Q2 2024 Rockwool AS Earnings Call
the oatorcon momentarily conferen momentarily thank you for your patient
The Rockwool conference call will start momentarily.
Thank you for your patience.
Ladies and gentlemen, welcome to the Rockwool report on the first half year of 2024.
Speaker Change: ladies and gentlemen welcome to the rock woall report on the first half year of two thousand and twenty four today i'm pleased to present ceo d jim burginson and cfo timim anderson for the first part of this call
Speaker Change: Today I'm pleased to present CEO Jens Birgersson and CFO Kim Andersen for the first part of this call.
Speaker Change: all participants will be in listcent only mode and afterwards there will be a question-and-answer sessionas a reminder this conference call is being recorded i would now like to turn the presentation over to your host please begin
Speaker Change: All participants will be in a listen-only mode and afterwards there will be a question and answer session.
Speaker Change: As a reminder, this conference call is being recorded.
Speaker Change: i
Speaker Change: and giving us ind good afternoon everybody s sry for for the lay we have some technical challenges here in chenight from may were taking the calls
Kim Aunders: today i firstofall of course i'm kim uanders in the cfo and with me here i have the ceoan speak son and today we present to you the first half we out and then enough course go into q and eight
Speaker Change: before we start just like to remainmind joh slight number two the forward-looking statement and please be aware that this presentation contains uncertainties
Speaker Change: and with this we can quly go into the prep on slide number three
Speaker Change: I would now like to turn the presentation over to your host.
Speaker Change: morning provvided every vol the end shipiff
Speaker Change: Please begin.
Speaker Change: became an eye and the home borarder directors of rockfulll including my successor
Speaker Change: Thank you very much and good afternoon, everybody.
Speaker Change: yess moved
Speaker Change: we are indiaianshenai and the reason we are here doing the board meeting is about ninety kilometers sou west stoand
Speaker Change: Sorry for the delay.
Speaker Change: and for previously called mas street we have the potipies of land we ever through the factortoryri project for our second factortory in
Speaker Change: in in india where we have had quite a successful last couple of years filling up power first factory so so that's the reasons we have
Speaker Change: We had some technical challenges here in Chennai from where we're taking the calls.
Speaker Change: calling from here as and i really can't playlame in the up per the technical promty we everything work thereited some other issu of problems set so if weremove to slide three daysage won results
Speaker Change: Today, first of all, of course, I'm Kim Andersen, the CFO, and with me here I have the CEO Jens Birgersson.
Speaker Change: And today we will present to you the first half result and then afterwards we go into Q&A.
Speaker Change: you know i normally nott comment that have you very much but
Speaker Change: into contrast between h hel due to a bit interesting soin
Speaker Change: age from wesaw eight percent quite broad-based growth of as we have seen in previous proin the last one off here it the commercial side with the ness going on the
Speaker Change: Thank you for your patience.
Operator: Thank you for your patience. Ladies and gentlemen, welcome to the Rockwool report on the first half year of 2024.
Speaker Change: much growth or residential ra opposite so the residential 's still travel but what we are doing
Speaker Change: fine on the commercial side do things
Speaker Change: we look at assault year todayd' avbit margin seventeen point seven percent and that has been achieved on moreorless neutral pricing we have
Speaker Change: fractional overga price reduction there's and makes a market is on somewhat as the process going up for something multi americon
Speaker Change: or soasia and they ares but process to hold them and some where they're down may be kind of monitoring our market share and na ig get that so overall
Speaker Change: Before we start, I'd just like to remind you on slide number two, the forward-looking statement, and please be aware that this presentation contains uncertainties.
Speaker Change: we have to be the first half year moving on to slide four second quarter highlights
Speaker Change: comparable difersce a little bit so two to wases t personor last year
Speaker Change: to one musclea song either last year
Speaker Change: so i would say we have a really broad-based growth
Speaker Change: and record record growth in north america idon't think we had a dbigigger growadth number and higher stes up go for both the canada in the u s
Speaker Change: overall sales in nominal we sto budget rate good to see that we acrossed billion i'm not sure if that's the first time but the very strong quarter and that
Speaker Change: on the abage margin
Speaker Change: we reached eighteen point seven percent and that includes
Speaker Change: seven million or creating a permission or the nations and just sum up we addingin q or q or prosecutorours a little bit more than thiru million but we have only let's move to slide five
Speaker Change: And with this, we can quickly go into the presentation on slide number three.
Speaker Change: i just got the
Speaker Change: i'm not really going to com with this but if you look on the rightof system divisionss growve
Speaker Change: this is minus one percent we did divest chancever so like for like numbers system division have two percentage qu that to growth that's shown there you cannegoti to slidees six
Speaker Change: Good morning, everybody.
Speaker Change: we situteed to and what pleasing here is to see that here obviously inallation business is growing
Speaker Change: Jens here.
Speaker Change: Kim and I are the whole board of directors of Rockwool, including my successor, Jens Munch.
Speaker Change: very very much s a supergood quarter but maybe from my perspective the more pleasing is that system divation was gained a little bit of momentum so if we add back the two percent
Speaker Change: last top line for chancesey let me have about five percent on the comparable
Speaker Change: basis so we are looking now in the coming quarters by the the growth will increase a littleabit in pos cess division
Speaker Change: the main the main driver for the system division growth is handandulland growth of the and had very strong development it poturned to slide the seven the regional sites development
Speaker Change: starting with with europe it's very scattered picture in in investing europewe have
Speaker Change: some countries growing ttwenty to thir to percentend we have
Speaker Change: threeed and growing
Speaker Change: surprising quadwell
Speaker Change: germany single dic digit growth has the has the growth ta turning the core corner although we don't see germany of the residential side turning up at all but that the commercial side
Speaker Change: then we have contries like spain from you paay up are around the coslargely negatives acquable widespread or not moving into easing or irrus a
Speaker Change: the scene
Speaker Change: several the countries but there ious allid dated growth numbers and the bor two of the small amounts of negativeven and we are not listed a rususha russia had a very
Speaker Change: very good quarter but sodid poll land and so so did for example craine we are small in a grain but we grew some for ty percent cr moving on to north america asian others
Speaker Change: creek summary of the whole thing about this
Speaker Change: We are in India, in Chennai, and the reason we are here during a board meeting is that about 90 kilometers southwest of Chennai, what was previously called Madras, we have bought a piece of land and we have approved a factory project for our second factory in India, where we have had quite a successful last couple of years filling up our first factory.
Speaker Change: is a china's negative
Speaker Change: Ladies and gentlemen, welcome to the Rockwool report on the first half year of 2024.
Speaker Change: u s and canalized on record growth and
Speaker Change: Today I'm pleased to present CEO Jens Birgersson and CFO, Kim Andersen, for the first part of this call.
Operator: Today I'm pleased to present CEO Jens Birgersson and CFO, Kim Andersen, for the first part of this call. All participants will be in a listen only mode, and afterwards there will be a question and answer session. As a reminder, this conference call has been recorded, I would now like to turn the presentation over to your host. Please begin. Thank you very much and good afternoon everybody. Sorry for the delay.
Speaker Change: for these daysia to the getap hand very good to grow so tha umominayation the theia and where we are now eat hour on very good growth we have are getting close at to point but becomescerned more but is nice to see that we have very are growing out here
Speaker Change: All participants will be in a listen only mode, and afterwards there will be a question and answer session.
Speaker Change: As a reminder, this conference call has been recorded, I would now like to turn the presentation over to your host.
Speaker Change: and also in m in america
Speaker Change: let's go to profitability on slide eight
Speaker Change: Please begin.
Speaker Change: marginhas increased quite a lot if you look there on the right hand diagrgram
Operator: We have some technical challenges here in Chennai from where we're taking the calls.
Speaker Change: Thank you very much and good afternoon everybody.
Kim Andersen: Today, I first of all, of course, I'm Kim Young Andersen, the CFO, and with me here I have the CEO Jens Birgersson, and today we will present to you the first half result, and then afterwards we go into Q&A. Before we start, I just like to remind you on slide number two, the follow-up statement, and please be aware that this presentation contains uncertainties. And with this, we can quickly go into the presentation on slide number three.
Speaker Change: there all marg enough to twenty-five percent medic margin m eighteen pointcent of sand wichges
Speaker Change: and not higher than than the yearback so the trend upwards have been healthy we have listed some of the factors obviously bolly growth stable saes prices
Speaker Change: Sorry for the delay.
Speaker Change: in for the cost has canpt stable be see now maybe fllection comp be back a little bit of hus favorable factors coming in obviously compared on the inflation but we see also many manyim materials kind of kicking up with normal inflation
Jens Birgersson: Good morning, today everyone is Jens Birgersson. We came and I and the whole board of directors of rock pool, including my successor, Yes Moon. We are in India and Chennai, and the reason we are here doing a board meeting is about 90 kilometers south west of Chennai. Hopefully, previously called my address screen, we have a database of land that we have approved the factory project for our second factory in India, where we have had quite the successful last couple of years filling up our first factory.
Speaker Change: onlight them here of these
Speaker Change: we no thing if you look at a headcount
Speaker Change: we are about one hundred of hundred employees also so higher in in the headcount compared to yearback and that is where the ten percent growth so obviously we have a
Speaker Change: We have some technical challenges here in Chennai from where we're taking the calls.
Speaker Change: Today, I first of all, of course, I'm Kim Young Andersen, the CFO, and with me here I have the CEO Jens Birgersson, and today we will present to you the first half result, and then afterwards we go into Q&A.
Speaker Change: commmendous tremendous productivity improvementthat they almost nine ten percent productivity improvement and that gives up nice over absorption where we coffee cost on the facture over has some on the rest and and you see that flow through to the bottom line so iss nice to see that that
Speaker Change: Before we start, I just like to remind you on slide number two, the follow-up statement, and please be aware that this presentation contains uncertainties.
Jens Birgersson: So that's the reason we are calling from here, and I really can't blame India for the technical problem. Everything works there, it's some other issue, that's a great problem. So if you move to slide three, the H1 results. Thanks. As you know, I normally don't comment, but I hope you have very much, but in the contrast between H1 and Q2 is a little bit interesting. So in H1, we saw 8% quite broad-based growth, but as we have seen in previous probably in the last one and half year, it's the commercial side of the business, the growing, we don't see much growth or residential rather opposite.
Speaker Change: stcalability is there in the business i'm also quite happy with this quite st om
Speaker Change: ramp up in the factories where from some of the north america we have to step up capacity
Speaker Change: And with this, we can quickly go into the presentation on slide number three.
Speaker Change: Good morning, today everyone is Jens Birgersson.
Speaker Change: We came and I and the whole board of directors of rock pool, including my successor, Yes Moon.
Speaker Change: very quickly and also some european countries thatep off germany for example increased the ships but we have been able to do that relatively quickly and that has have thoughtof in support of this growth if we look to slide nine
Speaker Change: We are in India and Chennai, and the reason we are here doing a board meeting is about 90 kilometers south west of Chennai.
Speaker Change: so
Speaker Change: here i only about the comment bargaininsing in in qil twenty- four
Speaker Change: and i guess i spoke about the five percent like for like role system dation here are quite pleased with that the system division is up on around the you take per cent bargain again of course is a nation that margin is
Speaker Change: Hopefully, previously called my address screen, we have a database of land that we have approved the factory project for our second factory in India, where we have had quite the successful last couple of years filling up our first factory.
Jens Birgersson: So the residential is still a trouble, but what we are doing fine on the commercial side of things. We look at the results, yet to date, if it's more than 17.7% and that has been achieved on more or less neutral pricing, we have a fraction of a price reduction. There's a mix of market and some markets, the prices are going up for something more than America and parts of Asia and there are those where the prices just hold and some are there down, but we get kind of monitoring our market share and now we get that.
Speaker Change: So that's the reason we are calling from here, and I really can't blame India for the technical problem.
Speaker Change: doing very well and i also want to maybe clarified up their whole the whole retainained don ation has been been put an insulation so that you are well up of that
Speaker Change: Everything works there, it's some other issue, that's a great problem.
Speaker Change: look into the investment activities
Speaker Change: more nothing not where that you will recocordnize most of these things but we have done a smaller acquisition in that now we have signed and be a very close to close i think for to six weeks
Speaker Change: So if you move to slide three, the H1 results.
Jens Birgersson: So overall, we have very happy with the first half year. Moving on to slide four, second quarter highlights. Comparable difference a little bit, so Q2 was a very strong last year. Q1 was a strong either last year, so I would say we had a really broad-based growth and record growth in North America. I don't think we ever had a big growth number and higher sales, that goes from both Canada and the US.
Speaker Change: Thanks.
Speaker Change: So that's the reason we are calling from here and I really can't blame India for the technical problems.
Speaker Change: As you know, I normally don't comment, but I hope you have very much, but in the contrast between H1 and Q2 is a little bit interesting.
Speaker Change: and just underline that we are here with the borinationia we have since since since a while be working here in natia to
Speaker Change: Everything works here.
Speaker Change: So in H1, we saw 8% quite broad-based growth, but as we have seen in previous probably in the last one and half year, it's the commercial side of the business, the growing, we don't see much growth or residential rather opposite.
Speaker Change: It's some other issue, not great problems here.
Speaker Change: to steep up our efforts time it's a very small acquisition but yet an important bridge head intovietnamand
Speaker Change: many of us i don't know that you even even the country like it now one hundred billion people of
Speaker Change: the very great outlook at moment so have to be that really we could guest that one because again this clearly go markets and itiss good to have the more us own the stone factory in the country
Jens Birgersson: Overall sales in nominal, we always talk about the trade, good to see that we crossed the billion. I'm not sure if that's the first time, but very very strong quarter and then on the 8-bit margin, we reached 18.7 percent and that includes 7 million Euro or creating a correlation of the nations and just some of we are adding Q1, Q1 plus Q2 is a little bit more than 30 million that we have donate.
Speaker Change: we also working on also about their targets in the region iss not a lot around but what we have scouting move on to slide eleven
Speaker Change: So if we move to slide three, the H1 results.
Speaker Change: networking capital percentage level point five percent down comparedto giveback from thirteen point four
Speaker Change: but not special that this is nothing we really need to focus a lot on the sits inherent in the business that we don't ti up too much networking capital if we had one reasonion that number
Jens Birgersson: Let's move to slide five. I'm not really going to comment this, but if you look on the right, the system's division's growth is in minus 1 percent. We did some division have 2 percent, which is quite a big growth that's shown there. We've been our shift to slide six. We see Q2 and what's pleasing here is to see that here obviously the information business is growing. Very, very much. It's a super good quarter, but maybe from my perspective, even more pleasing is that the system division was gained a little bit of momentum.
Speaker Change: due to the volume growads may perhaps would have like to have a little bit more finished goodth venary we had to soundend a little bit more than evwant to
Speaker Change: we're going to work now ended to bring up dementary up in the coming quarters and then the last that there the had net cash position
Speaker Change: around two hundred million net cash positive and thatad the diavvidend is off to the share buyback we are on track we had about hundred sixty million
Speaker Change: As you know, I normally don't comment on RPA very much, but the contrast between H1 and, Q2 is a little bit interesting.
Speaker Change: euro buyback plan for this yearm we are pacing relatively wellalong the curve on thatformones good cash and despite ofg
Speaker Change: So in H1, we saw 8% quite broad-based growth, but as we have seen in previous, probably, in the last one and a half year, is the commercial side of the business going.
Jens Birgersson: So if we add back the 2% lost top life for Chelsea, let me have about 5% on the comparable basis. So we are looking now at the coming quarters, whether the growth will increase a little bit. In the system division, the main driver for the system division growth is about to handle and grow down that has a very strong development. If we turn to slide the 7, the regional science development, starting with Europe, it's a very scattered picture in the investing Europe.
Speaker Change: We don't see much growth on residential, rather the opposite.
Speaker Change: slide trail
Speaker Change: as as we normally do in
Speaker Change: So the residential is still troubled, but we are doing fine on the commercial side of, things.
Speaker Change: in the half year report we normally include while the two slicse sustainability we have done that also here is' not much drama about that we have theied
Speaker Change: We look at the result year-to-date, the average margin is 17.7%, and that has been achieved, on more or less neutral pricing. We have a fraction of a price reduction.
Speaker Change: There's a mix of markets, some markets the price is going up, for example, North America, and parts of Asia, and there are others where the prices just hold, and some of them are down, but we are kind of monitoring our market share and how we get that.
Speaker Change: sustainability to goals
Jens Birgersson: We have some countries growing, 23% we have Sweden growing, surprisingly quite well. Germany has the growth act turning the corner, although we don't see Germany on the residential side, turning off the tall, but that's not the commercial side. Then we have countries like Spain, France, UK that are around the Sierra, slightly negative, it's quite a wise spread on that. Moving to Eastern Europe and Russia, you see several countries where there is all the double digit growth numbers and the smaller two of the small amounts are negative and we are not listed at Russia.
Speaker Change: that good time izingon to print third d we we on track or ahead on all almost those pull out a couple of dattopotshere
Speaker Change: okay i thank it from my member saw so if you look first on the
Speaker Change: asdue to emission intensity this is the goal decled to four science by target proist that nor as an enginey us a good metric here we have achieved to be the index two thousand and fifteen one hundred in terms of
Speaker Change: So the residential is still a trouble, but what we are doing fine on the commercial side of things.
Speaker Change: tom zero twoper produce timem
Speaker Change: starwonne
Speaker Change: we had the reference level to thousand fifteen of one hundred and now inherent in the business we have reached the indeulect co so that' sixteen and sixteen poins or sixteen percent down from come produce
Speaker Change: gothrough productivity improvements proverscial green some other actions
Speaker Change: and we will see we willresee this number now
Speaker Change: continue oub over the common years because we are we are investing in we are taking actual
Jens Birgersson: Russia had a very good quarter, but so did Poland and so did for example Ukraine, yes one in Ukraine, but we grew some 40% in Ukraine. Moving on to North America, Asian others, a quick summary of the whole thing, that this is a China's negative. US and Canada is on record growth and South East Asia, in Japan, very good growth, so Parliamentation in Asia and where we are now in the hour on very good growth.
Speaker Change: in dinual report on the sustainability report you ll see a number below based it for us done progressing well
Speaker Change: and you know the green investment on the capex likeyou the to mol we put into that we also working now as we said on
Speaker Change: onour anygy supplies on the contracting around that to see if we can get out to this stream volatility to the next the next round we have an energy cris or something that that's enough that for just
Speaker Change: wegoing and science basace target
Jens Birgersson: We are getting closer to points, but we can't sell more, but it's nice to see that we are growing out here and also in North America. Let's go to profitability on slide 8. Margin has increased quite a lot, if you look there on the right hand diagram, they've told Margin up to 25% and it's Margin more 18.7%, which is a lot higher than the year back, so the trend upwards have been healthy.
Speaker Change: but we also have a goal for
Speaker Change: talks about theer two acree lth eitials in absolute terms excluding acquisitionss
Speaker Change: we have 't gone for that too and it's quite pleas to see that when the business is growing volume of a top line doubledigit
Speaker Change: that our q to emissions only increase with the six percent on more than ten percent volume in sage growth so so that's good that shows that that
Speaker Change: We look at the results, yet to date, if it's more than 17.7% and that has been achieved on more or less neutral pricing, we have a fraction of a price reduction.
Jens Birgersson: We have listed some of the factors, obviously volume growth, stable sales, prices, import costs have kept stable. We see now maybe inflation can be back a little bit, we have some favorable factors coming in obviously compared on the inflation, but we see also very many materials kind of ticking up for normal inflation. One like them here, that these... Well, no thing. If you look at the head count, we are about 100 to 100 employees, so so higher in the head count compared to a year back.
Speaker Change: kind of emissions ality is working it also shows the pandalyance the challenge behave of
Speaker Change: There's a mix of market and some markets, the prices are going up for something more than America and parts of Asia and there are those where the prices just hold and some are there down, but we get kind of monitoring our market share and now we get that.
Speaker Change: two thousand and thirty and all mars of really really convert that would come company moreor less into electrical ensing driven by gremenity so we need is to really challengge the target that we are working on at this stage we don't
Speaker Change: So overall, we have very happy with the first half year.
Speaker Change: Moving on to slide four, second quarter highlights.
Speaker Change: Comparable difference a little bit, so Q2 was a very strong last year.
Speaker Change: that it's impossible we have we have the technologies
Speaker Change: we have the investment plan but then of course to more of the growth of more challenging do goals be counts so at the moment i will say the long-term growth out with it's quite positive
Speaker Change: Q1 was a strong either last year, so I would say we had a really broad-based growth and record growth in North America.
Jens Birgersson: And that is with the 10% growth. So obviously we have a tremendous productivity improvement. There are almost 9, 10% productivity improvement. And that gives us a nice overall absorption where we all face costs on the factory. And you see that flow through to the bottom line. So it's nice to see that that scalability is there in the business. I'm also quite happy with this quite sudden ramp up in the factories where, for example, the North America, we have to step up capacity.
Speaker Change: I don't think we ever had a big growth number and higher sales, that goes from both Canada and the US.
Speaker Change: so so is a challenging goal that we are working you con sideed that thations we are taking a good on the rock cycle is
Speaker Change: Overall sales in nominal, we always talk about the trade, good to see that we crossed the billion.
Speaker Change: core here repfer ofus the reil waste teams would n't take back our own products and and
Speaker Change: outside of them
Speaker Change: lease cy of them we have added mal of poland
Speaker Change: to the countries where we off to this service
Speaker Change: and i mean are now twenty-two countries in the scheme and we go to start by twenty thirtito so we avail ahead of that we will be thought all we very question for twent and thirteen
Jens Birgersson: Very quickly and also some European countries step up Germany, for example, increased the shifts. But we have a lot of work to do. We've been able to do that relatively quickly. And that has helped us in supporting this growth. If we look to slide nine. Here I only want to comment the bargaining thing in people 24. And I guess I spoke about the 5% like for like road system division. Here I'm quite pleased with that.
Speaker Change: yeah
Speaker Change: and then we'll say the the safety go through the serious accidents on both fatalities in the first half year is not it is what we like to see
Speaker Change: and does' subready to perform one the time but as you know we have if we have a big big
Speaker Change: operational with manufacturerism and this factor is things can happen but we have workkingin very areas on not and this's good that we have a good first half yet
Jens Birgersson: The system division is up around the 15% bargain again. Of course, the information that that margin is doing. Very well. And I also want to maybe clarify that the whole, the whole Ukraine, the donation has been input on the installation. So that you are well of that. Looking to the investment activities. No, no, nothing else worth it. You recognize most of these things.
Speaker Change: So overall, we are very happy with the first half year.
Speaker Change: I'm not sure if that's the first time, but very very strong quarter and then on the 8-bit margin, we reached 18.7 percent and that includes 7 million Euro or creating a correlation of the nations and just some of we are adding Q1, Q1 plus Q2 is a little bit more than 30 million that we have donate.
Speaker Change: go into the outlook slide fourteen
Speaker Change: Moving on to slide four, second quarter highlights.
Speaker Change: going forward on the strangeed
Speaker Change: we we haven't seen
Speaker Change: Let's move to slide five.
Speaker Change: any change should any dramatic developments in the market of we are stepping in a couple of quarters where you have more challenging comparable the sto on the top planthat
Speaker Change: Comparable differs a little bit, so Q2 wasn't very strong last year, Q1 wasn't strong either, last year, so I would say we had a really broad-based growth and record growth in North America.
Speaker Change: I'm not really going to comment this, but if you look on the right, the system's division's growth is in minus 1 percent.
Speaker Change: I think we have had a bigger growth number and higher sales, that goes for both Canada, and the U.S.
Speaker Change: midsingle-digit present age growth thingsms like it go outlook still although we are head of that unt now but that's because we compare on t as we see now we see the business continue that's good on the abit bargainin around
Speaker Change: We did some division have 2 percent, which is quite a big growth that's shown there.
Jens Birgersson: But what we have done a small acquisition in Vietnam, we have signed and we're very close to close, I think, 4 to 6 weeks. And that's on the line that we are here with the board in Asia. We have since since since a while, been working here in Asia to step up our efforts.
Speaker Change: Overall sales, nominal, we always talk budget rate, good to see that we crossed a billion.
Speaker Change: I'm not sure if that's the first time, but very, very strong quarter, and then on the, EBIT margin, we reached 18.7%, and that includes 7 million euro provision or donations, and just to sum up, we are adding Q1, Q1 plus Q2 is a little bit more than 30 million that we have donated.
Speaker Change: We've been our shift to slide six.
Speaker Change: We see Q2 and what's pleasing here is to see that here obviously the information business is growing.
Speaker Change: seventeen percent also there we are little bit ahead of the mustyou know be are the december effect
Speaker Change: Very, very much.
Jens Birgersson: I'm it's a very small acquisition, but yet an important bridge had into Vietnam. And many of us might don't know that even even the country like Vietnam has 100 million people and the very great outlook at the moment. So I'm happy with that. We could get that one because again, this clearly growth market. And it's good to have that more or less on this normal factory in the country. We also working on all some other targets in the region.
Speaker Change: togo away we also have to somewhere in france profitable business for us in impite a bit of posly comfortable to that outlook only investment not needed to
Speaker Change: It's a super good quarter, but maybe from my perspective, even more pleasing is that the system division was gained a little bit of momentum.
Speaker Change: to report from that um
Speaker Change: So if we add back the 2% lost top life for Chelsea, let me have about 5% on the comparable basis.
Speaker Change: we on track to invest whatt what we are plant us for the year
Speaker Change: So we are looking now at the coming quarters, whether the growth will increase a little bit.
Speaker Change: In the system division, the main driver for the system division growth is about to handle and grow down that has a very strong development.
Speaker Change: If we turn to slide the 7, the regional science development, starting with Europe, it's a very scattered picture in the investing Europe.
Speaker Change: We have some countries growing, 23% we have Sweden growing, surprisingly quite well.
Kim Andersen: It's not a lot around, but we have got to move on to slide 11. Next working capital percentage 11.5% down compared to a year back from 30.4. Nothing special with that is it's nothing we really need to focus a lot on the sits inherent in the business that we don't tie up too much networking capital. So if we had one region that number due to the volume growth, we may perhaps would have liked to have a little bit more finished from the inventory.
Speaker Change: very dict told one of the lawsuits
Speaker Change: Germany has the growth act turning the corner, although we don't see Germany on the residential side, turning off the tall, but that's not the commercial side.
Speaker Change: so we are reallygroup that we have got the all given up the new factory in france but we need to look at that don'll see see how we keep pushing the plant in france
Speaker Change: Then we have countries like Spain, France, UK that are around the Sierra, slightly negative, it's quite a wise spread on that.
Speaker Change: it tals we should g to start building it now of this loss set back and we can expect to furtherthe deal i possibly real move the resources some ce ates and another the project we have a number of this start but we have absolutely not given up on the trench out
Speaker Change: Moving to Eastern Europe and Russia, you see several countries where there is all the double digit growth numbers and the smaller two of the small amounts are negative and we are not listed at Russia.
Speaker Change: Russia had a very good quarter, but so did Poland and so did for example Ukraine, yes one in Ukraine, but we grew some 40% in Ukraine.
Kim Andersen: We had to sell a little bit more than we want to do. And that's off to the David end and it's off to the share by back. We are on track. We had about 160 million euro by back plan for this year. And we are pacing relatively well on the curve. That's also going to be good cash and spider dog. We have a lot of cash in the company. It's a good to see that.
Speaker Change: Let's move to slide five.
Speaker Change: keep working through that
Speaker Change: I'm not really going to comment this, but if you look up on the right, the systems division's, growth is in minus 1%.
Cresieldes: over to cresieldes
Cresieldes: We did divest Charlesville, so on like-for-like numbers, system division have two percentage, point metric growth that's shown there.
Speaker Change: thank you we will now begin the question-and-answer session
Speaker Change: If we now shift to slide six, we see Q2, and what's pleasing here is to see that here, obviously, the insulation business is growing, very, very much.
Speaker Change: It's a super good quarter. But maybe from my perspective, even more pleasing is that the system division has gained a little bit of momentum. So if we add back the 2% last top line for Charlesville, we have about 5% on a comparable basis.
Speaker Change: to ask a question you may press star than one on your touch toone phone if you're using a speaker phone please pick up your handset before pressing the keys if i need time your question has been addressed and you will like to withdraw your question please press star then to
Speaker Change: Moving on to North America, Asian others, a quick summary of the whole thing, that this is a China's negative.
Speaker Change: US and Canada is on record growth and South East Asia, in Japan, very good growth, so Parliamentation in Asia and where we are now in the hour on very good growth.
Speaker Change: We are getting closer to points, but we can't sell more, but it's nice to see that we are growing out here and also in North America.
Speaker Change: Let's go to profitability on slide 8.
Speaker Change: we will start with the two questions per participant please respect this and at this time will pause momentarily to a simbo roster
Speaker Change: So we are looking now in the coming quarters whether the growth will increase a little bit in the system division. The main driver for the system division growth is the box handling growth on that.
Speaker Change: Margin has increased quite a lot, if you look there on the right hand diagram, they've told Margin up to 25% and it's Margin more 18.7%, which is a lot higher than the year back, so the trend upwards have been healthy.
Speaker Change: I've had very strong development.
Speaker Change: We have listed some of the factors, obviously volume growth, stable sales, prices, import costs have kept stable.
Speaker Change: If we turn to slide 7, the regional sales development, starting with Europe, it's a very scattered picture in Western Europe. We have some countries growing 20-30%.
Speaker Change: and the first question will come from cloud almer with nordiaa please go ahead
Speaker Change: We see now maybe inflation can be back a little bit, we have some favorable factors coming in obviously compared on the inflation, but we see also very many materials kind of ticking up for normal inflation.
Speaker Change: One like them here, that these...
Kim Andersen: Slide 12, as we normally do in the half-year report, we normally include water-to-slives and sustainability. We have done that also here. It's not much drama about that. We have the five sustainability goals that will be the time horizon to print. Third, we don't track or head on all those. I'll just pull out the capital data points here. Okay, I'll take it from my memory. So, if you look first on the CO2 emission intensity, this is the goal we defined before.
Cloud Almer: thanking you were yeah to crispfor my side and do that one by one
Cloud Almer: the first question goes to inflation you mention that you do see a sound like a small inflation does that mean you're going to raace prices or will you have to abhoort that in your in your pnl sol to speak that will be the first one
Speaker Change: Well, no thing.
Speaker Change: also clou thank for introducing yourself we don't have to know about a screening we can ce ive've asked to question i new you are so great if you can
Speaker Change: introduces u like that sort the m no yeah i see i mean theinflation doesn't go away we are had the energy benefit from some other benefits but
Speaker Change: but
Kim Andersen: Science-based target exists. That's an engineer. That's a good metric. Here, we have achieved the index 2015-100 in terms of time CO2 produced time stolen. We had the reference level 2015 of 100. We have now inherently in the business. We have reached the index-active core, so that's 16 and 16 points, so 16% down from time produced through productivity improvements, commercials, green energy and some other actions. We will see this number continue down over the coming years because we are investing and we are taking actions in the annual report on the sustainability report.
Speaker Change: we have several markets where be foreseen that we would do a small drum bit price increase to cover that inflation there could be competitive dynamics in some places where
Speaker Change: wherearer
Speaker Change: we might not do that but the overall direction is that we are ready to do a small price increase to pass on inflation pressures as far as we can
Speaker Change: okay and i leing to the next question is you know if you interested second half guides and you did first upon this in your in your slides but implicitly you guys around sixteen percent ebit margin in the second half so down versus first half also if we adjust for the ukraine donation
Speaker Change: is this a only d friends and to cember se as you said or is it also the inflation impact your pro y said it's not easy to brace prices in all marks market so you had to be more you know specific about these price increases
Kim Andersen: We will see a number below the fourth. That's progressing well. You know, the green investment on the graphics line, you see what the capital money we put into that. We are also working now, as we said, on our energy supplies and the contracting around that, to see if we can get out of this trim volatility the next round. We have an energy crisis. That's what is ongoing. Science-based target, that we also have a goal for talks about CO2 equivalent emissions in absolute terms, excluding acquisitions.
Speaker Change: We have Sweden growing surprisingly quite well.
Speaker Change: Germany, single-digit growth, healthy growth back, turning the corner, although we don't see Germany on the residential side turning up at all, but that's on the commercial side.
Speaker Change: Then we have countries like Spain, France, UK that are around the zero, slightly negative.
Speaker Change: So quite a wide spread on that.
Speaker Change: Moving to Eastern Europe and Russia, you see several countries with very solid double-digit, growth numbers, and one or two of the small amounts are negative.
Speaker Change: i saw i saw your headllineed that your initial comment and i would say we are not
Speaker Change: you'll seen on company so'll
Speaker Change: released there
Speaker Change: earnings report now that i've seen declineed in top line of that is quite a mix picture and indifferen relates to sector so
Kim Andersen: We have a goal for that too, and it's quite pleasing to see that when the business is growing volume of top-line W did it, that our CO2 emissions only increased with the 6% on a more than 10% volume of sales growth. So that shows that that kind of emissions part on the East working. It also shows that underlies the challenge we have on 23rd GMO boards of really, really convert the old company more or less into electro-commenting driven by green energy.
Speaker Change: and we haven't seen that so we are not pessimistic we are not pessimistic on the prices i think we can do most of that yes we believe there is inflation where pressures but
Speaker Change: we have the bition to pass on so that's the outlook and that we didat upgrade pervoit of july to seventeen percent to be falled to to make an assessment now is is
Speaker Change: itis not proue that we be it comfortable to the sevente percent we obviously have noer bation
Speaker Change: to reduce the profitability but the acknowledgeation of december effect and the francets ofeffactors we do so i i believe that for my success where to
Speaker Change: to kind of name that
Speaker Change: outf in his
Speaker Change: may the first order in corone
Speaker Change: there there are also and you know that becoming close and closer to the autumn periods we are many of our markets will negotiate two and twenty five ices
Kim Andersen: So we need it. It's a really challenging target, but we are working on it at this stage. We don't. Heal that it's impossible, we have the technologies, we have the investment time, but then of course the more we grow, the more challenging that goes becomes. So not the moment that was said the long term growth outlook is quite positive. So it's a challenging goal, but we are working, you can see that actions we are taking good.
Speaker Change: then it was t need to be the timing there soorry i wouldn't i wouldn't you do straight mathematics and i concluded that there s that
Speaker Change: wewill come back on that fore customer with llivty deper into those discussions and i also say i
Speaker Change: we feel comfortable with the seventy percent to it
Kim Andersen: On the rock cycle is here is the report of the retail waste themes, but we take back our own products and upcycled them. We have added miles of Poland to the countries where we offer this service, and we have now 22 countries in the scheme, and we go to 30 by 2030. So we are we are in the head of that, we will beat that goal, we will be ready, much before 2030.
Speaker Change: the next number given no more
Speaker Change: rana things are mus dances
Speaker Change: thank
peter sehesed: the next question will come from peter sehesed with abg please go ahead
peter sehesed: great peputter from may thank our questions i have two the first one is on france with the marin of treimmental of programmers has noted an increasase in applications following they were turned to the
Kim Andersen: And then we'll say the safety goal, no serious accidents and no fatalities in the first half year, and it's what we like to see, and that's what we need to perform all the time, but as you know we have a big, big operation with many factories.
Speaker Change #101: in all application procedures and i guess that these applications will probably not fit the market are realized to utize in the second half
Speaker Change #102: is this something that you have techkenme to account in your guidance because i know that in france the renoformvation program has been a very important driver for work for the past of the third person
Speaker Change #103: the ice accounted or the
Jens Birgersson: And this factor is it's things can happen, but we are working very seriously on that, and it's good that we have a good first half year going to the outlook slide 14. Going forward on sales, we we haven't seen any change should any dramatic developments in the market. But we are stepping in a couple of quarters where we have more challenging comparable. So on the top line that mid single digit percentage growth seems like a good, good outlook still, although we are ahead of that until now, but that's because of comparable.
Speaker Change #104: we have a good profitable business and
Speaker Change #105: and francecis sliides in the negative territory in in the quarter and we have in factoredty in any hopes and dreams from the scheme so mean we have a good conservative there or realistic forecast and thatdoes include
Speaker Change: If you look at the head count, we are about 100 to 100 employees, so so higher in the head count compared to a year back. And that is with the 10% growth.
Speaker Change #106: but adjust going back to the guidance because you are you wording on on pricing it into the same as you had you did in q one and q four
Speaker Change: So obviously we have a tremendous productivity improvement.
Speaker Change: There are almost 9, 10% productivity improvement.
Speaker Change #107: also with respect and we have sort of the usual thing about the same ber impact that's also something that you typically iterate around this the is there anything
Speaker Change: And that gives us a nice overall absorption where we all face costs on the factory.
Jens Birgersson: As we said, now we see the business could continue, that's good. On the A bit margin around 17%, also there, we are a little bit ahead, but then as you know, we are the December effect. We go either way, and we also had to somewhere in France, profit of business for us, impact a bit, but what we feel comfortable with that outlook and on the investment, nothing needed to, to, to report from that. We are on track to invest, but we are planting this for the year.
Speaker Change #107: that is sort of
Speaker Change #107: different this time that it has been
Speaker Change: And you see that flow through to the bottom line.
Speaker Change #108: it s say no no tras mar it's very much business a used use of you know we we drive a very strict rising process and become any
Speaker Change: So it's nice to see that that scalability is there in the business.
Speaker Change #109: we stay on top of the marts and and we try to take that veryious see areious and there is them there is
Speaker Change #110: in the dynamics are there that is different to another year of course we don't have the situation we how did they also trying to conitute with the hyper inflation all this so is i would say business as usual and the wren slide in pat the try to go and and it's not
Speaker Change: I'm also quite happy with this quite sudden ramp up in the factories where, for example, the North America, we have to step up capacity. Very quickly and also some European countries step up Germany, for example, increased the shifts.
Speaker Change: But we have a lot of work to do.
Jens Birgersson: Yeah, you should, you should say though, on the investment side, we have had one setback, our new plant in France, we, we were surprised, I must say that we got the negative. Varadict on one of the lawsuits, so we are regrouping on that, we have not at all given up the new factory in France, but we need to look at that and see, see how we keep pushing the plant in France.
Speaker Change #110: no no drraam about the whole thing but but that of course you have know some market some agno has the pressures we work come all down be so of far so good
Speaker Change #111: thank for ing my questions and also i d like to say thanks for your effort and would you've done lo i think you've said you want team the team said a very higher but a benchmark for for the incoming ce o so good notck train as well
Speaker Change: We've been able to do that relatively quickly.
Speaker Change: And that has helped us in supporting this growth.
Jens Birgersson: We don't, we should be able to start building it up, but this was a setback and we can expect the further delay, possibly we will move the resources and accelerate to not the product. We have a number of products started, but we have absolutely not given up on the French plant, keep working through that.
Speaker Change #112: yes you thank you very much treatater we have the same team in play for the guest a very strong pa of han thankking over the business or 'm very optimist to come on to futuretal
Speaker Change: If we look to slide nine.
Speaker Change #113: thanks next
Speaker Change #113: the next question will come from or nodleman with bank of america please go ahead
elderlyman: thank you very much my name is elderlyman form a bank of america my first question is is i guess related to to pricing margina and returns they on that topic you indeed i've done very well on margin
Operator: Over two questions. Thank you.
Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you're using a speaker phone, please pick up your handset before pressing the keys. If any time your question has been addressed and you would like to withdraw your question, please press star then two.
elderlyman: um
Operator: We will start with the two questions for participants. Please respect this.
Speaker Change #115: and that drove an improvement in r i see which you publish think twenty three percent is a print printed number in the h one report over the last thing that's the twelve months rolling data which compared to fifteen percent last year appreciate eleount of
Operator: And at this time, we'll pause momentarily to assemble a roster.
Klaus Almar: And the first question will come from Klaus Almar, with Nordea. Please go ahead. Thank you. Yeah. Two questions from my side. I'll do them one by one.
Speaker Change: Here I only want to comment the bargaining thing in people 24.
Jens Birgersson: The first question goes to inflation. Jens, you mentioned that you do see a, it sounds like a small inflation. Does that mean you're going to raise prices, or will you have to uphold that in your, in your P&L, so to speak? That would be the first one. Yeah. So Klaus, thanks for introducing yourself. We don't have the normal screen, but we can see who asked the question. I know you are. So great, if you can introduce yourself like that, you know, no, I, yeah, I see, I mean, inflation doesn't go away.
Speaker Change #116: and i say it's fl in capex on the cost of edadding new plants has gone up but on the other i i don't believe you have a broad based plants to increase a capacity it's more selective process so i guess my question is you know beyond pricing and margin levels do you believe that this sort of returns sustainable going forward or is there possibility for some sort of normalization of a time
Speaker Change: And I guess I spoke about the 5% like for like road system division.
Speaker Change: Here I'm quite pleased with that.
Speaker Change #117: i would like to i will give just a prettyef flameor on that reflection on that a team commented because he continues my view of that is that we be not still you know we want to have fifteen percent aboutve but
Speaker Change: The system division is up around the 15% bargain again.
Jens Birgersson: We are at the energy benefits and some other benefits, but, but we have several markets where we foresee that we would do a small drunken price increase to cover that, that inflation. They could be competitive dynamics in some places where we might not do that, but the overall direction is that we are ready to do a small high price increase to pass on the inflation or pressures as far as we can. Okay.
Speaker Change #118: the biggest job us to see or what i've seen it is so for me is not so important if is
Speaker Change: Of course, the information that that margin is doing.
Speaker Change #119: twenty-three percent to sixteen percent of whataverage is important but we key supporting the volume of growth and not to end in our industry if you have the capacity you can deliver the volume so
Speaker Change #120: from my perspective i think yes we want to have a good cash generation with the good margin
Speaker Change: Very well.
Jens Birgersson: Another leading to the next question, which is, you know, the implicit second half guides, and you did toss upon this in your, in your slides, but implicitly you guys for around 16% EBIT margin in the second half. So down versus first half also if we adjust for the Ukraine donation. Is this only due to friends and, and, and, and December sale, as you said, or is it also the inflation impact? You have previously said it is not easy to raise prices in all markets, markets, so you had to be more, you know, specifically about these price increases.
Speaker Change #120: but we would like to invest more than sometimes we get thel like now france the plant we would read and like to build that and that would be a bur for quite a while such a big plant on the return capital employed quite frankly i rather have
Speaker Change: And I also want to maybe clarify that the whole, the whole Ukraine, the donation has been input on the installation.
Speaker Change: So that you are well of that.
Speaker Change #120: a couple of percent this point lower returner capital employing the plllonged pend because that's badful for the long term
Speaker Change: Looking to the investment activities.
Speaker Change #120: for this business so that's how we look at it so i think that now you have a combination of the some proprodujects are hanging and yes we are building
Speaker Change #120: gten in their coun ant romania the building on the three u s and the u s you know we we are we r building it's not just selective brr building and because a step up capex that is quite hard to be in
Speaker Change: No, no, nothing else worth it.
Jens Birgersson: Yeah, yeah, I saw, I saw your headline in your initial comment, and I, I would say, we are not, you have seen some companies that have released their earnings report now and that have seen the client in top line, that is quite a mixed picture in in different related sectors or and we haven't seen any of that. So, we are not pessimistic, we are not pessimistic on the prices. I think we can do most of that.
Speaker Change #121: it's not go in its staf for to cup twenty three but i should let cle know all of the produ the short term twenty three or twenty four closer twenty four compared to two some fifteen that year the last year was was a bit
Speaker Change: You recognize most of these things.
Speaker Change: But what we have done a small acquisition in Vietnam, we have signed and we're very close to close, I think, 4 to 6 weeks.
Speaker Change #121: abnormally low because that was impacted by the twenty andtwenty two downsh
Speaker Change: And that's on the line that we are here with the board in Asia.
Jens Birgersson: Yes, we believe there is inflation or pressures, but we, we have the ambition to pass that on. So, that's the outlook, and then we, we did upgrade, I'm also day 10, hope you're alive to 17% to be prepared to, to make an assessment now is is not proved that we feel comfortable with the 17% we obviously have no ambition to reduce the profitability but the acknowledge of the December effect and the France effect as well as to. So I believe that for my successor to kind of nail that outlook that his maybe first earnings call.
Speaker Change #121: in performance
Speaker Change #121: so maybe this year' ' a bit of normally highs since we have a relative with low working capital there for the beginning of the year so so i think it's a i think an ommalization would be around the twenty s
Speaker Change: We have since since since a while, been working here in Asia to step up our efforts.
Speaker Change #122: but as m said it's something that we stear to watch necessarily the short term
Speaker Change #123: be to the fifteen plus tar setting internally and then we we go for this but we know step of investment in the coming years so so yes and myself will maybe not be able to per twenty four percent i in short term
Speaker Change: I'm it's a very small acquisition, but yet an important bridge had into Vietnam.
Speaker Change #124: in the childrenroom that's where the numbers are
Speaker Change #125: very good thank you thank you for that my my second question is that's ok is regarding russia
Speaker Change #125: We are not listed yet on Russia.
Speaker Change #125: Russia had a very good quarter, but so did Poland and so did, for example, Ukraine.
Speaker Change #125: And many of us might don't know that even even the country like Vietnam has 100 million people and the very great outlook at the moment.
Klaus Almar: And you know that how becoming close and closer to the autumn period where many of our markets would negotiate 20-25 prices. So there's also a little bit of the timing there. So I wouldn't you know do straight to mathematics inside the conclude that there's some that will come back on that for us when we're a little bit deeper into those discussions and I also say I you know we feel comfortable with the 70% turning it really you know the next time we've been on board. Thank you so much for the answers. Thanks.
Speaker Change #125: We are small in Ukraine, but we grew some 40% in Ukraine.
Speaker Change #125: Moving on to North, America, Asia, and others, a quick summary of the whole thing is that China is negative.
Speaker Change #125: The US and Canada are on record growth, and Southeast Asia, including Japan, very good, growth.
Speaker Change #125: So Thailand, Malaysia, Indonesia, and where we are now, India, on very good growth.
Speaker Change #126: i mean no chan further can tell in terms of the the way you're thinking of but they ownt have she poff daassets for the for ro co should expect a chance with a new human managementt in the future i guess think you know we have a very
Speaker Change #125: So I'm happy with that.
Speaker Change #125: We could get that one because again, this clearly growth market.
Speaker Change #126: We are getting closer to a point where we can't sell more, but it's nice to see that we are
Speaker Change #126: growing out here, and also in North America.
Speaker Change #126: we have worked through this through in detatime my successor
Speaker Change #126: Let's go to profitability on slide 8.
Speaker Change #126: Margin has increased quite a lot. If you look there on the right-hand diagram, debit margin up to 25%, debit margin now 18.7%, which is a lot higher than a year back.
Speaker Change #127: it's still unil the first of september board member his partment we haven't seen the external al environmental on the reging for not continue what we do
Speaker Change #126: And it's good to have that more or less on this normal factory in the country.
Speaker Change #126: We also working on all some other targets in the region.
Speaker Change #126: It's not a lot around, but we have got to move on to slide 11.
Peter Sahested: The next question will come from Peter Sahested with ABG. Please go ahead. Great. Peter from ABG. Thank you for taking my questions. I have two. The first one is from France.
Speaker Change #126: Next working capital percentage 11.5% down compared to a year back from 30.4.
Speaker Change #126: Nothing special with that is it's nothing we really need to focus a lot on the sits inherent in the business that we don't tie up too much networking capital.
Speaker Change #128: so we we see no reasoncent to change and there is no intent of the chance to strategy because of a new ity on the company and 's we are all an line of this
Peter Sahested: The Maurene of the Triemannacht Programme has noted an increase in applications following their return to the autumn application procedures and I guess these applications will probably not hit the market or real life in the second half. Is there something that you have to take into account in your guidance because I know that in France the renovation program has been a very important driver for for local for the past. The answer to the question is yes it counts as for we you know we have a good profitable business and France is slightly in the negative territory in the quarter and we haven't factored in any hopes and dreams from this scheme. So we have a good conservative or realistic forecast and that's included.
Speaker Change #129: thank you very much
Speaker Change #130: next question will come from you seen towering with unfilled investment research please go ahead
Youssef Squali: yes good on to question on nice side as well first could you commment it a bit about the pricing transrends and the vouting fr that you've seen in in july and august
Youssef Squali: So the trend upwards has been healthy. We have listed some of the factors, obviously volume growth, stable sales, prices, import costs have kept stable. We see now maybe inflation coming back a little bit.
Youssef Squali: We have had some favorable factors coming in, obviously, compared on the inflation, but we see also many, many materials kind of picking up with normal inflation.
Speaker Change #132: is it fa to assume that there is no tranl in pricing or arvieue announced additional price increase i think in the us there were some priceing increase and on volume are useding an improvement or the deterioration that second quarter
Speaker Change #132: One item here and others.
Speaker Change #132: We are about 100 employees or so higher in the headcount compared to a year back and, that is with a 10% growth.
Speaker Change #133: and then say any question would be on the new un rrends
Speaker Change #134: like in a n mon for margin relativeively high today do you he risk for new companies to unter the european or mus americ an mean wood industry do you think it's too hard like because of a regulation like and they could sa an issu areyou facishing infront
Peter Sahested: So it's just to go back to the guidance because you're you're wording on pricing it into the same as you had you did in Q1 and Q4 also we respect and we have sort of the usual thing about the December impact that's also something that you typically write to rate around this time of year. Is there anything that is sort of different this time that it has been let's say no no it's very much business and use use of you know we we drive a very strict pricing process in the company we stay on top of the market and we try to take that very serious and there is some there is some any dynamics out there that is different to another year of course and we don't have the situation we had in the autumn 2022 with the hyperinflation of all this.
Speaker Change #135: so la frs we see some pricice imppressure in the residential segment of the lightw
Speaker Change #136: proly spoken to relatively low we haven't seen much of a change i mean that is around the caroslightghter negative slightly up want dramatic can not think reddid some
Speaker Change #137: i don't know governmental programs taking action to get that up overall the growroup
Speaker Change #137: one to didit p side or things
Speaker Change #138: we probably haven't seen the case for a broad base upterminent it has weakened a little bit lateately in europe so so fr sets around the ceos likelightly negative
Speaker Change #139: nothing et a dramatical price bas segmentss a bit found of the segments we can increase the prices so that' sel downoutside and that price increases are some market where we
Peter Sahested: So I will say business as usual and there is a sliding patient that we've been trying to go off the race and it's not no no drama around the whole thing but but then of course you have you know some marketing some segments coming out of the pressures we work on all that but so far so good Thank you for sharing my questions and also I'd like to say thanks for your effort and what you've done at Rockwool.
Speaker Change #139: there is no us what's every bit price which someppred the u s just launch eight percent increase
Speaker Change #140: and that does line that what's happening in the market and co what and allabout that's moving the last question just to mat understood you asked me how difficult it is to enter the stoable business or such question
Jens Birgersson: I think you've said, you want to join the team, you said a very high pitch mark for the incoming CEO, so good luck to him as well. Yeah, thank you very much, Peter. We have the same team in place, I guess very strong pair of hands, thank you all for the business. So I'm very optimistic about the future.
Speaker Change #141: do you see a risk because it's the margine to they are much higher than where to go yes this year always colct n player only an mat ative
Speaker Change #142: yes obviously
Speaker Change #143: there are
Speaker Change #144: people that look at normal now take of this is thea fantastic business lets and to this you have eight a apresentcent pbit marinum and the rest
Arnaud Lehmann: Thanks, next question. Welcome from Arnaud Lehmann with Bank of America, please go ahead.
Arnaud Lehmann: Yep, thank you very much.
Speaker Change #145: and i think having a single plant versus
Arnaud Lehmann: My name is Arnaud Lehmann for Bank of America. My first question is, I guess related to pricing margin and returns staying on that topic. Indeed, I've done very well on margin and that drove an improvement in ROIC, which published I think 23% is a printed number in the H1 report over the last, I think that's 12 months rolling data, which compared to 15% last year. I appreciate there's an element of let's say inflation in Quebec and the cost of adding new plans has gone up, but on the other hand, I don't believe you have a broad base plans to increase capacity. It's more of a selective process.
Speaker Change #146: our quite big machine now bit
Speaker Change #147: a lot of economical of scale and also considering how
Speaker Change #148: how difficulti es to start up the plant and around it really really productive outfit i think you will see some entrance
Speaker Change #149: but i must said there hasn't been the nentrump for a long time that come even closed tower bargain
Speaker Change #149: because it's very very difficult to rather a small network or the small plant without brand and without the service level aboall the rest of are not
Speaker Change #150: i'm not particular worrried about you enters but yes some people will announced
Speaker Change #150: and your comomps on the
Speaker Change #150: below
Speaker Change #150: we're deal with that ren out comes but
Jens Birgersson: So I guess my question is, you know, beyond pricing and margin levels, do you believe that these sort of returns are sustainable going forward or is there a possibility for some sort of normalization? Yeah, I would like to, I would give just a pretty flavor on that reflection on it and I came, she commented because he continues. My view on that is that we are not still, you know, we want to have 15% or about, but the biggest job is to see or what I've seen is that for me, it's not so important.
Speaker Change #150: that trend histor just been that the coun are it are announced and very much delayed because it's also very very difficult to build the plants that you need to be very persistent to some geographies to get your plant build in today's i think there
Speaker Change #132: So if we had one region that number due to the volume growth, we may perhaps would have liked to have a little bit more finished from the inventory.
Speaker Change #150: scale iss also important because we have
Speaker Change #151: the means the persistence to just keep worgking ultal we can build our plants so 'snot it can be very challenged to get all the privits and you get the privits of the rculture so whatever as as it is in many interestri in europe able
Speaker Change #132: We had to sell a little bit more than we want to do.
Speaker Change #132: And that's off to the David end and it's off to the share by back.
Jens Birgersson: If it's 23% or 16% or whatever, it's important that we keep supporting the volume growth and at the end in our industry, you know, if you have the capacity, you can deliver the volume. So from my perspective, I think, yes, we want to have a good cash generation with the good margin, but we would like to invest more. And sometimes we get delays like now in France, the plant, we would really like to build that.
Speaker Change #152: and there is a just a very last point which is just like not a question that more
Speaker Change #153: commment but the fact that you will develop such a greater growth forther company i think it's quite imimpressive what you've been able to do in terms of margin
Speaker Change #132: We are on track.
Speaker Change #154: and the productivities will just wantcontined to issue with the best lucks for you f your del
Speaker Change #155: and you
Speaker Change #156: thank you very much as see and you go mention an aspect there that this is an important bone to us that we don't talk about too muchgin that is our productivity that economic of scale of the business that that's an underlying
Speaker Change #132: We had about 160 million euro by back plan for this year.
Jens Birgersson: And that would be a burden for quite a while, such a big plant on the return on capital employed and quite frankly, I'd rather have a couple of percentage point lower return on capital employed and get that plant built because that's better for the long term for this business. But I should let you know about the short term, the 23 or 24 closer to 24 compared to 2015 last year. But the last year was was a bit abnormally low because it that was impacted by the 22 downturn in performance.
Speaker Change #156: So obviously we have tremendous productivity improvement, almost 9-10% productivity improvement, and that gives us nice overabsorption where we have fixed costs on the factory overheads and on the rest and you see that flow through to the bottom line.
Speaker Change #156: And we are pacing relatively well on the curve.
Speaker Change #157: big advantage of brck well but we have in the culture and ves's a strong terspth thank you for those words
Speaker Change #157: So it's nice to see that that scalability is there in the business.
Speaker Change #157: i
burges tomarsiiah: thenext question will come from burges tomarsiiah with hbc please go ahead
burges tomarsiiah: I'm also quite happy with this quite sudden ramp up in the factories where for example, in North America we have to step up capacity very quickly and also some European countries step up. Germany for example increased the shifts but we have been able to do that relatively quickly, and that has helped us in supporting this growth.
burges tomarsiiah: thegreach
burges tomarsiiah: so i have couple as well just on the pricing right it's interesting that you keep talking about pricing flood is in the quarter but looking at eastern europe eastern europe coach is up twenty it was in q two
burges tomarsiiah: If we go to slide 9, here I only want to comment on margins in Q220 and I guess I spoke about the 5% like-for-like growth of system division, here I'm quite pleased with that. The system division is up on around the 50% margin again.
burges tomarsiiah: That's also going to be good cash and spider dog.
burges tomarsiiah: Of course, insulation at that margin is doing very well and I also want to maybe clarify, that the whole Ukraine donation has been put on insulation so that you are aware of that.
burges tomarsiiah: Looking to the investment activities, nothing noteworthy, you recognize most of these things but we have done a small acquisition in Vietnam, we have signed and we are very close to close I think four to six weeks and just to underline that we are here with the board in Asia and, we have since a while been working here in Asia to step up our efforts.
burges tomarsiiah: It's a very small acquisition but yet an important bridgehead into Vietnam and many of us might, not know that even a country like Vietnam has 100 million people and a very great outlook at the moment so I'm happy that we could get that one because again it's clearly growth markets and it's good to have the more or less only small manufacturing in the country.
burges tomarsiiah: We have a lot of cash in the company.
Speaker Change #159: given some of your compettor is not direct one but a different segment little bit but they talk about when the posusme wasresbonds back to see some pricing pressure
Speaker Change #159: We are also working on some other targets in the region, it's not a lot around but we, are scouting.
Speaker Change #159: Moving on to slide 11, net working capital percentage 11.5% down compared to a year back of 13.4%, nothing special with that, it's nothing we really need to focus a lot on, it sits inherent in the business that we don't tie up too much net working capital, around 200 million net cash positive and that's after the dividend and it's after the share buyback.
Speaker Change #159: We are on track, we had about 160 million euro buyback plan for this year and we are, pacing relatively well on the curve, that's also good cash and in spite of High investment obviously with the earnings level we have now. We have a lot of cash in the company,
Speaker Change #159: It's a good to see that.
Jens Birgersson: So and maybe this year is a bit abnormally high since we have relatively low working capital for the beginning of the year. So I think it's a, I think a normalization would be around the 20th, but as M said, it's not something that we steer towards necessarily on the short term. RICs, we do the 15 plus tag setting internally and then we go for this, but we will step up investment in the coming year. So so yes and myself will maybe not be able to present the 24% RIC short term in the short term. That's where the numbers are.
Speaker Change #160: it doess something
Speaker Change #160: so good to see that.
Speaker Change #160: is also impact you because i collect historyically eastern eupe has been a different market where competition is state more intense compared to in of so any comments around that will be very helpful and within that if you could just give little more flavor into the western europe and everybody is talking about interest rate impro cut coming through to use the similar risk panning out investingin europe as well when the volume bounds happens towards end of q four or maybe into two thousand andtwenty five so that's my first onei'willcome back in second
Speaker Change #160: Slide 12, as we normally do in the half-year report, we normally include water-to-slives and sustainability.
Speaker Change #160: Slide 12.
Speaker Change #160: As we normally do in the half-year report, we normally include one or two slides on sustainability. We have done that also here.
Speaker Change #160: There's not much drama about that.
Speaker Change #160: We have the five sustainability goals with the time horizon to 2030.
Speaker Change #160: We are on track or ahead, on all of those. I'll just pull out a couple of data points here.
Speaker Change #160: We have done that also here.
Speaker Change #160: Okay, I'll take it from my memory.
Speaker Change #160: If you look first on the CO2 emission intensity, this is the goal we defined before, science-based target existed.
Speaker Change #160: It's not much drama about that.
Speaker Change #160: As an engineer, that's a good metric.
Speaker Change #160: Here we have achieved with the index 2015 100 in terms of tonne CO2 per produced tonne stonewall.
Speaker Change #160: We had the reference level 2015 of 100. Now, inherently in the business, we have reached the index 84, so that's 16 points, so 16% down per tonne produced through productivity improvements, conversions, green energy, and some other actions.
Speaker Change #160: We have the five sustainability goals that will be the time horizon to print.
Speaker Change #160: We will see this number now continue down over the coming years because we are investing and we are taking actions.
Speaker Change #161: okay thank you brh certainly eas terneurope we have the classic country for some po umwhere
Speaker Change #161: In the annual report on the sustainability report, you will see a number below the 84, so that's progressing well.
Speaker Change #161: Third, we don't track or head on all those.
Arnaud Lehmann: Very good, thank you, thank you for that.
Speaker Change #161: You know the green investment on the capex slide, you see what type of money we put into that.
Speaker Change #161: We are also working now, as we said, on our energy supplies and the contracting around that to see if we can get out of this extreme volatility.
Speaker Change #161: I'll just pull out the capital data points here.
Arnaud Lehmann: My second question is that's okay, is regarding Russia. I mean, no change as far as I can tell in terms of the way you're thinking of, about the ownership of these assets for Rockwool.
Speaker Change #161: The next round, we have an energy crisis or something like that, so that work is ongoing.
Speaker Change #161: A science-based target that we also have a goal for talks about CO2 equivalent emissions in absolute terms excluding acquisitions.
Speaker Change #161: We have a goal for that too, and it's quite pleasing to see that when the business is growing volume of top-line double digit that our CO2 emissions only increase with 6% or more than 10% volume and sales growth.
Speaker Change #161: Okay, I'll take it from my memory.
Speaker Change #162: priice competition his three years whenever voluumes go down whatever it is down when you see the whole of eps competition in several segments fluro
Speaker Change #161: So, if you look first on the CO2 emission intensity, this is the goal we defined before.
Jens Birgersson: Should we expect a change with a new management in the future? I guess maybe something. You know, we have a very, we have worked this through in detail. My successor is still until the 1st of September, board member, his part of it, and we haven't seen the external environment on the reasoning for not continuing what we do. We haven't seen anything change, and we see the companies that take the other route. It impacts very negatively. So, we see no reason to change them, and there is no intention to change the strategy because of a new CEO of the company, and we are all aligned with this.
Speaker Change #161: Science-based target exists.
Arnaud Lehmann: Thank you very much.
Speaker Change #163: and emfohassaes
Speaker Change #161: That's an engineer.
Speaker Change #164: so so then we really live it but then they are also stop eastern european markets where you rremain ia hunary but we don't see part of that but more
Speaker Change #161: That's a good metric.
Speaker Change #165: western in the dynamics but forsure that effect to say i it's no secret that po on is
Speaker Change #165: challenging but we talance volume and price and this's kind of schoolbook really really a lot of competitors that want volume for any price some we we do well not the really big projects where you won't really our
Speaker Change #161: Here, we have achieved the index 2015-100 in terms of time CO2 produced time stolen. We had the reference level 2015 of 100.
Speaker Change #161: We have now inherently in the business.
Speaker Change #161: We have reached the index-active core, so that's 16 and 16 points, so 16% down from time produced through productivity improvements, commercials, green energy and some other actions.
Speaker Change #165: high safety you want to deliveververy safe do you want to do logatistic those projects we still can take bit good margins and only the other ability to play it a bit more by the erand
Speaker Change #165: So that's good.
Speaker Change #165: We will see this number continue down over the coming years because we are investing and we are taking actions in the annual report on the sustainability report.
Speaker Change #165: That shows that that kind of emissions per tonne is working.
Speaker Change #165: It also shows, on the lines the challenge we have of 2030 and onwards of really, really convert the whole company more or less into electrical melting driven by green energy. So it's a really challenging target that we are working on.
Speaker Change #165: At this stage, we don't know, call here is referred to as the reclaim waste schemes where we take back our own products and upcycle them, recycle them.
Speaker Change #166: then correct some from the upturn come so so that's the same partis as we have discussed at times beand but they are also quite a curious in european markets doesn't have that polition on that so
Speaker Change #165: We will see a number below the fourth.
Yassine Touahri: The next question will come from your scene, towering, with on-field investment research. Please go ahead. Yes, good afternoon. So, two question on my side as well. First, could you comment a little bit about the pricing trends and the volume trends that you've seen in July and August? Is it fair to assume that there is no trend on pricing, or have you announced some additional price increase? I think in the US, there were some price increase. And on the volume, have you seen any improvement or deterioration versus the concoiter?
Speaker Change #165: That's progressing well.
Speaker Change #166: We have added now also Poland to the countries where we offer this service and we have now 22 countries in the scheme and the goal is 30 by 2030 so we are well ahead of that.
Speaker Change #166: We will beat that goal, we will be ready much before 2030.
Speaker Change #166: You know, the green investment on the graphics line, you see what the capital money we put into that.
Speaker Change #166: And then we'll save the safety goal, no serious accidents and no fatalities in the first half, year and it's what we like to see and that's how we need to prop up all the time but as you know we have a big big operation with many factories and at these factories things can happen but we are working very seriously on that and it's good that we
Speaker Change #166: We are also working now, as we said, on our energy supplies and the contracting around that, to see if we can get out of this trim volatility the next round. We have an energy crisis.
Speaker Change #166: have a good first half year.
Speaker Change #166: Going to the outlook slide 14, going forward on sales we haven't seen any change or any dramatic developments in the market but we are stepping in a couple of quarters where we have more challenging comparables so on the top line that mid single digit percentage growth seems like a good outlook still although we are ahead of that until now but that's because of comparables but as we see it now we see the business pretty much continue that's good on the EBIT bargain around 17% also there we are a little bit ahead but then as you know we have the December effect, going away and we also have the summer in France profit of business for us impact a bit but we feel comfortable with that outlook and on the investment nothing needed to report on that we are on track to invest what we have planted us for the year.
Speaker Change #166: Should say though on the investment side we have had more setback our new plant in France we, were surprised I must say that we got a negative verdict on one of the lawsuits so we are regrouping on that we have not at all given up the new factory in France but we need to look at that and see how we keep pushing the plant in France we thought we should be able to start building it now but this was a setback and we can expect the further deal I possibly will move the resources and accelerate another project we have a number of projects started but we have absolutely not given up on the French plant we will keep working through that.
Speaker Change #166: That's what is ongoing.
Speaker Change #166: Over to questions.
Speaker Change #166: Thank you.
Speaker Change #167: then where with bestternin europe of the trend of the dynamics i think fundamentally invesesttor year what you see is not
Speaker Change #166: Science-based target, that we also have a goal for talks about CO2 equivalent emissions in absolute terms, excluding acquisitions.
Speaker Change #166: We have a goal for that too, and it's quite pleasing to see that when the business is growing volume of top-line W did it, that our CO2 emissions only increased with the 6% on a more than 10% volume of sales growth.
Speaker Change #166: So that shows that that kind of emissions part on the East working.
Speaker Change #167: sometimes
Speaker Change #168: that could be
Speaker Change #169: there couldbe circumstances me take those three four months on you get simply too many projects
Speaker Change #166: It also shows that underlies the challenge we have on 23rd GMO boards of really, really convert the old company more or less into electro-commenting driven by green energy.
Yassine Touahri: And then my second question would be on the on the new one trends. Like, in another month, where margin are relatively high, today, do you see a risk for new companies to enter the European or North American mineral wood industry? Or do you think it's too hard? Like, because of a regulation, like, and they could take us any issue, are you facing in France? Yeah, yeah. So, so in France, we see some price impression, the residential segment of the light walls, perspective is relatively low.
Speaker Change #166: So we need it.
Speaker Change #170: and then someone does t get enough but now it turns into bit able a see some on pan in
Speaker Change #171: one of the competitors and that is nothing unusual that that we have seen it for some any germanmany several times where someone reervative about volumes some our approach tradition will the bit of okay if if it's not on the suain in the level pricing be rather
Speaker Change #166: It's a really challenging target, but we are working on it at this stage.
Speaker Change #166: We don't.
Speaker Change #166: Heal that it's impossible, we have the technologies, we have the investment time, but then of course the more we grow, the more challenging that goes becomes.
Speaker Change #166: So not the moment that was said the long term growth outlook is quite positive.
Speaker Change #172: they just step away from those projects and then the market to be normalizede and and i i must admit i have not seen any other trend in in europe i don't see any change to the fundamental dynamics to restingin european pricing on to now
Speaker Change #166: So it's a challenging goal, but we are working, you can see that actions we are taking good.
Yassine Touahri: We haven't seen much of a change. I mean, it's around the era of slightly negative, slightly up. Nothing dramatic. And I think we need some, I don't know, governmental programs, taking action to get that up. Overall, in Europe, on the gdp side of things, we probably haven't seen a case for a broad base upturn. It has weakened a little bit lately in Europe. So, in France, it's around the the era of slightly negative.
Speaker Change #166: On the rock cycle is here is the report of the retail waste themes, but we take back our own products and upcycled them.
Speaker Change #166: We have added miles of Poland to the countries where we offer this service, and we have now 22 countries in the scheme, and we go to 30 by 2030.
Speaker Change #172: We will now begin the question and answer session.
Speaker Change #172: So we are we are in the head of that, we will beat that goal, we will be ready, much before 2030.
Speaker Change #172: And then we'll say the safety goal, no serious accidents and no fatalities in the first half year, and it's what we like to see, and that's what we need to perform all the time, but as you know we have a big, big operation with many factories.
Speaker Change #173: perfect and a second question is more into the u us you're talking about us your are neararing full capacity then lookingok into twenty five and twenty six and i just new plant is not coming on stream month and where seven so what kind of
Speaker Change #172: And this factor is it's things can happen, but we are working very seriously on that, and it's good that we have a good first half year going to the outlook slide 14.
Speaker Change #172: Going forward on sales, we we haven't seen any change should any dramatic developments in the market.
Yassine Touahri: Nothing really dramatic on price, maybe some segments have been down, but on the segments, we can increase the prices. So that's on that side. And then, price increases at some market where we there is no issue whatsoever, but price. For example, the US, we just launched a percent increase. And that's in line with what's happening in the market on Glasswood and Stonewood. That's moving.
Speaker Change #174: us i was talking about u s studry finalio
Speaker Change #175: yeah so ' ' thinking about stuff
Speaker Change #172: But we are stepping in a couple of quarters where we have more challenging comparable.
Speaker Change #172: So on the top line that mid single digit percentage growth seems like a good, good outlook still, although we are ahead of that until now, but that's because of comparable.
Speaker Change #176: sorry if i just finish some question is that you have near full capacity right now and looking into twenty-five and twenty six what's kind of
Speaker Change #172: As we said, now we see the business could continue, that's good.
Speaker Change #172: On the A bit margin around 17%, also there, we are a little bit ahead, but then as you know, we are the December effect.
Speaker Change #177: volume headroom you have to continue to grow this number or you see there is a kind of a area capacity constraints meeting your growth in the near medium term until the new plant comes in two thousand and twenty seven
Speaker Change #172: We go either way, and we also had to somewhere in France, profit of business for us, impact a bit, but what we feel comfortable with that outlook and on the investment, nothing needed to, to, to report from that.
Speaker Change #172: We are on track to invest, but we are planting this for the year.
Yassine Touahri: The last question just to make sure I understood you asked me how difficult it is to enter the Stonewood business or such a question. Do you see a risk because the margins today are much higher than they were 10 years ago? Yeah, do you see a risk or that you will have a new player on the market? Yeah, obviously, there are people that look at Stonewood now and think of this as a fantastic business.
Speaker Change #172: Yeah, you should, you should say though, on the investment side, we have had one setback, our new plant in France, we, we were surprised, I must say that we got the negative.
Speaker Change #178: yesso that there'are a normal
Speaker Change #179: two or three factors are on full capacity that can be quite confusing for our business
Speaker Change #172: Varadict on one of the lawsuits, so we are regrouping on that, we have not at all given up the new factory in France, but we need to look at that and see, see how we keep pushing the plant in France.
Speaker Change #180: because if we don't if we meet a few months that we have not to both capacity we are prorossing capacity and we can never cash back in the year and and what happanyily herehave was
Yassine Touahri: Let's enter this, you know, 18% of it's money on the rest. And I think having a single plant versus our quite big machine now with a lot of economics of scale and also considering how difficult it is to start up the plant and run it really, really productive outfit. I think you will see some entrance, but I must say there hasn't been an entrance for a long time that come even close to our bargains because it's very, very difficult to run a small network or just one plant without brand and without the service level of all the rest of.
Speaker Change #180: we have
Speaker Change #181: some challenges with delivery ty so in the u us we didn'tto expect the ramp up the business went down in tren twentyto two or twent to turntwentyto three and then it stpped changed up it didn't have theships in place be batled to get
Speaker Change #181: blue color workers in to shift up on of train that am all the rest and let me sat with this more than six months backlog of orders on delivery times during that perier wedidn't increased prices because fo cus one take to work back lead times
Speaker Change #181: and then we go up from full capacity
Speaker Change #181: so so this doesn't mean we don't have more capacity in the plantevenment of the w brant a couple of months and phoneall so gore into next year we will
Speaker Change #172: We don't, we should be able to start building it up, but this was a setback and we can expect the further delay, possibly we will move the resources and accelerate to not the product.
Yassine Touahri: I'm not, I'm not particular worried about your interest, but yes, some people will announce new plants and we'll deal with that when that comes, but the trend has been that the plants are announced and very much delayed because it's also very, very difficult to build the plants. You need to be very persistent to some geographies to get your plant build in today's world. And I think their scale is also important because we have the means and the persistence to just keep working until we can build our plants. So it can be very challenging to get all the permits and you get the permits so that you have to alter so whatever as it is in many industries in Europe, but the moment.
Speaker Change #182: count to that if you see a good next year with more seasonal stock
Speaker Change #182: and running more close to foallld the rest of the year so
Speaker Change #183: we have more growth in the business and that takeles through water to i think and then of course after that we do what we normally do if we run out the use
Speaker Change #172: We have a number of products started, but we have absolutely not given up on the French plant, keep working through that.
Speaker Change #184: competitive from am other parts of the world of the supply in the boond
Speaker Change #172: Over two questions.
Speaker Change #185: although we don't make a lot of money over that we our ambition and we have done a lot of that ineurope you remember last time were up and very higher italilization we sht from even all right down to germany the useall st of ans because our priority if we have that demand this
Speaker Change #172: Thank you.
Speaker Change #185: either customers on here pretty much getting for that next year or the year after that actually have to bring in circ grat stone one into the u us and we would be ready for that and is needed
Speaker Change #172: We will now begin the question and answer session.
Yassine Touahri: And that is just very last point, which is just like not a question, but more comment about the fact that you, you delivered such a greater growth for the company. I think it's quite impressive what you've been able to do in terms of margin and productivity. So just wanted to wish you the best of luck for your future. Thank you.
Speaker Change #172: To ask a question, you may press star then one on your touch tone phone.
Speaker Change #185: t
Speaker Change #186: okthat's great thank you thank you and for of all your kind of effort and i think on a great jobas mycolagues have already told that's kind probablythe pricing initiative you have taken in the last term nine yearss has been
Speaker Change #172: If you're using a speaker phone, please pick up your handset before pressing the keys.
Speaker Change #172: If any time your question has been addressed and you would like to withdraw your question, please press star then two.
Speaker Change #172: We will start with the two questions for participants.
Jens Birgersson: Thank you very much, you see, and I need to mention an aspect there that that this is an important one to us that we don't talk about too much. And that is a productivity that economists of scale of the business that that's an underlying big advantage of Rockwell that we have in the culture. And that's a strong point, but thank you for those words.
Speaker Change #187: simply pretty impressive and that's we can see with the margins or thank you very much gender goods next cheinnings
Speaker Change #187: To ask a question, you may press star then 1 on your touchtone phone.
Speaker Change #187: Please respect this.
Bash: thank you bash for whatthanks
Harry: the next question will come from harry with the gode please go ahead
Speaker Change #187: And at this time, we'll pause momentarily to assemble a roster.
Harry: If you're using a speakerphone, please pick up your handset before pressing the keys.
Harry: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2.
Speaker Change #190: car your line is open
Speaker Change #190: We will start with the two questions per participant.
Speaker Change #190: And the first question will come from Klaus Almar, with Nordea.
Brijesh Siya: The next question will come from Burgess to Marcia with HSBC. Please go ahead. Nick. So I have a couple as well. Just on the pricing, right? It's interesting that you keep talking about pricing, flag is in the quarter, but looking at Eastern Europe, Eastern Europe is up 28% in Q2, given some of your competitors, not direct one, but a different segment, a bit, but they talk about when the volume is bounce back, they see some pricing pressure.
Harry: yes hi can you he me
Harry: Please respect this.
Harry: And at this time, we will pause momentarily to assemble our roster.
Harry: we can ar your yes okay grgreat z harriet baromega what to you please so curfirstly is coming back on
Harry: Please go ahead.
Harry: And the first question will come from Klaus Almer with Nordia.
Harry: Thank you.
Speaker Change #191: couple of remarks you've made on the marginand i think it made in response to hon its question but just a clarity
Harry: Yeah.
Harry: Two questions from my side.
Speaker Change #192: appreciate your point that both margins in returns of capital could can move around and but were you indicating that around fifteen percent in terms of edit margin is the right way to think about a sort of through cycle
Harry: I'll do them one by one.
Speaker Change #193: average margin and obvly having had a big increase this year
Speaker Change #194: the second question please is around sort of pricing and competition and when we're thinking about that should we be thinking about
Harry: The first question goes to inflation.
Brijesh Siya: If that's something, it's also impacting you, because I recollect historically, Eastern Europe has been a different market, where competition is a little more intense compared to Western Europe. So any comments around that will be very helpful. And within that, if you could just give a little more flavor into the Western Europe, when everybody's talking about interest rate income, cut coming through, do you see similar risk spanning out in Western Europe as well, when the volume bounce happens maybe towards the end of Q4, or maybe in 2025?
Speaker Change #195: your product relative to of stoneall providers or should we actually always be thinking about it relative to the broader suite of intealllation products thank you
Harry: Jens, you mentioned that you do see a, it sounds like a small inflation.
Harry: Does that mean you're going to raise prices, or will you have to uphold that in your, in your P&L, so to speak?
Speaker Change #196: yes so so i will hand over to fifteen percent margin question to to see came i take the outof one person then came but answer the ver cycle bargain but
Speaker Change #197: i don't feel i'm the right one to answer at this this moment on pricing competition about
Harry: That would be the first one.
Brijesh Siya: So that's my first one. I'll come back in a second. Okay, thank you, Breish. So in Eastern Europe, we have the classic country, for example, Poland, where price competition is free, whenever volume goes down, wherever it is down, now you see the whole EPS competition, several segments, Gladwell and Infosodes. So there we really live it, but then there are also some Eastern European markets where Romania, Hungary, but we don't see much of that, but it's more Western in the dynamics, but for sure that defectors there.
Harry: Yeah.
Harry: So Klaus, thanks for introducing yourself.
Speaker Change #198: i will the state of yes it probably attract people
Harry: We don't have the normal screen, but we can see who asked the question.
Speaker Change #199: through the market st ea great product it had has a very cleara cut-out space in in the market and to meet you know the climate goals
Speaker Change #200: our insulation of our gaother installation possibly be needed the moccus we think up is the best and so i think we can see some new entrals spot again
Harry: I know you are.
Speaker Change #201: i don't see anything happen there quickly due to the nature of the business and'm
Speaker Change #201: in the last couple of years inflation of equipment this meuring drive that has happened
Harry: So great, if you can introduce yourself like that, you know, no, I, yeah, I see, I mean, inflation doesn't go away.
Brijesh Siya: It's no secret that Poland is challenging, but we've all balanced volume and price, and it's kind of schoolbook, really, really a lot of competitors that want volume for any price. And we do well on the really big projects where you want really our five safety, you want to deliver safety, you want to do logistics, those projects we still can take a bit good modest, and on the other we need to play it a bit more by the year and then correct some after the upturn.
Speaker Change #201: in europe and the us is just expensive and complicated to build and there isn't we have a lot of inhouse engers during
Speaker Change #202: not to this work is not the eas i would't factory that you will have big new enttrancethat come in five six factorri is very quickly does' not likely to happen but sure we' going to have new rons
Harry: We are at the energy benefits and some other benefits, but, but we have several markets where we foresee that we would do a small drunken price increase to cover that, that inflation.
Speaker Change #203: normalized marin i don't think necessily exist co in the coming a few years year
Speaker Change #204: in twenty-five twenty-six we have no plans to open in a new factories so there will be nose of made depreciation change coming that would change of course once we start to get the big facatue is open in the in europe and in the u s
Harry: They could be competitive dynamics in some places where we might not do that, but the overall direction is that we are ready to do a small high price increase to pass on the inflation or pressures as far as we can.
Brijesh Siya: So that's the same pattern as we have discussed many times, Breish. But there are also quite a few Eastern European markets that doesn't have that Polish on them. So then with Western Europe on the trends of the dynamics, I think fundamentally Western Europe, what you see is that sometimes there could be, you know, there could be circumstances that mean that they go three, four months and you get simply too many projects, and then someone doesn't get enough, but then it turns into a bit of a system on panic in one of the competitors. And that is nothing unusual of that, that we have seen it for example in Germany several times where someone really, really want volume.
Harry: Okay.
Speaker Change #205: sort of that dity impact the ebit we are working on a margin improvements we have toldtalyou previous about co efforts to reduce the mening in actuallytory that is definitely margin
Harry: Another leading to the next question, which is, you know, the implicit second half guides, and you did toss upon this in your, in your slides, but implicitly you guys for around 16% EBIT margin in the second half.
Speaker Change #206: possibility bide that i think we just worked what
Speaker Change #207: having having contstent focus on productivity and then hopefully to to maintain our improve markets that really but is at some
Speaker Change #208: so 's seven hourgers there would definitely be more depreciation coming from the planned investments that we' doing over the years
Harry: So down versus first half also if we adjust for the Ukraine donation.
Speaker Change #208: Please go ahead.
Speaker Change #209: thank you very much
Speaker Change #210: a apfort
vain beo: next question will come from vain beo what gave p morgan please go ahead afternoon or just two questions three but first one is i notic is a slight mx pect in the regionalslls can you just remind us on the impact this has on the margins ceseen by region amthense secondly on your hedging for the year and into twenty five please thank you
vain beo: Thank you.
vain beo: Is this only due to friends and, and, and, and December sale, as you said, or is it also the inflation impact?
Brijesh Siya: So our approach has traditionally been that okay, if it's not on the sustainable level pricing, we rather step away from those projects, and then the market has been normalized, and I must admit I have not seen any other trend in Europe. I don't see any change to the fundamental dynamics to the rest of Europe in pricing on Perfect, and my second question is more into the U.S. You're talking about U.S., you're nearing full capacity, then looking into 25 and 26 and I guess your new plant is not coming on stream until 27.
vain beo: Yeah, two questions from my side.
vain beo: You have previously said it is not easy to raise prices in all markets, markets, so you had to be more, you know, specifically about these price increases.
Speaker Change #212: i don't need the hedging that came actually with the reason
Speaker Change #213: and success we how did north america
Speaker Change #214: we don't have
vain beo: Yeah, yeah, I saw, I saw your headline in your initial comment, and I, I would say, we are not, you have seen some companies that have released their earnings report now and that have seen the client in top line, that is quite a mixed picture in in different related sectors or and we haven't seen any of that.
Speaker Change #215: so much regional effects of the margins and we have always had france is a verygood markets but we have a lot of other markets now that are the same same levels when you have north america versus
Brijesh Siya: So what kind of U.S., I was talking about U.S., sorry. Sorry, I just finished the question, is that you have a near full capacity right now and looking into 25 and 26, what's kind of volume headroom you have to continue to grow this number or you see there is a kind of a real capacity constraint that's limiting your growth in the near to medium term until the new plant comes in 2027.
Speaker Change #215: erope on average you don't see much mix affect in a conributicts affect anymore because we up scale andlet m start to have that mass profitability
Speaker Change #215: in north america then asia still too small to impact the picture doesn't matter if the grow trench cent they want to impact all the numbers because so stillad too small so so there are some effects
Speaker Change #215: doyou you know we see to have more difficult markees like poland
Speaker Change #215: some other markets are if that really the growross a lot it des but at this stage i won't say a conttrbutic effect is big
Brijesh Siya: So there are the normal two or three factors here on full capacity that can be quite confusing for our business because if we don't, if we miss a few months or we are not the full capacity, we are frozen capacity and we can never catch up back in the year and so what happened here was that we had some challenges with delivery time. So in the U.S., we didn't expect the ramp up, the business went down in 2022 or 2023 and then it stepped changed up and we didn't have the ships in place, we backed them to get blue color workers in, to ship them off and to train them on the rest and then we sat for this more than six months back log of orders on delivery times.
Speaker Change #216: and then in the residential segments actually our margins per dun it a little bithigher that of this s of the other half get beautitiful overhelsor str from all
Speaker Change #216: commercial haveaveviddensity product slap fs and that's also given an effect side i will say they have any great mix mix imps at the moment but for sure if we would have had the volume growth that we have now
Speaker Change #216: all these bigay projects heavy got true projects that d to the vget because that margin of the papers slightide be lower but with this absorption as far
Speaker Change #217: on the hedging side them as we know we have this with the foundary cope still our biggest energy ource there we can only prizise the quarter at the time
Brijesh Siya: During that period we didn't increase prices, we just focused on one thing to work back lead times and then we go up on full capacity. So this doesn't mean we don't have more capacity in the plant even though we run a couple of months at full. So going into next year, we will count to that if you see a good next year with more seasonal stock and running more close to full the rest of the year.
Speaker Change #218: itis right now we don't have a weat and twenty five
Speaker Change #219: on the and gas have the marke to trithem that always spain you do have sort of long-term contracts
Speaker Change #219: for the best of the consumption on an nominic city and on gas we have covered the quarter into to q two next year let's say about now yes we almost of expected consuion
Speaker Change #219: I'll do them one by one.
Brijesh Siya: So we have more growth in the business and that would take us through one or two years I think and then of course after that we do what we normally do if we run out, we use capacity from other parts of the world, we supply to the bond, although we don't make a lot of money without our ambition and we have done a lot of that in Europe, we remember last time when we were up in very high utilization, we ship from even Norway down to Germany. The U.S, stock of means because our priority, if we have that demand, this puts other customers on here, we might get into that next year or the year off, to where they actually have to bring in certain graduates of Stonewall into the U.S, and we would be ready for that and we'll see that.
Speaker Change #220: haveextenini for those answers and y' bestluck your fure them vers also
Speaker Change #220: The first question goes to inflation.
Speaker Change #221: thank you very much thank you
Speaker Change #221: Jens, you mentioned that you do see a – it sounds like a small inflation.
marart' coal: the next question will come from marart' coal with the ubs please go ahead
Margaret Cohen: high market go from ebs i've got two questions as well i was reading in a statement but you've covered some share you're apcloachjust
marart' coal: wondering here re willing to put some numbers to that and then the second question is just on the volume growth strengthen in h one or there only one off ome that will we should be aware ofyou do t thinkthatcan be repeated inthe year
Speaker Change #224: okay is some mark to share our view go msaes
Brijesh Siya: Okay, that's great. Thank you. Thank you and for all your kind of effort and I think I've done a great job as my colleagues have already told that the pricing initiative we have taken in the last nine years has been simply pretty impressive and that's we can see with the margins. So thank you very much and good next training. Thank you, Brijesh. Thank you.
Speaker Change #221: So, we are not pessimistic, we are not pessimistic on the prices.
Speaker Change #225: you know it staring partar of maintained again and you know on countri we no doubge the det because there are association of urking exidence i should be don no exactcutive so so so the market share has remained prcess stable that it could be country differences and all ious the u s
Speaker Change #221: I think we can do most of that.
Speaker Change #226: where we are growing but they have a therevery in law
Harry Goad: The next question will come from Harry with the Goad, please go ahead. Harry, your line is open. Yes, hi, can you hear me? Yeah, we can hear you. Yeah, okay, great.
Speaker Change #227: market shapeing the total market we have a high-market share with install with for the stillin holder captoital percentage port of the over instsuidation market we are taking market share
Speaker Change #227: up to the inflation market but i don't think anyone is no hope to think that because all the sre so so so mararchkesha state from improving some prices like the thousand others but
Harry Goad: Yes, Harry,[inaudible] I would like to think about a sort of through cycle average margin and obviously having had a big increase this year. The second question please is around sort of pricing and competition and when we're thinking about that, should we be thinking about your product relative to other stonewall providers? Or should we actually always be thinking about it relative to the broader suite of insulation products?
Speaker Change #228: or we are happy a way remanish us
Speaker Change #229: what certain qu don't have tration one else by low one those though
Speaker Change #230: we don't we have some big projects but you know the biggest project we have get to start for ar g there so and that the oms so we have brought some big produ or the impact
Speaker Change #221: Yes, we believe there is inflation or pressures, but we, we have the ambition to pass that on.
Speaker Change #231: thank you much and looks for g
Speaker Change #232: thank you
Speaker Change #232: Does that mean you're going to raise prices or will you have to absorb that in your P&L, so to speak?
Speaker Change #232: That will be the first one.
axual stasi: the next question will come from axual stasi with mms please go ahead
axual stasi: Yeah.
axual stasi: So, that's the outlook, and then we, we did upgrade, I'm also day 10, hope you're alive to 17% to be prepared to, to make an assessment now is is not proved that we feel comfortable with the 17% we obviously have no ambition to reduce the profitability but the acknowledge of the December effect and the France effect as well as to.
axual stasi: good afternoon everyone thanks for taking my question i just have the one remainingum
axual stasi: So I believe that for my successor to kind of nail that outlook that his maybe first earnings call.
Speaker Change #234: if i m understood correctly the commercial market drove the a bit margins in the first half year
axual stasi: And you know that how becoming close and closer to the autumn period where many of our markets would negotiate 20-25 prices.
Kim Andersen: Thank you. Yeah, so I will hand over to 50% margin question to see if all came. I think the other one person then came and answered the average cycle margin, but I don't feel I'm the right one to answer at this moment. On pricing and competition, I would say that yes, it probably attracts people through the market. Stonewall is a great product. It has a very clear cutout space in the market to meet the climate goals.
Speaker Change #235: so how should we look at pricing in the residential market going forward and i'm asking this question specifically based on your comment on the key focus on volume growth so its fair towith you we could see some price risk in the redeention markets when bond pick up or did i not understanding rectcord thank you
axual stasi: So there's also a little bit of the timing there.
axual stasi: So I wouldn't you know do straight to mathematics inside the conclude that there's some that will come back on that for us when we're a little bit deeper into those discussions and I also say I you know we feel comfortable with the 70% turning it really you know the next time we've been on board.
Speaker Change #236: we unfortunately to have a very disturbance on the line so we could not hear a that question
axual stasi: Thank you so much for the answers.
axual stasi: Thanks.
Speaker Change #237: could you maybegujust werepeat one mar your perent ' very short yes sorry and the commercial market drove the bit marde in the first half halfalth year of the year
axual stasi: The next question will come from Peter Sahested with ABG.
Kim Andersen: Our insulation among other insulation possibly be needed and obviously we think up is the best. And so I think we can see some new entrance, but again, I don't see anything happening there quickly due to the nature of the business. And in the last couple of years, the inflation on equipment, this mere showing drive that has happened in Europe and the US is just expensive and complicated to build. And there is some we have a lot of in-house engineers during a lot of this work.
Speaker Change #238: and based on your comment on key focus on volume growth going forward is it fair to assume that equcouldsee some pricing risk in the residential market going forward to gain share
axual stasi: Please go ahead.
Kim Andersen: It's not easy, so I wouldn't factor in that you will have big new entrance that come in 5, 6 factories very quickly. That's not likely to happen, but sure we're going to have new entrance. And normally, a margin, I don't think necessarily it exists. Of course, in the coming a few years here in 25 and into 26, we have no fans to open in a new factory. So there will be no self-made appreciation change coming.
axual stasi: Great.
Speaker Change #239: about what it
Speaker Change #240: we be not going try to just just ice step immute to am we just equal cannot
axual stasi: Peter from ABG.
Speaker Change #240: okay
axual stasi: Thank you for taking my questions.
Speaker Change #241: yeah ok ay stole so i think the resational of market at the moment is a bit so a foallly night
axual stasi: I have two.
Speaker Change #242: so we clearly don't have an ambeshown in a market if you look at the new housy starts
axual stasi: The first one is from France.
axual stasi: The Maurene of the Triemannacht Programme has noted an increase in applications following their return to the autumn application procedures and I guess these applications will probably not hit the market or real life in the second half.
Speaker Change #243: in germany is down to even lower level than last year country member how much but this is reallyiterated all so so we don't have a plan
axual stasi: Is there something that you have to take into account in your guidance because I know that in France the renovation program has been a very important driver for for local for the past.
axual stasi: The answer to the question is yes it counts as for we you know we have a good profitable business and France is slightly in the negative territory in the quarter and we haven't factored in any hopes and dreams from this scheme.
Kim Andersen: That will change. Of course, once we start to get the big factories open in Europe and in the US. So that will definitely impact the EBIT. We are working on margin improvements. We've told you previously about how efforts to reduce the mining in our factory. That is definitely a margin possibility. But the size that I think we just worked was having constant focus on productivity and then hopefully to maintain or improve margins. That's really our aim. But I said from the 7 onwards, there will definitely be more depreciation coming from the planned investments that we're doing over the coming years.
axual stasi: So we have a good conservative or realistic forecast and that's included.
Marcus Cole: Brijesh, thank you very much.
Speaker Change #243: to attack in any way and take market share we just cut to stay in
axual stasi: So it's just to go back to the guidance because you're you're wording on pricing it into the same as you had you did in Q1 and Q4 also we respect and we have sort of the usual thing about the December impact that's also something that you typically write to rate around this time of year.
axual stasi: Is there anything that is sort of different this time that it has been let's say no no it's very much business and use use of you know we we drive a very strict pricing process in the company we stay on top of the market and we try to take that very serious and there is some there is some any dynamics out there that is different to another year of course and we don't have the situation we had in the autumn 2022 with the hyperinflation of all this.
Speaker Change #243: and when the market is that below it's better to focus on the you know where we have some volume growth i may they have an opportunities does ramp up
axual stasi: So I will say business as usual and there is a sliding patient that we've been trying to go off the race and it's not no no drama around the whole thing but but then of course you have you know some marketing some segments coming out of the pressures we work on all that but so far so good Thank you for sharing my questions and also I'd like to say thanks for your effort and what you've done at Rockwool.
axual stasi: I think you've said, you want to join the team, you said a very high pitch mark for the incoming CEO, so good luck to him as well.
Speaker Change #244: andi get myice business in so i don't think ' timing to grow off the market share growth in the residential is a good one at all because i think it will just result in
axual stasi: Yeah, thank you very much, Peter.
Speaker Change #244: in the price bar negative price firems so we tried to care our market share and then we hope that the some stages market comesable
axual stasi: We have the same team in place, I guess very strong pair of hands, thank you all for the business.
Speaker Change #245: okay thank you very much
axual stasi: So I'm very optimistic about the future.
Zaim Beekawa: The next question will come from Zaim Beekawa with JP Morgan. Please go ahead. Afternoon, all just two questions for me. The first one is I notice there's a slight mix effect in the regional sales. Can you just remind us on the impact this has on the margins between the Bay region and then secondly on your hedging for the year and into 25, please. Thank you.
Speaker Change #245: So, Klaus, thanks for introducing yourself.
Speaker Change #245: We don't have the normal screen, but we can see who asked the question and who you are.
Speaker Change #245: So, great if you can introduce yourself like that so we know.
Speaker Change #245: Yeah, I see – I mean, the inflation doesn't go away.
Speaker Change #246: this concludes our question-answer session i would like to turn the conference back over to our host for today for any closing remarks please go ahead
Speaker Change #245: Thanks, next question.
Speaker Change #246: We had the energy benefit and some other benefits, but we have several markets where we foresee that we will do a small drumbeat price increase to cover that inflation.
Speaker Change #246: Is this only due to France and December sales, as you said, or is it also the inflation impact?
Speaker Change #246: There could be competitive dynamics in some places where we might not do that,
Speaker Change #246: You have previously said it's not easy to raise prices in all markets, so you have to be more specific about these price increases.
Speaker Change #246: but the overall direction is that we are ready to do a small price increase to pass on the inflationary pressures as fast as we can.
Speaker Change #246: Yeah, yeah.
Speaker Change #246: Welcome from Arnaud Lehmann with Bank of America, please go ahead.
Speaker Change #246: Okay.
Speaker Change #246: I saw your headline in your initial comment, and I would say we are not – you have seen some companies that have released their earnings report now
Speaker Change #246: And then leading to the next question, which is the implicit second-half guides, and you did touch upon this in your slides.
Speaker Change #246: and that have seen decline in top line, and that is quite a mixed picture in different related sectors, and we haven't seen any of that.
Speaker Change #246: But implicitly, you guide for around 16% EBIT margin in the second half, so down versus first half also if we adjust for the Ukraine donation.
Speaker Change #246: Yep, thank you very much.
Speaker Change #246: So we are not pessimistic.
Speaker Change #246: We are not pessimistic on the prices.
Speaker Change #246: I think we can do most of that.
Speaker Change #246: from the scheme.
Speaker Change #246: Yes, we believe there is inflationary pressures, but we have the ambition to pass that on.
Speaker Change #246: My name is Arnaud Lehmann for Bank of America.
Speaker Change #246: So we have a good conservative or realistic forecast. And that's included.
Speaker Change #247: yes from my self and wed like to thank youvery much for the call to today i'm oring design probably here at the end if you have questions out the wards ofcourse welcome to give you your call and for some of you seeyou next week and very much have a ily
Speaker Change #247: is not prudent.
Speaker Change #247: Good.
Speaker Change #247: We feel comfortable with the 70%.
Speaker Change #247: And just going back to the guidance, because you're wording on pricing is
Speaker Change #247: We obviously have no ambition to
Speaker Change #247: the same as you had you did in Q1 and Q4.
Speaker Change #247: reduce the profitability, but we acknowledge the December effect and the France effect,
Speaker Change #247: Also, with respect, and we have sort of the usual thing
Speaker Change #247: Thank you very much, Peter.
Speaker Change #247: as we always do.
Speaker Change #247: about the December impact.
Speaker Change #247: We have the same team in place and we get a very strong pair of hands taking over the business, so I'm very optimistic about the future.
Speaker Change #247: So I will leave that to my successor to kind of nail that outlook and his
Speaker Change #247: That's also something that you typically iterate around this time of
Speaker Change #247: Thanks.
Speaker Change #247: maybe first earnings call.
Speaker Change #247: year.
Speaker Change #247: And you know that we're coming closer and closer to the autumn period,
Speaker Change #247: Is there anything that is sort of different this time that it has been, let's say?
Speaker Change #247: where many of our markets will negotiate 2025 prices.
Speaker Change #247: No, it's very much business as usual.
Speaker Change #247: Thank you very much.
Speaker Change #247: There's always a little bit of timing
Speaker Change #247: You know, we drive a very strict
Speaker Change #247: My first question is, I guess related to pricing margin and returns staying on that topic.
Speaker Change #247: My name is Arnaud Lehmann from Bank of America.
Speaker Change #247: there.
Speaker Change #247: pricing process in the company.
Kim Andersen: Okay, I'm going to leave the hedging to Kim. Actually with the recent success we have had in North America. We don't have so much regional effects of the margins and we have all the such frowns. It's a very good markets, but we have a lot of other markets now that are in the same levels. So when you have North America versus Europe on average, you don't see much mix effect and country mix effect anymore because we are up on scale and we start to have that much profitability in North America.
Speaker Change #247: My first question is, I guess, related to pricing margin and returns, staying on that topic.
Speaker Change #247: Yeah, yeah.
Speaker Change #247: We stay on top of the markets.
Speaker Change #247: So I guess my question is, beyond pricing and margin levels, do you believe that these sort of returns are sustainable going forward or is there a possibility for some sort of normalization over time?
Speaker Change #247: So I wouldn't, you know, do straight to mathematics and say we have concluded
Speaker Change #247: And we try to take that very serious.
Speaker Change #247: But the biggest job as a CEO or what I've seen is that, for me, it's not so important if it's 23% or 16% or whatever.
Speaker Change #247: this or that.
Speaker Change #247: And there isn't any dynamics out there that is different to another year, of course.
Speaker Change #247: It's important that we keep supporting the volume growth.
Speaker Change #247: We'll come back on that forecast when we're a little bit deeper into those
Speaker Change #247: And we
Speaker Change #247: Indeed, I've done very well on margin and that drove an improvement in ROIC, which published I think 23% is a printed number in the H1 report over the last, I think that's 12 months rolling data, which compared to 15% last year.
Speaker Change #247: In the short term, that's where the numbers are.
Speaker Change #247: discussions.
Speaker Change #247: don't have the situation we had in the autumn 2022 with the hyperinflation of all this.
Speaker Change #247: Very good.
Speaker Change #247: And I also say, you know, we feel comfortable with the 70%.
Speaker Change #247: So
Speaker Change #247: Thank you.
Speaker Change #247: And you know,
Speaker Change #247: I will say business as usual. And there is a slight inflation.
Speaker Change #247: Thank you for that.
Speaker Change #247: the next time we will know more.
Speaker Change #247: And we will try to go after it.
Speaker Change #247: My second question, if that's okay, is regarding
Speaker Change #247: Fair enough.
Speaker Change #248: the conference has now concluded thank you for attending today's presentation you may now disconnect
Speaker Change #248: And it's not no drama about the whole thing.
Speaker Change #248: Russia.
Speaker Change #248: Thank you so much for the answers.
Speaker Change #248: But then, of course, you have, you know, some markets,
Speaker Change #248: I appreciate there's an element of let's say inflation in Quebec and the cost of adding new plans has gone up, but on the other hand, I don't believe you have a broad base plans to increase capacity.
Speaker Change #248: I mean, no change, as far as I can tell, in terms of the way you're thinking
Speaker Change #248: Thanks.
Speaker Change #248: some segments, some health depressions.
Speaker Change #248: of about the ownership of these assets for Rockwool.
Speaker Change #248: The next question will come from Peter Sahested with ABG.
Speaker Change #248: We work on all that.
Speaker Change #248: Should we expect a change with the
Speaker Change #248: Please go ahead.
Speaker Change #248: But so far, so good.
Speaker Change #248: new management in the future, I guess?
Speaker Change #248: Great.
Speaker Change #248: Thank you for taking my questions and also I'd like to say thanks for your effort and what you've done at Rockwool.
Speaker Change #248: Maybe something?
Speaker Change #248: It's Peter from ABG.
Speaker Change #248: I think you and the team have set a very high benchmark for the incoming CEO, so good luck to him as well.
Speaker Change #248: You know, we have a very, we have worked this through in detail.
Speaker Change #248: Thanks for taking my questions.
Speaker Change #248: My successor is still
Speaker Change #248: I have two.
Speaker Change #248: until the 1st of September a board member.
Speaker Change #248: The first one is on France.
Speaker Change #248: He's part of it.
Speaker Change #248: It's more of a selective process.
Speaker Change #248: The Marinoff-Trimanoff program has noted an increase in applications following their return
Speaker Change #248: We haven't seen the external
Speaker Change #248: to the normal application procedures.
Speaker Change #248: environment or the reasoning for not continuing what we do.
Speaker Change #248: And I guess that these applications will probably not hit
Speaker Change #248: We haven't seen anything change.
Speaker Change #248: will probably not hit the market.
Speaker Change #248: When we see the companies that take the other route, it impacts very negatively.
Speaker Change #248: I realize you realize in the second half,
Speaker Change #248: So we see
Speaker Change #248: is this something that you have taken into account in your guidance?
Speaker Change #248: So I guess my question is, you know, beyond pricing and margin levels, do you believe that these sort of returns are sustainable going forward or is there a possibility for some sort of normalization?
Speaker Change #248: no reason to change them.
Speaker Change #248: Because I know that
Speaker Change #248: And there is no intention to change the strategy because of
Speaker Change #248: in France, the renovation program has been a very important driver for the past.
Speaker Change #248: a new CEO of the company.
Speaker Change #248: Yeah, it's accounted for.
Speaker Change #248: And we are all aligned on this.
Speaker Change #248: We, you know, we have a good profitable business.
Speaker Change #248: Thank you very much.
Speaker Change #248: And France is
Speaker Change #248: Our next question will come from Yassin Tauri with Onfield Investment Research.
Speaker Change #248: live in the negative territory in the quarter.
Speaker Change #248: Please go ahead.
Speaker Change #248: And we haven't factored in any hopes and dreams
Speaker Change #248: Yes, good afternoon.
Speaker Change #248: So two questions on my side as well.
Speaker Change #248: First, could you comment a little
Speaker Change #248: bit about the pricing trends and the volume trends that you've seen in July and August?
Speaker Change #248: Is it fair to assume that there is no change on pricing?
Speaker Change #248: Or have you announced some additional
Speaker Change #248: price increase?
Speaker Change #248: Yeah, I would like to, I would give just a pretty flavor on that reflection on it and I came, she commented because he continues.
Kim Andersen: And then Asia is still too small to impact the picture. It doesn't matter if the world runs. It won't impact all the numbers because it's still too small. So there are some effects. We still have more difficult markets like Poland and some other markets. If that really grows a lot, it does. But at this stage, I won't say a country mix effect is big. And then in the residential segments, actually our margins per unit is a little bit higher that will be slow.
Speaker Change #248: I think in the US there was some price increase.
Speaker Change #248: And on volume, have you
Speaker Change #248: seen any improvement or deterioration versus the second quarter?
Speaker Change #248: My view on that is that we are not still, you know, we want to have 15% or about, but the biggest job is to see or what I've seen is that for me, it's not so important.
Speaker Change #248: And then my second question
Speaker Change #248: would be on the new entrant.
Speaker Change #248: If it's 23% or 16% or whatever, it's important that we keep supporting the volume growth and at the end in our industry, you know, if you have the capacity, you can deliver the volume.
Speaker Change #248: In an environment where margins are relatively high today, do
Speaker Change #248: you see a risk for new companies to enter the European or North American mineral wood
Speaker Change #248: industry?
Speaker Change #248: Or do you think it's too hard because of a regulation?
Speaker Change #248: And they could face the same
Speaker Change #248: So from my perspective, I think, yes, we want to have a good cash generation with the good margin, but we would like to invest more.
Speaker Change #248: issue that you're facing in France?
Speaker Change #248: Yeah.
Speaker Change #248: So in France, we see some price impression in the residential segment of the light wood
Speaker Change #248: perspective is relatively low.
Speaker Change #248: And sometimes we get delays like now in France, the plant, we would really like to build that.
Speaker Change #248: We haven't seen much of a change.
Speaker Change #248: I mean, it's around
Speaker Change #248: the CRO slightly negative, slightly up. Nothing dramatic.
Speaker Change #248: And I think we need some, I don't
Speaker Change #248: know, governmental programs taking action to get that up.
Speaker Change #248: Overall, in Europe, on the
Speaker Change #248: GDP side of things, we probably haven't seen a case for a broad-based upturn.
Speaker Change #248: It has weakened
Speaker Change #248: a little bit lately in Europe.
Speaker Change #248: So France sits around the CRO slightly negative.
Speaker Change #248: Nothing
Speaker Change #248: really dramatic on price.
Speaker Change #248: Maybe some segments are a bit down, but in the segments, we can
Speaker Change #248: increase the prices.
Speaker Change #248: So that's on that side.
Speaker Change #248: And then price increases are some markets
Speaker Change #248: where there is no issue whatsoever with price.
Speaker Change #248: For example, the US, we just launched an 8%
Speaker Change #248: increase.
Speaker Change #248: The last question, just to make sure I understood, you asked me how difficult it is to enter
Speaker Change #248: the Stonewall business, was that the question?
Kim Andersen: On the other hand, we get beautiful homeraps from all the commercial heavy density products, platforms and all that. And that's also given effect. So I won't say we have any great mix impacts at the moment. But for sure, if we wouldn't have had the volume growth that we have now, all these big projects, heavy platforms, would have value to the margins because that margin on the paper is slightly lower, but with the absorption response.
Speaker Change #248: Yeah, do you see a risk?
Speaker Change #248: Because the margins today are much higher than they were 20 years ago.
Speaker Change #248: Yeah.
Speaker Change #248: Do you see a risk that you will see new players coming into the market?
Speaker Change #248: Obviously, there are people that look at Stonewall now and think, oh, this is a fantastic business,
Speaker Change #248: let's enter this, and you have, you know, 8% Debit Margin and the rest, and I think
Speaker Change #248: having a single plant versus our quite big machine now with a lot of economics of scale,
Speaker Change #248: and also considering how difficult it is to start up a plant and run a really, really
Speaker Change #248: productive outfit, I think you will see some entrants, but I must say there hasn't been
Speaker Change #248: an entrant for a long time that come even close to our margins, because it's very, very
Speaker Change #248: difficult to run a small network or just one plant without brand and without the service
Speaker Change #248: level and all the rest, so I'm not particularly worried about new entrants, but yes, some
Speaker Change #248: people will announce new plants and we'll deal with that when that comes, but the trend
Speaker Change #248: historically has been that the plants are announced and very much delayed, because it's
Speaker Change #248: also very, very difficult to build the plants, so you need to be very persistent in some
Speaker Change #248: geographies to get your plant built in today's world, and I think their scale is also important,
Speaker Change #248: because we have the means and the persistence to just keep working it until we can build
Speaker Change #248: our plants, so it can be very challenging to get all the permits, and you get the permits,
Speaker Change #248: so then you have products or whatever, as it is in many industries in Europe at the moment.
Speaker Change #248: And maybe just a very last point, which is just like not a question, but more a comment about the
Speaker Change #248: fact that you've delivered such a great growth for the company, I think it's quite impressive
Speaker Change #248: what you've been able to do in terms of margin and productivity, so just wanted to wish you
Speaker Change #248: the best of luck for your future.
Speaker Change #248: Thank you.
Speaker Change #248: Thank you very much, Yassir, and you mentioned
Speaker Change #248: an aspect there that this is an important one to us, that we don't talk about too much,
Speaker Change #248: and that is our productivity, that economics of scale of the business, that's an underlying
Speaker Change #248: big advantage of Rockwool that we have in the culture, and that's a strong point,
Speaker Change #248: thank you for those words.
Speaker Change #248: The next question will come from Burgess Kumarsiah with HSBC, please go ahead.
Speaker Change #248: So I have a couple as well.
Speaker Change #248: Just on the pricing, right?
Speaker Change #248: It's interesting that you keep talking
Speaker Change #248: about pricing in the Quarter.
Speaker Change #248: But looking at Eastern Europe, Eastern Europe growth is
Speaker Change #248: up 28% in Q2.
Speaker Change #248: Given some of your competitors, not direct one, but a different segment, but
Kim Andersen: On the hedging side, see, you know, we have this with the counter-coke with still our biggest energy source. There, we can only take prices at quarter at a time. Right now, we don't have a beat for 2025. On the existing and existing markets, we do have fun and all the way in Spain. We do have some sort of long-term contracts. For the best of the consumption on the existing and on gas, we have covered the quarter into two next year. That's it about now. The best year we have almost all expected consumption.
Speaker Change #248: they talk about when the volume is bounced back, they see some pricing pressure.
Speaker Change #248: Is that
Speaker Change #248: something is also impacting you?
Speaker Change #248: Because I recollect historically, Eastern Europe has
Speaker Change #248: been a different market where competition is a little more intense compared to Western
Speaker Change #248: Europe.
Speaker Change #248: So any comments around that will be very helpful.
Speaker Change #248: And within that, if you could
Speaker Change #248: just give a little more flavor into the Western Europe, when everybody's talking about interest
Speaker Change #248: rate cut coming through, do you see similar risk panning out in Western Europe as well
Speaker Change #248: when the volume bounce happens maybe towards end of Q4 or maybe into 2025?
Speaker Change #248: So that's my
Speaker Change #248: first one.
Speaker Change #248: I'll come back in a second.
Speaker Change #248: Yeah.
Speaker Change #248: Okay.
Speaker Change #248: Thank you, Priyesh.
Speaker Change #248: So in Eastern Europe, we have the classic country, for example,
Speaker Change #248: where price competition is fierce.
Speaker Change #248: Whenever volumes go down, wherever it is down, you see
Speaker Change #248: the whole EPS competition in several segments, flat roof and in facades.
Speaker Change #248: So there we really
Speaker Change #248: live it.
Speaker Change #248: But then there are also some Eastern European markets where, you know, Romania,
Speaker Change #248: Hungary, but we don't see much of that where it's more Western in the dynamics.
Speaker Change #248: But for sure,
Speaker Change #248: that effect is there.
Speaker Change #248: And it's no secret that Poland is challenging now with the balanced
Speaker Change #248: volume and price of this kind of schoolbook.
Speaker Change #248: Really, really a lot of competitors want volume
Speaker Change #248: for any price.
Speaker Change #248: And we do well on the really big projects where you want really our price
Speaker Change #248: safety, you want delivery safety, you want the logistics.
Speaker Change #248: Those projects we still can take
Speaker Change #248: with good margins.
Speaker Change #248: And on the other, we need to play it a bit more by the year and then correct
Speaker Change #248: some when the upturn comes.
Speaker Change #248: So that's the same pattern as we have discussed many times, Priyesh.
Speaker Change #248: But there are also quite a few Eastern European markets that doesn't have that Polish dynamic.
Speaker Change #248: So
Speaker Change #248: then in Western Europe, on the trends of the dynamics, I think fundamentally in Western Europe,
Speaker Change #248: what you see is that sometimes there could be, you know, there could be circumstances that means
Speaker Change #248: that there goes three, four months and you get simply too many projects.
Speaker Change #248: And then someone doesn't
Speaker Change #248: get enough, but then it turns into a bit of a seasonal panic in one of the competitors.
Speaker Change #248: And
Zaim Beekawa: I have a thank you for these answers and in the best of luck on your future there is also. Thank you very much. Thank you.
Speaker Change #248: that is nothing unusual of that.
Speaker Change #248: We have seen it, for example, in Germany several times where
Speaker Change #248: someone really, really wants volume.
Speaker Change #248: So our approach has traditionally been that, okay,
Speaker Change #248: if it's not on a sustainable level pricing, we'd rather step away from those projects.
Speaker Change #248: And then
Speaker Change #248: the market would normalize.
Speaker Change #248: And I must admit, I have not seen any other trend
Speaker Change #248: in Europe.
Speaker Change #248: And that would be a burden for quite a while, such a big plant on the return on capital employed and quite frankly, I'd rather have a couple of percentage point lower return on capital employed and get that plant built because that's better for the long term for this business.
Marcus Cole: The next question will come from Marcus Cole with UBS. Please go ahead. Hi Marcus Cole from UBS. I've got two questions as well. I was reading in a statement that you covered some share in Europe. I was just wondering if you were willing to put some numbers to that.
Speaker Change #248: I don't see any change to the fundamental dynamics to the
Speaker Change #248: Western European pricing until now.
Speaker Change #248: Perfect.
Speaker Change #248: And my second question is more into the U.S. You're talking about U.S. You're
Speaker Change #248: nearing full capacity.
Speaker Change #248: Then looking into 25 and 26, and I guess your new plant is not
Speaker Change #248: But I should let you know about the short term, the 23 or 24 closer to 24 compared to 2015 last year.
Speaker Change #248: coming on stream until 2027.
Speaker Change #248: So what kind of U.S.
Speaker Change #248: But the last year was was a bit abnormally low because it that was impacted by the 22 downturn in performance. So and maybe this year is a bit abnormally high since we have relatively low working capital for the beginning of the year.
Marcus Cole: And then the second question is, just on the volume growth strength in H1, are there any one of them that we should be aware of that you don't think that can be repeated in the rest of your James, some mark to share our view to both of us is, you know, I've been staring by hard on maintaining it. And you know, in some countries we know a thousand, the decimal, because there are associations looking at it and sometimes we don't know exactly.
Speaker Change #248: I was talking about U.S.
Speaker Change #248: Sorry.
Speaker Change #248: If I just finish the question, is that you have near full capacity right now, and looking
Speaker Change #248: So I think it's a, I think a normalization would be around the 20th, but as M said, it's not something that we steer towards necessarily on the short term.
Speaker Change #248: into 25 and 26, what's kind of volume headroom you have to continue to grow this number,
Speaker Change #248: or you see there is a kind of a really a capacity constraint that's limiting your growth in
Speaker Change #248: the medium term until the new plant comes in 2027?
Speaker Change #248: Yeah.
Speaker Change #248: So there are the normal two or three factors here on full capacity that can be
Speaker Change #248: quite confusing for our business.
Speaker Change #248: Because if we don't, if we miss a few months and we
Speaker Change #248: are not on full capacity, we are frozen capacity, and we can never catch up back in the year.
Speaker Change #248: So what happened here was that we had some challenges with delivery time.
Speaker Change #248: So in the U.S.,
Speaker Change #248: we didn't expect the ramp up.
Speaker Change #248: The business went down in 2022, early 2023, and then it
Speaker Change #248: step changed up, and we didn't have the ships in place to be battled to get blue-collar
Speaker Change #248: workers in, to shift up, and to train them and all the rest.
Speaker Change #248: And then we sat with this
Speaker Change #248: more than six months backlog of orders on delivery times.
Speaker Change #248: During that period, we didn't
Speaker Change #248: increase prices.
Speaker Change #248: We just focused on wanting to work back lead times.
Speaker Change #248: And then we go up
Speaker Change #248: on full capacity.
Speaker Change #248: So this doesn't mean we don't have more capacity in the plant, even
Speaker Change #248: though we run a couple of months on full.
Speaker Change #248: So going into next year, we will counter that,
Speaker Change #248: if you see a good next year, with more seasonal stock and running more close to full the rest
Speaker Change #248: of the year.
Speaker Change #248: So we have more growth in the business, and that will take us through one
Speaker Change #248: or two years, I think.
Speaker Change #248: And then, of course, after that, we do what we normally do if we
Speaker Change #248: run out.
Speaker Change #248: We use capacity from other parts of the world, and we supply the demand, although
Speaker Change #248: we don't make a lot of money on that.
Speaker Change #248: Our ambition, and we have done a lot of that in
Speaker Change #248: Europe.
Marcus Cole: So the mark to share has remained. Princess Stable, that it could have been country differences. And obviously in the U.S, where we are growing and they have a very low market share in the total market. They have a high market share with installments, but they still only come to the percentage point of the over-installation market. We are taking market share out of the installation market, but I don't think anyone is hoping to think that because everyone is going to score. So mark to share Stable, improving some prices like a thousand others, but we are happy with the way we manage that.
Speaker Change #248: You remember last time we were up on very high utilization.
Speaker Change #248: We shipped from
Speaker Change #248: even Norway down to Germany.
Speaker Change #248: We use those type of means, because our priority, if we
Speaker Change #248: have that demand, is to supply the customers.
Speaker Change #248: And here, we might get into that next year
Speaker Change #248: or the year after, where we actually have to bring in certain grades of stonewall into
Speaker Change #248: the U.S., and we will be ready for that when it's needed.
Speaker Change #248: Okay, that's great.
Speaker Change #248: Thank you.
Speaker Change #248: Thank you, Hans, for all your kind of effort.
Speaker Change #248: And I think
Speaker Change #248: you've done a great job, as my colleagues have already told.
Speaker Change #248: The pricing initiative
Speaker Change #248: we have taken in the last nine years has been simply pretty impressive, and that we can
Speaker Change #248: see with the margin.
Speaker Change #248: So, thank you very much, and good next training.
Speaker Change #248: The next question will come from Harry with the GOAD.
Speaker Change #248: Please go ahead.
Speaker Change #248: Harry, your line is open.
Speaker Change #248: Yes, hi, can you hear me?
Speaker Change #248: Yeah, we can hear you.
Speaker Change #248: Yeah, okay, great.
Speaker Change #248: Yes, Harry at
Speaker Change #248: Barenberg, I've got two, please.
Speaker Change #248: So firstly, just coming back on a couple of remarks you've
Speaker Change #248: made on the margin, I think it may be in response to Oned's question, but just for clarity,
Speaker Change #248: I appreciate your point that both margins and returns of capital could move around.
Speaker Change #248: But
Speaker Change #248: were you indicating that around 15% in terms of EBIT margin is the right way to think about
Speaker Change #248: a sort of through cycle average margin and obviously having had a big increase this year?
Speaker Change #248: The second question, please, is around sort of pricing and competition.
Speaker Change #248: And when we're
Speaker Change #248: thinking about that, should we be thinking about your product relative to other Stonewall providers
Speaker Change #248: or should we actually always be thinking about it relative to the broader suite of insulation
Speaker Change #248: products?
Speaker Change #248: Thank you.
Speaker Change #248: Yeah, so I will hand over the 15% margin question to
Speaker Change #248: CFO Kim.
Speaker Change #248: I'll take the other one first and then Kim will answer the average cycle margin, which
Marcus Cole: And what was the other thing? We don't have East Asian one else. No one else, no. We have some big projects, but you know, the biggest project we ever get is like four or five years ago. So we have got some big projects, but that's in that impact. Okay.
Speaker Change #248: I don't feel I'm the right one to answer at this moment.
Speaker Change #248: On pricing and competition, I would
Operator: Thank you very much.
Speaker Change #248: say that yes, it probably attracts people to the market.
Operator: Thank you.
Speaker Change #248: Stonewall is a great product.
Speaker Change #248: It has a very clear cutout space in the market to meet the climate goals.
Speaker Change #248: Our insulation, among other insulation products, will be needed and obviously we think it's the
Speaker Change #248: best.
Speaker Change #248: And so I think we can see some new entrants.
Speaker Change #248: But again, I don't see anything happening there
Speaker Change #248: quickly due to the nature of the business. And in the last couple of years, the inflation on
Speaker Change #248: equipment, this near-shoring drive that has happened in Europe and the US is just expensive
Speaker Change #248: and complicated to build.
Speaker Change #248: We have a lot of in-house engineers doing a lot of this work.
Speaker Change #248: It's not easy.
Speaker Change #248: So I wouldn't factor in that you will have big new entrants that come in five,
Speaker Change #248: six factories very quickly.
Speaker Change #248: That's not likely to happen.
Speaker Change #248: But sure, we're going to have new entrants.
Speaker Change #248: A normalized margin, I don't think necessarily it exists.
Speaker Change #248: Of course, in the coming few years here,
Speaker Change #248: in 2025 and into 2026, we have no plans to open any new factories.
Speaker Change #248: So there will be no
Speaker Change #248: sort of major depreciation chains coming.
Speaker Change #248: That will change, of course, once we start to get
Speaker Change #248: the big factories open in Europe and in the US.
Speaker Change #248: So that will definitely impact the EBIT.
Speaker Change #248: We are working on margin improvements.
Axel Stasse: The next question will come from Axel Stasi with MS. Please go ahead. Good afternoon everyone. Thanks for taking my question. I just have one remaining. If I'm understood correctly, the commercial market drove a bit margin in the first half year. So how should we look at pricing in the residential market going forward? And I'm asking this question specifically based on your comment on the key focus on volume growth. So is it fair to assume we could see some pricing risk in the residential market when volume pick up? Or did I not understand it correctly? Thank you. We unfortunately have a very disturbance on the lines. So we could not hear that question. Could you maybe just repeat one more time if it's very short?
Speaker Change #248: We told you previously about our efforts to reduce the
Speaker Change #248: manning in our factory.
Speaker Change #248: That is definitely a margin possibility.
Speaker Change #248: But besides that, I think
Speaker Change #248: we just work towards having constant focus on productivity and then hopefully to maintain or
Speaker Change #248: improve margins.
Speaker Change #248: That's really our aim.
Speaker Change #248: But as I said, from 2027 onwards, there will be no
Speaker Change #248: RICs, we do the 15 plus tag setting internally and then we go for this, but we will step up investment in the coming year.
Speaker Change #248: 2027 onwards.
Speaker Change #248: There will definitely be more depreciation coming
Speaker Change #248: from the planned investments that we're doing over the coming years.
Speaker Change #248: Thank you very much.
Speaker Change #248: The next question will come from Zaim Beekawa with J.P. Morgan.
Axel Stasse: Yeah, sure. Sorry. So the commercial market drove a bit margin in the first half year of the year. And based on your comment on the key focus on volume growth going forward, is it fair to assume that we could see some pricing risk in the residential market going forward to gain share? We just want to try to just affect and we mute you and we just see if we cannot. Okay. Yeah, okay.
Speaker Change #248: Please go ahead.
Speaker Change #248: Afternoon all.
Speaker Change #248: Just two questions for me.
Speaker Change #248: The first one is I noticed there's a slight mixed effect in the regional sales.
Speaker Change #248: Can you just remind us on the impact this has on the margins, particularly by region?
Speaker Change #248: And then secondly, on your hedging for the year and into 2025, please.
Speaker Change #248: So so yes and myself will maybe not be able to present the 24% RIC short term in the short term.
Speaker Change #248: Thank you.
Speaker Change #248: Okay.
Speaker Change #248: I'm going to leave the hedging to Kim.
Speaker Change #248: Actually, with the recent success we have had in North America, we don't have so much regional effects of the margins.
Speaker Change #248: That's where the numbers are.
Speaker Change #248: And then Asia is still too small to impact the picture.
Speaker Change #248: It doesn't matter if they grow 20%.
Speaker Change #248: They won't impact all the numbers because they're still too small.
Speaker Change #248: So there are some effects.
Speaker Change #248: We still have more difficult markets like Poland and some other markets that if that really grows a lot, it dilutes.
Speaker Change #248: But at this stage, I won't say country mixed effect is big.
Speaker Change #248: Very good, thank you, thank you for that.
Speaker Change #248: And then in the residential segment, actually our margins per unit is a little bit higher.
Speaker Change #248: That one is low.
Speaker Change #248: On the other hand, we get this beautiful overabsorption from all the commercial heavy-density products, platforms and all of that.
Speaker Change #248: And that's also giving an effect.
Speaker Change #248: So I won't say we have any great mixed impacts at the moment.
Speaker Change #248: But for sure, if we wouldn't have had the volume growth that we have now, all these big products, heavy platform products would have diluted the margin a bit because that margin on the paper is slightly lower, but with this absorption, it's fine.
Speaker Change #248: My second question is that's okay, is regarding Russia.
Speaker Change #248: On the hedging side, Siemens, we have this with the country cope, which is still our biggest energy source.
Speaker Change #248: There we can only take prices a quarter at a time.
Speaker Change #248: Right now, we don't have a beat for 2025.
Speaker Change #248: For the best of the consumption on electricity and on gas, we have covered a quarter into June and Q2 next year.
Speaker Change #248: That's it about now.
Speaker Change #248: Perfect.
Speaker Change #248: Thank you for those answers.
Speaker Change #248: And Jens, best of luck on your future deliveries also.
Speaker Change #248: Thank you very much.
Speaker Change #248: Thank you.
Speaker Change #248: The next question will come from Marcus Cole with UBS.
Speaker Change #248: Please go ahead.
Speaker Change #248: Hi, Marcus Cole from UBS.
Speaker Change #248: I've got two questions as well.
Speaker Change #248: I was reading in a statement that you've recovered some share in Europe.
Speaker Change #248: I was just wondering if you're willing to put some numbers to that.
Speaker Change #248: And then the second question is, just on the volume growth strength in H1, are there any one-offs in there that we should be aware of that you don't think that can be repeated in the rest of the year?
Speaker Change #248: I mean, no change as far as I can tell in terms of the way you're thinking of, about the ownership of these assets for Rockwool.
Speaker Change #248: Thanks.
Speaker Change #248: Okay, so market share, our view of gold prices, you know, I've been staring quite hard at
Speaker Change #248: maintaining it.
Speaker Change #248: And, you know, in some countries, we know it down to the decimal because there are associations
Speaker Change #248: looking at it, and sometimes we don't know exactly.
Speaker Change #248: So the market share has remained pretty stable, but there could be country differences.
Speaker Change #248: Should we expect a change with a new management in the future?
Speaker Change #248: And obviously, in the US, where we are growing, and we have a very low market share in the
Speaker Change #248: total market, we have a high market share for the installment, but there's still only
Speaker Change #248: a couple of percentage points of the overall installation market.
Speaker Change #248: We are taking market share out of the installation market, but I don't think anyone is noticing
Speaker Change #248: that because everyone underscores.
Speaker Change #248: So market share is stable, improving in some places, slightly down in others, but overall,
Speaker Change #248: we are happy with the way we manage that.
Speaker Change #248: And what was the other question?
Speaker Change #248: We don't have any special one-offs.
Speaker Change #248: No, no one-offs, no.
Speaker Change #248: We have some big projects, but you know, the biggest project we ever get is like 4 or 5
Speaker Change #248: million euros, and there's not many of them.
Speaker Change #248: So we have got some big projects, but nothing that impacts the growth.
Speaker Change #248: Okay, thank you very much, and best of luck for the future, Jens.
Speaker Change #248: Thank you.
Speaker Change #248: The next question will come from Axel Stassi with MS.
Speaker Change #248: Please go ahead.
Speaker Change #248: Good afternoon, everyone.
Speaker Change #248: I guess maybe something.
Speaker Change #248: Thanks for taking my question.
Speaker Change #248: I just have one remaining.
Speaker Change #248: If I understood correctly, the commercial market drove the upbeat margins in the first
Speaker Change #248: half year.
Speaker Change #248: So how should we look at pricing in the residential market going forward?
Speaker Change #248: And I'm asking this question specifically based on your comment on the key focus on
Speaker Change #248: volume growth.
Speaker Change #248: So is it fair to assume we could see some pricing risk in the residential market when
Speaker Change #248: You know, we have a very, we have worked this through in detail.
Speaker Change #248: volumes pick up, or did I not understand it correctly?
Speaker Change #248: Thank you.
Speaker Change #248: We unfortunately have a very disturbance on the lines, so we could not hear that question.
Speaker Change #248: Could you maybe just repeat one more time?
Speaker Change #248: Yeah, sure, sorry.
Speaker Change #248: So the commercial market drove the upbeat margin in the first half year of the year.
Speaker Change #248: My successor is still until the 1st of September, board member, his part of it, and we haven't seen the external environment on the reasoning for not continuing what we do.
Speaker Change #248: And based on your comment on the key focus on volume growth going forward, is it fair
Speaker Change #248: to assume that we could see some pricing risk in the residential market going forward to
Speaker Change #248: We haven't seen anything change, and we see the companies that take the other route.
Axel Stasse: So I think the residential market at the moment is a bit overfalling now. So we clearly don't have an ambition in the market. If you look at the new housing starts in Germany, it's down to even lower level than Austria. I can't remember how much, but it's really really low. So we don't have a plan, and to attack in any way and take market share. We just got to stay in and when the market is not low, it's better to focus on maybe have some volume growth or maybe have an opportunity to just ramp up and get nice business in.
Speaker Change #248: gain share?
Speaker Change #248: We're just going to try to…just a second.
Speaker Change #248: We'll mute you and we'll just see if we can…
Speaker Change #248: Okay.
Speaker Change #248: Yeah, okay.
Speaker Change #248: So I think the residential market at the moment is a bit of a falling eye.
Speaker Change #248: It impacts very negatively.
Speaker Change #248: So we clearly don't have an ambition in the market.
Speaker Change #248: If you look at the new housing stock in Germany, it's down to even lower level than last year.
Speaker Change #248: I can't remember how much, but it's really, really low.
Speaker Change #248: So we don't have a plan.
Speaker Change #248: to attack in any way and take market share.
Speaker Change #248: We just try to stay in.
Speaker Change #248: And when the market is that low,
Speaker Change #248: it's better to focus on, you know, where we have some volume growth and where we have an opportunity
Speaker Change #248: to just ramp up and get nice business in.
Speaker Change #248: So I don't think the timing to go after market share
Speaker Change #248: growth in residential is a good one at all because I think it will just result in a negative price
Speaker Change #248: spiral.
Speaker Change #248: So we try to take care of our market share and then we hope that at some stage this
Speaker Change #248: market comes around.
Speaker Change #248: Okay, thank you very much.
Speaker Change #248: This concludes our question and answer session.
Speaker Change #248: I would like to turn the conference back over to our host for today for any closing remarks.
Speaker Change #248: So, we see no reason to change them, and there is no intention to change the strategy because of a new CEO of the company, and we are all aligned with this.
Speaker Change #248: Please go ahead.
Speaker Change #248: Yes, from myself and Jens here, we'd like to thank you very much for the call
Speaker Change #248: today.
Speaker Change #248: I'm sorry the line broke up a little bit here at the end.
Speaker Change #248: Thank you very much.
Speaker Change #248: If you have questions afterwards,
Speaker Change #248: of course, you're welcome to give me a call.
Speaker Change #248: And for some of you, we will see you next week.
Speaker Change #248: Thank
Speaker Change #248: you very much.
Speaker Change #248: The next question will come from your scene, towering, with on-field investment research.
Speaker Change #248: Have a nice day.
Speaker Change #248: The conference is now concluded.
Speaker Change #248: Thank you for attending today's
Speaker Change #248: presentation.
Speaker Change #248: You may now disconnect.
Speaker Change #248: Please go ahead.
Jens Birgersson: So I don't think the timing to go off the market share growth in the residential is a good one at all because I think it will just resolve the in the price by negative price by runs to be we try to to care our market share and then we hope that some stages market comes up.
Speaker Change #248: Yes, good afternoon.
Operator: Okay, thank you very much.
Speaker Change #248: So, two question on my side as well.
Operator: This concludes our question and answer session.
Speaker Change #248: First, could you comment a little bit about the pricing trends and the volume trends that you've seen in July and August?
Speaker Change #248: Is it fair to assume that there is no trend on pricing, or have you announced some additional price increase?
Operator: I would like to turn the conference back over to our host for today for any closing remarks. Please go ahead. Yes, yeah, from from myself and you would like to thank very much for the call to take. I'm sure the sign broke up a bit here at the end. If you have questions afterwards of course you're welcome to give me a call and for some of you will see you next week. Thank you very much. Have a nice day.
Speaker Change #248: I think in the US, there were some price increase.
Speaker Change #248: And on the volume, have you seen any improvement or deterioration versus the concoiter?
Operator: The conference is now concluded. Thank you for attending today's presentation.
Speaker Change #248: And then my second question would be on the on the new one trends.
Operator: You may now disconnect.
Speaker Change #248: Like, in another month, where margin are relatively high, today, do you see a risk for new companies to enter the European or North American mineral wood industry?
Speaker Change #248: Or do you think it's too hard?
Speaker Change #248: Like, because of a regulation, like, and they could take us any issue, are you facing in France?
Speaker Change #248: Yeah, yeah.
Speaker Change #248: So, so in France, we see some price impression, the residential segment of the light walls, perspective is relatively low.
Speaker Change #248: We haven't seen much of a change.
Speaker Change #248: I mean, it's around the era of slightly negative, slightly up.
Speaker Change #248: Nothing dramatic.
Speaker Change #248: And I think we need some, I don't know, governmental programs, taking action to get that up.
Speaker Change #248: Overall, in Europe, on the gdp side of things, we probably haven't seen a case for a broad base upturn.
Speaker Change #248: It has weakened a little bit lately in Europe.
Speaker Change #248: So, in France, it's around the the era of slightly negative.
Speaker Change #248: Nothing really dramatic on price, maybe some segments have been down, but on the segments, we can increase the prices.
Speaker Change #248: So that's on that side.
Speaker Change #248: And then, price increases at some market where we there is no issue whatsoever, but price.
Speaker Change #248: For example, the US, we just launched a percent increase.
Speaker Change #248: And that's in line with what's happening in the market on Glasswood and Stonewood.
Speaker Change #248: That's moving.
Speaker Change #248: The last question just to make sure I understood you asked me how difficult it is to enter the Stonewood business or such a question.
Speaker Change #248: Do you see a risk because the margins today are much higher than they were 10 years ago?
Speaker Change #248: Yeah, do you see a risk or that you will have a new player on the market?
Speaker Change #248: Yeah, obviously, there are people that look at Stonewood now and think of this as a fantastic business.
Speaker Change #248: Let's enter this, you know, 18% of it's money on the rest.
Speaker Change #248: And I think having a single plant versus our quite big machine now with a lot of economics of scale and also considering how difficult it is to start up the plant and run it really, really productive outfit.
Speaker Change #248: I think you will see some entrance, but I must say there hasn't been an entrance for a long time that come even close to our bargains because it's very, very difficult to run a small network or just one plant without brand and without the service level of all the rest of.
Speaker Change #248: I'm not, I'm not particular worried about your interest, but yes, some people will announce new plants and we'll deal with that when that comes, but the trend has been that the plants are announced and very much delayed because it's also very, very difficult to build the plants.
Speaker Change #248: You need to be very persistent to some geographies to get your plant build in today's world.
Speaker Change #248: And I think their scale is also important because we have the means and the persistence to just keep working until we can build our plants.
Speaker Change #248: So it can be very challenging to get all the permits and you get the permits so that you have to alter so whatever as it is in many industries in Europe, but the moment.
Speaker Change #248: And that is just very last point, which is just like not a question, but more comment about the fact that you, you delivered such a greater growth for the company.
Speaker Change #248: I think it's quite impressive what you've been able to do in terms of margin and productivity.
Speaker Change #248: So just wanted to wish you the best of luck for your future.
Speaker Change #248: Thank you.
Speaker Change #248: Thank you very much, you see, and I need to mention an aspect there that that this is an important one to us that we don't talk about too much.
Speaker Change #248: And that is a productivity that economists of scale of the business that that's an underlying big advantage of Rockwell that we have in the culture.
Speaker Change #248: And that's a strong point, but thank you for those words.
Speaker Change #248: The next question will come from Burgess to Marcia with HSBC.
Speaker Change #248: Please go ahead.
Speaker Change #248: Nick.
Speaker Change #248: So I have a couple as well.
Speaker Change #248: Just on the pricing, right?
Speaker Change #248: It's interesting that you keep talking about pricing, flag is in the quarter, but looking at Eastern Europe, Eastern Europe is up 28% in Q2, given some of your competitors, not direct one, but a different segment, a bit, but they talk about when the volume is bounce back, they see some pricing pressure.
Speaker Change #248: If that's something, it's also impacting you, because I recollect historically, Eastern Europe has been a different market, where competition is a little more intense compared to Western Europe.
Speaker Change #248: So any comments around that will be very helpful.
Speaker Change #248: And within that, if you could just give a little more flavor into the Western Europe, when everybody's talking about interest rate income, cut coming through, do you see similar risk spanning out in Western Europe as well, when the volume bounce happens maybe towards the end of Q4, or maybe in 2025?
Speaker Change #248: So that's my first one.
Speaker Change #248: I'll come back in a second.
Speaker Change #248: Okay, thank you, Breish.
Speaker Change #248: So in Eastern Europe, we have the classic country, for example, Poland, where price competition is free, whenever volume goes down, wherever it is down, now you see the whole EPS competition, several segments, Gladwell and Infosodes.
Speaker Change #248: So there we really live it, but then there are also some Eastern European markets where Romania, Hungary, but we don't see much of that, but it's more Western in the dynamics, but for sure that defectors there.
Speaker Change #248: It's no secret that Poland is challenging, but we've all balanced volume and price, and it's kind of schoolbook, really, really a lot of competitors that want volume for any price.
Speaker Change #248: And we do well on the really big projects where you want really our five safety, you want to deliver safety, you want to do logistics, those projects we still can take a bit good modest, and on the other we need to play it a bit more by the year and then correct some after the upturn.
Speaker Change #248: So that's the same pattern as we have discussed many times, Breish.
Speaker Change #248: But there are also quite a few Eastern European markets that doesn't have that Polish on them.
Speaker Change #248: So then with Western Europe on the trends of the dynamics, I think fundamentally Western Europe, what you see is that sometimes there could be, you know, there could be circumstances that mean that they go three, four months and you get simply too many projects, and then someone doesn't get enough, but then it turns into a bit of a system on panic in one of the competitors.
Speaker Change #248: And that is nothing unusual of that, that we have seen it for example in Germany several times where someone really, really want volume.
Speaker Change #248: So our approach has traditionally been that okay, if it's not on the sustainable level pricing, we rather step away from those projects, and then the market has been normalized, and I must admit I have not seen any other trend in Europe.
Speaker Change #248: I don't see any change to the fundamental dynamics to the rest of Europe in pricing on Perfect, and my second question is more into the U.S.
Speaker Change #248: You're talking about U.S., you're nearing full capacity, then looking into 25 and 26 and I guess your new plant is not coming on stream until 27.
Speaker Change #248: So what kind of U.S., I was talking about U.S., sorry.
Speaker Change #248: Sorry, I just finished the question, is that you have a near full capacity right now and looking into 25 and 26, what's kind of volume headroom you have to continue to grow this number or you see there is a kind of a real capacity constraint that's limiting your growth in the near to medium term until the new plant comes in 2027.
Speaker Change #248: So there are the normal two or three factors here on full capacity that can be quite confusing for our business because if we don't, if we miss a few months or we are not the full capacity, we are frozen capacity and we can never catch up back in the year and so what happened here was that we had some challenges with delivery time.
Speaker Change #248: So in the U.S., we didn't expect the ramp up, the business went down in 2022 or 2023 and then it stepped changed up and we didn't have the ships in place, we backed them to get blue color workers in, to ship them off and to train them on the rest and then we sat for this more than six months back log of orders on delivery times.
Speaker Change #248: During that period we didn't increase prices, we just focused on one thing to work back lead times and then we go up on full capacity. So this doesn't mean we don't have more capacity in the plant even though we run a couple of months at full.
Speaker Change #248: So going into next year, we will count to that if you see a good next year with more seasonal stock and running more close to full the rest of the year.
Speaker Change #248: So we have more growth in the business and that would take us through one or two years I think and then of course after that we do what we normally do if we run out, we use capacity from other parts of the world, we supply to the bond, although we don't make a lot of money without our ambition and we have done a lot of that in Europe, we remember last time when we were up in very high utilization, we ship from even Norway down to Germany.
Speaker Change #248: The U.S, stock of means because our priority, if we have that demand, this puts other customers on here, we might get into that next year or the year off, to where they actually have to bring in certain graduates of Stonewall into the U.S, and we would be ready for that and we'll see that.
Speaker Change #248: Okay, that's great.
Speaker Change #248: Thank you.
Speaker Change #248: Thank you and for all your kind of effort and I think I've done a great job as my colleagues have already told that the pricing initiative we have taken in the last nine years has been simply pretty impressive and that's we can see with the margins.
Speaker Change #248: So thank you very much and good next training.
Speaker Change #248: Thank you, Brijesh.
Speaker Change #248: Thank you.
Speaker Change #248: The next question will come from Harry with the Goad, please go ahead.
Speaker Change #248: Harry, your line is open.
Speaker Change #248: Yes, hi, can you hear me?
Speaker Change #248: Yeah, we can hear you.
Speaker Change #248: Yeah, okay, great.
Speaker Change #248: Yes, Harry,[inaudible] I would like to think about a sort of through cycle average margin and obviously having had a big increase this year.
Speaker Change #248: The second question please is around sort of pricing and competition and when we're thinking about that, should we be thinking about your product relative to other stonewall providers?
Speaker Change #248: Or should we actually always be thinking about it relative to the broader suite of insulation products?
Speaker Change #248: Thank you.
Speaker Change #248: Yeah, so I will hand over to 50% margin question to see if all came.
Speaker Change #248: I think the other one person then came and answered the average cycle margin, but I don't feel I'm the right one to answer at this moment.
Speaker Change #248: On pricing and competition, I would say that yes, it probably attracts people through the market.
Speaker Change #248: Stonewall is a great product.
Speaker Change #248: It has a very clear cutout space in the market to meet the climate goals.
Speaker Change #248: Our insulation among other insulation possibly be needed and obviously we think up is the best.
Speaker Change #248: And so I think we can see some new entrance, but again, I don't see anything happening there quickly due to the nature of the business.
Speaker Change #248: And in the last couple of years, the inflation on equipment, this mere showing drive that has happened in Europe and the US is just expensive and complicated to build.
Speaker Change #248: And there is some we have a lot of in-house engineers during a lot of this work.
Speaker Change #248: It's not easy, so I wouldn't factor in that you will have big new entrance that come in 5, 6 factories very quickly.
Speaker Change #248: That's not likely to happen, but sure we're going to have new entrance.
Speaker Change #248: And normally, a margin, I don't think necessarily it exists.
Speaker Change #248: Of course, in the coming a few years here in 25 and into 26, we have no fans to open in a new factory.
Speaker Change #248: So there will be no self-made appreciation change coming.
Speaker Change #248: That will change.
Speaker Change #248: Of course, once we start to get the big factories open in Europe and in the US.
Speaker Change #248: So that will definitely impact the EBIT.
Speaker Change #248: We are working on margin improvements.
Speaker Change #248: We've told you previously about how efforts to reduce the mining in our factory.
Speaker Change #248: That is definitely a margin possibility.
Speaker Change #248: But the size that I think we just worked was having constant focus on productivity and then hopefully to maintain or improve margins.
Speaker Change #248: That's really our aim.
Speaker Change #248: But I said from the 7 onwards, there will definitely be more depreciation coming from the planned investments that we're doing over the coming years.
Speaker Change #248: Brijesh, thank you very much.
Speaker Change #248: The next question will come from Zaim Beekawa with JP Morgan.
Speaker Change #248: Please go ahead.
Speaker Change #248: Afternoon, all just two questions for me.
Speaker Change #248: The first one is I notice there's a slight mix effect in the regional sales.
Speaker Change #248: Can you just remind us on the impact this has on the margins between the Bay region and then secondly on your hedging for the year and into 25, please.
Speaker Change #248: Thank you.
Speaker Change #248: Okay, I'm going to leave the hedging to Kim.
Speaker Change #248: Actually with the recent success we have had in North America.
Speaker Change #248: We don't have so much regional effects of the margins and we have all the such frowns.
Speaker Change #248: It's a very good markets, but we have a lot of other markets now that are in the same levels.
Speaker Change #248: So when you have North America versus Europe on average, you don't see much mix effect and country mix effect anymore because we are up on scale and we start to have that much profitability in North America.
Speaker Change #248: And then Asia is still too small to impact the picture.
Speaker Change #248: It doesn't matter if the world runs.
Speaker Change #248: It won't impact all the numbers because it's still too small.
Speaker Change #248: So there are some effects.
Speaker Change #248: We still have more difficult markets like Poland and some other markets.
Speaker Change #248: If that really grows a lot, it does.
Speaker Change #248: But at this stage, I won't say a country mix effect is big.
Speaker Change #248: And then in the residential segments, actually our margins per unit is a little bit higher that will be slow.
Speaker Change #248: On the other hand, we get beautiful homeraps from all the commercial heavy density products, platforms and all that.
Speaker Change #248: And that's also given effect.
Speaker Change #248: So I won't say we have any great mix impacts at the moment. But for sure, if we wouldn't have had the volume growth that we have now, all these big projects, heavy platforms, would have value to the margins because that margin on the paper is slightly lower, but with the absorption response.
Speaker Change #248: On the hedging side, see, you know, we have this with the counter-coke with still our biggest energy source.
Speaker Change #248: There, we can only take prices at quarter at a time.
Speaker Change #248: Right now, we don't have a beat for 2025.
Speaker Change #248: On the existing and existing markets, we do have fun and all the way in Spain.
Speaker Change #248: We do have some sort of long-term contracts.
Speaker Change #248: For the best of the consumption on the existing and on gas, we have covered the quarter into two next year.
Speaker Change #248: That's it about now.
Speaker Change #248: The best year we have almost all expected consumption.
Speaker Change #248: I have a thank you for these answers and in the best of luck on your future there is also.
Speaker Change #248: Thank you very much.
Speaker Change #248: Thank you.
Speaker Change #248: The next question will come from Marcus Cole with UBS.
Speaker Change #248: Please go ahead.
Speaker Change #248: Hi Marcus Cole from UBS.
Speaker Change #248: I've got two questions as well.
Speaker Change #248: I was reading in a statement that you covered some share in Europe.
Speaker Change #248: I was just wondering if you were willing to put some numbers to that.
Speaker Change #248: And then the second question is, just on the volume growth strength in H1, are there any one of them that we should be aware of that you don't think that can be repeated in the rest of your James, some mark to share our view to both of us is, you know, I've been staring by hard on maintaining it.
Speaker Change #248: And you know, in some countries we know a thousand, the decimal, because there are associations looking at it and sometimes we don't know exactly.
Speaker Change #248: So the mark to share has remained.
Speaker Change #248: Princess Stable, that it could have been country differences.
Speaker Change #248: And obviously in the U.S, where we are growing and they have a very low market share in the total market.
Speaker Change #248: They have a high market share with installments, but they still only come to the percentage point of the over-installation market.
Speaker Change #248: We are taking market share out of the installation market, but I don't think anyone is hoping to think that because everyone is going to score.
Speaker Change #248: So mark to share Stable, improving some prices like a thousand others, but we are happy with the way we manage that.
Speaker Change #248: And what was the other thing?
Speaker Change #248: We don't have East Asian one else.
Speaker Change #248: No one else, no.
Speaker Change #248: We have some big projects, but you know, the biggest project we ever get is like four or five years ago.
Speaker Change #248: So we have got some big projects, but that's in that impact.
Speaker Change #248: Okay.
Speaker Change #248: Thank you very much.
Speaker Change #248: Thank you.
Speaker Change #248: The next question will come from Axel Stasi with MS.
Speaker Change #248: Please go ahead.
Speaker Change #248: Good afternoon everyone.
Speaker Change #248: Thanks for taking my question.
Speaker Change #248: I just have one remaining.
Speaker Change #248: If I'm understood correctly, the commercial market drove a bit margin in the first half year.
Speaker Change #248: So how should we look at pricing in the residential market going forward?
Speaker Change #248: And I'm asking this question specifically based on your comment on the key focus on volume growth.
Speaker Change #248: So is it fair to assume we could see some pricing risk in the residential market when volume pick up?
Speaker Change #248: Or did I not understand it correctly?
Speaker Change #248: Thank you.
Speaker Change #248: We unfortunately have a very disturbance on the lines.
Speaker Change #248: So we could not hear that question.
Speaker Change #248: Could you maybe just repeat one more time if it's very short?
Speaker Change #248: Yeah, sure.
Speaker Change #248: Sorry.
Speaker Change #248: So the commercial market drove a bit margin in the first half year of the year.
Speaker Change #248: And based on your comment on the key focus on volume growth going forward, is it fair to assume that we could see some pricing risk in the residential market going forward to gain share?
Speaker Change #248: We just want to try to just affect and we mute you and we just see if we cannot.
Speaker Change #248: Okay.
Speaker Change #248: Yeah, okay.
Speaker Change #248: So I think the residential market at the moment is a bit overfalling now.
Speaker Change #248: So we clearly don't have an ambition in the market.
Speaker Change #248: If you look at the new housing starts in Germany, it's down to even lower level than Austria.
Speaker Change #248: I can't remember how much, but it's really really low.
Speaker Change #248: So we don't have a plan, and to attack in any way and take market share.
Speaker Change #248: We just got to stay in and when the market is not low, it's better to focus on maybe have some volume growth or maybe have an opportunity to just ramp up and get nice business in.
Speaker Change #248: So I don't think the timing to go off the market share growth in the residential is a good one at all because I think it will just resolve the in the price by negative price by runs to be we try to to care our market share and then we hope that some stages market comes up.
Speaker Change #248: Okay, thank you very much.
Speaker Change #248: This concludes our question and answer session.
Speaker Change #248: I would like to turn the conference back over to our host for today for any closing remarks.
Speaker Change #248: Please go ahead.
Speaker Change #248: Yes, yeah, from from myself and you would like to thank very much for the call to take.
Speaker Change #248: I'm sure the sign broke up a bit here at the end.
Speaker Change #248: If you have questions afterwards of course you're welcome to give me a call and for some of you will see you next week.
Speaker Change #248: Thank you very much.
Speaker Change #248: Have a nice day.
Speaker Change #248: The conference is now concluded.
Speaker Change #248: Thank you for attending today's presentation.
Speaker Change #248: You may now disconnect.