Thank you. Welcome, everyone.

Good afternoon. The idea, as usual, is to go over our presentation that was made available for you.

Like the operator said, starting later on some Q&A session on the matters that can be more of interest to you. Results that were released this early afternoon are, I would say, not as good as the previous 2 years, but still pretty sound, at least in our opinion.

We were able to stabilize the turnover, basically remain at the same level as last year, even considering some very challenging conditions in some of our geographies. The cement volumes, if we consider the reported figure, are actually 5% above last year.

It is true that they've been influenced quite significantly by some scope changes, but still they are showing a favorable trend. We are instead somewhat lower than last year if we look at our ready-mix volumes, about 4% low.

This is also due to the fact that most of our vertical integration is located in the markets or the region that suffer the most in terms of, let's say, demand softness. In terms of EBITDA, we are going down about 8% versus the same period of last year.

There is some impact coming from, let's say, scope effect and also currency, which we will describe better later. This obviously a bit disappointing, but it's somehow associated to the trend of two geographies in particular, which perform, let's say, worse than last year, that are usually also showing margins above average or stronger profitability in absolute terms.

The US and Russia. Some other geographies actually perform better than last year, or at the same level, or for some times much better than last year.

We are also somewhat hopeful that in the second part of the year, we can recover, at least in part, the decline that we've in the first 6 months. Moving to the analysis of our turnover, which you find on page two, you can see that in Italy, the performance in terms of sales volume remain somewhat weak.

You certainly remember that the first quarter across Europe was characterized by, let's say, wet and cold weather, was not helpful. Let's say, the first 3 months of the year were not helpful in terms of cement and ready-mix deliveries.

Also in the second quarter, for the full 6 months, we did not see really, neither in Italy nor in Germany or Central Europe, a clear recovery. The gap, let's say, that somehow was accumulated in the first quarter, yes, it closed somewhat, but not to the extent that we were all budgeting.

This is something that we believe is likely to continue also over the next 6 months, although maybe to somewhat minor extent. Unlikely to see really, let's say, the variance turning positive for the full year.

Instead, going back to the Italian situation, we do have a favorable price effect and also a minor favorable, let's say, scope effect that is associated with asset purchases in the ready-mix business. Similar situation in the Central Europe, with the volumes suffering some, and price effect positive, favorable, not as much as in Italy to a lesser extent, and also some benefit coming from the scope changes again associated with asset purchases in the vertical integration of our cement business.

Eastern Europe includes area that perform in a very different way from one another. Because the Eastern Europe countries within the European Union, overall, they did well, okay, let's say according to expectations, Poland and Czech Republic.

Poland, yes, declining in terms of volumes, but also or mainly due to the fact that our comparison base was extremely high last year. It's a market where we believe we can actually close the gap going forward in the next 6 months.

Czech Republic, stable to slightly positive. Instead, a significant, let's say, drop in Russia, which I was mentioning at the beginning, that is affecting the overall, let's say, tradition turnover of that macro area.

The FX impact was particularly favorable in Russia. Russia perform definitely worse than last year if you look at volume, prices, and profitability.

In part, this unfavorable performance was, let's say, partly offset by the strength of the ruble in the first 6 months. USA, they did well, also I would say better than expected in terms of volumes.

We are slightly above last year. The first quarter was definitely stronger than the second one, but still, we continue to remain at higher production and delivery level than last year.

We suffer some on the pricing side. It's kind of a regional effect, mainly, I would say, the difficulties in the price level remains mainly in Texas.

In other states, we had some improvements or anyway no declines. On average, we are showing a slight unfavorable variance.

In addition to that, the weakness of the dollar was affecting the turnover by about $50 million, relatively large amount. Going to Brazil, everything okay so far, good.

I think volumes could have been even better because in the Southeast, in particularly the rainy season was more, let's say, rainy than usual. Again, the prospects for the second-half are probably better in terms of volumes for the Southeast region than what we have experienced, let's say, so far.

The pricing level was definitely improving quite significantly driven by higher capacity utilization, higher demand, but also some rising costs. Certainly the spread was favorable.

We had also the currency impact favorable, which is, [laughs] not always like so, particularly for let's call it a currency like the real that can have a lot of volatility. In this case, the volatility was giving a favorable sign, improving further our turnover.

The UAE represents, let's say, the only significant scope change for the first-half. You may remember that last year, we had 2 months, basically May and June.

The first three number, volume -1, price +7, and FX -5, referred to the comparison between last May and June, let's say, months. Meanwhile, the 53 is the first 4 months of turnover.

Of course, UAE is the most affected directly by the geopolitical, let's say, tensions. Definitely suffer in terms of volume, but I think the management of the new acquired company was able to take, let's say, some interesting measure to offset anyway the disadvantages coming from the situation, and making sure that our results will perform, let's say, definitely in the right direction.

Of course, you may say that it's relatively easy to do better when you start from a low level, but I think that we have to give merit really to the strategy that was applied and to the results that have been achieved. It's not so evident, I would say.

We can be fairly happy with the result, particularly in the current situation. Moving to the following page, we have the EBITDA bridge, difference between the 526 of the first-half of last year to the 483.

Volume impact overall somewhat negative, as we mentioned at the very beginning. Price impact overall favorable, most of the country were able to achieve and improve in their pricing level.

Unfortunately, some important ones did not, like we said. Variable cost, in part, okay, this is associated to the, let's say, somewhat lower volumes, lower production level.

Actually, we had some significant benefits, for example in Italy, for the cost of power. Maybe comment briefly later on the so-called energy release factor, which was definitely a big plus for the Italian profitability.

Also fuel so far, in the first 6 months, even if there is some cost pressure on the fossil fuel, remain more or less at the level of last year. On the fixed cost instead, we had an unfavorable variance.

This is mostly related to staff cost, maintenance, also in part to the scope changes, clearly, which are adding some staff to the previous, let's say, setup. These were, let's say, more difficult to keep under control.

Just to give you an example, in the US, the tariff impact on the maintenance cost, on the spare parts, repairs, etc., that we buy that are subject to tariff themselves, say, accounted for about $2 million, which is not little if consider the overall unfavorable variance. On the other unfavorable changes, we have to consider mainly the inventory adjustment, which has been affecting also the cash generated from operations, the working capital, let's say, impact.

We basically absorb during the first-half more clinker, our clinker inventory went down during the first-half quite significantly. This translated into this kind of, let's call it, unfavorable impact of about 15 million, out of which the inventory is 12.

Clearly, this is also something that during the year or over the next 6 months can go the opposite way if we have, let's say, a different, not necessarily better, but let's say a different management of our clinker inventory. CO2 so far has not represented any cost similar to last year.

The reason is associated with the way we account for CO2 rights. We do not consider, let's say, them as a cost until we enter into the so-called deficit.

Since the free allowances are usually able to cover in full the first-half of our production, and also somewhat more going on, the CO2 cost will appear in the second-half, probably in the last quarter, or between the third and the last quarter. We keep our, say, forecast of about €35 million to €40 million of CO2 cost for the full year, depending of course on the production, on how the different countries will perform, etc.

The foreign exchange impact on the EBITDA has been €9 million. That's a net between the different countries, again.

Negative particularly for the dollar, positive for the real, positive for the ruble. A net negative result of €9 million.

Then we have the €9 million of scope coming from the UAE, which we were commenting before in terms of, relatively speaking, good performance for this newly acquired entity. If we move to the next page, we have an overview of our, let's call it, cash flow statement.

Again, what I was mentioning before, cash generated from operation is, how could I say, not as good as one might expect, or somewhat lower as you can see also on the right comparing to the previous year. It's true that our margins went down, but net cash flow from operations suffer, as I said, mainly from the working capital adjustment.

This is where we absorb, let's say, more cash flow than we did versus last year. The inventory adjustment, let's say, as I said, and also the trade receivables, the trade payables, the combination of these three factors is what mainly drove down the net cash from operations.

CapEx are slightly higher than last year. This was expected.

Let's say, we are in line or maybe even somewhat below our budget for the full year, but nothing unexpected there. Equity investment, there are small, let's say, acquisition of entity, either in capital increases, let's say, in joint ventures or subsidiary.

These are all, let's say, related clearly to the industrial footprint of the company. Dividend payments remain even with last year, also, let's say, due to the fact that the dividend per share did not change.

Dividend received, they are somewhat greater than last year, but this is mainly a temporary disalignment regarding the dividend from the Mexican joint venture. Over the year, they should more or less match what we received in the previous year.

Share buyback was an important item during the period because it was a use of €180 million in the first 6 months, which became €200 [million] by July 17, if I recall correctly, when we officially closed this tranche, which was open in late February. Was expected to run potentially until the end of August, but it was closed somewhat earlier.

Right for the 6 months, the interim report. Other item of different origin, for €462 million, which are bringing the net cash position to €896 [million] at the end of June, which is obviously very very sound and give us a lot of flexibility, as usual.

Moving to the focusing, let's say, a little bit more on the on the geographical area, on the on the main markets, the US, as I said at the beginning, is where, also due to the size of the business there, we suffer we suffer the most in lower EBITDA, lower margins, and and all coupled with with lower turnover. The the increasing volumes was not was not sufficient to keep the turnover at the same level, mainly mainly because of the currency impact.

You see that on a like-for-like basis, we are at -0.6%, even. The weakness of the dollar then impacted quite quite significantly, about €50 million.

On the on the EBITDA, like-for-like -15%, with a negative foreign exchange impact of about €13 million. The issue there was was the, let's say, certainly the the the negative, let's say, price level or the unfavorable price level which we which we faced during during the 6 months.

Second, production costs that remain not very very different from the the previous year in in terms of variable cost and also unit fixed cost, but yes, increasing logistic cost to transfer, let's say, cement across the the distribution network. Other other fixed costs, same as we mentioned before, not in part related to production, in part related to general expenses like labor cost or property taxes, which went up quite quite significantly.

We don't have here We are not showing We usually don't show a split between the profitability of the cement business versus the profitability of the ready-mix business in the in the US, but certainly we can say that profitability of the decline in the profitability of the ready-mix business was much more significant than the decline of the profitability in the cement business. The ready-mix business is located mainly in Texas.

Texas is is the region that suffer the most during the first 6 months. The ready-mix business typically has a greater volatility versus the result of the cement business.

This was clear, certainly, in in the in the in the first-half, the kind of this kind of decline with which we faced, particularly in that in that in that business. The EBITDA margin went down about 4.5%.

This is not a good result, but again, is is the outcome coming from from the variables and the trend that I just just mentioned on the, let's call it, revenue and prices and and and costs. Jump, let's say, a little bit forward looking down the road at the next 6 months, 6 months, we are, I would say, somewhat more confident that we can recover not in full versus last year, because this is very unlikely, but to a large extent, let's say, the unfavorable variance of the first 6 months, particularly in terms of of EBITDA of EBITDA margin.

Yes, we will remain below because the market situation is such that does not allow for a full recovery, plus we have the foreign exchange impact. We do believe that the second-half will be definitely less penalizing than than the previous than than the first one.

On the Italian situation, which follows next, definitely more favorable. We are, well actually, somewhat lower level in terms of turnover, but we improve EBITDA and of course, also EBITDA margin.

What is the reason? The reason is mainly a cost trend which was particularly favorable if you look at the power cost.

Power cost enjoy quite a significant decline coming from the energy release program. This energy release programs had an impact both on the 2025 and 2026.

We are actually including in this 2026 figures a nonrecurring item of about €7.5 million, if I recall correctly, which is the energy release accrual for 2025. How much is it, the energy release for this year 2026?

Around €11, €12 million.

For the full year?

For the full year, yeah.

For the full year, we expect another €11, €12 million, which is already in part included in the first 6 months, more or less half of it, of advantage on the power cost. If you consider basically these benefits on the power cost, and you clean it from the first 6 months EBITDA, you come to a level which is very similar to last year, not very different.

However, is certainly a good result, which we can confirm also in the following months. The price level was also somewhat better.

On one side, yes, lower volumes, but better pricing and lower cost, in particular power cost. Margin expansion certainly confirmed and with the possibility to confirm it also in the coming months.

In Central Europe, a little bit disappointing also here. Main reason is the weak demand conditions with declines both in cement and ready-mix.

In some region, also quite significantly, like the Netherlands. Ready-mix volumes went down by approximately 8%.

We are in a situation where particularly in Germany, I would say, which is the largest contributor to this region, the expectation for a recovery in demand not being met yet, at least. The pricing trend was, yes, somewhat favorable, but only slightly favorable, unable really to offset the demand decline.

Again, on the ready-mix results, which are normally, similar to what we said to the US, more volatile and more affected when the volumes are going down, we have been suffering in Germany, but also in the Netherlands. That's why the cement margins came somewhat under pressure, and they were impacted by the cost inflation in the region without the possibility really to improve pricing or only slightly.

Also, certainly recall that in Germany, we were already, let's say, running at a low capacity utilization level. This trend was not counter-effected, let's say, in the first 6 months.

To regain a certain margin level, we definitely need to have some improvements in the capacity utilization, because pricing can be helpful, but capacity utilization is normally even more helpful, and that's why we are currently in a situation which is not satisfactory. On the Eastern Europe, again a mix, with Poland below last year in terms of volumes, but with a tough comparison base.

Looking for equalizing last year in the second-half. Czechia, a good expansion of the construction activity, and of our volume stable to slightly improving, let's say, results.

Again, Russia, which is part of the region, but obviously is a kind of different under several features, suffered from quite a significant volume decline, about 9%, and also pricing pressure. The ruble helped somewhat, but not enough to really offset the profitability decline that we experienced in Russia.

I would say no big worries. Actually, good feelings from Poland and Czech Republic also for the second-half.

Russia probably not changing much in the second-half, but could be somewhat better, let's say the second 6 months versus the first 6. Going to Brazil, which is page 10, very favorable conditions overall, even in a in a market which is not been growing quite very significantly, because we are talking about volumes up between 3% and 4%.

There is actually a regional difference between the Northeast and the Southeast. I mentioned already before the the more difficulties in the Southeast due to weather and and also to a different and actual different trend of the of the of the demand.

High capacity utilization anyway, particularly in the Northeast, but also the Southeast starting to get close closer and closer, let's say, to full capacity utilization, which is also giving possibilities or more possibility to to improve to improve prices. Cost went up, mainly logistic, associated with the cost associated with the minimum transportation, I would call it, tables.

There are some the transportation costs in Brazil are are somehow regulated, and clearly also with the with the changes in the the fuel cost, in the diesel cost. Brazil is almost not using basically not using any kind of logistic means different from from trucks, they don't have distribution in by river or by by train.

Diesel cost has had an immediate impact on the on the truck on the truck logistic, which is basically the only one. Following that, clearly the the the price the delivered price went up, but also the the the price at the plant went up, and we were we were able to, let's say, bring the margins to a nice improvement because when you compare with last year or anyway 2 years ago, you had kind of, let's say, 4% to 5% improvements in the in the margins, which is quite nice.

Also, EBITDA, in this case, the help from the currency was about 2.5 million, but still, almost 50% increase at in like-for-like conditions. Prospects for this year remains they remain favorable.

Yes, Brazil is is going will go through the presidential election, which is certainly favorable overall, let's say at least until the presidential election. After the election, we don't know, of course, it depends partly from the outcome.

Anyway, any potential change in trend will not will not happen right away. We remain pretty confident that the country and also the the company, the subsidiary, enter into a positive phase of the cycle, which which can last certainly longer than than 1 year.

The Emirates are okay, relatively small addition to the group. Not much to add versus what I was just commenting before.

The domestic construction activity continues to be quite strong. Clearly, there is a decline or a slow down in the residential or touristic projects, but investment in infrastructure, energy projects continue to be pretty strong, and will remain so also in the coming years.

Also, as a consequence of the attention between US and Iran. The price growth was an outcome, let's say, of two variables.

One is actually the price of cement itself, but another important one is the mix. The fact that the company has been shifting its commercial focus more on cement, less on export, and less on clinker, more on domestic cement, less on export, less on clinker.

This translating into a mix which is giving, let's say, a more favorable average price level. In addition to that, also that the cement price went up some.

Here you see the figures. Of course, we were starting from a low level last year, but the improvement is quite significant, and the second-half, unless really the overall situation worsen significantly, can continue to perform in a similar way.

Mexico, our JV, extremely good, I would say, extremely favorable results for the first 6 months. Good performance in terms of cement volumes.

The pricing effect was also somewhat favorable. We are running at a high capacity utilization.

Production costs, yes, are increasing, but they've been offset, or mostly offset, by the price effect. That's why you see that the EBITDA margin continues to be basically at the level of the previous 2 years, and EBITDA overall is reaching 265 million, which is an extremely high value.

Here we are talking about 100%, let's say, of the company, obviously our share of results reflects basically 1/3 of that. Still, in terms of let's say management effort and involvement, we consider ourselves at 50%, which is actually the case together with our Spanish partners.

There are some, how could I say, uncertainties, let's say, going forward. The macroeconomic situation is acceptable, but let's say not really too strong.

The relationship with the US and the signing, or not signing, or signing at which condition of the USMCA treaty is a critical path, let's say, for the development of the country and also of the cement industry going forward. If a satisfactory treaty will be signed soon, I think the expectation and the forecast will continue to be favorable.

Not as much if this goal would not be reached in a short time. Far, I would say, very very positive performance and very good numbers.

Nothing really difficult to do something better. On the outlook, well, I tried already to cover it when I was speaking about the different geographies.

What can we add? We don't see a big changes in the trends through the year-end versus what we faced in the first-half.

We see trends that should be pretty much consistent with the H1 performance. Probably in general, slightly better than worse.

I mentioned already the country where we are more confident to do better, but the overall underlying trend should be pretty similar. US, we said, I think the first-half was affected by some factors and reason and customer situation which were particularly damaging in a sense.

Things are looking somewhat better for the second-half. Italy, the power cost incentive are extremely significant, should continue.

Residential activity not great, infrastructure slowing down, but overall, I would say a good balance between volume, price, and cost. Central Europe, this is probably the most disappointing situation in terms of demand because we're still waiting for the support of the federal infrastructure plan in Germany.

Will it become visible? Will it not?

When? It's a bit of a question mark, but certainly is very much needed to improve capacity utilization and through that lower production cost in the country.

Eastern Europe, no big issues, fortunately. Good support from governmental initiatives in Czech Republic and Poland.

Russia, problematic situation which not sure whether it will adjust, and when. Brazil, we said, hopefully there will be also some efforts or some decision by the Central Bank to lower interest rates, which is in a way, it is the direction, but the absolute level is still very very high and is affecting certainly the construction activity.

There is a low unemployment overall in the country. Demands for residential is supported by the government.

The government is also involved into some infrastructure projects, and we're seeing a good development for cement demand going forward, as we said. UAE, just said, they are contributing positive results in line with what maybe even more than what we were expecting initially, at least.

In particular, considering the critical situation in the Gulf, and how much this has affected the traveling, the tourism, etc., in the region. Mexico, yes, there is some performance first-half.

USMCA developments, we'll see. Can change somewhat the picture, but for the moment, the trends are quite favorable.

Here we are in a situation which is not as good as the previous 2 years, but still quite favorable in our opinion. The weakness of the US dollar, yes, is an important factor, but this may also somehow reduce versus the original forecast.

Overall, this take us to a level of profitability which we project in the range of 1.1, 1.2 billion. If we ended up, let's say, at the upper level of the range, it would be, yes, a decline versus last year, but in my opinion, not so significant or not so negative, considering the overall, let's say, situation that we are facing during 2026.

We are certainly shooting or trying to do as much as possible to stay not only in the interval, possibly at the upper range of the interval, but in part it will depend on us, in part not, as usual. Again, not a year with results as excellent or as outstanding as the last two, but still in our opinion, very sound, very favorable, and giving us, again, a good cash flow generation, a good flexibility to move forward ways to, let's say, look at the cement market and our geographies for CapEx, roadmap, expansion.

We have a picture in front of us that thanks to this result, we can manage and achieve very well. In the following pages, there are more details, which maybe we can use in the Q&A session if they should be needed.

You have turnover by country, EBITDA by country, the full income statement, the cash flow statement which we commented pretty much already, and the detail of the net cash position between short term and long term. Took almost 1 hour, I think it's time to give the floor to the listeners and to the ones that are willing to ask some questions.

Please, let's go to the Q&A session. Thank you.

Yes.

Hi, Pietro. Thank Thanks very much for the time this afternoon.

I've had three questions, please. My My first was on price costs into the second-half.

It was super valuable to hear some of the moving parts, I guess, in the first quarter the first-half around positive pricing, some of those savings on variable costs. I guess as we look into the second-half and maybe more pressure from energy inflation, do you still expect to offset some of these costs?

Or or could we see incrementally a little bit more pressure in terms of price costs than than the first-half? The second question would just be on the EU ETS.

Guess we've seen more details in the last few weeks on potential changes there. Does that change your decarbonization business cases at all in Europe?

Are there any areas that you think are more interesting now, some of those changes around funding and conditional allowances in particular? Then my final question was just around M&A.

I know we spent some time at the last results speaking about some of the opportunities, but it'd be worth hearing from from you how I guess you see the opportunities at the moment, any regions in particular where you think there would be a good fit for your portfolio. Thank you.

Can you repeat the third question? Because we were not fully able to understand it.

The third question was just around M&A. I know we spent some time at the last results speaking about the optionality within M&A in a few regions.

Is this something that you're still looking at closely, and are there any regions in focus?

Good. On the power cost, well, I think that in Europe, there is certainly a trend, a need, a pressure coming from the, well, particularly energy-intensive businesses, but also in general to somehow make energy, particularly power, let's say, more available in somehow at a lower cost versus what has been so far, and also when you compare towards other geographies.

Certainly, the competitiveness of the European industry is related to a large extent to the cost of power. My impression is that benefits or some subsidies in a sense that were introduced in the first-half will continue because, again, there is a lot of pressure on it.

For example, in Germany, there is also similar, let's say, energy release program which we are following, was not yet let's say fully achieved in a sense that we can not yet, let's say, recognize from an accounting standpoint the benefit because we are working on it. There is a possibility already, I would say, in the second-half of this year to enter into the program and to receive this kind of benefits.

For Europe, I think fairly confident that we will see a new level, let's say, of energy cost in the biggest market we operate, like Italy and Germany, that should stay for some time. On the fuel, it's different because the fuel is clearly more an international market, is more affected by the fossil fuel trends.

There, yeah, there is volatility, there are increases, and the only way we have, or the main way we have to offset is to introduce as much as possible waste-derived fuels, which is also part of the decarbonization roadmap. This is again significant management effort, which has been, I would say, successful certainly so far.

In almost in any countries where we operate, our substitution rate has gone up, and we need to continue to go that way, let's say, as much as possible according to our targets that are valid both for decarbonization, but also for cost management. It's one of the few items where [laughs] you couple, let's say, roadmap targets with lower cost.

On the EU ETS, I think it's a little early to really discuss in detail what has been proposed, by the way, because it's still a proposal, not necessarily it will remain the same. Yes, in general, I would say it's pretty much what we expected.

They're giving some more time, in a sense, [laughs] which is an easy decision, if you wish, a certain postponement moving forward decreasing somewhat the reduction factor of the free allowances, which is good. A little more time to achieve the targets.

Then, yes, they are also introducing some new or different funding and the possibility to some extent to create, let's say, credits outside of Europe, and being able to use it in Europe. These are all, I would say, yeah, decision which we agree with, and they go in to the right direction.

The full details are not clear. They have to be well-studied, well-identified, the actual availability and possibilities they have to be clear very well.

Again, it's a small step, but probably a small step in let's say the right direction, I think so. It will not be the last one, but for the time being, [laughs] this is the available step and, let's say, the new advantages that we can enjoy.

On the M&A optionality, I would say yes, with as usual, some kind of cautious approach. We have seen movements, particularly in the US, at multiples that are very, very high, difficult, let's say, to justify.

At the end, when you see this kind of multiple, you also compare them, at least we compare them, with the possibility to improve significantly your industrial footprint through either vertical integration or also new equipment, modernization of the plants, because yeah, it's true that an M&A target can increase your size from 1 day to another, but also by keeping, let's say, your industrial footprint in a good shape and, in particularly, very cost efficient, or as cost efficient as possible, is even more helpful in times, particularly in times when maybe the cycle turns bad or can give you, let's say, a lot of possibility in terms of managing your, yeah, overall production network and logistic cost, for example. There are a number of interesting things to do beside the M&A.

There are other countries where the multiples are not as crazy, where maybe there we can take, let's say, a closer look at what comes on the market. I would say rational approach, certainly more interest into reinforcing the existing, either through internal or external growth.

Always compare, let's say, internal growth, internal expansion with external, because in some country, as I said, this comparison in my opinion is somewhat shifting.

Very helpful. Thanks very much.

Thank you. The two questions specifically.

On Brazil, there was a very strong performance, the acquisition of the rest of the 50% looks like it was very well-timed. Congratulations for that.

Do you have plans on growing significantly in Brazil, especially given that there are some of your competitors who are looking to sell assets? Given the outlook for the market and your performance so far, is that one place where you are in particular kind of looking to grow?

Secondly, in terms of the US outlook, you kind of mentioned the weakness in residential and nonresidential demand and offset by data center infrastructure investments. Texas is supposed to be one of those data center hubs.

Are you looking to further grow volumes in the data center aspect, and can you give a sense as to what percentage of your sales are going to that particular subsegment of the market there? Thank you.

Okay. Yes, Brazil, we are already there, I think since some years, like you said, moving from a JV to a fully-owned company.

Timing, yes, in part, I don't know if it was [laughs] No, it was good, but of course the external condition always play a significant role. The advantage now for the country is the recovery in volumes, the higher capacity utilization, and also the fact that they were starting from a relatively low level both in volume and prices.

However, yes, I think the industry structure is going and will go under some changes, also significant, potentially significant. We are, yeah, we are interested in following this kind of development.

To find a possibility to grow our footprint there. There is certainly one of the country where we think we have yeah, the possibility, because sometimes you would like to do something, but you cannot, [laughs] because there are no options on the table.

In this case, there are probably options on the table, it's up to us, let's say, to, yes, somehow find the right option or the right solution. There is certainly an interest to do that.

Texas, yeah, well, data centers are all over. We have seen, let's say, projects across the country in many different states, many different markets.

Texas is certainly, due to the size of the economy, the population, the size of the towns, is a destination for this kind of projects. It's not that we can always choose whether, [laughs] because like on any, let's say, construction project, it depends who is building, the relationship with a customer, with that specific customer, is there a bidding process, how do they select the cement or ready-mix supply.

We are there. We have a significant, let's say, market share in the state, we can certainly participate.

If we look in the first 6 months, actually almost 10% of our volumes in the country went to this kind of project, which is a lot. Was probably one of the main reason of the market growing, not really even forecasted correctly by the American Cement Association.

Now they change, also the American Cement Association change a bit. It's forecast.

They came out just lately with their summer forecast, which is showing an improvement in volume versus the previous forecast. It's certainly driven to a large extent by this kind of hubs, or let's say, yeah, big data center.

We try to do our best in [laughs] supplying them. Yes.

Thank you.

Hi. Thank you for taking my questions.

I have a few on the US. On US pricing, are you planning any increases later this summer or in the second-half?

With GCC bringing around a million tons of new capacity, would you prioritize maintaining pricing, even if it means giving back a bit of market share? Have you already seen more competition from GCC in West Texas or in San Antonio and Dallas-Fort Worth?

Then regarding the Section 301 tariffs, what was your view on the impact of the 12.5% tariff? Was it lower than what the industry was hoping for?

What would be your view then on the likely outcome of an anti-dumping investigation on Vietnam imports? What do you think the timing could be?

Maybe on US volumes, how are your volumes in July? Has it improved versus the second quarter, given the Texas weather disruptions are behind us?

Maybe if I can ask the last one on capital expenditure. If the Texas plant upgrade goes ahead, is around €500 million CapEx for the year still a reasonable assumption?

Or could it increase to maybe €700 million if you choose to go through with the CapEx on the Texas upgrade? Thanks.

Okay. No, there are price increases in the US.

Again, in particularly in the Midwest area, there is, let's say, an attempt, or more than an attempt, to go up. It's quite scatter, let's say, the pricing situation.

There are definitely area like South Texas with the imports in Houston that continues to actually somewhat increase or putting pressure on the prices. You have also in Dallas it's not a new player, but in a sense, it's a new player because when Quikrete took over, let's say, the Midlothian plant, it's another potential point of captive supply versus maybe buying from other competitors.

This again is somehow translating into some, yeah, conflict, let's say, between producer. I think by year-end, probably if we look at the average price for the US, we can move from a slightly negative sign to a slightly positive.

It will be quite differentiated between states and regions. GCC, yes, of course, it's not really a new player, because in part, they were anyway bringing cement from Mexico to prepare for the commissioning of the new line.

I think most of the competition, in this case, is on oil well cement, not so much on the gray cement, which is again, kind of a niche, but profitable one, and but also very volatile in terms of demand, because it's strictly related to the number of active, let's say, oil wells. There we need to defend ourselves.

I think we can because our, let's call it, quality and service is pretty good, but it will be certainly more challenging. The following question was

On the Section 301 tariffs?

Exactly. Here, I let Giovanni intervene because he's more knowledgeable than me on this subject.

Sure. As we've been discussing throughout this 6 months, we aren't really planned around that.

We were just waiting for the outcome. The outcome came end of July, and substantially nothing has really changed.

For most countries, the tariff increase was just 2.5%, 3%. When you convert it to dollar per ton, it's basically nothing.

Not really impactful. It's not going to help us, but we weren't really forecasting or budgeting the year around that item.

No,

what was somehow unexpected was a different tariff on Canada. The last one.

It's not frankly clear yet if the Canadian tariff, the 50% one, is going to be somehow replaced by Section 301 or not.

Exactly. Of course, if a significant increase on Canadian tariffs can have an impact on the Northeast market.

In a sense, favorable, if you wish, for the domestic producer. It's had to be seen if it actually will remain like this, because the trading between Northeast and the Great Lakes area has always been pretty significant, is a kind of a necessity for the country.

July volumes, yes, US slightly up versus last year, I would say okay. Texas plans, well, we have approved the first phase, which is the implementation is not so quick.

I think we're budgeting about $70 million this year coming from $70 million, let's say, coming from this first phase, which is the new grinding capacity, the new finish grinding, let's say, department mill together with a number of other related jobs which it's not worth describing in detail, but they are a necessity for not only the new grinding mill, but to prepare the plant for the potential, let's say, or likely future installation of the line. We need to do a lot of changes in the, let's call it, the landscape or the structure of the building, the location of the building, the electrical substation.

A number of items that are coming together. We're starting, but the impact on this year will be relatively minor.

I think if we end up at 550, 560, for the entire group, I think this is the likely number.

Okay. Thank you very much.

hi.

Hi, Pietro. Ciao.

I have four questions. The first one is just a follow-up on what you said before.

You said here, maybe we will end at, let's say, 550 or something in terms of CapEx. Now, if we take into account that we have the heavier phase of these CapEx plan in the US in the coming years, which kind of level of CapEx do you see?

Maybe still, let's say, close to this, let's say, half billion level, just to understand the trend going forward because this is just, let's say, the start of this CapEx plan in the US. Thanks.

If we move on with the new line, but I think it would take another 2 years, let's say, before really deciding. We need to finish the finish mill.

We need to finish the terminal, let's say, in Beaumont, which has to do with the new line, but not necessarily, but anyway is undergoing. We will, I think, 99% start also inside the San Antonio plant the railway terminal.

Finish mill and railway terminal plus the new terminal in, let's call it, import terminal, which is not, can be import not necessarily for cement, also for other materials in Beaumont. Once we have this, let's call it, new Texas setup running, and also looking at the trend of the demand, the expectation, etc., we can decide on the new line.

I think for the next 2 years, I think we will be in that range. Can go up 1 year to 600?

Yes, it can, but probably not beyond that level. If we really start then the new line, it would become more significant.

Then

the second question is on let's say the situation in Russia. Clearly, I know that, let's say, maybe clearly full disclosure about the underlying performance there, but considering the huge drop into the EBITDA we saw in this first-half, can you give us a sense of what is happening there?

Is it cost? Is it, let's say, this decline in prices now you mentioned especially?

Because in the end, Russia, let's say, held up pretty well recently in the past years, and now we had this collapse into the dynamics.

It's true. It's what it came all together, I think was a general consequence of the general impact from the long period of war, where at the beginning there was some, let's call it, excitement and more production and now less and less.

Then you had the interest rates rising to 15%, 16%. There is also certainly some competitive situation, which is making things worse.

There was a change of ownership in one of our competitors not too far, in a sense, not too far in terms of Russian geography, but let's say, [laughs] somehow competing on a similar market in Russia. As as opposed to Brazil, you move cement by train, you go very far.

This new ownership is clearly targeting an increase in market share, which we are not willing to give up, and is affecting the prices. I think the volume trend is something general, more related to the macroeconomic environment.

The pricing trend is kind of specific, could have been better in a normal situation, which is not right now due to competitive pressure.

Understood. Then, let's say the third question is you mentioned before capital location, you discuss briefly the M&A opportunities, but recently, you canceled your treasury shares after, let's say, a good buyback.

Is it something that we should consider as a one-off or can become a sort of a regular capital location to buying back and then canceling?

I think that we decided to cancel because we did not see, let's say, in the foreseeable future, a clear use of the shares. We thought that it would be more meaningful, made more sense to go with the cancellation.

However, doesn't mean that we are not open, let's say, to a transaction or let's call it M&A opportunity that could also involve our equity, in a sense that if tomorrow something really compelling comes about and make sense in a financial and strategic sense to use the shares, we could always do it. Simply instead of using shares that are already in your pocket, you issue new ones.

To keep those shares in portfolio for probably a long time, didn't appear to us like a good decision. We thought that it was preferable to cancel and, as I said, remain however open to interesting combination if they come about.

Will this happen again? I don't know.

It depends pretty much on the, I would say, CapEx plans, certainly, because CapEx are more tangible and more significant for the reasons that we just mentioned, decarbonization, US modernization, etc. Also results a little less good, still a very strong financial position, results, but maybe not as good as, yeah, not as good as the previous 2 years.

We don't have to rush. We will check.

I think that if we open a new buyback program, then yeah, probably we are more likely to cancel the shares than the opposite,

yes. Thanks.

The last question is on Germany. Considering Germany was, let's say, a country not performing, let's say, how can we say, below expectation.

Do you see, or at least do you have any evidence from your, let's say, sales force that we may have some positive impact in the coming quarters, or even, let's say, in Q1 next year from these long-so-waited infra program? On the pricing side, do you see the possibility, you mentioned before US, but do you see the possibility to increase a little bit pricing this year?

Or considering that the current demand level, maybe we should think about, I don't know, next year to try to raise again a little bit prices there?

Yes. I think I think the the pricing in Okay, in US is is mostly related to the to the market situation.

Again, it's very regional where where where volumes were more affected or you you have a wider range of supply like in area like Houston, Southern Texas. You need You need some some, let's say, stronger recovery in the demand, I think, to to to be able to to go up.

We're not, we're not entering, let's say, a a price war or something similar. It's simply kind of unable to to to to apply certain increases.

In Germany, it's a little different, but but Germany, as opposed to Italy, right now has a little more difficulties in in pricing increases also due to the Well, first of all, to the to the low capacity utilization, which is true also for Italy, but also to the to the highly fragmented industry structure, which in many regions is clearly or can clearly damage the price level. Plus also the vertical integration, let's say, of the producer is not as significant as we have in in Italy, and you have an again, a number of customer in in ready-mix that can, correctly, can play can play a game on on prices by addressing or asking, let's say, offers from from from different producer, which is the way to do.

Again, is absolutely correct, but in a situation where the capacity utilization is underutilized is sometimes forcing, let's say, or [laughs] not forcing, but inviting, let's say, producer to try to to sell more by by offering discounts, etc. We hope, yeah, we we do hope, and we are, let's say, pretty confident that what you were mentioning, the the greater demand coming from the famous infrastructure plan, should shall shall change, let's say, the the picture a bit.

When, we don't know. There the feelings, the the sensation is that, yes, something is already moving, let's say, in the right direction.

It's certainly needed because the economy, the the strength of the economy is not very high. You can see also in terms of the industrial footprint suffering, etc.

Without some help from the governmental projects, is difficult to imagine a significant recovery of the volume, which is certainly very much very much needed to stabilize the price, and maybe also being able to to increase them a bit.

Yeah. Hi, guys.

Thanks so much for taking the time. Hey.

Two quick ones, a lot of them have already been asked. The first one is, looking at the guidance range, I think a lot of the moving parts here are quite clear.

You've been relatively open about all the variables. Could you just specify what are the assumptions, especially the big ones like price, volume, that kind of thing, to get you to the top or the bottom end of that EBITDA range exactly?

What are the big differences?

I think it would be mainly the volumes. On the pricing, in the US, maybe, as I said, there could be a second-half slightly more favorable.

If not a widespread, let's say, increase, yes, some improvements in the area. For the rest, it would be volumes.

A trend in volumes, particularly in Europe, somewhat, let's say, better than the first-half, which was I would say overall. We assume a cost trend which is, like happened for some area, for power and also fuel, still relatively favorable.

Kind of no significant disadvantage on the variable cost. If we can go up with the volumes, immediately, particularly in the area where the fixed cost represent a significant portion, let's say, of our production cost.

Clearly, there are differences between, I don't know, Brazil versus US or Germany, where the weight of the fixed cost is much greater. There, to really achieve, let's say, your target, you need to possibly sell more.

This is what would make the difference together with a pricing level, which will remain anyway favorable, because it was already favorable in the first-half. Can be slightly more favorable in the second-half in countries like the US, where we had a negative variance.

Yeah. Perfect.

Then second question. Can I ask about your hedges?

You've spoken about it before, I think, but what's your hedging level for H2? How does that compare to H1?

I think I recall in the original guidance, one of the reasons for your assumption about an EBITDA decline was that in the second-half of the year, you're a little bit less hedged than in the first-half of the year. What's your hedging level for H2?

Also, have you bought forward any power or gas yet for 2027? Yes, yes.

It's a kind of rolling. We are on average, I think we are around 50%, 50% to 60%, maybe on fuel a little bit more, on electrical power a little bit less.

There are some area, some plants where you actually cannot because there are some plants, particularly in the US, where the energy supply is regulated and you cannot buy from someone else and you take the price that they are setting. There is really basically no hedging possibility.

In general, I think we keep kind of a rolling. Sometimes there could be months or quarters where the hedging will increase because we see maybe the pricing becoming more attractive, particularly on the power cost.

You can consider basically half.

Based on what you're saying, I would think that you are a bit hedged for 2027 already at this point,

but

it'll probably be at higher levels now than Yeah, okay, perfect. All right.

Thank you so much.

Correct. Yes.

You're welcome.

Hi. Good afternoon.

Just one question from my side. I know you guys are pushing hard for your US plants convert to natural gas for net-zero goal.

I wonder, how's the progress there? Are you expecting to benefit from the recent, the gas price coming down in the second-half?

Do you expect any margin improvement on this front? Thank you.

No, we don't have in that forecast really any margin improvement coming from that. The program is absolutely going on.

We will have, if not all, 95%, let's say, of the plants being able to use gas, or to switch basically from 1 day to another from either petcoke or coal to gas. This is something, yeah, which has been the main driver originally, yes, has been the decarbonization, but it could also become something interesting from an economic standpoint.

Already in some plants, like Maryneal in Texas, we mostly use already gas because it's more advantageous. In others, it's still not yet, let's say, more advantageous.

With the rise of the oil and the fossil fuels, it might well become. To answer your question, there's no specific bonus, let's say, included in the forecast.

Thank you.

Thanks very much. I've just got a question on cash generation.

It was weak in the half. You have flagged the increase in CapEx, which I think is understandable.

However, that doesn't talk to what is quite a meaningful decline, €100 billion year-over-year in the operating cash flow line. Could you give us a little bit more color on what's going on there?

Is this a working capital build? How to think about cash generation in the second-half?

Thank you.

Yes, it is mainly working capital. On the changes in working capital, we absorbed basically €100-plus million, which last year was much less because we had 50 approximately.

This is coming from the trade receivables and trade payables, although if we look at the let's say days outstanding it's not that we have been cashing, let's say, money in a worse way. The terms of the receivables have not changed.

In part is seasonal. It's true that also last year was seasonal, same, let's call it, period of the year.

On the trade payables, there were some specific reason. For example, in the UAE, we had some old payments due to suppliers which were, how do you say, overdue and we wanted to clear.

Certainly this made quite a difference, and is a one-off in a sense that it's not recurring. The main reason is really the working capital changes, inventory, trade receivable, and trade payable.

Okay. Why did you have such a shift in your payment terms?

Why were you paying people later and now paying them more quickly? What's going on there?

No, this came with the acquisition. It was a situation included in the books of the company before us.

Understood. Then cash in the second-half, do we assume that your receivables and payables days stay the same as they were at the end of the first-half, or do we get a nice working capital inflow?

How do we think about that?

No, I think we should reverse, let's say, a trend. We don't see a reason why we should not achieve cash generated from operation in terms of ratio to net sales, which is similar to what we had last year.

We can lose maybe, okay, 1 percentage point or maximum 2 percentage points, but not as much as it happened in the first-half.

That's very helpful. Thank you.

Yeah.

Good morning, and thanks for the time. Maybe one question concerning the CapEx plan in the CO2 capture in Germany.

Are there any updates? How's it going?

Have you presented the project to the authorities to try and get the subsidies? I think the window closes in September, but any more color would be very much appreciated.

Thank you.

Okay. No, basically the decarbonization project which we started for the Deuna plant is on hold at the moment.

We were not able to, as we say, to de-risk, let's say, completely both the let's call it technology, but also even more important, the logistic and the storage. At the moment, we cannot proceed.

We are a number of other projects which are not carbon capture, they are in Deuna, for example. We are planning a complete, let's say, modernization of the plant, which is we think a better idea because if tomorrow we will be able to get back to the carbon capture, we will apply the carbon capture to an equipment, let's say a production facility which is already modernized, let's say, best available technology, traditional, let's say, technology, versus attaching a carbon capture equipment to something that was built in the '70s, which is okay, still working, it's a good plant, but would make a big difference, in our opinion, to do that.

To apply, let's say, carbon capture to a modern plant versus an older one, assuming that all the, let's say, surrounding conditions are there.

Clear. Thank you very much.

You're welcome.

Thank you. I don't know, probably there are no more listeners, but [laughs] to the one that are still there, thank you for listening and have a nice summer, and a nice vacation if some or all of you still have to enjoy the summer holidays.

Thank you so much for listening, and so long.