Q4 2025 Heidelberg Materials AG Earnings Call

February 25, 2026

Sergen: Ladies and gentlemen, welcome to the Heidelberg Materials Full Year Results 2025 Conference Call. I'm Sergen, the conference call operator. I would like to remind you that all participants will be 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. 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 Christoph Beumelburg. Please go ahead, sir.

Operator: Ladies and gentlemen, welcome to the Heidelberg Materials Full Year Results 2025 Conference Call. I'm Sergen, the conference call operator. I would like to remind you that all participants will be 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. 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 Christoph Beumelburg. Please go ahead, sir.

Speaker #3: Ladies and gentlemen, welcome to the Heidelberg Materials full-year results 2025 conference call. I'm Sörgen, the Course Call Operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded.

Speaker #3: 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.

Speaker #3: 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 turn it over to Christoph Beumelburg.

Speaker #3: Please go ahead, sir.

Speaker #4: Thank you, operator. Good morning, good afternoon. Good evening to everyone one listening into our full-year 2025 conference call. Thanks for dialing in. As usual, we have Dominik and René with us, CEO and CFO, plus the IR team in the room.

Christoph Beumelburg: Thank you, operator. Good morning, good afternoon, good evening to everyone listening into our full year 2025 Conference Call. Thanks for dialing in. As usual, we have Dominic and Rene with us, CEO and CFO, plus the IR team in the room. We have some prepared remarks. We're gonna go through them relatively quickly and then, you know, take the time for your questions. Over to you, Dominic.

Christoph Beumelburg: Thank you, operator. Good morning, good afternoon, good evening to everyone listening into our full year 2025 Conference Call. Thanks for dialing in. As usual, we have Dominik and René with us, CEO and CFO, plus the IR team in the room. We have some prepared remarks. We're gonna go through them relatively quickly and then, you know, take the time for your questions. Over to you, Dominik.

Speaker #4: We have some prepared remarks. We're going to go through them relatively quickly, and then take the time for your questions. Over to you, Dominik.

Speaker #5: Chris, thanks a lot. Hello, everybody. Sunshine in Heidelberg, 20 degrees—that's a good time to have the conference call. Great setting. Welcome. Let's go into the summary, first page.

Dominik von Achten: Chris, thanks a lot. Hello, everybody. Sunshine in Heidelberg, 20 degrees. That's a good time to have the conference call. Great setting. Welcome. Let's go into the summary first page. Very good year for us. Yet another record year. I think all the key matrices go in the right direction. RCO reached a new record high at EUR 3.4 billion. EBITDA margin up, important for us, you know that we are very focused on improving the structural profitability, up to almost 22%. Also driven by a great success on the Transformation Accelerator initiative that has already encountered EUR 380 million of saving. Remember, the saving target is down the road, EUR 500 million by end of this year.

Speaker #5: Very good year for us, yet another record year. I think all the key metrics go in the right direction. RCO reached a new record high at €3.4 billion.

Speaker #5: EBITDA margin is up, which is important for us. You know that we are very focused on improving the structural profitability—up to almost 22%. This was also driven by great success with the Transformation Accelerator initiative, which has already achieved €380 million of savings.

Speaker #5: Remember, the saving target is down the road, 500 million by end of this year. I remember very well our Q3 conference call. Here you go.

Dominik von Achten: I remember very well our Q3 conference call. Here you go. European margins increased to 20.5%. Very good performance out of Europe, especially also in Q4. I think a fantastic entry point going into 2026. Free cash flow, Rene will further go into at a strong level of EUR 2.1 billion, leverage stable at around 1.2x. What is very good now is the ROIC that has surpassed comfortably the 10% mark. 10.4%, I think is the highest we ever had. And it's really well on track to our midterm guidance from the capital markets, where we said we go up to 12%.

Speaker #5: European margins increased to 20.5%. So very good performance out of Europe, especially also in Q4. So I think fantastic entry point going into 2026.

Speaker #5: Free cash flow, René will further go into. It is a strong level of 2.1 billion euros, leveraged stable at around 1.2 times. What is very good now is the ROIC that has surpassed comfortably the 10% mark.

Speaker #5: So 10.4%, I think, is the highest we had ever had. And it's really well on track to our midterm guidance from the capital markets where we said we go up to 12%.

Dominik von Achten: Shareholder return up 10%, so even more, more than the profitability increase, with a combination of progressive dividend and share buybacks, EUR 1.1 billion. The second tranche has been done, and the acquired shares have been canceled. We are really continuing to make the difference, not only because we are the only global ones, not only because we are the heavy building materials guys, but also because we now turn this into superior differentiating products. EvoZero hits the market as the world's first carbon-captured net zero cement, and the first customers are happily using it. Last but not least, importantly, the outlook for this year, we are optimistic.

Speaker #5: Shareholder return up 10%. So even more than the profitability increase, with a combination of progressive dividend and share buybacks. 1.1 billion euros. The second tranche has been done.

Speaker #5: And the acquired shares have been canceled. We are really continuing to make the difference, not only because we are the only global ones, not only because we are the heavy building materials guys but also because we now turn this into superior differentiating products.

Speaker #5: Evo Zero hits the market, as the world's first carbon-captured near-zero cement. And the first customers are happily using it. And then last but not least, importantly, the outlook for this year.

Speaker #5: We are optimistic. We are going to increase our result with a range that, as you know from us, is always cautious at the beginning of the year: €3.4 to €3.75 billion.

Dominik von Achten: We are gonna increase our result with a range that you know, from us is always cautious at the beginning of the year, EUR 3.4 to 3.75 billion. ROIC again, above 10%, and the CO2 emissions continue to decline. With that, I think next page is basically just repeating what I just said. I think we don't need to go through that other than, you know, it's green on basically all dimensions, and the adjusted APS has also gone up. Rene will talk to you that in a minute. Overall, I think a strong performance. Rene, you want to say something on the transaction in Australia?

Speaker #5: ROIC, again, above 10%. And the CO2 emissions continue to decline. With that, I think the next page is basically just repeating what I just said.

Speaker #5: I think we don't need to go through that, other than it's green on basically all dimensions. And the adjusted EPS has also gone up.

Speaker #5: René will talk to you that in a minute. So overall, I think a strong performance. René, you want to say something on the transaction in Australia?

Speaker #6: Thanks, Dominik. Hello, everyone. That's it from my side. As you saw three weeks ago, we announced that we signed an agreement to take over the construction materials segment of the Master Group in Australia.

Christoph Beumelburg: Thanks, Dominik. Hello, everyone. As from my side, you've seen three weeks ago, we have announced that we signed an agreement that we want to take over the construction materials segment of the Maas Group in Australia. Here you see some numbers. It's 40 aggregates quarries, and you can read it. They've released their results, and it's a listed company, so it's 7 to 8 million tons of aggregates. It's 1 million cubes of concrete and has asphalt and the recycling operations that complements our footprint on the East Coast very nicely. Important is to say that we stay in our strict financial framework.

René Aldach: Thanks, Dominik. Hello, everyone. As from my side, you've seen three weeks ago, we have announced that we signed an agreement that we want to take over the construction materials segment of the Maas Group in Australia. Here you see some numbers. It's 40 aggregates quarries, and you can read it. They've released their results, and it's a listed company, so it's 7 to 8 million tons of aggregates. It's 1 million cubes of concrete and has asphalt and the recycling operations that complements our footprint on the East Coast very nicely. Important is to say that we stay in our strict financial framework.

Speaker #6: And here you see some numbers. It's 40 aggregate quarries, and you can read it there. They have released their results. And it's a listed company.

Speaker #6: So it's seven to eight million tons of aggregates. It's a million cubes of concrete and has asphalt in the recycling operations. That complements our footprint on the East Coast.

Speaker #6: Very nicely. And important is to say that we stay in our strict financial framework. You see it. The transaction value is 1.7 billion Aussie.

Christoph Beumelburg: You see it, the transaction value is AUD 1.7 billion, after synergies, the multiple is 8.4x, which fits to our, let's say, targets, what we have guided for. You have seen probably two days ago, Maas announced the H1 result. He has put it here on the chart, the revenue is up 43%, and the EBITDA increased by 36%, which is on track to what we have assumed even slightly better. You see there's good potential in that acquisition. The only one is what we need now is authorities from the regulators, which will come probably, phwoah! Q3, hopefully, we see how that goes. Dominic, over to you.

René Aldach: You see it, the transaction value is AUD 1.7 billion, after synergies, the multiple is 8.4x, which fits to our, let's say, targets, what we have guided for. You have seen probably two days ago, Maas announced the H1 result. He has put it here on the chart, the revenue is up 43%, and the EBITDA increased by 36%, which is on track to what we have assumed even slightly better. You see there's good potential in that acquisition. The only one is what we need now is authorities from the regulators, which will come probably, phwoah! Q3, hopefully, we see how that goes. Dominik, over to you.

Speaker #6: And after synergies, the multiple is 8.4, which fits to our targets, what we have guided for. And you have seen probably two days ago, Mars announced the H1 result.

Speaker #6: We have put it here on the chart. And the revenue is up 43%, and the EBITDA increases by 36, which is on track to what we are we have assumed even slightly better.

Speaker #6: So you see, there's good potential in that acquisition. So the only one is what we need now is authorities from the regulators, which will come probably Q3, hopefully.

Speaker #6: And then we see how that goes. Dominik, over to you.

Speaker #5: Thanks, René. On the back of that page five, I think we need to pause here for a moment because I think this is a super important slide.

Dominik von Achten: Thanks, Rene. On the back of that, page 5, I think we need to pause here for a moment because I think this is a super important slide. Underpinning strongly the 7 to 10% growth, the target we gave midterm on RCO. Where does it come from? Organic and acquisitions side by side. On the left side, you see the organic development, and we really have to take a couple of seconds here to digest this. 2022 versus 2025, the RCO went from EUR 2.5 billion to EUR 3.4 billion. I would say, sorry, guys, à la bonne heure, that's not a bad track record. It is solely driven by the triangle management of price costs. That includes both fixed and variable costs and some M&A.

Dominik von Achten: Thanks, René. On the back of that, page 5, I think we need to pause here for a moment because I think this is a super important slide. Underpinning strongly the 7 to 10% growth, the target we gave midterm on RCO. Where does it come from? Organic and acquisitions side by side. On the left side, you see the organic development, and we really have to take a couple of seconds here to digest this. 2022 versus 2025, the RCO went from EUR 2.5 billion to EUR 3.4 billion. I would say, sorry, guys, à la bonne heure, that's not a bad track record. It is solely driven by the triangle management of price costs. That includes both fixed and variable costs and some M&A.

Speaker #5: Underpinning strongly the 7 to 10% growth, the target we gave midterm on RCO, where does it come from? Organic and acquisitions side by side.

Speaker #5: On the left side, you see the organic development. And we really have to take a couple of seconds here to digest this, 2022 versus 2025.

Speaker #5: The RCO went from 2.5 billion euros to 3.4 billion. I would say, sorry, guys, à la bonne heure. That's not a bad track record.

Speaker #5: It is solely driven by the triangle management of price, cost—that includes both fixed and variable cost—and some M&A. So, a good contribution, strong contribution from that end.

Dominik von Achten: A good contribution, strong contribution on that end. You go back left to the volume side, and with the decline of the volumes in the past couple of years, we got a headwind of EUR 1 billion result. EUR 1 billion result just driven by volume decline. Statistically, I said it this morning in the press conference here. Statistically, after four years of volume decline, we are coming nearer to the point where this will turn, and I will give you some further indications down the road. You can make the calculation yourself. If this only turns slightly on the much better cost base, I tell you, we're going to have some fun when it comes down to the RCO development. That's just the organic side.

Speaker #5: But then you go back left to the volume side, and with a decline of the volumes in the past couple of years, we got a headwind of €1 billion result.

Speaker #5: €1 billion result just driven by volume decline. Now, statistically, I said it this morning in the press conference here, statistically, after four years of volume decline, we are coming nearer to the point where this will turn, and I will give you some further indications down the road.

Speaker #5: Now, you can make the calculation yourself. If this only turns slightly, on the much better cost base, I tell you, we're going to have some fun when it comes down to the RCO development.

Speaker #5: So that's just the organic side. And then you put the complemented with the acquisition side that goes on top of it. We've not been sitting on our hands, but we've told you we're going to accelerate.

Dominik von Achten: You complement it with the acquisition side that goes on top of it. We've not been sitting on our hands, we've told you we're going to accelerate, Rene just showed you how we are accelerating already at the beginning of 2026, with a focus on all our key markets, North America, Australia, Morocco, Tanzania, Southeast Asia, and also Europe, including the recycling piece. Every market is now really focused on a very strong M&A pipeline. The pipeline is clearly full, you should see more M&A as we go through 2026, more than in 2025. Transformation Accelerator initiative. I mentioned it already. We said, I think in earlier calls, it's going to be backloaded, 40/60, between 25 and 26. Look what we have done.

Speaker #5: And René just showed you how we are accelerating already at the beginning of 2026 with a focus on all our key markets, North America, Australia, Morocco, Tanzania, Southeast Asia, and also Europe, including the recycling piece.

Speaker #5: So every market is now really focused on a very strong M&A pipeline. The pipeline is clearly full. And you should see more M&A as we go through 2026, more than in 2025.

Speaker #5: Then transformation accelerator initiative. I mentioned it already. We set, I think, in earlier calls, it's going to be backloaded 40, 60 between 25 and 26.

Speaker #5: And look what we have done. It’s been front-loaded quite significantly, with a significant impact—positively—on the savings side. René will give you the impact that it also has on other financial metrics later on.

Dominik von Achten: It's been front-loaded quite significantly, with a significant impact positively on the savings side. Rene will give you the impact that it also has on other financial metrics later on, but I think the EUR 380 million are really strong. From my seat, I am very convinced that we will well surpass the EUR 500 million when it comes to the end of this year. From my understanding, there is clear upside on the tie savings.

Speaker #5: But I think the €380 million are really strong. So from my seat, I am very convinced that we will surpass—well surpass—the €500 million when it comes to the end of this year.

Speaker #5: So from my understanding, there is clear upside on the Thai savings. If you go to decarbonization, I think we are trying to stay on the floor, and we're trying to be modest.

Dominik von Achten: If you go to decarbonization, I think we are trying to stay on the floor, and we're trying to be modest, but I think it's fair to say all the numbers that we've seen so far, we are now the clear leader in decarbonization of the traditional levers, long before we even come to carbon capture and storage. So on net CO2 emissions, on alternative fuels, on clinker incorporation, on sustainable revenues, it's hard to beat us. So I think all are moving in the right direction. Look at the jump down alternative fuel rates, 300 basis points in just one year, guys. I think this is a very strong track record that will eventually also turn into superior results.

Speaker #5: But I think it's fair to say, all the numbers that we've seen so far, we are now the clear leader—the clear leader—in decarbonization of the traditional levers, long before we even come to carbon capture and storage.

Speaker #5: So on net CO2 emissions, on alternative fuels, on clinker incorporation, on sustainable revenues, it's hard to beat us. So I think all are moving in the right direction.

Speaker #5: And look at the jump down on alternative fuel rates, 300 basis points in just one year, guys. I think this is a very strong track record that will eventually also turn into superior results.

Speaker #5: Talking about sustainability, I think it's clear that we want to make the difference on the back of this on the product side. In the end, every technology is only as good as it turns into an advantage for our customers.

Dominik von Achten: Talking about sustainability, I think, it's clear that we want to make the difference on the back of this, on the product side. In the end, every technology is only as good as it turns into an advantage for our customers. We are very focused on selling at the very interesting margins, both evoZero and EvoBuild, all including EvoBuild carbon capture, to make sure that we carry the technical advantages that we have built also to the P&Ls of our customers and to the advantage of our customers. We are going to build out our near zero leadership through CCS. We've done Brevik. Technically, it's running. O2 gets captured. The product is in the market. Padeswood is the one that we have now kicked off.

Speaker #5: So, we are very focused on selling at very interesting margins, both EvoZero and EvoBuilds, including EvoBuild carbon capture, to make sure that we carry the technical advantages that we have built also to the P&Ls of our customers and to the advantage of our customers.

Speaker #5: We are going to build out our near zero leadership through CCS. We've done Brevik. Technically, it's running. CO2 gets captured. The product is in the market.

Speaker #5: Pacewood is the one that we have now kicked off. We are going to continue to push Pacewood. And you know that we have gotten the funding for other projects in the EU.

Dominik von Achten: We are gonna continue to push Padeswood, and you know that we have gotten the funding for other projects in the EU, but the framework needs to still be adjusted in order for us to FID any of these projects. I'm sure we'll come back to that point later on in your question. Now, what is important for me to understand, when you think about Heidelberg Materials, it's not just about CCS. Sometimes I have to when I get some of your feedback, everybody says, Hey, yeah, it's CCS, but the rest, you know? Sorry, guys, CCS is well marketed, that's clear, and it's important for us for the future. It's the proof point that we get to near zero and net zero on concrete side, absolutely. Heidelberg is not built on CCS only.

Speaker #5: But the framework needs to still be adjusted in order for us to FID any of these projects. I'm sure we'll come back to that point later on in your question.

Speaker #5: Now, what is important for me to understand when you think about Heidelberg Materials is not just about CCS. Sometimes I have the when I get some of your feedback, everybody says, "Hey, yeah, yeah, it's CCS." But the rest, you know?

Speaker #5: Sorry, guys. CCS is well marketed. That's clear. And it's important for us for the future. It's the proof point that we get to near zero.

Speaker #5: And net zero on concrete side, absolutely. But Heidelberg is not built on CCS only. As I showed you, it's built on a very solid decarbonization piece.

Dominik von Achten: As I showed you, it's built on a very solid decarbonization piece, and it's built on a very strong and ever being stronger digital automation and AI piece. I just brought you this one example on autonomous trucks. I think we've shared with some of you already directly, and that is really now getting into being scaled up. We've done, completed the pilot. Before end of 2025, we have completed a 2 million ton haul package in our Bridgeport, Lake Bridgeport quarry, and from there, we expect significant savings out of this. This is not Mickey Mouse, guys. This is a huge addressable cost base when we talk about both CapEx and OpEx. You know, buying these trucks is very costly.

Speaker #5: And it's built on a very strong and ever being stronger digital automation and AI piece. And I just brought you this one example. On autonomous trucks, I think we've shared with some of you already directly.

Speaker #5: And that is really now getting into being scaled up. We've completed the pilot. Before the end of 2025, we will have completed a 2-million-ton haul package in our Bridgeport Lake Bridgeport quarry.

Speaker #5: And from there, we expect significant savings out of this. This is not Mickey Mouse, guys. This is a huge addressable cost base when we talk about both CAPEX and OPEX.

Speaker #5: Buying these trucks is very costly. Operating them is very costly. Also, because you need drivers—and not only one driver—you typically need two or three drivers if you run on a three-shift system.

Dominik von Achten: Operating them is very costly also because you need drivers, and not only one driver, you typically need two or three drivers if you run on a three shift system. That means, you know, significant staff cost savings, significant savings on fuel and tires, significant savings on repair and maintenance costs, and by the way, also better productivity levels. If you put that all together, this has fantastic paybacks below two years. There's not a lot of projects where you can get two years. Again, very same mindset, like in decarbonization. We do these things to bring it down to the bottom line. If it doesn't create value, we don't touch it. Don't assume that we are just investing into these things to make a big, big marketing splash about it.

Speaker #5: And that means significant staff cost savings, significant savings on fuel and tires, significant savings on repair and maintenance costs. And by the way, also better productivity levels.

Speaker #5: If you put that all together, this has fantastic paybacks—below two years. There are not a lot of projects where you can get two years.

Speaker #5: And again, very same mindset like in decarbonization. We do these things to bring it down to the bottom line. If it doesn't create value, we don't touch it.

Speaker #5: Don't assume that we are just investing into these things to make a big marketing splash about it. No, we make this to increase our margins to accelerate our growth.

Dominik von Achten: No, we make this to increase our margins, to accelerate our growth, and here's a good example. I could give you 10 more. You followed also the partnership setup that we have created to also switch the industry into the cloud and to move the industry so long beyond Heidelberg Materials into the cloud, with a partnership ecosystem set up between Command Alkon, Geotech, Pathways, and C60. That one is really going well, and with that, both using that setup internally and also for third parties, the drivers are clear. We want to increase the stickiness for our customers. We want to boost their and our revenue and margins with us, with that setup. We want to really accelerate our evoZero and EvoBuild sales by combining it with a very robust digital process.

Speaker #5: And here's a good example. I could give you 10 more. You followed also the partnership setup that we have created to also switch the industry into the cloud and to move the industry.

Speaker #5: So, long beyond Heidelberg Materials, into the cloud with a partnership ecosystem set up between Command ICON, Geotech, Pathways, and C60. That one is really going well.

Speaker #5: And with that, both using that setup internally and also for third parties, the drivers are clear. We want to increase the stickiness for our customers.

Speaker #5: We want to boost their and our revenue and margins with that setup. We want to really accelerate our Evo Zero and Evo Build sales by combining it with a very robust digital process.

Speaker #5: And obviously, we'll also use it to automate the EPD. So you don't get it only once a year, but you get it basically real-time.

Dominik von Achten: Obviously, we'll also use it to automate the EPD, so you don't get it only once a year, but you get it basically real time. Again, here, only a couple of examples. On the operational side of things, I think important to note that Q4 was a good Q4, especially when it comes to EBITDA margins, and RCO. I think a strong exit point out of 2025 going into 2026. Of course, there is winter here and there, I think it's fair to say that in Europe and also in the US, you saw the blizzard in New York during this week. There is a little bit in these small months and small quarters, there is always the risk of winter, and once things are frozen.

Speaker #5: Again, here only a couple of examples. On the operational side of things, I think important to note that Q4 was a good Q4, especially when it comes to EBITDA.

Speaker #5: EBITDA margins and RCO. I think strong exit point out of 2025 going into 2026. Of course, there is return here and there. So I think it's fair to say that in Europe and also in the US, you saw the blizzard in New York during this week.

Speaker #5: There is a little bit in these small months and small quarters. There is always the risk of winter. And once things are frozen. And today, 20 degrees, as I said, sunshine in Heidelberg.

Dominik von Achten: Today, you know, 20 degrees, as I said, sunshine in Heidelberg, so we are moving in the right direction. If you go to the full year, I think we've shared with you the results. I think for me, that's okay. Let's go to the bridge on page 14 and 15. You see that the picture that we've seen for a while has not fundamentally changed. We see good price over cost, positive price over cost, even stronger than in Q3, I think. Q4 had a better price over cost development than Q3. You see the structural advantage of Q4, but a big volume hit again.

Speaker #5: So we are moving in the right direction. If you go to the full year, I think we've shared with you the results. I think for me, that's okay.

Speaker #5: Let's go to the bridge on page 14 and 15. You see that the picture that we've seen for a while has not fundamentally changed.

Speaker #5: We see good price-over-cost, positive price-over-cost, even stronger than in Q3, I think. So Q4 had a better price-over-cost development than Q3. So you see the structural advantage of Q4.

Speaker #5: But a big volume hit again. So to my earlier remark, if that only turns flat, basically, that would be significant advantage. If you go to the same page, on page 15, for the full year, you see that price-over-cost is very positive.

Dominik von Achten: To my earlier remark, if that only turns flat, that would be a significant advantage. If you go to the same page, on page 15, for the full year, you see that price over cost is very positive, still a hit on the net volume side, to the very right, you see some good contributions from M&A now kicking in, EUR 65 million. I think that's good. If you go to Europe, I think Europe, convincing performance. Remember in Q3, we had a little bit of a question and answer, TikTok, around what's going on in Europe.

Speaker #5: Still a hit on the net volume side. But also to the very right, you see some good contributions from M&A now kicking in. 65 million.

Speaker #5: So I think that's good. Then if you go to Europe, I think Europe convincing performance. And again, remember, in Q3, we had a little bit of a question-and-answer TikTok around what's going on in Europe.

Speaker #5: And René and I told you, 'Hey, hold your breath, guys.' From one quarter to the other, we said there were some extraordinary shifts over the quarter borderline.

Dominik von Achten: We, Rene and I told you, Hey, hold your breath, guys. From one quarter to the other, we said there were some extraordinary shifts over the quarter, borderline. Here we go. I think Europe, despite shitty weather, sorry, despite shitty weather, especially in December, I think Europe pulled off a very strong performance in Q4, and we are moving in the right direction, both in terms of EBITDA, but also in terms of EBITDA margin, and by the way, across all three business lines. North America, I think overall, okay, but I wouldn't say something to celebrate too much.

Dominik von Achten: We, Rene and I told you. Hey, hold your breath, guys. From Q1 to the other, we said there were some extraordinary shifts over the quarter, borderline. Here we go. I think Europe, despite weather, sorry, despite weather, especially in December, I think Europe pulled off a very strong performance in Q4, and we are moving in the right direction, both in terms of EBITDA, but also in terms of EBITDA margin, and by the way, across all three business lines. North America, I think overall, okay, but I wouldn't say something to celebrate too much.

Speaker #5: So here we go. So I think Europe despite shitty weather, sorry, despite shitty weather, especially in December, I think Europe pulled off a very strong performance in Q4.

Speaker #5: And we are moving in the right direction. Both in terms of EBITDA, but also in terms of EBITDA margin. And by the way, across all three business lines.

Speaker #5: North America, I think overall okay. But I wouldn't say something to celebrate too much. I think there is upside in North America. From my seat, I think we are working well on the EBITDA.

Dominik von Achten: I think there is upside in North America, from my seat, I think we are working well on the EBITDA. I think that's okay, especially if you take the weather effect into account, because remember, our footprint is quite northern. We have a big footprint in the Northeast, Midwest, including Canada and in the Northwest, and that's obviously in winter always a little bit. Q4 and Q1 for us is always in North America, is a little bit volatile. I think on the EBITDA margins are on aggregates, good performance, I think 33.3%.

Speaker #5: I think that's okay. Especially if you take the weather effect into account. Because remember, our footprint is quite northern. So we have a big footprint in the northeast, midwest, including Canada and in the northwest.

Speaker #5: And that's obviously in winter always a little bit so Q4 and Q1 for us is always in North America is a little bit volatile.

Speaker #5: But I think on the EBITDA margin side on aggregates, good performance. I think 33.3%. I would say there is still upside on cement and ready mix as we go into 2026.

Dominik von Achten: I would say there is still upside on cement and ready-mix as we go into 2026, and the team has fully understood this, as we have obviously discussed this internally. Asia Pacific, I think, okay, but I would say, below my personal ambitions and expectations. I think, Rene, maybe you say something to Australia in a second, but I think overall margin moving up, that's good. That's a good sign that the structural profitability is moving. Cost management is being very good, despite the markets being really sluggish. China, Hong Kong, Bangladesh, Indonesia, difficult. Thailand and especially India, better volume growth. Malaysia, getting better throughout the year. Overall, I think the markets are still somewhat sluggish.

Speaker #5: And the team has fully understood this as we have obviously discussed this internally. Then Asia Pacific, I think okay. But I would say below my personal ambition and expectations.

Speaker #5: I think, René, maybe you say something to Australia in a second. But I think overall, margin moving up—that's good. That's a good sign that the structural profitability is moving.

Speaker #5: Cost management is being very good, despite the markets being really sluggish. China, Hong Kong, Bangladesh, Indonesia—difficult. Thailand, and especially India—better. Volume growth.

Speaker #5: Malaysia getting better throughout the year. So overall, I think the markets are still somewhat sluggish. Nevertheless, the team has pulled off a good, very good margin performance.

Dominik von Achten: Nevertheless, the team has pulled off a good, very good margin performance. With that structural profitability as volumes come back, I think we should see also better result development. Maybe, René, you say something first.

Speaker #5: And with that structural profitability as volumes come back, I think we should see also better result development. Maybe René, you say something for Australia.

Christoph Beumelburg: Yeah. For Australia, Q4, I think, was 10% up in Q4, which was very good. The full year also up versus prior year. Even due to the fact that the first 6 months were weak in Australia, the market is coming back. January, February confirms that the market is improving. Outlook for Australia should be okay.

René Aldach: Yeah. For Australia, Q4, I think, was 10% up in Q4, which was very good. The full year also up versus prior year. Even due to the fact that the first 6 months were weak in Australia, the market is coming back. January, February confirms that the market is improving. Outlook for Australia should be okay.

Speaker #5: Yeah. For Australia, Q4, I think was 10% up in Q4, which was very good. And then the full year also up versus prior year.

Speaker #5: Even if we even due to the fact that the first six months were weak in Australia. But the market is coming back in January, February confirms that the market is improving.

Speaker #5: So outlook for Australia should be okay. Yeah. And then what do you want me to say? You enjoy this one on your own. What do you want to say?

Dominik von Achten: Yeah, what do you want me to say? You enjoy this one on your own. What do you want to say? You know, I think a fantastic top line growth in all dimensions, in the right direction. EBITDA, RCO. Look at the margin level there, EBITDA margin in cement, 30%. I'm, I leave this for you to enjoy without a comment.

Christoph Beumelburg: Yeah, what do you want me to say? You enjoy this one on your own. What do you want to say? You know, I think a fantastic top line growth in all dimensions, in the right direction. EBITDA, RCO. Look at the margin level there, EBITDA margin in cement, 30%. I'm, I leave this for you to enjoy without a comment.

Speaker #5: I think a fantastic top-line growth. In all dimensions, in the right direction. EBITDA, RCO. Look at the margin level there. EBITDA margin in cement, 30%.

Speaker #5: I leave this for you to enjoy without a comment. Africa, Middle East. We're talking. Sorry, I'm talking about 19, page 19. Africa, Mediterranean, and Western Asia.

Christoph Beumelburg: Africa, Middle East.

René Aldach: Africa, Middle East.

Dominik von Achten: Yeah.

Christoph Beumelburg: Okay.

René Aldach: Okay.

Dominik von Achten: Sorry, I'm talking about 19, page 19. Africa, Mediterranean, and Western Asia. Okay. With that, Rene, I turn over to you.

Dominik von Achten: Sorry, I'm talking about 19, page 19. Africa, Mediterranean, and Western Asia.

Christoph Beumelburg: Okay. With that, Rene, I turn over to you.

Speaker #5: Okay. With that, René, I turn over to you. Thanks, Dominik. Let me go on slide 21. Just quickly, the highlights. Adjusted earnings per share go up 4%.

Christoph Beumelburg: Thanks, Dominic. Let me go on slide 21. Quickly, the highlights. Adjusted earnings per share go up 4%. They adjusted, as you know, we take the AOR out. In previous, in prior year, 2024, we had a EUR 65 million provision release in discontinued operations, which is really also a purely one of which we've taken out. That leads to a 4% increase. Free cash flow, EUR 2.1 billion. We come later to that, why is this slightly going down? Cash conversion at 45%, which we said was the target for 2025. Now, in the latest Capital Markets Day, we've moved this to 50%, I think with that number, we are on track. ROIC, 10.4 at record level, as Dominic said.

René Aldach: Thanks, Dominic. Let me go on slide 21. Quickly, the highlights. Adjusted earnings per share go up 4%. They adjusted, as you know, we take the AOR out. In previous, in prior year, 2024, we had a EUR 65 million provision release in discontinued operations, which is really also a purely one of which we've taken out. That leads to a 4% increase. Free cash flow, EUR 2.1 billion. We come later to that, why is this slightly going down? Cash conversion at 45%, which we said was the target for 2025. Now, in the latest Capital Markets Day, we've moved this to 50%, I think with that number, we are on track. ROIC, 10.4 at record level, as Dominik said.

Speaker #5: And the adjusted—as you know, we take the AOR out. And in the prior year, '24, we had a €65 million provision release in discontinued operations, which was also a purely one-off, which we've taken out.

Speaker #5: And that leads to a 4% increase. Free cash flow at 2.1 billion. We come later to that. Why is this slightly going down? Cash conversion at 45%, which we said was the target for 25.

Speaker #5: Now we've, in the latest capital markets, moved this to 50. But I think with that number, we are on track. ROIC, 10.4, at record level.

Speaker #5: As Dominik said, that tells you a little bit that we manage the company very in a very disciplined way. Leverage at 1.2. No surprises.

Christoph Beumelburg: That tells you a little bit that we manage the company very in a very disciplined way. Leverage at 1.2, no surprises, below our midterm target. Capital allocation, we said it, shareholder return went up 10% and will also further go up in 2026 because we set progressive dividend, plus we have the last tranche of the share buyback, so that will go up further. Asment de Témara is closed, and Maersk we have signed, so that's just a repetition. Let's go to the next slide. The P&L, until RCO, we have discussed. AOR is EUR 170 million better than last year, but still, you know, we have we have some impairments, some restructuring costs in the EUR 264 million.

René Aldach: That tells you a little bit that we manage the company very in a very disciplined way. Leverage at 1.2, no surprises, below our midterm target. Capital allocation, we said it, shareholder return went up 10% and will also further go up in 2026 because we set progressive dividend, plus we have the last tranche of the share buyback, so that will go up further. Asment de Témara is closed, and Maersk we have signed, so that's just a repetition. Let's go to the next slide. The P&L, until RCO, we have discussed. AOR is EUR 170 million better than last year, but still, you know, we have we have some impairments, some restructuring costs in the EUR 264 million.

Speaker #5: Below our mid-term target. And then capital allocation, we said it, shareholder return went up 10%. And we'll also further go up in 2026. Because we said progressive dividend plus we have the last tranche of the share buyback.

Speaker #5: So that will go up further. And then asset management on giant is closed. And Mars, we have signed. So that's just a repetition. Let's go to the next slide.

Speaker #5: The P&L until RCO, we have discussed. AOR is €170 million better than last year, but still, we have some impairments, some restructuring costs in the €264 million.

Speaker #5: And as you, we have outlined in the capital markets today, we have the, let's say, European master plan also. And this needs to be prepared.

Christoph Beumelburg: As you, we have outlined in the Capital Markets Day, we have, let's say, European master plan also, you know, and this needs to be prepared. There, there you have numbers in for restructuring and impairment, the good thing is it's lower than in 2024. Financial result, I think, very, very, very low for the size of the company, EUR 193 million. I guess it's best-in-class number. Income taxes go slightly up, you see it, our profits go up, we have to pay taxes. Net result from discontinued operations, that's the -EUR 80. What I said, there's a EUR 65 million in last year, de facto, it's nearly flat. Non-controlling interest, you see, is EUR 190. That goes EUR 50 million up. Why is this?

René Aldach: As you, we have outlined in the Capital Markets Day, we have, let's say, European master plan also, you know, and this needs to be prepared. There, there you have numbers in for restructuring and impairment, the good thing is it's lower than in 2024. Financial result, I think, very, very, very low for the size of the company, EUR 193 million. I guess it's best-in-class number. Income taxes go slightly up, you see it, our profits go up, we have to pay taxes. Net result from discontinued operations, that's the -EUR 80. What I said, there's a EUR 65 million in last year, de facto, it's nearly flat. Non-controlling interest, you see, is EUR 190. That goes EUR 50 million up. Why is this?

Speaker #5: And here you have numbers in for restructuring and impairment. But the good thing is it's lower than in 24. Financial result, I think very, very, very low for the size of the company.

Speaker #5: 193 million. I guess it's best in class number. Income taxes go slightly up. And you see it, our profits go up. So we have to pay taxes.

Speaker #5: Net result from discontinued operations, that's the minus 80, what I said as a 65 million in last year. So de facto, it's nearly flat.

Speaker #5: And then non-controlling interest, you see, is 190. That goes 50 million up. Why is this? Because in Africa, we have countries where we don't own 100%, like Morocco or Egypt.

Christoph Beumelburg: Because in Africa, we have countries where we don't own 100%, like Morocco or Egypt. Here, the minorities go out. We come to a reported group share profit of EUR 1.94 billion, which is EUR 160 million up. If you take the one-offs out, let's say AOR and the big provision release, we go up by EUR 0.50 per share, which is, I think, a very good result. If you go to the next slide, to the free cash flow, you see that here, EUR 2.1 billion, EUR 60 million lower. Two major, let's say, items. You see the CapEx goes up by EUR 80 million, and Dominik alluded to that. We have here already some money in Q4 for Padeswood, which is good.

René Aldach: Because in Africa, we have countries where we don't own 100%, like Morocco or Egypt. Here, the minorities go out. We come to a reported group share profit of EUR 1.94 billion, which is EUR 160 million up. If you take the one-offs out, let's say AOR and the big provision release, we go up by EUR 0.50 per share, which is, I think, a very good result. If you go to the next slide, to the free cash flow, you see that here, EUR 2.1 billion, EUR 60 million lower. Two major, let's say, items. You see the CapEx goes up by EUR 80 million, and Dominik alluded to that. We have here already some money in Q4 for Padeswood, which is good.

Speaker #5: And then here, the minorities go out. So we come to a reported group share profit of €1.94 billion, which is €160 million up. And if you take the one-offs out—let's say AOR and the big provision release—we go up by €0.50 per share, which is, I think, a very good result.

Speaker #5: If you go to the next slide, to the free cash flow, you see that here, 2.1 billion. It's 60 million lower. Two major items.

Speaker #5: You see the CapEx goes up by 80 million. And Dominik alluded to that. We have here already some money in Q4 for Padeswood, which is good.

Christoph Beumelburg: Yeah, we are building something that's very good, you know that we get here also support from the UK Government. Then another line is here, non-cash items and other. You see -EUR 152, this is due to the fact that we have some cash out from provisions. Yeah, last for the restructuring last year, we have built up the provision, this year we have paid it out. Yeah, that's for restructuring. There's some obviously some bonuses if the company does record result, there's one-to-one off payments for some litigations. There's nothing, you know, we have very good transparency here. Obviously, there's nothing of concern, you have seen the TAI project. We, instead of EUR 250 million, we have delivered EUR 380.

René Aldach: Yeah, we are building something that's very good, you know that we get here also support from the UK Government. Then another line is here, non-cash items and other. You see -EUR 152, this is due to the fact that we have some cash out from provisions. Yeah, last for the restructuring last year, we have built up the provision, this year we have paid it out. Yeah, that's for restructuring. There's some obviously some bonuses if the company does record result, there's one-to-one off payments for some litigations. There's nothing, you know, we have very good transparency here. Obviously, there's nothing of concern, you have seen the TAI project. We, instead of EUR 250 million, we have delivered EUR 380.

Speaker #5: We are building something. That's very good. And that we get here also support from the UK government. And then the another line is here: non-cash items and other.

Speaker #5: You see here minus 152. And this is due to the fact that we have some cash out from provisions. Last year, for the restructuring, we built up the provision.

Speaker #5: And this year, we have paid it out. That's for restructuring. There's some obviously some bonuses if the company does record result. And there's one-to-one off payments for some litigations.

Speaker #5: So, there's nothing—we have very good transparency here. Obviously, there's nothing of concern. And obviously, you have seen the TIE project. Instead of €250 million, we have delivered €380 million.

Speaker #5: That comes obviously with some cost. But we should see some relief here because the big things have been done. If we then go to the next slide, net debt development, you see net debt is going up 400 million.

Christoph Beumelburg: That comes obviously with some cost, but, you know, we should see some relief here, because the big things have been done. If you go to the next slide, net debt development, you see net debt is going up EUR 400 million leverage. I say 1.2 to 1.2. That's flat. How did we use the free cash flow? Our net gross CapEx of EUR 1.1 billion, which was then the biggest one was Giant Asment de Témara. That's, roughly EUR 800 million, EUR 900 million of this, or EUR 800 million of this. Dividends, we have increased, minorities, also share buyback, EUR 400 million, so EUR 1.1 billion share return, which is +10%. Some other investors releasing liabilities in there, which we have every year.

René Aldach: That comes obviously with some cost, but, you know, we should see some relief here, because the big things have been done. If you go to the next slide, net debt development, you see net debt is going up EUR 400 million leverage. I say 1.2 to 1.2. That's flat. How did we use the free cash flow? Our net gross CapEx of EUR 1.1 billion, which was then the biggest one was Giant Asment de Témara. That's, roughly EUR 800 million, EUR 900 million of this, or EUR 800 million of this. Dividends, we have increased, minorities, also share buyback, EUR 400 million, so EUR 1.1 billion share return, which is +10%. Some other investors releasing liabilities in there, which we have every year.

Speaker #5: Leverage, I say 1.2 to 1.2. That's flat. And how did we use the free cash flow? Net gross CapEx of 1.1 billion. Which were then the biggest one was here giant and asset management.

Speaker #5: That's roughly $800–900 million of this, or $800 million of this. Dividends, we have increased minorities also. Share buyback, $400 million. So, $1.1 billion shareholder return, which is plus 10%.

Speaker #5: And then some other, which is releasing liabilities in there, which we have every year. I think very solid number: €5.7 billion for the company comes to a leverage of 1.2.

Christoph Beumelburg: I think very solid number, EUR 5.7 billion for the company, comes to a leverage of 1.2. To the next slide, the earnings per share over a longer period, that moves up 12, CAGR 12%. I guess it's a remarkable number. Obviously, the plan for 2026 is that this moves further up. The ROIC now at 10.4, I alluded to that. It's a record number. RCO up, tax rate better, invested capital well managed. All three dimensions very well managed, leading to that number. Dominic, I hand over to you for the outlook.

René Aldach: I think very solid number, EUR 5.7 billion for the company, comes to a leverage of 1.2. To the next slide, the earnings per share over a longer period, that moves up 12, CAGR 12%. I guess it's a remarkable number. Obviously, the plan for 2026 is that this moves further up. The ROIC now at 10.4, I alluded to that. It's a record number. RCO up, tax rate better, invested capital well managed. All three dimensions very well managed, leading to that number. Dominic, I hand over to you for the outlook.

Speaker #5: If we then come to the next slide, the earnings per share over a longer period. That moves up 12 KGA, 12%. I guess it's a remarkable number.

Speaker #5: And obviously, the plan for 26 is this moves further up. And the ROIC now at 10.4. I alluded to that. It's a record number.

Speaker #5: RCO up, tax rate better, invested capital well managed. So all three dimensions very well managed, leading to that number. Dominik, I hand over to you for the outlook.

Speaker #5: Thanks, Rene. Then let me go through the outlook before we come to your questions. Let's go from left to right. So overall, North America, positive outlook.

Dominik von Achten: Thanks, Rene. Let me go through the outlook before we come to your questions. Let's go from left to right. Overall, North America, positive outlook, as we have good, both good volumes and also pricing expectations for North America. Of course, residential is gonna continue to stay a little bit soft, but I think, you know, data centers, but also, you know, the real estate sector is coming back when it comes to the commercial real estate sector. Overall, I think a quite positive outlook for North America. Africa, Mediterranean and Western Asia, same thing. We kept it short, intact, organic growth, good management performance on pricing and costs should lead to another good year out of AMBA.

Speaker #5: As we have both good volumes and also good pricing expectations for North America. Of course, residential is going to continue to stay a little bit soft.

Speaker #5: But I think data centers, but also the real estate sector is coming back when it comes to the commercial real estate sector. So overall, I think quite positive outlook for North America.

Speaker #5: Africa, Mediterranean, and Western Asia same thing. We kept it short. Intact organic growth. Good management performance on pricing and costs should lead to another good year out of Amber.

Dominik von Achten: Europe, I think overall, continues to be strong, especially on Eastern and Southern Europe. I also do see some light at the end of the tunnel now for this home market here in Germany, and also our Northern European market, which is very important for us, that it comes back. Hopefully the same will then happen eventually in Benelux, France, and the UK. Pricing, we have deliberately not put on the slide here in Europe because, you know, this is very competitive sensitive. That's why we are staying here very diligent when it comes to competition. Asia Pacific, I think good market momentum in Australia, as you heard from Rene. Positive development in India, especially on the volume side.

Speaker #5: Europe, I think, overall continues to be strong, especially in Eastern and Southern Europe. But I also do see some light at the end of the tunnel now for this home market here in Germany.

Speaker #5: And also our Northern European market—this is very important for us when it comes back. And hopefully, the same will then happen eventually in Benelux, France, and the UK.

Speaker #5: Pricing—we have deliberately not put on the slide here in Europe because this is very competitively sensitive. That's why we are staying very diligent when it comes to competition.

Speaker #5: Asia Pacific, I think good market momentum in Australia, as you heard from Rene. And positive development in India, especially on the volume side. Hopefully, Thailand will recover after the election now.

Dominik von Achten: Hopefully Thailand will recover after the election now has been done, was very quiet. I think this should lead to a stable government. Indonesia and China will remain probably a little bit challenging, as they are trying to find their foothold in the new setup, both in China and in Indonesia. That's the picture for us. That then turns into a positive guidance. We are confident on RCO. We'll grow our RCO between 3.4 to 3.75, as you know from other materials, both cautious and a larger range at the beginning of the year. We'll continue to go through 2026. ROIC, we are confident that we can deliver again above 10%.

Speaker #5: Has been done. Was very quiet. I think this is should lead to a stable government. And then Indonesia, and China will remain probably a little bit challenging as they are trying to find their foothold in the new setup both in China and in Indonesia.

Speaker #5: So that's the picture for us. And that then turns into a positive guidance. We are confident on RCO. We'll grow our RCO, between 3.4 to 3.75, as you know from other materials—both cautious and a larger range at the beginning of the year.

Speaker #5: And then we'll continue to go through 2026. ROIC, we are confident that we can deliver again above 10% CO2 emissions should see a further slight reduction on the back of a global leadership already.

Dominik von Achten: CO₂ emissions should see a further slight reduction on the back of a global leadership already. CapEx, as Rene was alluding to, slightly higher than in 2025 for the reasons he gave. Leverage should gonna stay around 1.5x in line with our midterm targets. That's it from our side, and then we'll get to your questions.

Speaker #5: CapEx, as Rene was alluding to, slightly higher than in 2025 for the reasons he gave. And then leverage should go to stay around 1.5 times in line with our midterm targets.

Speaker #5: That's it from our side. And then we'll get to your questions. Thank you. Operator, can you start the Q&A process, please? Yes. Ladies and gentlemen, we will now begin the question and answer session.

Christoph Beumelburg: Thank you. Operator, can you start the Q&A process, please?

Sergen: Yes. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press Star and two. Questioners on the phone are requested to stay in the loudspeaker mode while asking a question. Anyone with a question may press Star and one at this time.

Operator: Yes. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press Star and two. Questioners on the phone are requested to stay in the loudspeaker mode while asking a question. Anyone with a question may press Star and one at this time.

Speaker #5: Anyone wishes to ask a question may press star. And one on the telephone. You will hear a tone to confirm that you have entered the queue.

Speaker #5: If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to stay with the loudspeaker mode while asking a question.

Speaker #5: Anyone who has a question may press star and one at this time. Okay. So we have quite a few people on the line. So please, as always, restrict your questions to two at a time.

Christoph Beumelburg: Okay, we have quite a few people on the line, so please, as always, restrict your questions to 2 at a time, if you will. We start with Bansari Rande Martin from Goldman Sachs.

Christoph Beumelburg: Okay, we have quite a few people on the line, so please, as always, restrict your questions to 2 at a time, if you will. We start with Ben Rada Martin from Goldman Sachs.

Speaker #5: If you will, we start with Ben Radamartin from Goldman Sachs. Hi, good afternoon. Dominik and Rene, thanks very much for the questions today. My first was just on the 2026 EBIT guidance.

Bansari Rande Martin: Hi. Good afternoon.

Ben Rada Martin: Hi. Good afternoon.

Dominik von Achten: Good afternoon, Ben.

Bansari Rande Martin: Dominic and Rene, thanks very much for the questions today. My first was just on the 2026 EBIT guidance. I wonder, can you talk through some of your assumptions when it comes to scope and FX? I noted, you know, you're talking about a better M&A year in 2026 versus 2025, but just so we understand what's driven by those two buckets, and I guess what's organic. The second question would just be on the European ETS. I know we've seen, you know, a lot of uncertainty in the last few weeks, a range of outcomes.

Ben Rada Martin: Dominic and Rene, thanks very much for the questions today. My first was just on the 2026 EBIT guidance. I wonder, can you talk through some of your assumptions when it comes to scope and FX? I noted, you know, you're talking about a better M&A year in 2026 versus 2025, but just so we understand what's driven by those two buckets, and I guess what's organic. The second question would just be on the European ETS. I know we've seen, you know, a lot of uncertainty in the last few weeks, a range of outcomes.

Speaker #5: I wonder, can you talk through some of your assumptions when it comes to scope and effects? I noted you're talking about a better M&A year in 2026, versus 2025 first.

Speaker #5: But just so we understand what's driven by those two buckets. And I guess what's organic? And then the second question would just be on the European ETS.

Speaker #5: I know we've seen a lot of uncertainty in the last few weeks—a range of outcomes. I'd be interested in, I guess, how you internally see the outcomes that are on the table.

Bansari Rande Martin: I'd be interested in, you know, I guess, how you internally see the outcomes that are on the table, and I guess if you're looking to incorporate any flexibility into your European cement planning at all, just when it comes to, you know, cling to rationalization, any investment. I know there's a lot of things being thrown up at the moment, but it'd be valuable to touch on that topic. Thank you.

Ben Rada Martin: I'd be interested in, you know, I guess, how you internally see the outcomes that are on the table, and I guess if you're looking to incorporate any flexibility into your European cement planning at all, just when it comes to, you know, cling to rationalization, any investment. I know there's a lot of things being thrown up at the moment, but it'd be valuable to touch on that topic. Thank you.

Speaker #5: And I guess if you're looking to incorporate any flexibility into your European cement planning at all, just when it comes to clinker rationalization and any investment.

Speaker #5: I know there's a lot of things being thrown up at the moment, but it'd be valuable to touch on that topic. Thank you. Rene, take the first one.

Dominik von Achten: Good. That, Rene, take the first one, and I'll do the second one, okay?

Speaker #5: And I'll do the second one, okay? Hi, Ben. It's a déjà vu here for me now. We have the same first question, I think, last year when we talked about our guidance.

Christoph Beumelburg: Hi, Ben. Although it's a deja vu here for me now, with the same first question, I think last year when we talked about our guidance. Although, guys, just for transparency, our guidance includes a 3-digit million negative FX impact, which is roughly 3%. The rest, you can do the math. If we add up organic and scope, we are coming to a growth of roughly 8%, which is fully in line what we told you at the Capital Markets Day. Yeah, the scope piece of this is probably rather on the 1% to 2%, 1.5% to 2% range. That tells you something.

René Aldach: Hi, Ben. Although it's a deja vu here for me now, with the same first question, I think last year when we talked about our guidance. Although, guys, just for transparency, our guidance includes a 3-digit million negative FX impact, which is roughly 3%. The rest, you can do the math. If we add up organic and scope, we are coming to a growth of roughly 8%, which is fully in line what we told you at the Capital Markets Day. Yeah, the scope piece of this is probably rather on the 1% to 2%, 1.5% to 2% range. That tells you something.

Speaker #5: Guys, just for transparency, our guidance includes three-digit million negative FX impact. Which is roughly 3%. And then the rest, you can do the math.

Speaker #5: So if we add up organic and scope, we are coming to a growth of roughly 8%. Which is fully in line with what we told you at the capital markets day.

Speaker #5: And the scope piece of this is probably rather on the 1 to 1 and a half to 2% range. So that tells you something.

Christoph Beumelburg: As Dominik said it, let's see how it comes through the year, but I think an 8% growth, not considering FX, is a very, very reasonable number. Maybe there's something in it. If it gets better, we have upside here on the fixed side. If you look at the rates, maybe there's something. In the scope side, Dominik said it, we wanna grow. Maas is obviously not included in that guidance, for example. I think there is some room if everything goes well.

Speaker #5: So as Dominik said it, let's see how we come through the year. But I think an 8% growth, not considering FX, is a very, very reasonable number.

René Aldach: As Dominik said it, let's see how it comes through the year, but I think an 8% growth, not considering FX, is a very, very reasonable number. Maybe there's something in it. If it gets better, we have upside here on the fixed side. If you look at the rates, maybe there's something. In the scope side, Dominik said it, we wanna grow. Maas is obviously not included in that guidance, for example. I think there is some room if everything goes well.

Speaker #5: And maybe there's something in it if it gets better. We have upside here on the FX side. If you look at the rates, maybe there's something.

Speaker #5: And in the scope side, Dominik said it, we want to grow. Math is obviously not included in that guidance, for example. So I think there is some room if everything goes well.

Speaker #5: Okay, Rene. Thanks a lot. And then Ben, on the ETS, we are not the markets. But I can tell you I'm shaking my head a little bit.

Dominik von Achten: Okay, Rene, thanks a lot. Ben, on the ATS, you know, you know, we are not the markets, but I can tell you, I'm shaking my head a little bit. I think this, I really don't understand, quite frankly, what's going on there. For us, you know, to your point, the EU ETS system has been there for 20 years. Do you really believe that's gonna get scrapped? Forget it. It's never gonna happen. Are they gonna make some adjustments? Maybe. Guys, you know, just remember, for Heidelberg, you know, you asked about flexibility. Guys, we are daily able to shift between the different gears, and we have proven this for many years now.

Speaker #5: I think I really don't understand, quite frankly, what's going on there. Because for us, to your points, the EU ETS system has been there for 20 years.

Speaker #5: Do you really believe that's going to get scrapped? Forget it. It's never going to happen. Are they going to make some adjustment? Maybe. But guys, just remember, for Heidelberg, you ask about flexibility.

Speaker #5: Guys, we are daily able to shift between the different gears. And we have proven this for many years now. And I think it's clear to be specific to your points, rationalization of capacity will absolutely continue.

Dominik von Achten: I think it's clear, to be specific to your points, rationalization of capacity will absolutely continue, because we, you know, with or without CO2, we want to be the cost leader, especially in Europe, but also in other parts of the world. Then you can put the CO2 thing on top, and that may create even more dynamics, but in the end, clear, the rationalization will continue. On the investment side, the general part of the investments, also the traditional decarbonization, will absolutely continue, obviously in line with returns. You know, if we have a decarbonization investment that depends on a CO2 price of EUR 100, and we don't have that CO2 price right now in sight, well, then we hold off with that investment. That's nothing new for us. That's normal day-to-day business.

Speaker #5: Because we with or without CO2, we want to be the cost leader, especially in Europe. But also in other parts of the world. So and then you can put the CO2 thing on top.

Speaker #5: And that may create even more dynamics. But in the end, clear the rationalization will continue. On the investment side, the general part of the investments also the traditional decarbonization will absolutely continue.

Speaker #5: Obviously, in line with returns. If we have an decarbonization investment, that depends on a CO2 price of 100 euros. And we don't have that CO2 price right now in sight.

Speaker #5: Well, then we hold off with that investment. But that's nothing new for us, guys. That's normal day-to-day business. And the same is true for CCS.

Dominik von Achten: The same is true for CCS. You know, we always said we only FID these projects if there is a superior business case. If the government is spread some uncertainty, we just sit on our hands and wait until the framework is in a way that we can use it. That was the fact in Brevik, and that was the fact in Padeswood. That's why we've done those two. Guess why we have nothing done in Europe yet? Maybe there is not enough stability in the framework and not enough funding from either Europe or the national governments, and then we do not move. That's also why we said in the capital markets, Don't get so excited, in last year in May. We are the clear CCS leader, CCUS leader.

Speaker #5: We always said, we only FID these projects if there is a superior business case. And if the governments spread some uncertainty, we just sit on our hands and wait until the framework is in a way that we can use it.

Speaker #5: And that was the fact in BRIVIC. And that was the fact in PACEwood. That's why we've done those two. But guess why we have nothing done in Europe yet?

Speaker #5: Maybe there is not enough stability in the framework, and not enough funding from either Europe or the national governments. And then we do not move.

Speaker #5: That's also why we said in the capital markets, don't get so excited last year in May. We are the clear CCS leader, CCUS leader.

Speaker #5: We are going to be that for the next five years. There is no rush for us to go into anything crazy. We are going to stay financially disciplined.

Dominik von Achten: We are gonna be that for the next 5 years. There is no rush for us to go into anything crazy. We are gonna stay financially disciplined. I really don't understand all this noise. For me, that's, I have to smile a little bit. Sorry.

Speaker #5: So I really don't understand all this noise. For me, that's I have to smile a little bit. Sorry. Very clear. Thanks very much. Thanks, Ben.

Sergen: Very clear. Thanks very much.

Ben Rada Martin: Very clear. Thanks very much.

Dominik von Achten: Okay.

Christoph Beumelburg: Thanks, Ben. The next question comes from Luis Prieto from Kepler Cheuvreux.

Speaker #5: The next question comes from Luis Preto from Kepler. Luis? Luis, hello. Hello. Hello, guys. Thanks a lot for taking my questions. Two from me today.

Dominik von Achten: Luis.

Christoph Beumelburg: Luis, hello.

Luis Prieto: Hello. Hello, guys. Thanks a lot for taking my questions, 2 from me today. The first one is how have price increases started this year in the context of declining CO2 allowances? Also regarding this, when do we know more about benchmarks and how the industry is suffering or not from the lower allowances? The second one is surpassing the EUR 500 million Transformation Accelerator savings target to an extent included in your current guidance range that you just commented on?

Speaker #5: The first one is, how have price increases started this year in the context of declining CO2 allowances? And also regarding this, when do we know more about benchmarks and how the industry is suffering or not from the lower allowances?

Speaker #5: And the second one is, surpassing the 500 million euro transformation accelerator savings target to an extent included in your current guidance range that you just commented on?

Speaker #5: Okay, Luis. Let Rene take the last one. And I'll take the first two ones. On the price increases, guys, again, calm down. There is no change to what we have told you before.

Dominik von Achten: Okay, Luis. Let's Rene take the last one, and I'll take the first two ones. The price increases, guys, again, calm down. There is no change to what we have told you before. Price increases get implemented across the world. That's also true for Europe. Obviously, as I said, you know, given the winter set up in Q4 and Q1, there's always, there may be some delay as the business is just not, not moving at this point. There is no change in terms of what we want to achieve in terms of pricing, both in Europe, and in the US and in other parts of the world. When it comes to the benchmark, Luis, we are not the EU Commission or the EU Parliament.

Speaker #5: Price increases get implemented across the world. That's also true for Europe. Obviously, as I said, given the winter setup in Q4 and Q1, there is always—there may be some delay, as the business is just not moving at this point.

Speaker #5: But there is no change in terms of what we want to achieve in terms of pricing, both in Europe and in the US and in other parts of the world.

Speaker #5: When it comes to the benchmark Luis, we are not the EU Commission or the EU Parliament. You know the timeline around this. They are trying to get their arms around this in this quarter or at the latest next quarter.

Dominik von Achten: You know the timeline around this. They are trying to get their arms around this in this quarter or at the latest, next quarter, and they will publish a benchmark. There are thousands of rumors around what the benchmark figure will be. Personally, and this is my personal opinion, don't quote me on this, I do not believe that the benchmark is gonna be tightened to the very limits. It's gonna be somewhere in the middle between where we are now and where it, the big speculation, was in the past. I foresee that there may be some relief on the benchmark versus the very extreme approach that was maybe discussed half a year or a year ago. It's.

Speaker #5: And they will publish a benchmark. There are thousands of rumors around what the benchmark figure will be. Personally, and this is my personal opinion, don't quote me on this, I do not believe that the benchmark is going to be tightened to the very limit.

Speaker #5: It's going to be somewhere in the middle between where we are now and where the big speculation was in the past. So I foresee that there may be some relief on the benchmark versus the very extreme approach that was maybe discussed half a year or a year ago.

Speaker #5: But it's—sorry—that's the normal review process that happens every year. But now everybody gets so excited about it. I don't know what's going on.

Dominik von Achten: Sorry, that's the normal, that's the normal review process that happens every year, but now everybody gets so excited about it. I don't know what's going on. Every couple of years, you have this review cycle, and then they play around with the benchmark, and they do a little bit here and there, but that doesn't change anything fundamentally, guys. That's where we sit on the benchmark discussion.

Speaker #5: Every couple of years, you have this review cycle. And then they play around with the benchmark. And they do a little bit here and there.

Speaker #5: But that doesn't change anything fundamentally, guys. So that's where we sit on the benchmark discussion. So Luis, regarding time, just one in advance. You see our Thai numbers clearly in Thai savings in our P&L.

Christoph Beumelburg: Luis, regarding TAI, just one in advance. Although, you see our TAI numbers clearly in TAI savings in our P&L. We have reduced our fixed costs this year by EUR 40 million reported, even though we have EUR 40 million negative inventory. Like for like, EUR 80 million reduction. That tells you that we see the net effect of the TAI in our numbers. That's number 1. Number 2, to your question, do we have more than 500 in our guidance? I would say, obviously there is a big part in the guidance, but as we have written it on the slide, maybe there's some upside in that number also.

René Aldach: Luis, regarding TAI, just one in advance. Although, you see our TAI numbers clearly in TAI savings in our P&L. We have reduced our fixed costs this year by EUR 40 million reported, even though we have EUR 40 million negative inventory. Like for like, EUR 80 million reduction. That tells you that we see the net effect of the TAI in our numbers. That's number 1. Number 2, to your question, do we have more than 500 in our guidance? I would say, obviously there is a big part in the guidance, but as we have written it on the slide, maybe there's some upside in that number also.

Speaker #5: We have reduced our fixed costs this year by 40 million euro. Reported even though we are 40 million negative inventory. So for like 80 million euro reductions.

Speaker #5: So that tells you that we see the net effect of the Thai in our numbers. So that's number one. Number two, to your question, do we have more than 500 in our guidance?

Speaker #5: I would say, obviously, there is a big part in the guidance. But as we have written it on the slide, maybe there's some upside in that number also.

Speaker #5: Excellent. Thank you. Great. Next one comes from Elodie Raw from JPMorgan. Elodie, hello. Hello. Hi. Good afternoon. Thanks for taking my question. So my two questions would be, first of all, going back to European cement prices.

Luis Prieto: Excellent. Thank you.

Christoph Beumelburg: ... Great. Next one comes from Elodie Rall from J.P. Morgan. Elodie, hello.

Elodie Rall: Hi, good afternoon. Thanks for taking my question, sir. My two questions would be, first of all, going back to European cement prices. I just wondered if you could just tell us if the discussions that have taken place or started to taken place on the EU ETS has impacted the outlook at all for European cement prices, and in particular, the price cost spread that you do expect to generate this year and next year, if there's any change to that in your view, and if a lower carbon price also impacts that? Second, on your guidance, it'd be helpful if you can help us understand, you know, what takes you to the lower and higher end of the range in term of pricing, volume, or other assumptions that you've made there. Thanks very much.

Speaker #5: I just wondered if you could just tell us if the discussions that have taken place have started to take place on the EUTS. Has it impacted the outlook at all for you for European cement prices?

Speaker #5: And in particular, the price cost spread that you do expect to generate this year and next year. If there's any change to that in your view.

Speaker #5: And if a lower carbon price also impacts that. And second, on your guidance, it'd be helpful if you can help us understand what takes you to the lower and higher end of the range in terms of pricing, volume, or other assumptions that you've made there.

Speaker #5: Thanks very much. Thanks, Elodie. To your first question, no and no. So, no change. And we are fully on track. And also, no, whether there will be an impact to price over cost from my perspective—no.

Christoph Beumelburg: Thanks, Elodie. To your first question, no, and no. No change, and we are fully on track. Also, no, whether there will be an impact to price over cost, from my perspective, no. Clear target will be again to deliver a positive price over cost scenario for 2026. In both cases, no, which means yes, in the end, no?

René Aldach: Thanks, Elodie. To your first question, no, and no. No change, and we are fully on track. Also, no, whether there will be an impact to price over cost, from my perspective, no. Clear target will be again to deliver a positive price over cost scenario for 2026. In both cases, no, which means yes, in the end, no?

Speaker #5: The clear target will be, again, to deliver a positive price-over-cost scenario for 2026. So, in both cases, no, no. Which means, yes, yes, in the end.

Speaker #5: Okay. Okay. Regarding the guidance, Elodie, first of all, lower end, obviously, Dominik said it. I think we and you see it on the slide.

Elodie Rall: Okay.

Christoph Beumelburg: Okay, regarding the guidance, Elodie, also, first of all, as a lower end, obviously, Dominik said it. I think we, and you see it on the slide. We have assumed volume recovery in a few of our areas, and we are sitting here last year. I said it also for Europe, volume recovery for the rest, and it didn't happen, but we still deliver the result. If the volume recovery does not happen, maybe we come to the lower end of the guidance. Yeah. If everything goes to plan, we can be probably a little bit better than the midpoint of the guidance. It's early in the year. I said it, we have some maybe tie upside. There's, I think, maybe something, there's scope, maybe something.

Speaker #5: We have assumed volume recovery in a few of our areas. And we were sitting here last year, and I said it also for Europe, volume recovery for the rest.

Speaker #5: And it didn't happen. But we still delivered the result. So if the volume recovery does not happen, maybe we come to the lower end of the guidance.

Speaker #5: But if everything goes to plan, we can be probably a little bit better than the midpoint of the guidance. It's early in the year, I said it.

Speaker #5: We have some maybe Thai upside. There's a fix, maybe something. There's scope, maybe something. So this can lead us probably to the upper end to the guidance.

Christoph Beumelburg: This can lead us probably to the upper end, to the guidance. I hope that's enough. Elodie, just, my team gets completely nervous with my no, and yes. Just to be very clear, what, you know, you asked whether there is any change on the pricing targets and the pricing implementation, no. Whether there is any negative impact on the price over cost dynamics, no. That's why I said yes, because both goes in the right direction in pricing, and also in price over cost, just to be clear about it, no?

Christoph Beumelburg: This can lead us probably to the upper end, to the guidance. I hope that's enough.

Speaker #5: I hope that's enough. And Elodie, just Martine gets completely nervous with my no, no and yes, yes, just to be very clear what you asked whether there is any change.

Dominik von Achten: Elodie, just, my team gets completely nervous with my no, and yes. Just to be very clear, what, you know, you asked whether there is any change on the pricing targets and the pricing implementation, no. Whether there is any negative impact on the price over cost dynamics, no. That's why I said yes, because both goes in the right direction in pricing, and also in price over cost, just to be clear about it, no?

Speaker #5: On the pricing targets and the pricing implementation, no. Whether there is any negative impact on the price-over-cost dynamics, no. So that's why I said yes, yes, because both go in the right direction in pricing.

Speaker #5: And also in price over cost, just to be clear about it. That's very clear. Thanks, Elodie. Next line is Pujoli Ghosh from Bernstein. Hi.

Elodie Rall: That's very clear.

Christoph Beumelburg: Thanks, Elodie. Next in line is Pujarini Ghosh from Bernstein. Hi, Puchali.

Christoph Beumelburg: Thanks, Elodie. Next in line is Pujarini Ghosh from Bernstein. Hi, Pujarini.

Pujarini Ghosh: Hi. Hey, thanks for taking my question. One question is on the margin expectation that's baked into your guidance for 2026. Could you provide a little bit of color around, you know, what range of margin expansion you're expecting, given, you know, the very strong margin expansion we saw last year? Then how this splits into maybe the TAI synergies, price, cost, operating leverage or deleverage, and anything else, and could there be some regional differences? I think my second question is around, again, going back to the EU ETS discussion, and, you know, you've already invested in Brevik, and you've started investing in Padeswood as well.

Speaker #5: Hey. Thanks for taking my question. So one question is on the margin expectation for that's baked into your guidance for 2026. And could you provide a little bit of color around what range of margin expansion you're expecting, given the very strong margin expansion we saw last year?

Speaker #5: And then how this flips into maybe the TAI synergies, price cost operating leverage or deleverage. And anything else. And could there be some regional differences?

Speaker #5: And I think my second question is around, again, going back to the ETF discussion. And you've already invested in Brevik, and you've started investing in Padeswood as well.

Pujarini Ghosh: Last year at the CMD, you gave a very good, you know, explanation of the excellent profitability and returns from Brevik. Supposing, you know, hypothetical prices collapse, then could you provide of, you know, your returns or, from these plants, to, like, every inch in the carbon prices?

Speaker #5: And last year, at the CMD, you gave a very good explanation of the excellent profitability and returns from Brevik. But supposing hypothetic prices collapse, then could you provide your returns or from these plans?

Speaker #5: To every change in the carbon prices. Okay. René, maybe you want to start with the margins question first. And then I'll help a little bit with the EU ETS, and maybe René can also add with the financial impact.

Christoph Beumelburg: Okay, Rene, maybe you want to start with the margins, with the margin question first, and then I'll help a little bit with the EU ETS, and maybe Rene can also add with the financial piece. That's a very detailed here margin question. I have to say, I'll give you a high level what should happen. Obviously, what we said as well in the capital markets day, for Europe, our margins should move further up. You know, we do the, let's say, the plant optimization, the pricing should be reasonable, and if volumes come back a little bit, that is all obviously contributing to our margin, and you see this also in 25. That works and should go further up. We go to North America.

Dominik von Achten: Okay, Rene, maybe you want to start with the margins, with the margin question first, and then I'll help a little bit with the EU ETS, and maybe Rene can also add with the financial piece. That's a very detailed here margin question. I have to say, I'll give you a high level what should happen. Obviously, what we said as well in the capital markets day, for Europe, our margins should move further up. You know, we do the, let's say, the plant optimization, the pricing should be reasonable, and if volumes come back a little bit, that is all obviously contributing to our margin, and you see this also in 25. That works and should go further up. We go to North America.

Speaker #5: That's a very detailed here. Margin question. I have to say, so I'll give you a high level what should happen. Obviously, what we said as well in the capital markets today for Europe, our margins should move further up.

Speaker #5: We do the, let's say, the plant optimization. The pricing should be reasonable. Then if volumes come back a little bit, that is all obviously contributing to our margin.

Speaker #5: And you see this also in '25. So that works. And should go further up. Then we go to North America. You see, we have in cement, you have seen the number went slightly down in '25.

Christoph Beumelburg: You see, we have in cement, you have seen the number went slightly down in 2025. That should obviously recover because the cement price increase in the US should be more pronounced than we had it in 2025. On the cost side, the US colleagues have a good, very good cost target. In aggregate, you know, there should be decent pricing also. Margins in the US should move further up. You know, in Asia or in APAC, the margins are already pretty at the bottom. That depends on a little bit what does pricing do, because cost management is very good. Let's see how that moves in APAC. For sure, Australia margins have to go up due to good cost and good pricing.

Dominik von Achten: You see, we have in cement, you have seen the number went slightly down in 2025. That should obviously recover because the cement price increase in the US should be more pronounced than we had it in 2025. On the cost side, the US colleagues have a good, very good cost target. In aggregate, you know, there should be decent pricing also. Margins in the US should move further up. You know, in Asia or in APAC, the margins are already pretty at the bottom. That depends on a little bit what does pricing do, because cost management is very good. Let's see how that moves in APAC. For sure, Australia margins have to go up due to good cost and good pricing.

Speaker #5: That should obviously recover. Because the cement price increased in the US should be more pronounced than we had it in '25. And also on the cost side, the US colleagues have a good, very good cost target.

Speaker #5: And in aggregates, there should be decent pricing also. So margins in the US should move further up. And then in Asia, or in APEC, the margins are already pretty at the bottom.

Speaker #5: So that depends a little bit on what pricing does, because cost management is very good. Let's see how that moves in APEC. For sure, Australia margins have to go up due to good cost and good pricing.

Speaker #5: And then for AMVA, margin is already at 30%. So let's see how we move there. But overall, the sentiment here is also good. So overall, we should see the group margin obviously going up with all the measures we are taking.

Christoph Beumelburg: For AMBA, you know, margin is already at 30%, so let's see how we move there. Overall, the sentiment here is also good. Overall, we should see the group margin obviously going up with all the measures we are taking.

Dominik von Achten: For AMBA, you know, margin is already at 30%, so let's see how we move there. Overall, the sentiment here is also good. Overall, we should see the group margin obviously going up with all the measures we are taking.

Speaker #5: Thanks, Pujoli. The next question comes from Tom Tsang from sorry, sorry, sorry. Yes. So on the EUATS, first of all, there is no sign whatsoever that the demand for our evo-built carbon capture or evo-built or evo-zero products is collapsing or even the price discussion is collapsing.

[Company Representative] (Heidelberg Materials AG): Thanks, Pacioli. The next question comes from Tom Zhang from-

Christoph Beumelburg: Thanks, Pujarini. The next question comes from Tom Zhang from-

Dominik von Achten: Hold on.

[Company Representative] (Heidelberg Materials AG): Sorry, sorry.

Christoph Beumelburg: Sorry, sorry.

Dominik von Achten: We haven't heard.

[Company Representative] (Heidelberg Materials AG): Yes. It is.

Christoph Beumelburg: Yes. It is.

Dominik von Achten: On the AOACs, you know, first of all, there is no sign whatsoever that the demand for our EvoBuild carbon capture or EvoBuild or EvoZero products is collapsing, or even the price discussion is collapsing. Absolutely not. There is no impact whatsoever. Just to be very clear, and I think that answers then also the question, what's your hypothetical approach for us? That hypothesis is not one that we follow at all. As you know, just as a general remark, our equity in Brevik is very limited. If you try to get to the downside protection, forget it. It's meaningless. That's always what we said.

Speaker #5: Absolutely not. There is no impact whatsoever. Just to be very clear. And I think that answers then also the question, what's the hypothetical approach for us that hypothesis is not one that we follow at all.

Speaker #5: And as you know, just as a general remark, our equity in Brevik is very limited. So if you try to get to the downside protection, forget it.

Speaker #5: It's meaningless. That's always what we said. It needs to be a very, very profitable business case. And our skin in the game is not zero, but it is very, very small and reasonable.

Dominik von Achten: You know, it needs to be a very, very profitable business case, and our skin in the game is not zero, but it is very, very small and reasonable. That's both true for Brevik and Padeswood. There is no impact for us from that end.

Speaker #5: That's both true for Brevik and Paidwood. So there is no impact for us on from that end. So the only if I may add, and we discussed it intensively, obviously, is also if the price really drops to 30 or 50 euro, the only thing what we will do then is there will be a very hard review of all the CapEx projects we are doing.

Christoph Beumelburg: The only, if I might, may add, we discussed it intensively, obviously. Although if the price really drops to EUR 30 or EUR 50, you know, the only thing what we will do then is there will be a very hard review of all the CapEx projects we are doing. New CapEx projects, which are purely based on CO2 prices, will obviously have it very difficult to get approved because the business case just doesn't work. If at all this happens, then you should see an improvement in our cash flow because the CapEx spending will somehow go down. Yeah, that's a really, because for the big projects, we will then put the brakes on. We said it today morning in the press conference also, uncertainty politically, in the particular environment is not helping that Heidelberg is speeding up investments.

René Aldach: The only, if I might, may add, we discussed it intensively, obviously. Although if the price really drops to EUR 30 or EUR 50, you know, the only thing what we will do then is there will be a very hard review of all the CapEx projects we are doing. New CapEx projects, which are purely based on CO2 prices, will obviously have it very difficult to get approved because the business case just doesn't work. If at all this happens, then you should see an improvement in our cash flow because the CapEx spending will somehow go down. Yeah, that's a really, because for the big projects, we will then put the brakes on. We said it today morning in the press conference also, uncertainty politically, in the particular environment is not helping that Heidelberg is speeding up investments.

Speaker #5: New CapEx projects, which are purely based on CO2 prices, will obviously have a very difficult to get approved because the business case just doesn't work.

Speaker #5: So if at all this happens, then you should see an improvement in our cash flow because the CapEx spending will somehow go down. So that's it.

Speaker #5: Because for the big projects, we will then put the brakes on. And we said it today morning in the press conference also. Uncertainty politically in the political environment is not helping that Heidelberg is speeding up investments.

Speaker #5: So that's very clear. And if at all, our cash flow would go up. Thank you. Very clear. Then Tom Tsang from Barclays. Hey, Tom.

Christoph Beumelburg: That's very clear, and if at all, our cash flow would go up.

René Aldach: That's very clear, and if at all, our cash flow would go up.

[Company Representative] (Heidelberg Materials AG): Thank you. Very clear. Tom Zhang from Barclays.

Christoph Beumelburg: Thank you. Very clear. Tom Zhang from Barclays.

Dominik von Achten: Hey, Tom.

Speaker #5: Tom, hello. Hi, guys. Thanks. Thanks for the opportunity. Maybe following on from your point around cash, actually. My first question was just, you just about hit the cash conversion target for above 45% this year.

[Company Representative] (Heidelberg Materials AG): Tom, hello.

Tom Zhang: Hi, guys. Thanks for the opportunity. Maybe following on from your point around cash, actually, my first question was just, you know, you just about hit the cash conversion target for above 45% this year. I understand there was quite a lot of restructuring cash outs. Could you maybe talk about the phasing of that? Has the cash outs or restructuring, are we past the peak of that? Should that come off in 2026 now that the bulk of Transformation Accelerator is done? Do you have a view around, you know, can we get above 45% cash flow conversion next year, even though CapEx is going higher? Then the second question is just on your shareholder return policy.

Speaker #5: I understand there was quite a lot of restructuring cash out. Could you maybe talk about the phasing of that? Has the cash outs or restructuring?

Speaker #5: Are we past the peak of that? Should that come off in 2026 now that the bulk of Transformation Accelerator is done? And do you have a view around whether we can get above 45% cash flow conversion next year, even though CapEx is going higher?

Speaker #5: And then the second question is just on your shareholder return policy I suppose you talked quite a lot about M&A. As a use for excess capital, obviously, with a pullback in your share pricing.

Tom Zhang: I suppose you talked quite a lot about M&A as a use for excess capital, obviously, with a pullback in your share price. Is that, does that create an opportunity, I suppose, to either pull forward the 3rd tranche, extend the 3rd tranche? Yeah, I would be curious of your thoughts on that side. Thank you.

Speaker #5: Is that does that create an opportunity? I suppose, to either pull forward the third tranche, extend the third tranche, yeah, I'd be curious of your thoughts on that side.

Speaker #5: Thank you. Okay. Hi, Tom. Thanks for the two questions. First, let's do the shareholder return policy question. We will start the third tranche after the AGM as we have done the second one or as we have done in 2025.

Christoph Beumelburg: Okay. Hi, Tom, thanks for the two questions. As a first, let's do the shareholder return policy question. You know, the we will start the third tranche after the AGM, as we have done the second one, well, as we've done in 2025, so there's no change. If you do the math, you know, we announced EUR 1.2 billion for that program, and the third tranche will be the biggest. That improves, let's say, moves the share buyback already up in 2026.

René Aldach: Okay. Hi, Tom, thanks for the two questions. As a first, let's do the shareholder return policy question. You know, the we will start the third tranche after the AGM, as we have done the second one, well, as we've done in 2025, so there's no change. If you do the math, you know, we announced EUR 1.2 billion for that program, and the third tranche will be the biggest. That improves, let's say, moves the share buyback already up in 2026.

Speaker #5: So there's no change. And if you do the math, we announced 1.2 billion for that program. And the third tranche will be the biggest.

Speaker #5: So that improves moves the share back already up in 2026. That's an important point. I think it's overlooked a little bit because if we are going to stick to the 1.2 billion, and then you can do the math, and you can calculate that the last tranche is deliberately the biggest.

Dominik von Achten: That's an important point, I think it's overlooked a little bit, because if we are gonna stick to the EUR 1.2 billion, and then you can do the math, and you can calculate that the last tranche is deliberately the biggest. In that respect, I think, I'm not sure everybody got that.

Speaker #5: So in that respect, I think I'm not sure everybody got that. Yeah. It will be 450 million euro, the third tranche, in this year.

Christoph Beumelburg: Yeah, it's, it will be EUR 450 million, the third tranche in this year. That is a good increase. As we said, it also from a dividend perspective, is that progressive, so that means it will go up. You see, we'll see a nicely increased shareholder return also in 2026. For now, you know, no change to our return policy. We increased it, we will increase it in 2026, then let's see how the year goes, what we then do the year after. In terms of free cash flow and there's some noise, and cash conversion, yes, we reached the 45%.

René Aldach: Yeah, it's, it will be EUR 450 million, the third tranche in this year. That is a good increase. As we said, it also from a dividend perspective, is that progressive, so that means it will go up. You see, we'll see a nicely increased shareholder return also in 2026. For now, you know, no change to our return policy. We increased it, we will increase it in 2026, then let's see how the year goes, what we then do the year after. In terms of free cash flow and there's some noise, and cash conversion, yes, we reached the 45%.

Speaker #5: So that is a good increase. And as we said, also from a dividend perspective, we said progressive. So that means it will go up.

Speaker #5: So you see we'll see a nicely increased shareholder return also in 2026. And for now, no change to our return policy. We increased it.

Speaker #5: We will increase it in '26. And then let's see how the year goes, what we then do the year after. In terms of free cash flow and there's some noise.

Speaker #5: And cash conversion, yes, we reached the 45%. And coming to your question about restructuring and cash out, although I would say we should be near the we should have seen the peak, yeah, so the number in 2026 should be lower, materially lower than we have seen in 2025, which should help obviously at the on the cash conversion.

Christoph Beumelburg: Coming to your question about restructuring and cash out, we should be near the, we should have seen the peak. Yeah? The number in 2026 should be lower, materially lower than we have seen in 2025, which should help obviously on the cash conversion. We, as we said it, we wanna come closer to the 50%, but also we do CCUS Padeswood in 2026. You see it in our CapEx numbers, we always stay below our guidance. That is a little bit the thing in the CapEx guidance this year, we have EUR 1.2 to 1.3.

René Aldach: Coming to your question about restructuring and cash out, we should be near the, we should have seen the peak. Yeah? The number in 2026 should be lower, materially lower than we have seen in 2025, which should help obviously on the cash conversion. We, as we said it, we wanna come closer to the 50%, but also we do CCUS Padeswood in 2026. You see it in our CapEx numbers, we always stay below our guidance. That is a little bit the thing in the CapEx guidance this year, we have EUR 1.2 to 1.3.

Speaker #5: And then as we said it, we want to come closer to the 50%. But also, we do see the US Paidwood in 2026. But you see it in our CapEx numbers.

Speaker #5: We always stayed below our guidance. And that is a little bit the thing in the 1.3. And if we will be below the 1.3, which we've announced at the capital markets day, there's as well room for the cash conversion.

Christoph Beumelburg: If we will be below the 1.3, which we've announced at the capital markets day, there's as well room for the cash conversion. I think we are on track, Tom. There's the big one of this restructuring cost this year. We should be okay in 2026.

René Aldach: If we will be below the 1.3, which we've announced at the capital markets day, there's as well room for the cash conversion. I think we are on track, Tom. There's the big one of this restructuring cost this year. We should be okay in 2026.

Speaker #5: So I think we are on track. Tom, the big one of these restructuring costs this year so we should be okay in 2026. Thanks, Tom.

[Company Representative] (Heidelberg Materials AG): Thanks, Tom. The next in line is Ephrem Ravi from Citigroup.

Christoph Beumelburg: Thanks, Tom. The next in line is Ephrem Ravi from Citigroup.

Speaker #5: The next in line is Ephraim Ravi from Citigroup. Hey, Ephraim. Hi, Ephraim. Hi. Hi, guys. So, two quick questions. Firstly, on M&A, you say the pipeline is very full, and you seem genuinely excited about it.

Dominik von Achten: Ephraim.

Dominik von Achten: Ephrem.

[Company Representative] (Heidelberg Materials AG): Ephraim?

[Company Representative] (Heidelberg Materials AG): Ephrem?

Tom Zhang: Hi. Hi, guys. Two quick questions. Firstly, on M&A, you say the pipeline is very full, and you seem genuinely excited about it. Just to get to that 1.5x net debt to EBITDA, you're talking about, you know...

Ephrem Ravi: Hi. Hi, guys. Two quick questions. Firstly, on M&A, you say the pipeline is very full, and you seem genuinely excited about it. Just to get to that 1.5x net debt to EBITDA, you're talking about, you know...

Speaker #5: Just to get to that 1.5 times net debt to EBITDA, you're talking about probably about 3.5 billion of cash headroom for acquisitions, and you've already spent about 1.3 billion on math.

Ephrem Ravi: ... probably about EUR 3.5 billion of cash headroom for acquisitions, and you've already spent about EUR 1.3 billion on Maas. Are we looking more like EUR 2.2, EUR 2.3 billion, sort of scale of acquisitions, or are you also looking at, you know, acquisitions that may require issuing equity? Just in terms of the scale of M&A that you're looking at. Second question, on your digital investments, and obviously Command Alkon and those, a lot of the software companies or legacy software companies in the market have seen their share prices halve or more, because AI is going to basically replicate all of that.

Speaker #5: So are we looking more like 2.2, 2.3 billion sort of scale of acquisitions, or are you also looking at acquisitions that may require issuing equity?

Speaker #5: So just in terms of the scale of M&A that you're looking at. Second question, on your digital investments, obviously, command Alcon and those, a lot of the software companies or legacy software companies in the market have seen their share prices halve or more because AI is going to basically replicate all of that.

Ephrem Ravi: Do you think you've got the right suit of digital tools, for the AI world rather than sort of the legacy, you know, software world, in terms of your digital strategy? Thank you.

Speaker #5: Do you think you got the right suit of digital tools for the AI world rather than sort of the legacy software world in terms of your digital strategy?

Ephrem Ravi: Do you think you've got the right suit of digital tools, for the AI world rather than sort of the legacy, you know, software world, in terms of your digital strategy? Thank you.

Speaker #5: Thank you. Ephraim, thanks a lot for your question. On the very first one, zero equity raise for M&A just to be very clear. If there is any speculation on your end, sorry, guys.

Dominik von Achten: Ephrem, thanks a lot for your question. On the very first one, 0 equity raise for M&A. Just to be very clear, if there is any speculation on your end, sorry, guys, no equity raise for acquisitions. We never indicated that, and that's clearly off the table, just to be very clear. Rene, then I say something on the digital side.

Speaker #5: No equity raise for acquisitions. We never indicated that. And that's clearly off the table, just to be very clear. But René, you want to make and then I'll say something on the digital side.

Christoph Beumelburg: Ephrem, also, your math, I need to understand, because you said this capacity of what, EUR 3.5 billion or something. Our free cash flow is, let's pick a number, what we have this year, EUR 2.1, and then we pay, or let's say EUR 1.1, EUR 1.2 million shareholder return, dividends and share buyback, then there's EUR 1 billion left. If I want to move the leverage open three up, there's another EUR 1.3 to come, so there's EUR 2.4 billion left for M&A. If I do that math, if I want to come to the net debt to EBITDA target, yes, there will be some EBITDA contribution also, but okay. The math number, I need to correct, you said EUR 1.3 billion.

René Aldach: Ephrem, also, your math, I need to understand, because you said this capacity of what, EUR 3.5 billion or something. Our free cash flow is, let's pick a number, what we have this year, EUR 2.1, and then we pay, or let's say EUR 1.1, EUR 1.2 million shareholder return, dividends and share buyback, then there's EUR 1 billion left. If I want to move the leverage open three up, there's another EUR 1.3 to come, so there's EUR 2.4 billion left for M&A. If I do that math, if I want to come to the net debt to EBITDA target, yes, there will be some EBITDA contribution also, but okay. The math number, I need to correct, you said EUR 1.3 billion.

Speaker #5: And Ephraim, also your math I need to understand because you said we have capacity of, what, 3.5 billion or something. Although our free cash flow is, let's pick a number, what we have this year, 2.1.

Speaker #5: And then we pay all, let's say, $1.1, $1.2 million shareholder return, dividends, and share buyback. Then there's $1 billion left. And if I want to move the leverage 0.3 up, there's another $1.3 billion to come.

Speaker #5: So there's 2.4 billion left for M&A. Yeah? If I do that math, if I want to come to the net debt to EBITDA target, yes, there will be some EBITDA contribution also.

Speaker #5: But okay. And the math number I need to correct—you said $1.3 billion. It's $1.6, $1.7 billion Aussie, which is €950 million. Yeah?

Christoph Beumelburg: It's 1.6, 1.7 billion AUD, which is EUR 950 million. Yeah, that's the math number. As Dominik said it, you know, we have more capacity to do that. If we spent EUR 1 billion, then the leverage would be still below 1.4. I did the math just right now, and, you know, the 1.5 is not a, it's not a, is our midterm target, you know? We can be maybe 1.6, or we can be 1.2, so that's our midterm target, which we will keep. It's very clear we wanna grow further, and there will be more M&A to come.

René Aldach: It's 1.6, 1.7 billion AUD, which is EUR 950 million. Yeah, that's the math number. As Dominik said it, you know, we have more capacity to do that. If we spent EUR 1 billion, then the leverage would be still below 1.4. I did the math just right now, and, you know, the 1.5 is not a, it's not a, is our midterm target, you know? We can be maybe 1.6, or we can be 1.2, so that's our midterm target, which we will keep. It's very clear we wanna grow further, and there will be more M&A to come.

Speaker #5: That's the math number. And there's Dominik said it. We have more capacity to do that if we spend 1 billion. Then the leverage would be still below 1.4.

Speaker #5: I did the math just right now. And the 1.5 is not a it's our midterm target. We can be maybe 1.6, or we can be 1.2.

Speaker #5: So that's our midterm target, which we will keep. But it's very clear we want to grow further, and there will be more M&A to come.

Speaker #5: Okay. And then, on the digital investments—Ephraim, I think you're right from my perspective. You see what the capital markets have done in the last couple of weeks on the software side of things.

Dominik von Achten: Then on the digital investments, Ephrem, I think you're right from my perspective, and you see what the capital market has markets have done in the last couple of weeks on the software side of things. Rest assured, we've taken diligent reviews on exactly that point. I think from our seat, it's clear that the software world will split a little bit with all that AI discussion into, I would say, the general software companies and those who are deeply intertwined with the workflow end to end with your customers, and those will rather profit from this whole discussion. We have a vast acceleration of product development and a much higher productivity in terms of coding.

Speaker #5: Rest assured, we've taken diligent reviews on exactly that point. And I think from our seat, it's clear that the software world will split a little bit with all that AI discussion.

Speaker #5: I would say the general software companies and those who are deeply intertwined with the workflow end-to-end with your customers and those will rather profit from this whole discussion because we have a vast acceleration of product development and a much higher productivity in terms of coding so the costs will lower, the time to market will be quicker, and you get a very sticky connection in the workflow.

Dominik von Achten: The costs will lower, the time to market will be quicker, and you get a very sticky connection in the workflow. We have done this review also together with our partner, Thoma Bravo, and we have no reason to believe that Command Alkon gets any hit from this. It's probably rather the opposite.

Speaker #5: So we have done this review also together with our partner, Thomas Bravo, and we have no reason to believe that command Alcon gets any hit from this.

Speaker #5: It's probably rather the opposite. Thank you. Yeah. The next question comes from Cida Ekblom from Morgan Stanley. Hey, Cida. Cida, hi. Hello. Hi. Two questions from me.

Ephrem Ravi: Thank you.

Christoph Beumelburg: Yeah.

[Company Representative] (Heidelberg Materials AG): The next question comes from Cedar Ekblom, from Morgan Stanley.

Dominik von Achten: Hey, Cedar.

Christoph Beumelburg: Sita, hi.

Christoph Beumelburg: Cedar, hi.

Operator: Hello. Hi. 2 questions from me. Can you talk about the North American business? We've now had 4 quarters of consecutive negative organic top-line growth. If I'm assuming that you had a little bit of positive pricing momentum in Q4, you're looking at sort of high single-digit volume declines across all product categories in North America. I'd like to get a sense of how we should be thinking about the development in this very important market for you in 2026. Are we actually seeing growth yet at a top-line perspective? Secondly, on M&A, we've obviously debated a lot about the scope for M&A, which sounds very material. It sounds like you guys are really bullish on the growth opportunities. Can you just remind us about how we're thinking around sort of priorities, regionally, products, et cetera?

Cedar Ekblom: Hello. Hi. 2 questions from me. Can you talk about the North American business? We've now had 4 quarters of consecutive negative organic top-line growth. If I'm assuming that you had a little bit of positive pricing momentum in Q4, you're looking at sort of high single-digit volume declines across all product categories in North America. I'd like to get a sense of how we should be thinking about the development in this very important market for you in 2026. Are we actually seeing growth yet at a top-line perspective? Secondly, on M&A, we've obviously debated a lot about the scope for M&A, which sounds very material. It sounds like you guys are really bullish on the growth opportunities. Can you just remind us about how we're thinking around sort of priorities, regionally, products, et cetera?

Speaker #5: Can you talk about the North American business? We've now had four quarters of consecutive negative organic top-line growth. And if I'm assuming that you had a little bit of positive pricing momentum in the fourth quarter, you're looking at sort of high single-digit volume declines across all product categories in North America.

Speaker #5: So I'd like to get a sense of how we should be thinking about the development in this very important market for you in 2026.

Speaker #5: Are we actually seeing growth yet at a top-line perspective? And then secondly, on M&A, we've obviously debated a lot about the scope for M&A, which sounds very material.

Speaker #5: It sounds like you guys are really bullish on the growth opportunities. Can you just remind us about how we're thinking around, sort of, priorities—regionally, products, etc.?

Operator: That would be helpful. Thank you.

Speaker #5: That would be helpful. Thank you. Yeah, Cida, thanks a lot. Let me take those two questions, and then you jump in if you want on both.

Cedar Ekblom: That would be helpful. Thank you.

Dominik von Achten: Yeah, Sita, thanks a lot. Let me take those two questions, and then you jump in, if you want, on both. North America top line growth, you're right. Top line was sluggish in North America for a while. I don't think we are on our own. I think that tells you that the market, especially on the volume side, has not been our friend over the last couple of years, I would even say. I think the other point is that, you know, cost management has been good, but it needs to be super good because inflation, underlying inflation in North America is still fairly high. I think there you have that one element.

Dominik von Achten: Yeah, Cedar, thanks a lot. Let me take those two questions, and then you jump in, if you want, on both. North America top line growth, you're right. Top line was sluggish in North America for a while. I don't think we are on our own. I think that tells you that the market, especially on the volume side, has not been our friend over the last couple of years, I would even say. I think the other point is that, you know, cost management has been good, but it needs to be super good because inflation, underlying inflation in North America is still fairly high. I think there you have that one element.

Speaker #5: So North America top-line growth, you're right. Top-line was sluggish in North America for a while. I don't think we are on our own. So I think that tells you that the market, especially on the volume side, has not been our friend.

Speaker #5: Over the last couple of years, I would even say. I think the other point is that cost management has been good, but it needs to be super good because inflation underlying inflation in North America is still fairly high.

Speaker #5: So I think there you have that one element. The relief on the energy cost side in North America, you don't get as much as in other parts of the world.

Dominik von Achten: The relief on the energy cost side in North America, you don't get as much as in other parts of the world. Last but not least, when it comes to pricing, I think it differs quite market by market, quarter by quarter, and business line by business line. As I indicated earlier, if you look to the last couple of quarters, we are not entirely happy with the development on the cement side. I think there was some import pressure historically, that I think has balanced out a little bit under the whole tariff discussion. We are more optimistic for pricing in cement in the US.

Speaker #5: And then, last but not least, when it comes to pricing, I think it differs quite market by market, quarter by quarter, and business line by business line.

Speaker #5: And as I indicated earlier, if you look to the last couple of quarters, we are not entirely happy with the development on the cement side.

Speaker #5: I think there was some import pressure historically. That I think has balanced out a little bit. Under the whole tariff discussion. So we are more optimistic for pricing in cement in the US.

Speaker #5: That's what you saw in the guidance. And obviously, anyway, for aggregates. Aggregates pricing performance was actually good. So we are that's the picture from our side.

Dominik von Achten: That's what you saw in the guidance. Obviously, anyway, for aggregates pricing performance was actually good. We are, that's the picture from our side, Cedar. You want to add to that?

Speaker #5: Cida, you want to add to that? Cida, just you made the comment high single-digit volume reduction. That is absolutely not correct. In cement, it's even close to flat.

Christoph Beumelburg: Yeah, Cedar, just, you made the comment, high single-digit volume reduction. That is absolutely not correct.

René Aldach: Yeah, Cedar, just, you made the comment, high single-digit volume reduction. That is absolutely not correct.

Dominik von Achten: In cement, it's even close to flat. In aggregate, it's low single digit. Although that's not correct, I just want to say this because, if you look at also the competition, and we went through the transcripts, like for like, you know, we are the only one which is really better than everyone else is Martin. Okay, fair enough. We don't need to hide from the other ones because from a volume perspective, we are not, we are on par with the other ones.

Speaker #5: In aggregates, it's low, low single-digit. Although that's not correct. I just want to say this because if you look at also the competition, and we went to the transcripts like for like, we are the only one which is really better than everyone else is Martin.

Speaker #5: Okay. Fair enough. But we don't need to hide from the other ones because from a volume perspective, we are not we are on par with the other ones.

Operator: But-

Cedar Ekblom: But-

Christoph Beumelburg: Okay.

Speaker #5: Okay. And then, sorry, before we go on to M&A—so in the fourth quarter, you had minus 3.6% like-for-like negative organic at the top line.

Operator: Sorry, before we go on to M&A. In Q4, you had -3.6% like for like negative organic at the top line. If volumes-

Cedar Ekblom: Sorry, before we go on to M&A. In Q4, you had -3.6% like for like negative organic at the top line. If volumes-

Speaker #5: So if volumes are sort of flattish, that implies Yeah. Okay. That was done by ready mix. Ready mix. Fine. So we don't have to be worried about pricing trends in cement or pricing in aggregates.

Dominik von Achten: Yeah.

Operator: Are sort of flattish, that.

Cedar Ekblom: Are sort of flattish, that.

Dominik von Achten: That was driven by ready-mix.

Operator: Yeah. Okay, fine.

Cedar Ekblom: Yeah. Okay, fine.

Dominik von Achten: That was driven by ready-mix. Ready-mix.

Operator: Fine. We don't have to be worried about pricing trends in cement or pricing in aggregate-

Cedar Ekblom: Fine. We don't have to be worried about pricing trends in cement or pricing in aggregate-

Dominik von Achten: No.

Operator: Quite comfortable with those pictures?

Cedar Ekblom: Quite comfortable with those pictures?

Speaker #5: Quite comfortable with those pictures. Okay. Fine. Exactly. The biggest drop was in ready mix, Cida. Cement ag is okay. Okay. Great. Thank you. And then on M&A?

Dominik von Achten: No.

Operator: Okay, fine.

Cedar Ekblom: Okay, fine.

Dominik von Achten: Exactly.

Operator: Fine.

Cedar Ekblom: Fine.

Dominik von Achten: The biggest drop was in ready-mix, Cedar. Cement and agg is okay.

Operator: Okay, great. Thank you. Then on M&A, some color on targets...

Cedar Ekblom: Okay, great. Thank you. Then on M&A, some color on targets...

Speaker #5: Some color on targets. Priorities, etc.? Yeah. Yeah. M&A, I mean, first of all, we want to stick to the core markets that we have announced and that you know very well.

Dominik von Achten: Yeah.

Operator: Priorities, et cetera?

Cedar Ekblom: Priorities, et cetera?

Dominik von Achten: Yeah. Yeah, M&A, I mean, first of all, we're gonna stick to the core markets that we have announced and that you know very well. We're gonna tighten the net. We're gonna stick to the business lines that you know, so no endeavor into any other stuff like light sides or anything. We're gonna stick to the heavy upstream, downstream, that we've always done. And then, from a geographic perspective, as you saw on the earlier map, all our core markets are on the radar screen and in the pipeline. That's true for North America, it's true for Africa, it's true for Asia, it's true for Australia, and it's true for Europe. No exclusion from there.

Speaker #5: We're going to tighten the net. We're going to stick to the business lines that you know. So no endeavor into any other stuff like light sides or anything.

Speaker #5: We're going to stick to the heavy upstream, downstream, and that what we've always done. And then from a geographic perspective, as you saw on the earlier map, all our core markets are on the radar screen and in the pipeline.

Speaker #5: That's true for North America. It's true for Africa. It's true for Asia. It's true for Australia. And it's true for Europe. So no exclusion from there.

Dominik von Achten: From there, it's an opportunity-driven game. Wherever we have the best opportunity, we will jump. All pipelines are being filled and compete against each other.

Speaker #5: It's an opportunity-driven game. Wherever we have the best opportunity, we will jump. But all pipelines are being filled and compete against each other. Thank you, Cida.

Christoph Beumelburg: Thank you, Sita.

Operator: Thanks so much. Thank you.

Cedar Ekblom: Thanks so much. Thank you.

Speaker #5: Thanks so much. Thank you. Thank you. Next question comes from Julian Rattlinger from UBS. Hey, Julian. Hi, Julian. Julian. Yeah, thanks very much, guys.

Christoph Beumelburg: Thank you.

[Company Representative] (Heidelberg Materials AG): Next question comes from Julian Radlinger from UBS.

Christoph Beumelburg: Hey, Julian.

Dominik von Achten: Julian.

Dominik von Achten: Hi, Julian.

Julian Radlinger: Yeah. Thanks very much, guys. Hey. Two for me as well. First of all, in Europe, the European margins in Q4 were really strong, especially in cement. Can you talk about what drove that? In Q3, I remember you had a EUR 10 to 15 million inventory phasing related one-off. Has that reversed now? Is that effect in there? Is there anything else that's kind of, one-off, like CO2 allowance sales or anything like that? Is it a result of the transformation program? What drove that strength in Europe, organic EBIT in Q4? Second question, just to come back to the M&A once more, please.

Speaker #5: Hey. So two from me as well. So first of all, in Europe. So the European margins in Q4 were really strong. Especially in cement.

Speaker #5: Can you talk about what drove that? In Q3, I remember you had a 10 to 15 million euro inventory phasing related one-off. Has that reversed now?

Speaker #5: Has that effect in there? Is there anything else that's kind of one-off, like CO2 allowance sales or anything like that? Is it a result of the transformation program?

Speaker #5: What drove that strength in Europe? Organic EBIT in Q4. And then, second question, just to come back to the M&A once more, please. So, you said in the opening remarks that you expect more M&A in 2026 than in 2025 based on your pipeline.

Julian Radlinger: You said in the opening remarks that you expect more M&A in 2026 than in 2025 based on your pipeline, not that you've factored into the guidance, but based on what you're seeing. In 25, you had EUR 113 million EBIT contribution. Does that mean you're based on your pipeline, you think you could possibly surpass that number in 2026? In that context, can you remind us, please, what the multiples were on average that you paid in 2025 and what you would expect for 26? Thank you.

Julian Radlinger: You said in the opening remarks that you expect more M&A in 2026 than in 2025 based on your pipeline, not that you've factored into the guidance, but based on what you're seeing. In 2025, you had EUR 113 million EBIT contribution. Does that mean you're based on your pipeline, you think you could possibly surpass that number in 2026? In that context, can you remind us, please, what the multiples were on average that you paid in 2025 and what you would expect for 2026? Thank you.

Speaker #5: Not that you factored into the guidance, but based on what you're seeing. So in '25, you had 113 million EBIT contribution on well, you had 113 million EBIT contribution.

Speaker #5: Does that mean you're based on your pipeline, you think you could possibly surpass that number in 2026? And then in that context, can you remind us, please, what the multiples were on average that you paid in 2025 and what you would expect for '26?

Speaker #5: Thank you. Okay. I'll have a quiet afternoon for a second. So René, maybe you start with the Europe Q4 and are there any one-offs and everything?

Dominik von Achten: Okay. I'll have a quiet afternoon for a second. Rene, maybe you start with the Europe Q4, are there any one-offs and everything?

Christoph Beumelburg: Okay, Julian. Now, the Europe Q4, I said clearly in the Q3 call, everybody was disappointed of Q3 margins, I said, Guys, calm down. It will move into Q4. Some phasing effects, which we have now, the positives in Q4, there is no one off of CO2 sales or whatever. You know, why should we sell off our valuable certificates? No, we don't. Other the good thing out of Europe in Q4 was there was good pricing and very good cost management. That is in simple terms, that is the answer, and it came out what we said, margins in Q4 will be good, and they were good. Number two-

René Aldach: Okay, Julian. Now, the Europe Q4, I said clearly in the Q3 call, everybody was disappointed of Q3 margins, I said, Guys, calm down. It will move into Q4. Some phasing effects, which we have now, the positives in Q4, there is no one off of CO2 sales or whatever. You know, why should we sell off our valuable certificates? No, we don't. Other the good thing out of Europe in Q4 was there was good pricing and very good cost management. That is in simple terms, that is the answer, and it came out what we said, margins in Q4 will be good, and they were good. Number two-

Speaker #5: Okay, Julian. So Europe Q4. What I said clearly in the Q3 call, everybody was disappointed of Q3 margins that I said, "Guys, calm down.

Speaker #5: It will move into Q4. There were some phasing effects, which we have now. The positives are in Q4. There's no one-off of CO2 sales or whatever.

Speaker #5: Why should we sell our valuable certificates? No, we don't. Although the good thing out of Europe in Q4 was there was good pricing and very good cost management.

Speaker #5: So that's in simple terms. That is the answer. And it came out what we said, margins in Q4 will be good and they were good.

Speaker #5: Number two This is an important point, just to add what René was saying. This is tie. This is the plant adjustments, the capacity adjustments, the FTE reductions.

Dominik von Achten: This is an important point, just to add what Rene was saying. This is, you know, the plant adjustments, the capacity adjustments, the FTE reductions. We always said we are gonna focus this on Europe, and you see clearly, by the way, you know, our year-over-year global fixed cost has come down in absolute terms, like for like. I think that is really very strong and a good contribution, a strong contribution came from Europe, and you should expect more as we go along, because we are probably going to even accelerate the second wave of the master plan in Europe. We are on it, and I can tell you there is more to come when it comes to margin expansion in Europe.

Speaker #5: We always said we are going to focus this on Europe. And you see clearly, by the way, our year-over-year global fixed costs have come down in absolute terms.

Speaker #5: Like for like, so I think that is really very strong. And a good contribution, a strong contribution came from Europe. And you should expect more as we go along because we are probably going to even accelerate the second wave of the master plan in Europe.

Speaker #5: So we are on it. And I can tell you there is more to come when it comes to margin expansion in Europe. And when we come talk about M&A, Julian, I don't know where you have the numbers from.

Christoph Beumelburg: When we come talk about M&A, and I don't know where you have the numbers from. On slide 30, there are the numbers. Scope for 2025 on EBIT RCO level slash RCO was EUR 65 million, on EBITDA, EUR 115 or EUR 113. At the beginning, I said our guidance includes 1.5% to 2% RCO scope, which you can do the numbers, it's probably between EUR 50 million and EUR 60 million. You know, additional scope is dependent on when do we close the acquisition. You know, the Maas acquisition is announced, that's great, but it's not in my hands when we get the regulator approval. That depends a little bit.

René Aldach: When we come talk about M&A, and I don't know where you have the numbers from. On slide 30, there are the numbers. Scope for 2025 on EBIT RCO level slash RCO was EUR 65 million, on EBITDA, EUR 115 or EUR 113. At the beginning, I said our guidance includes 1.5% to 2% RCO scope, which you can do the numbers, it's probably between EUR 50 million and EUR 60 million. You know, additional scope is dependent on when do we close the acquisition. You know, the Maas acquisition is announced, that's great, but it's not in my hands when we get the regulator approval. That depends a little bit.

Speaker #5: On slide 30, there are the numbers. Scope for 2025 on EBIT RCO level/RCO was 65 million on EBITDA, 115 or 113. And in the original at the beginning, I said our guidance includes one and a half to 2 percent RCO scope, which you can do the numbers.

Speaker #5: It's probably between 50 and 60 million 50 and 60 million. And additional scope is dependent on when do we close the acquisition. The mass acquisition is announced.

Speaker #5: That's great. But it's not, in my hands, when we get the regulator approval. So that depends a little bit. So to put now some estimations, I'm reluctant to do because it's not in my hands.

Christoph Beumelburg: To put now some estimations, I'm reluctant to do because it's not in my hands. We have something in the guidance, and if we do more M&A, and the closing is at the right time, there will be more in there, but I can't tell you how much.

René Aldach: To put now some estimations, I'm reluctant to do because it's not in my hands. We have something in the guidance, and if we do more M&A, and the closing is at the right time, there will be more in there, but I can't tell you how much.

Speaker #5: We have something in the guidance. And if we do more M&A, and the closing is at the right time, there will be more in there.

Speaker #5: But I can't tell you how much. And maybe to your multiples, just the general market, we just closed the multiple on Mars. And I think it's clear we are going to stay very disciplined on the M&A side.

Dominik von Achten: Maybe to your multiples, you know, just a general market, we just closed the multiple in on March. I think it's clear we are gonna stay very disciplined on the M&A side. We are not gonna do a 16, 20, whatever time multiple after synergies. That's crazy, guys. We are, you know, you saw the math, it's just above 8 for after synergies margins returns. I think that's clearly the ballpark that we are using to commit or to stick in the framework that we have committed.

Speaker #5: We are not going to do a 16, 20, whatever time multiple after synergies. That's crazy, guys. We are so you saw the Mars. It's just above 8 for after synergies returns.

Speaker #5: And I think that's clearly the ballpark that we are using to commit or to stick in the framework that we have committed because you know if you go outside of this to make eventually a returns on M&A in our industry will be very difficult.

Dominik von Achten: Because, you know, if you go outside of this to make, eventually, returns on M&A in our industry will be very difficult, and that's why we're gonna stay very focused, to stay in that ballpark, yeah.

Speaker #5: And that's why we're going to stay very focused to stay in that ballpark. All right. Thanks, guys. Okay. Thanks, Julian. Thanks. Next one from Arnaud Lehmann from Bank of America.

Harry Dow: All right. Thanks a lot, guys.

Julian Radlinger: All right. Thanks a lot, guys.

Christoph Beumelburg: Okay. Thanks, Julian. Thanks. Next one from Arnaud Lehmann, from Bank of America.

Dominik von Achten: Arnaud.

Speaker #5: Arnaud. Arnaud, hello. Hello. Thank you very much. And good afternoon. My first question is about Europe, please. You mentioned your positive outlook for pricing and the fact that price increases are getting implemented.

Christoph Beumelburg: Arnaud, hello.

Arnaud Lehmann: Hello. Thank you very much, and good afternoon. My first question is about Europe, please. You mentioned your positive outlook for pricing and the fact that price increase are getting implemented. On the other side of that, is there any cost inflation to consider? We know that French electricity costs could go up. Are there any other cost factor that we need to account for, or do you expect the price increase to flow through in the bottom line? That's my first question. My second question is coming back on your acquisition strategy. I appreciate you've made some comments, but looking at the business historically, it was US, US.

Speaker #5: On the other side of that, are there is there any cost inflation to consider? We know that French electricity costs could go up. Are there other cost factors that we need to account for?

Speaker #5: Or do you expect the price increase to flow through in the bottom line? That's my first question. And my second question is coming back on your acquisition strategy.

Speaker #5: I appreciate you've made some comments, but looking at the business historically, it was US, US, US, we know at one point maybe you wanted to do larger deals that did not happen.

Arnaud Lehmann: We know you at one point, maybe you wanted to do a larger deal that did not happen. The more recent past, you've clearly focused M&A on. You've done smaller deals in Morocco, Indonesia, Australia. I think there was press articles about Turkey recently. Appreciate you've done Giant as well in the US, so it's still on the list. What has changed in your M&A mindset to justify this, let's say, geographic diversification in your M&A strategy? Thank you.

Speaker #5: The more recent past, you've clearly focused M&A on you've done smaller deals in Morocco, Indonesia, Australia. I think there was press articles about Turkey recently.

Speaker #5: Appreciate you've done giant as well in the US. So it's still on the list. But what has changed in your M&A mindset to justify this?

Speaker #5: Let's say geographic diversification in your M&A strategy. Thank you. I'll do the second one and let René do the first one on pricing in Europe.

Dominik von Achten: Yeah. I'll do the second one and let René do the first one on pricing.

Christoph Beumelburg: Hello, hello, Arnaud. Regarding Europe, you were asking about cost. Yes, you are right for France. The oven, electricity support, let's say, is not as cheap anymore. That is gone, now that hits us with additional cost. That is correct and no news. You ask about other costs. Obviously, there is certain inflation on salaries. It's clear there is salary increases for our employees in every country, which is probably, or what it would truly be, it's probably 2, 3% wage increases. That's probably the big, let's say, cost movements. On the other side, you, Dominik von Achten said it also, our wave two of our European spend plan optimization, let's say, is coming into play.

René Aldach: Hello, hello, Arnaud. Regarding Europe, you were asking about cost. Yes, you are right for France. The oven, electricity support, let's say, is not as cheap anymore. That is gone, now that hits us with additional cost. That is correct and no news. You ask about other costs. Obviously, there is certain inflation on salaries. It's clear there is salary increases for our employees in every country, which is probably, or what it would truly be, it's probably 2, 3% wage increases. That's probably the big, let's say, cost movements. On the other side, you, Dominik von Achten said it also, our wave two of our European spend plan optimization, let's say, is coming into play.

Speaker #5: Hello. Hello. Regarding Europe, you were asking about cost. Yes, you are right. For France, there are electricity support, let's say, is not as cheap anymore.

Speaker #5: It's gone. And now that hits us with additional costs. That is correct. And no news. And then you asked about other costs. Obviously, there is certain inflation on salaries.

Speaker #5: It's clear there is salary increases for the employees in every country. Which is probably what it should be. It's probably 2, 3 percent wage increases.

Speaker #5: And then that's probably the big cost movements. On the other side, you Dominic said it also. Our wave two of our European cement plant optimization, let's say, is coming into play.

Speaker #5: We have the tie. We will have the tie full effect on the cost side also. And then we have the price increases. So overall, as we said it, price over cost for Europe should be okay and positive.

Christoph Beumelburg: We will have the tie full effect on the cost side also. We have the price increases. Overall, as we said it, the price of our cost for Europe should be okay and positive. Overall, energy should be roughly flat. January, February now was expensive because it was so cold, but the summer will come off again. Overall, for Europe, price of our cost should be good and margin should improve.

René Aldach: We will have the tie full effect on the cost side also. We have the price increases. Overall, as we said it, the price of our cost for Europe should be okay and positive. Overall, energy should be roughly flat. January, February now was expensive because it was so cold, but the summer will come off again. Overall, for Europe, price of our cost should be good and margin should improve.

Speaker #5: And on an overall and energy should be roughly flat. Obviously, January, February now was expensive because it was so cold. But the summer will come off again.

Speaker #5: So overall, for Europe, price over cost should be good. The margin should improve. Okay. And then, Arnaud, on the acquisition side, just to sit back, sorry, to correct you a little bit, but I can't see that we have lost the focus on US.

Dominik von Achten: Okay, Arnaud, on the acquisition side, just to sit back, sorry to correct you a little bit, but I can't see that we've lost the focus on US. We've done Giants, a massive, big acquisition in the Southeast. We've done BURNCO, the assets of BURNCO in the Northwest. That we are not executing on North American acquisitions, I cannot follow. It's not like it's US, and US only. Sorry, we are a global company, and we can also create good or even better returns in other parts of the world. That's why we look at a global picture, and that's why you also see, you know, acquisitions in Africa.

Speaker #5: We've done giant massive big acquisition in the Southeast. We've done Bernko, the assets of Bernko in the Northwest. So that we've that we are not executing on North American acquisitions, I cannot follow.

Speaker #5: But it's not like it's US, US, and US only. Sorry, we are a global company. And we can also create good or even better returns in other parts of the world.

Speaker #5: And that's why we look at a global picture. And that's why you also see acquisitions in Africa. That's why you see acquisitions in Australia.

Dominik von Achten: That's why you see acquisitions in Australia, that's why you see also acquisitions in Asia and acquisitions in Europe. We always said in our core markets, and obviously there's not only US, US. Plus, I think to be fair, also, the US market is challenging in acquisitions. It's very costly, and again, with the rigidity of our financial framework, we want to create the returns. That doesn't mean that we do anything in the US, guys. Very clearly, we are very, very focused, and we look at everything that moves in the US market. But we are very diligent about, does it fit to our financial framework? You should see acquisitions in North America down the road, absolutely.

Speaker #5: And that's why you see also acquisitions in Asia. And acquisitions in Europe. We always said in our core markets. And obviously, there's not only US, US, US.

Speaker #5: Plus, I think to be fair, also the US market is challenging in acquisitions. It's very costly. And again, with the rigidity of our financial framework, we want to create the returns.

Speaker #5: That doesn't mean that we do anything in the US, guys. Very clearly, we are very, very focused. And we look at everything that moves in the US market.

Speaker #5: But we are very diligent about does it fit to our financial framework. And you should see acquisitions in North America. And down the road, absolutely.

Speaker #5: But you should also see acquisitions in other parts of the world as they complement our existing footprint, existing markets, drive good synergies, improve the market position.

Dominik von Achten: You should also see acquisitions in other parts of the world, as they complement our existing footprint, existing markets, drive good synergies, and improve the market position, and with that, give us further growth potential organically, and obviously, margin potential when it comes to better synergies.

Speaker #5: And with that, give us further growth potential organically. And obviously, margin potential when it comes to better synergies. Thank you so much. Thanks, Arnaud.

Arnaud Lehmann: Thank you so much.

Christoph Beumelburg: Right. Thanks, Arnaud. The second to last question now comes from Harry Dow from Rothschild and Redburn.

Christoph Beumelburg: Right. Thanks, Arnaud. The second to last question now comes from Harry Dow from Rothschild & Redburn.

Speaker #5: The second to last question now comes from Harry Dow from Rothschild in Redburn. Harry. Harry, hello. Hello. Yeah. Afternoon, everybody. Thanks for taking my questions just too from me.

Dominik von Achten: Harry. Harry, hello.

Harry Dow: Hello, yeah, afternoon, everybody. Thanks for taking my questions. Just two from me. Firstly, maybe if we just hone a bit back on Europe and recovery and kind of volumes and those comments. I was wondering if you could just give us some more color on what you're seeing on the ground. I think the like-for-like in Q4, I think it was -2 at the top line. I suppose it's not signaling any great improvement as of yet, but you sound like you've got quite a lot of confidence. I suppose that things are turning a corner, so maybe just in some of the core countries, it'd be great to hear sort of views on what you're seeing at the start of 2026. Secondly, just around the comments on changing of clinker ratios and alternative fuels.

Speaker #5: Firstly, maybe if we just hone a bit back on Europe and recovery and kind of volumes and those comments. I was wondering if you could just give us some more color on what you're seeing on the ground.

Speaker #5: I think the light for like in Q4, I think it was minus two at the top line. I suppose it's not signaling any great improvement as of yet.

Speaker #5: But you sound like you've got quite a lot of confidence, I suppose, that things are turning a corner. So maybe just in some of the core countries, it'd be great to hear sort of views on what you're seeing at the start of 2026.

Speaker #5: And then secondly, just around the comments on changing of clinker ratios and alternative fuels, I think obviously that's seen as through the great lens of reducing carbon per ton and overall.

Harry Dow: I think obviously that's seen as through the great lens of reducing carbon per ton and overall. I wonder whether you could comment also on maybe some of the economic benefits of that. I don't know how much some of those lower sort of fossil fuels and lower clinker ratios actually reduce costs, boost margins, in your view, and maybe where regionally you see the most opportunity on that. I know the US starts from a higher base, but maybe there's more pushback from customers. Anything on the economics of those changes? Thanks.

Speaker #5: But I wonder whether you could comment also on maybe some of the economic benefits of that. I don't know how much some of those lower sort of fossil fuels and lower clinker ratios actually reduce costs, boost margins in your view.

Speaker #5: And maybe where regionally you see the most opportunity on that. I know the US starts from a higher base, but maybe there's more pushback from customers.

Speaker #5: But anything on the economics of those changes. Thanks. Yeah. Good questions, Harry. Let me just answer both and then René chips in if he wants.

Dominik von Achten: Yeah. Good question, Harry. Let me just answer both, and then Rene chips in if he wants. On the volume side, in Europe, I think, you know, I think let's go country by country, or let's say region by region, a little bit. Southern Europe, absolute intact, good volume developments expectation for 2026. Same is true for Eastern Europe. That's, I think, one important part of Europe. We have, I would say, Germany and Northern Europe. I indicated earlier, I think we do expect recovery in both parts of that part of Europe for 2026. I think the ones that are lagging a little bit behind are Benelux, France, and UK.

Speaker #5: So on the volume side, in Europe, I think I think let's go country by country or let's say region by region a little bit.

Speaker #5: Southern Europe, expectation for 2026. Same is true for Eastern Europe. So that's, I think, one important part of Europe. Then we have I would say Germany and Northern Europe.

Speaker #5: I indicated earlier, I think we do expect recovery in both parts of that part of Europe. For 2026, I think the ones that are lagging a little bit behind are Benelux, France, and UK.

Dominik von Achten: Let's wait and see how that volume develops in those markets. In general, don't forget, in Europe also, Q4 and Q1 are always winter quarters. This time we had winter, so you will see an interesting dynamic over the years now between the different quarters, also in Europe, given the weather impact. Underlyingly, and that's importantly from a market perspective, I think we clearly see positive indications in some of our key markets that things are moving in the right direction. I said it earlier, I think in the Q4, for example, in Germany, we saw that the groundwork has really increased. Those companies who are working on the ground to lay infrastructure and everything, they have really a much better and more healthy order book and execute that order book.

Speaker #5: Let's wait and see how that volume develops in those markets. But in general, don't forget in Europe also, Q4 and Q1 are always winter quarters.

Speaker #5: This time we had winter. So you will see an interesting dynamic over the years now between the different quarters also in Europe, given the weather impact.

Speaker #5: But underlyingly, and that's importantly from a market perspective, I think we clearly see positive indications in some of our key markets that things are moving in the right direction.

Speaker #5: I said it earlier, I think in the Q4, for example, in Germany, we saw that the groundwork has really increased. So those companies who are working on the ground to lay infrastructure and everything, they have really a much better and more healthy order book.

Speaker #5: And execute that order book. So that should also increase cement and concrete demand down the road. So the early indicators, let alone the permits that are going up on housing and everything, so I think there are some good indications for volume developments in Europe.

Dominik von Achten: That should also increase cement and concrete demand down the road. The early indicators, let alone the permits, that are going up on housing and everything, I think there are some good indications for volume developments in Europe. Nothing is perfect over everywhere, but I think those are the this is the color. On clinker incorporation, very interesting question that we have also internally, and I thank you for the question because I think it's important to clarify that again. Yes, we are the decarbonization leader, but we have combined this with superior financial performance guys, which tells you the clear message internally, which I'm happy to share with you. We are doing the decarbonization on equal or better footing financially.

Speaker #5: Nothing is perfect over everywhere. But I think those are—this is the color. And then on clinker incorporation, very interesting question that we have also internally.

Speaker #5: And I thank you for the question because I think it's important to clarify that again. Yes, we are the decarbonization leader, but we have combined this with superior financial performance, guys, which tells you the clear message internally, which I'm happy to share with you.

Speaker #5: We are doing the decarbonization on equal or better footing financially. If it's worse footing and for example, for whatever reason, the coal price would drop to minus where it's 10% or 20% cheaper, then we go for coal.

Dominik von Achten: If it's a worse footing, and for example, for whatever reason, the coal price would drop to minus where it's 10% or 20% cheaper, then we go for coal. Sorry, we are a capital market-oriented company, and we don't throw money out the window. If there is an opportunity to make money, that sits within our strategy, but short term, needs to be sacrificed for operational and financial performance, and then we have a clear mindset here, to pull that advantage. There you see also how we play with this to make, to give, to create a full picture that you have seen here in the past hour or so.

Speaker #5: Sorry. We are a capital market-oriented company, and we don't throw money out the window if there is an opportunity to make money. That sits within our strategy.

Speaker #5: But short-term, it needs to be sacrificed for operational and financial performance. Then we have a clear mindset here to pull that advantage. So there you see also how we play with this to make to give to create a full picture that you have seen here in the past hour or so.

Speaker #5: Just if I may add here, just you asked for the economics. As Dominik said, an alternative fuel, what does it do? Two things. In Europe, it is overall, it saves everywhere CO2.

Christoph Beumelburg: Just as I may add here, just you asked for the economics, no? As Dominik said it, alternative fuel. What does it do? Two things. In Europe, it is, well, overall, it saves everywhere CO2. In Europe, there is a price behind CO2. We will save, in theory, that price. If you are short, you would save to use a part of the certificate, number one. Number two, if you replace fossil fuels, which are normally more expensive, with a cheaper thing, or even in some countries, we get a gate fee. We will get paid to take alternative fuels, yeah?

René Aldach: Just as I may add here, just you asked for the economics, no? As Dominik said it, alternative fuel. What does it do? Two things. In Europe, it is, well, overall, it saves everywhere CO2. In Europe, there is a price behind CO2. We will save, in theory, that price. If you are short, you would save to use a part of the certificate, number one. Number two, if you replace fossil fuels, which are normally more expensive, with a cheaper thing, or even in some countries, we get a gate fee. We will get paid to take alternative fuels, yeah?

Speaker #5: But in Europe, there is a price behind CO2. So we will save in theory that price if you are short. You would save to use part of a certificate, number one.

Speaker #5: Number two is you replace fossil fuels, which are normally more expensive, with a cheaper thing. Or even in some countries, we get a gate fee.

Speaker #5: So we will get paid to take alternative fuels. So we probably have a few plants in the group in Europe where we have positive costs from fuel because alternative fuels is so high and we get a nice gate fee.

Christoph Beumelburg: We have probably, we have a few plants in the group in Europe, where we have positive costs from fuel because alternative fuel is so high, and we get a nice gate fee. I'll give you another example, also in emerging markets, give you Indonesia, the example, I think the alternative fuel we are using there is half the price of coal. They're not paying for CO2, fine, but we save 50% of the coal cost. This makes absolute sense to use alternative fuel to ramp it up. This is core DNA. We know what to do, and we can do it.

René Aldach: We have probably, we have a few plants in the group in Europe, where we have positive costs from fuel because alternative fuel is so high, and we get a nice gate fee. I'll give you another example, also in emerging markets, give you Indonesia, the example, I think the alternative fuel we are using there is half the price of coal. They're not paying for CO2, fine, but we save 50% of the coal cost. This makes absolute sense to use alternative fuel to ramp it up. This is core DNA. We know what to do, and we can do it.

Speaker #5: Even also in give another example. Also in emerging markets, give you Indonesia, the example. I think the alternative fuel we are using there is half the price of coal.

Speaker #5: They're not paying for CO2. Fine. But we save 50% of the coal cost. So this makes absolutely sense to use alternative fuel and to ramp it up.

Speaker #5: And this is core DNA. We know what to do, and we can do it. Then, clinker incorporation—it's even more pronounced because saving a percentage of clinker incorporation saves you between 8 to 10 kilos of CO2 per ton, which is very valuable in the CO2 context, especially in Europe.

Christoph Beumelburg: Clinker incorporation, it's even more pronounced because saving a percentage of clinker incorporation saves between 8 to 10 kilo CO2 per ton, which is very valuable in the CO2 context, especially in Europe. Plus, using SCMs to replace the clinker is, let's say, the next cost advantage, because the clinker burning is the most expensive part of the cement production process, and this you replace with a cheaper product. It makes all the sense of the world to hammer these two, let's say, KPIs like crazy, and which we have done. You see it's moving up, and we are number 1 in both of them, in, of the big ones which publish. That's for the economics.

René Aldach: Clinker incorporation, it's even more pronounced because saving a percentage of clinker incorporation saves between 8 to 10 kilo CO2 per ton, which is very valuable in the CO2 context, especially in Europe. Plus, using SCMs to replace the clinker is, let's say, the next cost advantage, because the clinker burning is the most expensive part of the cement production process, and this you replace with a cheaper product. It makes all the sense of the world to hammer these two, let's say, KPIs like crazy, and which we have done. You see it's moving up, and we are number 1 in both of them, in, of the big ones which publish. That's for the economics.

Speaker #5: Plus, using SCMs to replace the clinker is, let's say, the next cost advantage because the clinker is more the clinker burning is the most expensive part of the cement production process.

Speaker #5: And this you replace with a cheaper product. So it makes all the sense of the world to hammer these two let's say KPIs here like crazy, in which we have done.

Speaker #5: You see it. It's moving up. And we are number one in both of them in the world of the big ones, which publish. So that's for the economics.

Speaker #5: So I think to build on what René has said, clinker incorporation next to alternative fuel is a good indication of future structural profitability. Why?

Dominik von Achten: I think to build on what Rene has said, you know, clinker incorporation next to alternative fuel is a good indication of future structural profitability. Why? If you take out that costly capacity like we do in master plan wave one and two, you build your cost position for the future because you get rid of both the most cost intensive, most maintenance intensive, and most CO2 emitting part of the. It's a win-win in all positive directions, and that's why we are so focused to be the leader here, not only in Europe, but globally. We do this in a very well-balanced decision by decision trade-off between CO2 impact and financial impact to the direct bottom line of the year. I think that's well understood, Harry.

Speaker #5: If you take out that costly capacity like we do in master plan wave one and two, you build your cost position for the future because you get rid of both the most cost-intensive, most maintenance-intensive, and most CO2-emitting part of the so it's a whammy in all positive directions.

Speaker #5: And that's why we are so focused to be the leader here not only in Europe, but globally. And we do this in a very well-balanced decision-by-decision trade-off between CO2 impact and financial impact to the direct bottom line of the year.

Speaker #5: So I think that's well understood, Harry. Right. Yeah. Thank you very much. Thanks, Harry. So we got time for one more question that's coming from Isaac Occhio from On Field Investment Research.

Sergen: Great, yeah. Thank you very much.

Harry Dow: Great, yeah. Thank you very much.

Christoph Beumelburg: Thanks, Harry. We got time for one more question, that's coming from Yassine Touahri from OnField Investment Research.

Christoph Beumelburg: Thanks, Harry. We got time for one more question, that's coming from Isaac Ocio from OnField Investment Research.

Speaker #5: Hey, Isaac. Hi. Can you hear me? Yep. Hello. Yeah. Thanks for taking my question. So I have two. So first of all, any early indications that cement price increases are sticking both the US and Europe.

Dominik von Achten: Hey, Isaac. Isaac?

Yassine Touahri: Hi, can you hear me?

Isaac Ocio: Hi, can you hear me?

Dominik von Achten: Yes.

Yassine Touahri: Hello. Yeah, thanks so much for my question. I have 2. First of all, any early indications that cement price increases are sticking both to US and Europe? In Europe, maybe are the mid-single digit increases holding so far, and do you see them supporting margins through the year? Some of your US peers have guided towards low single digit pricing growth in North America. Are you seeing similar trends? On the CO2 pricing outlook, maybe through the 2 scenarios, what would it mean for the long-term CCS strategy and cash generation growth if CO2 prices were closer to 30 to 40 EUR per ton, as recently suggested by President Macron, versus the Europe, you know, the 100 EUR per ton assumption that was outlined at the Capital Markets Day? Thank you.

Isaac Ocio: Hello. Yeah, thanks so much for my question. I have 2. First of all, any early indications that cement price increases are sticking both to US and Europe? In Europe, maybe are the mid-single digit increases holding so far, and do you see them supporting margins through the year? Some of your US peers have guided towards low single digit pricing growth in North America. Are you seeing similar trends? On the CO2 pricing outlook, maybe through the 2 scenarios, what would it mean for the long-term CCS strategy and cash generation growth if CO2 prices were closer to 30 to 40 EUR per ton, as recently suggested by President Macron, versus the Europe, you know, the 100 EUR per ton assumption that was outlined at the Capital Markets Day? Thank you.

Speaker #5: So in Europe, maybe are there mid-signal digit increases holding so far? And do you see them supporting margins through the year? And some of your US peers have guided towards low single-digit pricing growth in North America.

Speaker #5: Are you seeing similar trends? And on the CO2 pricing outlook, so maybe through the two scenarios, what would it mean for the long-term CCS strategy and cash generation growth if CO2 prices were closer to 30 to 40 per ton?

Speaker #5: As recently suggested by President Macron, versus the €100 per ton assumption that was outlined at the capital markets day. Thank you. Hey, Isaac.

Dominik von Achten: Hey, Isaac, thanks a lot for your question. Let me do the first and then Rene does the second. No early indication of any changes. As I said before, pricing and both in US and Europe, are moving in the targeted direction. We are not, we are not looking left or right. We take our independent pricing decision both in North America, and we've indicated that we are clearly moving pricing ahead in all key areas and all product lines in North America, and the same is true for Europe. As you well know from the past discussions, we try to get out of the gate on as early as even possible.

Speaker #5: Thanks a lot for your question. Let me do the first, and then René does the second. So, no early indication of any changes, as I said before.

Speaker #5: Pricing and both in US and Europe are moving in the targeted direction. We are not looking left or right. We take our independent pricing decision both in North America and we've indicated that we are clearly moving pricing ahead in all key areas and all product lines in North America.

Speaker #5: And the same is true for Europe. And as you well know from the past discussions, we try to get out of the gate on a as early as even possible.

Speaker #5: Obviously, with the winter, this may shift a little bit back and forth. But overall, there is no change to the original plan. And we continue to execute on pricing as we really have a value before volume strategy that has not changed.

Dominik von Achten: Obviously, with the winter, this may shift a little bit back and forth. Overall, there is no change to the original plan. We continue to execute on pricing, as we really have a value before volume strategy that has not changed.

Christoph Beumelburg: For the second question, I guess we have answered it this already, but let's do it again. If the CO2 price goes to EUR 30, there's no business case for CCUS plant. That's what Dominic and I said the same, the whole time. We do it only if there's a financially valid, good business case, and you can do the math by yourself. With EUR 30 CO2, there's no good business case. I think that answers the question.

Speaker #5: And then for the second question, I guess we've answered this already, but let's do it again. If the CO₂ price goes to €30, there's no business case for a CCUS plant.

René Aldach: For the second question, I guess we have answered it this already, but let's do it again. If the CO2 price goes to EUR 30, there's no business case for CCUS plant. That's what Dominic and I said the same, the whole time. We do it only if there's a financially valid, good business case, and you can do the math by yourself. With EUR 30 CO2, there's no good business case. I think that answers the question.

Speaker #5: So that's what Dominik and I said. The whole time, we do it only if there's a financially valid, good business case. And you can do the math by yourself.

Speaker #5: It's 30 euro CO2. There's no good business case. So I think that answers the question. Very good. Isaac, thanks. So let's close this call.

Dominik von Achten: Very good. Isaac, thanks.

Christoph Beumelburg: Let's close this call. Thanks for your good questions. Just to remind everyone, we are going to be on the road, you know, together with management and on IR. Next week, we are going to go to the West Coast in the US and to the East Coast. We're in London, Frankfurt, and Paris with Rene, Dominik, we are in London again at the BNP conference, and we also hit Vienna, Zurich, and Geneva. If you wanna see us, please let us know, and with that, have a nice day.

Speaker #5: Thanks for your good questions. Just to remind everyone, we are going to be on the road together with management and on IR next week.

Speaker #5: We are going to go to the West Coast in the US. And to the East Coast. Then we're in London. Frankfurt and Paris with René.

Speaker #5: Dominik, we are in London again, at the BNP conference. And we also hit Vienna, Zurich, and Geneva. So if you want to see us, please let us know.

Speaker #5: And with that, have a nice day. Hey, thanks for joining. Thanks, everyone. Thank you. Thank you. Ladies and gentlemen, the conference is now over.

Dominik von Achten: Hey, thanks for joining.

Christoph Beumelburg: Thanks, everyone.

Dominik von Achten: Great.

Christoph Beumelburg: Thank you.

Dominik von Achten: Thank you.

Sergen: Ladies and gentlemen, the conference is now over. You may now disconnect the lines. Goodbye.

Operator: Ladies and gentlemen, the conference is now over. You may now disconnect the lines. Goodbye.

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