Holcim Ltd

Good morning. Welcome to Holcim's First Quarter 2025 Trading Update.

My name is Bernd Pomrehn, and I'm pleased to be here with our CEO, Miljan Gutovic; and our CFO, Steffen Kindler. After their presentations of our results, you will have the opportunity to ask your questions.

[Operator Instructions] And with this, I'll directly hand it over to Miljan. Miljan, please?

Thank you, Bernd. Good morning to all of you and welcome to Holcim's Q1 trading update.

Steffen and I are pleased to be presenting our results to you today. And of course, there will be time afterwards for your questions.

To start with, let me take you through the key highlights. We had a good start to the year in Q1.

Our net sales were stable versus Q1 2024 despite unfavorable weather conditions in North America. We achieved over proportional growth in recurring EBIT this increased by 1.7% in local currency versus a year ago.

As you can see, we continued with our strong M&A momentum with another five value accretive acquisitions. We are well-positioned to navigate today's economic uncertainty and I will speak more about this shortly.

I can confirm the spin-off of Amrize is on track and expected to occur in June. We are confirming full year guidance 2025.

Let's look at these highlights now in more details. First, let's look at the progression of our recurring EBIT and recurring EBIT margin on a rolling 12 months basis.

This graph shows that we have further expanded our 12-month rolling recurring EBIT margin of 19.1% and rolling recurring EBIT above CHF5 billion. This is, of course, driven by our high-value strategy from scaling up our advanced sustainable building solutions, accelerating decarbonization, and also Circle initiatives to our value-accretive M&A strategy with focus on the most attractive markets, and of course, our empowered leadership with a strong performance culture.

This actually demonstrates that the resilience of our business model across all market conditions and all economic cycles. We also made a good progress in growing our premium ECO-brands in Q1.

And from ECOPact and ECOPlanet to ECOCycle. Last month, we were recognized as a global climate leader by CDP ranking on the prestigious A List for climate for the fourth time.

To strengthen our local-for-local business model, we have begun constructing a new site in Tilbury in U.K. to serve the growing London market with a circular and sustainable building solutions to be commissioned by H1 2026.

In North America, we started the construction of our new Malarkey advanced roofing plant in Indiana to expand into the Midwest and Eastern U.S. markets.

With completion expected by H2 2026. Now, taking a closer look at ECOPact and ECOPlanet with customer demand continuing to grow.

Net sales of ECOPact and ECOPlanet reached 32% and 29% of the respective categories. and you can see that progression there even from Q4 last year.

And it is our sustainable building solutions like ECOPact and ECOPlanet that really make Holcim the partner of choice for our customers. Many of you are now familiar with our project slides.

These show where we add value to our customers with our sustainable, with our circular durable and, of course, energy-efficient building solution. The first project on this slide is a modern office building in Madrid, which is one of the cities much sustainable building built with Holcim's ECOPact concrete.

In Texas and in some other parts of the world, we are building data centers. The one here for Meta incorporates our advanced solutions from foundation to rooftop with ECOPact and also Elevate.

We are also supplying sustainable building solutions for Grand Egyptian Museum, Africa's first building to get IFC edge recognition and built with Holcim's ECOPact. With that, I would like to hand it over to Steffen who will take you through some financial highlights.

Steffen?

Thank you, Miljan and a warm welcome to you also from my side. It's always a pleasure to be here with you today.

Turning first to the net sales bridge, you can see that net acquisitions contributed a positive 0.4% in local currency to our net sales, with a slight negative contribution from organic growth that leaves it broadly stable year-on-year. There was a minimal FX effect in what is our smallest quarter of the year.

In the first quarter, we also delivered over proportional growth in recurring EBIT, up 1.7% with most of the contribution coming from the organic side. Looking at the next slide.

I think it is important to note that some strong results from Latin America, Europe and also from Asia, Middle East, and Africa are recorded in recurring EBIT. North America had a good start to the year, but being affected by unfavorable weather conditions.

There were improved trading conditions in March and we completed the acquisition of the aggregates business in the quarter. Holcim has now secured more than 230 infrastructure projects down to 2028.

Market fundamentals in North America remained strong in the mid and long-term, driven, as you know, by infrastructure, modernization, and the onshoring of manufacturing. Next to Latin America, where profitable growth continued, and we achieved an outstanding recurring EBIT margin of 35% in the first quarter.

M&A is supporting our growth in this region as well, and there are some promising prospects where we're currently looking at. In terms of outlook, there's a robust project pipeline in Mexico and we see the public and private sector driving infrastructure and commercial investments across the region in all of 2025.

In Europe, there was a continuation of strong over-proportional recurring EBIT growth. There was continued margin expansion in the first quarter.

Our M&A momentum was extended. We made three value-accretive acquisitions, one in Bulgaria, one in France, and one in Serbia.

We expect continued demand for sustainable building solutions to drive profitable growth in this region. Asia, Middle East, and Africa delivered double-digit recurring EBIT growth in local currency, led by North Africa.

This was accompanied by an outstanding margin expansion of 250 basis points to a margin of 21.7%. A key driver of that was good momentum in ECOPact sales, which reached 29% of our ready-mix sales in the region in the first quarter.

Our outlook is as before. We expect strong demand in North Africa, positive outlook in Australia and price recovery in China.

Our final business segment, Solutions & Products saw net sales growth, driven by roofing in North America. Roofing also saw some margin expansion this quarter.

We made one acquisition during the first quarter to expand our specialty building solutions in Peru. For 2025, as we've previously said, we expect a favorable outlook for both new construction and repair and refurbishment.

And with that, I'm pleased to hand it back to you, Miljan.

Thank you, Steffen. So, as you're all aware, there is an increased level of economic uncertainty in the world currently due to these changes in the global trade.

What does it mean for Holcim? Well, I would like to share with you a few key points.

Firstly, Holcim, our business is local-for-local business from sourcing and production to delivering for our customers. And therefore, we are well-positioned to navigate all these economic cycles.

This is based on the following facts. We have a well-established footprint with more than 2,500 sites focused purely on domestic production.

We have a fully decentralized operating model with more than 500 in part P&L leaders that have a strict focus on financial discipline and also to a strong balance sheet. Therefore, regardless of all these external factors, at Holcim, we will continue to focus on controlling the controllables and also on delivering innovative and sustainable solutions to our customers.

Therefore, we are well-positioned for 2025. Holcim expects continued profitable growth with mid-single-digit net sales growth in local currency with over-proportional growth in recurring EBIT.

We want to further expand our recurring EBIT margin and free cash flow of above CHF3.5 billion. We will also continue double-digit growth in recycled construction demolition materials.

On the Amrize side, well, we are well on track with the listing of our North American business, planned by the way of the 100% spinoff to shareholders. You can see on this slide, we have multiple milestones we have passed now.

The last two are the shareholders' approval at our AGM on May 14th, 2025 and then the listing itself, which will happen in June. With that, I'm happy to now open it up to Q&A.

Do you guys hear me?

Perfectly well.

Excellent. Excellent.

Thanks a lot for your time. I had a couple of questions.

The first one is you attribute to in Asia, Middle East and Africa. -- the margin expansion to good momentum in ECOPact sales.

Could you provide us a bit more detail on where that demand is coming from in the region because for me is not intuitive? I would have assumed that as more a European thing than Asia, Middle East, et cetera?

And the second question is you talked about some fundamentals in North America over the medium and long-term. But how should we think about 2025?

You also talked about a significant amount of infrastructure projects, but what is the situation of the IIJA [ph] and the IRA plans after what we saw the impact we saw with recent executive orders of President Trump regarding the speed of implementation?

Good morning Luis, and thank you for your question. I'll start with the U.S., and then I will move to EMEA ECOPact.

On the U.S., as you have seen, we have experienced unfavorable weather conditions, especially in January and February. We have seen good activity, construction activity in March and also it continues in April.

So far, all the projects, infrastructure projects, and we did put in our presentation, we have secured now more than 230 of them. They're all progressing.

No project has been canceled or postponed and we -- I am confident that 2025 will be another strong year for U.S. On your EMEA question, yes, in EMEA, in some countries, we are seeing a very strong development on ECOPact range.

I'll start with Australia where we are developing the next generation of ECOPact and the acceptance has been extreme. These products have been received extremely good.

We also in North Africa, we are scaling up even in the presentation, we mentioned that we have supplied ECOPact and ECOPlanet for the museum in Egypt. So, we will see the momentum growing on ECOPact and also ECOPlanet side in countries across Asia, Middle East, and Africa.

Excellent. Thanks Miljan.

Perfect. Then we have three questions which came in from Marcus Cole from UBS by e-mail.

His first question is, how are price increases sticking by geography? And where have you seen price increases being delayed?

That's the first question.

We have seen good momentum on pricing. Michael, first of all, I'll start with Europe.

I think I would say robust, but resilient pricing momentum across the whole region. We have a robust momentum in U.S., and it will continue in Q2.

And in all our emerging markets, we are aiming well above inflation, in some cases, double-digit growth.

Perfect. The second question for Marcus is what price cost spread is assumed in your guidance?

I'll just cut and then maybe I'll hand it over to Steffen to elaborate on the cost. At Holcim, our main focus is on price over cost.

And I'm very proud to report that Q1 was 12th consecutive quarter of the growth in price over cost. Steffen will give you details.

In Q1, we reached CHF95 million. So, we are managing costs very well.

We have a strict financial discipline that is driven by our fully empowered more than 500 P&L leaders. Steffen?

Yes. Thanks, William.

You already said that we had positive price over cost of almost CHF100 million in this quarter. We have got a positive price over cost, I think, now since 12 quarters.

So, this is a very, very steady development. When you think about how this is imposed, you could say that is low to mid-single-digit price increases on average across our company, and there's almost flat inflation and input cost in total.

So, this is the composition. So, really, our price over cost is driven by the value of our portfolio by the growth of ECOPact ECOPlanet, by all our branded solutions that bring the value of the portfolio up and we maintain the inflation of the input cost side pretty well.

And this drives this development quarter-after-quarter.

And then there's a third question for Marcus, which is pretty much related. So, he's asking what are your latest cost assumptions for the full year?

And how hedged are you for the remainder of 25%.

Yes, that's pretty much the same answer, right? We don't like to talk about hedging so much because we do these things, but we always do it with the eye of securing our operating business.

And what is for us more important when it comes to energy costs, as we secure long-term our energy. We go into power purchase agreements, but also what is super important around energy is that we increased the rate of our alternative fuels because today already, we have factories in Europe that use more than 90% of alternative fuel rates where we take energy from the waste streams.

And this, for us, is a super important way to, A, save costs but B, also to bring our CO2 footprint down. Again, we do also work on the financial markets, but we would think the energy has been a tailwind in the first quarter.

We would hope this continues, but there's a certain amount of uncertainty as you know.

Perfect. Steffen.

Now, we already anticipated and explained the next question, which came in from Paul Roger from BNP Paribas. But here's one additional question, how could the recent macro volatility impact your M&A strategy, if at all?

Well, thank you, Paul, for the question. We -- we'll continue with our M&A, and we have an excellent track record, as you know, I would not say there would be any significant impact.

We will always be exercised strict discipline when it comes to M&A. We want to buy the companies that the lower multiples.

We want to achieve significant synergies and integrate them into our business as soon as possible. However, I do not expect any significant impact as a result of all these global uncertainty on M&A activity at Holcim.

Perfect. The next question comes in from Yassine Touahri from On Field Investment Research.

Good morning Yassine.

Yes, good morning. Can you hear me?

Perfectly well. Please go ahead.

Thank you very much for taking my question. So, first, when I look at your Latin American results, I'm a little bit surprised by the strength.

I think Q1 cement demand was down by more than 10% in Mexico, but your results suggest that you did much better than that. Is that correct?

And if this is the case, why is it related to? Are you gaining market share?

And the second question is would be look in the U.S. you're highlighting better volume in March and the beginning of April.

Is it something that you can quantify?

Good morning Yassine and thank you for your question. I'll start with the Mexico.

Of course, in Mexico, the secret to our success is our strong commercial activities. We are targeting both infrastructure projects through our dedicated teams, through specification, selling and also execution.

But at the same time, we are targeting our retail and DIY customers throughout the Disensa store. One of the big success in Mexico in the past few years that we have managed to expand our Disensa footprint significantly.

And also thanks to the acquisitions and we did have several acquisitions in the last few years in Mexico. We did manage to increase our product portfolio in the Disensa store.

And that's why we are ahead when it comes to the net sales and profitability in Mexico. Your question on U.S.

is, I would not go into details, but I would like to confirm once again that after a very slow start of the year in January and February, which was driven by this unfavorable conditions, especially in the Southern U.S. in our key markets like Texas, Colorado and so on, we have seen good and strong recovery in March, and we see this continues to April.

So, I'm confident that Q2 would be strong in U.S.

And maybe a last question. Have you finalized the debt split between Amrize and Holcim, are we still waiting for the latest data?

Yes, Look, we explained at our Capital Markets Day that we split the net financial debt between Amrize and Holcim in relation to our EBITDA both at the forecast level end of 2025. That has been communicated.

That has been also approved by our Board. And now the first step in implementing this, is you might have seen that on April 2nd, we took -- we issued bonds in the United States for about $3.4 billion.

So, we financed Amrize and with that money, Amrize is going to repay intercompany that and through this mechanism, we're going to kind of adjust the water levels to exactly the point that both companies will have the right amount of net financial debt in relation to the EBITDA. Mind you, we did this with a strong focus of maintaining a BBB+ credit rating for both companies, which meanwhile is also confirmed by both rating agencies by Standard & Poor's and BA1 by Moody's for both companies.

So, this process is almost complete and will be fully complete with the debt repayment internally by the time of the spin. I think we're on a good track here.

And we're glad it could go into the market before the turmoil. So, I think we used the last possible window here.

Thank you very much.

Perfect. Thank you, Yassine.

The next question comes from the line from Elodie Rall from JPMorgan. Good morning Elodie.

Hi, good morning and thank you very much for taking my questions. So, first of all, on pricing, I wonder if I could come back on that and ask you what kind of price increases you're seeing in the U.S.

specifically and in Europe, specifically? That's my first question.

My second question is on the Solutions & Products division. I've noticed it's the only one where you haven't actually posted over-proportional EBIT growth.

So, I was wondering if you could come back on why is that? And if you expect that to change in -- for the remaining of the year?

And my last question is on FX. Would you be able to give us some update -- updated assumption for the year, given the moves recently?

Thank you.

Good morning Elodie and thank you for your question. I'll start with pricing and Solutions & Products, and then I'll hand it over to Steffen to tackle the question on FX.

First, on the pricing, I'll start with Europe. We are seeing resilient pricing momentum, low to single -- low to mid-single-digits across all our markets.

In U.S., it's more dynamic, more pricing will come especially in price increases will come especially in Q2 in our roofing business in April and May. So far so good, but probably in Q2, we will be able to give you more information on the pricing impact.

Secondly, on the Solutions & Products, well, our roofing business is going really well. Despite unfavorable weather condition, we have seen strong growth in U.S.

and this is driven by repair and refurbishment, especially in our Malarkey business, more than 90% is repair and refurbishment as well as Duralast. So this is driving the strong momentum in roofing and therefore, in Solutions & Products.

Steffen, on FX?

Yes. Thanks for the difficult question Elodie.

FX is, of course, very difficult to forecast these days. Look, I would say we have seen the increase of the Swiss franc hold a little bit.

I if we go from current rates, then we might be looking at an FX impact of sales for this year between 4% and 5% and maybe between 6% and 7% on EBIT. You know as well as I do that I might be wrong on Monday morning.

So, please take this with a grain of salt.

Hey, thanks. Thank you.

Perfect. Thank you, Steffen for this one.

The next one on the line is Arnaud Lehmann from Bank of America. Good morning Arnaud.

Good morning gentlemen. Thank you for taking my questions.

Firstly, just the scope effect based on the M&A and the bolt-ons, can you give us an impact on full year sales and EBIT, please? Secondly, on the tariffs, if I remember well, you were importing some cement into the U.S.

from North Africa. Are you still doing that?

Are you adjusting your imports and exports strategy based on the tariff situation? And lastly, can you give us an update on China-Russian operations?

Have you seen any sign of improvement in China in the last months? Thank you very much.

Good morning, Arnaud, and thank you for your questions. I'll take care of tariffs in China, and then I'll hand it over to Steffen for scope effect.

Regarding tariffs, yes, we did have some exports from -- especially from North Africa to U.S., but this is negligible. This mainly came from Algeria.

Now these days, a domestic market in Algeria is doing very well, so we are not -- we do not rely on exports to U.S. So, we do not make any strategic plan regarding this.

Our focus for Algeria is to build up our local presence. On China, as you know, Arnaud, it was a very difficult few years.

Since COVID, China did not recover what we have seen this year for the first time, we are seeing this price recovery in China. And so far, it is going really well.

Government has made some pretty drastic announcements regarding significant investments in infrastructure in residential, they're talking more than 1 trillion. And this will obviously have a positive impact on our operations in China in the years to come.

Just to remind you that we are not consolidating Russia. So, the impact in the past few years was really negligible.

Steffen?

Yes. We guided previously that our mid-single-digit sales growth is about one-third scope and two-third organic, and this -- we would confirm that guidance.

Of course, it depends a little bit on exactly when we do the divestiture -- when we closed the divestiture of Nigeria, which has been announced. But roughly, you can go with that guidance, one-third to two-third.

Thank you very much.

Perfect. Then we have three questions from Jon Bell from Deutsche Bank, which just came in.

Can you draw out any difference between the commercial and residential roofing business in the U.S.?

Commercial versus residential. Jon, thank you for the question.

Malarkey is 100% residential, while Elevate and Duralast close to 100% commercial. If you make it -- if we want to make it very simple.

And obviously, probably the question is also a little bit related to what current trading, what business is doing better than the other one?

So, most of our business in Malarkey -- majority of our business in Malarkey, I should say, is repair and refurbishment. And these unfavorable weather conditions are driving the growth in this business.

We also have a significant part of our Elevate business, more than 60% also in repair and refurbishment. And that's why, Jon, we are seeing good momentum on our roofing side in U.S.

Perfect. Then his next question is also related to residential and Malarkey.

So, Jon is asking, is there scope to accelerate your expansion in the Midwest via M&A? Or are you focusing on organic expansion?

Jon, as always, we are looking at the both -- all opportunities. We are looking at the acquisitions, if possible.

But at the moment -- and as we highlighted in the presentation, we are excited about building our new state-of-the-art, most advanced roofing plan Malarkey plant in Indiana, and this will give us good access to this Midwest and Eastern market.

And then Jon's third question is related to Germany. How excited are you about the German fiscal expansion plan?

Well, everyone seems to be very excited, including us at Holcim. What's interesting that Holcim Germany has been performing really well.

And I'm sharing this with you from the firsthand experience as I was running Europe before taking over as CEO. Our team was the first one and the best one in the class in Germany to focus on this high-value strategy.

They focus on scaling up advanced sustainable solutions. They focus on accelerating decarbonization and also circular construction activities.

We have several M&As closed in the last three years. So, so far, Germany was pretty good for us.

So, what's coming next? Well, our footprint in Germany is very strong.

We have four fully integrated cement plants. We have three grinding stations.

We have more than 60 ready-mix plants and more than 30 aggregate quarries plus additional production sites for light and structural precast. So, this 0.5 trillion of investment is something that we are looking forward to.

And we are well-positioned to capture this in the years to come.

Perfect. The next question comes from the line from Ephrem Ravi from Citigroup.

Good morning Ephrem.

Morning. Two quick questions.

Apologies if these have been answered. I had a bit of a tech problem in the middle.

Firstly, on the guidance, obviously, given the AMRI spin, can you give us a sense as to what you're looking for the SpinCo? Is that possible at all at this stage?

And -- sorry for the RemainCo, I meant? And then a second question on Lat Am.

Clearly, you called out that region for M&A, and it looks like some big plans over there. It's also the region with the best margins at 35%.

And -- is there a risk of margin dilution there if you kind of do sizable M&A there? Or are you looking at businesses with a similar margin profile as the current LatAm business?

Thank you.

Good morning Ephrem. Regarding the guidance, unfortunately, at this stage, we cannot share this with you.

This will be shared in our H1 update. And on LatAm, well, yes, this region has the highest margins in the group.

And as you have seen, we are one of the most best performing when it comes to EBIT margin expansion in LatAm. We will continue to focus on margin extensions.

And I think even with the M&A activity with the companies below our EBIT margin average, we are able to achieve significant synergies. And as you have seen last year alone, we have bought five companies and within relatively short period of time, we are able to bring the margins of these companies above 30%.

So, we are looking at all the options. If the company makes strategic fit, if it has a good geographical position regardless if the margins are 30% or slightly below 30%, we will look into it.

And on M&A in LatAm, we did five acquisitions in 2024. And I'm very pleased that we are off to a good start with another M&A in Peru in Q1 2025.

Thank you.

Perfect. Tobias Woerner from Stifel sent us three questions.

The first one is how do we expect the separation costs for Holcim and Amrize to develop from here?

I think I answered that question at the Capital Markets Day. We had short below CHF100 million last year.

We expect in total to be this number, about CHF170 million at the end of the process. Reminder, this this contains everything, okay?

This contains auditors, accountants, also the IT, lawyers, everything that is connected to this project is part of this envelope.

Perfect. Then Tobias is asking a second question, can you just remind us how the trade relationships are struck between Holcim and Amrize in terms of cement exports and imports?

Are these at arm's length?

My short answer is yes. Tobias, the answer is yes.

They are at arm's length. And we're going to be two separate companies, and we're going to engage into supply and demand relationships like two companies.

Of course, we know each other very well, and we hope we can maintain some business relationships. But contractually, we're two different companies.

And then the last question from Tobias is could Asia, Middle East, Africa, surprise on the upside this year? How are Morocco, Algeria, and Egypt doing in more detail?

And is there a chance that volumes return in China.

Well, I already addressed this question on China, but to give you a little -- to elaborate a little bit, we are seeing a very good momentum in North Africa. Just a reminder that North African margins are closer to Latin America.

And the local demand is growing nicely in Egypt. We are seeing a good momentum in Algeria and Morocco.

Also Australia, while the Q1 is the very small quarter in Australia, but we are seeing positive momentum. And to remind you, the government of Australia has already committed AUD130 billion investments in infrastructure over four years, and we are already participating in this -- in some of these projects.

On China, I think there is a good upside coming up. As I said, there is a significant investment from the government.

We talk about more than $1 trillion, and that will address infrastructure and residential. But on even more positive side, as I said, we are seeing finally a strong price recovery in China.

Perfect. Thank you, Miljan.

The next one on the line is Ross Harvey from Davy. Good morning Ross.

Good morning and thanks for taking my question. So, I've got two.

Firstly, you currently get a modest price premium on ECOPlanet. And I'm wondering how that has trended in recent times?

And do you anticipate any changes as some of your competitors and eventually, you come to the market with the near zero or zero carbon cement? And secondly, I think, Miljan, you mentioned the economic uncertainty earlier.

Have you introduced any cost-saving initiatives internally? Or is it much too early for that?

Thanks.

Good morning Ross and thank you for your question. So, on the pricing, we are seeing the same momentum as I told you earlier mid-single-digit pricing premiums on average globally.

So, the beauty about ECOPact and ECOPlanet trust is that this opens the door for innovation. Three years ago, ECOPact will be different next year as we are able to introduce the new supplementary new -- and, I should say, innovative supplementary cementitious materials.

And by doing this, we are reducing cost and I believe we will even see upside on the pricing premium. And what's interesting that we are seeing this across globally from Mexico all the way to Australia, even in the emerging market, scaling up of these ECOPact and ECOPlanet advanced branded solutions is going well.

On the economical impact at the moment, it's too early to do anything. I would like to repeat once again that our business model with 500 P&L fully decentralized empowered P&L leaders.

Their job is day and day to focus on the strict financial discipline and this is driving our margin expansion and our growth.

Thanks Miljan.

Perfect. Thank you, Ross.

The next one on the line is Brijesh Siya from HSBC. Good morning Brijesh.

Good morning gents. I have two questions as well.

So, the first one is on Africa Middle East. Clearly, there's a strong growth on the top line.

But if I exclude the China contribution of CHF10 million from EBIT, that EBIT like-for-like contribution increase is roughly similar to the top line. So, could you please elaborate?

Is that kind of -- still you are seeing some negative price cost there that's impacting your profitability improvement? And the second one is on the U.S.

In the beginning of the year, obviously, the expectation was having a mid-single-digit price increase. But given what has gone through the Q1 and the trade tension and following this on energy deflation, which you are seeing, are you kind of tempering that expectation probably towards low to mid rather than just having mid-single-digits?

Good morning, Brijesh, and thank you for the question. I'll start with U.S.

comment on EMEA, and then Steffen, if you would like to elaborate on price over cost. On the U.S., so far, we are sticking to our guidance from the beginning of the year.

I believe that all the regions will contribute equally. Specifically, on U.S., as I said, yes, beginning of the year was relatively slow, driven by the unfavorable weather conditions, but the momentum in March and now even April is strong.

So, there will be no changes on the guidance for Holcim. On EMEA, well, we are seeing, as I said, positive momentum in North Africa in some of our key markets and price over cost overall is heading in the right direction.

I'll hand it over to Steffen to provide more details.

Yes, I think I said this before, right, the price over cost in the first quarter is right where we expected it. And I said this before, we had a low to mid-single-digit price increase in the first quarter, we had very low cost inflation in the first quarter and we also had some tailwinds in energy, again, not through hedging, but through the long-term supply of energy and through our strategies.

This is basically how our price over cost came together, and we expect that to continue throughout the year. Hence, I mean, this is the essence on why we're able to guide over-proportional EBIT growth and margin expansion.

Perfect. Thank you, Steffen.

The last question from the line comes from Mike [indiscernible] from Database Analysis. Good morning Mike.

Yes, good morning. My question is on central overhead after the separation, where remain will be left with all of the overhead, but the business is only halved in size.

So, I've got kind of three questions, please, related to that. Firstly, roughly what's the magnitude of the central overhead?

How quickly can you reduce it? Will it impact the second half margins?

And then thirdly, Steffen, you gave a figure of CHF174 million separation costs. Does that also include sorting out presumably some redundancy in that central overhead?

Thank you.

Good morning Mike. I think Steffen will tackle most of your questions.

I just want to repeat that when it comes to the redundancy, there will be no redundancy as we mentioned at the beginning of the year. It is true that some of the headcount will be shifted from Holcim to Amrize, but no redundancy at Holcim.

Steffen?

Yes, I would like -- thanks, Miljan. I would like to confirm what Miljan just said, no redundancy.

The envelope I gave you on the project costs are really project-related costs. So, this is expenses.

We have to do the project. This is create a landing zone for the IT in the United States.

This is work with lawyers to make sure we have the SEC filing ready, work with banks to make sure we get the bonds launched that we launch accountants and so on. So, these are the costs that are in there, okay?

So, it's no redundancy. Yes, it's true.

At the moment, we have got -- we're going to end up with an overhead of about 3% of sales for Holcim and over the next two years. Also with a change of geography, we are very active in M&A, we acquire businesses, we also divest.

We have some announcement there. So, the structure of the company will change over time.

And so we expect that in the long-term, we come down to about 2%. But there is no restructuring or anything like that in there.

Thank you.

Perfect. So, this was the last question for today.

Thank you so much for the active participation. If there are any further questions, please do not hesitate to reach out to the IR department.

We are more than happy to help. And with this, I hand it back to Miljan for some closing remarks.

Thank you all for joining once again. Thank you for your questions.

Just would like to reiterate a few points. Holcim is indeed local-for-local business.

We will continue to focus on control the controllable aspects of our business. We will continue to focus on our strategic initiatives.

And this, combined with impeccable execution of more than 65,000 of my colleagues around the world, I think 2020 -- I'm confident that 2025 will be another successful year for Holcim. Now, we are looking for the next chapter of our journey with the planned spin-off.

Once again, two milestones are left. First one is AGM mid-May, and then in June, we are going live.

Once again, thank you all for joining us this morning.