Good afternoon, this is the Chorus Call Conference Operator. Welcome, and thank you for joining the Cementir Holding third quarter 2023 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, then they signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Marco Maria Bianconi, Head of M&A and Investor Relations. Please go ahead, sir. Thank you, and welcome everybody to Cementir Holding first nine months results highlights. I'm here with Mr. Francesco Caltagirone, our Chairman and Chief Executive. Good afternoon, who is ready to take your questions at the end. I have a few pages deck that has been distributed, so I will immediately comment on page two with the results highlights. The group reported EUR 1.295 billion of revenues on a GAAP basis, and on a non-GAAP basis, revenue reached EUR 1.288 billion, up 0.8% year-over-year. Cement volumes were down by around 3.1%, mainly due to Denmark, Belgium, U.S., Malaysia and Egypt, partially offset by growth in Turkey and China. Both ready-mix and aggregate volumes were down in the period by 10% and 11% respectively. EBITDA reached EUR 326.2 million, up 36.9% year-over-year, and non-GAAP EBITDA was EUR 321.1 million, up 32.6%. There was a higher EBITDA in all regions except for the U.S. EBITDA includes a non-recurring income of EUR 13.5 million, mainly related to gains on asset sale. Excluding those non-recurring items, non-GAAP EBITDA reached EUR 307.6 million, up 27% on a like-for-like basis. Non-GAAP EBITDA margin grew from 18.9%- 24.9%. Non-GAAP EBIT reached EUR 234 million, up 49.5% year-over-year. GAAP EBIT was up 59.7% to EUR 231.7 million. Pre-tax was EUR 241.3 million, up 50% year-over-year. Non-GAAP pre-tax was up 60% to EUR 246.4 million. The net cash position at the end of the period was EUR 45.5 million, an improvement of EUR 75.4 million year-on-year, including EUR 34.2 million of dividend distribution, and an impact IFRS 16 of EUR 84.2 million versus 66 of the last year. To turn the page to the most important, subsidiary, that's Nordic and Baltic, accounting for 44% of group EBITDA in the period. Here, you can see that Denmark, cement volumes in Denmark declined because of, low demand, in mainly the residential market, partially compensated by the infrastructure segment. Both ready-mix and aggregate volumes were down by 20% and 8% respectively. EBITDA, though, increased, thanks to careful management of energy and distribution costs, and we return to a pre-COVID profitability levels. EBITDA includes also a non-recurring EUR 6.8 million gain from asset sales. In Norway, ready-mix sales volumes were down by 24%, mainly due to residential and commercial slowdown, higher competition, and some delays in new infrastructure projects. There was an EBITDA contraction due to lower volumes and higher operating costs. On top, the Norwegian krone depreciated by around 13.4% versus the euro. In Sweden, ready-mix and aggregate sales volumes were sharply down, around 46% and 15% respectively, as a result of a residential demand slump. EBITDA contraction was due to lower volumes and higher operating costs. On top, the Swedish krona depreciated by around 9% versus the euro. If you turn to page four, Belgium and France, accounting for around 22% of group EBITDA. Cement volumes declined by 8%, mostly due to a generalized demand slowdown, and also ready-mix volumes were down by around 8%, both in Belgium and in France. Aggregate volumes were down 13%, both on the domestic and on the export markets, also due to particularly good performance in the previous period. EBITDA, even though increased, thanks to tight operating cost control and increasing selling prices. Turning to page five, Turkey, accounting for around 18% of group EBITDA. Here, we have to remind you that from April 2022, Turkey is considered hyperinflationary, and the results are prepared according to IAS 29 accounting principle. Those figures are non-GAAP to make them comparable with the operating performance of last year. In Turkey, revenue increased by 31.5%, with domestic cement volumes up 19%, thanks to significantly higher sales in Marmara and Eastern Anatolia. Part of this demand is due to many projects driven by anti-seismic investment. Cement exports were down by 34%, as sales were redirected on the more profitable domestic market. Ready-mix volumes were up 8%, and aggregate volumes were stable due to temporary operational issues. EBITDA reached EUR 58 million, driven by cement prices, more than offsetting production cost increase and currency devaluation. This figure includes a non-recurring EUR 4.5 million of gain on asset sale, and excluding such non-recurring items, EBITDA would have reached EUR 53.5 million, up 163% on a like-for-like basis. We have to remind you that there was a devaluation of the Turkish lira of 43.1% versus the euro average exchange rate in the period. Turning to page six, United States. White cement volumes in the USA declined by 16%, in line with the residential market, especially deliveries to Texas and Florida suffered from stronger contraction due to competitive pressures from imports and lower demand. More moderate decline was visible in New York and in California. EBITDA was down due to lower cement volumes and higher variable costs, only partially offset by higher average prices. There was also a higher contribution from our subsidiary, Vianini Pipe, operating in the concrete products business. Also here, there was a 1.8% US dollar devaluation versus the euro average exchange rate. Moving to Asia Pacific on page seven. Here, you can see that China—In China, revenue was broadly flat, due to 15% volume growth, offset by lower cement prices. In Q1 of this year, cement sales were negatively affected by lockdowns. In Q2 and Q3, volumes were up, but competition put pressure on pricing. EBITDA includes a non-recurring EUR 2.1 million gain from asset disposals. Excluding such non-recurring items, EBITDA would have been down by around 6% year-over-year, as higher volumes could not offset declining prices. There was also an 8.6% renminbi depreciation versus the euro average. In Malaysia, on the other hand, revenue declined by 7.9% with a 16% volume drop. White cement exports were down 19%, driven by a decline in clinker exports, a different calendar for shipments, and lower deliveries to some countries. Domestic volumes increased by 22% as a result of good recovery in the construction markets. As a result of higher prices and careful management of freight cost and variable cost, EBITDA increased in Malaysia. But there was also a 6% Malaysian ringgit devaluation versus the euro average exchange rates. On page eight, the last business unit, Egypt. Here, revenue declined by 14.2% because of the strong devaluation of the Egyptian pound versus the euro. In local currency, revenue were up by 49.6%, while cement volumes were stable both on the domestic deliveries and exports. EBITDA was up, thanks to tight production cost control and higher selling prices, despite the negative effect of a 74% Egyptian pound devaluation versus the euro average. The last slide of this presentation is the full year guidance. We are further upgrading our EBITDA expectations. The revenue forecast for the year is unchanged at around EUR 1.8 billion. The EBITDA is up by around 4% from the previous guidance of EUR 365 million. We now expect to reach around EUR 380 million for the year. It is unchanged, the target of reaching over EUR 200 million of net cash and a CapEx of around EUR 113 million. This guidance refers to like-for-like ongoing operations, non-GAAP, and excluding any extraordinary items. With this, my presentation ends, and I leave the floor to our Chairman and Chief Executive for any questions you may have. Thank you. This is the Chorus Call Conference Operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their 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 Emanuele Gallazzi with Equita. Please go ahead. Yes, good afternoon, everybody. I have two questions. The first one is on the guidance, which seems, again, too cautious, as it implies a fourth quarter EBITDA down more than 20% year-on-year, with margins materially down, despite the strong performance in the first nine months. Can you just elaborate more on the assumption behind the new guidance to understand if this, let's say, cautious approach is driven by volumes or cost assumptions? My second question is about pricing heading into 2024. You are starting the discussion with your clients in the Nordics region. Can you give us a sense of your expectation for prices in 2024? Thank you. Yes, about the guidance, we increased a little bit, and not furthermore, just because, you know, in the previous quarter, we were, let me say, facing one war, and now we are facing two war. And as you know, we have one plant that is in Eg- in Egypt that is closed, let me say, in the Sinai region. So we don't know, it's just a cautious approach because, frankly speaking, as you said, if you just extrapolate a linear, let me say, development of the EBITDA, we have done so far, or the rolling twelve months of our EBITDA, you reach a number that is above EUR 400 million. But as we said, we want, we don't want to be too pushy, because if something goes wrong, then we don't want, let me say, to overestimate, let me say, our capability to overcome. So the market, I think that the key message in these numbers is that the very strong resilience of the group almost everywhere, because if we look at the decline of the market in terms of volume, that is roughly around 20% in the Nordics, and around 10% in Belgium, France, the two key areas for us, then you see that we increase our EBITDA on non-GAAP basis around 30%. In the past, with this kind of downturn, we should have, let me say, lost nearly 20%-30% of EBITDA, while this time we increased because of the positioning, because of the white cement, because of the cost structure, and because also the hedging that we did on the energy. And about pricing for the next year, it seems that there isn't, let me say, any key issue related to the price or pressure to the price. I don't think really, because also this year we are seeing a declining in raw material and energy, that there is space for a further increase. Also CO2, you have seen that, especially in the last two or three weeks, it is, let me say, below EUR 80. But let's say that, keeping this kind of price and, if let's say, we are just starting to see somewhere a bottoming in terms of the downturn. So, on the third quarter, especially if we look at the quantities, for example, on your group, we have a positive, let me say, quarter-on-quarter increase, compared to an overall decrease of nearly 7%. And also the decrease on ready-mix and aggregate is slowing down. So this doesn't matter that we are out or that the downturn in the economy is at the end, but we are seeing a sign of stabilization. This, let's say, doesn't consider any weird outcome from this Middle East spot and Ukraine and Russia, let me say, war. But I repeat, I think that the company... I'm very happy how the company went through this sort of mini recession, because in the last two quarter, we saw a quite sharp downturn, especially in the quantity, Nordics and in Belgium, France. But the number and the way we manage the company, the digitalization and everything that is, let me say, behind the management of the company, compared to the last downturn, that is, was around 2013, 2014, 2013, 2014, the company is responding in a completely different way. We have also to consider that these numbers, if, let's say, we are at six weeks, even five weeks, away from the end of the year, because then, let me say, after the half of December, let me say, the market, let me say, will say close in terms of consumption. So October went in line with the number that we are giving you, and so we are already in the first week of November, so I don't know if, let me say, something very, let me say, ugly should happen. But anyway, we are projected on the number that we expected for 2025. On terms of the revenues and also the net financial position, the revenues probably will be a bit lower than EUR 1.8, because we have to consider two things: one is the softness of the market in the Nordics and in Northern Europe. On the other side, even if Turkey is producing a very good result in euros, the devaluation of the Turkish lira, let's say, hit a bit, let me say, the revenue. But you have seen that we have increased nearly 6 or 7 points of the profitability. So this is, I think, the key message. So we don't see any sharp, any, let's say, substantial decrease in the price in Europe. The only country that, let's say, might... I mean, looking at 2024, might, let's say, suffer a bit, might be Turkey because they are changing the, let me say, the monetary policy, they are tightening, and they are increasing the rates. But the market, especially for the recent earthquake, seems well supported in terms of consumption, and also the CBAM won't be in place in 2026. So for another couple of year, the export market is quite strong. So, I don't know which will be the inflation or the terminal exchange rate for this year or next year, but let's say, the difficult part to forecast for us, let's say, it's mainly Turkey. Okay. Thank you very much. The next question is from Emanuele Negri with Mediobanca. Please go ahead. Yeah, good afternoon, thanks for taking my question. I have actually just one follow-up from the answer before. Is again on Turkey, you were talking about before. So can you explain a bit better what we expect in terms of volumes for the year ahead in Turkey, given the geopolitical situation and the earthquake and all the other things you mentioned before? Thank you. The volumes this year are up nearly. See, the rolling twelve months are up a little bit, a little bit below 10% in terms of volume. This is for Turkey. Looking forward, let's say, as I said, the export market should not change because, let's say, we continue to have the opportunity to export to Europe and the other country without, let me say, the CO2 for another couple of years. The internal market, that is mainly, I mean, some part, let me say that is a portion that is, let me say, hit, the earthquake hit nearly 12 million of people. So Turkey is three times Italy in terms of size. So, we don't know if the increase in the rates might, let me say, decrease the demand, but also what we expect is just that in the North Europe and in the Nordics, the market should normalize. So, what we might, let me say, loss on Turkey should be recovered on Europe. So it is fair to assume that you are trying to consolidate the EBITDA for the next year, let's say, excluding the impact from Turkey, so in all the other regions? Sorry, could you rephrase the question, do you mind? We couldn't hear you well. Sorry, can you hear me now? Yes, that's better. Thank you. Okay, so the target for 2024, is it fair to assume that you are trying to consolidate the EBITDA level you had this year for the next year, excluding the impact from Turkey, which is kind of a mess? Turkey is performing well and has a very strong demography, and let's say that we will let me say, as you know, during end of January, early February, we'll give the update on the industrial plan. We are let me say, closing or at the end of the November our let me say forecast for the next year. So at this point, I think that let's say a company that in one year reached the three-year target let's say we need... We need to understand where we can go, because if you consider that, just the volume in Nordics and North Europe should recover in two or three years, not in 1 year, let me say, not tomorrow, and, we maintain this kind of profitability, let’s try to imagine, where the company can arrive. And so this is I mean, the important thing from our point of view. So, if Turkey then will produce EUR 5 million less or EUR 5 million more of EBITDA, let me say, considering that around now EUR 400 million of EBITDA, EUR 5 million is 1%. So the sensitivity, at this moment, is not, let me say, we cannot have this kind of sensitivity now. In Turkey, when we close the year and in January, February, when we have, let me say, all the numbers, the exchange, the final exchange rate, and everything in place, probably we will have a better view. Yeah, if I may interject to what the chairman has just said. I mean, you're right in saying that, you know, we were looking to consolidate the results next year, and that's correct. I think the elephant in the room, in that case, probably the difficulty to forecast exchange rates. But looking at the business in isolation, there are two data points that I think are worth noticing. One is that with the perimeter we have today, we're approaching a record profitability in Turkish lira terms, if looking back the history of the company. So I think we are very happy, and I think it's performing extremely well. Clearly, going into next year, we'll have difficult comps, because this year there was a sharp recovery, and so clearly there is just a law of comparable numbers that will make the difference a bit less pronounced as it was this year. But, you know, again, we are confident that the business can still do well, with a bit of pinch of salt, because, you know, in the emerging markets, it's always difficult to forecast accurately what's gonna happen. But that's what we feel today about Turkey. And anyway, if you look at page five of the presentation, you can see that, on the non-GAAP, Turkey is nearly 3x the EBITDA of last year. I think that the issue of the old company that, probably having, a net financial position, that will be, for sure, above EUR 200 million, because we have a higher EBITDA. And, an EBITDA, let's say, between EUR 380 million and EUR 400 million, the company value, you can do the math. The issue, I think, is not Turkey, or is not doing, 10 or 20 million, more or less. I think that, the company is discounting, let me say, a lot of value, I don't know why, compared to the other peers, even if, we have a premium product, we are, well, let me say, balanced in terms of geographical portfolio. Because sometimes, also in the past years, I heard some of you saying: "Why don't you exit Turkey?" The reason why I didn't exit Turkey is this, as you all can see now. And so it's important that we are balanced. When Turkey goes down, Nordics goes up. When Turkey goes up, Nordics go down. So we are balanced, and we are, let me say, continue to improve our result, even in a difficult market situation. So, let's say this is my personal thought. But, also on the energy and the other raw material, I think that the company is well hedged for the next two or three years. And, also, today, we have the gas situation and the electricity situation that is completely different than last year. So it seems, besides the price, that the situation is more stable. Okay, thanks. The next question is from Bruno Permutti with Intesa Sanpaolo. Please go ahead. Yes, good afternoon, everyone. I have some question on the cost side. So, what are you seeing? Because at pricing, you said for 2024, you do not see increase in Europe, but if I have well understood, you don't, you do not see decreases. So, what could go wrong next year, I was wondering? Is there something on the cost side that could hamper the group's profitability or not? I mean, the personnel costs, or how much are you hedged on the energy costs and at which price? So, these are, I believe, the asset and above all, the volume trend. So, how do you see volumes move abroad next year, and so is this something that could be a worry for the absorption of structural cost, of this cost, or not? I'd like to have some comments on this aspect, because I believe that probably the fear of the market on the industry is related above all on the ability to react to possibly lower volumes next year. If I may, a second question concerning the M&A, if nothing changed compared to the last call, so or if you see something different in your scenario for M&A for 2024. Regarding the cost structure, if you see the last four years, even if with the... So I think that when you buy, let's say, a share of a company, you buy the product, but also you buy the management, right? So look at the last four years of the company with the COVID, with the energy spike, with the war in Ukraine. I think that you should see that we were able to manage very different and weird situation, I think in a brilliant way. Because every year, we made a record with the same perimeter. So I don't know if next year we will have a third war or something else. But without, let me say, external factor, I don't see major threat in the cost side, because most of our cost is energy, electricity, gas, or coal, and let's say that we are hedged, and also CO2. That, as I already said, then you are aware, most of the player pass directly to the final customer, so it's just, let me say, a tax and not a cost. So this is my very, let me say, brief answer. On M&A, we are still at the same point. So we need to understand better, and let's say that in the last 12-18 months, we have a better visibility, for sure, on the technology that might be, let me say, used for carbon capture. And, the other issue is the sequestration, because there are plants where sequestration is easy, with other plants where sequestration, let's say you need to put on, let me say, on a truck, and then transport to another place, and might cost further. But, the level of solution, and also the number of solutions that we are seeing in the last six months, seems that, let's say, in six, 12 months, we should reach, from our point of view, a good idea of what might be, let me say, the cost, the OpEx, the CapEx, and the OpEx of carbon capture and sequestration. So, so far, let's say we are still waiting just to understand better, but for sure there are, from our point of view, we are, let me say, happy to have only two plants in Europe, so we need to upgrade, retrofit or whatever it will be the technology, just two plants. Our others have a lot of plants. I think that we will have three different kind of player. Those player who can, let me say, use this technology, that probably are two or three technology, that will have the cost, and they have the money to do that. Then there are players who can use this technology, but, they are very far away from where they can, let me say, do the sequestration, and this will increase in, I mean, I say from EUR 50-EUR 100 only for sequestration, not to capture, and this might change or affect the cost. And so for us, this kind of plant is out of, let me say, sight. And then there are other plants, who is where it is not convenient, because they are too little or too old to, let me say, do any kind of upgrade. So we are clustering, let's say, in Europe, which kind of, of plant, from our point of view, if the solution A, B, or C will be, let me say, used. And then when we have the numbers and the development of this number, we can, let me say, have a, an idea where we would like to invest. This is one thing. The other thing is that, if there is somebody that would like to divest those assets. But for sure, from our point of view, there are a substantial number of plants where you cannot, let me say, upgrade or retrofit, or they are too far from, let's say, the sequestration site. There are geological map around, and certain player are aware. I don't know if you are aware, but there are some parts of Europe where it's impossible to sequestrate, and those plants, from my point of view, will not survive. But I will tell you now, where are the, I mean, the geographical part of here, but there are two geographical clusters where you cannot make any kind of sequestration. Capture, yes, but sequestration, no. So the only solution that I think that we are nearly five years behind carbon capture is to combine CO2 with hydrogen. So what will happen from the moment that next year will be sixth year to 2030, for those plants, is the cost of synthetic hydrogen will not drop significantly from 8 EUR per ton- 2 EUR per ton. I think it is difficult to combine, and to have a by-product that you can sell in the market, and then that can abate the total cost of the full cost of your cement. So I hope that you have a clear picture of what is, let me say, the game. The game is not the M&A. The game is that where and how much you have to invest, and if you have to close down a plant, or if you can survive. Or if you just, let me say, need to wait because the plant close to you will close, and you can take the market with, without any kind of investment. Thank you. Very interesting. Okay, okay. If I may, it's not related to this issue, but I was wondering, as you have the activity, the assets in Egypt, did you see a change in the rebound of the internal market following the beginning of the war in Israel, or for now, no impact at all? For the time being, the situation has improved, because usually we are in the middle of the desert with, let me say, a level of security that is, let's say, it's medium. Now, with the development and of this situation, there is much more, let me say, presence of military. The port of El Arish is used for, let me say, humanitarian aid. So the situation, for the time being, is better than one month ago, I mean, from our point of view. So I don't know, but I don't think that Egypt is ready to open the gate and, like Turkey did with Syria, and to receive 1 million or 500,000 refugees, even because you have to consider that you have the desert on the other side. So the refugees that might arrive in Egypt find, let me say, just sand, no water, no infrastructure, so it's different than the border between Syria and Turkey, where you have water, where let me say, the land is normal. So I really don't think that we might see a big flow of refugees that will arrive from Palestine to Egypt, also from this, let me say, logistic issue. Okay, thank you. As a reminder, if you wish to register for a question, please press star and one on your telephone. For any further questions, please press star and one on your telephone. Mr. Bianconi, gentlemen, there are no more questions registered at this time. Okay. Thank you very much for your interest in Cementir Holding, and I wish you a pleasant rest of your day. Thank you. Thank you. Have a nice evening. Bye. Bye-bye. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.