It's already 45 minutes from the beginning, maybe I suggest that we move to the Q&A session, and we can use some of these pages, if necessary, to answer your specific question, and any kind of question you might be interested in. Let's open, please, the Q&A session. Thank you. This is the conference call operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone 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 from J.P. Morgan. Please go ahead. Hi, good afternoon. Thanks for taking my question. Hello. Hi. Hello. Hi. I'll start with a general question on pricing power for the cement industry in Europe. Given the unprecedented price increases that we've seen last year, would you say that there has been a structural shift versus history? If yes, what would explain that? Would it be increased consolidation or carbon costs being pushed through customers? Or do you think it's mostly the hugely increase in energy costs that we've seen last year, in which case, how should we think about pricing going forward in this decreasing energy cost environment? That's my first question. Yeah, I know. For sure, the integrated hidden cost today, which is this CO2 cost that you mentioned, partly hidden because in some cases, it depends on the market, on the different situation, few allocations versus actual consumption. Anyway, it's a cost that is still not so visible. an argument, it's a topic that we are using clearly when we are discussing also with our customer price increase to explain that it's not only the inflation, which has been, yeah, the main reason for sure, also the inflation in the CO2, in the CO2 rights, which are every year, let's say, somehow, affecting you more and more because the availability of rights is decreasing every year. Soon it will fade out. It, I think it's important for as a message, let's say, for our customer to know that, yes, this cost increases, This price increases, they represent, they are necessary because there was a dramatic cost increase, very visible. Everyone knows, let's say. There's another one which is more hidden, but also soon becoming more and more important. Unfortunately, I have to say, and this is true mainly for Europe, actually I'm talking mainly for Europe because so far, the rest of the markets are. Europe does not have, yes, they do have inflation, but they do not have the limit for the cost of CO2. Again, this is something that we can clearly demonstrate, somehow is increasing the purchasing power in the U.S. countries. With the energy cost, talking about fuel, power declining, or stabilizing more than declining because anyway, we are. I think we remain at a level which is totally different from 2020 or even 2021. Anyway, let's say not rising anymore. I think again, in the ETS countries, we completely have an issue with the CO2. In other countries, it depends, I think very much on the demand. The pricing power will be dictated mostly by the demand. The countries where the demand will continue to absorb high volumes, so let's say high capacity will take us to or bring the people high capacity utilization. I think that we don't see a reason why the prices should decline or really change. Maybe they will not increase further, which is possible. In countries where the capacity utilization is lower or there is potential pressure from the imports, which is more typical, for example, Italy, there we need to find a good balance because we can afford, let's say, losing some volume, particularly if it's not taking us to a level where we are losing free allowances. If we go below, let's say the free allowances threshold or lower limit, then it could make sense to somehow react or not losing further volume. The driven issue. Let's say that this is a good issue because anyway, if the costs are going down, beside the CO2 which we need to take into account, in principle, there is not very good reason to keep the prices. I mean, the problem is not to enter into some kind of, let's call it, vertical or deep decline. As long as you are somehow reflecting in your prices a lower energy cost, I don't see there any problem, frankly. Maybe one additional element I wanted to add is that you can see in our numbers, and I'm sure you will see it in other numbers as well, is the fact that you can see the CapEx is increasing and not necessarily all the CapEx are short term, let's say with a short term perspective, which means that maybe potentially some of the paybacks may be slightly longer. Which means that we will need additional margins to basically offset this effect as well. If this is more perceived by the whole industry, then this will have an additional pressure to increase your prices. That this may be another element that you, that you have already seen and may further see down the road when the All the transition investments will come to play. Okay. Thanks very much. I'm sure there will be follow-up questions on pricing. Can I just ask one more question on your cost assumption, given that you still think it's gonna be up year-on-year. If you could give us a bit of color about what would drive that. I mean, we are seeing the energy costs being down year-to-date. If you could give us an update on your hedging policies. Thank you. No, you're right. I think the, this is again, somehow, related to mostly, if you wish to the hedging policy, because It's been an advantage in general in 2022. The countries that were strongly, let's say, hedged, particularly in the electrical power, enjoyed a low, much lower cost, and particularly in no volatility, which was one of the critical subject in other countries where you were facing in some moment, in some months, spikes in the electricity cost. It was very difficult to understand whether this should translate into higher pricing right away. On the other hand, once the all the edges are over, and you move to either fix or not fixing in the new price, but assume that you are fixing, which we did in several markets again, there is a step. From EUR 100, for example, we moved to EUR 200. This is our assumption. I think that in general, let's assume that we have, I don't know, 50%, 60% of our PC cost, actually, to believe as a whole, I mean, looking at the group as a whole. Well, yeah. See, you know, of course, some countries are much higher, some countries are much lower. Let's say for the group as a whole, 50%-60% of our PC cost hedged for the next year. We are hedging again, at a price which is totally different from 2022. That's why we believe that without adjusting the prices, there's no way to keep the margins. In other situation, in just other situation where we are more exposed to the stock market, we're actually. It's definitely what you're saying. We are seeing lower energy cost, lower than last year or let's say, the spike of last year so far, and less pressure definitely to move the prices up. I think, again, it will be a balance where you are hedged, you're basically also trying to achieve and maintain a certain price where you're not, no one is really, not ourselves, not our company is willing to reduce pricing. it happens in the market because the cost function is changing From every player, you can afford it without losing profitability. Okay. Thanks very much. The next question is from Yassine Touahri from On Field Investment Research. Please go ahead. Yes. Maybe a question on your capacity utilization rates. Are you sold out in the U.S.? Do you keep importing, and do you see the margin improvement on your imports at the time when freight rate are coming up? We, yeah, we are not really sold out at last year so far, at least. We need to or we would like to somehow also recover inventory. We have been In some, in some plants really, flat, running, let's say, completely, full steam. Without sufficient inventory. Yes, the idea, we do have a plan to continue to import. The total imported volume might be less than the previous year by year-end. For the moment, yes. You. Well, yes, there is a benefit in the, in the freight but the FOB, let's say, price, is not lower than last year. I will not speak about a clear improvement in profitability on imported volumes. Some, yeah, slight benefit coming from the freight to us, but also countries that are exporting have been increasing prices because they see the possibility, and they also have the cost structure more going up. I mean, the situation is true also for Turkey, for Egypt, for Greece, et cetera. A second question on Italy. You have a EUR 38 million credit on energy. Should we consider if credit as a one-off and that it will not happen again in 2023? It is a one-off. I think the size, the magnitude, will not be the same. It was written, I have to go today in the newspaper. We did see they extended, they extend the same percentage until June, at least until June 30. The credit will remain in place, but the way to the calculation is on cost differential, on the range cost differential. This cost differential, fortunately and luckily enough will go down or may even be negative in some months. This is more likely to happen in the second half than in the first half because still we are above the prices at the beginning of 2022. If you ask me, I guess how much it could be, I don't know. I I think less than half the amount. amount. First of all, we need to understand whether it will be available for the full year. For the moment, it's just 6 months. Second, the cost differential for electrical power is going down or maybe not even becoming zero. A question on Russia. You're generating only EUR 100 million of EBITDA in Russia. That's a very good year. What happened with the cash that you generated in Russia? Does it stay in Russia? It means that you cannot access it unless you sell the asset or unless the war ends. How does it work? Can you pay a dividend, or do you have to, do you need some kind of authorization to not to breach sanctions? No, it's a problem. It's one of the problems associated with the Russian investment today. In theory, we can declare a dividend, and we are allowed to declare a dividend. When the transfer, the actual transfer of cash will have to be authorized by the, let's call it, central bank, or anyway, the political, the political decision on that. It's something that we need to understand. In principle, I would say that it's, that it's not available. We may be able to receive a waiver. It's something that we need to go through with the process we need to go through and try to understand whether it will be green light or red light. If I understand the outlook for Russia or your strategic option would be either you keep the assets, not managing it, until the end of the war, or you decide to sell the assets, but you would need the authorization of Russia, of the Russian government, or the third option would be to shut down the operation. Would be very difficult to understand. I understand it's like two years now. No, no. Hard to communicate, but do you understand? Would we need to understand what options do you have on the assets? We are. The options are, I think the one the two the first two that you mentioned, it would not make sense in our opinion to shut down and close the operation for many reasons. In particularly, the fact that we have anyway a large number of employees there, which have been always very loyal to the company. We don't think that we should blame them or give them, let's call it, significant problems by losing their job because of someone that is leading the country, that is taking a crazy decision. I mean, Putin is one thing. probably, there is a good portion of the country which is approving his decision, but that is not the whole country. In our view, we have always been very, very, very close to, as much as possible, to our employees. The idea of shutting down and leaving the country is not feasible in our opinion for, let's call it, social reasons. The other two are both open in a sense that we continue to stay in a, let's call it, in a standby. We have the means of access to cash, which this is true, or not access to cash is a possibility. Other strategic option, like exiting the country are also a possibility. It's not something we rule out completely. The main issue is really being able to do it because there are very, very strong limitations similar to the dividend concept. There are for sure potential buyers, but these buyers, they're the same, if the selling process should go through again, an authorization approval like you mentioned, maybe buyers that are more likely to be approved are not the ones that we would prefer. We think that also in terms of let's call it ethical behavior, it's probably better for this company to be in the hand of a Western shareholder than going into the hands of a Russian oligarch. We don't have a clear. We don't. There's no easy solution. I mean, we don't, we don't. We are not reluctant in principle to consider a sale, but anyway, a potential problem with the buyer and with the process, very major one to overcome. The last question. When you look at the beginning of the year, like, you know, like January, February, and maybe the beginning of March, what kind of volume trend do you see? Is it consistent with your outlook, relatively stable trends in the US and a decline of let's say 5%-10% in Europe? It's, in general, yes. More, we don't have positive signs for the moment. Let's say that well maybe with the exception of Mexico and Brazil, but very, very few positive sign in the first 2, 3 months. In U.S., yeah, U.S., also negative, but not as much as let's say in Europe. Yeah, I would say pretty much in line with what we just mentioned in our outlook. Thank you very much. You're welcome. The next question is from Yury Serov from Redburn. Please go ahead. Hi, good afternoon. Hello. Yeah, hi. I want to go back to prices, unsurprisingly. Just to probe you a bit more on that, one thing that I'm finding surprising is current lack of competition. You mentioned possible pressure from imports. If I look at the numbers for Italy last year, imports to Italy went up by 33%, while exports. Yes. Fell by 17%, which means that import-export by itself took out of industry production. Yes. The industry is basically like pricing itself out of the business. Some of the companies probably have long CO2 permit positions. Why are they not undercutting the prices? I mean, it's very surprising that nobody's actually trying to compete. I think in Italy are very few, yeah, long, okay, long in a sense. We do have, for example, as you all know, some, let's say, reserve of the CO2. The rest of the competitors, we don't know exactly. We are not sure. Probably there's a mix. Someone has to buy everything because they were in the need to sell before, some others may have a similar situation. I think everyone is looking at the so-called interval with the versus the, what is it called, the average activity level of the previous 2 year. Everyone is trying. This is the way we are approaching, let's say, the commercial strategy, not to go below the -15, let's say, of the previous two years. Can you clarify that? What does that mean? Minus 15 what? No. There's an interval in your activity level, which is, which is the one, if you stay within this interval, this range, which is -15, +15 of your production of the previous 2 years, you receive the same allowances. Let's say that in theory, if you are minor, the ideal situation would be in terms of CO2 allowances, not without considering other factors. Let's say it would be to run at -14 because you receive 100 more than in theory, more than what you need. I think this is the behavior of most of the competition. If you can afford to stay within this range, which does not reduce your free allowances volume, then to rush and to try to gain market share by cutting the prices, in our opinion, is not a good idea. If instead, you're running the risk of going below that, so losing, let's say, free allowances, then it's probably worth doing something. Against some imports, I think at the moment, we would always be the losers. I mean, there are countries that anyway, without the CO2 cost, or also with lower energy cost, maybe greater use of alternative fuel, which is not allowed and not easy to achieve in Italy. Some of the competition in the Mediterranean, if they want to really sell, they can anyway be more cost effective and more competitive. I would not say that there is a lost war or battle, but it's probably better, again, up to a certain extent, to avoid entering into a vertical negative spiral of price fix instead of really competing very strongly. This at least, being last year, and I think it will be also this year, our approach. That's your approach. I mean, there are private players who have, through the history, been quite competitive, both in Italy and in Germany and in some other places, and they don't seem to be willing to compete right now at all. I'm talking about domestic competition, not necessarily. I I mean, imports are obviously a big factor, but, you know, even domestically, there don't seem to be any competition happening in the industry. I think everyone is very concerned about the CO2 cost, about the fact that it is true that cement prices went up significantly, but they will need another step to cover the CO2 when when this when anyway, we will do the next phase out of the free allowances. If you, if you start declining prices, you get more and more far away from the from that target. I think everyone is concerned about that. If you don't have any CO2 limitation, then it's different. I mean, if you are reasoning, I mean, if you are reasoning on a on a pure marginal cost basis, leading from Turkey, you cannot beat the price. Fortunately, there is a physical limit to the imports. I mean, beyond a certain level, they are unlikely to be able to go. Yes, it's one of the main reason why we lost volumes last year, for sure. In this climate, how's the ready-mix industry doing? Do you make a profit in your ready-mix operations, let's say in the U.S. and Germany? Yes, we are okay. I mean, we've been going through some improvements also related to our, let's say, mix. They're always margins that are clearly lower than the ones of cement. It's always a matter of if the company that pays transfer price decide exactly what should be the right price to be charged to your own ready-mix. This affecting of course the on the one side, it can improve the ready-mix profitability if you are a little lower, or worse than the cement profitability on the other hand. Let's say, assuming that you're giving a right transfer price, we can say that the ready-mix profitability this year in particular, has been better than expected. What about your ready-mix customers? Some indices that I have seen, cement prices went up quite significantly, but ready-mix prices haven't really kept up. I can imagine that some of your customers are finding it difficult. We are targeting probably a certain customer mix which is a little different, in a sense that, if you look at our ready-mix volumes last year in Italy, for example, they went down basically with the market. We kept our market share, and we are targeting either projects or customer that are requiring a certain. You know, in ready-mix, you can differentiate yourself more than the cement at the end, because it's more a service rather than a product. If you provide solution, if you provide services, you can charge a little bit more. This is what was happening. In U.S., we went down in volumes, but there was more the lack of drivers. It continue to be really challenging to have the drivers in the San Antonio, Austin, with Houston area. Very, very difficult. And since, and since, we have anyway a full capacity utilization of cement, it did not make sense in our opinion, to push the ready-mix too much without the ability to supply our own cement. Instead now. Yeah. No, my question was about your customers, ready-mix customers, you know, independent companies who buy from you. Given that the prices for ready-mix haven't really kept up with prices for cement, how are they doing? Are they suffering? No, they didn't. No, they did, actually. Yes. No, they did catch up. In Italy for sure. In U.S. a little less. This is true. If you look at the U.S. profitability of our ready-mix, it's lower than last year. In Italy is better, in Germany is basically even. I would say that anyway, the price improvement was also in the ready-mix. Generally speaking, was definitely accepted by the market, by the customer, like you're seeing also in ready-mix. With again, a target that we follow devoted more to quality, service, special projects where you need a supplier that is reliable and can solve your problems. Okay, thanks so much. The next question is from Corrado Baccani, a private investor. Please go ahead. Hi, good afternoon. My question is quite simple. First of all, congratulations for the fantastic results, especially considering how the investment community was considering how 2022. Thank you. Now the company has been doing very well. I mean, been doing well since ever, but clearly there is a clear step change in terms of EBITDA, revenue growth. Quite interestingly, since COVID times, I guess. Even the net financial position swang over the last 10 years from not very big, but clearly a negative to a positive. Yet the dividend yield is a little bit too low, in my honest opinion. The buyback is there, yes, but it's not a strong commitment on canceling shares. It's frankly probably a little bit too shy in terms of how much the company can do. Dr. Buzzi, what is your view in terms of how the future. I mean, considering that the company is doing phenomenally well, and I understand that the CO2 things that need to be taken into consideration, there are investments to be done, but the company clearly can reward their shareholders in a more generous way. Do you agree with this? Do you have plan to increase dividend yield or buyback, things like that? I'm afraid it is a little bit. I mean, company can definitely do much better in terms of total return. Thank you. W ell, again, thank you for your view, which is maybe very, very, how could I say? Not say optimistic, but let's say very, very positive, and I really mostly share. I mean, in a sense that we are happy with the results and we can be, yeah, I think, very, very grateful to our people, our management, and also the overall situation which allowed that to happen. Can we do even better, in particular in terms of, let's say, return to shareholders? You can always, you can always do better. There are, yes, ways to improve also that specific, let's call it item or specific wish of some of the investor. We are trying to follow a path which we consider sustainable. The idea is, yes, to increase, to do better, but gradually, with a pace that would allow us not to 1 year from now, 2 years from now, let's say, go back or give some negative news or lower, let's call it, returns. I think that this has always been our idea and we will continue to follow the same pattern, both in terms of dividends. Buyback is an option for sure. It is a possibility. This year. No. Yeah, we did it in March last year. So far we did not start a program again. I think, the main reason was really related to the cash from operations, which, as we mentioned, within a set of results which is overall very favorable, is one of the deceiving, let's say, items, if you wish. There are reason to that. I mean, it's something that we can explain. The numbers are explaining. Versus the previous year, previous two years, our, let's call it, variance or improvement in the net financial position has been quite limited. This is the main reason why we think that the timing for a potential new buyback was not the right one at least so far. This is also something that should stabilize, particularly if the prices will. And the cost will not change so much because we have seen that this is due to cost, but also to pricing. We have a country or three who are experiencing some pressure in this, in this year. To endorse our impact. Yes. Yes. Thank you for joining our call. It will gradually decrease and make the overall business, yeah, of this first this year. No commitment, if I may follow up just a little bit more, trying to push a little bit more, at least a commit, that of course not in this moment, just to look at how 2023 develops and at least make a commitment on some sort of a dividend payout ratio. You know, EUR 0.45 times the number of shares, if I'm not mistaken, please correct me if I'm wrong. Less than EUR 100 million of the total dividend. It's around 90 now. I think should be around. Exactly. Yeah. Yeah, it didn't change. You know, a company that makes. I understand cash from operation is not exactly always necessarily equal to the net earnings after tax. Yeah. Yeah. Yeah. Yeah. Yeah. Exactly. The company clearly is producing cash from a negative net financial position to a positive net financial position. I understand you want to be conservative because over the last few years, we had to deal with some uncertainties. It seems to me that those uncertainties are actually making things better. Personally, this is how I see it, considering that finally a bit of inflation is pushing not only the cost income, the costs of producing cement, but actually even the price of selling cement, considering that prices, especially in Europe, in Italy, for instance, haven't moved for the last 40 years, right? I mean, the company is really in a very, very solid position. At least a commitment over the next 6 months to a dividend payout ratio, because clearly the dividend can easily be doubled from here. Well, I mean, as for the commitment, we never really engaged into that. I will not do it right now. I agree with you that in general, the payout can only improve. If it's going to be tomorrow, again, it's around 20%, tomorrow can be 22, 23, 25. I think there are ways to improve it. By. If you ask me, are we going to pay 50% of our net earnings? I don't think so. Unless really, really we come to a point where we don't see any, absolutely no better use of this cash. In ordinary world and all the plans that we have and with the outlook that continues to be somehow, yeah, not too easy to. I mean, I mean, we have overcome, yes, difficult situation in 2021, 2022, 2023. We are confident that we can perform in a similar way, but still open, I mean, of course. Yeah, I think, I think we can. In our view, we see definitely the possibility and we have in mind to improve the payout ratio in a, I would say, gradual way. If there is really a moment where we have no better, absolutely no, yeah, no better use of cash available, looking at the mostly industrial plants. Industrial or also expansion plan that can be internal growth, external growth, etcetera. We are not, absolutely not against doing something different or something additional. I mean, the story of the last few years is showing that at the end, if you look at the last few years, beside the normal dividend, you know, payout, there has been different extraordinary payments returned to shareholders, which made our overall, let's say, cash return not so small. Actually, I consider quite meaningful. Thank you very much, Dr. Buzzi. You're welcome. The next question is from Emanuele Negri from Mediobanca. Please go ahead. Yes, good afternoon, everybody, and thanks for the presentation and for taking my question. I have two questions, if I may. The first one is on the profitability trend you see in Brazil for the year ahead, also considering CRH integration. The second one is on the assumption you have in your mind related to CapEx and tax rate for 2023. Thank you. Well, profitability means EBITDA margins? Yes. That we were looking at. Well, the idea is to stabilize, as I said. I think we think it won't be too easy to improve some, to really get back to, let's say, the level of 2 years ago. The goal is to stabilize it around the level of this year. Instead of going down, as we experienced between the last 2 years, to remain at least where we are. CapEx plan, in total, I think. Let me add it. Yeah. No, you can start. Go ahead. Yeah. You You start with that. CapEx plan is supposed to be a little bit higher than due to the main projects that are coming out of the roadmap. There we expect something above 2022 numbers, above EUR 300 million. Yeah, I think, tax was the other question, tax ratio. This is a little bit more tricky. Due to the contribution and the various impacts that need to be there, especially now with the news in the U.S., where you may have additional tax impacts. that have an impact, a balance impact already on the current results and not only on CapEx but also on current results. This, of course, has not been included in our, you know, budget yet. Therefore, it's a little bit tricky. I would say the best guess today is to have a similar effective tax rate as last year, potentially. Yeah. Last year was affected by some. Yeah. undeductible costs like the impairment loss, et cetera. It could be a bit less. We've always been in the range of 17, 18, 20. If you want to be a bit conservative, I would assume 20. I think it would make sense. At the consolidated, as a consolidated tax rate. Thank you. As a reminder, if you wish to register for a question, please press star 1 on your telephone. For any further questions, please press star 1 on your telephone. Mr. Buzzi, there are no more questions registered at this time. Okay. Thanks, everyone, the ones that are still listening, for having the patience to follow the entire conversation. I hope this has been somehow, I think informative, yes, also useful to you. We continue to be available through our and operator teams for follow-up questions or any kind of let's say, clarification you may need. Yeah, thanks for listening, and goodbye. Ladies and gentlemen, thank you for joining the conference. It's now over. You may disconnect your telephones.