Q2 2024 Rockwool AS Earnings Call

August 22, 2024

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Conference Call will start momentarily. Thank you for your patience.

Operator: Ladies and gentlemen, welcome to the Rockwool Report on the first half year of 2024. 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 is being recorded. I would now like to turn the presentation over to your host. Please begin.

Ladies and gentlemen, welcome to the Rockwool report on the first half year of 2024.

Speaker Change: ladies and gentlemen welcome to the rock wowall report on the first half year of two thousand and twenty four today i'm pleased to present ceo d jn ferginson and cfo kim 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: of all participants will be in listen 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.

Kim Andersen: Thank you very much, and good afternoon, everybody. Sorry for the delay. We had some technical challenges here in Chennai from where we're taking the call. Today, first of all, of course, I'm Kim Andersen, the CFO, and with me here, I have the CEO, Jens Birgersson. Today, we will present to you the first half result, and then afterwards, we go into Q&A. 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. With this, we can quickly go into the presentation on slide number three.

Speaker Change: and giving us in the good afternoon everybodysry for or the lay we have some technical challenges here in chenight from may we're taking the calls

Kim Vandersan: today i first ofall of course i'm kim vanders in the cfole and with me here i have the ceoan speakersson and today we will present to you the first half result and then after more we go into qand a

Kim Vandersan: before we start i just like to remind joy slighten number two the forward-looking statement and please be aware that this presentation contains uncertainties

Kim Vandersan: and with this we can criticallygo into the perstace on slide number three

Kim Vandersan: I would now like to turn the presentation over to your host.

Jens Birgersson: Good morning, good day, everyone. It's Jens Birgersson here. Kim Andersen and I and the whole board of directors of Rockwool, including my successor, Jes Munk Hansen. We are in India, in Chennai, and the reason we are here doing a board meeting is at 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. That's the reason we are calling from here, and I really can't blame India for the technical problems here. Everything works here. It's some other issue that created problems here. If we move to slide 3, the H1 results.

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ian shmf: became an eye and the whole orarder directors of rockfulll including my successor

ian shmf: Thank you very much and good afternoon, everybody.

Speaker Change: yes moved

Shana: we are indian shana and the reason we are here doing board we ing is about ninety kilometers stop we sto and

Shana: Sorry for the delay.

Speaker Change: and for previously called masstreet we have the qutipies of land that we have 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 our power first factory so so that's the reason we have

Speaker Change: We had some technical challenges here in Chennai from where we're taking the calls.

Speaker Change: calling from here otherther and i really ' plain in the for the technical proofittyility we everything work serited some other issue of greatredit problem set so if weremoved to slide three days 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, and today we will present to you the first half result and then afterwards we go into Q&A.

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.

Jens Birgersson: As you know, I normally don't comment on here very much, but the contrast between H1 and Q2 is a little bit interesting. 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 growing. We don't see much growth on residential, rather the opposite. The residential is still troubled, but we are doing fine on the commercial side of things. If you look at the results year to date, the EBIT margin 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.

Speaker Change: as you know i normally don t common that i have you very much but

Speaker Change: into contrast between h well que to a little bit interesting soin

Speaker Change: age one three we saw eight percent quite broad-based growth as we have seen in previous probably in the last woman off here

Thank you for your patience.

Operator: Thank you for your patience. .

Speaker Change: it is the commercial side with ness going don' the much growth or residential rather opposite so the residential is still troul but what we are doing

Speaker Change: fine on the commercial side of things

Speaker Change: the look at result year terto d's ebit margin seventeen point seven percent

Speaker Change: and that have been achieved on more or less neutral pricing we have

Speaker Change: a fractional over price reduction there's it makes a market is on somemaras depcess going up for something multi americ

Jens Birgersson: There are some markets where the price is going up, for example, North America and parts of Asia, and there are others where the prices just hold them, and some of them are down, but we are kind of monitoring our market share and navigate that. Overall, we are very happy with the H1. Moving on to slide four, Q2 highlights. Comparables differ a little bit, 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. I don't think we ever had a bigger growth number and higher sales. That goes for both Canada and the US. Overall sales in nominal, we always talk budget rate. Good to see that we crossed EUR 1 billion.

Speaker Change: perofasia they ares but process to hold them them consusomemer they re down where be kind of monitoring our market share and now get that so overall

Speaker Change: And with this, we can quickly go into the presentation on slide number three.

Speaker Change: we are very happy with the first half year year moving on to slide four second quarter highlights

Speaker Change: comparable differs a little bit for q two wasessome person last year

Speaker Change: q one was a song eer last year

Speaker Change: so i would say we have a really broad bed

Speaker Change: growth and record record growth in north america i don't think we ever had a dig broad number and higherses about cult ural both the canada in the u s

Speaker Change: allon sales in nominal be the sto budthe rate grou to see that we acrossed billion i'm not sure if that's the first time but there are very strong quarter of that

Jens Birgersson: I'm not sure if that's the first time, but very, very strong quarter. Then on the EBIT margin, we reached 18.7%, and that includes EUR 7 million Ukraine provision or donations. Just to sum up, we had in Q1 plus Q2 a little bit more than EUR 30 million that we have donated. Let's move to slide five. I'm not really gonna comment this, but if you look at up on the right, the Systems division's growth, you see -1%. We did divest Charles Town, so on like-for-like numbers, Systems division had two percentage points better growth that's shown there. If we now shift to slide six, we see Q2.

Speaker Change: on the abbitits margin

Speaker Change: we releached eighteen point seven percent and that includes

Speaker Change: seven million or creating a commission or the ations and just of sum of readding q or q or plcute tourists

Speaker Change: Good morning, good day, everyone.

Speaker Change: little bit more than thirteen million but we have totally let's move to slide five

Speaker Change: Jens here. Kim and I and the whole board of directors of Rockwool, including my successor, Jens Munch, 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: So that's the reason we are calling from here, and I really can't blame India for the technical problems.

Speaker Change: yeah

Speaker Change: i just got

Speaker Change: i'm not really going to comment this what did you look at on the rightous system divisicials growve

Speaker Change: this is minus one percent we diddivest chancevill so life for life numbers system division have two percentage quant back to growth let's shown there negotiate to slidees stkes

Speaker Change: Everything works here.

Speaker Change: It's some other issue, not great problems here.

Jens Birgersson: What's pleasing here is to see that here, obviously, the insulation business is growing very much. 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. If we add back the 2% lost top line for Charles Town, we have about 5% on a comparable basis. 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 box handling growth and that have had a very strong development. If we turn to slide 7, the regional sales development. Starting with Europe, it's a very scattered picture in Western Europe.

Speaker Change: we ituteed to and most pleasing hereis to see that here obviously the inallation business is growing

Speaker Change: So if we move to slide three, the H1 result.

Speaker Change: very very much it's a super quarter both maybe from my perspective a more pleasing is such the system division was gain a little bit of momentum so if we add back the two percent

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: last top line for a chancey let me have about five percent of the comparable

Speaker Change: basis so we are looking now in the coming quarters whether the growth will increase a little bit in theposs division

Speaker Change: the main the main driver for the system division growth is leland roth of that k had a very strong development the potential slide seven the region onsence development

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, it's the commercial side of the business going.

Speaker Change: starting with jurope it's very scattered picture in in inrestestingin europe we have

Speaker Change: We don't see much growth on residential, rather the opposite.

Jens Birgersson: We have some countries growing, you know, 20%, 30%. We have Sweden growing surprisingly quite well. Germany, single-digit growth, healthy growth, picking up, turning the corner. Although we don't see Germany on the residential side turning up at all, but that's on the commercial side. Then we have countries like Spain, France, and UK that are around zero, slightly negative. Quite a wide spread on that. Moving to Eastern Europe and Russia, you see several countries with very solid double-digit growth numbers and one or two of the small ones negative. We have not listed here that Russia had a very good quarter, but so did Poland, and so did, for example, Ukraine. We are small in Ukraine, but we grew some 40% in Ukraine.

Speaker Change: some countries growing that trend to thir to percent we have swed en growing

Speaker Change: surprising quadrwell

Speaker Change: germany single digitital growth has the health the growth t turningin the core corner although we don't see germany of the residential side turnving up at all to us of the commercial side

Speaker Change: So the residential is still troubled, but we are doing fine on the commercial side of, things.

Speaker Change: If you look at the result, year-to-date EBIT 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: then we have comes like spain from you paay that are around the coslightly negatives requred to move widespread or not mo into easasting or rus a

Speaker Change: you' see

Speaker Change: severalon the country but

Speaker Change: there is solid dbleatedit growth numbers and the oneall or two of the small amounts on negativeven and we are not listed together a russia russia had a very

Speaker Change: very good quarter but soldid po land and so so did for example crade we small in a grade but we grew some for to percent an cray moving on to nor n america asian others

Speaker Change: There's a mix of markets, and some markets, the price is going up, for example North America, and parts of Asia, and there are others where the price is just holding, and somewhere they are down, but we are kind of monitoring our market share and how we get that.

Jens Birgersson: Moving on to North America, Asia, and others, a quick summary of the whole thing that is that China's negative, US and Canada is on record growth, and Southeast Asia, including Japan, very good growth. Thailand, Malaysia, Indonesia, and where we are now, India, on very good growth. We are getting closer to a point where 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, EBITDA margin up to 25%. Net margin now 18.7%, which is a lot higher than a year back. The trend upwards have been healthy.

Speaker Change: So overall, we are very happy with the first half year.

Speaker Change: creek summary of the whole thing about this

Speaker Change: is a china's negative

Speaker Change: Moving on to slide four, second quarter highlights.

Operator: Ladies and gentlemen, welcome to the Rockwool Report on the first half year of 2024. 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 is being recorded, I would now like to turn the presentation over to your host.

Speaker Change: Ladies and gentlemen, welcome to the Rockwool Report on the first half year of 2024.

Speaker Change: for these daysia to the japhand very good to growth so p um malsiation in theia and where we are now eat the hour all very good growth we have we are getting close at to point but be concerned more but itiss nice to see that we have very are growing out here

Speaker Change: Comparable differs a little bit, so Q2 wasn't very strong last year.

Speaker Change: Q1 wasn't strong either last year, so I would say we have a really broad-based growth and, record, record growth in North America.

Speaker Change: and also in ml america

Speaker Change: I don't think we ever had a bigger growth number and higher sales, that goes for both, Canada and the U.S.

Speaker Change: Overall sales in nominal, we always talk budget rate, good to see that we crossed a billion.

Speaker Change: let's go to profitability lide eight

Kim Andersen: Please begin. Thank you very much, and good afternoon everybody, sorry for the delay, we have some technical challenges here in Chennai, from where we're taking the calls.

Speaker Change: margin has increased quite a lot if you look there on the right hand diagram

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 Ukrainian 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: Today I'm pleased to present CEO Jens Birgersson and CFO, Kim Andersen, for the first part of this call.

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'd just like to remind you on slide number two, the forward look 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 it all marg up to twenty-five percent ic margin all eighteen point cent strand bridges

Speaker Change: Let's move to slide five.

Speaker Change: and lot higher than than the yearback so the trend upwards have been healthy we have listasted in some of the factors obviously body growth stable ses prices

Jens Birgersson: We have listed some of the factors, obviously, volume growth, stable sales prices, input costs have kept stable. We see now maybe inflation coming back a little bit. We have had some favorable factors coming in, obviously, offsetting the inflation, but we see also many, many materials kind of ticking up with normal inflation. One item here that is worth noting, if you look at the headcount, we are about 100 employees or so higher in the headcount compared to a year back, and that is with the 10% growth. Obviously, we had a tremendous productivity improvement there, almost 9, 10 percent productivity improvement, and that gives us nice overabsorption where we have fixed costs on the factory, overheads and SG&A and all the rest, and you see that flow through to the bottom line.

Speaker Change: in put cost subsept stable be seen our v inflleation coming be back a little bit have has some favorable factors coming in obviously compare on the inflation but we see also very many materials kind of kicking up normal inflation

Speaker Change: All participants will be in a listen only mode, and afterwards there will be a question and answer session.

Jens Birgersson: Good morning, today everyone is Jens here. 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. What was previously called Madras Street, we have a lot of piece of land that we have approved the factory project for our second factory in India, where we have had quite a successful lost couple of years filling up our first factory.

Speaker Change: I'm not really going to comment this, but if you look at the, up on the right, the systems, divisions growth, it's a minus 1%.

Speaker Change: onlight them here of these

Speaker Change: As a reminder, this conference call is being recorded, I would now like to turn the presentation over to your host.

Speaker Change: we no thing if you look at a headcount

Speaker Change: we are about one hundred of hundred employees so higher in in the headcount compared to yearback and that is where the ten percent growth obviously we have a

Speaker Change: Please begin.

Speaker Change: tremendous tremendous productivity improvementof they almost nine ten percent productivity improvement and that gives us nice over absorption where we offe costs on the factu over has on the rest and and you see that flow through to the bottom line so is' nice to see that thats

Jens Birgersson: It's nice to see that scalability is there in the business. I'm also quite happy with this quite sudden ramp up in the factories where, for example, in North America, we had 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. That has helped us in supporting this growth. If we move to slide nine, here I only want to comment on margins in Q2 2024. 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 15% margin again.

Speaker Change: Thank you very much, and good afternoon everybody, sorry for the delay, we have some technical challenges here in Chennai, from where we're taking the calls.

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, not quite the problem set. So if we move to slide three, the H1 results. Thanks. As you know, I normally don't comment on Pierre 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 is the commercial side of this growing.

Speaker Change: stcalainability is there in the business i'm also quite happy this quite fom bram up in the factories where for some in north america we have to step up capacity

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.

Jens Birgersson: Before we start, I'd just like to remind you on slide number two, the forward look statement, and please be aware that this presentation contains uncertainties.

Speaker Change: And with this, we can quickly go into the presentation on slide number three.

Speaker Change: very quickly and also some european countries step off germany for example increased the ships but we have been able to do that relatively quickly that has have thought in support in this growth if we work to slide nine

Jens Birgersson: Good morning, today everyone is Jens here.

Speaker Change: so

Speaker Change: here i only about the comment bargaining in in cap twenty four

Speaker Change: We did divest Charlesville, so on like-for-like numbers, system division had 2% growth, that's, shown there.

Jens Birgersson: We came and I and the whole board of directors of rock pool, including my successor, yes, Moon.

Jens Birgersson: We don't see much growth or residential, rather the opposite. So the residential is still a trouble, but what we are doing fine on the commercial side of things. We look at the result, yet today, David Martin 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 market value. The market is the price is going up, for example, in North America and also Asia and the others with prices to hold them and some are down, but we are kind of monitoring our market share.

Speaker Change: and i guess i spoke about to five per cent like for life role suation here i quite pleased with that the system division is up on around the tre percent bargget again of course a nation thatch margin is doing

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.

Jens Birgersson: Of course, insulation at that margin is doing very well. I also want to maybe clarify that the whole Ukraine donation has been put on insulation so that you are aware of that. Look into the investment activities. No, nothing noteworthy. You recognize most of these things, but what we have done a small acquisition in Vietnam. We have signed and we are very close to close, I think four to six weeks. Just to underline that we are here with the board in Asia, and we have for a while been working here in Asia to step up our efforts. It's a very small acquisition, but yet an important bridgehead into Vietnam.

Speaker Change: If we now shift to slide six, we see Q2, and what's pleasing here is to see that here, obviously, the insolation business is growing, but we're not quite there yet, and we're not quite there yet, very very much.

Speaker Change: What was previously called Madras Street, we have a lot of piece of land that we have approved the factory project for our second factory in India, where we have had quite a successful lost couple of years filling up our first factory.

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.

Speaker Change: So if we add back the two percent last top line for Charlesville, we have about five percent on a comparable basis.

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: I've had a very strong development.

Speaker Change: If we turn to slide seven, the regional sales development, starting with Europe, it's a very scattered picture in Western Europe.

Speaker Change: verywell and i also want to maybe clarified out their whole the whole rerain donation has been been put an insuallation so that you're well of that

Speaker Change: We have some countries growing 20-30 percent.

Speaker Change: We have Sweden growing surprisingly quite well.

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: Germany single-digit growth, the healthy growth pack 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 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 of negative and we have not listed Russia.

Speaker Change: Russia had a very good quarter but so did Poland and so did for example Ukraine.

Speaker Change: We, are small in Ukraine but we grew some 40 percent in Ukraine.

Speaker Change: Everything works there, it's some other issue, not quite the problem set.

Speaker Change: So if we move to slide three, the H1 results.

Speaker Change: look into the investment activities

Speaker Change: more nothing not where you will recognize most of these things but what we have done a small acquisition in that now we have signed and be a very close to close i think for to six weeks

Speaker Change: Thanks.

Jens Birgersson: And now we get that. So overall, we are very happy with the first half year. Moving on to slide 4, second quarter highlights. Comparable difference a little bit, so Q2 was a strong last year. Q1 was a strong either last year. So I would say we have 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: As you know, I normally don't comment on Pierre very much, but in the contrast between H1 and Q2 is a little bit interesting.

Speaker Change: Moving on to North America, Asia and others, a quick summary of the whole thing is that China is negative.

Speaker Change: and just underline that we are here with the borardinationia we have since since since a while' be working here in natia to

Speaker Change: US and Canada is on record growth and Southeast Asia including Japan, very good growth.

Speaker Change: Thailand, Malaysia, Indonesia and where we are now India on very good growth.

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 is the commercial side of this growing.

Speaker Change: to step up our efforts time it's a very small acquisition but yet an important bridge head intovietnamand

Jens Birgersson: Many of us might not know that even a country like Vietnam has 100 million people and a very great outlook at the moment. I'm happy with that we could get that one because, again, it's clearly growth markets, and it's good to have the more or less only stone wool factory in the country. We're also working on some other targets in the region. It's not a lot around, but we are scouting. Move on to slide 11. Net working capital percentage 11.5% is down compared to a year back from 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.

Speaker Change: and

Speaker Change: many of us might don't know that you even even the country like it now mas one hundred billion people of

Speaker Change: the very great outlook at them moment so had to be got really we could guest that one because again this clearly growth marketts and it's good to have the more or less nor one factory in the country

Jens Birgersson: Over on 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 average margin, we reached 18.7%. And that includes 7 million euro, creating a correction or donations. And just some of we are adding Q1, Q1 plus Q2 is a little bit more than 30 million that we have. Let's move to slide 5.

Speaker Change: we' also working on also about the targets the regio it's not a lot around but we have scouting moon to slide eleven

Speaker Change: We are getting closer to a point where 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 eight.

Speaker Change: Margin has increased quite a lot.

Speaker Change: If you look there on the right-hand diagram, the EBITDA margin up to 25 percent, the EBITDA margin now 18.7 percent which is a lot higher than a year back so the trend upwards have been healthy.

Speaker Change: networking capital percentage level point five percent down corared yearback thir point four

Speaker Change: on m special but that this is nothing we really need to focus a lot on the sits inherent in the business or it donont tie up to mar networking capital if we have more brion that number

Jens Birgersson: If we had one wish on that number, due to the volume growth, we may perhaps would've liked to have a little bit more finished goods inventory. We had to sell a little bit more than we wanted to. We're gonna work now maybe to bring that inventory up in the coming quarters. Then the last bullet there, the net cash position around EUR 200 million net cash positive. That's after the dividend, and it's after the share buyback. We are on track. We had about EUR 160 million buyback plan for this year, and we are pacing relatively well on the curve on that one.

Speaker Change: We don't see much growth or residential, rather the opposite.

Jens Birgersson: I'm not really going to comment this, but if you look on the right, the system, division's growth is minus 1%. We did have a chance with that, so like for like numbers, system division, we have 2% of the growth that's shown there in our shift to slide 6. 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: We have listed some of the factors, obviously volume growth, stable state, prices, input costs have kept stable. We see now maybe inflation coming back a little bit.

Speaker Change: We have had some favorable factors coming in obviously compared on the inflation but we see also many materials kind of kicking up with normal inflation.

Speaker Change: One item here that is Noting if you look at the head count, We are about 100 to 100 employees or so higher in In the head count compared to a year back and that is with a 10% growth.

Speaker Change: It's obviously we have the, tremendous tremendous productivity improvement There almost 9-10% productivity improvement and that gives up nice, Over-absorption where we fix costs on the factory overheads and on the rest and and you see that flow through to the bottom line, so it's nice to see that that Scalability is there in the business.

Speaker Change: 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 increase the shifts, But we have been able to do that Relatively quickly and that has helped us, In supporting this growth.

Speaker Change: due to the volume growad may perhaps would have like to have a little bit more finished growth the venary we have to sell a little bit more than re want to

Speaker Change: If we go to slide 9 Here I only want to comment on margins in, Q2 2024 and And I guess I spoke about the 5% like-for-like growth of system division here, I'm quite pleased with that.

Speaker Change: We we may perhaps would have liked to have a little bit more finish, Inventory we had to sell a little bit more than we wanted to We're gonna work now maybe to bring that inventory up in in the coming quarters, And then the last bullet there the net net cash position around 200 million net cash positive And that's off to the the dividend and it's off to the share buyback.

Speaker Change: The system division is up on around the 50% margin again, of course Isolation, That margin is doing very well and and I also want to Maybe clarify that the whole, the whole Ukraine a donation has been input on insulation so that you are well of that, look into the investment activities No, Nothing noteworthy you recognize most of these things but What we have done a small acquisition in Vietnam, We have signed and they're very close to close I think four to six weeks and, Just to underline 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: It's a very small acquisition, but yet an important bridgehead into Vietnam, Many of us might don't know that even even even a country like Vietnam has a hundred million people of a very great outlook at the moment, so I'm happy with that.

Speaker Change: We we could get that one because, Again, this clearly growth markets and it's good to to have the more or less all the stonewall factory in the country We also working on some other targets in in the region.

Speaker Change: It's not a lot around but, We are scouting Move on to slide 11, The Networking capital percentage 11.5 percent down compared to a year back of 13.4, Nothing special, but that is it's nothing We really need to focus a lot on this sits inherent in the business that we don't tie up too much networking capital, If we had one wish of that number Due to the volume growth.

Speaker Change: So the residential is still a trouble, but what we are doing fine on the commercial side of things.

Speaker Change: we're going to work now ended to bring up toentary up the coming quarters and then the last of there the net net cash proition

Speaker Change: 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 despite of High investment obviously with the earnings level we have now.

Speaker Change: around two hundred million have cash positive and thatad after the diavvidend is off to the share buyback we are on track we had about hundred and sixty million euro buyback plan for this yearm

Speaker Change: We look at the result, yet today, David Martin 17.7% and that has been achieved on more or less neutral pricing.

Speaker Change: We have a fraction of a price reduction.

Speaker Change: There's a mix of market and some market value.

Jens Birgersson: Good cash and despite of high investment obviously with the earnings level we have now, we have a lot of cash in the company, so good to see that. Slide 12. As we normally do in the half year report, we normally include one or two slides on sustainability. We have done that also here. It's not much drama about that. We have the five sustainability goals that with the time horizon to 2030. We are on track or ahead on all of those. I'll just pull out a couple of data points here. Okay, I'll take it from my memory. If you look first on the CO2 emission intensity, this is the goal we defined before science-based target existed.

Speaker Change: we are pacing relatively well along the curve of that form good cash and the spite of

Speaker Change: We have a lot of cash in the company, so good to see that.

Jens Birgersson: So if we add back the 2% lost top life for Chaudsville, let me have about 5% on a 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 10 million growth on that, 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.

Speaker Change: Slide 12.

Speaker Change: slide ttrail of

Speaker Change: as as been normally do in

Speaker Change: 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: in the half year report we normally include well the two slicse sustainability we have done that also here is's not much drama about that we have theied

Speaker Change: There's not much drama about that.

Speaker Change: sustainabilityated to goals

Speaker Change: that the tiger izon to print third do we we on track or ahead on almost that was pull out the couple of dat topots

Speaker Change: We have the five sustainability goals with the time horizon to 2030.

Speaker Change: okay i thinkthank it from my member saw so if you look first on the

Jens Birgersson: In the invest in Europe, we have some countries growing, 20, 30 percent. Then we have Sweden growing, surprisingly quite well. Germany's single digit growth has the growth factor in the corner, although we don't see Germany on the residential side, turning up at all, but that's not the commercial side. One or two of the small amounts were negative, and we have not listed yet that Russia had a very good quarter, but so did Poland, and so did for example Ukraine.

Speaker Change: We are on track or ahead, on all of those. I'll just pull out a couple of data points here.

Speaker Change: asdm to emission intensity this is the goal definineed to four science bas target ist that an engine us a good metric here we have achieved to be the index two thousand and fifteen a hundred in terms of

Jens Birgersson: You know, as an engineer, that's a good metric. Here we have achieved with the index 2015 100 in terms of ton CO2 per produced ton, stone wool. We had the reference level 2015 of 100, and now inherently in the business we have reached the index 84, so that's 16 points or 16% down from ton produced, through productivity improvements, conversions, green energy and some other actions. We will see this number now continue down over the coming years because we are investing and we are taking actions. In the annual report, on the sustainability report, you will see a number below the 84. That's progressing well.

Speaker Change: Okay, I'll take it from my memory.

Tom: tom cero twoper produce tom

Tom: If you look first on the CO2 emission intensity, this is the goal we defined before, science-based target existed.

Tom: sttormwon

Speaker Change: we beyond the reference level to thousand and fifteen of one hundred and now inherent in the business we have reached the uct co so that' sixteen and sixteen poins or sixteen percent down from from produce

Speaker Change: As an engineer, that's a good metric.

Speaker Change: Here we have achieved with the index 2015-100 in terms of tonne CO2 per produced tonne stonewall. 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: through productivity improvements converscial green and some other actions

Speaker Change: and we will see we will see this number of

Speaker Change: We will see this number now continue down over the coming years because we are investing and we are taking actions.

Speaker Change: continuue ddownb over the common years because we are we are investing and we are taking actions

Speaker Change: In the annual report on the sustainability report, you will see a number below the 84, so that's progressing well.

Speaker Change: in din ual report on the sustainability to report you would see you would see a number below based for us 've done progressing well

Speaker Change: You know the green investment on the capex slide, you see what type of money we put into that.

Jens Birgersson: We are small in Ukraine, but we grew some 40 percent in Ukraine. Moving on to North America, Asia and others, a quick summary of the whole thing is that this is a China's negative. U.S, and Canada is on record growth, and South East Asia, including Japan, very good growth. So, Taiwan, Malaysia and Indonesia, and where we are now in the hour on very good growth, we are getting closer to point where we can sell more, but it's nice to see that we are growing out here, and also in North America.

Jens Birgersson: You know, the green investment on the CapEx slide, you see what type of 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 extreme volatility the next round we have an energy crisis or something like that. That work is ongoing. Science-based target that we also have a goal for talks about CO2 equivalent emissions in absolute terms, excluding acquisitions. We have a goal for that too, and it's quite pleasing to see that when the business is growing volume and top line double-digit, that our CO2 emissions only increase with 6% on a more than 10% volume and sales growth. That's good.

Speaker Change: 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: and you know the green investment on the capex like you see the part mol we put into that we also wor now as we said on

Speaker Change: onno any new supplies on the contracting around that to see if we can get out to this extreme volatility to the next the next round we have entergy cris and something that that's enough that forjust

Speaker Change: The next round, we have an energy crisis or something like that, so that work is ongoing.

Speaker Change: Science-based targets, we also have a goal for CO2 equivalent emissions in absolute terms excluding acquisitions.

Speaker Change: The market is the price is going up, for example, in North America and also Asia and the others with prices to hold them and some are down, but we are kind of monitoring our market share.

Speaker Change: wego science based target

Speaker Change: that we also have a goone for talks about c two a crval l emissions in absolute terms excluding acquisitions

Speaker Change: We have a goal for that too.

Speaker Change: And now we get that.

Jens Birgersson: Let's go to profitability on slide 8th. Marguin has increased quite a lot. If you look there on the right hand diagram, it's all Marguin up to 25 percent. Marguin is more 18.7 percent, which is a lot higher than the year back, so the trend upwards have 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 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 clicking up with normal inflation.

Speaker Change: we have a gold for that too and it's quite pleas to see that when the business is growing volume of a top line ou pos dit

Speaker Change: 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% on a more than 10% volume and sales growth.

Speaker Change: So overall, we are very happy with the first half year.

Speaker Change: Moving on to slide 4, second quarter highlights.

Speaker Change: That's good.

Speaker Change: that our due to emissions only increase with the six percent on a more than ten percent volume and sage growth so so that' group that shows that that

Speaker Change: Comparable difference a little bit, so Q2 was a strong last year.

Jens Birgersson: That shows that kind of emissions per ton is working. It also shows, underlines the challenge we have of the 2030 and onwards of really convert the whole company more or less into electrical melting driven by green energy. It's a really challenging target, but we are working on it. At this stage, we don't feel that it's impossible. We have the technologies, and we have the investment plan. But then of course, the more we grow, the more challenging that goals become. At the moment, I would say the long-term growth outlook is quite positive, so it's a challenging goal, but we are working, and we can see that the actions we are taking are good.

Speaker Change: That shows that that kind of emissions per tonne is working.

Speaker Change: Q1 was a strong either last year.

Speaker Change: kind of

Speaker Change: emissions prctity is working it also shows the los the challenge behalf of

Speaker Change: It also shows the underlying challenge we have of 2030 and onwards of really, really convert the whole company more or less into electrical melting, driven by green energy.

Speaker Change: So I would say we have a really broad-based growth and record growth in North America.

Speaker Change: two thousand and thirty all mars of really really convert that will come any moreor less into electriccompensic driven by greenity so we need is to really challengge target that we are working on at this stage we don't

Speaker Change: It's a really challenging target that we are working on.

Speaker Change: 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: I don't think we ever had a big growth number and higher sales, that goes from both Canada and the US.

Jens Birgersson: 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 year back, and that is with the 10% growth. So obviously we had a tremendous productivity improvement, there almost 9, 10% productivity improvement, and that gives us a nice overall absorption where we face growth. On the factory, we over have some on the rest and you'll see that flow through to the bottom line, so it's nice to see that that scalability is there in the business.

Speaker Change: is that it's impossible we have we have the technologies we have the investment time but then of course the more of the growth of our challenging that goes because so not the moment i would say the long-term growth out it's quite positive

Speaker Change: Over on sales in nominal, we always talk about the trade.

Speaker Change: so so the challenging goth but we have working in you can seeed that thations we are taking a good on the rock cycle is

Jens Birgersson: On the Rockcycle is referred to as the reclaim waste streams, where we take back our own products and upcycle them, recycle them. 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. We are well ahead of that. We will beat that goal. We will be ready much before 2030. Yeah. On safety, the safety goal, no serious accidents and no fatalities in H1, you know, it's what we like to see, and that's how we need to perform all the time.

Speaker Change: Good to see that we crossed the billion.

Speaker Change: poar here is refer to the reclim waste sthemes but will take back our own products and upside of them recy to them we have added our also poll them to the countries where we offer this service

Speaker Change: We have added now also Poland to the countries where we offer this service.

Speaker Change: I'm not sure if that's the first time, but very very strong quarter.

Jens Birgersson: I'm also quite happy with this quite southern ramp up in the factories, where for some of the North America we have to step up capacity, very quickly and also some European countries step up Germany for some to increase the shifts. But we have been able to do that relatively quickly, and that has helped us in supporting this growth. If we look to slide now, here I only want to comment on Bargain's thing in Q24, and I guess I spoke about the 5% light for light growth of system division, here I'm quite pleased with that.

Speaker Change: And we have now 22 countries in the scheme.

Speaker Change: and i we are now twenty-two countries in the scheme and we goal to start byy twenty thirti so we avareil ahead of that we will be thought all we be ready march for twent thousand and teen

Speaker Change: And the goal is 30 by 2030.

Speaker Change: And then on the average margin, we reached 18.7%.

Speaker Change: So we are well ahead of that, we will beat that goal, we will be ready much before 2030.

Speaker Change: yeah

Speaker Change: and then we'll say the the safetyto go through the serious accidents and or fatalities in the first half year is not it is what we like to see

Speaker Change: And then we'll save the safety goal, no serious accidents and no fatalities in the first half, year.

Jens Birgersson: As you know, we have a big operation with many factories. These factories, things can happen, but we are working very seriously on that, and it's good that we have a good H1. 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. 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. As we see it now, we see the business pretty much continue. That's good. On the EBIT margin, around 17%.

Speaker Change: and that does how to for one the time but as you know we have if we have a big big

Speaker Change: And it's what we like to see.

Speaker Change: operational made manufacturetoriism this factorriis things can happen but we have worked in very areas though not and this's good that we have a good to first half yet

Jens Birgersson: The system division is up around the 15% margin again. Of course, that margin is doing very well, and I also want to maybe clarify that the whole Ukrainian donation has been put on insulation, so that you are aware of that. Looking to the investment activities, no, nothing not worth it, you recognize most of these things, but we have done a small elect position in Vietnam, we have signed, and we are very close to close, I think 46 weeks.

Speaker Change: And that's how we did all the time.

Speaker Change: And that includes 7 million euro, creating a correction or donations.

Speaker Change: But as you know, we have a big, big operation with many factories.

Speaker Change: And these factories, things can happen, but we are working very seriously on that.

Speaker Change: go into the outlook slide fourteen

Speaker Change: And it's good that we have a good first half year.

Speaker Change: going forward on the astaled

Speaker Change: we we haven't seen

Speaker Change: Going to the outlook, slide 14.

Speaker Change: any change should in dramatic relevan in the market pa we are stepping in a couple of quarters where you have more challenging comparable so on the top planthat

Speaker Change: And just some of we are adding Q1, Q1 plus Q2 is a little bit more than 30 million that we have.

Speaker Change: 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.

Speaker Change: midsingle d it percentage growth seems like a good outlook excal although we are ahead of that also now but that's because the compare on t as we see now weiously the business pretintty much continue that's good on the ambit bar around

Speaker Change: So on the top line, that mid single digit percentage growth seems like a good outlook still.

Speaker Change: Although we are ahead of that until now, but that's because of comparables.

Speaker Change: Let's move to slide 5.

Jens Birgersson: And just underlined 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. 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 a country like Vietnam has 100 million people. It's a very great outlook at the moment, so I'm happy that we could get that one, because again, this 380 growth markets, and it's good to have more or less all this normal factory in the country.

Speaker Change: As we see it now, we see the business pretty much continue.

Jens Birgersson: 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, profitable business for us, impact a bit, but we feel comfortable with that outlook. On the investment, nothing really to report on that. We are on track to invest what we have planned for the rest of the year. Yeah. Should say though, on the investment side, we have had one setback. Our new plant in France, we were surprised, I must say that we got a negative verdict on one of the lawsuits. We are regrouping on that.

Speaker Change: aseventen percent also there we are little bit ahead but there must you know we are the december effect

Speaker Change: I'm not really going to comment this, but if you look on the right, the system, division's growth is minus 1%.

Speaker Change: go into away we also have to somewhere in france profitable business for us impact a bit but posly comfortable that outlook i don only investment nothing needed to report them out

Speaker Change: We did have a chance with that, so like for like numbers, system division, we have 2% of the growth that's shown there in our shift to slide 6.

Speaker Change: we on track to invest whatt put plant in us for the year

Speaker Change: yes should say though on the investment side had both setback our new cled from speed peopleber surprised i will say that the got negative

Speaker Change: We see Q2.

Jens Birgersson: We are also working on some other targets in the region, it's not a lot around, but we are scouting. Moving on to slide 11, networking capital percentage 11.5%, down compared to a year back from 30.4, 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 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: And what's pleasing here is to see that here, obviously, the information business is growing.

Speaker Change: very dict one of the lawsuits

Jens Birgersson: 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 a further delay. Possibly we'll 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. Over to questions.

Speaker Change: so we are reallygroup about we have what at all givenit up to new factory in france but we need to look at that and see see how we keep pushing the plant in france

Speaker Change: we thoughtks we should be to start building a part of this loss setback and we can expect to furthera deal like possibly will

Speaker Change: Very, very much.

Speaker Change: move the resources of some ceother ates and on the project we have a number from the start to book

Jens Birgersson: We had to sell a little bit more than we wanted to, we're going to work now maybe to bring up the inventory up in the coming quarters. That's also going to be good cash around the spider dog. We have a lot of cash in the company, so good to see that. Slide 12, as we normally do in the half-year report, we normally include one or two slides of sustainability, we have done that also here.

Speaker Change: we have absolute given up on the of the trench could ' keep working through that

Speaker Change: That's good.

Speaker Change: On the EBIT margin around 17%.

Speaker Change: over to questialieldes

Operator: Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. We will start with the two questions per participant. Please respect this. At this time, we'll pause momentarily to assemble our roster. The first question will come from Claus Almer with Nordea. Please go ahead.

Speaker Change: Also there, we are a little bit ahead, but then as you know, we have the December effect, going away.

Speaker Change: thank you we will now begin the question-and- answer session

Speaker Change: to ask a question you may press store than one on your touch toone phone if you're using a speaker phone please pick up your handset before pressing the keys if any time your question has been address and you will like to withdraw your question please press store then to

Speaker Change: And we also have the summer in France, profit of business for us, impact a bit.

Speaker Change: we will start with the two questions for participant please respect this and at this time will pause momentarily to a mbo roster

Speaker Change: But we feel comfortable with that outlook and all the investment.

Speaker Change: and the first question will come from cloud almer with nordiaa please go ahead

Speaker Change: Nothing really to report on that.

Claus Almer: Thank you. Two questions from my side. I'll do them one by one. The first question goes to inflation. Jens, you mentioned that you do see it sounds like a small inflation. Does that mean you're going to raise prices, or will you have to absorb that in your P&L, so to speak? That would be the first one.

Speaker Change: We are on track to invest what we have planned to invest for the year. I should say though, on the investment side, we have had one setback.

Speaker Change: thanking you two chrpto my side and do them one by one

Cloud Almer: the first question goes to inflation you you mentsay that you do see a sound like a small inflation does that mean you're going to raace prices or will you have to upho that in your in your p nl so to spe that'will be the first one

Jens Birgersson: It's not much drama about that. We have the five sustainability goals, the time horizon to 23rd, we on track or ahead on all of those. Let's 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, science-based target exists, that's an engineer, that's a good metric, through productivity improvements, conversions, green ended ends, some other actions.

Jens Birgersson: Yeah. Yeah. Klaus, thanks for introducing yourself. We don't have the normal screen where we can see who asked the question and who you are. Great if you can introduce yourself like that, so we know. No, yeah, I see, I mean, the inflation doesn't go away. We had the energy benefits and some other benefits, but we have several markets where we foresee that we will do a small drum beat price increase to cover that inflation. There 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 price increase to pass on the inflationary pressures as far as we can.

Speaker Change: so clla thank for introducing your we don't have the nor but screening but we canceive asked to question i new ares so great if you kind of

Speaker Change: introduces sur like that's sort the nor no yeah i see i mean the inflation doesn't go away if we arehad the energy benefit from some other benefits but

Speaker Change: but

Speaker Change: we have several markets where where be foreseen that we could do a small drump b price increase to cover that not inflation there could be competitive dynamics in some places where

Speaker Change: bararer

Speaker Change: we might not do that but the overall direction is that we are ready to do a small price increaseed to pass on inflation presres as far as we can

Claus Almer: Okay. Leading to the next question, which is, you know, the implicit H2 guides, and you did touch upon this in your slides. Implicitly, you guide for around 16% EBIT margin in the H2, so down versus H1 also if we adjust for the Ukraine donation. Is this only due to France and December sale, as you said, or is it also the inflation impact? You have previously said it's not easy to raise prices in all markets, so you had to be more, you know, specific about these price increases.

Speaker Change: okayand another leing to to the next question was is you know 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 adjustge for the ukraine donation

Jens Birgersson: And we've received this number, continue down over the coming years because we are investing and we are taking actions and in dining and report on the sustainability report, you would see a number below the floor, so that's progressing well. And you know the green investment from the capital slide, 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 extreme volatility to the next round we have an energy crisis or something like that.

Speaker Change: is this a only you friends and to smber se as you said or is it also the inflation impact your pro said it'is not easy to brace prices in all marks market so you had to be more you know specific about these price increases

Jens Birgersson: Yeah, 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 and that have seen decline in top line, and that is quite a mixed picture in different related sectors. We haven't seen any of that. We are not pessimistic. We are not pessimistic on the prices. I think we can do most of that. Yes, we believe there is inflationary pressures, but we have the ambition to pass that on. That's the outlook. We did upgrade what was it, 18 July to 17%. We felt to make an assessment now is not prudent. We feel comfortable with the 17%.

Speaker Change: i saw i saw your headllineed that your initial comment and i won say we are not

Speaker Change: you'have scseenes some companies that have

Speaker Change: release

Speaker Change: earnings report now and that has seen declined in top line of that is quite a mixed picture and indifferen related to sector saw

Jens Birgersson: That word is ongoing. Science-based target that we also have a goal for, it talks about CO2 equivalent emissions in absolute terms excluding acquisitions, 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 that our two emissions only increase with the 6% on a more than 10% volume and sales growth. So that shows that that kind of emissions are currently is working.

Speaker Change: and we haven't seen of that so we are not pessimistic we are not pessimistic of the prices i think we can do most of that yes we believe there is inflation or pressures but

Speaker Change: we have the bion to pass on so that's the outlook and that we did upgrade pervoite of july to seventeen percent to be fall to to make an assessment now is is

Jens Birgersson: We obviously have no ambition to reduce the profitability, but we acknowledge, you know, the December effect and the France effect as we always do. I will leave that to my successor to kind of nail that outlook in his maybe first earnings call.

Speaker Change: itis not proue that we feelit comfortable with the seventy percent we obvly have no invation

Speaker Change: to reduce the profitability but the acknowledg of december effect and the francets effactors we ers od so i i believe that to my success forto

Jens Birgersson: It also shows the underlying is the challenge they have on the 23rd GMO boards of really, really convert the whole company more or less into electric and melting driven by humanity. So we need it is the really challenging target that we are working on at this stage. We don't. Piel, 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 to come, so not the moment, I would say that long-term growth outlook is quite positive, so it's a challenging goal but we are working and you can see that actually we are taking good.

Speaker Change: to kind ommade that

Kim Andersen: You know how we're coming closer and closer to the autumn period, where many of our markets will negotiate 2025 prices. There's always a little bit of timing there.

Speaker Change: than his very first order in ' corone there was also and you know that becoming clo and closer to the autumn period there are many of our markets will negotiate two thousand andtwenty five prices that it was going to be the timing there sory i wouldn't i wouldn't

Kim Andersen: You know how we're coming closer and closer to the autumn period, where many of our markets will negotiate 2025 prices. There's always a little bit of timing there.

Jens Birgersson: Yeah. I wouldn't, you know, do straight the mathematics and say we have concluded this and that. We'll come back on that forecast when we're a little bit deeper into those discussions. I also say, you know, we feel comfortable with the 17%. We'll, you know, the next time we will know more.

Speaker Change: you know do wrate the mathematics and i we concluded this of that we will come back on that fore customer millittlebit deor into those discussions and i also say i

Speaker Change: we feel comfortable with the seventty percent on

Jens Birgersson: On the rock cycle, here is the focus, the retail waste themes, but then take back our own products and upcycling them, release cycle them, we have added more support 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, we will beat that goal, we will be ready much before 2030. And then we'll say the safety goal, no serious accident and no fatalities in the first half year and it's what we like to see, and that's how we need to perform the time, but as you know, we have a big, big operation, with many factories, and these factories, things can happen, but we have worked very seriously on that and it's good that we have a good first half year.

Kim Andersen: Fair enough. Thank you so much for the answers.

Claus Almer: Fair enough. Thank you so much for the answers.

Speaker Change: the next time given no more

Speaker Change: fanof things are are mus dances

Jens Birgersson: Thanks.

Operator: The next question will come from Peter Sehested with ABG. Please go ahead.

Speaker Change: ice

Peter Sehested: the next question wewillll come from peter sehested with abg please go ahead

Peter Sehested: Great. It's Peter from ABG. Thanks for taking my questions. I have two. The first one is on France. With the MaPrimeRénov' program has noted an increase in applications following their return to the normal application procedures. I guess that these applications will probably not hit the markets or realize in the second half. Is this something that you have taken into account in your guidance? Because I know that in France the renovation program has been a very important driver for Rockwool for the past year. That's the first question.

Peter Sehested: great peri from thank questions i have two the first one is on france is the mar in also timment of programmers and has noted an increasingin applications following they were turning to the

Speaker Change: the allm application procedures and i guess that these applications would probably not fit the market are reallike to realize in the second half

Speaker Change: is this something that you have taken into account of your guidance because i know that in france the renovation program has been a very important driver for for workcal for the past the first question

Jens Birgersson: Yeah, it's accounted for. 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 the scheme. We have a good conservative or realistic forecast, and that's included.

Speaker Change: the ice accounted for the

Speaker Change: Our new plant in France, we were surprised, I must say, that we got a negative verdict on one of the lawsuits.

Speaker Change: we have a good profitable business and

Speaker Change #100: and franceis slidide in the negative territory in in the quarter and we have in factored in any hopx and dreams from the scheme to me if we have a good conservative where all realistic forecast and that includde

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.

Jens Birgersson: Going to the outlook, slide 14, going forward on sales, we haven't seen any change, should any dramatic developments in the market, but we are stepping in a couple of quarters where you have more challenging compared, but also on the top line that mid-single digit percentage growth seems like a good, good outlook still, although we are ahead of that up to now, but that's because we're compared, as we see it now, we see the business could not continue, that's good, on the average margin around 30%, also there we are a little bit ahead, but then as you know, we are in the December effect to 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 report on that, we are on track to invest what we have planned for the year. Yeah, you should say, though, on the investment side, we have had one 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 able to, but we have got to talk, given up, the new fact to ring in France, but we need to look at that and see how we keep pushing the plant in France.

Peter Sehested: Okay. Good. Just going back to the guidance, because your wording on pricing is essentially the same as you had used it in Q1 and Q4. Also with respect, and we have sort of the usual thing about the December impact. That's also something that you typically reiterate around this time of year.

Speaker Change #101: good at adjustic going back to the guidance because you are you wording

Speaker Change #102: on on pricing into the same as you had you did in q one and any q four

Speaker Change #103: also with respect and we have sort of the usual thing about the december impact that's also something that you typically iterate down this year is there anything

Jens Birgersson: Yeah.

Peter Sehested: Is there anything that is sort of different this time than it has been, let's say, Q1?

Speaker Change #104: that is sort of different this time that it has been that say no no tremar this is very much business used usual you know we we drive a very strict rising process and become for

Jens Birgersson: No, it's very much business as usual. You know, we drive a very strict pricing process in the company, and we stay on top of the markets, and we try to take that very serious. There isn't any dynamics out there that is different to another year. Of course, we don't have the situation we had in the autumn 2022 with the hyperinflation of all this. I would say business as usual, and there is a slight inflation, and we will try to go after it, and it's no drama around the whole thing. Then, of course, you have, you know, some markets, some segments, competitive pressures. We work from all that, but so far so good.

Speaker Change #104: we stay on top of the markets and we try to take that very se emas but there is some there isn'

Speaker Change #105: in the dynamics out there that is different to another year of course we don't have the situation we how did it ought try to it to the h inflation of the all this so is i wouldwill say business as usual and the it is slight in pati will try to go rest and and it's not

Speaker Change: So if we add back the 2% lost top life for Chaudsville, let me have about 5% on a comparable basis.

Speaker Change #106: no no drama about the whole thing but but that of course you have some markeketts igments the pressures we are come all down some of our so good

Peter Sehested: Thank you for taking my questions. Also I'd like to say, thanks for your effort and what you've done at Rockwool. I think you and Tim and the team have set a very high, let's say, benchmark for the incoming CEO. Good luck to him as well.

Speaker Change #107: thank ing my questions and also iwouldd like to say thanks for your effort and you've done at what i think you've said you on team team said a very higher but a benchmark for the incoming ce o good not train as well

Jens Birgersson: Yeah. Yeah.

Kim Andersen: Thank you, Peter.

Jens Birgersson: You know, thank you very much, Peter. We have the same team in place, so he gets a very strong pair of hands taking over the business. I'm very optimistic about the future. Thanks. Next.

Speaker Change: So we are looking now at the coming quarters, whether the growth will increase a little bit.

Jens Birgersson: We thought we should be able to start building it up, but this was a setback, and we can expect the further delay, possibly we'll move the resources and accelerate on the product, we have a number of products started, but we have absolutely not given up on the other side of the French plant, maybe they keep working through that. Over two questions. Thank you.

Speaker Change #108: yes you know thank you very much featter we have the same team we play for guest a very strong pairof hands thankking over the business or 'm very optimistic about the futureal

Operator: The next question will come from Arnaud Lehmann with Bank of America. Please go ahead.

Speaker Change #108: thanks n

nodleman: the next question will come from or nodleman with bank of america please go ahead

Speaker Change: In the system division, the main driver for the system division growth is about 10 million growth on that, that has a very strong development.

Arnaud Lehmann: Yep. Thank you very much. My name is Arnaud Lehmann from Bank of America. My first question is, I guess, related to pricing margin and returns, staying on that topic. You indeed have done very well on margins, and that drove an improvement in ROIC, which you publish. I think 23% is the printed number in the H1 report over the last. I think that's a 12 months rolling data, which compared to 15% last year. I appreciate there's an element of, let's say, inflation in CapEx and the cost of adding new plants has gone up. But on the other hand, you. I don't believe you have a broad-based plant strategy. It's a capacity, it's more of a selective process.

nodleman: So we are regrouping on that.

Speaker Change: If we turn to slide the 7, the regional science development, starting with Europe, it's a very scattered picture.

elderlyma: thank you very much my name is elderlyma 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 ihave done very well on margins

Speaker Change: In the invest in Europe, we have some countries growing, 20, 30 percent.

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.

Operator: If any time your question has been addressed and you would like to withdraw your question, please press star then two. We will start with the two questions for participants. Please respect this.

Speaker Change #111: and that drove an improvement in o i see which publish think twenty three percent is a print printed number in the h one report over the last thing that' the twelve months rolling data which compared to fifteen percent last year appreciate elemontht of

Operator: And at this time, we'll pause momentarily to assemble a roster.

Speaker Change: Then we have Sweden growing, surprisingly quite well.

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: Germany's single digit growth has the growth factor in the corner, although we don't see Germany on the residential side, turning up at all, but that's not the commercial side.

Speaker Change: One or two of the small amounts were negative, and we have not listed yet that Russia had a very good quarter, but so did Poland, and so did for example Ukraine.

Kim Andersen: The first question goes to inflation. 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 absorb that in your in your P&L? So to speak, that will 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.

Speaker Change #112: and let's say it's fl in capexs on the cost of edadding new plants has gone up but on the other i knew i don't believe you have a broad basaseed plants to to increase a capacity ' more a selective process so i guess my question is you know beyond pricing and largeg levels to you believe that this sort of returns sustainable going forward or is there a possibility for some sort of normalization of a time

Arnaud Lehmann: 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 over time?

Jens Birgersson: Yeah. I will give just a brief flavor on that reflection on it, and then Kim should comment it because he continues. My view on that is that we are not still. You know, we want to have 15% or above, but the biggest job as the CEO or what I've seen is that for me it's not so important if it's 23% or 16% or whatever. It's important that we keep supporting the volume growth. At the end, in our industry, you know, if you have the capacity, you can deliver the volume. From my perspective, I think, yes, we want to have a good cash generation with a good margin, but we would like to invest more, and sometimes we get delays, like now in France, the plant.

Speaker Change #113: i would like to i will give just a pretty flavor on that reflection on the ment kingam commonant because he continues my view or that is start

Kim Andersen: So you know, yeah, I see, I mean, inflation doesn't go away. We are at the energy benefit and some other benefits, but we have several markets where we foresee that we would do a small grumbit price increase to cover that that inflation. There 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 price increase to pass on the inflation or pressures as far as we can. Okay.

Speaker Change: We are small in Ukraine, but we grew some 40 percent in Ukraine.

Speaker Change #114: webe are not here we want to have fifteen percent or above but

Speaker Change #115: the biggest job us to see what i'll see it is but for me it's not so important if is

Speaker Change: Moving on to North America, Asia and others, a quick summary of the whole thing is that this is a China's negative.

Speaker Change #116: twenty-three percent to sixteen percent of what everaverage important but we keepy support ing the volumeof growth and at the end in our industry you know if you have the capacity you can deliver the volume so

Speaker Change #117: from my perspective i think yes we want to have a good cash generation with the good margin

Speaker Change: U.S, and Canada is on record growth, and South East Asia, including Japan, very good growth.

Speaker Change: So, Taiwan, Malaysia and Indonesia, and where we are now in the hour on very good growth, we are getting closer to point where we can sell more, but it's nice to see that we are growing out here, and also in North America.

Kim Andersen: And then 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 own youth friends and and and the sample sale, as you said, or is it also the inflation impact? Your previously said it's not easy to raise prices in all markets, so you had to be more, you know, specifically about these price increases.

Speaker Change #118: but we would like to invest more than sometimes we get tless like now in france the plant we would read and like to be in that and that would be a burden for quite a whileise such a big count on the return capital employer quite frankly a rather have

Jens Birgersson: We would really like to build that. That would be a burden for quite a while, such a big plant on the return on capital employed. 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. That's how we look at it. I think that now you have a combination of that, some projects are hanging, and yes, we are building plants in India, plants in Romania, we are building one in Sweden.

Speaker Change: Let's go to profitability on slide 8th.

Speaker Change #118: a couple of percent this point lower return capital employing that platllong bend because that's bful for the long term

Speaker Change: Marguin has increased quite a lot.

Speaker Change #118: for this business

Speaker Change #118: so that's how we look at it so i think that now you have a combination of the some project are hanging and yes we are building

Speaker Change #119: dred in ia coun romania we are iling on the three u s and the u s you know we we are b r building it's not the selective brr building and because a step up capex of this quite hard to be and so

Arnaud Lehmann: US.

Jens Birgersson: The US. You know, we are building. It's not just selective. We are building, and we've got to step up CapEx, but it's quite hard to build. It's not a goal in itself for me to keep it to the 23. I should let Kim-

Speaker Change: If you look there on the right hand diagram, it's all Marguin up to 25 percent.

Kim Andersen: Yeah. 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, and that has seen the client and top line of that. It's quite a mixed picture in different related sectors. So 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.

Kim Andersen: You know, the short term at 23 or 24, close to 24 compared to 15 last year. The last year was a bit abnormally low because that was impacted by the 2022 downturn in performance. Maybe this year's is a bit abnormally high since we have a relatively low working capital for the beginning of the year. I think a normalization would be around the 20s. As Jens said, it's not something that we steer towards necessarily on these short-term ROICs. We do the 15+ target setting internally, and then we go for this. We will step up investment in the coming years.

Speaker Change #120: it's not a go in staf for be to keep it twenty three but i should let clean out over the do at the shortterm twenty three or twenty fourcloser twenty four compared to two fifteen last year the last year was was a bit

Speaker Change: Marguin is more 18.7 percent, which is a lot higher than the year back, so the trend upwards have been healthy. We have listed some of the factors, obviously volume growth, stable sales, prices, import costs have kept stable.

Speaker Change #120: abnormally low because it that was impacted by the two thousand andtwenty two downher in performance

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 clicking up with normal inflation.

Kim Andersen: 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 almost a day, 10% of your life to 17% to be prepared to to make an assessment now is He's not prudent. 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 we all do.

Speaker Change #121: so maybe this year' is a bit of norm high since we have relative with all working capital the beginning of the year so so i think it's a i think an ommalization would be around the twenty s but as same said it's something that we stear to watch necessarily the short term

Speaker Change: 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 year back, and that is with the 10% growth.

Speaker Change: So obviously we had a tremendous productivity improvement, there almost 9, 10% productivity improvement, and that gives us a nice overall absorption where we face growth.

Speaker Change #122: may be to the fifteen trust tar setting internally and then we we go for this but we will step up investment in the coming years so so yes and myself will maybe not be able to per twenty four percent i short term

Speaker Change: On the factory, we over have some on the rest and you'll see that flow through to the bottom line, so it's nice to see that that scalability is there in the business.

Yassine Touahri: Yes, and myself will maybe not be able to present a 24% ROIC short term. Yeah. In the short term, that's where the numbers are.

Kim Andersen: Yes, and myself will maybe not be able to present a 24% ROIC short term. Yeah. In the short term, that's where the numbers are.

Speaker Change: I'm also quite happy with this quite southern ramp up in the factories, where for some of the North America we have to step up capacity, very quickly and also some European countries step up Germany for some to increase the shifts.

Kim Andersen: So I believe that, for my success here, to kind of nail that outlook and hiss, maybe the first earnings column. And you know, that's how becoming close and closer to the autumn period, where many of our markets will negotiate 20-25 prices. So there's always a little bit of timing there. So I wouldn't, I wouldn't, you know, do straight to mathematics and say, yeah, conclude that this and that. We'll come back on that forecast from a little bit deeper into those discussions. And I also say, I, you know, we feel comfortable with the 70% tonnage, will it, you know, the next time we know more.

Speaker Change #123: in the childrenortroom that's where the numbers are

Arnaud Lehmann: Very good. Thank you. Thank you for that. My second question, if that's okay, is regarding Russia. I mean, no change as far as I can tell in terms of the way you're thinking about the ownership of these assets for Rockwool. Should we expect a change with the new management in the future, I guess? Maybe something.

Speaker Change #124: very good thank you thank you for that my my second question is that's okay is regarding russia i mean no chan further can tell in termsof the way you're thinking of about the own of symbople of da set for the for rocool should expect a chance with a new management in the future i guess

Speaker Change: But we have been able to do that relatively quickly, and that has helped us in supporting this growth.

Klaus Almar: Thank you so much for the answers. Thanks.

Jens Birgersson: We have worked through this in detail. My successor is still, until 1 September, a board member. He's 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. We see no reason to change, and there is no intention to change the strategy because of the new CEO of the company, and we are all aligned on this.

Speaker Change #125: you know we have there very we have blo throughy this through in indeed time my success or

Speaker Change #126: is still long to the first of september board member his partment and we haven't seen the external on environment on the regthey for not continue what we do

Speaker Change: If we look to slide now, here I only want to comment on Bargain's thing in Q24, and I guess I spoke about the 5% light for light growth of system division, here I'm quite pleased with that.

Peter Sahested: The next question will come from Peter Sahested with ABG. Please go ahead. Great. That's Peter from ABG. Thank you for taking my questions. I have two. The first one is on France. The Marinoff, the Trimoloff program has noted an increase in applications following their return to the autumn application procedures. And I guess that these applications would probably not hit the market, or we like to realize in the second half, is there something that you have taken into account in your guidance, because I know that in France, the renovation program has been a very important driver for the local for the past.

Speaker Change: The system division is up around the 15% margin again.

Speaker Change: Of course, that margin is doing very well, and I also want to maybe clarify that the whole Ukrainian donation has been put on insulation, so that you are aware of that.

Speaker Change: Looking to the investment activities, no, nothing not worth it, you recognize most of these things, but we have done a small elect position in Vietnam, we have signed, and we are very close to close, I think 46 weeks.

Speaker Change #127: so we see no reason to change and there is no intention to change to strategy because of a new se on the company and 's we are all aligning of this

Arnaud Lehmann: Thank you very much.

Operator: The next question will come from Yassine Touahri with On Field Investment Research. Please go ahead.

Speaker Change #128: thank you very much

Speaker Change #129: the next question will come from guusine towering with unfiled investment research please go ahead

Yassine Touahri: Yes, good afternoon. Two questions 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 volume, have you seen any improvement or deterioration versus Q2? Then my second question would be on the new entrants. Like in an environment where margins are relatively high today, do you see a risk for new companies to enter the European or North American mineral wool industry?

guusine towering: yes good on two question on nice side as well first could you cononunt it a bit about the pricing transrends and the voume frund that you've seen in july and august

Peter Sahested: Yeah, it's a constant for, you know, we have a good profitable business. And France is slightly in the negative territory in the quarter. And we have a factory in any hopes and dreams from this game. So we have a good conservative or realistic forecast. And that's included. Good. And just to go back to the guidance, because you were, you were wording on pricing the same as you had, you did in Q1 and Q4.

Speaker Change #131: it it fa toassume that there is no tran on pricing or arview announced additional price increase i think in the s there were some price increase and on volume are used any improvement or thedeterioration that is second quarter

Speaker Change #132: and then i say any question with on a new un ranceds back in a ger mons are marginine relacatively high

Speaker Change #133: today do you the risk for new companies to until the european not ary cana mean ar wood industry but do you think it' too hard like because of a regulation like and liqu fachases an issue are your facishing in front

Yassine Touahri: Do you think it's too hard like because of a regulation like, and they could face the same issue as you're facing in France?

Speaker Change #133: 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.

Speaker Change #133: We thought we should be able to start building it now, but this was a setback and we can expect a further deal.

Speaker Change #133: I possibly will move the resources and accelerate another project.

Speaker Change #133: We have a number of projects started, but we have absolutely not given up on the French plant.

Speaker Change #133: We will keep working through that.

Speaker Change #133: Over to questions.

Jens Birgersson: In France, we see some price impression in the residential segment of the light walls because the activity is relatively low. We haven't seen much of a change. I mean, it's around the zero, slightly negative, slightly up. Nothing dramatic, and I think we need some 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-based upturn. It has weakened a little bit lately in Europe. France sits around the zero, slightly negative, nothing really dramatic on price. Maybe some segments a bit down, but other segments we can increase the prices. That's on that side. Then, price increases in some markets where there is no issue whatsoever with price.

Speaker Change #133: Thank you.

Peter Sahested: 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. It's very much business and use use of, you know, we drive a very strict pricing process in the company. We stay right to take that very serious.

Speaker Change #134: so s from we see some price impression the residential segment of the life w proive is relatively low we haven't seen much of a change i mean is around the cer aslightghterly negative slightly up

Speaker Change #135: what' dramatic cani think we need some

Speaker Change #136: i don't know government al programs taking action to get that fact overall the grope

Speaker Change #136: on the gen p side or things

Speaker Change #136: we probably haven't seen in the case for a broad base upterminive it has weak in a little bit lately in europe

Peter Sahested: And there is some, there is some, in the 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. So it's, I will say business as you were showing, and there is a slight inflation that we've been trying to go out of the race. And it's not, no, no drama around the whole thing. But then of course, you have, you know, some market, some segment of the pressure we work on all that, but it's so far so good.

Speaker Change #137: so the first sets around the seos slightly negative

Speaker Change #137: nothing me a dramatical price basase segments have bit down of the segments we can increase the prices so that's outside and that price increases are some market where we

Jens Birgersson: For example, the US, we just launched an 8% increase, and that's in line with what's happening in the market on glass wool and stone wool. That's moving. The last question, just to make sure I understood, you asked me how difficult it is to enter the stone wool business. Was that the question?

Speaker Change #137: there is no issue what's every bit priced from some of the u s weredjust launch eightid percent increase

Speaker Change #137: We will now begin the question and answer session.

Speaker Change #137: To ask a question, you may press star then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys.

Speaker Change #137: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2.

Speaker Change: And just underlined 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.

Peter Sahested: Thank you for taking my questions and also I'd like to say thanks for your effort and what you've done at Rockwool. I think you've said you won't team in the team, you said a very high, but say benchmark for the incoming CEO, so good luck to him as well. Yeah, yeah, thank you. 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.

Speaker Change #138: and that does in line that what's happening in the market and glass ful the all about that's moving the large question just to make sure understood you asked me how difficbecause it is to enter the sto business or such question

Speaker Change: 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 a country like Vietnam has 100 million people.

Speaker Change #138: We will start with the two questions per participant.

Speaker Change #138: Please respect this.

Speaker Change #138: And at this time, we will pause momentarily to assemble our roster.

Speaker Change #138: And the first question will come from Klaus Almor with Nordia.

Yassine Touahri: Yeah. Do you see a risk? Because the margins today are much higher than they were, 10 years ago.

Speaker Change #138: do you see a risk because it's marging they are much higher than where to ago this year always lect for many player call organiz it

Jens Birgersson: Yeah.

Yassine Touahri: Do you see a risk that you will see new player coming into the market?

Jens Birgersson: Yeah. Obviously, there are people that look at stone wool now and think, "Oh, this is a fantastic business. Let's enter this." You have, you know, 18, 8% EBIT margin and the rest. I think having a single plant versus our quite big machine now with a lot of economies of scale, and also considering how difficult it is to start up a plant and run a really productive outfit. I think you will see some entrants, but I must say there hasn't been an entrant for a long time that come even close to our margins, because it's very difficult to run a small network or just one plant without brand and without the service level and all the rest. I'm not particularly worried about new entrants.

Speaker Change #139: they are obviously

Speaker Change: It's a very great outlook at the moment, so I'm happy that we could get that one, because again, this 380 growth markets, and it's good to have more or less all this normal factory in the country.

Operator: So I'm very optimistic about the future.

Speaker Change #140: there are people that look at stable now take of this is the fantastic business leadts and to this you have know conitioncent tbitarian them and the rest

Speaker Change: We are also working on some other targets in the region, it's not a lot around, but we are scouting.

Operator: Thanks, next question.

Speaker Change #141: and i think having a single plot versus

Arnaud Lehmann: Welcome from Arnaud Lehmann with Bank of America, please go ahead. Thank you very much. My name is Arnaud Lehmann for Bank of America.

Speaker Change #142: our quite big machine now with a lot of economics of scale and also considering how how difficulti es to start up the plant and around it really really productive out it i think you will see some entrance

Arnaud Lehmann: My first question is, I guess, related to pricing, margin and returns staying on that topic. You indeed have 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 Capex 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: Moving on to slide 11, networking capital percentage 11.5%, down compared to a year back from 30.4, 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 networking capital.

Speaker Change #142: but i must say there hasn't been an nentrumt for a long time that come even closed toour bargain

Speaker Change #143: because it's very very difficult to r a small network of the one plant without brand and without the service level all the rest of i'm not

Jens Birgersson: Yes, some people will announce new plants and we'll deal with that when that comes. The trend historically 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 in some geographies to get your plant built in today's world. I think their scale is also important because we have the means and the persistence to just keep working it until we can build our plants. It's not. It can be very challenging to get all the permits. You get the permits, and then you have protests or whatever, as it is in many industries in Europe at the moment.

Speaker Change #144: i'm not particular worid part you entinterest but yes some people announced

Speaker Change #145: and your promms on the

Speaker Change #145: b we'will deal with that when that comes but

Jens Birgersson: So I guess my question is, you know, be on 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 of a time? Yeah, I would like to, I would give just a pretty flavor on that reflection on it and then came, she commented because he continues. My view on that is that we are not still, you know, we want to have 50% or about, but the biggest job is to see or what I've seen is that for me, it's not so important if it's 23% or 16% or whatever.

Speaker Change #145: the trend histor just been that the plcer are announced and very much delayed because it's also very very difficult to build the plants need to be very persistent to some geographies to get your plant build in today's i think there

Speaker Change #145: scale is also important because we have

Speaker Change #145: the means the persistence to just keep working the to we can build our plants so it can be very challenged to get all the prv and you get the privits of that you ultte so whatever as as it is in many indinterestis in europe putable

Yassine Touahri: Maybe just very last point, which is just like, not a question, but more a comment about the fact that you developed such a great growth for the company. I think it's quite impressive what you've been able to do in terms of margin and productivity. Just wanted to wish you the best of luck for your future endeavor. Thank you.

Speaker Change #146: and there just a very last point which is just like ' not a question that more

Speaker Change: 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. We had to sell a little bit more than we wanted to, we're going to work now maybe to bring up the inventory up in the coming quarters.

Jens Birgersson: 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. So it's not a goal in itself for me to keep it to the 23, but I should let you know about the short term, the 23 or 24 closer to 24 compared to 2015 last year.

Speaker Change #147: commment but the fact that develop such a greater growth other company i think it's quite so impressive what you've been able to do in terms of margin and the productivities will just wanted to issue the best ofluck for your f ure level

Speaker Change: That's also going to be good cash around the spider dog.

Jens Birgersson: Thank you very much, Yassine. You mentioned an aspect there that is an important one to us that we don't talk about too much, and that is our productivity, the economics of scale of the business. That's an underlying big advantage of Rockwool that we have in the culture, and that's a strong point. Thank you for those words.

Speaker Change #148: ok thank you very much as see and needyou to mention an aspect they that that this is an important boneound to us that we don't talk about too muchion that is our productivity at economics of scale of the business that that's an underlying

Speaker Change #149: big advantage of brockwell that we have in the culture and the us is strong cor spon thank you for those words

Speaker Change #149: Please go ahead.

Speaker Change #149: Thank you.

Operator: The next question will come from Brijesh Kumar with HSBC. Please go ahead.

Operator: The next question will come from Brijesh Kumar Siya with HSBC. Please go ahead.

Burgess Marsiiah: the next question will come from burges to marsiiah with hbc please go ahead

Jens Birgersson: Please.

Burgess Marsiiah: Yeah, two questions from my side.

Brijesh Kumar: I have a couple as well. Just on the pricing, right? It's interesting that you keep talking about pricing like this in the quarter. Looking at Eastern Europe, Eastern Europe growth is up 28% in Q2. Given some of your competitors, not direct one, but a different segment little bit, but they talk about when the volume is bounced back, they see some pricing pressure. Is that something also impacting you? Because I recollect historically, Eastern Europe has been a different market where competition is a bit more intense compared to Western Europe. Any comments around that will be very helpful.

Brijesh Siya: I have a couple as well. Just on the pricing, right? It's interesting that you keep talking about pricing like this in the quarter. Looking at Eastern Europe, Eastern Europe growth is up 28% in Q2. Given some of your competitors, not direct one, but a different segment little bit, but they talk about when the volume is bounced back, they see some pricing pressure. Is that something also impacting you? Because I recollect historically, Eastern Europe has been a different market where competition is a bit more intense compared to Western Europe. Any comments around that will be very helpful.

Speaker Change #151: the greach

Speaker Change #152: so i have couple as well just on the pricing right it's interesting that you keep talking the about pricing fllood is the quarter but looking at eastern europe eastern europe cloach is of twenty eight was in q two

Speaker Change: We have a lot of cash in the company, so good to see that.

Speaker Change: Slide 12, as we normally do in the half-year report, we normally include one or two slides of sustainability, we have done that also here.

Jens Birgersson: But the last year was was a bit abnormally low because it that was impacted by the 22, 22 downturn in performance. 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 #153: given some of fe competit is not direct one but different segment you take but they talk about when the posme was bounce backag to see some pricing pressure

Speaker Change #154: it doess something

Speaker Change #155: is also impact because i recollect historically eastern europe has been a different market where competition is more intense compared to 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 interestrate impro cut coming through to you see similar risk panning out investingin europeas well when the volume bonds happens

Brijesh Kumar: Within that, if you could just give a little more flavor into Western Europe, when everybody's talking about interest rate cut coming through. Do you see similar risk panning out in Western Europe as well when the volume bounce happens maybe towards end of Q4 or maybe into 2025? That's my first one. I'll come back on second.

Brijesh Siya: Within that, if you could just give a little more flavor into Western Europe, when everybody's talking about interest rate cut coming through. Do you see similar risk panning out in Western Europe as well when the volume bounce happens maybe towards end of Q4 or maybe into 2025? That's my first one. I'll come back on second.

Speaker Change: It's not much drama about that.

Speaker Change #155: I'll do them one by one.

Speaker Change #155: towards end of q four or maybe into ent two thousand and twenty five so that's my first one i will come back in second

Speaker Change #155: The first question goes to inflation.

Jens Birgersson: Thank you, Brijesh. In Eastern Europe, we have the classic country, for example, Poland, where price competition is fierce. Whenever volumes go down, wherever it is down, and you see the whole EPS competition in several segments, flat roof and in facades. So there we really live it. But then there are also some Eastern European markets where, you know, Romania, Hungary, but we don't see much of that, where it's more Western in the dynamics. But for sure that effect is there. It's no secret that Poland is challenging now, but we balance volume and price, and it's kind of schoolbook really a lot of competitors that want volume for any price.

Speaker Change #155: Jens, you mentioned that you do see a – it sounds like a small inflation.

Speaker Change: We have the five sustainability goals, the time horizon to 23rd, we on track or ahead on all of those.

Speaker Change #155: 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 #156: okgu thank you br certain the easast terneurope we have

Speaker Change: Let's pull out the capital data points here.

Operator: Very good, thank you, thank you for that.

Speaker Change: Okay, I'll take it from my memory.

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 all these assets for Rockwool.

Speaker Change #156: That will be the first one.

Speaker Change #156: Yeah.

Speaker Change #157: the classic country for exampleato onwhereare

Speaker Change #157: So, Klaus, thanks for introducing yourself.

Speaker Change #157: We don't have the normal screen, but we can see who asked the question and who you are.

Speaker Change: So, if you look first on the CO2 emission intensity, this is the goal we defined before, science-based target exists, that's an engineer, that's a good metric, through productivity improvements, conversions, green ended ends, some other actions.

Speaker Change #157: So, great if you can introduce yourself like that so we know.

Speaker Change #157: Yeah, I see – I mean, the inflation doesn't go away.

Speaker Change #158: priice competition is three years whenever volume go down whatever it is down now you see the whole of eps competition in several segments slap

Speaker Change #158: 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. There 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 price increase to pass on the inflationary pressures as far as we can.

Speaker Change #158: Okay.

Speaker Change #158: 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: And we've received this number, continue down over the coming years because we are investing and we are taking actions and in dining and report on the sustainability report, you would see a number below the floor, so that's progressing well.

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 through this through in detail, my successor is stay long till 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, and there is no intention to change the strategy because of a new CEO and the company, and we are all aligned with this.

Speaker Change: And you know the green investment from the capital slide, you see what the capital money we put into that.

Arnaud Lehmann: Thank you very much.

Speaker Change #158: and the foads

Speaker Change #159: so then we really live it but then they are also stop eastern european markets where you remain ia hunary but we don't see what should that but more

Speaker Change #160: western in the dynamics but for sure that ef fect to say it's no secret of pon is

Speaker Change #160: challenging where we talus volume and price and this's kind of schoolbook really really a lot of competitors the want volume for any priceand we we do well on the really big projects where you won't really our

Speaker Change: 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 to the next round we have an energy crisis or something like that.

Jens Birgersson: We do well on the really big projects where you want really our fire safety, you want delivery safety, you want to do logistics. Those projects we still can take with good margins. On the other, we need to play it a bit more by the ear and then correct some of that when the upturn comes. That's the same pattern as we have discussed many times, Brijesh. But there are also quite a few Eastern European markets that doesn't have that Polish dynamic. Then in 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 means that there goes three, four months, and you get simply too many projects.

Speaker Change: That word is ongoing.

Speaker Change #161: five safety you want to everyvery safe do you want to do logatistic those projects we still can take with good margins and only other ivility to play it a bit more by the erand

Speaker Change: Science-based target that we also have a goal for, it talks about CO2 equivalent emissions in absolute terms excluding acquisitions, we have a goal for that too.

Speaker Change #162: then correct some partment the upturn so so that's the same partactis as we have discussed many at times but there are also quite a fewious european markets doesn't have that polarished on that so

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.

Speaker Change: And it's quite pleasing to see that when the business is growing volume of top line W did that our two emissions only increase with the 6% on a more than 10% volume and sales growth.

Yassine Touahri: 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 pricing increase? I think in the US, there were some pricing increase, and on the volume, have you seen any improvement or deterioration versus the concoiter?

Speaker Change #163: thenll where with w ternin europe on the trend of the dynamics i think fundamentally investingin your what you see is stock

Speaker Change: So that shows that that kind of emissions are currently is working.

Speaker Change: It also shows the underlying is the challenge they have on the 23rd GMO boards of really, really convert the whole company more or less into electric and melting driven by humanity.

Speaker Change #163: sometimes

Speaker Change #164: let could be

Speaker Change #165: there could be circumstananceces that me so take go three four mons them you get simply too many projects

Speaker Change: So we need it is the really challenging target that we are working on at this stage.

Jens Birgersson: And then my second question would be on the on the new entrance. Like in the non-government where margin are relatively high today, do you see a risk for new companies to enter the European or North American mineral water industry? Or do you think it's too hard? Because of a regulation, and it could take the same issue as that. Are you facing in France? Yeah, so same for us, we see some pricing pressure in the residential segment of the light wars perspective to relatively low.

Jens Birgersson: Then someone doesn't get enough, and then it turns into a bit of a seasonal panic in all of the competitors, and that is nothing unusual of that. We have seen it, for example in Germany several times where someone really wants volumes. Our approach has traditionally been that, if it's not on a sustainable level pricing, we'd rather step away from those projects and then the market will normalize. I must admit, I have not seen any other trend in Europe. I don't see any change to the fundamental dynamics to the Western European pricing until now.

Speaker Change: We don't.

Speaker Change #166: and then someone doesn't get them enough but then it turns into bit of a season on panic

Speaker Change #167: followof the competitors and that is nothing unusual that that we have seen it for somethingple a german several times where

Speaker Change: Piel, 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 to come, so not the moment, I would say that long-term growth outlook is quite positive, so it's a challenging goal but we are working and you can see that actually we are taking good.

Speaker Change: On the rock cycle, here is the focus, the retail waste themes, but then take back our own products and upcycling them, release cycle them, we have added more support 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, we will beat that goal, we will be ready much before 2030.

Speaker Change: And then we'll say the safety goal, no serious accident and no fatalities in the first half year and it's what we like to see, and that's how we need to perform the time, but as you know, we have a big, big operation, with many factories, and these factories, things can happen, but we have worked very seriously on that and it's good that we have a good first half year.

Speaker Change #168: someone reallyer about mouumes and our approach traditional a bit not okay if if it's not on the sustainablethe level pricing be rather

Speaker Change #169: they just step away from those projects and then the marketof been normalizede and and i i must submit i have not seen any other trend in in europe i don't see any change to the fundamental dynamics to rest in european pricing on to now

Speaker Change: Going to the outlook, slide 14, going forward on sales, we haven't seen any change, should any dramatic developments in the market, but we are stepping in a couple of quarters where you have more challenging compared, but also on the top line that mid-single digit percentage growth seems like a good, good outlook still, although we are ahead of that up to now, but that's because we're compared, as we see it now, we see the business could not continue, that's good, on the average margin around 30%, also there we are a little bit ahead, but then as you know, we are in the December effect to 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 report on that, we are on track to invest what we have planned for the year.

Jens Birgersson: We haven't seen much of a change. It's around the negative, like they are up. Nothing dramatic, and I think we need some, I don't know, government on 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 for us, it's around the zero, slightly negative. Nothing made it dramatic on price, and it's a bit down, but the segments we can increase the prices.

Speaker Change: Yeah, you should say, though, on the investment side, we have had one 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 able to, but we have got to talk, given up, the new fact to ring in France, but we need to look at that and see how we keep pushing the plant in France.

Speaker Change: We thought we should be able to start building it up, but this was a setback, and we can expect the further delay, possibly we'll move the resources and accelerate on the product, we have a number of products started, but we have absolutely not given up on the other side of the French plant, maybe they keep working through that.

Brijesh Kumar: Perfect. My second question is more into the US. You're talking about US, you are nearing full capacity. Then looking into 25 and 26, and I guess your new plant is not coming on stream until 2027.

Brijesh Siya: Perfect. My second question is more into the US. You're talking about US, you are nearing full capacity. Then looking into 25 and 26, and I guess your new plant is not coming on stream until 2027.

Speaker Change: Over two questions.

Speaker Change #170: perfect and my second question is more into the u s you're talking about u s you are nearing full capacity then looking into twenty five and twenty six and i ask your new plant is not coming on strethree month and where seven to what kind of

Speaker Change: Thank you.

Speaker Change: We will now begin the question and answer session.

Jens Birgersson: Where?

Brijesh Kumar: US. I was talking about US. Sorry.

Brijesh Siya: US. I was talking about US. Sorry.

Speaker Change: To ask a question, you may press star then one on your touch tone phone.

Jens Birgersson: Okay. Yeah.

Speaker Change #171: u s i was talking about you study f you

Brijesh Kumar: Sorry, if I just finish the question, is that you have near full capacity right now, and looking into 25 and 26, what kind of volume headroom you have to continue to grow this number? 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 #172: so n't really i've thinking about

Jens Birgersson: So that's on that side, and then the price increases at some market where there is no issue whatsoever, from some of the US with just launched 8% increase. And that's in line with what's happening in the market on Glasswood and Stonewood, that's moving.

Brijesh Siya: Sorry, if I just finish the question, is that you have near full capacity right now, and looking into 25 and 26, what kind of volume headroom you have to continue to grow this number? 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 #173: sorry if i just finish some question is that you have your full capacity right now and looking into twenty-five and twenty-six what's kind of

Speaker Change #174: volume headroom you have to continue to grow this number or you see there is a kind of a area capacity constraints are meeting your growth in the near medium term until the new plant comes in two thousand and twenty seven

Jens Birgersson: 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. Yeah, because it's the margin to their much higher number where ten years ago, yeah, obviously, there are people that look at Stonewood now and think, this is a fantastic business, let's enter this, you know, eight in the end of the Sunday, it's already in the rest. And I think having a single plant versus our quite big machine now with a lot to the economics of scale, and also considering how difficult it is to start up the plant and run it really, really productive outfit.

Jens Birgersson: Yeah. There are the normal 2 or 3 factors here on full capacity that can be quite confusing for our business. Because if we miss a few months and we are not on full capacity, we are frozen capacity, and we can never catch that back in the year. What happened here was that we had some challenges with delivery time. In the US, we didn't expect the ramp up. The business went down in 2022, early 2023, and then it step changed up, and we didn't have the shifts in place. We battled to get blue collar workers in to shift up and to train them and all the rest. Then we sat with this more than 6 months backlog of orders on delivery times.

Speaker Change #175: yesso that there's a normal

Speaker Change #176: two or three factors are old capacity that can be quite confusing for our business

Speaker Change #177: because if we don't if we meet a few months so we have not to fu capacity are proing capacity we can never cpt sh back in the year and some of what happily have set

Speaker Change #176: we have

Speaker Change #178: some challenges with delivery times so in the u us we didn'tto expect the ramp up the business man downedin tren twenty two orly twent to turn to three

Speaker Change #178: and then it st changed up it didn't have the ships in place be battled to get

Speaker Change #178: blue color workers in to shift off on to train of them all the rest and let me sat with this more than six months backlog of orders on delivery times during that period wedidn't increased prices because four percent one take to work back lead times

Jens Birgersson: I think you will see some entrance, but I must say that 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 of just one plant without brand and without the service level of all the rest. So I'm not, I'm not particularly worried about your interest, but yes, some people will announce new plants and we'll deal with that when that comes, but the trend in storage has been that the plants are announced and very much delayed because it's also very, very difficult to build the plants.

Jens Birgersson: During that period, we didn't increase prices. We just focused on one thing, to work back lead times. We go up on full capacity. This doesn't mean we don't have more capacity in the plant, even though we run a couple of months at full. Going into next year, we will counter that if we see a good next year with more seasonal stock and running more close to full the rest of the year. We have more growth in the business, and that will take us through one or two years, I think. Of course, after that, we do what we normally do if we run out. We use capacity from other parts of the world and we supply the demand.

Speaker Change #178: and then we go up from full capacity

Speaker Change #178: so

Speaker Change #178: so this doesn't mean we don't have more capacity in the plant evenment of the ra brant a couple months and phoneall so going into next year we will

Speaker Change #178: count to that if you see a good next year with more seasonal stock

Speaker Change #178: and running more close to fold the rest of the yearso

Speaker Change #178: ifwe have more growth in the business and that will takeus through wal two the i think and then of course after that we do what we normally do if we run out the use

Jens Birgersson: You need to be very persistent to some geographies to get your plant built in today's world. And I think their scale is also important because we have the means and the persistence to just keep working and 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're not told just whatever as it is in many industries in Europe, but the more.

Jens Birgersson: Although we don't make a lot of money on that, our ambition, and we have done a lot of that in Europe. You remember last time we were up on very high utilization. We shipped from even Norway down to Germany. We use those type of means because our priority, if we have that demand, is to supply the customers. Here we might get into that next year or the year after, where we actually have to bring in certain grades of stone wool into the US, and we will be ready for that when it's needed.

Speaker Change #179: cappetitive from am other parts of the world of the supplily in abo

Speaker Change #180: although we don't make a lot of money or that we our ambition we have done a lot of that ineuropeyou remember last time will were up to very higher itilization we sht from even thoughall way down to gergrmany the use stp of means because our priority if we have that demand this

Speaker Change #180: e customers and here pret much getting into that next year or the year after to really actually have to bring in circ grad on one into the u us and we would be ready for thatct and this needit

Yassine Touahri: And maybe just a very last point which is just like not a question that more comment about the fact that you've developed such a great 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 happen there. Thank you. Thank you very much, you see.

Brijesh Kumar: Okay. That's great. Thank you. Thank you, Jens Birgersson, for all your kind of effort. I think, yeah, you've done a great job, as my colleagues have already told that kind of probably the pricing initiative you have taken in the last nine years has been simply pretty impressive, and that's what we can see with the margins. Thank you very much and good next innings.

Brijesh Siya: Okay. That's great. Thank you. Thank you, Jens Birgersson, for all your kind of effort. I think, yeah, you've done a great job, as my colleagues have already told that kind of probably the pricing initiative you have taken in the last nine years has been simply pretty impressive, and that's what we can see with the margins. Thank you very much and good next innings.

Jens Birgersson: And you mentioned the aspect there that that this is an important one to us that we don't talk about too much and that is that productivity that economists of scale of the business that that's an underlying big advantage of rock wall that we have in the culture and that's a strong point. But thank you for those words.

Speaker Change #181: okthat's great thank you thank you and for of all your your kind of effort and i think i done a great jobass my colagues have already told thatit's probably the pricing initiative wehave taken in the last term nine years has been simply pretty imimpressive and that's we can see with the margins so thank you very much andenda good next shnings

Jens Birgersson: Thank you, Brijesh. Go well. Thanks.

Operator: The next question will come from Harry with Berenberg. Please go ahead. Harry, your line is open.

Bash: thank you bash for thanks

Harry: the next question will come from harry what the gode please go ahead

Harry Goad: Yes. Hi. Can you hear me?

car: car your line is open

Jens Birgersson: Yeah, we can hear you.

Burgess Tamacia: The next question will come from Burgess, to Marcia with HSBC. Please go ahead. Dick. 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, they talk about when the volume responds back, they see some pricing. I think pressure is that something is 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.

Harry: yes hi can you he me

Harry Goad: Yeah. Okay, great. Yeah, it's Harry at Berenberg. I've got 2, please. So firstly, just coming back on a couple of remarks you've made on the margin. I think it mainly in response to Arnaud's question, but just for clarity, I appreciate your point that both margins and returns on capital could move around, but were you indicating that around 15% in terms of EBIT margin is the right way 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. When we're thinking about that, should we be thinking about your product relative to other stone wool providers, or should we actually always be thinking about it relative to the broader suite of insulation products? Thank you.

Harry: every canye

Harry Baromeger: yes okay gr zs harriet baromeger what two please so curly just coming back on

Harry Baromeger: 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.

Harry Baromeger: Is this only due to France and December sales, as you said, or is it also the inflation impact?

Speaker Change #186: acouple of remarks you've made onthe margin i think it may in response to hon ' question but just a clarity

Speaker Change: If you're using a speaker phone, please pick up your handset before pressing the keys.

Speaker Change: If any time your question has been addressed and you would like to withdraw your question, please press star then two.

Speaker Change #187: appreciate your point that both margins in returns of capital could could move around and but we were indicating that around fifteen percent

Speaker Change: We will start with the two questions for participants.

Speaker Change: Please respect this.

Speaker Change: And at this time, we'll pause momentarily to assemble a roster.

Speaker Change #188: in terms of edit margin is the right way to think about a sort of through cycle average margin an obvject vious having had a big increase this year

Speaker Change: And the first question will come from Klaus Almar with Nordea.

Speaker Change #188: 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 #188: the second question please is around sort of pricing and competition and when we're thinking about that should we d be thinking about

Speaker Change: Please go ahead.

Speaker Change #189: your product relative to of stoneall providers or should we actually always be thinking about it relative to the broader reil inteation products thank you

Speaker Change #189: Yeah, yeah.

Speaker Change: Thank you.

Jens Birgersson: 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 is talking about interest rate income, coming through, do you see similar risk panning out in Western Europe as well, when the volume bounds happen maybe towards the end of Q4 or maybe in 2025? So that's my first one. I'll come back in a second. OK, thank you, British.

Speaker Change #189: 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, 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.

Jens Birgersson: I will hand over the 15% margin question to CFO Kim. I'll take the other one first, and then Kim will answer the average cycle margin, which 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 to the market. Stone wool is a great product. It has a very clear cut out space in the market and to meet, you know, the climate goals, our insulation among other insulation products will be needed, and obviously we think ours is the best. I think we can see some new entrants, but again, I don't see anything happening there quickly, due to the nature of the business.

Speaker Change: Yeah.

Speaker Change #190: yesso so i will hand over to fifteen percent margin question to see vo came and take the out of one person thank you answer to ver cy margin but

Speaker Change #190: So we are not pessimistic.

Speaker Change #191: don't feel i'm the right long to answer at this this moment on pricing competition i bo

Speaker Change: Two questions from my side.

Speaker Change: I'll do them one by one.

Speaker Change: The first question goes to inflation.

Speaker Change #192: i will stay that yes properly attracts people

Speaker Change: You mentioned that you do see a, it sounds like a small inflation.

Jens Birgersson: So in Eastern Europe, we have the classic country, for example, Poland, where price competition is fierce, whenever volume goes down, wherever it is down, you see the whole EPS competition, several segments. So there we really leave it, but then there are also some Eastern European markets where, you know, Romania, Hungary, but we don't see much of that. There's more Western in the dynamics, but for sure that defect is there. It's no secret that Poland is challenging now, but we've all balanced volume and price.

Speaker Change #193: through the market norone is a great product it had has a very clear cut out space in in the market and to meet the climate goals

Speaker Change #194: our insulation of about hardder institation possibility be neededat in obviously that we think up is the best as i think we can see some new ent transport again

Speaker Change #195: i don't see anything happening there quickly due to the natural the business and

Jens Birgersson: In the last couple of years, the inflation on equipment, this nearshoring drive that has happened in Europe and the US is just expensive and complicated to build. There isn't a lot. We have a lot of in-house engineers doing a lot of this work. It's not easy. I wouldn't factor in that you will have big new entrants that come in five, six factories very quickly. That's not likely to happen. Sure, we're gonna have new entrants.

Speaker Change #195: in the last couple of years inflation equipment this nearuring drives that has happen

Speaker Change: Does that mean you're going to raise prices or will you have to absorb that in your in your P&L?

Speaker Change #196: in europe and the u s is just expensive and complicated to build and there isn't we have a lot of inhouse engineers during

Speaker Change: So to speak, that will be the first one.

Jens Birgersson: And it's kind of school book, 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 5 safety, you want delivery safety, you want to do logistics, those projects we still can take a bit more. And on the other, we need to play it a bit more by the year and then correct some after the turn. So that's the same practice as we have discussed many times. But there are also quite a few Eastern European markets that doesn't have that Polish.

Speaker Change #197: lot of this work it's not the eas so i wouldn't factory in that you will have big new ent tr that come five six factorri is very quickly that's not likely to have en but sure we beggoing to have new rons

Speaker Change: Yeah.

Kim Andersen: In a normalized margin, I don't think necessarily it exists. Of course, in the coming a few years here in 2025 and into 2026, we have no plans to open any new factories, so there will be no sort of major depreciation change coming. That will change of course once we start to get the big factories open in Europe and in the US. That will definitely impact the EBIT. We are working on margin improvements. We have told you previously about our efforts to reduce the manning in our factories. That is definitely a margin possibility. Besides that, I think we just work towards, you know, having constant focus on productivity and then hopefully to maintain or improve margins. That's really our aim.

Speaker Change #197: normalized mmarin don't think necessaryily it exist cost in the coming a few years year in twenty five into twenty six we have no plans to bo in a new facries so there will be nose of made depreciation change coming that would change of course once we start to get the big crack is openened in the in europe and then the u s

Speaker Change: So Klaus, thanks for introducing yourself.

Speaker Change: We don't have the normal screen, but we can see who asked the question.

Speaker Change: I know you are so great if you can introduce yourself like that.

Speaker Change #197: We are not pessimistic on the prices.

Speaker Change #198: sort of that capvity impact the ebit we are working on a margin improvements we have told previous about our efforts to reduce the mening in facactuallytory that is definitely margin

Speaker Change: So you know, yeah, I see, I mean, inflation doesn't go away.

Jens Birgersson: So then it went 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 of me, so 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 season on panic in one of the competitors. And that is nothing unusual of that. I don't see any change to the fundamental dynamics to the Western European pricing on the market. Perfect.

Speaker Change: We are at the energy benefit and some other benefits, but we have several markets where we foresee that we would do a small grumbit price increase to cover that that inflation.

Speaker Change #199: possibility but decides that i think we just worked wards

Speaker Change #200: having having content focus on productivity and then hopefully to

Kim Andersen: As I said, from 27 onwards, there will definitely be more depreciation coming from the planned investments that we're doing over the coming years.

Speaker Change #200: to maintain our improve marke that's really but set them so 's seven numbers there' definitely be more depreciation coming from the planned investments that we do reover the coming years

Speaker Change: There 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 price increase to pass on the inflation or pressures as far as we can.

Harry Goad: Thank you very much.

Speaker Change: Okay.

Speaker Change #200: I think we can do most of that.

Operator: The next question will come from Zain Sherazi with JP Morgan. Please go ahead.

Operator: The next question will come from Zaim Beekawa with JP Morgan. Please go ahead.

Speaker Change #200: thank you very much

Speaker Change #200: happ

Speaker Change #201: next question will come from then g be morgan please go head afternoon all just two questions for first on is i notic is a slight makes pects in the regional cell can you just remind us on the impact this has on the margins perceed by region and thense secondly on your hedging for the year and into twenty five please thank you i ' the headedgerink actually actuallyshould with the reason

Speaker Change #201: Yes, we believe there is inflationary pressures, but we have the ambition to pass that on, is not prudent.

Zain Sherazi: Afternoon all. Just, two questions for me. The first one is, I noticed there's a slight mix effect in the regional sales. Can you just remind us on the impact this has on the margins, particularly by region? Secondly, on your hedging, for the year and into 25, please. Thank you.

Zaim Beekawa: Afternoon all. Just, two questions for me. The first one is, I noticed there's a slight mix effect in the regional sales. Can you just remind us on the impact this has on the margins, particularly by region? Secondly, on your hedging, for the year and into 25, please. Thank you.

Speaker Change: And then 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.

Jens Birgersson: Okay. I'm gonna leave the hedging to Kim. Actually, with the recent success we have had in North America, we don't have so much regional effects on the margins. We have always said France is a very good market, but we have a lot of other markets now that are on the same level. When you have North America versus Europe on average, you don't see much mix effect, country mix effect anymore because we're at scale, and we start to have that massive profitability in North America. Asia is still too small to impact the picture. It doesn't matter if they grow 20%. They won't impact our numbers because they're still too small. There are some effects.

Burgess Tamacia: And a second question is more into the US. You're talking about US, 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 #202: a success how in north america

Speaker Change #203: we don't have

Speaker Change: So down versus first half also, if we adjust for the Ukraine donation, is this own youth friends and and and the sample sale, as you said, or is it also the inflation impact?

Speaker Change #204: so much regional effects of the margins and we have always had france is a very good markets but we have a lot about other markets now that are in the same same levels when you have north america versus

Speaker Change: Your previously said it's not easy to raise prices in all markets, so you had to be more, you know, specifically about these price increases.

Jens Birgersson: So what kind of US, I was talking about US, sorry, if I just finish the question, is that you have near full capacity right now and looking into 25 and 26, what 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 time until the new plant comes in 2027. 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 meet a few months of, we are not the full capacity, we are frozen capacity and we can ever catch up back in the year and what happened here was that we had some challenges with delivery times.

Speaker Change #205: erope on average you don't see much mmax affect that the country buticks affect anymore because we up scale let we start to have that mass profitability

Speaker Change #205: more america than asia still

Speaker Change #206: too small to impact a picture doesn't matter if they go trench cent they want impact all numbers because of in

Speaker Change #206: too small so so there are some effects

Jens Birgersson: You know, we still have more difficult markets like Poland and some other markets that if that really grows a lot, it dilutes. At this stage, I wouldn't say a country mix effect is big. In the residential segment, actually our margins per unit is a little bit higher. That one is low. On the other hand, we get this beautiful over absorb from all the commercial heavy density products, flat roofs and all of that. That's also given an effect. I won't say we have any great mix impacts at the moment.

Speaker Change #206: know we still have more difficult partes like poland

Speaker Change #206: some other markets are if that the growth a lot it do but at this stage i wonwill say a contributicks effect is speak and then in the residential segments actually our margins per

Speaker Change: Yeah.

Speaker Change #207: you a little bit highred than all this low of the other hand get beautiful overhelsforstr from allthe

Speaker Change #208: commercial haveevanceensity product slab ules and ong and that's also given fectack side will say they have any great mix mix impacts at the moment but for sure if we would had the volume growth that we have now

Jens Birgersson: for sure, if we wouldn't have had the volume growth that we have now, all these big projects, heavy flat roof projects would have diluted the margin a bit because that margin on the, on the paper is slightly lower, but with this absorption is fine.

Speaker Change: 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, and that has seen the client and top line of that.

Jens Birgersson: So in the US, we didn't expect the ramp up, the business went down in 2022 or 2023 and then it's kept 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. Then we sat with this more than six months back, a lot of orders on delivery times, during that period we didn't increase prices, we just focused on one thing to work back lead times and then we go off on full capacity.

Speaker Change #208: all these paay project everyav clattrue projects would have dilute to the vget because of margin of the papers slightide be lower but with this absorpttion as far

Kim Andersen: On the hedging side, Zain Sherazi, we had this with the foundry coke, which is still our biggest energy source. There we can only fix prices a quarter at a time. As right now we don't have a read for 2025. On the electricity and gas, which we have the markets that do have France and Norway and Spain, we do have sort of long-term contracts for the rest of the consumption on electricity and on gas. We have covered the quarter into June and Q2 next year. Let's say the bottom out. The rest of the year we have for most of expected consumption.

Kim Andersen: On the hedging side, Zaim Beekawa, we had this with the foundry coke, which is still our biggest energy source. There we can only fix prices a quarter at a time. As right now we don't have a read for 2025. On the electricity and gas, which we have the markets that do have France and Norway and Spain, we do have sort of long-term contracts for the rest of the consumption on electricity and on gas. We have covered the quarter into June and Q2 next year. Let's say the bottom out. The rest of the year we have for most of expected consumption.

Speaker Change: It's quite a mixed picture in different related sectors.

Speaker Change #209: on the hedging side as we know we have this with the foundary cope allow biggest energy ource there we can only exprise the coarter at the time

Speaker Change #210: itis right now we don't have a beatfor twenty fiveyears

Speaker Change: So and we haven't seen any of that.

Jens Birgersson: 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. So we have more growth in the business and that protects through one or two years. 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 it in the bond, although we don't make a lot of money or that's our ambition.

Speaker Change #210: on the and gas have the markets are tri them that way spain do have sort of long-term contracts

Speaker Change: So we are not pessimistic.

Speaker Change #210: for the best of the consumption on an ominic city and not gas we have covered the quarter into to q two next year let's say about now the year we almost of expected consuion

Speaker Change: We are not pessimistic on the prices.

Zain Sherazi: Perfect. Thank you for those answers. Jens, best of luck on your future endeavors also.

Zaim Beekawa: Perfect. Thank you for those answers. Jens, best of luck on your future endeavors also.

Speaker Change: I think we can do most of that.

Speaker Change #211: haveexteninyou for those answers and yn' best uck on your future debors also

Jens Birgersson: Thank you very much. Thank you.

Operator: The next question will come from Marcus Cole with UBS. Please go ahead.

Speaker Change #212: thank you very much thank you

Marartist Coal: the next question will come from marartist coal what the ubs please go go ahead

Marcus Cole: Hi, Marcus Cole from UBS. I've got two questions as well. I was reading in a statement that you've recovered some share in Europe. I was just wondering if you're willing to put some numbers to that. 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? Thanks.

Jens Birgersson: And we have done a lot of that in Europe, you remember last time when we were off from very high utilization, we ship from even all the way down to Germany. The use of stock means because our priority, if we have that demand, this because either customers in here, we might get into that next year or the year after, they actually have to bring in certain grades of stone one into the US and we would be ready for that and we'll just need that.

Marartist Cogo: i marketcus cogo from ubbs ' got two questions as well i'was reading in a statement that you've recovered some share you're agocloti

Marartist Coal: wondering here re willing to put some numbers to that and then the second question is just on the volume growth strengththen h one are there onlyone off that should be aware of you don't think be repeated in the last year

Jens Birgersson: Okay. Marcus, to share our view on a broad basis. You know, we've been steering quite hard on maintaining it. You know, in some countries, we know down to the decimal because there are associations working at it, and sometimes we don't know exactly. The market share has remained pretty stable. There could be country differences. Obviously the US, where we are growing and we have a very low market share in the total market, we have a high market share with installed, but it's still only a couple of percentage point of the overall installation market. We are taking market share out of the installation market, but I don't think anyone is noticing that because everyone is growing.

Speaker Change #215: ok so mar to share our view go bysas

Burgess Tamacia: Okay, that's great. Thank you. Thank you, Hans, for all your kind of effort. And I think, yeah, it's on a great job as my colleagues have already told that it's kind of probably 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 #216: you know i've been staring by hard of maintaining it and they you know countries we no douge the decimal because there are association of worurking id sometimes of be don't exactly so so so the market share has remained princess stable that it could have be country differences and obviously the u s

Operator: So thank you very much and a good next training. Yes. Thank you, B. Ash, farewell.

Operator: Thanks.

Speaker Change #217: rewe are growing but they have a very 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 #218: market share the total mode we have a high market share with install with for the still only couple of percentage point of the over instidation market

Speaker Change #218: we are taking market share up to the inflation market but i don't think anyone is noble to think that because every allof the core so so the sol markesha state from improving some places like the thousand others but

Jens Birgersson: Market share is stable, improving in some places, slightly down in others, but overall, we are happy with the way we manage that. What was the other question?

Harry Goad: Yes, Harry, Barry Mugger wants to please. So firstly, just coming back on a couple of remarks you've made on the margin, I think it may be in response to all those questions, but just for clarity, I appreciate your point that both margins and returns of capital could move around. But were you indicating that around 15% in terms of edit margin is the right way to think about us sort of through cycle average margin and obviously obviously having had a big increase this year.

Speaker Change: Yes, we believe there is inflation or pressures, but we we have the ambition to pass that on.

Speaker Change #219: or we are happy with away remanish us

Kim Andersen: We don't have any special one-offs.

Jens Birgersson: No, no one-offs. No, we don't. We have some big projects, but you know, the biggest project we ever get is like EUR 4 or 5 million or so. There's not many of them. We have got some big projects, but I think that's the impact.

Speaker Change #220: the mo was certain quase don' have special one else i no one those though

Speaker Change #221: don't we have some big projects but you know the biggest project we have get to like four argget or or so and of them so we have brought something produ this ust impact

Speaker Change: So that's the outlook.

Speaker Change: And then we we did upgrade almost a day, 10% of your life to 17% to be prepared to to make an assessment now is He's not prudent.

Kim Andersen: 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 details insulation products. Thank you. Yeah, so I will hand over to 50% margin question to see if all came and take the other one person and came along so the average cycle margin, but don't feel I'm the right one to answer at this moment.

Operator: Okay, thank you very much. Best of luck for the future, Jens.

Jens Birgersson: Thank you.

Speaker Change #222: thank youvery much and a bestff looks with g

Operator: The next question will come from Axel Stasse with MS. Please go ahead.

Speaker Change #223: thank you

Speaker Change #224: thehoennext question will come from axual staffi with mms please go ahead

Speaker Change #224: We feel comfortable with the 17%.

Axel Stasse: Good afternoon, everyone. Thanks for taking my question. I just have one remaining. If I understood correctly, the commercial market drove the EBIT margins in H1. 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. Is it fair to assume we could see some pricing risk in the residential market when volumes pick up, or did I not understand it correctly? Thank you.

Speaker Change #224: We obviously have no ambition to reduce the profitability, but we acknowledge the December effect and the France effect, as we always do.

Speaker Change #224: So I will leave that to my successor to kind of nail that outlook and his maybe first earnings call.

Speaker Change #224: And you know that, Klaus, we're coming close and closer to the autumn period, where many of our markets will negotiate 2025 prices.

axual staffi: butgood afternoon everyone thanks for taking my question i just have the one remaining

axual staffi: There's always a little bit of timing there.

Speaker Change: 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 we all do.

axual staffi: Yeah.

Speaker Change #226: if i'm understood correctly the commercial market drove the a bit margins in the first half year

Speaker Change #226: So I wouldn't, you know, do straight to mathematics and say we have concluded this or that.

Speaker Change #226: Fair enough.

Speaker Change: So I believe that, for my success here, to kind of nail that outlook and hiss, maybe the first earnings column.

Speaker Change #226: We'll come back on that forecast when we're a little bit deeper into those discussions.

Speaker Change #226: And I also say, you know, we feel comfortable with the 70%.

Speaker Change #226: And, you know, the next time we will know more.

Speaker Change #226: Thank you so much for the answers.

Speaker Change #227: 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 it a fed towith you we could see some priceing risk in the resential market when bon pick up

Speaker Change #227: Thanks.

Speaker Change #227: Your next question will come from Peter Sehested with ABG.

Speaker Change: And you know, that's how becoming close and closer to the autumn period, where many of our markets will negotiate 20-25 prices.

Kim Andersen: 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, our installation among other installation possibly be needed and obviously we think is the best. 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 #227: Please go ahead.

Speaker Change #227: Great.

Jens Birgersson: We unfortunately have a very disturbance on the line, so we could not hear that question.

Speaker Change #227: or did i not understanding correctic thank you

Speaker Change #228: we unfortunately to have a very disturbance on the line so we could not hear that question

Speaker Change #228: It's Peter from ABG.

Kim Andersen: Could you maybe just repeat one more time?

Jens Birgersson: See if it's better now.

Kim Andersen: Keep it very short.

Speaker Change: So there's always a little bit of timing there.

Speaker Change #228: Thanks for taking my questions.

Axel Stasse: Yeah, yeah. Sure, sure. Sorry. The commercial market drove the EBIT margin in the first half of the year. Based on your comment on 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 #229: could you maybe just repeat one mar only partic ' been very short yes sorry and the commercial market drove the bit marg in the first half half year of of the year

Speaker Change #229: I have two.

Speaker Change #229: The first one is on France.

Speaker Change #229: Yes.

Speaker Change #229: The Marinoff-Trimanoff program has noted an increase in applications following their return, to the normal application procedures.

Speaker Change #229: And I guess that these applications will probably not hit the market or realize in the second half.

Speaker Change #229: Is this something that you have taken into account in your guidance?

Speaker Change #229: Because I know that in France, the renovation program has been a very important driver for Rocco for the past, for the first question.

Speaker Change #230: and based on your comment on 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 #230: Yeah, it's accounted for.

Kim Andersen: And in the last couple of years, 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, it's not easy, so I wouldn't factory that you will have big new entrance that come in five six factories very quickly that's not likely to happen, but sure we're going to have new entrance.

Jens Birgersson: Just a second. We mute you, and we just see if we cannot.

Speaker Change #230: We, you know, we have a good profitable business.

Speaker Change #230: And France is likely in the negative territory in the quarter.

Speaker Change #230: We haven't factored in any hopes and dreams from the scheme.

Speaker Change #231: well want it

Jens Birgersson: Just a second. We mute you, and we just see if we cannot.

Speaker Change #231: So we have a good conservative or realistic forecast. And that's included.

Speaker Change #232: we going to try to just just a step immut to and we just see you cannot

Speaker Change #232: Good.

Axel Stasse: Okay.

Speaker Change: So I wouldn't, I wouldn't, you know, do straight to mathematics and say, yeah, conclude that this and that.

Speaker Change #232: okay

Speaker Change #232: And just going back to the guidance, because your wording on pricing is the same as you did in Q1 and Q4.

Jens Birgersson: Yeah. Okay. I think the residential market at the moment is a bit of a falling knife. We clearly don't have an ambition in a market to... If you look at the new housing starts in Germany, it's down to even lower level than last year. I can't remember how much, but it's really low. We don't have a plan to attack in any way and take market share. We just try to stay in. When the market is that low, it's better to focus on, you know, where we have some volume growth or maybe have an opportunity to just ramp up and get nice business in.

Speaker Change #232: Also, with respect, we have sort of the usual thing about the December impact.

Speaker Change #232: That's also something that you typically iterate around this time of year.

Speaker Change #232: Is there anything that is sort of different this time that it has been?

Speaker Change #232: No, it's very much business as usual.

Speaker Change #233: yeah can sto so i think the resial market at the moment is a bit so all night

Speaker Change #233: You know, we drive a very strict pricing process in the company.

Speaker Change #233: We stay on top of the markets.

Speaker Change #234: so we clearly don't have and be shown in a marketitude if you look at the new houseous y starts

Speaker Change: We'll come back on that forecast from a little bit deeper into those discussions.

Kim Andersen: And normally, a margin, I don't think necessarily it exists across 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 sort of negotiation change coming 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 on margin improvements, we have told you previous about our efforts to reduce the manning in our factory, that is definitely a margin possibility, but the size that I think we just worked what, you know, having, having constant focus on productivity and then hopefully to to maintain or improve margins, that's really our aim. But I said from 47 onwards, there will definitely be more depreciation coming from the planned investments that we do in over the coming years.

Speaker Change #234: 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 planned

Speaker Change #234: And we try to take that very serious.

Speaker Change #234: And there isn't any dynamics out there that is different to another year.

Speaker Change #234: Of course, we don't have the situation we had in the autumn 2022 with the hyperinflation of all this.

Speaker Change: And I also say, I, you know, we feel comfortable with the 70% tonnage, will it, you know, the next time we know more.

Operator: Thank you very much.

Speaker Change #234: So I will say business as usual. And there is a slight inflation.

Speaker Change #234: And we will try to go after it.

Speaker Change #234: to attack in any way and take market share we just try to stay in

Speaker Change #234: And it's not no drama about the whole thing.

Speaker Change: Thank you so much for the answers.

Zaim Beekawa: The next question will come from Zaim Beekawa with J.P. Morgan.

Speaker Change #234: But then, of course, you have, you know, some markets, some segments, competitive pressures.

Speaker Change: Thanks.

Speaker Change #234: and when the market is that below it's better to focus on the you know where we have some volume growth or maybe have an opportunity does rampup

Speaker Change #234: We work on all that.

Speaker Change #234: But so far, so good.

Speaker Change #234: 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 #234: 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 #234: Thank you very much, Peter.

Speaker Change #234: 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.

Jens Birgersson: I don't think the timing to go after market share growth in residential is a good one at all because I think it will just result in a negative price spiral. We try to take care of our market share, and then we hope that at some stage, this market comes around.

Speaker Change #235: andi get much business in so i don't think ' timebeing to go off the market share growth in the residential list is a good world at all because i think it will just result in

Speaker Change #235: Thanks.

Speaker Change #235: My name is Arnaud Lehmann from Bank of America.

Speaker Change #235: My first question is, I guess, related to pricing margin and returns, staying on that topic.

Speaker Change #235: 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 #235: But the biggest job as the CEO or what I've seen is, for me, it's not so important if it's 23% or 16% or whatever.

Speaker Change #235: It's important that we keep supporting the volume growth.

Speaker Change #235: But the short term at 23 or 24, close to 24 compared to 15 last year, the last year was a bit abnormally low because that was impacted by the 2022 downturn in performance.

Speaker Change #235: So and maybe this year is a bit abnormally high since we have relatively low working capital at the beginning of the year.

Speaker Change #235: So I think it's a I think a normalization would be around the 20s.

Speaker Change #235: But as Jim said, it's not something that we steer towards necessarily on these short term RICs.

Speaker Change #235: We do the 15 plus target setting internally.

Speaker Change #235: And then we go for this.

Speaker Change #235: in the price bar negative price fire to be we tried to care our market share and that we hope that some stages market conable

Speaker Change #235: But we will step up investment in the coming years.

Speaker Change: The next question will come from Peter Sahested with ABG.

Speaker Change #235: So yes, and myself will maybe not be able to present 24% RIC short term.

Speaker Change #235: In the short term, that's where the numbers are.

Speaker Change #235: Very good.

Speaker Change #235: Thank you.

Speaker Change #235: Thank you for that.

Speaker Change #235: My second question, if that's okay, is regarding, Russia.

Speaker Change #235: 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 #235: Should we expect a change with the new management in the future, I guess?

Speaker Change #235: Maybe something?

Axel Stasse: Okay. Thank you very much.

Speaker Change #235: We have worked through this in detail.

Speaker Change: Please go ahead.

Speaker Change #235: My successor is still, until the 1st of September, a board member.

Speaker Change #235: He's part of it, and we haven't seen the external environment or the reasoning for not continuing what we do.

Speaker Change #235: We haven't seen anything change, and we see the companies that take the other route.

Speaker Change #235: The next question will come from Yassin Tauri with Onfield Investment Research.

Operator: This concludes our question and 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 #236: okay thank you very much

Speaker Change #236: It impacts very negatively.

Speaker Change #236: Please, go ahead.

Speaker Change: Great.

Speaker Change #236: So, we see no reason to change, and there is no intention to change the strategy because of the new CEO of the company.

Speaker Change #236: Yes.

Speaker Change #236: We are all aligned on this.

Speaker Change #236: Good afternoon.

Speaker Change #236: Thank you very much.

Speaker Change #236: So, two questions on my side as well.

Speaker Change #236: There, we can only take prices a quarter at a time.

Speaker Change #237: this concludes our question-and answer session i would like to turn the conference back over to our hosts for today for any closing remarks please go ahead

Peter Sahested: That's Peter from ABG.

Speaker Change #237: 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 #237: Right now, we don't have a V2025.

Speaker Change: Thank you for taking my questions.

Speaker Change #237: Is it fair to assume that there is no change in pricing, or have you announced some additional price increase? I think in the US, there was some price increase.

Speaker Change #237: On the electricity and gas, we do have long-term contracts.

Speaker Change #237: And on volume, have you seen any, improvement or deterioration versus the second quarter?

Speaker Change #237: For the rest of the consumption on electricity and on gas, we have covered a quarter into two next year.

Speaker Change #237: And then, my second question would be on the new entrants.

Speaker Change #237: For the rest of the year, we have most of the expected consumption.

Speaker Change #237: In an environment where margins 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 because of a regulation, and they could face the same issues that you're facing in France?

Speaker Change #237: Could you maybe just repeat one more time and keep it very short?

Speaker Change #237: Okay, so market share, our view on this is, you know, I've been staring quite hard at, maintaining it.

Kim Andersen: Yes. Yeah. From myself and Jens here, we'd like to thank you very much for the call today. I'm sorry the line broke up a little bit here at the end. If you have questions afterwards, of course, you're welcome to give me a call. For some of you, we will see you next week. Thank you very much. Have a nice day.

Speaker Change #237: Yeah.

Speaker Change #237: Yeah, sure, sorry.

Speaker Change #237: And, you know, in some countries, we know down to the decimal because there are associations, looking at it, and sometimes we don't know exactly.

Speaker Change #237: So, in France, we see some pricing pressure in the residential segment, but the light wood perspective is relatively low.

Speaker Change #237: So the commercial market drove the upbeat margin in the first half year of the year, and based on your comment on 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 #237: So the market share has remained pretty stable, but there could be country differences.

Speaker Change #237: We haven't seen much of a change. I mean, it's around the zero, slightly negative, slightly up.

Speaker Change #237: We're just going to try to…just a second.

Speaker Change #237: And obviously, the U.S., where we are growing, and we have a very low market share in the, total market.

Speaker Change #237: Nothing dramatic, and I think we need some governmental programs taking action to get that up.

Speaker Change #237: We'll mute you, and we'll just see if we can… Okay.

Speaker Change #237: We have a high market share with installments, but there's still only a couple of percentage, points of the overall installation market.

Speaker Change #238: yes from my self and here we'd like to thank you very much for the call today i'm surery the line pro bab bit here at the end if you have questions afterwards ofcourse you welcome to give you a call and for some of you seeyou next week and very much have a nicely

Speaker Change #238: Overall, in Europe, on the GDP side of things, we probably haven't seen a case for a broad-based upturn. It has weakened a little bit lately in Europe.

Speaker Change #238: Yeah, okay.

Speaker Change #238: We are taking market share out of the installation market, but I don't think anyone is noticing, that because everyone is slow.

Speaker Change #238: I'm sorry the line broke up a little bit here at the end.

Speaker Change #238: So, France sits around the zero, slightly negative.

Speaker Change #238: So I think the residential market at the moment is a bit of a falling knife.

Speaker Change #238: So market share is stable, improving in some places, slightly down in others, but overall, we are happy with the way we manage that.

Speaker Change #238: Nothing really dramatic on price, maybe some segments a bit down, but the segments, we can increase the prices.

Speaker Change #238: So we clearly don't have an ambition in the market.

Speaker Change #238: And what was the other question?

Speaker Change #238: So, that's on that side.

Speaker Change #238: If you look at the new housing stock in Germany, it's down to an even lower level than last, year. I can't remember how much, but it's really, really low.

Speaker Change #238: We don't have any special one-offs.

Speaker Change #238: And then, price increases are some markets where, there is no issue whatsoever with price.

Speaker Change #238: So we don't have a plan, to attack in any way and take market share, we just try to stay in.

Speaker Change #238: No, no one-offs, no.

Speaker Change #238: For example, the US, we just launched an 8% increase.

Speaker Change #238: And when the market is that low, it's better to focus on, you know, where we have some volume growth, or maybe have an opportunity to just ramp up and get nice business in.

Speaker Change #238: If you have questions afterwards, of course, you're welcome to give me a call.

Speaker Change #238: We have some big projects, but, you know, the biggest project we ever get is like $4-5, million or so, and there's not many of them. So we have brought in some big projects, but nothing that impacts the overall market share.

Speaker Change #238: The last question, just to make sure I understood, you asked me how difficult it is to enter, the Stonewall business.

Speaker Change #238: So I don't think the timing to go after market share growth in residential is a good one at all, because I think it will just result in a negative price spiral.

Speaker Change #238: And for some of you, we will see you next week.

Speaker Change #238: Okay, thank you very much, and best of luck for the future, Jens.

Speaker Change #238: Was that the question?

Speaker Change #238: So we try to take care of our market share, and then we hope that at some stage this market comes around.

Speaker Change #238: Thank you.

Speaker Change #238: Yeah.

Speaker Change #238: Okay, thank you very much.

Speaker Change #238: The next question will come from Axel Stassi with MS.

Speaker Change #238: Do you see a risk? Because the margins today are much higher than they were 20 years, ago.

Speaker Change #238: This concludes our question and answer session.

Speaker Change #238: Please go ahead.

Speaker Change #238: Yeah.

Speaker Change #238: I would like to turn the conference back over to

Speaker Change #238: Good afternoon, everyone.

Speaker Change #238: Thank you very much.

Speaker Change #238: Yeah.

Speaker Change #238: our host for today.

Speaker Change #238: Thanks for taking my question.

Speaker Change #238: Have a nice day.

Speaker Change #238: Do you see a risk that you will see new players coming into the market?

Speaker Change #238: For any closing remarks, please go ahead.

Speaker Change #238: I just have one remaining.

Speaker Change #238: The conference is now concluded.

Speaker Change #238: Obviously, there are people that look at Stonewall now and think, oh, this is a fantastic business.

Speaker Change #238: Yes, from myself and Jens here, we'd like to thank you very much for the call today.

Speaker Change #238: If I understood correctly, the commercial market drove the upbeat margins in the first, half year.

Speaker Change #238: Thank you for, attending today's presentation.

Speaker Change #238: Let's enter this.

Speaker Change #238: So how should we look at pricing in the residential market going forward?

Speaker Change #238: You may now disconnect.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change #238: You have, you know, 8% David Martin and the rest.

Speaker Change #238: And I'm asking this question specifically based on your comment on the key focus on volume growth.

Speaker Change #238: 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 a plant and run a really, really productive outfit.

Speaker Change #238: So is it fair to assume we could see some pricing risk in the residential market when, volumes pick up, or did I not understand it correctly?

Speaker Change #238: I think you will see some entrants, but I must say there hasn't been an entrant for a long time, that come even close to our margins, because it's very, very difficult to run a small network of just one plant without brand and without the service level and all the rest.

Speaker Change #238: Thank you.

Speaker Change #238: So I'm not particularly worried about new entrants.

Speaker Change #238: We unfortunately have a very disturbance on the lines, so we could not hear that question.

Speaker Change #238: But yes, some people will announce, new plants and we'll deal with that when that comes.

Speaker Change #239: the conference has now concluded thank you for attending today's presentation you may now disconnect

Speaker Change #239: But the trend historically has been that the plants are announced and very much delayed because it's also very, very difficult to build the plants.

Speaker Change #239: You need to be very persistent in some geographies to get your plant built in today's world.

Speaker Change #239: 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 #239: So it can be very challenging to get all the permits and you get the permits so that you have to also whatever as it is in many industries in Europe at the moment.

Speaker Change #239: And maybe just a very last point, which is just like not a question, but more, comment about the fact that you've delivered such a great growth for the company.

Speaker Change #239: I think it's quite impressive what you've been able to do in terms of margin and productivity.

Speaker Change #239: So just wanted to wish you the best of luck for your future.

Speaker Change #239: Thank you very much, Yassine.

Speaker Change #239: And you mentioned an aspect there that this is an important one, to us that we don't talk about too much.

Speaker Change #239: And that is our productivity, that economics of scale of the business.

Speaker Change #239: That's an underlying big advantage of Rockwell that we have in the culture.

Speaker Change #239: And that's a strong point.

Speaker Change #239: Thank you for those words.

Speaker Change #239: The next question will come from Burgess Kumar Sia with HSBC.

Speaker Change #239: Please go ahead.

Speaker Change #239: So I have a couple as well.

Speaker Change #239: Just on the pricing, right?

Speaker Change #239: It's interesting that you keep talking, about pricing and flag days in the quarter.

Speaker Change #239: But looking at Eastern Europe, Eastern Europe growth is up 28% in Q2.

Speaker Change #239: Given some of your competitors, not direct one, but a different segment a little bit, but they talk about when the volume is bounced back, they see some pricing pressure.

Speaker Change #239: Is that something that is also impacting you?

Speaker Change #239: Because I recollect historically, Eastern Europe has been a different market where competition is a little more intense compared to Western Europe.

Speaker Change #239: So any comments around that will be very helpful.

Speaker Change #239: And within that, if you could just give a little more flavor into the Western Europe, when everybody's talking about interest rate income coming through, do you see similar risk panning out in Western Europe as well when the volume bounce happens maybe towards end of Q4 or maybe into 2025?

Speaker Change #239: So that's my first one.

Speaker Change #239: I'll come back in a second.

Speaker Change #239: Yeah.

Speaker Change #239: Okay.

Speaker Change #239: Thank you, Priyesh.

Speaker Change: I have two.

Zaim Beekawa: Please go ahead. Then Asia is still too small to impact the picture. It doesn't matter if they grow 20%. They want to impact all of our numbers because they are still too small. There are some effects. We still have more difficult markets like Poland and some other markets. If that really grows a lot, it does. All the commercial heavy density products, that are also given effect. I won't say we have any great mixed 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, black food products, would have diluted the margins a bit because that margin on the paper is slightly lower, but with the absorption is fine.

Speaker Change #239: So in Eastern Europe, we have the classic country, for example, Poland, where price competition is fierce whenever volumes go down, wherever it is down, and you see the whole EPS competition in several segments, flat rule, and in facades.

Speaker Change #239: So there we really live it.

Speaker Change #239: But then there are also some Eastern European markets where, you know,

Speaker Change #239: Romania, Hungary, but we don't see much of that where it's more Western in the dynamics.

Speaker Change: The first one is on France.

Speaker Change #239: But for sure, that effect is there.

Speaker Change #239: It's no secret that Poland is challenging now with, balanced volume and price, and it's kind of a schoolbook.

Speaker Change: The Marinoff, the Trimoloff program has noted an increase in applications following their return to the autumn application procedures.

Speaker Change #239: Really, really a lot of competitors that want volume for any price.

Speaker Change #239: And we do well on the really big projects where you want really our fire safety, you want delivery safety, you want to do logistics.

Speaker Change #239: Those projects we still can take a bit good margins, and on the other, we need to play it a bit more by the ear and then correct some when the upturn comes.

Speaker Change #239: So that's the same pattern as we have discussed many times, Priyesh.

Speaker Change #239: But there are also quite a few Eastern European markets that doesn't have that Polish dynamic.

Speaker Change #239: So then in Western Europe, on the trends of the dynamics, I think fundamentally in Western Europe, what you see is that sometimes there could be, you know, there could be circumstances that means that there goes three, four months and you get simply too many projects.

Speaker Change #239: And then someone doesn't get enough, but then it turns into a bit of a seasonal panic in one of the competitors.

Speaker Change #239: And that is nothing unusual of that.

Speaker Change #239: We have seen it, for example, in Germany several times where someone really, really wants volumes.

Speaker Change #239: And our approach has traditionally been that, okay, if it's not on the sustainable level pricing, we'd rather step away from those projects and then the market will normalize.

Speaker Change #239: And I must admit, I have not seen any other trend in Europe.

Speaker Change #239: I don't see any change to the fundamental dynamics to Western European pricing until now.

Speaker Change #239: Perfect.

Speaker Change #239: And my second question is more into the U.S. You're talking about U.S. You're, nearing full capacity.

Speaker Change #239: Then looking into 25 and 26, and I guess your new plant is not coming on stream until 2027.

Speaker Change #239: So what kind of U.S.

Speaker Change #239: I was talking about U.S.

Speaker Change #239: Sorry.

Speaker Change #239: If I just finish the question, is that you have 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 really a capacity constraint that's limiting your growth in the near to medium term until the new plant comes in 2027?

Speaker Change #239: Yeah, yeah.

Speaker Change #239: So there are the normal two or three factors here on full capacity that can, be quite confusing for our business.

Speaker Change #239: Because if we don't, if we miss a few months and we are not on full capacity, we are frozen capacity, and we can never catch up back in the year.

Speaker Change #239: So what happened here was that we had some challenges with delivery time.

Speaker Change #239: So in the U.S., we didn't expect the ramp up.

Speaker Change #239: The business went down in 2022, early 2023.

Speaker Change #239: And then it step changed up, and we didn't have the shifts in place.

Speaker Change #239: We battled to get blue-collar workers in to shift up and to train them and all the rest.

Speaker Change #239: And then we sat with this more than six months backlog of orders on delivery times. During that period, we didn't increase prices. We just focused on wanting to work back lead times.

Speaker Change #239: 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 #239: So going into next year, we will counter that if we see a good next year with more seasonal stock and running more close to full the rest of the year.

Speaker Change #239: So we have more growth in the business, and that will take us through one or two years, I think.

Speaker Change #239: And then, of course, after that, we do what we normally do if we run out.

Speaker Change #239: We use capacity from other parts of the world.

Speaker Change #239: We supply the demand.

Speaker Change #239: Although we don't make a lot of money on that, our ambition, and we have done a lot of that in Europe.

Speaker Change #239: You remember last time we were up to very high utilization.

Speaker Change #239: We shipped from even Norway down to Germany.

Speaker Change #239: We use those type of means because our priority, if we have that demand, is to supply the customers.

Speaker Change #239: And here, we might get to that next year or the year after where we actually have to bring in certain grades of stonewall into the U.S., and we will be ready for that when it's needed.

Speaker Change #239: Okay.

Speaker Change #239: That's great.

Speaker Change #239: Thank you.

Speaker Change #239: Thank you for all your kind of effort.

Speaker Change #239: And I think, yeah, you've done a great job, as my colleagues have already told.

Speaker Change #239: It's kind of probably the pricing initiative we have taken in the last nine years has been simply pretty impressive, and that's what we can see with the margins.

Speaker Change #239: So, thank you very much, and good next training.

Speaker Change #239: The next question will come from Harry with the GOAD.

Speaker Change #239: Please go ahead.

Speaker Change #239: Harry, your line is open.

Speaker Change #239: Yes, hi, can you hear me?

Speaker Change #239: We can hear you.

Speaker Change #239: Yeah, okay, great.

Speaker Change #239: Yes, Harry at Barenberg I want to please.

Speaker Change #239: So firstly, just coming back on, a couple of remarks you've made on the margin, I think it may be in response to Oned's question, but just for clarity, I appreciate your point that both margins and returns of capital could move around, but were you indicating that around 15% in terms of EBIT margin is the right way to think about a sort of through cycle average margin and obviously having had a big increase this year?

Speaker Change #239: 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 #239: Thank you.

Speaker Change #239: Yeah, so I will hand over the 15% margin question to CFO Kim.

Speaker Change #239: I'll take the other one first and then, Kim will answer the average cycle margin, which I don't feel I'm the right one to answer at this moment.

Speaker Change #239: On pricing and competition, I would say that yes, it probably attracts people to the market.

Speaker Change #239: Stonewall is a great product. It has a very clear cut-out space in the market and to meet the climate goals, our insulation, among other insulation products, will be needed and obviously we think it's the best.

Speaker Change #239: So I think we can see some new entrants, but again, I don't see anything happening there quickly due to the nature of the business.

Speaker Change #239: In the last couple of years, the inflation on equipment, this near-shoring drive that has, happened in Europe and the US is just expensive and complicated to build and we have a lot of in-house engineers doing a lot of this work.

Speaker Change #239: It's not easy, so I wouldn't factor in that you will have big new entrants that come in five, six factories very quickly.

Speaker Change #239: That's not likely to happen, but sure, we're going to have new entrants.

Speaker Change #239: Normalised margin, I don't think necessarily it exists.

Speaker Change #239: Of course, in the coming few years here, in 2025 and into 2026, we have no plans to open any new factories, so there will be no major depreciation chains coming.

Speaker Change #239: That will change, of course, once we start to get the big factories open in Europe and in the US.

Zaim Beekawa: On the hedging side, we have this with the counter-cook, which is still our biggest energy source. There we can only take prices at quarter at the time. Right now, we don't have a beat for 2025. On the end, we have the market share to have fun and all we are paying, we do have an expense on the long-term contracts. For the best of the consumption on the electricity and on gas, we have covered the quarter into two next year.

Speaker Change #239: So that will definitely impact the EBIT We are working on margin improvements.

Speaker Change #239: We have told you previously about our, efforts to reduce the manning in our factories.

Speaker Change #239: That is definitely a margin possibility, but besides that, I think we just work towards having constant focus on productivity and then hopefully to maintain or improve margins.

Speaker Change #239: That's really our aim, but as I said, from 2027 onwards, there will definitely be more depreciation coming, from the planned investments that we're doing over the coming years.

Speaker Change #239: Thank you very much.

Speaker Change #239: The next question will come from Zaim Beekawa with J.P. Morgan.

Speaker Change #239: Please go ahead.

Speaker Change #239: Afternoon all.

Speaker Change #239: Just two questions for me.

Speaker Change #239: The first one is I noticed there's a slight mixed effect in the regional sales.

Speaker Change #239: Can you just remind us on the impact this has on the margins, particularly by region?

Speaker Change #239: And then secondly, on your hedging for the year and into 2025, please.

Speaker Change #239: Thank you.

Speaker Change #239: Okay.

Speaker Change #239: I'm going to leave the hedging to Kim.

Speaker Change #239: Actually, with the recent success we have had in North America, we don't have so much regional effects of the margins.

Speaker Change #239: And then Asia is still too small to impact the picture.

Speaker Change #239: It doesn't matter if they grow 20%.

Speaker Change #239: They won't impact all the numbers because they're still too small.

Speaker Change #239: So there are some effects.

Speaker Change #239: We still have more difficult markets like Poland and some other markets.

Speaker Change #239: So if that really grows a lot, it dilutes.

Speaker Change #239: But at this stage, I won't say country mixed effect is big.

Speaker Change #239: And then in the residential segment, actually, our margins per unit is a little bit higher.

Speaker Change #239: That one is low.

Speaker Change #239: On the other hand, we get this beautiful overabsorption from all the commercial heavy-density products, platforms and all of that.

Speaker Change #239: And that's also giving an effect.

Speaker Change #239: So I won't say we have any great mixed impacts at the moment. 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 #239: On the hedging side, Siemens, we have this with the Foundry Co. which is still our biggest energy source.

Jens Birgersson: That's it about now. The best year we have for most of expected consumption.

Zaim Beekawa: I have a thank you for these answers and again, best of luck on your future endeavors also. Thank you very much.

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've recovered some share in Europe. I was just wondering if you're willing to put some numbers to that. The second question is, just on the volume growth strength in H1, are there any one office 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: And I guess that these applications would probably not hit the market, or we like to realize in the second half, is there something that you have taken into account in your guidance, because I know that in France, the renovation program has been a very important driver for the local for the past.

Jens Birgersson: Klaus Sonsberg to share our view of both sides, you know, I've been staring quite hard on maintaining it. And, you know, in some countries we know a thousand, but that's not because there are associations looking at it and sometimes we don't know exactly. So the market share has remained pretty stable, and that it could have been counter-differences. And obviously in the US, where we are growing, we have a very low market share in the total market, we have a high market share with the instalment, but they still only come to the percentage point of the over-insubation market.

Jens Birgersson: We are taking market share out of the installation market, but I don't think anyone is known to think that because everyone is growing. So, so market share is stable, improving some places like a thousand others, but we are happy with the way we manage that.

Jens Birgersson: And what was certain, we don't have East Asian one else, no one else. We have some big projects, but, you know, the biggest project we ever get is like four or five million. So, we have brought some big projects, what's in that impact.

Marcus Cole: Okay, thank you very much, and that looks the future ends. Thank you.

Axel Stasse: The next question will come from Axel Stasi with MS. Please go ahead.

Jens Birgersson: Good afternoon, everyone. Thanks for taking my question. I just have one remaining. If I 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 comments on the key focus on volume growth. So, is it fair to us to you, we could see some pricing risk in the residential market when volume pick up, or did I not understand it correctly.

Speaker Change: Yeah, it's a constant for, you know, we have a good profitable business.

Jens Birgersson: 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? Yeah, yeah, sure, sure. Sorry. So, the commercial market drove a bit margin in the first half year of the year. And based on your comment on key focus on volume growth going forward, is it fair to assume that we could see some pricing risk.

Jens Birgersson: In the residential market going forward to game share. We just want to try to just suspect we mute you and we just see if we cannot. Okay. Yeah, okay, so I think the residential market at the moment is a bit for the following night. So, we, we clearly don't have an ambition in the market. If you look at the new housing stocks in Germany, it's down to even lower level than last year.

Speaker Change: And France is slightly in the negative territory in the quarter.

Speaker Change: And we have a factory in any hopes and dreams from this game.

Speaker Change: So we have a good conservative or realistic forecast. And that's included.

Speaker Change: Good.

Jens Birgersson: So, we don't have a plan, and to attack in any way and take market share. We just cut to stay in, and when the market is not low, it's better to focus on where we have some volume growth and maybe have an opportunity to just ramp up and get nice business in. 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. So we try to take care of our market share and then we hope that some stages market comes up.

Speaker Change: And just to go back to the guidance, because you were, you were wording on pricing the same as you had, you did in Q1 and Q4.

Operator: Okay, thank you very much. This concludes our question and answer session.

Speaker Change: Also, we respect, and we have sort of the usual thing about the December impact.

Speaker Change: That's also something that you typically write to rate around this time of year.

Speaker Change: Is there anything that is sort of different this time that it has been, let's say?

Speaker Change: No, no, it's very much business.

Operator: I would like to turn the conference back over to our host for today for any closing remarks. Please go ahead. Yes, yeah, yeah, from from myself and you'd like to thank very much for the call to take. I'm sorry, the line 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, we will see you next week. Thank you very much. Have a nice day. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change: It's very much business and use use of, you know, we drive a very strict pricing process in the company.

Speaker Change: We stay right to take that very serious.

Speaker Change: And there is some, there is some, in the dynamics out there that is different to another year.

Speaker Change: Of course, and we don't have the situation we had in the autumn 2022 with the hyperinflation of all this.

Speaker Change: So it's, I will say business as you were showing, and there is a slight inflation that we've been trying to go out of the race.

Speaker Change: And it's not, no, no drama around the whole thing.

Speaker Change: But then of course, you have, you know, some market, some segment of the pressure we work on all that, but it's so far so good.

Speaker Change: 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: I think you've said you won't team in the team, you said a very high, but say benchmark for the incoming CEO, so good luck to him as well.

Speaker Change: Yeah, yeah, thank you.

Speaker Change: Thank you very much Peter.

Speaker Change: We have the same team in place, I guess very strong pair of hands, thank you all for the business.

Speaker Change: So I'm very optimistic about the future.

Speaker Change: Thanks, next question.

Speaker Change: Welcome from Arnaud Lehmann with Bank of America, please go ahead.

Speaker Change: Thank you very much.

Arnaud Lehmann: My name is Arnaud Lehmann for Bank of America.

Speaker Change: My first question is, I guess, related to pricing, margin and returns staying on that topic.

Speaker Change: You indeed have 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: I appreciate there's an element of, let's say inflation in Capex and the cost of adding new plans has gone up.

Speaker Change: 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: So I guess my question is, you know, be on 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 of a time?

Speaker Change: Yeah, I would like to, I would give just a pretty flavor on that reflection on it and then came, she commented because he continues.

Speaker Change: My view on that is that we are not still, you know, we want to have 50% or about, but the biggest job is to see or what I've seen is that for me, it's not so important if it's 23% or 16% or whatever.

Speaker Change: 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: 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: So it's not a goal in itself for me to keep it to the 23, but I should let you know about the short term, the 23 or 24 closer to 24 compared to 2015 last year.

Speaker Change: But the last year was was a bit abnormally low because it that was impacted by the 22, 22 downturn in performance.

Speaker Change: So, so yes and myself will maybe not be able to present the 24% RIC short term in the short term.

Speaker Change: That's where the numbers are.

Speaker Change: Very good, thank you, thank you for that.

Speaker Change: My second question is that's okay, is regarding Russia?

Speaker Change: I mean, no change as far as I can tell in terms of the way you're thinking of about the ownership of all these assets for Rockwool.

Speaker Change: Should we expect a change with a new management in the future?

Speaker Change: I guess, maybe something, you know, we have a very, we have worked through this through in detail, my successor is stay long till 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: We haven't seen anything change, and we see the companies that take the other route, it impacts very negatively.

Speaker Change: So we see no reason to change, and there is no intention to change the strategy because of a new CEO and the company, and we are all aligned with this.

Speaker Change: Thank you very much.

Speaker Change: The next question will come from your scene, towering, with on-field investment research.

Speaker Change: Please go ahead.

Speaker Change: Yes, good afternoon, so two question on my side as well.

Speaker Change: 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: Is it fair to assume that there is no trend on pricing, or have you announced some additional pricing increase?

Speaker Change: I think in the US, there were some pricing increase, and on the volume, have you seen any improvement or deterioration versus the concoiter?

Speaker Change: And then my second question would be on the on the new entrance.

Speaker Change: Like in the non-government where margin are relatively high today, do you see a risk for new companies to enter the European or North American mineral water industry?

Speaker Change: Or do you think it's too hard?

Speaker Change: Because of a regulation, and it could take the same issue as that.

Speaker Change #100: Are you facing in France?

Speaker Change #101: Yeah, so same for us, we see some pricing pressure in the residential segment of the light wars perspective to relatively low.

Speaker Change #101: We haven't seen much of a change.

Speaker Change #102: It's around the negative, like they are up.

Speaker Change #103: Nothing dramatic, and I think we need some, I don't know, government on programs taking action to get that up.

Speaker Change #103: 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.

Speaker Change #103: So for us, it's around the zero, slightly negative.

Speaker Change #103: Nothing made it dramatic on price, and it's a bit down, but the segments we can increase the prices.

Speaker Change #103: So that's on that side, and then the price increases at some market where there is no issue whatsoever, from some of the US with just launched 8% increase.

Speaker Change #103: And that's in line with what's happening in the market on Glasswood and Stonewood, that's moving.

Speaker Change #104: 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 #105: Yeah, because it's the margin to their much higher number where ten years ago, yeah, obviously, there are people that look at Stonewood now and think, this is a fantastic business, let's enter this, you know, eight in the end of the Sunday, it's already in the rest.

Speaker Change #106: And I think having a single plant versus our quite big machine now with a lot to the economics of scale, and also considering how difficult it is to start up the plant and run it really, really productive outfit.

Speaker Change #107: I think you will see some entrance, but I must say that 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 of just one plant without brand and without the service level of all the rest.

Speaker Change #108: So I'm not, I'm not particularly worried about your interest, but yes, some people will announce new plants and we'll deal with that when that comes, but the trend in storage has been that the plants are announced and very much delayed because it's also very, very difficult to build the plants.

Speaker Change #108: You need to be very persistent to some geographies to get your plant built in today's world.

Speaker Change #108: And I think their scale is also important because we have the means and the persistence to just keep working and until we can build our plants.

Speaker Change #109: So it can be very challenging to get all the permits and you get the permits so that you're not told just whatever as it is in many industries in Europe, but the more.

Speaker Change #109: And maybe just a very last point which is just like not a question that more comment about the fact that you've developed such a great growth for the company.

Speaker Change #109: I think it's quite impressive what you've been able to do in terms of margin and productivity.

Speaker Change #109: So just wanted to wish you the best of luck for your future happen there.

Speaker Change #109: Thank you.

Speaker Change #109: Thank you very much, you see.

Speaker Change #110: And you mentioned the aspect there that that this is an important one to us that we don't talk about too much and that is that productivity that economists of scale of the business that that's an underlying big advantage of rock wall that we have in the culture and that's a strong point.

Speaker Change #110: But thank you for those words.

Speaker Change #111: The next question will come from Burgess, to Marcia with HSBC.

Speaker Change #112: Please go ahead.

Speaker Change #112: Dick.

Speaker Change #113: So I have a couple as well.

Speaker Change #114: Just on the pricing, right?

Speaker Change #115: It's interesting that you keep talking about pricing.

Speaker Change #116: Flag is in the quarter.

Speaker Change #117: But looking at Eastern Europe, Eastern Europe is up 28% in Q2.

Speaker Change #118: Given some of your competitors, not direct one, but a different segment, they talk about when the volume responds back, they see some pricing.

Speaker Change #119: I think pressure is that something is 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 #120: So any comments around that will be very helpful.

Speaker Change #121: And within that, if you could just give a little more flavor into the Western Europe, when everybody is talking about interest rate income, coming through, do you see similar risk panning out in Western Europe as well, when the volume bounds happen maybe towards the end of Q4 or maybe in 2025?

Speaker Change #121: So that's my first one.

Speaker Change #121: I'll come back in a second.

Speaker Change #122: OK, thank you, British.

Speaker Change #123: So in Eastern Europe, we have the classic country, for example, Poland, where price competition is fierce, whenever volume goes down, wherever it is down, you see the whole EPS competition, several segments.

Speaker Change #124: So there we really leave it, but then there are also some Eastern European markets where, you know, Romania, Hungary, but we don't see much of that.

Speaker Change #124: There's more Western in the dynamics, but for sure that defect is there.

Speaker Change #125: It's no secret that Poland is challenging now, but we've all balanced volume and price.

Speaker Change #125: And it's kind of school book, really, really a lot of competitors that want volume for any price.

Speaker Change #125: And we do well on the really big projects where you want really our 5 safety, you want delivery safety, you want to do logistics, those projects we still can take a bit more.

Speaker Change #125: And on the other, we need to play it a bit more by the year and then correct some after the turn.

Speaker Change #125: So that's the same practice as we have discussed many times.

Speaker Change #125: But there are also quite a few Eastern European markets that doesn't have that Polish.

Speaker Change #125: So then it went with Western Europe on the trends of the dynamics.

Speaker Change #125: I think fundamentally, Western Europe, what you see is that sometimes there could be, you know, there could be circumstances of me, so they go three, four months and you get simply too many projects.

Speaker Change #126: And then someone doesn't get enough, but then it turns into a bit of a season on panic in one of the competitors.

Speaker Change #126: And that is nothing unusual of that.

Speaker Change #126: I don't see any change to the fundamental dynamics to the Western European pricing on the market.

Speaker Change #126: Perfect.

Speaker Change #126: And a second question is more into the US.

Speaker Change #127: You're talking about US, 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 #128: So what kind of US, I was talking about US, sorry, if I just finish the question, is that you have near full capacity right now and looking into 25 and 26, what 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 time until the new plant comes in 2027.

Speaker Change #129: 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 meet a few months of, we are not the full capacity, we are frozen capacity and we can ever catch up back in the year and what happened here was that we had some challenges with delivery times.

Speaker Change #130: So in the US, we didn't expect the ramp up, the business went down in 2022 or 2023 and then it's kept 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.

Speaker Change #131: Then we sat with this more than six months back, a lot of orders on delivery times, during that period we didn't increase prices, we just focused on one thing to work back lead times and then we go off on full capacity.

Speaker Change #132: 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 #132: 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 #132: So we have more growth in the business and that protects through one or two years.

Speaker Change #133: 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 it in the bond, although we don't make a lot of money or that's our ambition.

Speaker Change #134: And we have done a lot of that in Europe, you remember last time when we were off from very high utilization, we ship from even all the way down to Germany.

Speaker Change #135: The use of stock means because our priority, if we have that demand, this because either customers in here, we might get into that next year or the year after, they actually have to bring in certain grades of stone one into the US and we would be ready for that and we'll just need that.

Speaker Change #135: Okay, that's great.

Speaker Change #135: Thank you.

Speaker Change #135: Thank you, Hans, for all your kind of effort.

Speaker Change #136: And I think, yeah, it's on a great job as my colleagues have already told that it's kind of probably 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 #137: So thank you very much and a good next training.

Speaker Change #137: Yes.

Speaker Change #138: Thank you, B.

Speaker Change #139: Ash, farewell.

Speaker Change #139: Thanks.

Speaker Change #140: The next question will come from Harry, with the Goad.

Speaker Change #141: Please go ahead.

Speaker Change #141: Harry, your line is open.

Speaker Change #142: Yes, hi, can you hear me?

Speaker Change #143: Yeah, we can hear you.

Speaker Change #144: Yeah, okay, great.

Speaker Change #144: Yes, Harry, Barry Mugger wants to please.

Speaker Change #145: So firstly, just coming back on a couple of remarks you've made on the margin, I think it may be in response to all those questions, but just for clarity, I appreciate your point that both margins and returns of capital could move around.

Speaker Change #146: But were you indicating that around 15% in terms of edit margin is the right way to think about us sort of through cycle average margin and obviously obviously having had a big increase this year.

Speaker Change #147: 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 details insulation products.

Speaker Change #147: Thank you.

Speaker Change #148: Yeah, so I will hand over to 50% margin question to see if all came and take the other one person and came along so the average cycle margin, but don't feel I'm the right one to answer at this moment.

Speaker Change #149: On pricing and competition, I would say that yes, it probably attracts people through the market, stonewall is a great product.

Speaker Change #150: It has a very clear cutout space in the market to meet the climate goals, our installation among other installation possibly be needed and obviously we think is the best.

Speaker Change #150: 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 #150: And in the last couple of years, inflation on equipment, this mere showing drive that has happened in Europe and the US is just expensive and complicated to build.

Speaker Change #151: And there is some we have a lot of in house engineers during a lot of this work, it's not easy, so I wouldn't factory that you will have big new entrance that come in five six factories very quickly that's not likely to happen, but sure we're going to have new entrance.

Speaker Change #152: And normally, a margin, I don't think necessarily it exists across 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 sort of negotiation change coming that will change.

Speaker Change #153: Of course, once we start to get the big factories open in Europe and in the US.

Speaker Change #153: So that will definitely impact the EBIT.

Speaker Change #154: We are working on on margin improvements, we have told you previous about our efforts to reduce the manning in our factory, that is definitely a margin possibility, but the size that I think we just worked what, you know, having, having constant focus on productivity and then hopefully to to maintain or improve margins, that's really our aim.

Speaker Change #154: But I said from 47 onwards, there will definitely be more depreciation coming from the planned investments that we do in over the coming years.

Speaker Change #154: Thank you very much.

Speaker Change #155: The next question will come from Zaim Beekawa with J.P.

Speaker Change #155: Morgan.

Speaker Change #155: Please go ahead.

Speaker Change #156: Then Asia is still too small to impact the picture.

Speaker Change #157: It doesn't matter if they grow 20%.

Speaker Change #158: They want to impact all of our numbers because they are still too small.

Speaker Change #158: There are some effects.

Speaker Change #158: We still have more difficult markets like Poland and some other markets.

Speaker Change #158: If that really grows a lot, it does.

Speaker Change #158: All the commercial heavy density products, that are also given effect.

Speaker Change #159: I won't say we have any great mixed 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, black food products, would have diluted the margins a bit because that margin on the paper is slightly lower, but with the absorption is fine.

Speaker Change #159: On the hedging side, we have this with the counter-cook, which is still our biggest energy source.

Speaker Change #159: There we can only take prices at quarter at the time.

Speaker Change #159: Right now, we don't have a beat for 2025.

Speaker Change #160: On the end, we have the market share to have fun and all we are paying, we do have an expense on the long-term contracts.

Speaker Change #161: For the best of the consumption on the electricity and on gas, we have covered the quarter into two next year.

Speaker Change #161: That's it about now.

Speaker Change #161: The best year we have for most of expected consumption.

Speaker Change #161: I have a thank you for these answers and again, best of luck on your future endeavors also.

Speaker Change #161: Thank you very much.

Speaker Change #161: The next question will come from Marcus Cole with UBS.

Speaker Change #162: Please go ahead.

Speaker Change #162: Hi, Marcus Cole from UBS.

Speaker Change #163: I've got two questions as well.

Speaker Change #164: I was reading in a statement that you've recovered some share in Europe.

Speaker Change #165: I was just wondering if you're willing to put some numbers to that.

Speaker Change #166: The second question is, just on the volume growth strength in H1, are there any one office 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 #166: Klaus Sonsberg to share our view of both sides, you know, I've been staring quite hard on maintaining it.

Speaker Change #167: And, you know, in some countries we know a thousand, but that's not because there are associations looking at it and sometimes we don't know exactly.

Speaker Change #168: So the market share has remained pretty stable, and that it could have been counter-differences.

Speaker Change #169: And obviously in the US, where we are growing, we have a very low market share in the total market, we have a high market share with the instalment, but they still only come to the percentage point of the over-insubation market.

Speaker Change #169: We are taking market share out of the installation market, but I don't think anyone is known to think that because everyone is growing.

Speaker Change #169: So, so market share is stable, improving some places like a thousand others, but we are happy with the way we manage that.

Speaker Change #169: And what was certain, we don't have East Asian one else, no one else.

Speaker Change #169: We have some big projects, but, you know, the biggest project we ever get is like four or five million.

Speaker Change #169: So, we have brought some big projects, what's in that impact.

Speaker Change #169: Okay, thank you very much, and that looks the future ends.

Speaker Change #169: Thank you.

Speaker Change #169: The next question will come from Axel Stasi with MS.

Axel Stasi: Please go ahead.

Speaker Change #171: Good afternoon, everyone.

Speaker Change #172: Thanks for taking my question.

Speaker Change #173: I just have one remaining.

Speaker Change #174: If I understood correctly, the commercial market drove a bit margin in the first half year.

Speaker Change #174: So, how should we look at pricing in the residential market going forward?

Speaker Change #174: And I'm asking this question specifically based on your comments on the key focus on volume growth.

Speaker Change #175: So, is it fair to us to you, we could see some pricing risk in the residential market when volume pick up, or did I not understand it correctly.

Speaker Change #175: Thank you.

Speaker Change #176: We unfortunately have a very disturbance on the lines, so we could not hear that question.

Speaker Change #177: Could you maybe just repeat one more time if it's very short?

Speaker Change #177: Yeah, yeah, sure, sure.

Speaker Change #177: Sorry.

Speaker Change #177: So, the commercial market drove a bit margin in the first half year of the year.

Speaker Change #178: And based on your comment on key focus on volume growth going forward, is it fair to assume that we could see some pricing risk.

Speaker Change #179: In the residential market going forward to game share.

Speaker Change #180: We just want to try to just suspect we mute you and we just see if we cannot.

Speaker Change #180: Okay.

Speaker Change #181: Yeah, okay, so I think the residential market at the moment is a bit for the following night.

Speaker Change #182: So, we, we clearly don't have an ambition in the market.

Speaker Change #182: If you look at the new housing stocks in Germany, it's down to even lower level than last year.

Speaker Change #182: So, we don't have a plan, and to attack in any way and take market share.

Speaker Change #182: We just cut to stay in, and when the market is not low, it's better to focus on where we have some volume growth and maybe have an opportunity to just ramp up and get nice business in.

Speaker Change #183: 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.

Speaker Change #184: So we try to take care of our market share and then we hope that some stages market comes up.

Speaker Change #184: Okay, thank you very much.

Speaker Change #184: This concludes our question and answer session.

Speaker Change #185: I would like to turn the conference back over to our host for today for any closing remarks.

Speaker Change #185: Please go ahead.

Speaker Change #185: Yes, yeah, yeah, from from myself and you'd like to thank very much for the call to take.

Speaker Change #186: I'm sorry, the line broke up a bit here at the end.

Speaker Change #187: If you have questions afterwards, of course, you're welcome to give me a call.

Speaker Change #187: And for some of you, we will see you next week.

Speaker Change #187: Thank you very much.

Speaker Change #187: Have a nice day.

Speaker Change #188: The conference is now concluded.

Speaker Change #188: Thank you for attending today's presentation.

Speaker Change #188: You may now disconnect.

Q2 2024 Rockwool AS Earnings Call

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