Hello, and welcome to Rockwool A/S conference calls regarding the results for the first quarter of 2026. My name is Kim Junge Andersen, I'm the CFO of Rockwool A/S.

Here is present CEO Jes Munk Hansen. For the first part of this call, all participants will be in a listening-only mode.

As a reminder, this conference call is being recorded. First, Jes will go through and give you an update of the results for the first quarter of 2026.

Afterwards, we'll be ready to answer all your questions. Before I hand over to Jes, I must ask you to [look at slide 2?]

, which is the forward-looking statements. Please be aware that this presentation contains uncertainties.

Now we can go to the next slide, slide number 3. Jes, I will now hand over to you.

Thank you, Kim. Also welcome from my side.

As Kim said, I will start on slide number 3, where we have our key numbers. Rockwool Group delivered resilient performance in Q1, despite a challenging operating environment, with revenue growth of 2% driven by Eastern Europe, the United States, and Southern Europe.

The EBIT margin, as you can see, reached 13.2%, what we believe is a satisfactory result, though 2.2 percentage points below the record high of last year. Weak construction market, particularly in Canada and United Kingdom, pressured the margin, as did higher logistics costs and an increased cost base.

Go to page number 4, focus on the revenue in Q1, where overall the construction market continued to be affected by the geopolitical turbulence and macroeconomic [headwinds?] .

The first 2 months of the year were impacted by adverse weather across Europe and North America. However, volume demand recovered in March and onwards.

We successfully restarted the Swiss factory in Flums, the Flumroc factory during the quarter, but the production stop had an adverse impact on performance in the quarter. Additionally, the conversion to electric melting and upgrades to one of our production lines in our Roermond factory temporarily reduced capacity.

The growth was driven by higher volumes and a minor increase in overall sales prices. Page number 5, where you see the revenue by business segments.

Insulation revenue grew 2% in local currencies, with solid growth in the United States and key markets across Eastern and Southern Europe. That growth was partly offset by decline in Germany and Switzerland.

In our Systems segment, revenue grew 4% in local currency. Rockfon Europe-Asia delivered solid growth across key markets, Lapinus and Grodan also achieved growth, while our Rockpanel business had a stable quarter.

Page number 6, where we look at the regional revenue in the quarter. In North America, we sustained the growth momentum, while Canadian revenue declined in a very challenging market, characterized by weak residential and ongoing trade uncertainties.

In Western Europe, revenue declined 1%, as solid growth in Southern Europe was offset by market-driven declines in the UK and Germany, and delay in construction due to the hard winter in January and February. Eastern Europe delivered strong 15% revenue growth, driven by solid growth in Romania and Hungary, while Poland increased double-digit in the quarter.

In Asia, revenue grew more than 7%, with decent growth in several of our markets. Page number 8, where we look at the profitability in the quarter.

Although the EBIT margin was down 2.2 percentage points, we consider this a good result under challenging market conditions, compared to a record-high profit level last year. Margins in the quarter were impacted by several factors.

First, a very weak market in Canada and United Kingdom. Second, higher logistics costs and a higher cost base.

Third, additional costs related to the Flums factory in Switzerland and the planned stop in the Netherlands related to the electric conversion and other upgrades of the production line there. Overall, these four factors accounted for about one-half of the margin reduction, that is equivalent to approximately 1 percentage point.

While production is up and running in Switzerland, we do expect the running-in of the new electric melting technology and these other upgrades in Netherlands to affect the margin for the rest of the year. Last year first quarter, donations to the Foundation for Ukrainian Relief was €6 million out of the total donation of €13 million, while no donation was recognized in 2026.

On the next page, we look at profitability by segments. First, the Insulation segment: looking at profitability by segment, the EBIT margin in Insulation was down 1.7 percentage points compared to last year.

The result was impacted by several factors, including the ones I just mentioned. In the Systems segment, the EBIT margin decreased 3.7 percentage points, driven by inflation on input costs that were not sufficiently offset by sales price increases.

Additional factors include increases in provisions as well as increased scaling investments in our new business area, which is part of the Systems segment. These new businesses mainly consist of our water management systems and our prefab construction solutions.

Let's look at our investments in Q1. Our biggest investment in Q1 related to the construction of new factories in the United States and India and a new technical insulation production line in the United States, and production expansion in Romania, as well as a large logistics project in Germany.

The new factory in India is expected to come online during this summer. The sustainability investments are mainly related to electric conversions and in France.

On May 5th, we signed an agreement to acquire Ravago's stonewool factory in northeastern Hungary, with a capacity of 40 million, sorry, 40,000 tonnes. The acquisition will support our long-term priority to meet regional demand.

The transaction is expected to close during 2026, of course subject to closing conditions and regulatory approvals. The acquisition is not expected to materially impact our 2026 outlook.

Then we have our cash flow for the quarter. As expected, our net financial position turned into net debt of €300 million.

That brings our gearing ratio at the end of Q1 at 0.4, which is well within our policy of maximum ratio of 1. At the end of Q1, we had unused committed credit facility of €400 million.

Cash usage for working capital during the quarter was unchanged compared to Q1 last year. The development in working capital ratio was mainly due to the planned stock build and a higher than usual seasonal increase in trade receivables due to the revenue uptick at the end of the quarter.

Free cash flow decreased €68 million compared to the same quarter last year, mainly from higher investments and less cash from operating activities. Last but not least, to our outlook on page 12.

The revenue, as previously communicated, we are now expecting revenue growth to land between 3% and 6% in local currencies. The growth outlook is based on the increased activity we saw in March and thereafter, and the announced sales price increases in the range of 6% to 8%, which will mainly take effect from the mid-year.

We continue to closely monitor, of course, the ongoing geopolitical and macroeconomic uncertainties. EBIT group margin for 2026 is still expected to be between 13% and 14%, as the announced sales price increases are expected to cover input costs and logistics inflation, whereby maintaining profit margins.

Investments: investments in 2026 include capacity expansions, as already mentioned, in India, Romania, United States, and France, along with acquisition of land for further manufacturing sites in several countries. Overall, our total investments are expected to reach around €700 million in 2026, excluding acquisitions.

That concludes the run-through of the key data points, and I hand back over to Kim.

Yes, thank you very much, Jes. We'll invite questions now.

I just have a small request for you: even if we limit to two questions at a time, please allow us to answer one question at a time. Thank you very much.

Thanks, Jes and Kim, for the time today. My first question was on cost inflation.

Thank you for providing some of the color in terms of the pricing changes you're looking to put into the market. Be interested in what you're seeing in terms of energy cost inflation and transport inflation as we go into the back half of the year.

Gas was maybe towards higher euros and similar for delivery costs. That would just be my first question.

Thank you. Yes, let take that one, Ben.

We have seen an increase in cost inflation, including transportation. It is so that, as our energy consumption consists of three energy sources.

One of them is foundry coke, which is the largest energy source. Then of course, we also have electricity and then gas that we also use in the manufacturing site.

Foundry coke is where we have these fixed price agreements a quarter at a time. That has not increased significantly between quarter 1 and quarter 2, there's not so much inflation there.

Of course, on the gas and electricity, they are more, you say, correlated to the general sort of energy inflation in the market, and there we have seen increases. As mentioned, we have a coverage in place for half of the expected consumption for the second half of the year.

Of course, cushioning this a bit. There is inflation coming in the second half also on transportation, mainly in North America.

We still believe that this 6% to 8% price should be enough to cover the inflationary impact in the second half.

Excellent. Maybe just a second one on capacity expansions outside of the ones that you're investing in now.

I'm thinking Feluy, Sweden, Italy. Could you maybe share an update on some of the timelines for these projects?

I'm interested just given, I guess, the uncertain economic backdrop in Europe seen in terms of interest rates moving higher and some excess capacity in the market. Could some of these later facility openings be flexible in I guess their opening times or how you adapt to some of those additional factors

particularly? I can give you a couple of data points.

Now you spoke specifically about Feluy, let's take those. Next year we open up Romania factory, where we are adding capacity to our existing facility in Ploiești.

There, of course, you should also notice that the capacity we have bought in Hungary adds 40,000 kilotonnes that is for Romania. If you look at it, just a small little detail, Romania is better served from Hungary due to the mountain range going.

That's a small little detail. Romania will come next year, and then the acquisition will add another 40 kilotonnes there.

Then the next one coming online in Europe will be the Soissons factory in France. 2029 is that expected to open up.

That was for Soissons. Then, I don't want to give too many details on where we have announced, but where we haven't set a date yet, but after 2030, it will be Italy, the one in Birmingham, and outside of Stockholm, European capacity.

I think it is important when we talk capacity also to talk about productivity. We are very focused on, of course, also optimizing existing footprint.

We are a manufacturer that pays a great attention to productivity, the usual approaches with lean and kaizen. There's quite a lot more that we can pull out of our existing footprint to optimize capacity utilization, not just in Europe, but throughout the group.

Excellent. Maybe just a follow-up on that.

It seems like maybe the France factory Soissons is a little bit delayed versus prior expectations there. Is that a conscious effort on your side, or some of the progress is taking a little bit longer to move on that plant?

Oh,

it's not significant. The delay that originally was caused by getting building permits, that's what pushed it originally, but else the project is very in line.

The timing of all these, of course, what we're trying to hit here is this expected uptick in Europe in what we call the Renovation Wave. As in Europe, the new EPBD regulations that now are falling in place, we are following very, very closely country by country and are modeling what volume uptick will take place the next few years.

Our logic is driven by the expected uptick due to the EPBD regulations.

Very clear.

Thanks, hi everyone, thanks for taking my question. The first one, a bit more detail on your volume expectations for this year, possibly by region and key them?

It's just that if I take some midpoint of your pricing, 2% for H1 and 7%, that gives full-year price increases of about 4.5%, which is the new midpoint of your local currency guide. Would assume, yeah, any detail here would be helpful.

Anna, we had a little bit of trouble with the sound, apparently. Could you maybe just repeat?

Thank you.

Sorry about the sound. Could you just provide a bit more detail on your volume expectations for this year, possibly by regions?

Thank you very much. As Jes said, a volume pickup in the end of the first quarter was driven by some positive moves in some of our key markets.

We can also see that in the second quarter, we see a higher volume, most likely that there are competing materials that are increasing prices faster and higher than we are. Our increases are mainly coming around June, July.

In our forecasting assumptions, we have assumed that we will have a little bit of stagnation on volume in the second half. To be seen whether that'll be realized, but at least the assumption that we have put in the 3% to 6% growth for the full year is that that volume will start to be a bit stagnated compared to last year in the second half of this year.

Anna, was there a second question? Anna Schumacher, your line is live.

Hi, sorry, I was on mute. You called out quite solid growth in Southern Europe, and, yeah, from the comments, it sounds like it's mostly volumes.

What is driving this? Is it new build, renovation, new channels?

Thanks.

We had a little bit hard time, we just repeated it to each other here. I understood your question was targeted towards Southern and Eastern Europe, the volume pickup we've seen.

As it is very important to understand we compete against glass and we compete against foam plastic products. When we look at the developments in cost, we do believe that the foam plastic products are harder hit than we are on input cost in the market, or at least that their price points and availability are under strain.

We are winning, I believe, market shares across, and that drives growth in East Europe, PIR, PUR products. In Southern Europe, it's been a growth trajectory we've been on for quite a while.

I think we should highlight again that fire protection regulations in Europe, particularly also again in Eastern Europe, Romania, Poland, are getting more and more attention. When we become more competitive price-point-wise against the flammable products, then there's a tendency to shift over to stonewool, driving some of the growth.

Great. Thank you.

Morning, Jes and Kim, thanks for taking my questions. The first one is just on pricing.

I see you've announced 6% to 8%, but given your hedging levels and also the comments that you've made on foundry coke being flat between Q1 and Q2, how much of that announcement do you actually need to be realized to protect your margins this year? Now,

first of all, it is important to understand that input costs, of course, vary across regions. It's a different profile on input cost in in North America than it is in Europe.

Just as an example, we are harder hit on transport cost in in the US because we have longer, further transport patterns in the US, and the diesel price that has gone up in the US hit us hits us there. Input cost depends a lot on on the regional profile, to say.

Our pricing is of course also adjusted to local market condition and product groups and applications. It's not like one for all, that all products, all regions, all customers get exactly the same number.

In totality, in order to balance out the inflation, it is going to be around the 7% that that we need to harvest in order to balance out inflation.

Thank you. Then my next question is just on some of the one-offs.

I think you called out specific factors: Canada, the UK, but also Netherlands, Switzerland. How much of this would you expect to sort of continue for the remainder of the year?

On the topic of one-offs, I think you mentioned India starting online this summer. Will there be any one-off startup costs related to that, and is this already in guidance?

To take your last sub-question first because it's the quickest to answer: India, it is minimal what you will see affecting the numbers. It is single-digit in India.

It is already in the guidance for that startup. That is well planned.

The bigger challenges that also will take longer time to get resolved, is the market in Canada and the market in the UK. Both are down a lot.

You can just read public market reports about construction industry in Canada. Canada is hugely affected by the trade uncertainties with the US.

Investments in commercial, industrial, and in residential has stalled. They're actually down quite significantly.

That I don't think will resolve quickly. I do want to note that we believe we are winning share in this suppressed market, but because the overall market is down so significant, even market share gains from our side does not result in growth in Canada.

The UK is a different story, but has been somewhat quick in decline the last six months now and is caused by a couple of things. Our read on it is that the macroeconomics in the UK is generating a lot of uncertainty and hence a subdued willingness to invest in construction.

That is one thing. The other one is that the UK has instilled a new process for building permitting, which we believe in the long term will benefit us a great deal because it is very much focused around fire and fire regulations.

They're struggling with getting the bureaucracy of this new permitting process to get up and running, so that backlog of permitting is dramatic in the UK right now. We do, as that resolves, we do see an improvement in the situation in the UK.

Else, the UK market will also simply depend on the macros in that market.

Thank you. Sorry, can I just follow up on sort of the other issues with Netherlands and Switzerland?

Would that be a drag again in Q2 and beyond?

It won't change much in those two markets, but they're small for us, you won't really see them materially impacting the overall numbers.

Perfect, thanks for taking my questions.

Thank you. Also a few questions from my side, as wished I would do them one by one.

The first question goes about this price hikes. As I understand, there's a 3 to 5 months of delay between energy cost inflation to your new and higher prices.

Is there a reason for this long delay, not least as this appears to be later than your main competitors? That would be the first one.

Claus, it is quite different in the various markets. There are different traditions and different laws that govern, and also commercial contract, that govern how you can increase prices.

Some places we can increase prices faster, and some it simply takes a 3 months warning period. I don't think that's unusual.

I know it's not an all fair question, but it's also more compared to your key peers who seems to be a little bit more aggressive or faster in implementing these price increases. Maybe they have a bigger problem than you have, that might be the reason.

There can be many reasons. That's not what we have registered in the market on our direct peers.

We have also not used force majeure or instruments like that. You could be very right that some of the foam and plastic products are in a very different situation because their input costs have gone up dramatically more as they are based on petrochemical products almost completely.

Makes sense. Then the second question: is there any of your more meaningful markets where you have decided not to raise prices?

No, none of those.

That was short. Thank you so much.

Thank you very much, and hi Jes and Kim, and thank you for taking my questions. My first one is on the recent acquisition you made in Hungary.

I was wondering if this signals now a preference for doing acquisitions in capacity-constrained markets and whether you could maybe give us some examples of other markets where you could do similar transactions to gain volumes.

I think your observation of that it is a somewhat consolidating market is correct. We don't have a very strict, you can say, M&A search process.

We are a little bit more opportunistic in our approach and will only do it where it makes sense obviously, which means where we need the capacity, but also where the acquisition target has a high technological level that fits into our quality levels. That simply limits the opportunities that arise.

Thank you very much. I thought so, too.

My second question is on the data center opportunity in the US. Jes, you've mentioned in a recent interview that the US pipeline alone that includes around 1,500 potential data center projects, which does underline a sizable medium-term opportunity for you guys.

I was wondering if you were able to quantify this a bit for us, maybe what the average ticket size is for a data center project, and considering your situation in the US right now, would you even have available capacity to meet this increased demand? Thank you.

First, I have to start and say that we have not been a big player in that arena the last few years. The way data centers now are constructed is turning in our favor, and let me explain briefly why.

A few years ago, the main focus was building what you call data centers, mainly data repositories. It was cloud solutions.

There was a lot of focus on bits and bytes and building that. That had a certain building envelope that was not demanding what we can offer with our products, not to the same degree.

As these investments now move over to a slightly different type of data centers, namely AI data processing, the equipment in these facilities are becoming significantly more expensive. It's basically high-end processors, as you know.

They require both more cooling and more stringent fire protection. That is moving into our strength: the cooling insulation from our Technical Insulation team and the fire protection.

The numbers are big. Yes, it is around 1,500 projects.

They are in very different stages. Some of them are early planning and some of them are being implemented.

It's a big pipeline, and of course we have organized around ourselves harvesting that increasingly. Just to give you an idea, for the two, and they are of course all different sizes, but just to give you an idea, it is mainly the big four that we work with in this arena.

We won two big projects, I don't want to mention the customer name, but that alone generated around a million US dollar in fire protection and in cooling insulation. Please don't multiply that with 1,500.

Excellent. Thank you very much.

hello, thank you for taking my questions. My first question would be on the net working capital.

It was somewhat higher, I think, stands at 14.2% of 12-month sales, almost a percentage point higher than usual, or at least than last year. In your report, you mentioned next to the seasonal developments that there was planned higher inventories.

I'm just wondering what you're planning for, considering you mentioned that H2 sales volumes should stabilize?

Thank you, Alexander. When we build inventory, it is not to keep that inventory for several quarters.

It's typically to keep inventory for a few months. The build-up of inventory at the end of quarter 1 was to cater for some maintenance shutdowns in some of the factories, amongst others in Norway.

We also had, you can say, all the growth that we had in Q1 in fact came in March. There was a higher sales in March compared to March last year, and that simply build up accounts receivable.

We're typically collecting within 20 days after the month. There was a build-up in accounts receivable, and then there was a higher inventory due to this inventory build-up to be used in the second quarter.

Thank you for that. Now the second question I would have would be on the margin.

A colleague of mine already alluded to it, but basically with the 7% price increases that are taking effect as of Q2, I guess it's reasonable, in relative terms, that there's going to be some dilution effect on the margin. I'm wondering if the prices remain where they are, and if volumes don't change dramatically, that basically we would end up at the 13% to 14% guidance, more towards the bottom end of that range, and less towards the upper end.

Is that correct?

We are guiding in the range of 13% to 14%, but I think it's fair to say that what we see, the volume growth we are seeing here in quarter 1 and also in quarter 2, are mainly within our flat roof segments. That's where we have a selling price that is slightly lower than the average.

That's one element of it. I would say to quantify whether it's going to be close to the bottom of the range or in the upper end of the range, I think I'll just wait until I see the Q2 results, and then I can guide you slightly better on this one here, because it is mainly in Q2 we're going to see the bald impact before our prices start to pick up.

Okay. Thank you.

Yes. Thank you very much first for answering, my first question would be on your CapEx program.

I understand that this year you're probably targeting nearly half a billion euro of investment in capacity and sustainability. It's probably the largest investment that you're doing in the group history.

I understand that this is going to continue for the foreseeable future, like this half a billion euro investment per year. What kind of economics do you target on those investments?

What kind of return? If you can explain a little bit, how does it work, the timing and the potential impact on earnings in the coming years?

It's for sure, Yassine, it is clear that to build these four capacity expansions at the same time in parallel is a step up. Having said that, they are of course being built in different geographies, and we see growth in all three geographies: Asia, Europe, and North America.

That we need to build capacity. I would have wished that we could have built the factory in France 2 or 3 years earlier.

That would have sort of smoothed out a bit of CapEx impact, because we haven't opened a new factory since 2021. It would have been fantastic to have that factory in France a bit earlier.

Having said that, we need the capacity, and they are now coming sort of in subsequent years and going live into the market. Whenever you open a factory, you typically have the first 12 months of running-in cost.

That is typically for the larger factories, not the one in India, but for the three other ones, activity in the range of €10 million to €15 million as a one-off cost in the first 12 months of operating. After that, it sort of becomes normal operations.

These factories of course are all with the latest technologies. That means they will hopefully, when they're fully utilized, will be the most profitable and most effective factories we will have in the group.

How to put a number to that, we have not really done that exercise, but as I said, it is of course part of the plan that they will contribute to a very good return once they're up and running. We are in an industry where it takes 3 to 5 years to build these factories, and that means we have to be patient, shareholders have to be a bit patient, because we do need that capacity to continue to grow the company and also a profitable growth.

What I'm trying to understand, that when we look at, for example, historically, when you were investing €100 million, you were able to generate approximately €100 million of sales, or a bit more, a bit less depending on the investments, with mid-teens margin. Is it what we should expect?

If you are investing €500 million, we could expect €500 million of additional sales over time with a margin a bit above the group?

There is no one rule of thumb. We're building in North America, it's the most expensive place in the world to build, but that's also the place where we have the highest both sales and contribution profit per produced tonnes.

It all sort of links in. France also have a relatively high CapEx number, but again, it is also price-wise and contribution-profit-wise in Europe one of the most attractive places.

Romania is a place where you can say the sales price are lower, but the CapEx is also lower. It's all sort of ties in.

As I said, all of the factories will be more productive than any of existing ones. I don't have sort of a one number to give you that if we spend €100 million...

I understand that when we look at this number, which is quite high, with €500 million of addition of CapEx on top of maintenance, and I think a lot of investors try to understand what returns do you target on those investments. Do you have a minimum number that you're targeting?

All of them are living up to sort of our internal sort of thresholds, which we have said before, that we have sort of a threshold around 15% return on invested capital. They're sort of all of them living up to that.

As I said, it's very different market to market.

The 15% is before tax?

That's before tax.

Thank you.

Hi, good morning, thank you for taking my questions. The first question, I just want to confirm, Kim, you mentioned this Swiss plant and Netherlands electrical conversion as 1 percentage point on EBIT margin in Q1, is that correct?

Should we expect some margin recovery in Q2 if operations normalize?

The Swiss one it's not the conversion, that was the factory breakdown in the autumn that stretched into the beginning of Q1. That factory is up and running now, so that impact is not going to continue into Q2.

Whereas the one in Roermond is a sort of a bigger conversion we're doing on a major line down there, and that will impact also the result in Q2.

Thank you. My second question is maybe more specific on the return on CapEx in this Norway plant where you have €15 million added.

What kind of annual ROIC or ROI, and what's the timeline should we be expecting? Is it going to still be at the 15% as you just mentioned?

No, the investment we're doing in Norway, I think I alluded to somewhere, is just a warehousing that we have decided to acquire a land and construct a warehouse instead of renting several warehouses in the area. That's not a factory per se, it's just a warehousing project.

Thank you.

thanks for taking my question. I have just one.

On your recent acquisition, could you give us some color into the transaction value, how much sales you expect from the plant once it's fully consolidated, we have some numbers around it?

Yes, hello. As I said, the plant has this capacity of 40 40,000 tonnes, and the acquisition price, which will be revealed in the annual report anyway, is sort of in the mid-€40 million.

It will not have a substantial impact in the financial results for this year, neither on sales or on earnings. As I said, there's a regulatory sort of period until we can start to consolidate this into the group.

Yes. You mentioned that this year it's not going to have so much of an impact, but once it's fully consolidated, do you have any expectation of how much sales it could generate?

We will not reveal that. We do have an expectation, yes, but so it'll be blended into the entire group once we release the 2027 numbers.

Thank you.

Good morning, gentlemen. Thank you very much for your time.

Two questions for me, they're both on Q2. The first question is, can you, and I think this has been asked a few times in one way or another, but can you talk more specifically about the margin impact you expect for Q2 just from the fact that you're not increasing prices yet and you may have some of that input cost inflation?

Is there any way for us to just understand if you isolate that price versus cost headwind, is that meaningful at all? How should we think about that?

Julian, we will not do an outlook quarter by quarter, you'll just have to be a bit patient with us. As I said, my take it at least in the forecast assumption is that we will have, you can say, an impact from the higher input cost in Q2, and then we will cover margins gradually in Q3 and Q4 so the full year that we have, you could say, the same expectation for margins on EBIT for the full year.

That means we'll most likely do a bit better in the second half compared to the previous outlook.

Understood. Then switching to the top line.

The market challenges in the UK and Canada are very clear. Canada specifically declined quite meaningfully last year in Q2.

I remember this well, I think it was one of the reasons for your profit warning at the time. My question is, with Eastern Europe accelerating so meaningfully like we've already seen in Q1, and the base effect in North America becoming meaningfully easier for Canada and the US still doing well anyway, is it fair to think that volume growth in Q2 could be well ahead of Q1?

No, as Kim said before, we don't think Q2 will be way ahead of Q1 on the volume side. We don't see that.

No to that.

Do you follow my reasoning, though, with the base effect being significantly easier in North America? Is there something I'm missing?

That's also based on easier comparables in the latter half of last year. Then I agree.

Okay. Thank you very much.

Hi, good morning, everyone, and thank you for taking my questions. I also just have two.

Firstly, on the Systems margin: it's obviously still under quite some pressure, and you explained that there was some inability to pass through prices in time to offset rising costs, bad debt provisions, and so on and so forth. Could you explain a little bit about your expectations for the rest of the year?

Are a lot of those problems, primarily pricing, going to be recovered throughout the year, or how should I think about the phasing of that division on margin for the remaining quarters?

I can give you some insight to that. The bad debt, of course, we're still working on getting secured.

Then we do expect an improvement in the profitability in the Systems division as our measures take effect in those markets. Some of them are in Systems, as more project-based businesses, and it takes a little bit longer to flush it through depending on how the projects are set up.

We do expect an improvement in that area.

Perfect. My second question then: I recognize you just mentioned that you don't necessarily expect volumes in the second quarter to be much above the first quarter, but something that's been, I guess, spoken a lot about sort of across the entire building materials sector is this idea of pre-buying in the second quarter ahead of price increases.

Is that not something you think could potentially impact volumes going into the second half, I guess?

Chase. The we didn't comment on the second quarter, I did comment on it.

I think the the the volume in the second quarter for sure will be positive. It's the volume in the second half that in our in our assumption that we have given you 3% to 6%, there we have assumed that volume will be stagnant compared to last year.

Whether this is going to be the the case, we don't have have an order pipeline, as more than than 2 months out, we are still sort of a bit uncertain how the autumn season is going to pan out in this uncertain times. As that there might be a little bit of pre-buying here in quarter 2, but our distributors, similar to us, we cannot pre-buy a lot of physical products because they simply take up so much space.

You typically see if they buy forward a single day, it's a it's like a 5% growth in a in a month, but that that's more or less it. I don't think a lot of pre-buying will be will take place simply because the physical constraints that that that our our customers will have on on on their own storage space.

Great. That's very helpful.

Thank you for the clarification, gentlemen.

Thanks, both. I just had a quick follow-up with regards to Germany.

I think you called out that in the decline in Q1 was that solely due to weather, and so were the trends in April also good? Thank you.

It was a significant impact, not only in Germany, that the weather was so bad. All outdoor work, whether not roofing or, you can say, facades were at a very, very low level in Northern Europe.

Yes, the improvement has continued. So.

Great. Thank you.

Thank you very much. Jes and I thank you for today's earning call and for all your very good questions.

We appreciate your interest in Rockwool. If you have further questions, please feel free to reach out to me.

You may find the Rockwool contact details in the investor section and our corporate website. Have a very nice day.

Thank you.