Good day to everyone, and welcome to Rockwool A/S's conference call regarding the result for the first half of 2026. My name is Kim Junge Andersen.

I am the CFO of Rockwool A/S. Today, I am pleased to present CEO Jes Munk Hansen.

For the first part of the call, all participants will be in listen-only mode. As a reminder, this conference call is being recorded.

First, Jes will go through our presentation and give you an update on the results for the first half and second quarter of 2026. Afterwards, we will be ready to answer all your questions.

Before I hand over the word to Jes, I must ask you to notice slide number two, which is the forward-looking statement. Please be aware that this presentation contains uncertainties.

Now, we can go to the next slide, which is slide number three. Jes, I will now hand over the word to you.

Also, welcome and good morning from my side. My name is Jes Munk Hansen.

I am the CEO of Rockwool. I will start on page three.

As you have seen, the group delivered revenue growth of 6% the first half year. Importantly, this was driven by volume.

The EBIT margin reached 13.1%, a good result despite inflation on energy and mainly transportation prices, persistent market challenges in a few countries, as well as higher depreciation from investments. Free cash flow was impacted by the large ongoing capacity and decarbonization projects.

Page four. To the quarter, the group delivered a strong 10% revenue growth and reached a record-high quarter revenue of just north of EUR 1 billion in Q2 2026, driven by volume growth across regions.

EBIT margin was 12.9%, a good result considering the circumstances. Cash flow from operations was good.

Investments around EUR 200 million in the quarter led to a free cash flow of negative EUR 32 million. I will just jump directly to slide six.

Just jumping the half-year detail, but on Q2, I think we should spend more time on that. The revenue from the very strong 10% growth.

The growth was mainly driven by significantly higher volumes, partially from market share gains, where we benefited from favorable market dynamics with a narrowing price gap to competing combustible insulation materials. Somewhat more broadly and less directly related to the quarter results, we do observe in the market that higher oil and gas prices are driving a greater interest in energy efficiency in the build environment.

While we are affected on the cost side, of course, we also expect to benefit from the greater focus on energy efficiency that results from the higher energy prices in the market. At the same time, the tragic wildfires in South Europe and in North America over the summer are generating more awareness about the importance of non-combustible materials such as stone wool.

This should too become visible in higher demands over the next period. Okay.

Let's get back to the report. In the quarter, we saw pre-buying activity ahead of the announced price increases, not surprisingly, which mostly took effect from the price increases from July 1st.

We estimate that this pre-buying contributed to around 1%-2% points of the second quarter's growth. However, sales price increases were also realized, especially in the latter part of the quarter, and accounted for 1%-2% points of the growth, partially offset by negative product and country mix.

I'll also skip page seven, which is just a summary of the half-year revenue, and go to the second quarter revenue on the segment level. Insulation Segment revenue grew 10% in the quarter, with strong growth in the U.S.

and across Europe. The revenue in Canada, U.K., and Switzerland continued to decline, though the rate of decline moderated in U.K.

and Switzerland compared to the first quarter of the year. In our System Segment, revenue grew 9% with a good growth across the business.

Slide nine, where we take a look at the geographies. If we start from the left, from the west side of the map, U.S.

continued to perform well, with momentum accelerating into double-digit growth in the second quarter, and it's also worth noting that stone wool is growing as a category in the U.S., and that Rockwool is gaining market share in the total insulation market. This is, of course, in a soft overall market.

Here, the growth is also driven by greater focus on non-combustible insulation solutions in a row of segments, including the façade segments. Revenue in Canada declined in a challenging market as the Canadian economy has contracted now for two consecutive quarters in a row.

West Europe showed improvement compared to previous quarters, and key markets for us, like Germany and France, gained momentum, which was partially offset by the challenges I mentioned in U.K. and Switzerland.

Eastern Europe delivered a staggering 31% revenue growth, reflecting double-digit growth across the entire region. In Asia, we grew 17%, with double-digit growth in all major markets except China, where revenue remained flat year-over-year.

To slide 10 on our profit. The quarterly profit was impacted by rising oil and gas prices.

However, this also creates opportunity for us as elevated and fluctuating energy cost drive a much greater focus on energy efficiency in building, strengthening the overall demand for our insulation solutions. The EBITDA in absolute figures was up 6%, which we considered a good result.

Let me note that Q2 in 2026 benefited from a one-time EUR 7 million gain related to a settled claim against the former transport supplier in the U.K. That said, margins in the quarter were impacted by several factors, such as the weak construction market in Canada and United Kingdom, as I mentioned.

Importantly, higher logistic cost and an expanded cost base, especially related to energy and oil-based raw materials. Announced sales prices increased, this first took effect late in the second quarter.

We believe we are good at addressing challenges like these. Among other things, during the quarter, we also took the opportunity to refine our marketing and branding, and I hope you have noticed our emphasis on core value drivers like energy efficiency and fire safety.

We also redirected product flows and resources from softer markets into high-demand regions and adjusted our capacity expansion strategy based on long-term market condition expectations. The EBIT in absolute figures was up 3%, and the EBIT margin ended at 12.9% in the quarter.

EBIT was impacted by higher depreciation related to investments and a one-off EUR 9 million write-off on some reprioritization of our capacity investment base. Last year, Q2 included donations to the foundation of Ukraine's reconstruction of EUR 7.4 million out of the total EUR 13 million donated.

This year there was no donations recognized. Let's look at the segment on page 11, profitability by segment.

On the left, you see our insulation segment, and looking at profitability, the EBIT margin insulation was good and landed just short of 12%. The residual result mainly reflects timing lags between inflation and price increases, and costs from electric conversion shutdown in Netherlands and the EUR 9 million write-downs I just mentioned in reprioritization of our capacity expansion.

This was, as mentioned, partially offset by EUR 6 million gained from the settled transport supplier claim. I deliberately said EUR 6 million because the other EUR 1 million you can find in the system division.

The system segment EBIT margin was 12.6%, and this is a good result considering input cost inflation and lower performance in our Grodan business in North America. Here, as just alluded to, the 12.6% margin included EUR 6 million out of the total EUR 7 million claim gained from the supplier settlement.

Page 12 shows our investment in new capacity and decarbonization, and our major investments in Q2 were related to the new factory constructed importantly in the United States and India. If I can just stop up a second and say, I just a few hours ago saw pictures of the first commercial wall coming off our factory in India.

Investments in the new technical insulation production line in the United States and production expansions in Romania and our logistic automation projects in Germany. I just said that the Indian factory has gone online, and this will, of course, support the growing demands for stone wool in that particular market, where we see high growth rates.

The sustainability investments mainly considered of electric conversions in the Netherlands and in France. As part of our electrification strategy and to strengthen our in-house technical capabilities, we acquired the remaining stakes in the Swedish company ScanArc Plasma Technologies back in June 2026, a critical technology in our so-called JEDI conversion activities.

Page 13, where we look at our cash flow. Operating cash flow improved by EUR 31 million compared to Q2 last year, demonstrating underlying good cash generation.

The net working capital at end of the half year 2026 increased as per the usual season compared to year end 2025, and increased related partially to higher trade receivables from the increased quarterly sales and partially offset by higher trade payables. Cash flow ended at -EUR 32 million, reflecting the ongoing large capacity investments.

Our net debt position increased to now EUR 461 million at the end of the quarter. That brings our leverage ratio to 0.6, which is still within our policy of a leverage ratio below one.

A few comments to our sustainability and safety. You can see on page 14, just briefly, a few comments.

Safety remains our top priority in Rockwool with the aim, of course, of a zero fatality and zero serious incidents. That is almost logic that it should be zero, but we recorded two serious incidents in the first half of 2026.

Despite these incidents, the overall lost time incidents frequency rate improved significantly now at 1.6, and that is almost a 40% improvement compared to first half in 2025, which to us demonstrates that our efforts are working. The CO2 emission, just very briefly on that, you can see on the slide that our scope one and two CO2 emission, the intensity shows a 25% reduction compared to the baseline of 2019.

Nonetheless, the scope one and two greenhouse gas emissions increased by 1%, reflecting the higher production volumes. But the intensity, as mentioned, is down significantly.

In 2025, we adopted new targets for our renewable energy, and now we aim to reach 40% renewable on our energy consumption by 2034. In Q2 2026, we reached 22%, showing a solid progression on that target as well.

I also will not comment on the other targets. You can see that we are pretty much on target in general.

I jump all the way to slide 16. Importantly, our outlook for the remaining of the year.

As you noticed yesterday, we made upwards adjustments to our outlook, and after a record high Q2 revenue driven by volume, we expect the broad-based momentum to continue through the second half of 2026. The revenue growth will be driven by both volume and now also sales price increases, which we introduced to compensate for inflation on energy, raw materials, and transport.

However, we expect the growth to be partially constrained by sourcing limitations, such as in the North American arena. We therefore forecast full-year revenue growth of 5%-7% in local currencies.

At EBIT, we maintain our expectation for the full-year EBIT margin in the range of 13%-14%. While sales price increases will support this margin, the benefit will partially be offset by North American sourcing constraints and elevated maintenance cost and less favorable product and country mix.

Last but not least, our investments. Projects are largely on track, and we do have some timing on our CapEx, so significant supplier contracts were being finalized and are being finalized in 2026.

This timing of down payments are expected to drive our investment outlook to around EUR 750 million for the year. These were the initial slides, and I hand over now to questions.

We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad.

If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two.

In interest of time, we kindly ask to limit yourself to two questions only. At this time, we will assemble momentarily our roster.

First question is from Pujarini Ghosh, Bernstein.

Hi, and thanks for taking my questions. If we talk about your guidance, you have now raised the local currency growth guidance already twice this year.

Could you explain the changes in your assumptions on pricing and volumes, which has led to this latest upgrade, and how much price and volumes are being baked into the full-year guidance of 5%-7% overall? On the other hand, you have not taken up your margin guidance, and you did mention it's possibly because costs are also rising in line with the pricing.

Could you just explain a little bit more why the margin expectation is also not rising in line with the top-line guidance, or are you being a bit cautious as of now? Those are my questions.

Thank you.

Yeah. The market has been developing the last six months, and that's why we have made this progressive lift in our outlook.

I think w e have told a few in previous calls that we don't have outlook and cannot see developments six or 12 months into the future. We can only, of course, adjust as we see the market develop.

It has been very favorable the last quarter on, as I just reported, mainly on volume. But now, for the next half year, we do see a little bit less volume and more price that we have of timing differences.

It's at the half year that the price comes in. Will you comment on the specific numbers that you see, Kim, or?

Yeah, I can do that. What we see is, previously we had expected a 0% volume growth in the second half of the year.

We now expect to reach 1%-2% volume growth, and then on top of that comes then the impact from the pricing. We do see a slower Q3 in France and Germany, some of the bigger markets.

So we ending up at this 6% growth also for, you can say for the first half, and then hopefully between the 5% and 7% in the second half.

Did we answer your question?

Thank you. On the margin guidance?

The margin guidance is unchanged. The whole purpose with us doing the sales price increase on July 1st was to defend the full year EBIT margin.

I think that is still the expectation that we are able to do this. There is no change particular to the dynamics between the, in the full year guidance for the EBIT margin compared to what we did in May.

Okay. Thank you.

Next question is from Anders Christian Preetzmann, Danske Bank.

Yes. Hi, Jes and Kim, and thanks for taking my questions.

I would like to ask about the U.S. sourcing constraints that you mentioned.

My first question is, how much of the U.S. demand do you expect to be met by European imports through H2 2026 and into 2027, maybe expressed as a share of the expected U.S.

volumes? My follow-up question to that is, should we maybe be viewing shipping your volumes from Europe into the U.S.

as maybe a permanent way to capture an additional U.S. demand?

Or is this strictly a bridge until the new plant opens in 2028? In other words, should we expect it to keep importing into the U.S.

for as long as demand exceeds the U.S. supply, which I suspect could go on for many years?

Or would you rather reap on the margin expansion potential for the group? Thank you.

Yeah, I can answer that. For the foreseeable future, it's still limited what we need to import from Europe to the U.S.

market. The aim is overall to keep growth and momentum developing in the U.S.

to prepare for when our very large factory in the U.S. opens, our new factory that we're investing in and building right now in the U.S.

So we get, you can say, a high utilization rate when it opens in approximately two years from now. So it is what you call a bridge, and it's financial beneficial, not only because it generates business in the short term, but as I said, then we can start the factory with a high utilization when it comes online.

This becomes very detailed. Some product categories that are beneficial to import, it has to do with weight and volume and what is meaningful to import.

Some products are not affected at all, and some are affected more because available capacity and/or simple practicalities around shipping logistics. You can consider it a bridge, but here for the foreseeable future, it is limited.

We just wanted to share with you that we can satisfy the growth and the demand in the U.S. market with capacities from Europe.

That is doable and also sustainable for the period we need to.

Obviously, Anders, these imports of course come at a lower margin, but we always have this hurdle rate that said there has to be cash positive import. But it is in the short time, of course, the imported part will have a lower margin compared to the locally produced products.

Thank you very much.

Next question is from Zaim Beekawa, JPMorgan.

Morning. Thanks for taking my questions.

The first is just on CapEx. I think you've increased from EUR 700 million to EUR 750 million, largely due to timing, but then we also increased from EUR 650 million at Q1 due to warehouse investment.

How should we be thinking about CapEx next year? Should this be more around the EUR 600 million mark?

Secondly, on price and costs, can you comment on your hedging position for the remainder of the year, and if you see a risk of supply of natural gas. You have enough security there.

On price, do you still think that the 6%-8% from July 1st is enough to compensate some of the recent price cost inflation, or do recent developments need higher pricing? Thank you.

Yeah. Hi, it's Kim here.

The only major, not major, but the only CapEx that is going out this year, of course, is the factory in India. The other three main factories of insulation capacity and also the technical insulation project in the U.S.

will continue into next year. So I expect to have also an elevated CapEx next year.

We have not yet detailed out again the timing of the contracts when payments are falling due, but in 2027, as you know, we will have the Romanian factory opening up in the middle of the year. So in 2028, hopefully that CapEx will be gone as well.

But next year will be elevated as well. We haven't yet made the exact number, but we expect it to remain about the same level.

Second question about the hedging. We have covered now up to 75% of the Q4 electricity and gas.

As you know, we cannot cover forward foundry coke, but there's not been a big price development in that particular energy source. For the first two quarters next year, we've also started to cover of this.

But we are still in a period we have to determine the pricing drum beat plan for 2027 that has not yet, and does not yet have to be decided, but we need to decide that here in the autumn, before we start negotiating with our customers.

Great. Thank you.

Next question is from Kristian Tornøe Johansen at SEB.

Yes. Thank you.

Two questions. First one is on guidance.

To the previous question on why you have been raising growth guidance but not margin guidance, you primarily referred to the price increases you have done to safeguard EBIT margin. But in my view, that was more the explanation behind the change you did back in May.

My question is, has anything changed in your assumption on pricing and input costs since May? Therefore, why is this additional 1-2 percentage points which you raise your growth guidance now versus May not yielding an increase to the margin guidance?

Yeah, Kim here. The full year guidance, as I said, we will maintain, and of course it would have been nice to see an impact from that higher sales growth that we are having.

There is a little bit of a negative product mix or less favorable product mix in the top line that means that it does not in itself lift the margin. Then as I said, we also have a continued higher maintenance spent in some of the factories, mainly in Vermont and also in the U.S.

So, it is just a fact of those things coming in that we are seeing. We have a, I think you can say the inflationary impact, both on first half but also on the second half is mainly on the logistic cost.

As said, we are simply just transporting more goods around, and it has become more expensive to use this transport. So we also have just a slight increased, or assumed increased logistic cost for the second half compared to the first half.

Okay. Understood.

My second question goes to these sourcing limitations in the U.S. You in the previous question spoke about imports, but just to clarify, exactly what do you mean by these sourcing limitations?

There is a row of operational things, but one of them is maintenance. You have to do maintenance on our factories, in certain periods upgrade.

Also, we want to expand how much capacity we can drive out of each factory. It is lean and Kaizen activities, and that means that you have to take the factory out of the loop for a while.

There are some effects there. It is also the growth, and that is also why we are building more factory capacity, both in technical insulation and in general insulation materials.

I think it is a very good solution we have found in selecting products that can be imported from Europe. We are not hit on tariffs on that.

We can actually import from Europe and satisfy that demand until our large jumbo lines go online in approximately two years from now.

Understood. Thank you.

Next question is from Daniel Khajenouri, Morgan Stanley.

Hi, good morning. Thank you for taking my questions.

Just to follow up on the top-line guidance, if I missed it, apologies. But you delivered 6% local currency growth in H1, mainly volumes, while 6%-8% price increases are rolling through from the beginning of Q2, and the new guidance is 5%-7% local currency for the full year.

This begs the question on price realization and volume trends into H2. My understanding is you're seeing good price realization, but so far disappointing volumes.

Is that the correct read into the earlier answer?

Yeah. That is, Daniel, that is correct, and we do see a good price realization.

Right now, as we move into Q3, it stands around the 6%, which is within the framework that we talked about. We are pushing hopefully a little bit more up to the autumn season.

We had also anticipated that the volume will go down. We had quite a good run on both, in France and in Germany and also in Poland, other Eastern European countries, and we had already foreseen that that will sort of tamper down a bit in the second half.

That's why previously forecast was a 0% volume, for the second half. Now we are adjusting that slightly upwards to 1%-2% volume growth.

But there is a distinct difference compared to the first half that was mainly volume-driven and very limited price-driven.

Okay. That's very useful.

Just a follow-up on the CapEx, maybe I'll get back in the queue. You gave an idea for 2027, which is very useful.

But given the schedule of FID assets being built globally from 2027 onwards, should we expect this to stay at elevated CapEx levels, or should we expect that to start to slowly come down towards 2030?

Yeah. Thanks, Daniel.

We have right now sort of four large capacity investments ongoing. One of them India opening this year, one is in Romania opening in 2027, and then one in France to be open in 2028 and one in the U.S.

to be open in 2028. We are not yet announced any further capacity expansion plans.

That means once we sort of get those online, the best guess right now is that the CapEx amount will go down as we open up these factories. To what level then it will be in 2029 once we have opened all the four factories, I think we will have to revert to that.

That is so far out in the future that we have not yet even internally decided if there is room for further CapEx expansion. There is nothing planned and announced at this time after 2028.

Right. That is very useful.

Thank you.

Next question is from Claus Almer, Nordea.

Thank you. Yeah, also a few questions from my side.

The first question goes to guidance. If you look at the CapEx guidance, these extra EUR 50 million, you are increasing your guidance with, should we think about this as less EUR 50 million next year, given this timing of the milestones?

That would be the first one.

Yes, Klaus, you can think like that. It is a timing difference of down payments.

Okay. Very helpful.

About the P&L guidance. As you said, you are going to raise your price so far by six, and you will get additional maybe 1% in addition.

When you look at Q2, limited ASP impact, as you said, so key driver was volume. When I look at your gross margin, it seems to be down by 2 or 3 percentage points year-over-year, giving, I guess, energy cost.

Is it fair to assume if you had introduced your price increases earlier and thereby being able to fully offset the energy cost, then your EBIT margin in the quarter would have been 2 or 3 percentages higher than reported?

Obviously, as you know, in my perfect Excel world I live in, I could easily have put prices up in the second quarter, but in real life, we could not. We have contractual obligations with customers, and we didn't judge this exercise to be a force majeure.

We had to adhere to the notice periods that contractually we have with many of our key customers, and that is typically 8-12 weeks, i.e., it takes two or three months in order to have effectively get pricing into the market. On the supplier side, we got hit immediately with the higher transport cost.

That just hits us immediately, and that is just a timing difference. As I said, the plan has always been to maintain the full year EBIT margin, 13%-14%, knowing that we have a number of one-off this year, that disturbs the picture a bit.

But that is included in these 13%-14% EBIT margin guidance.

Sure. So Kim, what I'm trying to figure out what is the underlying, everything has been introduced and implemented at price increases.

As I understand, your reply is that when you look at Q3, everything equal, then probably the gross margin, EBIT margin should be 2-3 percentage point better than we saw in Q2. Is that a fair way of looking at it?

Moving upwards, definitely. I'm not sure we can know everything there because I also know of some of the things that we are looking at in terms of these maintenance costs.

But everything equal, yes, we should move upwards by a few percentage points.

Great. Thank you so much.

Next question is from Julian Radlinger, UBS.

Hey, guys. Thanks very much for taking my question.

I have a couple. The first one is it's the easier one.

Sorry to come back on the guidance. I still don't understand something here.

You did 6.3% local currency growth in H1. You're guiding 6% at the midpoint for the full year, so basically 6% in H2 as well.

Now you've got price, which is at least 6% you're saying in H2, but you're also saying 1%-2% volume on top. That gets me to 7%-8%.

What am I missing here?

You're missing a little bit of negative product and country mix. That's it, Julian.

Some of these growth are coming in markets where the average selling price are just lower than the average. That's really just the gist of it.

There's nothing really strange to this. This is just both a product and a country mix.

On the product side, it's mainly because we're selling a lot more flat roof insulation also in the second half, and that has a lower average cost than our normal insulation.

Okay. Understood.

My other question is a bit of a bigger picture one. I want to get back to this CapEx increase.

Look, you've been open about the capacity expansion in the coming years. You've made it clear CapEx is going up because of that and it's temporary.

Now you've increased it twice this year, and you've not really indicated whether next year is going to be up or not. I know you just said it might be on a similar level, but nonetheless.

You haven't really helped investors understand how to think about the returns on that CapEx. Aside from, of course, saying the incremental ROIC will meet your own hurdle rates.

The stock is now down 10% in two days, or since yesterday, and I think that's actually largely because of that. Assuming you won't provide more help on those fronts in today's call, which is, of course, not the right forum necessarily.

Is this a concern to you? Are there any plans that you have to provide some numbers and some visibility on this CapEx over the next few years, and more specifically, the returns over the next few years from when you open these plants in the form of an analyst day or just something to give investors a bit of a toolbox to get more comfortable around this and get more comfortable about buying into this?

Big question. Sorry.

Thank you.

Kim and I are looking at each other and nodding and saying, yes. Fair question, fair comment, and definitely also something we have discussed here.

Without promising too much, let me start somewhere else. Again, there are four factories announced, like Kim just alluded to.

They will be completed over the next two years. Yes, CapEx will be elevated and then come down as these four major footprint projects are getting finalized.

We have realized that it would be good for the investor community and in general to give some more granularity not just on a macro level, but also opening up a little bit for the individual projects of what that means on return on invested capital, as the capital flows out in establishing this capacity, but also when the, you can say, the volumes and the capital starts flowing the other way. It is a little bit premature to promise you the exact date when we come back to it, but if I can just park it here and say that we want to give you some more insight to it, and we are right now discussing what should be the form and format to open up to give you that insight into the capital movements.

That is fantastic. Thank you very much, Jes.

I think people are really going to appreciate that. If I can actually just throw on half a question, just a little last one.

I am really sorry about this, but really easy question. You are importing from Europe because you are sold out in the U.S.

Why aren't you importing from Canada if Canada is down?

We are, and we always have, by the way. The Canadian factories have been the backbone of our U.S.

business also. It becomes very granular to explain this.

It depends on the product type, but our factories are not the same. Some factories are better at producing certain product types more efficiently and have more capacity available.

It is always a mix. But we want to ensure, and this is the most important thing, we want to make sure that our growth and momentum that we have in the U.S.

market is satisfied and not limited by capacity. We can do that as one of your colleagues called the bridge, until our very large factory in Wallula goes online.

It is typically heavier products.

Understood. Thank you very much.

I mean, it is typically heavier products that travel well, just to give you an idea. But now we are into logistic numbers.

Got it. Thank you very much, guys.

Next question is from Alexander Craeymeersch, Kepler Cheuvreux.

Hey, good morning, Jes and Kim. Thank you for taking my questions.

First question would be basically on the question I even asked the last quarter's call. I flagged that if the H2 top line growth would be price driven rather than volume driven, the EBIT margin would likely land at the bottom of the 13%-14% guided margin range.

I asked you whether that was the right assumption, and your answer at the time was to wait for Q2, so here we are. Q2 is actually usually some of the stronger quarters.

Normally, it's above year average margin, yet with volume growth solid this quarter, EBIT margin barely touched 13%. The question I have is twofold.

First, what gives you the confidence to keep that 14% on the table, and what would specifically have to change from here on out to reach that at the top end? Second, if conditions stay exactly where we were and exactly as budgeted, where do we land?

Do we land on the upper end, on the lower end of the range? Second question would be on Dutch plant.

It has been taken out. I thought it actually was only taken out recently.

Could you elaborate on how long this Dutch plant has been taken offline? How long do we expect this conversion to take?

Considering that this is the largest plant, how much volumes or capacity are lost because of this? Thank you very much.

Yeah, I can start with the plant question, then Kim comes back to your margin question. In Roermond, there are three large production lines.

It's only one of the three that was taken out for electrification, and it's back online. We will at a later point also, actually in the near future, also electrify the next production line.

But the first one has been electrified and is now running stable.

Yeah, and I don't want to come into the detail on the margin. We have, of course, a spread on the margin there to allow us to have a little bit of uncertainties in the forecast, which they are, and said what will drive it towards the upper end, that will be more growth, obviously.

It'll be growth in markets where we have available capacity, i.e., France, Poland. Sorry, Germany, Poland, and the Nordics.

But that, so far, we are just in, you could say, in that broader segment. There's really just nothing more to comment on that particular range.

Okay. I'll come back on Q3 then.

Thanks.

Next question is from Yassine Touahri, On Field Investment Research.

Yes, good morning. Thank you very much for answering my question.

The first question would be coming back to Julian's question. After your factories in India, Roermond, I think you have an expansion in Mississippi, a new U.S.

factory, a new Wallula factory. After all those factories are fully operational, which I understand should be by the end of the decade, could you give us a very rough idea of the additional EBIT this investment could generate?

I understand that you might not give a precise number, and that you might do a capital market there, but even just a ballpark number would be extremely helpful.

Uh-

My second question, could you give us Sorry.

Yes, indeed. You know we cannot give you that because that's exactly what we're working on, trying to get an idea of, as we replied to Julian, if we have sort of a midterm outlook, we need to work on this still and find a timing to do that.

I cannot here on this call give you an idea of this.

You don't even have a range of outcome?

No, thank you.

The second question would be on, could you just give us a bit more color on the volume and pricing development in July? Are the trends that you're seeing consistent with your H2 guidance of volume up 1%-2%?

Yeah.

And pricing and mix up 4%-5%?

For sure we alluded to that there was some pre-buying in June. That, of course, we can see on the July numbers, where volume and growth is down.

Then we expect this to pick up here in August, September again. So there is nothing dramatic about July.

It sits there with a flat volume and a small-

But you can see the price increase sticking?

Yes. There is a price increase, but there is no, you can say, the volume was impacted by this pre-buying.

So there was a few percentage points of pre-buying in Q2 that affected the July volume, for sure.

Thank you.

Next question is from Allison Sun, Bank of America.

Hi. Morning.

Two questions from my side. First, what is your expectation for Eastern Europe for the second half?

Should we be expecting them to keep the good momentum we see in Q2? The second question is, you mentioned about the market share gain in some flat roof markets.

Which regions exactly are we talking about? Thank you.

I could not hear you a second. Just acoustically, I could not hear what you said.

Sorry. The second question is on the flat roof market share gain.

Can you tell me exactly which regions we see the market share gain?

Yeah.

Thank you.

Let me start there. It is in our large markets that we see the flat roof, that we gained a flat roof share.

It is because we are more competitive against our foam products, but also this bigger awareness of fire protection in France, Poland, Germany, as people put PV solar panels on their roofs in commercial buildings, they need to be fire safe. So that's in our main markets.

East Europe, we grew at 31%, like I said, that will not continue at that level going forward. We see more aggressive pricing from the foam and plastics, so it will come down a little bit from where we are right now.

Okay, thank you. Next question is from Chase Coughlan, Van Lanschot Kempen.

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

You mentioned in the report you are expecting a bit of margin pressure from what you said to be elevated maintenance costs. Could you explain a bit what that is and when you expect that to sort of fade out?

Was that related to the U.S. sourcing issues you mentioned earlier?

My second question, I think more of a clarification. You referenced the one time net debt EBITDA.

Is that an internal policy, or is that a sort of a debt covenant, a harder debt covenant? In the context of that, how are you looking at M&A at the moment, given obviously the higher CapEx spend and such?

Is that still something you're sizing up or maybe just sticking with the smaller strategic investments or smaller bolt-ons? Thank you.

No, that's an internal policy that we keep our leverage under one. We can run our investment programs within our policies.

The maintenance costs come from a row of areas, but now it becomes very operational. We have had to upgrade some things in our electric mill train in Norway that was planned, and the large electrification in the Netherlands are part of those costs.

When you shut down a big production line like that, then of course you also take the benefit of having the line stand still, and then you upgrade a whole row of other things that make sense to do while you are offline, so to say.

Okay. Yeah.

But how long do you expect those to remain elevated, then?

These maintenance runs don't normally take more than weeks, but then it's just a matter of how to forecast and foresee whether these are happening. So far we have had a few more incidents than we have normally had.

But, yeah, we don't have any sort of specific forecast for this Chase in the outlook.

Okay. No, that's still helpful.

Thank you very much.

Next question is from Anna, BNP Paribas.

Hi, everyone, and thanks for taking my questions. Most have been answered, but I just have a last one on North America.

The local currency growth of 4% was much softer than the group. What was driving this?

Is it the sourcing issues? Is it end market weakness, price discipline, share loss?

Any thoughts would help. Thank you.

We're struggling a little bit with hearing what you said, but I'm just double-checking with my colleagues.

I think, Anna, just repeat that again because the sound was not so clear here.

Sorry about the line. It was on North America softness, like what was driving this.

Was it the sourcing issues? Is it end market?

Any color here would be helpful.

Yeah, then we have to differentiate here a little bit. Canada is, as you can read in the press just now, for the two quarters in a row and technically in a recession, and the building construction industry is just at a very low level.

That's Canada. We also don't see that improve dramatically, although that's stabilizing a little bit right now.

That's Canada. And we are then benefiting from that we can use that wall in the U.S., so that doesn't hit us as hard as it would be if we were having overcapacity.

In the U.S., the construction market, then you really have to go down by region and see where there are some areas where there still is quite a lot of commercial industrial growth, and there's some areas where there's also residential. So it's more nuanced.

But we grow because we're gaining market share. Both the stone wool market is getting better, bigger, and we of course gain market share both in stone wool and totality.

When you put it all together, then it's 4%.

Okay, thank you.

Next question is from Daniel Khajenouri, Morgan Stanley.

Hi. Sorry, my follow-up question was indeed answered already.

Thank you.

Last question is from Pujarini Ghosh, Bernstein.

Hi, and thanks for taking my question again. A couple of times today you highlighted that stone wool is gaining market share in the U.S., and you are gaining market share probably within the stone wool space as well.

As I remember, I think in a previous presentation you had mentioned the share of stone wool in the U.S. was around 3%.

Do you have an indication of how much that share could be today, and then how much your share is within that space? Thank you.

Yeah, and we have a nice slide we sometimes show you. I think you can download it from some of the other presentations.

But as it looks now, and this is not exact science, please bear with me a little bit, but the numbers we see is that the share of the total insulation market, stone wool is moving from 4% up towards 5% these days. But when we look at other markets, including Canada, which is a comparable market, just simply from how you build houses in North America is comparable, then you are looking at markets where stone wool are close to 20% of the total insulation market.

I'm not suggesting that we will get the 20% total market share in the U.S. in the very near future, but our growth is driven by what you could call a category shift away from flammable foam and plastics into non-combustible stone wool.

This concludes our Q&A session. I would like to turn the conference back over to the management for any closing remarks.

Yeah. Jes and I thank you for joining today's earning call.

We would like to thank you for all the questions and the audience for listening in today's call. We appreciate your interest in Rockwool A/S.

If you have further questions, please feel free to reach out to me. You may find the Rockwool contact details in the investor sections on our corporate website.

Have a very nice day. Thank you.