Good morning, everyone, and thank you, Judith. A warm welcome to our Q1 results call.

My name is Therese Jandér, and I'm pleased to be hosting this call today from Vienna, our headquarters. I'm joined here by Dagmar Steinert, our CFO.

We will begin with a brief presentation of the key developments and our financials for the quarter, and then we will open the line for questions. With that, I will hand over now to Dagmar.

Thank you, Therese. Good morning, everyone, and a warm welcome from my side as well.

Our CEO, Heimo Scheuch, is still recovering from an infection, and therefore, he is not participating today. Let me start with the presentation and jump directly into it.

Our first quarter is not a surprise at all. The soft start in the year is fully in line with our expectation, and it was driven by weather-related weakness, especially in January and February.

Very important, we saw a clear recovery already in March, and volumes picking up, and our performance was back to prior year's levels. At the same time, of course, we are operating in an environment of increased geopolitical uncertainty, and of course, that's related to the conflict in Middle East, and that is heavily impacting visibility.

Under these circumstances, we reiterate our full year's guidance while, of course, we see that, yeah, visibility remains limited. Of course, we focus on execution, particularly in integrating Italcer, where we had the closing by the end of April, and our disciplined cost and margin management.

Now coming to our numbers. Our revenues are down by 7%, that reflects the, yeah, soft start into the year.

As you can see, our volume development, the market was down by 6%. Our operating EBITDA is close to €100 million, which is, yeah, significant below previous year's levels, but we've already seen a clear recovery in March.

Let me just repeat it, it's not a surprise. We expected that.

Important is maybe to mention that the first quarter 2025 was a strong quarter, we compare a soft start in the year with a very strong quarter of previous year. It's more like a transitional quarter rather than an indicative for the full year performance.

Let me now come to the market conditions, starting with Eastern and Central Europes. As you can see, our volumes are significantly impacted by, let me say it again, the severe weather conditions early in the quarter, and housing starts remain flat year-on-year.

Renovation market was also temporarily affected by the weather conditions, and especially in the roof segment. On the other hand, our infrastructure market in that region remained broadly stable.

Overall, the region shows a mixed picture with selective recovery. For instance, Poland is a good example where the weak start was mainly weather-related, underlying demand remains intact.

In the Czech Republic, we saw early signs of recovery in permits and starts, but on the other hand, very aggressive competition continues. Austria and Hungary, the demand remains subdued, but of course with affordability constraints, and therefore, it's a mixed picture.

Turning now to our region Europe West. There again, we see a mixed picture, and of course, volumes overall are down.

Housing starts remained at a low level while the renovation-driven demand was solid in that region. Infrastructure and energy transition supported overall our demand, but of course, the bad weather was the same issue in that region.

To give you a little bit more of a flavor from some countries, Germany was a very soft market in the first quarter, and construction activity was still at a very low level, although we are expecting early signs of recovery. In the UK, the situation continues to deteriorate, and we see declining construction activity and weak consumer confidence.

Ireland, on the other hand, is positive. We see publics investments on a better level, and yeah, Netherlands is showing signs of recovery, and France is still a mixed picture, but we expect a early recovery as well.

Belgium, for instance, was quite stable. Overall, the same picture: January and February soft, and March far better.

Coming now to North American market, and that was the most impacted region in our first quarter. We see a double-digit volume decline, and that was of course driven by the severe winter weather and, as well, weak new residential activity.

The new construction activity remains subdued. Single-family market is stabilizing, but the multi-family market is at multi-years lows.

The mortgage rates in North America remain at a high level. On the other hand, our roofing business benefited from a strong backlog, and that allowed some more solid production volumes.

In the piping business infrastructure, the market remains somehow positive, but of course, due to the weather, we've seen there a strong volume decline. In Canada, the situation is even more challenging.

Coming now to some acquisitions. We bought the news group, and that is an activity with the turnover of around €20 million annually, and we had a closing by the end of April.

The news group, that will strengthen our position in the water management segment. It's a very attractive niche for us, and it's a growing market.

It's a perfect strategic fit, and it complements our infrastructure and piping portfolio. It's a small transaction, but long-term, we see there a big gross potential.

Coming now to our, yeah, recent acquisition, Italcer. There as well, we had closing by the end of April, and I just would like to, yeah, repeat a little bit.

To finance that acquisition, we don't need a capital increase. We have a strong balance sheet, and we will finance it, yeah, by ourselves.

We have a clear roadmap: integration, deleveraging, and of course, next year, we have the, yeah, with this call option, the opportunity to get the full ownership. With Italcer, we enter the high-end tiles market.

It's strong in the renovation segment, and of course, we see synergies which will rise. On the other hand, Italcer is active in the, yeah, facade market, and that will even, yeah, turn our synergies which we see on a quite high level.

Italcer in total is a company which is at the high end, has high margins, and has a strong multibrand position, not only across Europe, but also in North America. Turning now to our numbers, starting with revenues and EBITDA.

Our revenues, as already mentioned, are down by 7%. Operating EBITDA even further, it came in at €97 million, that is, yeah, far below the previous year's number, but to remember you, the first quarter 2025 was a very strong quarter.

The key driver for that, of course, is the reduced volumes we've seen. Here again, March far better compared with the soft start in the year.

Having a look at our, yeah, revenue and EBITDA bridge. As you can see, of course, volume-driven, we have a negative organic growth.

Organic gross, our revenues are down by 6%. We lose a little bit on the currency side, and regarding our operating EBITDA, again, you see quite significant negative organic gross.

That's all, yeah, volume-driven and related to the soft start into the year, and that was already expected when we published our outlook. It's not a surprise at all.

We have seen in the first quarter overall a cost inflation of 2%, and that is again mainly driven by labor and energy cost. We don't see in the first quarter more or less any impact of the conflict regarding the Middle East.

That will be visible in the second quarter and of course, yeah, rest of the year. Our cost inflation with 2% is, yeah, somehow moderate.

On the energy side, as we have our fixed positions in not only natural gas, but as well of course in overall in energy, and there more or less now 80% of our needed volumes are fixed. Therefore, we are there in a, yeah, quite good position.

We remain to focus on of course cost discipline and operational excellence. We are still working on optimizing our production, and of course, we are driving an active margin management to overcome all the pressure we see in the running year.

Coming now to our regions, starting with Europe East. Revenues are down by 7%, that is in line with the group development.

Operating EBITDA quite weak because it's, yeah, even below the decrease within the group. There we had not only the decreased volumes what we've seen, but we've seen on the cost side a higher inflation than regarding the group average, and the volume decline hit all markets in the Eastern region.

Especially the pricing in that region was under pressure, but towards the end of the quarter, we are seeing here recovery as well. Western Europe, our, let me say, most stable region in the first quarter: revenues only down by 3% and operating EBITDA by 14%.

As already mentioned, we've seen quite a strong renovation demand, and that of course supported the performance of that region. Energy transition continues to drive our roof and piping demand, and the weakness was mainly in the beginning of the year from new build and, of course, the severe weather conditions.

It's a mixed regional picture, but the most, yeah, stable development in our first quarter. Coming now to our North America segment.

That was the most challenging region because markets have been very soft, very weak, and revenues are down by 21%, our operating EBITDA by 37%. As already mentioned, the very soft, yeah, new build market with weak residential construction is still a topic in North America, and in combination with an ongoing pressure on prices in piping, of course that's not a nice environment.

The US single-family market is stabilizing, but multifamily remains very, very low. Within North America, especially Canada is more challenging than ever.

With that, I'm coming now to our outlook, and just to remain you a little bit on our assumptions for the current year. We are expecting not a structural recovery in residential construction, flat infrastructure and renovation market, and of course, we expect that we cover the inflation, which will increase, of course, during the year due to the Middle East conflict, by price increases.

The Middle East conflict gives us as well a really limited visibility of the total year impact so far. We have mitigation measures already in place, and that's not only price increases, of course, it's a strict and strong cost management with cost discipline.

We have a strong execution. We are ongoing working on, yeah, working capital management as well as having a focus on our CapEx and spending.

Still the Fit for Growth program, which we implemented in autumn last year, is of course in place and is running. Despite the high volatility and everything, we believe we are well-positioned to deliver, and of course, we are supported by our mitigation measures.

With that, I would like to, yeah, close the presentation, and I am open to take your questions.

Thank you very much for answering my questions. Firstly, could you quantify a little bit the volume recovery that you're seeing in March, maybe by region?

I understand from your comments that your results were back to normal. Does it mean that the volume were stable in March or do you see a recovery?

Also on the volume side, do you have any color on what happened in the month of April? My second question would be on the cost inflation.

I understand that you are hedged on gas and electricity, but you've got about a third of your revenue which is pipe where costs have been historically correlated to PVC prices and oil price. When you integrate the recent move in oil price and PVC cost, what kind of cost inflation do you expect for 2026 at the group level?

I can imagine it's going to be more than the 2% in Q1. The third question would be on the magnitude of the price increase that have been announced.

It looks like prices was relatively flat in Q1, not much going on. What kind of action have you taken, notably in the pipe business, to recover the cost inflation?

Do you see any traction on the ceramic business to increase prices in April or later during the year?

Thank you for your questions, that's a bunch of questions. Let me start with the volume.

Overall in March, we have in the whole group, yeah, middle single-digit volume increase, and it's continuing in April. Looking into the regions, we see a strong increase of volumes in Eastern Europe and Western Europe.

Overall in Europe, it's double-digit number, and we still have a decrease in North America. That is our weakest region so far.

Coming to our end markets: new residential, renovation, infrastructure, we see in March overall an increase, so that's a very nice development. Our cost inflation, the 2%, of course, for the first quarter will not be the number for the full year as originally expected because we will have an impact from Middle East, higher energy prices, but there the impact for us is limited as we are, yeah, fixed for most of the volume we need and just remaining volumes we have to buy on the spot market.

Prices, of course, for energy are, yeah, going up and down, it's highly volatile. On the other hand, we've seen in the first quarter a strong decrease in, yeah, raw materials, plastics for our piping business, and due to the Middle East conflict, of course, that turned around, and we have a strong increase in plastic resin prices, we will see it in the second quarter and ongoing.

Therefore, of course, the development changes, turns. Therefore, there will be a much higher inflation in the next quarters to come.

Of course, we are increasing our prices, and overall in, let me say, in Europe, we are talking about a middle single-digit number. In regarding our infrastructure, our piping business, of course, we are talking about double-digit numbers.

Does that answer your questions?

Just on the cost inflation side. We will see a much bigger cost inflation.

Is it too early to quantify or maybe at least for Q2? Is a number something like 4%, 5% reasonable at the group level for inflation?

No,

it's too early to quantify that. Because there's a strong movement, not only, of course, on the raw material side.

We have an impact on more or less every material we buy. We see higher logistics, higher transport costs.

Therefore, it's across more or less the whole P&L, and it's too early to quantify it.

We're

working against it with price increases which are already implemented and in place, and we are talking about, yeah, single-digit, but double-digit price increases. It varies from country to country, of course.

For instance, in some, yeah, Eastern countries, we are increasing our prices by, yeah, 20%, and of course piping business, but it's across our whole business.

Do you have a view on the number that you mentioned, that double-digit for piping and mid-single-digit price increase for ceramics, were those price increases announced in April? Do you have a view on how much of those announcements are being realized?

Or is it, again, too early to say how much will stick?

No, that's too early to say it. Of course, we announced price increases not all in April.

We started at the beginning of the year, but of course, it takes some time until you see it in our P&L. Therefore, in the first quarter, there is not a big, yeah, impact visible on pricing, but there's more to come.

You will see much more in the second quarter and, of course, in the quarters to come.

To follow on that, if you look at all the different parameters that you already know, how confident are you in your ability to recover the cost inflation related to the war? Is it one of the main uncertainty that you're mentioning in your press release or do you feel comfortable that the price/cost dynamic could be neutral?

Far, we are quite confident, that's of course why we reiterate our outlook. On the other hand, I would like to point out there is a low visibility regarding the impact of Middle East, and therefore, we have to see how market develops.

We had a strong volume growth in March and April. On the other hand, there might be, of course, some advanced, yeah, purchases due to expected price increases, we will have a better visibility with the second quarter regarding the development of the full year.

The question is more on the volume side, where it's unclear whether the mid-single-digit volume increase that you see in March and April are pre-buying or whether they reflect a better market. On the price, on your ability to offset cost inflation, you would say that you don't see a risk that competition prevents you to do that in a context where everyone is increasing prices.

Is that the right way to look at it?

Of course, there's nothing without any risk. On the other hand, we are increasing our prices, our competitor are increasing their prices, so that's absolutely normal operating business.

It depends now how the market develops and how big the impact of the Middle East conflict will be. Far, we don't have any bottlenecks in our supply chain and so on, but of course, it's possible that that all turns,

yeah, into

a different situation. Okay.

Maybe, if I may, a very last small question for modeling. What kind of EBITDA contribution do you expect from acquisition this year?

In our €810 million operating EBITDA is a number of €50 million included for acquisitions, for Italcer. The news group, of course, is not included, but it's a very, yeah, minor acquisition.

It's more strategic with a big potential to grow, but the positive impact we will see in the running year will be very limited.

Thank you very much.

Hi, Dagmar. Thank you for taking my questions.

I have two. You mentioned at full year that you would implement cost savings of, I believe, roughly €30 million this year, and you've mentioned you'll increase that this year.

I was wondering whether you could tell us by how much you expect that to be now, and can you give us some examples of what you will be doing? Secondly, on M&A, given the more volatile macro and that you've announced two acquisitions, is your appetite still the same for more M&A this year or should we expect less?

I will start with your second question regarding M&A and our appetite. My appetite is done because I'm looking at our balance sheet, and I have a focus on remaining or keeping a solid balance sheet, and therefore, of course, our ability to finance acquisitions with Italcer is somehow done.

There might be another very small acquisition in the running year, but nothing medium-sized or nothing bigger because I want to keep our net debt on a, yeah, for me, a solid, decent level to have a leverage 2.2 times, and we have a strong commitment towards our investment-grade rating. Regarding cost savings, of course, that is something which is an ongoing activity now for years.

With our Fit for Growth program, we are streamlining our organization, we are getting, let me say, more closer towards our customer, and with all our, let me say, processes and operations, and that results, of course, in better performance, better processes, and that saves costs. On the other hand, we are of course always looking at our production setup.

We are, yeah, bundling production sites, we are going to, yeah, taking out maybe one or the other capacity, but that will save costs, of course, but not resulting in as a burden for our customers that we are not able to serve them. Another thing what we are doing this year, what I didn't mention so far, is of course that we are going to sell non-core properties to, yeah, support, of course, our cash flow.

Just to clarify, the €30 million that was roughly mentioned at full year, should we expect that to be a little bit more this year?

The €30 million, they are still valid, remain in place, and of course, we are trying to achieve always even more, but within the first quarter, it's too early to give you, yeah, an updated number, but the €30 million, that's definitely our commitment.

Understood. Thank you.

Thank you very much. Good morning, guys.

Thanks for taking our questions. Just a couple from me.

You've reiterated the 8- €810 million guidance, which after this Q1, means €90 million more operating EBITDA year-on-year in the remaining three quarters versus last year, or about €40 million excluding Italcer. Could you just elaborate, I think you've touched on all the points already, but can you just elaborate what the main drivers for that year-on-year increase are now going to be, particularly if volumes won't be a big tailwind, and you still have that sort of locked-in energy headwind that you've called out.

Maybe related to that, if we think about price/cost, so that was obviously negative in Q1, but I think that wasn't a surprise, you told us that was going to happen a couple months ago already. When should we think about price/cost flipping to positive?

Is that already a Q2 story or is that more of an H2 expectation? That's kind of my first question, the guidance and the price/cost.

Then just a couple quick ones on nat gas. How should we think about the unhedged portion?

I know it's not big at all, but is there any headwind from higher spot or 1-month forward prices in TTF that's going to impact you at all? Then secondly, may I ask in how far Italcer is hedged on nat gas?

Is it similar to your level or is it different? Thank you very much.

Thank you for your questions. Regarding our performance in the current year, 2025 was a year where there was a stronger start, and during the year, the market came down.

The start of the year 2026, besides the weather, of course, was on a lower level. We expect a stronger second half of the year compared with the first half of the year, and that reflects overall, let me say, a flat volume.

Of course, we expect a volume increase during the year 2026, but as we start at a low level, overall, our expectations are that it remains then on the same level like previous year. That is reflected in our outlook, and that's still our expectation.

The question price over cost and when it flips, of course, we have a burden from our, yeah, first quarter which we have to carry, and we will see a much better second quarter, of course, and but as already mentioned, the second half of the year will be stronger than the first half of the year. Regarding the natural gas, we are, yeah, fixed for roughly 80%.

In some countries, a little bit more; in some countries, a little bit less, but overall, it's 80%. Headwind from remaining volumes which we have to buy from the spot market, that will be very, very limited because, first of all, natural gas prices on the spot market came down.

I'm not aware where they are today, but last week, it was around €45, it's not €60-plus anymore. Therefore, the impact will be limited.

Does that answer your questions?

Italcer.

Italcer, of course, needs a little bit less energy than we do, but there we have fixed volumes as well.

Perfect. That's really helpful.

Can I just do one quick follow-up? Just to definitely get this right.

In Q2, when you're saying that price/cost is going to be much better than in Q1, are you saying you would expect price versus cost to be positive already or just less negative? I think this is an important point because, as some of my colleagues already pointed out, raw materials are going up quite strongly, I think we all understand that.

For you to get positive price/cost would mean that you increase prices very, very fast, sort of ahead of that, which when speaking to most other companies sort of in the construction industry, they're all kind of saying, even if price/cost is going to be positive, there's going to be a little bit of a lag in the first few months. I just want to clarify that for Q2.

For Q2, we are now in the middle of May, therefore, of course, I have a visibility regarding April, but there is still half of the quarter to go. I'm confident regarding price/cost for Europe, but the North American market is for us at the moment a difficult market, and therefore, I'm not able to give you a concrete or detailed answer on your question regarding the group performance, but I'm very confident for Europe.

Okay. All right.

Thank you very much, guys.

Hi, good morning. I hope you can hear me well.

I would have a question related to the cash flow and your leverage target. Can you remind us of your investment budget for the year and also shed some light on the kind of working capital trajectory that you expect over the course of the quarters?

If you feel still confident in the 2.2 times EBITDA leverage by year-end? That would be the first one.

Yes, I feel still confident, and looking at our, yeah, leverage target, which is 2.2, of course, it's two sides of a coin. On the one hand, it's operating EBITDA, of course.

Therefore, we have to deliver the €810 million. On the other hand, it's net debt, and we are working on both sides of the coin.

We are working to optimize, to strengthen our profitability. On the other hand, of course, to strengthen our cash flow and to reduce net debt.

We will see positive cash inflow or to reduce our net debt in the second half of the year because the second quarter will have the cash outflow for not only the purchase price of Italcer, the 50 plus 50% plus one share, which is €160 million. We have as well the cash outflow, but that's minor, that's less, of course, for the other small acquisition.

Therefore, with our half-year figures, you will see a much higher, yeah, net debt figure, and in the second half of the year, we are working on decreasing it. Looking at our working capital, in the first quarter, we already managed to reduce our working capital, let me say, a little bit slightly by volumes, but of course, there is a pricing effect due to inflation included, which of course has a, yeah, an impact on the working capital as well.

We are working, and still our targets remain to reduce it. It will be supported by this disposal of non-core properties, that will strengthen our cash flow.

Our CapEx expectations for the full year is €160 million, which we will spend for maintenance CapEx, plus another €20 million, which is our budget for improving health and safety in our plants. For growth CapEx, which included our ESG CapEx as well, there is a number of €100 million.

All right. How much leeway would you have to reduce CapEx in case, yeah, earnings or working capital development is not kind of panning out as expected?

We are having a focus and we, of course, monitor our CapEx and our projects. First, what is necessary, what do we have to do?

The second thing is that we are looking at our, yeah, supply chain. Do we have the right suppliers?

Are we able to get better ones which might help with some cost savings? Of course, nothing to reduce quality or something like that.

Of course, there's always a possibility to cut a little bit, to get some reductions. On the other hand, maintenance is important, and we have a focus on both sides and on quality as well.

Sure. If I may round it up with another question related to the cost picture, talking about energy.

What's your strategy now looking beyond 2026 in terms of forward buying? Can you help us understand if you just carry on with the kind of rolling forward as usual, or are you a bit more hesitant at this stage when it comes to forward buying for '27 already?

Our strategy is that we cover volumes for a period of time of, let me say, three years. Of course, everything which is beyond, let me say, 12 months with much lower levels.

Of course, we are having our, let me say, energy committee where we meet twice a month, and if necessary, even more often, where we discuss how are the prices going to develop, are we going to increase our level to fix volumes for '27 or '28, or are we waiting a little bit? That is something which we closely monitor.

All right. On the price increases, should we expect kind of a time gap between pipes and the ceramic part, or do you see that being implemented at a similar pace?

No, that's implemented at a similar pace. Of course, the price increases regarding the pipe segment are more visible as they are much much stronger.

Yeah. Okay.

All right. Thank you very much.

I'll get back into the line.

Good morning. Thank you for taking my questions.

Just a few follow-ups from me. You commented on some non-core property sales this year.

Is that part of the guidance? If so, could you comment on how much that is?

I also wanted to ask if there are any carbon credit sales during the quarter. Be useful just to understand if that happened or not on the underlying performances.

I just wanted to have a follow-up question on some of your comments on the recent volume trends. Did the positive volume development continue into May?

Starting with the non-core properties, of course, it's included in our guidance, and, yeah, it's more included in our cash flow than regarding our earnings, and my expectation there is that we will gain something between, I don't know, €20 million, €30 million as a result out of the sale of non-core properties. Yes, there are no sales of CO2 certificates.

Thank you. Just a follow-up question to the comments on pre-buying volumes into May.

Did that continue this month?

We've seen quite a strong volume development in March and April, but of course, it's difficult to identify what portion is a pre-buying and not, and so far what I see regarding the beginning of May, it's still continuing like, yeah, March and April.

That's very useful, thank you. Perhaps maybe just one more if I could squeeze it in.

On Italcer, the slide deck says it'll be closing April 30th, I assume that's closed now, is that correct? You said the hedging exposure for '26 has already been locked in for energy.

That's

correct. That's correct.

Thank you. Thanks.

Thank you, guys. Just a very quick follow-up.

I hope I didn't actually miss this, but back to the price increases. In the slide deck, you write that you're increasing prices across Europe, and you didn't mention it regarding North America.

I'm not sure if you said it or if I just didn't listen, but I assume you're also increasing prices for at least for pipes in North America, is that right?

Yes, it is right. In the first quarter, of course, not of course, but in the first quarter, prices came down in the piping business.

Turning the situation that raw material prices for piping are increasing, but that's mainly Europe, that's not the case in that extent in North America, of course then prices are increased. It's more a question of, yeah, of Europe, and in North America, we expect far less price increases.

That's perfect. Thank you very much.

On the gap between reported and operating EBITDA, did I understand correctly that you assume something like €20 million to €30 million of one-off gains from the real estate EBITDA disposals? Is there already any kind of visibility on, well, restructuring costs and the like, any kind of indication you can share with us?

No, that's too early.

Right, but the €20 million to €30 million positive effect that might be realized.

Yeah.

Thank you.

Thank you all for joining us today and for all your questions. We hope to welcome you again in our next results call, which will be in August, on the 12th of August.

With that, thank you, and goodbye, and enjoy your day.

Thank you very much. Goodbye.