This is Chorus Call conference operator. Welcome and thank you for joining the Buzzi S.p.A. Fir st Half 2025 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 turn the conference over to Mr. Pietro Buzzi, Chief Executive Officer for Buzzi S.p.A. Mr. Buzzi, you have the floor sir. Hello, good afternoon to everybody. Thank you for joining and listening to our periodic, let's say, or recurring summer calls after the release of the interim results. We will try to follow, or we are going to follow, let's say, the presentation that was made available to you all, I hope, and give you, as much as possible, detailed overview of what has happened in the last six months and what we think could happen in the following six months. If it starts from a brief, let's say, overview of the first semester, we can say that we had overall, let's say, quality results, not as good as last year, but for a number of reasons that we will try to explain during the call. It is true that if you look at the last two years, generally speaking, results have been growing and they've also been very outstanding, very, very positive, in a situation where the volume, the demand was not particularly strong. What we have seen this year is in some areas, actually, a rebound of the demand or a stabilization of the demand. In some others, more weaknesses. I would say a trend in prices and costs that has not been as favorable as we had in the last two years. This is, in a nutshell, the reason for the a little weaker results that we achieved during the six months. In terms of volume, yes, of course, we make a difference between the like-for-like figure and the actual figure because some significant changes occurred last year and particularly in the last quarter with the substantial acquisition of Brazil and the exit of Ukraine. If you consider the actual, let's say, summer volume, the results in terms of sales, they're positive. They include, of course, Brazil for the first time. They do not include Ukraine. There are some volumes also coming from the consolidation of the UAE plant starting from May. Resident volumes were not significantly affected or only in a small way affected by changes in scope. They are anyway slightly positive versus last year, both actual and like-for-like. Looking at the sales revenue, we had an increase of about 6% versus last year and first six months. By adjusting for changes in scope and also for change differences, we are at 1% after, very, very similar to last year. EBITDA is down 4%, including everything, so also the impacts from changes in scope. About 8.5% like-for-like, so after adjustment for no contribution for the new entries in the scope of the consolidation and some unfavorable changes in the foreign exchange valuation. Margin softer somewhat. EBITDA margin, let's say, profitability, following a some stage decline of some markets, in particular the U.S., where the average profitability is above the overall group profitability. Meanwhile, the entrance of Brazil has been positive. Brazil, in the last two years, has been showing anyway EBITDA margin that is slightly below what used to be or what was the average of 2023 and 2024. In a sense, it's contributing negatively to this figure for the group as a whole. Cash generation continues to be positive. Actually, as we will see later, net cash from operating activity was greater than last year, even after a lower, let's say, smaller total EBITDA results. Net cash by the end of the semester is around EUR 690 million versus EUR 755 million at the end of the previous year, after a significant, let's say, CapEx spending, of which a material portion was devoted to equity investments, like we will explain in the following pages. Going forward, if we look at the net sales variance by region, the Italian results are showing, let's say, small positives for volume and more significant change and favorable variance for scope. I refer here to the disposal of our plant in the northeast of Italy, which occurred at the beginning of the year, basically for the full semester. This was a disposal coupled with a wider, let's say, let's call it strategic operation. Together with the disposal of the Fanna plant, we actually decided to receive, in a sense, in exchange, a 25% interest in the bigger Alpacem Group, the same group that has been acquiring, let's say, the Fanna plant. These results that we have been losing in a sense in the line by line consolidation, we think would be more than offset by, let's say, greater equity accounting results going forward. Officially, if you look at the consolidated numbers, we are losing about EUR 22 million for scope reasons. Central Europe performed fairly well in terms of volume. Clearly, we were starting from a low base due to the fact that 2023 and 2024 have been quite negative, generally speaking, for the German, Luxembourg, and Netherlands markets in terms of volume. At least the market did start to show some rebound. Pricing trend, not as good. I mean, unfavorable variance. This is mainly due to the, let's say, carryover effects of what happened in 2024, in the sense that 2024 started in both Central Europe and also some countries of Eastern Europe with pricing freeze, which later on during the year was not sticking, was not confirmed, and was starting to be somewhat eroded. Our price staying in the first half of 2025 is not so different from the price from the exit price of 2024. Compared to the beginning of 2024, it is indeed lower. Eastern Europe performed, generally speaking, quite well, particularly Poland and also Czech in terms of volume. Pricing a little weaker. Talking about Poland, a similar trend to what I was explaining about Germany. The fact that pricing were on an upward trend at the beginning of 2024 and then somewhat adjusting to a lower level during 2024. Exit or prices or beginning of prices at the first part of 2025 that compare with a higher level at the beginning of 2024. That was not an issue in Czech and Poland. Scope, yes, changes associated with the disposal of Ukraine. Overall, a good performance in terms of volume and prices happening in Eastern Europe, in the remaining European countries, including also Russia, which did well in terms of volume and also prices. The U.S. probably already somehow has been the weakest point in the first half because volume were definitely softer than what we expected or what we were planning. I think it was a general market trend. It partly is impacted to some extent from weather. Until the end of June, we had a favorable weather event or rainy season longer than usual. Also a softness for the market, which has been also acknowledged recently again by the American Financial Association with the change in their quotas for the full year. Pricing holding basically at the level of the previous year, not declining. Relatively minor foreign exchange impact because the weakness of the dollar has been more pronounced lately. In the first half, it was still relatively similar to the previous year. We have the addition of Brazil and the United Arab Emirates that are contributing respectively EUR 165 million for the full semester and EUR 21 million in the case of Emirates for the two months. The company entered the scope of consolidation at the beginning of May. That's in a short summary, the explanation of our revenue variance. Going to the EBITDA variance, the volume effect, as we mentioned at the beginning, is overall positive, even without considering the major contribution coming from the changes in scope. The other price effect instead is negative. This is driven mainly by Germany, I would say, where we had most of the negative price effect in the scope of consolidation, and Poland to some extent. The rest has been more stable or in some cases even slightly favorable. Variable costs are somehow, let's say, impacting. There is quite a difference within the different countries. There are countries where we had a variable cost or a portion of the variable cost either declining or stable. Generally speaking, fuel and energy did not show any significant increase, with few exceptions, again. In general, they were pretty much under control. In some other countries, we did suffer from some increases in raw materials and also power. In terms of fixed costs, this is more impacting in expense, even if the absolute amount is not as significant because it occurred in a general situation where, let's say, the volumes did not increase or in some cases were low last year. Typically, countries or markets like the U.S., Italy, and Germany were suffering a volume decline. The impact of the fixed cost on the units, let's say, production costs has been definitely, definitely greater. This is typical of the situation where you are losing some volumes. It's, I don't want to say easy, but it can happen like it did happen in the first half, that your fixed cost management is not available or you're not, let's say, able to achieve a decrease or a level there which can keep the fixed unit production costs at the same level of the previous year, which is what happened actually in, for example, in the U.S., but also in Germany and partly in Italy. We have other costs that are more one-off or maybe more volatile or changing over time, which affected also negatively the EBITDA performance. For example, inventory changes. We have some significant costs one-off, so not repeatable for the second half, associated with the acquisition of the controlling stake in the Emirates. All these, they are included among others. Also, as opposed to last year, for the first time since two, three years, we suffered some write-down of the receivable due to a situation that needed to be addressed. Again, this is something that in the last two years, we almost had none. The difference is having, let's say, more evident versus something that did not exist at least in the last two, three years. The CO₂ costs for the moment are zero because, as you know, the accounting of the CO₂ costs starts to be accounted for when the CO₂ allocations are expiring or becoming, I mean, you need to use CO₂ licenses that have not been fully allocated. This is something that always refers to the second semester. We are not expecting the CO₂ cost impact for the full year, but we are still pretty much in the range of the allocation, with some exception in countries that perform particularly well, like Poland or, let's say, Czech to some extent. The effect impact is for the moment not so significant. The EBITDA coming from the scope changes is EUR 30 million. It includes both Brazil and the United Arab Emirates. Brazil, of course, is by far the most significant, also referring to the full semester instead of just two months. Moving to the cash generation, as I was mentioning at the beginning, again, I think we can be quite happy with the outcome of the semester because also after some variable positive changes within the working capital items, we were able to achieve net cash flow from operations greater than last year, even with a lower EBITDA contribution, as you can see. CapEx are not so different from last year in national CapEx. We are continuing with a similar, let's say, investment pattern as last year. We do expect acceleration in the second half, but for the moment, the outflow is similar. Equity investments represent a significant differential versus last year, and they include, as we mentioned at the beginning, in particular, the Emirates acquisition and the 25% stake that we bought into Alpacem Group, let's say, Alpacem, together with the disposal of the Fanna plant. Actually, the two items are more or less offsetting. You see that in the fixed asset disposal, we mentioned the negative final sale. Within equity investment, basically, the same amount represents our outflow for the investment into Alpacem Austria. Dividend payments have been greater than last year, according to the shareholder resolution, as you can see, from EUR 108 million in 2024 to EUR 124 million in 2025. We received less dividends from closed sales. This is basically related to a timing difference of the dividends flow from Mexico. Besides the foreign exchange impact on the Mexican peso, this component is going to become more similar to the previous year going forward in the second half. I already commented, let's say, the fixed asset disposal. We have other changes in the net financial condition, mostly related to foreign exchange differences on either liquidity or loans in foreign currency, like the U.S. dollar or the Brazilian reals. Taking a little closer look to the different geographic area, we start from the U.S. This is where we suffer the, I would say, the most significant decline also because in absolute terms, of course, the U.S. are the main contributor to our overall results. I could say, like I mentioned here, that there was still, still is there some weakness in the market driven mainly by the private sector, the residential, the fact that interest rates continue to be relatively high and they're not helping the typical, let's say, call it trading in the U.S. home market that we used to have or we experienced, let's say, until 2023 and probably hopefully in 2024. The public spending continues to be strong and to expand. At the end, in terms of actual construction activity, due to the inflation that is there, has been there in 2022, 2023, 2024, the amount of money allocated to that is not able to, is not enough to realize the same construction activities. Actually, there is an inflationary tax or toll that is being paid, which translates into somewhat slower not getting any projects as was originally planned. The volume decline is about 6%. Totally, and several weather was a factor during the first half. We are somewhat more optimistic on the second half, assuming that the weather stabilizes. Pricing was not particularly strong in terms of, let's say, positive changes, but on the other side, it was also solid with overall stable to slightly increasing pricing level. We did have some additional costs, as I mentioned at the beginning, particularly on the fixed cost side, like personnel, maintenance, not only. That's in a declining, let's say, production environment, production situation that translates immediately into lower margin, which is what has been happening. Negative effects, foreign exchange effects was not so significant, but still representing EUR 2.5 million negative on the first six months EBITDA. Just to make a decline information that inventory changes, another negative impact on EBITDA was EUR 7 million negative in 2025 versus 2024. I already mentioned, but this is particularly significant in the U.S., some write-down of receivables, which was EUR 3 million greater in 2025 versus 2024. Other items are adding to this or are somehow explaining the weaker profitability trend that we experienced in the first half. When we move to Italy, the situation is certainly more stable as far as volumes are concerned. Yes, they are down, but the reason, or the only reason I would say, is the deconsolidation of the Fanna plant. Like-for-like, we are actually showing a 2.7% increase. We had a good performance of our revenue operation, which was up 5.8% during the first six months. This was also, of course, helping our cement sales. EBITDA, yes, somewhat suffering. If we look at the second, let's try to move faster. Now, if we try to move faster. Now, if we look at the, let's say, contribution without final impact, the 22% decline becomes 17%. I did not take the calculations, but okay. This includes also the one-off costs associated with the Emirates acquisition, which are all parts of the Italian business, right or wrong, because they have, yes, nothing to do with the operation, but actually, they belong to, let's call it, to the holding level. We increased EBITDA by another EUR 7 million parts. You can see that results are not as bad as they look. Some of the negative impacts are one-off for the first semester and will not repeat themselves in the second one. Interest margin, same reason for the decline, partly associated with the cost, with the cost, let's say, trend. Some of the costs really are not recurring. Overall, I would say a more positive view on the second half. This would have good chances, in our opinion, to close this gap and get very close to the previous year results, of course, like for last, without considering the final sales. In Central Europe, good performance for the volumes, not as good as we consider the profitability. The main drag or decline actually came from Germany because both Luxembourg and the Netherlands improved their performance. Here, there is again a number of reasons that I'll try to explain as shortly as possible. One of the main reasons is certainly the price trend, which was affecting the German business, but also the Luxembourg business. The fact that we were, let's say, continuing on a price that was similar to the exit price of 2024 and still not able to go back to the, let's call it, average 2024 level. We are priced impact that is clearly affecting the overall result. In terms of profitability, the German business, which was down about, yeah, from 24, let's say, last year to 60 this year, we have to look mainly at the, I would say, the second, the cost trend, where in terms of variable costs, we suffer from a much higher power, electricity cost. This is mostly related to the hedging strategy, which is a little different in Germany from what we had in other countries. Typically, their electricity cost hedging is greater in terms of coverage than the rest of the countries, and it's being done more in advance. At the end, what you see here are, let's say, energy costs that were at 6, 10, maybe 12 months before, and they're not exactly showing the trend of power, which is, which is the, let's say, the market price during the first six months. Typically, for Germany, if you want to have a clearer picture of the electricity costs, you should look through two years in a row or maybe even more. For example, last year was more positive this year than in other countries, now is the opposite. In this case, the one-year cycle is not seeing the whole story. We had also some higher costs for alternative raw materials like slag, which Germany uses to a greater extent versus other countries. This was, let's say, on the variable cost side where the main reasons were power, as we mentioned. In terms of fixed costs, like plant personnel and maintenance, there was also some inflation, which was overall not as impacting as, for example, in the U.S. due to the fact that our volumes anyway perform better than last year. I would say that here, the main reason for the decline is associated with the price trend and some of the variable costs trend. This is what we are commenting here so that there was better operating leverage. Our comparison based on pricing in each one, together with higher raw material and power costs, affected our results, which is what my comment right now. Going to Eastern Europe, this is the area where probably we had the, yeah, I think the best performance of the group overall, even in a scenario where prices were not particularly strong. Actually, we mentioned the negative bearish in dollars, but very strong volume sales, which more than offset the negative price trend, the stable currency. Also, fuel and power costs, which were showing a positive variance. All in all, I would say with good developments. You can see also from the EBITDA margin changes, very favorable. So far so good, let's say. Not too much to worry about. Also, the last one performance was overall quite satisfactory. The impact coming from the Ukraine de-consolidation, it's not significant because at the end, with the performance of the other three countries, we are definitely more than offsetting the loss of Ukraine. In Brazil, the market is doing okay. We have 2%- 3% improvement in our volumes. The plants are running at a very good capacity utilization level. Main issue or one of the critical stage points remain the pricing level, which did not really change. In local currency, if we look at the price level in the first six months, we are very, very similar to the... Not hurting, let's say, very much yes in raising the profitability. Costs are, I would say, well under control. We did have in the first half some higher, particularly maintenance costs associated with the so-called yearly maintenance stoppage, particularly in one of the biggest plants that are all incurred. They've been all incurred in They've been all incurred in the first semester. From now on, the plants should be running hopefully well, but we think it will also thanks to what has been done during the maintenance period and the following six months. They are a little bit misleading in terms of all the timing difference because we will see much less of that in the second half. We think that the performance will continue more or less at the same pace with lower fixed costs and likely better variable costs, particularly as far as power and energy is concerned, which we will be enjoying for the full year versus only part of the first six months of the new PTA contract, which is very favorable in terms of power costs for the business. These results, of course, include what has been a very significant unstable variance in the exchange rate. It's not visible because in the first half, it was not consolidated. We cannot really compare like-for-like as we can do for other countries that were already in the scope of consolidation in the beginning of the year. If you do it pro forma, or at least if you compare with the FX level that we had originally in the budget, there is clearly an impact in the range of 14%- 15% due to the negative trend of the Brazilian real. Hopefully, this will also stabilize in the second part of the year or not get worse. With Mexico, it's not consolidated, as you all know, but it's a very significant part of our business. The performance continues to be overall very good, let's say, in absolute terms, outstanding also in terms of margin. As you can see, our profitability did not decline there as opposed to several other countries. In absolute numbers, we did lose something due to softer volumes on one side. This thing, yes, we can mention it, of course, because it's been in the scope, let's say, somehow since many years, the trend of the currency. EBITDA yet is down 15%, 15%, but adjusting for the currency impact, it would have been down only 1%. I would say a situation which is a little more difficult in terms of construction activity, volumes. For example, our revenues have been declining quite a bit in terms of volume trend. Not an easy year for the market. I would say that our, let's call it, efficiency is usually very high in the country. We can, in a sense, afford somewhat lower volumes without any significant impact on the profitability. Not a year where we will see improving results, also in local currencies, likely to be not as good as it was, but still a very significant, very positive in absolute terms and in terms of relative profitability. If you want to mention quickly how we see the next six months, I think we ran some numbers. We ran the usual, let's say, revised budget or forecast. In general, we can say that versus the original budget, we are overall a little more optimistic. We have the feeling, let's say, or more than the feeling of the, not the certainty, but let's say we have enough confidence on the fact that the second half should be somewhat better on what we saw and we experienced in the first one, particularly in those countries like the U.S., which showed a more negative trend in the first six months. In the U.S., for example, like we say here, we do not expect to be able to fully recover and to make up for the difference versus the 2024 results, in particularly considering an exchange rate which will move, we don't know, of course, precisely. We are assuming that versus the 1.04 that was our budget, let's say, assumption, the average for 2025 could be 1.12 or 1.13. This means just because of the exchange rate, some 8% negative variance. But anyway, we are a little more optimistic on the second half on our ability to recover, particularly on the volume side, not so much on the pricing, and to be able to spread our fixed cost over a greater production volume. The Italian market, we've seen already no major changes in the second half. Demand is pretty stable. Of course, there is some support from the National Recovery Plan. For as long as we have investment flow associated with the National Recovery Plan, we can remain quite, I would say, quite happy about the domestic demand. Once this Recovery Plan will come to an end, it will be probably a different scenario. For the moment, and probably also in the next year, in 2026, we should be able to rely pretty much on this kind of project using cement and concrete. Central Europe, we have changed our expectation somehow after the first half, which in terms of volume was anyway better than the original budget. Not great results, still some difficulties, as we explained, particularly in the German market. Our view is now somewhat more positive versus the original view of the original forecast that we made at the end of 2024. Eastern Europe, we continue to remain optimistic, particularly for the sector public and Poland. Here, we don't have fortunately any significant impact coming from foreign exchange. We should see a good continuous good trend in these two countries as we experienced in the first half. Brazil, we mentioned it already. We see demand going forward improving rather than the opposite. We will have less due to, let's say, associated with timing, with winter maintenance, etc., in the second half. We see the margins growing in the second half. There are no great expectations about the pricing trend. On the other hand, it's also more likely to see some, with the, let's say, capacity utilization going up in the country, it's also more likely to see price improvement than the opposite. It's not immediately in the coming months, maybe in 2036. The main negative factor is the exchange rate, as we mentioned. Mexico, yes, with some low economic growth or limited growth in the country, which translates into lower levels of construction investments. The company performance is expected to continue to be good, somewhat lower than last year. Yes, affected by the exchange rate. Overall, I would say the impact is very satisfactory, as it has always been in the last five, six years. That's why by running the number, we came up with some revision or amendment of our expectation, not to a large extent, actually. We think that the original message really was the one of being able to match last year's results, including the contribution coming from Brazil. Emirates was not considered, let's say, is unlikely to be achieved. Even considering the contribution of the changes of the profitability scope and considering the trend of the currencies, what our best, let's say, guess, best assumption, or let's say, assumption based on the information that we have and the knowledge of the market trends for the next month is that we will probably close the year somewhat in between EUR 1.1 billion, EUR 1.2 billion versus the EUR 1.280 billion of last year, which is, yeah, there's a bit of a decline. The fact that this happens or occurs after a positive change in scope of consolidation is not ideal. I think we have to look even more down the road. It's very positive the fact that we have been increasing our volumes in the sense of the group. This volume increase over time, it will perpetuate into better results. We have to be confident. We are confident that these strategic moves that we have made, we play for the better. This year, I mean, it's a matter of time. This year, there are other components, including the trends of the currency that are impacting on us. That we can certainly, let's say, overcome going forward and looking to a longer-term horizon. I would leave here append ix available to you for any detail or answer that may come to, based on your question. Let me finish with that and we can move forward with the Q&A session. Thank you. Thank you, sir. Excuse me. 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 the touchstone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. The first question comes from Tom Zhang of Barclays. Yes. Good afternoon. Thanks for taking our question. Hi. Two for me, please. The first one, just maybe again on costs. I think we've seen quite a significant step up in operating costs, which you've given a lot of color on. Certainly, compared to peers, I guess it's a little bit more stark. I get there's a lot of moving parts. Could you just remind us, you know, the total one-off cost impact that you saw in Q2? You mentioned the one-off legal costs, some one-off write-downs, I think, of receivables. Could you just give us an idea of how much is one-off and what we should see already with everything else in the second half? The second one, just on your sort of like-for-like earnings growth. Your EBITDA was down 8.5% through H1. I guess you've talked a little bit about one-off costs going away, Italy, a bit of catch-up, Germany, easier price comp, Brazil maybe a bit better, U.S. a bit better. What are the levers that might mean earnings growth is a lot better in the second half based on all these comments, right? What would be the risk that gets you to more like EUR 1.1 billion EBITDA instead of EUR 1.2 billion? Thank you. On the first question, I think that I did not mention before another, which was the opposite. Was the Was the opposite actually the other way around. The positive income that we had last year in Germany, particularly of about EUR 5 million, which was associated with the sale of some eco points, eco certificates that we gained in the past. It's a long story. I think we can have this. We can consider, let's say, the EUR 7 million of the legal expenses, the EUR 3 million of the write-down of the receivable, the EUR 5 million of the, let's say, eco points, which are again playing the opposite way, but it's always, let's say, one-off. I would say another EUR 3 million to EUR 5 million in terms of maintenance costs due to timing, in a sense of winter, usual, let's say, heavier winter maintenance or heavier winter maintenance costs versus what should be or should have been. This is, I think, is a reasonable figure that you can consider for Q2, let's say, not repeatable in Q2. For the rest, I don't know. I mean, I would tend to be, I'm going to say, conservative, realistic, running, let's say, our numbers. We come with something that, yes, it's maybe in between EUR 1.1 billion or EUR 1.2 billion. Doesn't that mean that we cannot achieve EUR 1.2 billion? Who knows? Maybe we will. The major thing is our, I would say, versus budget, we are certainly below expectation in Brazil, but it's mainly a foreign exchange impact. We are at an 8% below, but the foreign exchange is hitting more than that. In the U.S., we are another, let's say, 9% below budget, which is anyway less than the foreign exchange impact. We would see because the foreign exchange impact, of course, in the case of the dollar, is more unknown. Certainly, this is where also due to price, we are affected the most. For the rest, we don't see even versus the original budget, we don't see really a difference or an unfavorable variance in other countries. The trend should be slightly better. Okay. Just to confirm, I guess outside of the U.S., H2 versus H1, you're not seeing sort of major risks on the horizon. Obviously, there was this big downgrade for the debt effects. On an H2 versus H1 kind of run rate basis, you're not seeing big risks in any region? No, no. I would say no. I don't know. There are only the rest, of course. There was also a recent, we are apparently in this forecast more optimistic than, for example, what used to be the PCA, which is now the ICO. If we look at the very recent, it was one or two days ago, they issued their other summer forecast and they are now assuming some 5% decline for the market as a whole. Of course, it depends on where you are, the geographies, etc. Let's say we are now assuming a volume trend, which is not minus 5%. Even if it was minus 6% or 7% in the first half, we are assuming a stronger performance in the second half. We may be optimistic if this, let's say, forecast by the appropriation is correct. Sometimes they're not correct, it depends. We will see. I would say that overall, this is where our potential risk is the greatest, but more related to volumes, I would say, in the second half than to cost. Okay, sure. Thank you. The next question is from Ephraim Ravi of Citigroup. Thank you. Just going back to the point on cost, obviously, there's been some increase in fixed costs in particular. Are you planning some kind of a fixed cost rationalization plan in the second half and the early next year? Are you basically relying on operating leverage as volumes increase to spread that fixed cost over a wider volume base? The question is in terms of cost cutting, do you think the market outlook is robust enough to not take down some cost in the near term? Second, given the consolidation of Brazil and going into ECC, your exposure to emerging markets and consequent currency exposure has increased. Are you planning to change your sort of hedging policy on currencies and do more proactive hedging, especially on the real and the dirham and other currencies? Thank you. If you're questioning, I would say no. That doesn't mean that we cannot, we do not have improvement plans or are trying to, or being, let's say, making a continuous effort to try to reduce them. Big, big things like changing the investment footprint, we don't say we don't have a plan for that. It's particular because, in effect, this would be more needed in Europe than in other regions because it's where we have the lowest capacity utilization. Europe is biased and is anyway affected by the overall environment with the ETFs. The sale location is better. It's much more costly, in our opinion, to lose a sale location for certain plants than the benefits of the destruction, so the fixed cost reduction coming from cutting down one plant. This is a theme that may become more significant. I would say when the sale location will, if they will disappear in some years from now. On the hedging policy, I mean, we have to try to be a little maybe more careful with the lending to some extent. We could use, we did in the past, so we could use a little bit more the borrowing in dollars. This says on one side, okay, it can balance at least not the EBITDA, but in terms of net equity or partly also net interest expense, can offset partly the negative forex change variance. On the other hand, it is, let's say, more costly and does not really change the operating results. Any kind of hedging can have an impact first of all, would be I think very costly in general. Second, would have an impact only on the financial portion of the interest rate and not on the operating portion. We are, I mean, we are lucky to be wrong to the business line. There is anyway buying and selling in some area 100% and some other area 95% in the same currency. If the performance of the U.S. is very good, let's say, in terms of operating results, like it has been lately, we may have a surplus of dollars. This is true. This can be used for, let's say, capital spending there or potentially other also, let's say, investment projects where you need the dollar. It has also the advantage of, yes, potentially being subject to devaluation, but on the other hand, higher interest rates on the liquidity. I think we have to carefully manage all these different reflections and impacts. To start a real active hedging policy on the financial side, we don't think so. At the end, it's mostly an accounting issue due to the inflation. The next question is from Elodie Rall of JPMorgan. Hi. Good afternoon. Thanks for taking my questions. My first one is on FX. I was wondering if you could give us your expectation for the full year in terms of revenue and EBITDA impact in euros, please, in euros meaning. That's my first question. My second question is on the U.S. You've talked a lot about, you know, what's impacting performance in H1. I was wondering if you're planning to push a bit more pricing freezes in H2, if you think that could be possible. How much of the difficulties come from imports at the moment for your business, and if there is more inventory cost management to have in mind, hopefully not for H2. My third question is on price cost in Germany and Italy. Clearly, it was quite negative in H1. What are you doing to improve that from here? Peers have reported relatively positive numbers, so it's a bit surprising. My last question is on capital allocation. If you could give us an update on where you are with regard to your buyback program, and how much more is there and how you think. Locating the net cash position that you have. Thank you very much. I hope you'll be able to remember everything. Just one word there. Yes, thanks. On this, this is versus last year. Please. The residue. Sorry. Skip that. You were asking for the full-year impact because you can maybe do it yourself. Of course, I think that for me, it's easier to give you the effects that we have been using lately to adjust for the quarter. If you look, for example, at 2024, the actual U.S. dollar was $1.08, and we had in the forecast $1.12. In terms of reals, for example, we had $5.8 was 2024, and we are now at $6.50 for the forecast 2025. The next campaign is not actually impacting on the state revenue, but there are also some positives, for example, because Russia was 140 in 2024, and we are now assuming 98.8 in 2025. If you want the actual number, we can give it to you. I mean, we will send it to you later. On the strategy, let's say, for the reals, I don't think we should push on the price side. We have to be very careful on the volume because, as we have seen, the main reason for the decline in profitability is definitely the decline in production and the decline in volume. If we can keep the volumes up, obviously, in a consistent way with what the market does. If the market goes down five we cannot expect to go up five and keep the prices and increase the volume. Maybe we can do slightly better than the market and keep our production up, which is very important for the operating leverage and the profitability. There are a number of critical points in the U.S. market right now. It's not only a question of slowing down of the construction activity. There are many changes. Liquidity effective season has changed a lot of the market landscape. You have big revenues companies that are importing cement. You have independent importers that are pushing and trying to gain market share. If you can accommodate, in a sense, all these different factors, like you are able to in a situation like two years ago where the capacity utilization was very close to full. When the capacity utilization started to decline and it's assumed that the American Currency System corrects with -5.75 and you come 2023, 2024, and 2025, you get to some, I don't know, maybe 15% decline or so, which means a lot of cement available. Push on prices doesn't seem to be, in our opinion, the right strategy if you want to keep our market share and our volumes. The last question was on the roundabout back. You cannot probably not immediately see it in the numbers that are in the first draft, but our investment plan continues to be quite significant. We have a number of projects that have been approved or are close to approval, including some associated with the famous decarbonization, particularly in Europe, that will likely require in the coming years significant money. Some of them are not 100% approved. They're just in a, let's say, engineering studying phase, detail engineering. We will see if we will come to a final decision or not. Certainly, a certain reserve of money devoted to the investor footprint is necessary. I think we mentioned several times, also in the U.S., we have some, let's say, situations that are not certainly long-term. If you want to keep, like you want to, let's say, the same capacity and improve our efficiency and over time also lower our cost versus what we have seen over the years, the difficulty is to decrease our maintenance cost. We need to do something in terms of, let's say, upgrading our capacity. In the U.S., and this is particularly true after what has happened with the tariff adjustment, is where we will have most of the impact due to tariffs because the equipment is mainly coming from Europe actually. Any kind of improvement, let's say, addition to plants or increase of capacity will be subject to tariff in a country where already the investment costs are much higher than anywhere else. We will pursue our money at best, but there are potentially on the industrial footprint many projects that can afford a significant amount of financial resources. The buyback for the moment we didn't start, is something that may come to, how can I say, on the table with the board in a next occasion. For the moment, we didn't consider yet, let's say, the possibility to open the program, but it's something that we, let's say, regularly discuss. A decision could be taken in a next occasion. It also depends to some extent on the share price. Certainly, I do not, I'm not, let's say, I don't like the fact that the share price is going down or is not performing. On the other hand, if we want to start with a share buyback, it's the news of the season also for the board if the share price is not at its peak and it's somewhat lower. This would be good for any shareholder, actually, to buy at the lowest price possible. On the other hand, between the two alternatives, I would prefer, of course, a share price that is going up and use the resources for another reason or for, again, strategic reason that may become available in the near future, also besides the industrial, let's say, necessities. The next question is from Alessandro Tortora at Mediobanca. Yes. Hi. Good afternoon. Pietro. Hello. Yes, hi. I have three questions, okay? The first one is on Germany. You mentioned before that this unfavorable aging, no duplicate timing, made now six to nine months ago. The question is, do you think you have the same kind of idea of the team past hold in the sense you know exactly, let's say, non-discount prices or, let's say, kind of normal no-energy prices you would have had? Can you help us understand, because again, if you look at the second half of the year, in theory, you shouldn't have, let's say, this negative effect or maybe a lower impact from this aging. That's the first question, thanks. It's around, probably it's around EUR 4 million or so, EUR 4 or EUR 5 million for power, only for power in Germany. It could have been better. Again, we have to look across at least a two-year time. Yes, it is true that we suffer this year, but probably if we look at last year, figures that we were the opposite way around. Anyways, yeah. Okay. Thanks. In order to, let's say, the taste on DACH and the taste on Russia are not, let's say, so high. In reality, last quarter from the, let's say, pretty good, okay? What's the reason why we saw that huge contraction into profitability from Russia? There is no real good. Yeah, there is. There is contraction because already it went in terms of volume and also pricing. Yes, that's a good point. From Russia, I received the number, basically. Okay. Okay. It's a little, I assume that the word, again, somebody with the inflation in the country is high. The fact that we were able to improve prices, but maybe not beyond inflation. I think that this is probably the main reason. Unfortunately, we don't have too much information. Here is what it is. I was trying to look at the forecast. We are a little more optimistic, as I said, with the change rate. The forecast, yes, we are better off than budget, but anyway, below last year. We expect more or less to double the result of H1. It is above the original budget, certainly, in part due to better force, but in part also to better operating performance. I assume that there is a question of cost due to inflation, which is in the country. I don't remember exactly the rate, but it's probably more than everything. Okay. Let's say that, okay, maybe slightly more than the double we saw, but still with this EBITDA margin. I'll say it's lower due to, you know, some, okay, some cost inflation. The first question is on your CapEx plan. You mentioned, let's say, now this, I'm referring to the operating. Let's say, 2019 will mean some first half, a kind of acceleration, or maybe also the second half, and then some other initiatives. Can you give us, let's say, a sense of this year's CapEx, but also a sort of, should we expect, let's say, kind of acceleration? You mentioned the possibility also to invest in the U.S. Clearly, it could be in France, not, let's say, a full amount in a year. Can you give us a sense of, we are moving, I don't know, towards around the EUR 1 million per year CapEx? That's the direction. Thanks. You mean specifically around 25% or? From the year, yes. Considering the second half, if you can, let's say, give us a kind of indication that also in the medium term, should we expect, let's say, maybe a slightly higher rate for your topics? Thanks. Okay. Actually, the overall forecast for 2025 is now set at around EUR 300 million, which means, yes, a little bit more on the second half than on the first one. Okay. Including what we think that ideally, which were, but they were all in the first half. Okay. Let's say, all that what we can pretend imagine for this load. I mean, the run rate, let's call it, in the next years depends a lot on the two or three main projects that could be approved or become actual with the next budget approval, which means basically the decarbonization project in Germany. If it goes through, which can represent, I don't know, some EUR 50 million per year additional or maybe even more. It depends on how quick we are in developing the project. The capacity replacement, the capacity expansion in the U.S., which could mean probably depends. Again, in three years' time, three, four years' time, if we do it, it will be done in steps. The total amount is, let's say, it could be in the range of EUR 1 billion, but spread over a number of five to six years. Big project, with a very long-term horizon and approach to execute it by the year itself. It could easily bring, in the first two or three years, maybe EUR 100 million, EUR 150 million additional. This is clearly a very specific project for, again, you can call it capacity expansion or capacity replacement and to the U.S. Okay. Thanks for it. Sorry, the last case, I see, let's say, below the EBIT line, you have, let's say, an international interest benefiting from these foreign exchange gains on loans denominated in dollar. Yeah, sorry, can you give us a kind of bridge in order to understand the impact of this item, including, let's say, the recurring charges in which you get? Is there any comment on this line? Is it something that is going to stay with us just on the table? Because it should be huge in the impact of this or this effect. We have both third parties, and we have the intercompany loans that are playing. The main is IRR and ROI, too, yes. Correct. Now, it's basically referring mainly to some transfer, and we have closed some positions, a company position, which were denominated in dollars, in, you know, U.S. subsidiary, and headquarters. This played in favor for from the attack per se. We are transferring, let's say, borrowers from the U.S.. If the dollars declined and you adjust and then you close the position, let's say, theoretically, you have a benefit. Yeah. Than ours. Sure. More and more useful than legal. The proposition with third parties is less important. Minor. Yeah. Than the intercompany position. Okay. Yes. Very good. The next question is from Yassine Touahri of On Field Investment Research. Yes, good afternoon. Thank you very much for taking my questions. A couple of questions. First, a follow-up on the previous question on your CapEx. If I understand properly, you expect CapEx excluding equity investments of approximately EUR 500 million in 2025? I didn't know before, but let's say you're in the range of that. Ideally, yeah, EUR 500 million. You were expecting about this more million, so including EUR 90 million equity investment. If I understand that if you decide to go ahead with the progress of the decarbonization in Germany and the U.S. expansion, you could add a couple of hundred million of CapEx. You could end up with a run-rate CapEx of something like EUR 700 million in the coming years if you decide to go ahead with projects? In some years, yes. It's absolutely possible because the absolute amount of the decarbonization project, we don't know exactly. I think that the budget is still under most budgets of also the U.S., let's say, replacement expansion is under construction. Let's say that there are more uncertainties probably on the decarbonization project than on the U.S. Europe line. These are numbers that could impact, let's say, up to EUR 200 million, EUR 250 million per year if we do both together. The question related to that is what kind of, let's say, if you go ahead with this project in the U.S. to spend EUR 1 billion until the end of the decade, what will be the, what kind of return would you expect on this? The return is not so quick. The return is probably something that we have to consider in the range of 12- 15 years in finance return. What is the reason? The reason is that anyway, if you don't do it, you will end up in some years' time, and maybe in the same timeframe or even earlier, with much less stuff available because some of the existing plants do not have either the raw materials or the availability or the reliability of the equipment to carry on for the same time period. At the end, it's a decision whether you want to remain with a certain presence in the U.S., with a certain market presence, and with a certain, not the same, and improving significantly your efficiency, or you want to give up that position because this is the trade-off. On paper, the return is maybe not justified immediately such a decision. We have also learned in the past that some of the assumptions which were made, for example, when Marineo was renovated and expanded or even earlier, when the Pestos Plant was totally renovated, all the assumptions historically speaking proved to be, in this case, conservative. We had from those investments at least a quicker return than the one that we were calculating on paper. In the meantime, the return could be the same if we do something now. We don't know. It's true that the costs are going up. It's true that the tariffs are impacting and adding costs to the equipment. Still, it is a decision whether you want to remain a producer of a certain size in the U.S. in the long run or not. The decision to invest in Germany, is this a financial return question as well? How did you decide in? I don't know. don't know. It's more difficult to justify, clearly, at least with the current CO₂ cost, which is, let's say, relatively low. There, again, it could be a matter of remaining in business after 2040 or remaining an instrument producer when all, let's say, allowances, when there will be no allowances available, not easier to buy. Theoretically, I don't know if this will be the case. I think, I mean, I don't believe it too much because this would mean less, I don't know, 80% or more of the European cement industry will go away. If this really happens, at least you will have some, let's say, production in Europe fully decarbonized, which you can still carry on. I think that, again, the future is unknown and probably the targets set by the European Union are not feasible or at least are not feasible for the industry as a whole. Europe is the only place where today, in the light of what could happen in terms of availability of share flow allowances, it could make sense, at least to maybe not fully, but to decarbonize some of your production as much as possible where the conditions are there, because as we all know, it's not just a matter of being able to install a carbon capture equipment. It's around the logistic, transportation, storage, and whatsoever. If you have all the conditions in place, you are already, let's say, derisking to a large extent the investment. You can expect the CO₂ price to go up over time, and you anyway would be ready to continue to be a producer if and when no more allowances will be available. The last question on the cash flow question is that even when assuming all those investments, you can still finance them with your operating cash flow and the dividend. You will end up the year with nearly close to EUR 1 billion of cash in the bank. As a family member, is it for you the best way of the cash in the bank, or are you thinking of a better use of it? I think that the investment plan, it will be with such, let's call it, significant projects, we'll be absorbing a significant amount of it with no immediate return, as we mentioned already, because in the short run, there will not be a significant return. Probably in the long run, yes, but not so immediate. If we are able to finance it in full, more, of course, not a bad idea because it's anyway a huge use of cash. In our opinion, for what I just explained, it makes sense for the group at least in the longer run. If there is more availability, there are the usual potentials, let's call it uses, which can mean either something in terms of external growth, if it makes sense, if it's available, if there are, I mean, all the conditions, there is a greater shareholder return. I mean, yeah, many different ways of using it in the, we hope, let's say, in the best possible interest of all shareholders. Could you comment on the July trends in your key markets in the U.S., for example, if you seem a bit more optimistic for H2 than what you've seen in H1? Have you seen activity being a little bit less difficult in the last month or in the first month of the season of the U.S.? It was a little less difficult. Could you give another answer? Maybe my. I cannot, but I can say that it was a little less difficult. Thank you very much. You're welcome. The next question is from Cedar Ekblom of Morgan Stanley. Thanks very much. Just a follow-up question on costs and CapEx. With your fixed costs coming in a lot higher than expected and you guiding to a meaningful step-up in CapEx, some of which is obviously around expansion projects, I understand. Do we need to be concerned that the business has been underinvested for a couple of years and that the reason why maintenance costs and fixed costs are going up is because actually the assets are not entirely fit for purpose? Is that something we should be thinking about? Because often when businesses have a notable rise in CapEx and a notable rise in fixed costs, it does sometimes raise red flags about the operating integrity of assets. That's the first question. The second question, in the press release, you talk about a meaningful increase in volumes in your Netherlands and Luxembourg business, but you did not report an increase in pricing. I just wanted to understand why that is and do we need to be thinking about that kind of relationship to the extent we start to see a more meaningful increase in volumes in other European regions? Why are you not increasing pricing if you're getting double-digit volume increases in that market? Thank you. Perhaps from the last one, it's mainly because we are not, first of all, we have to be in the market. We have to be able to compete with what's happening. If the market trend goes in one direction, we can partly, of course, partly influence that. For example, in Luxembourg or in the Netherlands, Luxembourg, we are, of course, a significant player because there is not much production. Actually, Luxembourg is selling much more of its production outside of the country versus what's inside. I think we need to see, we need to go back to a greater capacity utilization, which has been strongly reduced in the last two years, down to probably 65%. When we are back to 85%, then there could be more chances to improve or a clear, let's say, cost increase, which might come from the CO₂. I don't know. Other items are somehow affecting the entire industry. On the underinvestments, I don't think so. At least in our mentality, I think versus other companies, it's been maybe the opposite, perhaps the way around. The problem is also sometimes how you usually invest because not always the money that you put at work turns out to be successful or as successful as you would have imagined when you approve certain projects or certain maintenance expenses. This goes to a point which is also critical, certainly I think for the entire industry. Sometimes it goes back to the human resources, to the sometimes the ability and the knowledge of our, let's say, technical people. For example, in the U.S., we certainly had particularly in some plants, a lot of turnover. Very difficult to keep the people to create knowledge to have not so much than in the headquarters. At the plant level, sound seem steadily, let's say, in place for a long time. When you change maybe maintenance supervisor for, I don't know, three times in a year or three times in two years, this can be a problem. We need to address that because, again, you can put a lot of money at work, potentially at work, but then if your team is not responding the way you would expect, you can have this kind of issues then together with the inflation, the cost of labor, cost of services, etc. This is an issue that certainly more in the U.S. than in Germany, we are facing and we need to, they're very difficult actually to address, to overcome. We are here to do it and we would quite openly go in that direction to improve it, but quite difficult. Okay. Sorry, I just want to follow up on your points that you made around sort of capacity utilization rates and pricing. Are you going to take that type of commercial approach in the other footprints that you operate in in Europe as volumes hopefully recover over the next, you know, two years or so? Will the intention be to lift utilization rates first before you try and lift pricing? Or are you focused on value over volume like your predecessors there? I think it matters, right? You've got a footprint in Europe and you're a big player. If the intention is to go for volume rather than price, it's a very clear difference in the message we're hearing from others. No, no, no, no. I think we have played a role because actually, the odd blower, let's say, because, okay, there are not readily available market share, let's say, indication of statistics. It's always difficult to have data that are consistent over time. If you look at our internal, let's call it, sales knowledge or, how do you call it, commercial know-how, certainly, it's some countries, but I would say in all countries, priority in the last few years was even more to prices than to volumes. Sometimes you come to a certain point, which is what happened, maybe last year in the middle of the year, in Germany. Also Poland. Poland was easier to recover as the market is stronger, and Luxembourg, which means Luxembourg and the surrounding country, where you don't want to go below a certain capacity utilization level. Let's say that it's certainly a threshold in your capacity utilization level, which you don't want to hit. I mean, you want to stay above. Again, we can influence the markets only to a certain extent. We can give a message, sometimes we lead in a certain direction, but then the announcement, also the public announcement or what you hear from other companies, is not necessarily percolating into the same message when you go down the organizational chain. There are particularly bigger companies that are more different. Great. Thank you so much for taking the time to answer all the questions. Thank you. The next question is from Jon Bell of Deutsche Bank. Yeah, thanks for taking my questions. I think I've got three. The first one would be, can you just elaborate on your earlier comment about the QUIKRETE deal changing the market dynamics, maybe the sort of specific impact that you've seen? The second one is just going back to carbon capture in Germany. Expecting that your kind of thought process, you know, involved where the CO₂ price goes to. Are you negotiating for subsidies? Are there other discussions with governments going on? The third and final question is, when I look at the U.S. performance, your ready-mix volumes held up slightly better than your cement volumes. I just wondered whether you could just explain that to us given that residential was clearly a weak end market and bad weather was also an influencing factor. Thank you. Yeah. On the first one, which was elaborated quickly, this is a really major, major thing in the U.S. market for two main reasons. QUIKRETE is a big cement customer for anyone and for us, too. The fact of becoming also a cement producer, and by the way, two days ago, it will become an even bigger cement producer because of this agreement to buy the Middle Eastern plant from Martin Marietta, indicates a clear strategy that they understand, which is, wherever I can buy the cement for myself, I will do it, which makes a lot of sense. They cannot, due to logistic reasons, buy cement in any place that they produce their mixing products from themselves. They will continue to be, of course, an important customer, but they're trying to become as independent as possible, which puts pressure on the volumes, but also on a company like ours which has been continuing to be, let's say, a significant supplier of cement to them. It's a big change. Second, their approach towards, let's say, decarbonization or lower carbon cement is purely, I would say, driven purely by economic reasons and by simplicity and by tradition in what is being and will at this time continue to be the U.S. cement market. To speak more clearly, they do not have any interest and any willingness either to buy or to develop or just to be an instrument producer now to push on the lower clinker factor. For companies like us, which have been promoting and trying to push massive quantities in the market, cement with lower clinker factor can be an issue because we have more difficulties to sell Type 1L lines of cement in the market if there is more availability of Type 1. I think these are the two main impacts that are somewhat changing the picture of the customer mix and the product mix in the U.S. that need to be addressed, but they are very, very challenging. At least if you are willing to follow a certain pattern in the direction of lowering the clinker factor. If you don't care, it's not a big problem. It needs a reversal versus what has been done so far, which is what's happening actually in the U.S. In terms of CO₂ capture in Germany, you can comment maybe a little briefly. Of course, we'll try to find something. Yeah. There are several options at the European level, but also country level. We are preparing. We are trying to understand if we can participate in the European funding stream and in the national funding. National funding is a bit more uncertain because the company is trying to allocate money on investments also in this field, in decarbonization. The European stream is, of course, a bit more clear because it's the innovation story for trying to participate in this stream. We are definitely trying to understand if we can be part of the game on both sides. We'll see if we are successful or not, not the issue, but yes, we'll see. In terms of ready-mix for the U.S., ready-mix for us is actually very much, let's say, limited to a certain area of the market. Our footprint is quite large because if you look at the cement sales, we go from Minneapolis down to New Orleans. We cover a very large portion of all the Midwest market. Ready-mix, we operate basically in three regions, or two regions: Houston, San Antonio, Oakland, and to a much smaller extent in Memphis and St. Louis. The reason is that Oakland, San Antonio, and also Houston to some extent perform, let's say, better than the other regions for cement. We We prefer we sell cement. Also, you have to consider that anyway, ready-mix is much more volatile versus cement. I mean, if you gain a big project in one year or one month, you can do easily 10% more, then when the project is over, you lose this 10%. This is the reason. Thank you very much. You're welcome. As a reminder, if you wish to register for a question, please press star and one on your desktop telephone. For any further questions, please press star and one on your telephone. Mr. Buzzi, there are no more questions registered at this time, sir. Okay, thank you all. I hope the call was interesting for anyone of you. Of course, you remain available for other questions with our investor relations. Thank you, and hope you can continue with a nice summer in the next month and be staying in touch. Thank you. Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephone.