Q3 2025 Holcim AG Trading Update Call

Ladies and gentlemen, welcome to the whole team Q3, 2025 trading update analyst and Investor Conference call and live webcast I am Sandra the chorus call operator.

We'd like to remind you that all participants are in listen only mode and the conference is being recorded.

The presentation will be followed by a Q&A session.

You can register for questions at any time by pressing star and one on your telephone or on the beautiful HD web phone keypad on your screen West Coast U S may submit their questions in writing by the relative field.

For operator assistance, Please press star and zero.

The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to bend from Remy.

Group head of Investor Relations. Please go ahead Sir.

Thank you Andre and good morning, everyone I'm pleased to be here with our CEO of <unk> and our CFO Stephane Kinder, Dave will provide an update on our strong nine months 25 results after which they will provide an update on our strategy and finally, obviously they will give an outlook for the call.

Over to you with this virus sort of introduction I direct you hand, it over 2 million new dump Keith Thank you Ben.

Good morning to all of you and I would welcome to hold seems third quarter results.

<unk> and I are pleased to be presenting all earnings to you today and of course, there will be a time afterwards for your questions.

Yeah.

We delivered strong profitable growth in the first nine months of 2025 highlights that you can see include.

Accelerating net sales growth in Q3 of almost 5% all saw strong over proportional recurring EBIT growth across all of our regions.

And the industry, leading margin above 19%.

Arjun expansion was driven by all high value strategy. This includes scaling up how sustainable offering and accelerating the carbonization and circle of construction to drive profitable growth.

Earlier this week, we announced that holds them signed a binding agreement to acquire <unk> Zeller.

Peer leader in sustainable and innovative walling systems.

The acquisition is a milestone in our vision to be the leading part for sustainable construction and it will all suck salaried the expansion of fall high value building solutions segment in line with our strategy.

With <unk>, we have a growth platform in the highly attractive 12 billion Euro walling market and I will talk more about this slate strong.

Elsewhere, we have continued our disciplined execution of value accretive M&A.

Since the start of the year, we have closed a further 14 transactions focused on the most attractive markets.

With these strong results, we are confirming our full year guidance for 'twenty 'twenty five I'll talk about the guidance in full at the end of this presentation.

Okay.

Turning to the regional highlights now Europe continues to deliver strong margin expansion driven by our high value strategy, our sustainable offering as well as the carbonization and circle of construction.

Demand for sustainable offering is expected to drive continued earnings momentum and here in Switzerland.

Lighthouse market for innovation waiver introduced the world's first circle US cement, we have just launched echo planet with Echo cycle cement with at least 10, 200% of recycled construction and demolition materials inside.

In Europe more broadly the residential market is showing signs of recovery and we also have a robust project pipeline.

In Latam, we deliver double digit net sales growth for the first nine months with recurring EBIT margin above 30%. We have also completed three value accretive acquisitions in Mexico, Peru, and Argentina since the <unk>.

<unk> of the year.

These acquisitions will help us further accelerate the expansion of the sensor the largest construction material retail franchise in the region.

The sensor is growing strongly and we have opened around 290 additional defense of stores in the first nine months.

We expect the strong performance they let them to continue with Central America, and recently acquired businesses driving growth in Mexico. There is a very strong pipeline of infrastructure projects to accelerate growth from 'twenty 'twenty six.

Asia Middle East and Africa delivered a double digit increase in recurring EBIT and outstanding margin expansion of 200 basis points. We saw a strong demand in north Patrick came in Australia, where our joint venture business cement.

<unk> also recently closed the acquisition of a division of BGC.

Further out there is a positive outlook in Australia, and we do expect the strong demand in North Africa to continue this share and also in the years to come.

With that I would like to hand, it over to Stefan to talk through the financials in more detail Stephane.

Thank you a million and a warm welcome to all of you also from my side, it's a pleasure to be with you today for nine months trading update.

Looking first at the net sales bridge you can see that organic growth was the main contributor.

The contribution from acquisitions exceeded the impact of divestments for a total of 2.9% rise in local currency, excluding large M&A. This keeps us nicely within the reach of our full year guidance.

The foreign exchange effect on sales was negative 600 million Swiss francs or 5%.

In the first nine months, we delivered nine 8% growth in recurring EBIT in local currency again, excluding large M&A.

With this performance we are still at the upper end of our full year guidance.

Despite FX headwinds of $160 million or above 7%, you managed to grow absolute EBIT and Swiss shrinks by almost 2%.

Now, let's look at the progression of our recurring EBIT and recurring EBIT margin on a rolling 12 months basis.

This graph shows that we have consistently expanded both a 12 month record 12 months rolling recurring EBIT margin and a rolling recurring EBIT now well above $2 8 billion Swiss francs.

As many of them said earlier this is driven by our high value strategy from scaling up advanced sustainable offering accelerating decarbonization and circularity initiatives to a value accretive M&A with focus on the most attractive markets and are empowered leadership with a strong performance culture.

We saw strong recurring EBIT contributions from all the regions more than 1 billion Swiss francs in Europe, and more than 700 million in each of Latam and EMEA.

Sales growth was double digit in Latin America, and we've maintained recurring EBIT margin of above 30%.

One quick comment on our Chris the Q3 margin in Latam on the efficiency side, we had some phasing of maintenance shutdown in Mexico by three plants, so almost half of our plans in the country.

It should be graded comparatively higher maintenance cost and an impact on inventory movement.

Timing has been good as we believe as we can now transition into the next phase of infrastructure projects with two large rail projects just starting it.

There are also some scope effects connected with the integration of our most regent acquisitions in Peru, and Guatemala that impacted the Q3 margins. We expect the margin in Latam to be above 30% again in Q4 and for the full year.

In Asia Middle East and Africa, there was a double digit recurring growth in EBIT at 14, 7%.

And especially strong Q3, and North African markets and Australia was also strong showing the benefits of our regional diversification playing out.

And with that short update I am pleased to hand, it to you back over a million.

Thank you. Thank you Stefan so.

To return to our Big news from the start of this week the acquisition of seller.

Let's walk through the rationale for Stifel.

I said this is a growth platform in the highly attractive European walling market and a business that the board has a scale in terms of topline and that is also high performing with margin off around 20%.

It brings us sustainable and energy efficient solutions powered by premium brands that are actually a great fit with hold seems portfolio with more than 900 salespeople dedicated to provide commercial support to the customers and also high values.

Efficacious Selic.

It also accelerates the expansion of the Hull seems high value building solution, which is in line with Nexgen growth 2030.

The financial saw very attractive transaction is priced at six nine times EV EBITDA multiple after synergies of approximately $60 million in year. Three it is also EPS and free cash flow accretive in year, one and ROIC accretive.

Q3.

Here you can see that exact law gives us a new capabilities in markets, where we are largely old red the present, which is beneficial in terms of vertical integration.

There has been a significant investment being zealous production facility in the recent years, making them truly state of the art.

And it's sustainable offering is powered by the premium brands you see listed here.

As noted this is absolutely not in line with our strategy.

<unk> talked about points one to three in the previous slides, but full full performance culture and value creation. It is also worth noting that <unk> is a pioneer in digitally supported construction and smile design tools and processes with its platforms.

Sprint and building companion.

Okay.

Aside the.

From the zelle off for Nexgen growth 2030, as a whole we are delivering superior performance and margin expansion focused on five drivers. Firstly, we are scaling up how sustainable offering powered by premium brands from Echo planet.

Our co pack to Echo cycle, we are accelerating initiatives for the carbonization and circle of construction, which is driving profitable growth a key part of our next Gen growth 2030 is expanding high value building solution and with.

How impeccable track record of value accretive M&A to focus on the most attractive markets.

And all of this is driven by our deeply embedded performance culture.

Let's look more closely at some of these drivers.

Okay.

Customer demand for our premium brands, our co pack and that complain that continues to grow.

These products are being used at the scale in large scale projects like Metro line in Colombia, which is actually build with echo packed inside and no tickled base in France build debate Echo planet that is even more sustainable do it do it skews.

Calcined clay instead of more energy intensive clinker.

We are also seeing a strong growth in echo's cycle, a circle of technology that is being used to recycle construction demolition material and put it back into our products. Our recent large scale projects using a co packed and echo cycle was.

These secondary school in Germany, which you can see on this slide.

Next M&A well, we have closed 14 value accretive transactions since the start of the year with five to strengthen in building materials and seven in high value building solution. We also closed the divestment of our Nigerian business in.

Sold Cariballo cement manufacturing in Iraq.

Now about our outlook.

Well with these strong results, we are confirming our full year 'twenty 25 guidance with the following net sales and recurring EBIT growth in line with Nextgen grow 2030 targets, 3% to 5% net sales growth in local currency, 6% to 10% recurring.

Gabe it growth in local currency.

Recurring EBIT margin of above 18% free cash flow before lease is off around $2 billion, and we will continue to grow and recycled of construction and demolition materials more than 20%.

We'll now turn to the questions band. Please open up the line.

Andre can you please repeat the instructions for the Q&A. Thank you.

We will now begin the question and answer session.

The one who wishes to ask a question May press star and one on their telephone or on the reaffirmed HD weapon keypad on your screen.

You will hear attuned to confirm that you have entered the queue.

If you wish to remove yourself from the question queue, you May press star into webcast.

You may submit their questions in writing by the relative field.

Anyone with a question maybe this time line at this time.

Andre the fastest one this morning was that comes back from Barclays. Good morning, its outcome.

Hi, good morning, Thanks, very much for taking our questions.

Maybe two for me. Please just the first one.

Look it's a little early but I think the big question from everyone is going to be into 2026 could you maybe give us any early color around pricing strategy, how kind of expectations around EPS changes fits into that especially in Europe.

And then the second one just on Latin America.

You mentioned I guess Stefan that you already expect Latam margins back above 30% from Q4 of those a bit of weakness in Peru, Guatemala could you, maybe just give us a little bit more color into what drove a little bit of the margin compression. This quarter. What gives you confidence that that already picks up next quarter. I mean is that more sort of market recovery is that cost control is not a kind of.

Integration of M&A.

Any color that would be very interesting. Thank you.

Good morning, Tom Thank you for joining and of course. Thank you for your question. So I think Cabo start with the pricing and then a.

Stefan will add a few points on Latam regarding pricing, Tom you said it yourself, it's bit too early but where do we stand today I would expect strong pricing momentum in 2026.

We are seeing a significant changes on EU ETS front are kicking in in January next year and automatically this will open opportunities for healthy momentum on the pricing front.

Outside Europe, I think class sulfide the indications are good obviously in the.

Markets, where we will have a high inflation, we will be aiming for double digit price increases, but so far so good I'm not expecting any major setbacks when it comes to pricing momentum in 2026 on the Latam front time I might start.

Obviously in the Stefan already mentioned that yes, we have seen a slightly lower EBIT in Q3, but I'm very optimistic about the full year and also next year maybe.

Maybe just from my side comment we have seen some delays on these projects in Mexico. However, just this week and last week, we have managed to secure the first tranche of these big projects. There is Mexico city to quit title. It's a train a rail project approximately.

200 kilometers and the other one that.

Goes from Mexico City airport to by Chilcot approximately hundred kilometers. So just the message from my side here. It is.

Coming it's probably has been delayed for a couple of months, but we are seeing at least the first by all of these projects coming through Stephane you exactly Hey, Tom. Good morning also from my side. So to your question look as a million just said we had a great run of infrastructure projects in <unk>.

Mexico, and we're now preparing for the next wave of infrastructure projects. This was a good time to take some of our factories into maintenance. So actually we took three of our seven factories in Mexico into maintenance, which had impacts on the cost and had impacts on the stock level variations.

This was one driver for Q3, and then a driver also that we had with the two larger acquisitions with Guatemala in Peru. This is very common in our company when we acquire when we acquire new companies, we bring them up to a wholesome standards in terms of health and safety in terms of accounting in terms of compliance. So this is some startup cost.

Which is of course part of our business plans. This business perform according to the plan, but absolutely satisfied with that but these startup costs are always part of our of our expectations and this is what hit Q3.

This is why and again together with millions of millions just described quite a quite confident that Q4 will be above 30% in absolutely confident that the full year, but also be above 30%. So high level of confidence that this was a Q3 limited.

Short trough.

Okay.

And I guess, maybe just very briefly follow up the sort of startup costs.

Maybe that that sort of integration happens over several quarters, but the big Delta I guess is factories coming back online after maintenance and projects will be starting in Mexico for Q4.

And you wouldn't rule out further margin progression into 26 as those.

The acquisition integration complete.

Complete absolutely you nailed it I would I could not I couldn't add anything to it inspires them to synergies plus the synergies yet.

Okay got it thank.

Thank you.

Alright. Thank you Tom the next one on the line is Ullianna oddly enough from UBS good morning Julien.

Yeah. Good morning, guys. Thanks, very much so to get two questions for me. Please the first one is on the EMEA segment. So it seems like pro forma excluding Nigeria.

EMEA accelerated on a like for like basis in terms of EBITDA growth in Q3 versus the first half if my if my math is right. We know of course, North Africa has been quite strong for some time, but would you agree with that characterization am I reading that right.

That earnings accelerating in Q3, and if so what or which countries are driving that and then and then secondly.

On the.

On the on the German pricing or the European pricing point.

Zinc a big debate amongst investors right now is.

Of course, the timing of.

Of all these regulatory steps and specifically the publication of the benchmark and.

I'm just wondering is it is there any risk you see or could you help us in thinking about.

The the relationship of the timing of the benchmark if that if that happens rather in Q1, it's at some point rather than before the end of the year would that would that have any impact on kind of annual price discussions do you think like like a delay or something like that how should we think about that thank you.

Good morning, Julian and thank you for joining and thank you for your question, Yes, I'll start on the pricing Mia and then maybe if you would like to add Stefan physical points in EMEA. So on the pricing, yes, we we need to know what's the benchmark. It will be published probably I was hoping and of the.

Sure, but it looks like it's going to be in Q1 mixed shape for us it won't make any difference we will may call assumptions Accordingly, and then Julien if you recall our pricing for full year. It takes effect from January to April so depending on the contract obligations.

So we have with the customers it will happen in the few steps and we also have a room for dynamic pricing, which we have executed four years successfully especially in Europe. So I would not expect any delays it will take its natural course of course, Oh, we would pre.

<unk> to have these benchmark published earlier than later, but we will deal with it on the EMEA side I'll start and then Stephane can add north.

North Africa momentum is really strong I had the opportunity to visit to Algeria, just recently.

And then I had the exposure to biggest country for years I have never seen such activity on the construction side and we are seeing similar trends in all our big markets, Egypt, and Morocco also Australia. If you recall I did say at the last call Australia was softer in.

Q1, it started recovering slightly in Q2, but the momentum now is on a very good level and then I think.

EMEA momentum will continue and it will be driven by North Africa, what is with all these huge investments on the infrastructure side, but also on residential plus countries like Australia, and so they will contribute to over proportional growth, it's definitely and thanks, that's really not.

Much to add to what you said, maybe it maybe just one small comment that's Australia develop positive momentum again and also in the Philippines, we've reached a bit of a new plateau in terms of performance as well as a straight line, but we had a good good reset in the third quarter, there as well so the whole region seems to be doing very well and I want to echo what.

<unk> said and we also expect a strong fourth quarter just keep in mind, our Nigeria also performed well in the third quarter with just now divested, but there'll be the region will continue to perform very very well.

Thank you both very much that's incredibly helpful. Thank you.

Perfect. Thank you Julian the next one on the line is the Bernhardt of Martin <unk> from Goldman Sachs. Good morning, Ben.

Yeah.

Good morning, Thanks million Stefan and Bert Thanks for the question this morning.

Trey place.

My first is on the European Clinker asset base I Wonder you know we've seen some of the P is closed assets in last few years in and talk to kind of an outlook of closures as well is this likely to be the same fuel business in 2026.

The second one was just on carbon capture a nice that it wasn't too much of a focus in the presentation today.

Could you give us an update on the timelines of the seven plants in Europe.

<unk> received.

<unk> fund.

Funding for.

Are they likely to still become operational in 2007 and 28.

And then finally would just be on price costs, Stephanie would you be able to talk to the price cost dynamic spud by region for the last quarter. Thank you.

Good morning, Ben Thank you for joining thank you for the question I'll start and then I'll hand, it over to Stephane on the.

Basically the question. The first question was on the footprint, we did optimize our footprint already in 2021 'twenty two with some some modifications. If you are asking me what do I expect the next two to three years.

I do see some of our existing plants that are currently producing clinker. They will be converted to produce something else. These are usually small to mid sized plants in selective locations and what they will be producing probably calcined clay we see this shift.

Will happen in the next few years.

On C C U S. A so Ben you know that we do have seven projects in Europe. These projects are partially funded by EU innovation Fund, we talk approximately close to a billion funding. They are progressing our commitment is actually 2030 I just came back.

Back last night from Belgium, where I was there with the board to revisit the Gulf War zero or one off fall lighthouse plants in Belgium that will be also carbon capture the first phase of the project has already started we are building new state.

Of the art plant debt.

That will be even without carbon capture the best in class. The most efficient on the cost side, but also on the C. O two footprint and we expect commissioning early in H, one 'twenty 'twenty seven once the plant is commissioned we will move to the next phase which is.

C. C. S. On this particular plant we got around 230 million euros are to support the second phase of the car.

Carbon capture so I expect that they could.

Could be some delays, but I'm not talking about years I'm talking about months, because we know what has to be done in our plants, but you need to think about the whole value chain, we need to have transport in place we need to have ports in place and of course, you need to have a sink storage in <unk>.

So this is work in progress.

At the same time.

Execution of these projects includes a collaboration with different parties we are.

Dealing with told the relevant stakeholders in the whole value chain.

These have been.

20%.

Price over questions, because hey, good morning, Ben.

Welcome to the group.

Look price over cost has been positive across all across all regions I would say the leading regions, our Europe and Middle East Africa, It's driven by pricing still very positive price across the board, but it's also very much driven by all the initiatives, we do on our structure and on a cost side from supply chain.

<unk> cost, where we now work with AI tools to optimize our forecasting two maintenance, where we again use AI towards to predictive maintenance just shows very very nice progress on the cost we.

We are we'd be told you before that after the spinoff, we slowly look to reduce our headquarter structures, which we're making very good progress on so all of these things on the cost side. All the actions. We do they also contribute very much to a positive price over cost and as you know at Hudson, We don't announce large cost saving programs and don't give.

Names, we do this every day for US this is a continuous activity to increase the prices and to watch the cost base. So I'm.

Positive price over cost in every region. This is this is a key for US also in every review, we do with our businesses.

Excellent thanks very much.

Thank you so much spend for your questions for the next one of the line is a push out of any golf from Bernstein. Good morning portal Arena.

Yeah.

Hi, good morning, and thanks for taking my questions.

I'm going back to the topic of the Latin American margins.

So thinking about it slightly on the medium to long term.

We are seeing you move slightly away from just selling some Indian banks to anymore.

Integrated approach with higher proportion of building solutions in the mix. So in that context, how do you expect the margins and also the returns to invoice in Latam.

And my second question is on on pricing again, but specifically on some of the regions, where you've struggled with pricing for example, Germany.

So we've heard from you as well as some of your smaller peers that you've already started talking to your customers in India.

In terms of raising prices next year.

What are you seeing on the ground and and.

Basically what are the expectations for pricing in difficult markets like Germany, but also if there are other such markets in our 2026.

Good morning, <unk>. Thank you for the question and thank you for joining us on a long time.

Yes, we will be moving more into the building solution.

At the end you have to think about the whole margin with the full vertical integration we've on a scale up.

Building solutions, yes margins and building solutions are slightly lower than in the building.

Materials, but looking at the whole picture, we are still seeing a potential for of course for margin expansion. Our commitment for long term remains the same our margins have to be above 30% and two we will continue at the same time to invest in building solutions.

They are organic and a key driver of expansion in lockdown will be the sensor, which is the largest franchise construction retail network that will help us maintain our market share increase our penetration into the markets and also maintain a V.

Very very healthy EBIT margins across a lot of them.

If you recall at our Nextgen grow its strategy in March we said, we have 200 of.

Of these shops around the whole Latin America. Our goal is to reach 5000. These shifts so far we have added approximately 300 and we believe this trend will continue to accelerate.

On the pricing.

Maybe if you want to add anything on the pricing, yes, Germany. This share it was oh the market the pricing momentum wasn't great but for us once again pricing is one aspect, but all initiatives our value over volume strategy D. C is what's driving.

Significantly margin expansion in Europe, and Pooch Arena. If you saw that expansion margin expansion in Europe. This year year to date was 130 basis points and this is our focus on a sustainable offering our premium brand our investments in the carbonization and serve.

Collect construction and of course M&A value accretive M&A strategy, where we are investing in the most attractive markets and most attractive business segments.

I believe as I said previously pricing momentum in Europe. So far is looking promising.

It will kick off in January probably by April we will have the full picture I just spent the last two weeks so far.

Conducting a comprehensive strategy reviews with the countries. It's part of our mid term planning cycle and what I have seen is positive.

Okay. Thank you.

Thank you put Verine Your trust again, Latin America or the expansion of the designs are stores from 2000, beginning of the year to about 5000. Obviously this is a very strong driver of our business in Latin America.

The next question comes from Luis Prieto from Kepler Chevron Good morning Louise.

Good morning. Thank.

Thank you for taking my questions a couple of them should.

Should we consider this as a platform to which you will synergistically add new small businesses or should we expect all the sizable M&A to achieve critical mass in the solutions space.

And my second question.

Goes back to your example of the use of sustainable products in Colombia in.

In the absence of meaningful environmental motivations, what explains the client choosing them over your regular offering again in the particular case of Colombia. Thank you.

Good morning, Louis Thank you for joining and thank you for the question on <unk> satellite Yes. Louis This is exactly and I think this slide is showing that you can see the slide for US. This is a new growth platform a platform that is highly attractive and also very profitable and you.

Would expect expansion in this sector expansion either through M&A or even organically, we see a great potential away halt team has a very strong position to actually expand in the MA X L. A is not producing so they could be.

Expansion will be a mix of organic growth and also a value accretive M&A deals on the on Colombia. So.

Latam has embarked on the journey for sustainable up offering early in the piece.

We are not getting significant premiums on these products in Colombia for instance, Louis don't get me wrong, we talk about modest pricing premiums, but these products. They also with these products we are able to reduce the cost because we are replacing a very expensive.

Raw materials with the cheaper more environmentally friendly options and this is what is driving the margin margin increase in Latam. We are also talking to all the different stakeholders highlighting the advantages of our solutions from the from the mechanical and.

Physical properties, but also on the sustainability footprint and we are managing to achieve the great penetration.

So look for that.

Yeah.

Perfect. Thank you so much Lewis. The next question is from the line of Cedar <unk> from Morgan Stanley Good morning, Peter.

Good morning, Thanks, very much two questions on Zyla.

The margins of the business have been under pressure and the business is exposed to residential engine as an end market in Europe. So I think we can understand why why that might be.

But I think there has been some debate in the market since the acquisition around the quality of the assets and whether your ambition for the 2026 EBITDA of that business is credible and plausible. So I'd just like to hear your sort of a battle to some of the most skeptical views out there.

That is not a good asset and maybe you could tell US why you think it is.

And then secondly on consolidation in Europe and.

In the last quarter, you spoke about maybe being the potential for some heavy side assets to be consolidated in Europe. I don't know if you could give us an update on our position there. Thank you.

Good morning, Cesar. Thank you for joining and thank you for your question.

Regarding sell us assets. So we did the conducted a very comprehensive due diligence, which was not totally desk due diligence in fact, we spend a lot of time in the field visiting plants, including myself I had to approach.

<unk> to see some plants our technical people are they had that chance to do a comprehensive onsite due diligence on all the key zelle assets from what we have seen and what we have concluded that they really have a very strong production.

Efficiencies already in place they did the some sort of a footprint optimization in the last.

Two or three years and at the same time, they invested heavily in the production facilities, where they want to stay and expand and we have seen high level of automation, we have seen a very efficient production cycles, we have seen that even V.

Good logistics sufficiency, how they're servicing their clients. So all in all I believe one of the greatest assets of this company are actually the.

Production assets. So we were very very pleased with that so on the on the <unk> side. So I did say so basically we talk about these huge bowling market, we talk about 12 billion and this market is growing.

And this market is profitable and.

It is expected to reach 16 plus billion by 2030. So what is driving this first of all there is a significant shortage in housing across the Europe, we talk about deficit of around 10 million homes, we are already seeing recovery and some will fall.

Our main market because as you know see the wholesale east present towards in the residential sector. This will drive growth. In addition to this we are seeing a strong a very strong momentum in repair and refurbishment for instance are 80% of the buildings the way we live and operate.

Today will exist in the next 2030 years, so we need to ensure they are suitable for use so a repair and refurbishment momentum will continue to grow and what's very important that the EU regulations will mandate energy efficient repair and refurbish.

<unk> and Gazelle us product range product offering is best positioned to capture this in a long term. So when it comes to the financial performance of the company I am not worried I am very excited that we closed this transaction that we can.

Start accelerating synergies such as so we talk about 60 million euros in year, three I believe that the potential.

Potential is even higher after that from the cost synergies old device to the commercial synergies in the presentation. We have given example of one of the projects. This project has been completed they do have we have supplied our co pack.

We have supplied zinc carew, all green roofing system and Zeller has supplied they sustainable bowling system and this is what time talking about this potential for the cross synergies from a specification sell early and also vertical integration.

In addition to that I believe really very good assets Zeller has 900 commercial people out of this 900 200 are purely dedicated to specification selling so these people. They they day everyday job is to go.

And talk to architects Engineers project managers builders are key on Earth to specify exactly products. Once we close the this very exciting acquisitions, they will be specifying called simpler products. This will accelerate those synergies on the commercial side.

Consolidation.

It started that I mean, I mentioned it several times, we did we did buy some assets already grinding stations terminals sports and I honestly believe we will see some.

Consolidation already starting in 'twenty six and this will be simply driven by the the whole EU U E. P. S phase four C bench and so on so if you're asking me, yes, depending on the market depending on the financials wholesale will be happy to participate.

This.

Perfect. Thank you so much SEDAR.

Now we've got two questions from Jon Bell from Deutsche Bank. He sent also there two questions first one.

Can you tell us how long have you been looking at seller.

How competitive was the process.

It was the Genesis of the deal. That's the first question. The second question regarding currency movements are that's a one question for you with stuff and currency movements, such as the weakness of the Euro will they have a positive impact on your year end net debt figure of 25.

Why don't you start yeah makes sense okay.

Okay Ah Hey, John Thanks for your question. So we guided our net financial debt of $4 1 billion at the year end with a debt leverage.

Of 1.1 or below.

The currency headwinds currently with about seven seven above 7% on EBIT or not a detriment to achieving any of our financial Kpis that include ethics free cash flow EPS be maintained guidance and we were able to deal with that on the on the net.

Financial debt basis, we now completed the the deal for for Nigeria, We received the cash so I would say the last guidance on net financial debt is probably conservative at this point of time, we're probably going to be right around 4 billion, depending on how free cash flow patterns.

Maybe even a little bit below.

Thank you John for the question look up we've known Zeller for Forever.

When we are supplying our big projects, we I personally like to visit construction sites. When I go on the construction side I do see a zealous products.

It's a very powerful brand name.

In most of our key markets have from Romania, Poland to Germany, Belgium, even here in Switzerland, We do have a zealous our construction sites will in fact around the head office.

For us we knew the company in some markets actually we have been supplying our products towards Ela for four years now.

It was the lateral process due diligence lasted for a few months I think we did spend time appropriate time energy and resources to conduct comprehensive.

Due diligence if you had a chance to hear see Theres question for US. It was very important that we understand the asset base that we understand their commercial approach to the market and this has taken a few months, but it was one on one discussion for the past several months and yes very happy that.

After due diligence we have managed to sign this deal.

This week.

Perfect and the next question comes from the line of Allo, the role of JP Morgan Good morning already.

Hi, good morning to my remaining questions would be just avoided on Nigeria I was wondering if you could give us how much did <unk> contribute to organic growth in Q3 and kind of living in a beep and al If you wanted to do that but would there.

Like for like watching T three excluding and Nigeria.

So that's my first question taken on do they lap.

It seems like the DNA is quite high and which is bringing EBIT margin down closer to the 12% Mark though is that the quaint now at any point and what is riding the tide Yenan, how should we think about EBIT margin going forward and then and it would be different housekeeping that corporate line and my next question broadly.

<unk> hundred median of quota it seems to me that the right number.

Going forward now.

I think most of these questions are for you.

For Saturday to Tonight today, you are not asking me anything.

So why don't you start maybe on Nigeria, Jeffrey Fine sorry.

It's a reality.

So on Nigeria, So just for the.

It was the consolidated end of August So September of us completely out on exact law DNA just I just I'm very happy what I saw when it comes to the investments into maintenance into the operational efficiency and obviously that was the main driver behind DNA.

I expect a significant margin improvement that will come from a recovery of the market, but also that will come from all highly attractive synergies that we committed in the plant I'll stop here and I'll hand, it over to Stephane, Yeah look at Nigeria, and it was about a third of the growth.

In EMEA, but also remember please that the negative ethics is also driven by Nigeria deny or depreciated by 20%. What's very important is looking forward Amy Ah the region will continue to perform strongly because the performance was so broad based and we said this before Lauder in Africa.

The Middle East, Australia, New dynamics in Australia, and a bit of a level of reset in Philippines is all came together.

So we will we will still see very very strong results from India into the fourth quarter and into next year, even after the divestment of Nigeria. I think this is the key message also Nigeria contributed positively.

And then there was a last question on on on corporate could you could you repeat that I didnt fully understand that please.

Yeah. It seems like it's now 100 median income having Pat Pat Cotter I mean, he used to be a lot higher.

I was wondering if this is the right number to have.

Yeah Yeah.

100, 100 million cooperative a corporate line, a 100 million corporate cost per quarter about yeah that seems about right. Yes, we are.

Remind you remind you a L O D. We set that as part of the spin off.

We said that the we hear it holds and we are we had a we had a bit of a larger structure. After that but also we have divestments ongoing. So we are in the permanent process to always look at our structures, but a permanent process to optimize I said before what we're doing in distribution, which we're doing and maintenance with the use of AI with the levy.

For each of our shared service centers. So there's always there's always a glide path of how we optimize our structure always not with one big program or with one with a one shot that has a disruptive ethics. We always do this over time and always in line with our employees' interests, so but yes.

This is a good this is a good way to look at I always like to look at the as a percentage of net sales yes. It may be if you yeah. Yeah. We look we have been our overhead cost has been has been 2% over the last two 2% over the long time in terms of net sales after the spin we shot to above 3% for a moment and we will.

B back to around 2% at the end of 2026. So this is the glide path I was talking about that we slowly work off structure back down to that again, we give us enough time, while the company keeps performing.

Yeah.

Thank you very much and regarding your last question regarding depreciation because obviously, it's not trust depreciation. It's also amortization and obviously seller has one incredibly strong brand, which is eat hung and obviously they already had some other intangible assets before we acquire them, which we continue.

To amortize the hours, but we can.

Kosmos bilaterally with the Investor Relations team and will obviously help you to model that come out of that.

Now we're going to Switzerland. The next question comes from Martin Who's law firms that can be good morning Martin.

Yes, good morning, everyone.

I have actually just two questions last maybe just stick to Akshay law again can you talk about the current utilization rate.

And what maintenance and growth Capex to you foresee two to do the growth of more than 5% do you expect.

Annually and also am I right that it's mainly a new construction pro Doc.

Can you maybe share your thoughts on what percentage of <unk>.

Sales you see for refurbishment on Zillow.

Good morning, Martin. Thank you for the question and thank you for joining us.

<unk> is active in both new construction and also refurbishment maybe the ratio is now at 80 70 to 20 to 30, but we expect this to continue to grow and this is driven because zealous solutions. They are nice combined with Hulk Sims for instance, rolling the whole rolling.

Is a perfect fit for our highly growing repair and refurbishment market on the on the zelle up our capacity utilization. So what they did and as I said in the last few years. They are optimized day production.

Heavily they actually invested in the facilities and upgrade them way they have been.

They want to stay in the long term the small inefficient facilities. They shut down now we are talking about 50, plus production sites across 21 countries and.

When it comes to capacity utilization, we talk about 50% to 60% it depends really from market to market. So we see a potential we see this a white space, where we can grow from this map. If you will look at the map that is on the slide on the on the screen you'll.

Can see that a we can expand in some very attractive markets, where our whole team has a leading position. If you look at the Spain. If you look at the Greece, Switzerland for instance, Mark Martin currently exactly he's not producing in Switzerland products are coming from <unk>.

In Germany. The question will be what are how do we tackle Switzerland in the future than the huge market is U K why exactly is currently servicing they have a commercial logistics setup, so I see opportunities huge opportunities of.

All in organic growth.

At the same time, we have already identified food few potential m&a's.

Yeah.

I think I answered did I Miss Kay.

Yeah. The Capex do you think that Capex well why did you give a range of 2% to 3% or.

Or is it higher I would I would I would say, it's slightly higher this capex is between light and heavy side. So it could stabilize around three 4% a long term.

Okay.

You can add them because you need FERC before on a question on and conversion of plants into calcined clay.

Obviously early stage, but I mean, this must come we said cost pegged right I mean to convert to depreciate the clinker factor.

Can you give us the sell Samsung probably a high level numbers, what we should expect there.

Well I'm, obviously marked and we are producing are already calcined clay in some of our.

Plants in some plants. We are we have a phase this way at one for certain period of time, they would produce clean current enviable produced a cough signed clay and so on and so on.

From the cost point of view, we don't need the massive massive upgrades in our existing plants, it's pretty it's pretty much straightforward and then on the D&A side I mean, we will still continue to produce the products saw.

Probably too early to say, but I do not expect any significant impact when we are converting existing clinker line two calcined clay line.

Okay. Thanks, a lot.

Martin <unk>.

Next one is Arnaud Lehmann Bank of America, well come back online congratulatory with what we have achieved.

Thank you. Thank you very much because it was the hard work but.

That does take reserves.

A couple of question on my side.

If I may just on <unk> could we have an indication of the.

The share of gentlemen need to sales relative to eastern Europe is it is it a is it 50 50 or is it very different from that.

Second question.

On M&A.

[noise] bus.

Zale acquisition, which I guess will take about a year to complete.

He or she will be pretty close to the <unk>.

One five times net debt to EBITDA ratio and I think a good.

Capital markets day, you you've kept yourself at one five does that limit.

Your ability to do other larger acquisitions seem to in the next year.

And related to that are you still interested in the insulation segment I'll now that you've done.

As a platform deal.

Moving on from installation. Thank you.

Good morning. Thank you for the question and thank you for joining it's interesting Guy I did get to look that question about zealous net sales split.

Germany versus the rest of the world.

In fact, I would expect that this year and next year German represents probably 25% to 28% of the total net sales the other big markets for seller, it's Poland, It's Romania, It's Belgium, Italy, and this is where a whole team.

He is in a very very strong position and I saw as I said earlier tomorrow I do expect a potential to expand the Greece, I mean, there'll be a market leader in cement and aggregates and ready mixed and grease Grease is a great market for these products another great market, Spain.

And of course U K, So Germany is no longer a dominant team zealous world and with the momentum happening around Germany, I think other countries will will grow the portion of the pie.

What was the second financial debt financial why don't you never yeah. Okay, Hey, good morning, underpinned financial that I alluded before that our balance sheet remains in excellent condition. We look at net financial debt of about 4 billion towards the year end with a leverage ratio of about one.

With the Accel acquisition to complete next year remember not only spending the money. We're also acquiring EBITDA. So it's it's the denominator and the numerator I expect purely from the shallow deal to stay.

At or below one five times and then also what I would like to add at the capital markets Day. We said this is our long term objective in order to be comfortably in triple B plus but we also said if opportunity arises if theres. Another deal on the table, we still have enough firepower to go up to below two times four.

Limited period of time and still remain in our credit rating. So the 1.5 is a long term ambition.

Could go above that for a period of 12 to 18 months. So we still have ample firepower to do more M&A, if we find equally attractive opportunities as sellers.

Going back to your last question I know Don installation I mean, two interest is high I mean, this is part of our whole offering if you recall I mean, we already producing PR AR products in Germany. This is part of our roofing.

The system, we have a production.

Facilities for installation in Poland in France, and recently, we did acquire a stonewall called plenty in our Poland. So for US. This is a complementary product range and.

It is needed all goal is to be a leader in sustainable construction with full our high end to end approach from the basement and the foundation to Diwali and of course roofing solution. So we did in the deck. We did one of these projects, which I already mentioned.

When it comes to the construction projects, we don't want to sell one product we want to sell a system selling system means we want to sell five 610 products and with exact law Vitol roofing systems with our evolving systems plus with a hold seems existing sustainable.

Portfolio, we are really now able to.

Off for these high end to end solutions to our customers and at the same time ensure maximum present.

Penetration on the construction side.

Perfect. Thank you. The next question comes from Paul Trussell from BNP Polyol Fondo Center correctly is currently on the road doing some field research. So hopefully the lawn Brooks Paul are you there.

Hi, honestly, Mike on for Paul Roger.

Thank you for taking my questions I have one left.

We were wondering what is the latest on seaborne trade allowances and the benchmark in Europe next year.

Oh. Thank you for your question regards to Paul Luca.

Look at it is happening first of January so new E. U E. P. S phase four scheme, which includes implementation of C band.

It comes to see Ben I would not expect anything major next year, it's all going to be about auditing and monitoring and soul and financial impact will come in 'twenty 'twenty seven.

Okay.

Very clear thank you would think of it.

Unfortunately, it's already I'm. The last question from me will can take the last question comes from how we draw from.

Rothschild how are you good morning.

Yeah.

Yes. Good morning. Thank you Yeah, I think maybe two questions.

AMB.

Firstly, just on Europe. It continues to grow EBIT in like for like and if that's right is probably the top line and see organic still being negative and prices themselves at all so no rent.

Relatively subdued because the comps because maybe the main driver and I wondered whether you'd be able to put down how much of that has to do with the penetration of eastern Iowa clean because sometimes little confidence meant so how much of that one six.

6% like for like EBIT growth did you see from the penetration of these another team to cement and I Wonder whether you can give some color on the economics of that kind of substitution in Europe. What is the average cost of some of these supplementary materials versus traditional came through in the mix and then related to that just wondering how you feel about sip.

Those supplementary materials going forwards I don't know if there's some people.

Number because it's don't call and then just finally relates to examine and again each one of them and I think in the mix with some moved to E C.

Seats, especially products that you would traditionally.

Construction chemicals okay.

It is an area of expansion most significantly in that market or is it still more focused on the mortgage traditional building materials. Thank you.

Good morning, Harry Thank you for joining us and thank you for the question on the start with the second question. So the focus is on the more towards the focuses on the roofing waterproofing. This is what we believe for Hudson is the best fit and the rest.

I, probably not high on the agenda regarding your question on E U.

So if you we can share it with you, but these side effects from 'twenty to 'twenty, one to 'twenty 'twenty four.

<unk> net sales in Europe have increased 30%, our EBIT has increased 60% and our EBIT margin expansion was around 300 basis points, you're seeing 2025, we continue to grow the EBIT, we continue with the EBIT margin.

Expansion, despite softer construction activities, mainly in western Europe. So.

Very simple Henry this is driven by our value over volume strategy.

There are three key factors here and I really would like say, they're contributing equally there are no first one yes, we are scaling our sustainable building solutions from <unk> to Echo planet and now Echo cycle on these products, we do get a small premium but we also have.

The cost advantage second pillar is that our investments in the carbonization and sort of collect constructions are actually driving margin expansion I actually in driving profitable growth and whatever whenever we invest in our business on de carbonization side and on the circle.

Construction, we do have a high.

Hi, paybacks and very attractive returns, it's either formulation with US you mentioned with make development or investment in alternative fuels or something else. So and the third pillar is actually M&A in Europe, we have a complete the six.

T and the last four years 60 highly value accretive acquisitions, where we are have attractive business plans, where we have attractive synergies and that's helping our.

Boost in our EBIT margins, so on the mix strategy.

So Henry traditionally I mean, it was flagged in fly ash and we still have these products. We have reserves, we have long contract.

Idea and where the future is that we move into the in house produced mix and when I say in house produced makes I talk about the calcined clay I talk about construction and demolition fines and these kind of products and this is all part of our investments in the carbonization in.

Circle of construction in Switzerland, we are producing cement that contained 20% of construction and demolition materials since site in France. He ever even showed the project. It was one of the note to code base in Marseille.

Aw in France anyway, where we are we are already producing cement that contain calcined clay. All of this is produced in house and we want to accelerate this so what the future holds for Hudson, we will be.

Less.

Dependent on the slag in fly Ash, and we will be able to produce these products in house Martin from US. That's K be asked the question. We will see this transition from clinker production and calcined Clay. This will happen in next few years and we are already producing.

Clays in several places around Europe, but also in Latin America and also in North Africa.

Perfect. Thank you Mr. Young. Thank you how are you. Thank you so much for participating in our conference call. Today. If there are further questions, which come up please don't hesitate to contact the investor relations team of faults and we're more than happy to help and with this I hand over to our captain you Jan for some closing remarks I kept them.

Thank you all for joining thank you for your question as you have seen once again, we delivered to be delivered exceptional financial performance and we will continue to deliver we are very excited about <unk>. The latest addition to holcim signing or seller now it's all about closing this acquisition.

And then delivering and over delivering on our business plan and also announced a strategy and once again all of this is possible. Thanks to our deeply embedded performance culture and one big Thank you to all my colleagues 45000 of them around the world.

All the best and thank you.

Hum.

Yeah.

Hum.

Uh huh.

Yes.

No.

Mhm.

[music].

No.

Mhm.

Mhm.

Yeah.

No.

Mhm.

Yeah.

Mhm.

No.

Okay.

Okay.

Yes.

No.

Oh.

Yeah.

No.