Q1 2026 Holcim AG Trading Update Call

April 24, 2026

Speaker #3: Good morning . Welcome to the Analysts and Investor conference call of Balsam's first quarter 2026 Trading update . My name is Bernd Pomrehn and I'm joined today by our CEO , Miljan Gutovic , and our CFO , Steffen Kindler .

Bernd Pomrehn: Good morning. Welcome to the Analysts and Investor Conference Call of Holcim's Q1 2026 Trading Update. My name is Bernd Pomrehn, and I'm joined today by our CEO, Miljan Gutovic, and our CFO, Steffen Kindler, to present our financial results. Following the presentation, we will open the floor for questions. Anyone who wishes to ask a question may press star one on the telephone. You will hear a tone to confirm that you have entered the queue. If you want to remove yourself from the queue, you may press star two. Webcast viewers might submit their questions in writing via the dedicated field on the screen. In the interest of time, please limit yourself to two questions. Now I'm happy to hand it over to you, Miljan.

Speaker #3: To present our financial results following following the presentation , you will . We will open the floor for questions Anyone who wishes to ask a question may press star one on the telephone .

Speaker #3: You will hear a tone to confirm that you have entered the queue. If you want to remove yourself from the queue, you may press star two.

Speaker #3: Webcast viewers might , might submit the questions and writing via the dedicated field on the screen . In the interest of time , please limit yourself to two questions .

Speaker #3: And now I'm happy to hand it over to you . Neil Young Thank you Ben Good morning to you all . And warm welcome to Holcim's 2026 .

Miljan Gutovic: Thank you, Dan. Good morning to you all and warm welcome to Holcim's 2026 Q1 trading update conference. Stefan and I are pleased to be presenting our numbers to you today, and we look forward to taking your questions afterwards. As you have seen, we have delivered a strong start to the year. There was a robust organic growth in net sales of nearly 4%, driven by leading positions in the highly attractive markets where we operate. The 8.3% organic growth in our recurring EBIT was even stronger, and this was driven by our premium and sustainable offering, our strict cost discipline, and operational excellence. With our resilient and proven business model across all economic cycles and market conditions after this strong start to the year, we are confirming our 2026 guidance, which includes a further increase of our industry-leading margins versus 2025. Turning to the regional highlights now.

Speaker #3: First quarter trading update conference. Stefan and I are pleased to be presenting our numbers to you today, and we look forward to taking your questions afterwards. As you have seen, we have delivered a strong start to the year.

Speaker #3: There was a robust organic growth in net sales of nearly 4% , driven by leading positions in the highly attractive markets where we operate The 8.3% organic growth in our recurring Ebit was even stronger , and this was driven by our premium and sustainable offering .

Speaker #3: Our strict cost discipline and operational excellence, together with our resilient and proven business model across all economic cycles and market conditions. After this strong start to the year, we are confirming our 2026 guidance, which includes a further increase of our industry-leading margins versus 2025.

Speaker #3: Turning to the regional highlights now. As you can see, in Europe, there was a sales acceleration in March and price over cost was positive, partially offsetting the impact of weather on the margin. Our use of alternative fuels increased to 70% in the region during the quarter.

Miljan Gutovic: As you can see, in Europe, there was a sales acceleration in March, and price over cost was positive, partially offsetting the impact of weather on the margin. Our use of alternative fuels increased to 70% in the region during the quarter. Future-proofing Holcim from energy price exposure and market volatility. You will hear more on this topic from Stefan later. In terms of the outlook, we expect strong activity in infrastructure across the whole region, and in residential, a recent increase in building permits is expected to continue in several countries. In LATAM, we delivered 7.6% organic growth in net sales, driven by Mexico, Central America, and Ecuador, with a recurring EBIT margin above 30%. We completed one large acquisition and also signed another, and we will talk more on this later on.

Speaker #3: Future-proofing Holcim from energy price exposure and market volatility. You will hear more on this topic from Stefan later. In terms of the outlook...

Speaker #3: We expect strong activity in infrastructure across the whole region and in residential . A recent increase in building permits is expected to continue in several countries We delivered 7.6% organic growth in net sales , driven by Mexico , Central America and Ecuador , with a recurring Ebit margin above 30% .

Speaker #3: We completed one large acquisition and also signed another , and we will talk more on these later on For the outlook , we expect that the Mexican government's plans for 1.8 million new homes and infrastructure projects to accelerate the growth in this key market .

Miljan Gutovic: For the outlook, we expect that the Mexican government's plans for 1.8 million new homes and infrastructure projects to accelerate the growth in this key market for us, and in Central America, there will be ongoing high demand for housing and infrastructure. Our performance in Asia, Middle East, and Africa clearly demonstrates that our strategy is able to achieve strong, profitable growth across all market conditions and economic cycles. The region delivered organic growth in recurring EBIT of 26%, while the margin rose 100 basis points to 22%. We saw strong demand trends in North Africa and Australia, and expect this to continue for the full year, driven mainly by the residential and infrastructure sectors in North Africa and infrastructure projects in Australia. With that, I would like to hand it over to Steffen to talk through the financials in more detail. Steffen?

Speaker #3: For us, and in Central America, there will be ongoing high demand for housing and infrastructure. Our performance in Asia, Middle East, and Africa clearly demonstrates that our strategy is able to achieve strong, profitable growth across all market conditions and economic cycles.

Speaker #3: The region delivered organic growth in recurring Ebit of 26% , while the margin rose 100 basis points to 22% . We saw a strong demand trends in North Africa and Australia , and expect this to continue for the full year , driven mainly by the residential and infrastructure sectors in North Africa and infrastructure projects in Australia With that , I would like to hand it over to Stefan to talk through the financials in more detail Stefan .

Steffen Kindler: Thank you, Miljan, and a warm welcome to all of you from my side as well. Always a pleasure to be here with you, and now for our Q1 trading update. Turning first to the net sales bridge, you can see that we had robust organic growth of 3.9%, representing CHF 136 million. Total sales was affected by a CHF -104 million impact, mainly coming from scope, following the divestment of our Nigeria business, Habr cement manufacturing in Iraq, and other divestments completed in 2025. Also, the FX effect created a translation effect of 5.6% as a mixture of mature and emerging markets currency devaluation versus the Swiss franc. Recurring EBIT, we delivered 8.3% organic growth. There were FX translation effects of CHF 26 million, or 5.5%, and CHF 63 million from divestments, as mentioned already in the sales chart.

Speaker #3: Thank you . Julian .

Speaker #4: And a warm welcome to all of you from my side as well. Always a pleasure to be here with you. And now for our Q1 trading update. Turning first to the net sales bridge.

Speaker #4: You can see that we had robust organic growth of 3.9%, representing CHF 136 million. Total sales was affected by a CHF -104 million impact, mainly coming from scope.

Speaker #4: Following the divestment of our Nigeria business , Karbala Cement Manufacturing in Iraq and other divestments completed in 2025 . Also , the FX effect created a translation effect of 5.6% as a mixture of mature and emerging markets , currency devaluation versus the Swiss franc , recurring Ebit .

Speaker #4: We delivered 8.3% organic growth. There were FX translation effects of 26 million CHF, or 5.5%, and 63 million CHF from divestments.

Speaker #4: As mentioned already in the sales chart, EBIT growth was driven by strong commercial execution, operational excellence, and disciplined cost management, both in the countries and at the corporate level.

Steffen Kindler: EBIT growth was driven by strong commercial execution, operational excellence, and disciplined cost management, both in the countries and at corporate level. Once again, we delivered positive price over cost. As you know, increasing our usage of alternative fuels is one of ways that sustainability drives profitable growth at Holcim, increasing our margin and reducing CO2. What may be less appreciated at that point is that it also future-proofs Holcim from energy price volatility. We are reducing fuel and costs through operational excellence in manufacturing while decarbonizing our electricity consumption. As you can see, in the last three years, increasing our alternative fuel usage by 11 percentage points came with a three percentage point decrease in our energy cost. That's fuel and electricity cost as a percentage of net sales.

Speaker #4: Once again, we delivered positive price over cost. As you know, increasing our usage of alternative fuels is one of the ways that sustainability drives profitable growth.

Speaker #4: At wholesale, increasing our margin and reducing CO2—what may be less appreciated at that point is that it also future-proofs Holcim from energy price volatility.

Speaker #4: We are reducing fuel and costs through operational excellence in manufacturing, while decarbonizing our electricity consumption. As you can see, in the last three years, increasing our alternative fuel usage by 11 percentage points came with a three percentage point decrease in our energy cost.

Speaker #4: That's fuel and electricity costs. As a percentage of net sales, by the year 2030 we will have scaled up this use of alternative fuels to 50% globally and 90% in Europe.

Steffen Kindler: By the year 2030, we will have scaled up this use of alternative fuels to 50% globally and 90% in Europe. Already today, almost half of our cement plants in Europe operate between 80% and 100% alternative fuels. Next, let's look at the progression of our Q1 recurring EBIT and recurring EBIT margin on a rolling 12-month basis. At this time of the year, we usually show this number as a 12-month rolling because Q1 is by far the smallest in terms of business size, so we put it into a better context. This graph shows our continuing margin expansion. The group margin for Q1 was down year over year slightly, mainly due to the divestments that I explained before. As Miljan has said, we are committed to further margin expansion to the full year 2026. Now let's quickly look at the regional performance.

Speaker #4: Already today

Steffen Kindler: Organic growth and net sales was strong in each of LATAM and EMEA. In Europe, there was significant acceleration in March. Asia, Middle East, and Africa, there was double-digit organic growth in recurring EBIT at 26%, with 100 basis point increase in margin, where we maintained a recurring EBIT margin of above 30% in Latin America. In Europe, the margin was impacted by weather. As mentioned before, good cost development on the corporate level continued. With that, I am pleased to hand it back over to Miljan.

Miljan Gutovic: Thank you, Steffen. For the NextGen Growth 2030, we are indeed delivering a superior performance and margin expansion focused on the five key drivers. As you can see from this slide, we are scaling up our sustainable offering powered by our premium brands. We are accelerating initiatives for decommoditization and circular construction, which is driving profitable growth. A key part of our NextGen Growth 2030 is expanding our high-value building solutions. With our impeccable track record of value-accretive M&A, we are focusing on the most attractive markets and also the most attractive segments, and all of this is driven by our deeply embedded performance culture. Let's look now more closely at some of these drivers. Firstly, customer demand for premium brands ECOPact and ECOPlanet continues to grow.

Miljan Gutovic: These are being used on the scale in large projects like the one you see on this slide in Argentina, which was built with ECOPact to help address the estimated 1.5 million housing gap in the country. This is a really exciting project with over a few hundred apartments and office space designed for sustainable urban living. Another example is this bridge in Bordeaux, in France, which was built using ECOPlanet. It's a long bridge of 550m, and it was built with 4,000 tons of ECOPlanet, with 50% lower carbon footprint relative to traditional cement. We are also seeing a strong growth in ECOCycle, our circular technology that is being used to recycle construction demolition materials and put it back into our products. A recent project completed using ECOCycle was this housing project in France, where ECOCycle was used to rebuild 90 social housing units.

Speaker #1: And office space designed for sustainable urban living. Another example is this bridge in Bordeaux, in France, which was built using ECOPact. It's a bridge of 550 meters, and it was built with 4,000 tons of ECOPact, with a 50% lower carbon footprint relative to traditional cement. We are also seeing strong growth in ECOCycle, our circular technology that is being used to recycle construction and demolition materials, and put it back into our products.

Speaker #1: A recent project completed using EcoCycle was this housing project in France, where EcoCycle was used to rebuild 90 social housing units. Again, Holcim is looking to address this housing gap here, as France aims to build an additional 2 million homes by 2030.

Miljan Gutovic: Again, Holcim is looking to address this housing gap here as France aims to build additional 2 million homes by 2030. Very pleased to report that last month we completed the acquisition of Pacasmayo in Peru, which is a milestone in Holcim's Latin America expansion, bringing a very complementary portfolio of building materials and solutions in Peru. The company is a leading player in Peru. With this acquisition, we are also reinforcing our ready-mix precast and roofing offering in Latin America. I was in Peru myself, and I can tell you it's a highly attractive market for construction material. It has excellent long-term economic growth prospects and increasing demand for higher quality housing, both new and renovated, as well as for infrastructure and industry. Peru has an infrastructure gap, which is estimated to be around $100 billion.

Speaker #1: Very pleased to report that last month we completed the acquisition of Pacasmayo in Peru, which is a milestone in Hoatzins Latin America expansion, bringing a very complementary portfolio of building materials and solutions in Peru.

Speaker #1: The company is a leading player in the in Peru . That . And with this acquisition , we are also reinforcing our . Ready mix and roofing offering in Latin America .

Speaker #1: I was in Peru myself, and I can tell you it's a highly attractive market for construction materials. It has excellent long-term economic growth prospects and increasing demand for higher quality housing.

Speaker #1: Both new and renovated , as well as for infrastructure and industry Peru Nation has a infrastructure gap which is estimated to be around 100 billion USD , and as a result of that , government has approved what they call a national infrastructure plan To prioritize more than 70 strategic projects to be completed by 2031 .

Miljan Gutovic: As a result of that, government has approved what they call a National Infrastructure Plan, to prioritize more than 70 strategic projects to be completed by 2031. As you can see on this first slide of this presentation, Holcim Peru played a key role in the construction of the new international airport in Lima, and we continue to support ongoing work associated with this expansion. We are also involved in some of the biggest projects in Peru, especially in Lima, the metro expansion, and the highways, which is connecting the capital from east to west. Now, more on M&A. Well, pleased to say that we closed five transactions in Q1, of which four were acquisition and one was divestment. We strengthened building materials by making acquisition in Romania as well as I mentioned, Cementos Pacasmayo in Peru.

Speaker #1: As you can see on this first slide of this presentation holds in Peru played a key role in the construction of the new international airport in Lima , and we continue to support ongoing work associated with this expansion .

Speaker #1: We are also involved in some of the biggest projects in Peru , especially in Lima . The Metro expansion and the highways , which is connecting the capital from east to west Now , more on M&A Well pleased to say that we closed five transactions in Q1 , of which four were acquisition and one was divestment .

Speaker #1: We strengthened building materials by making an acquisition in Romania as well as, as I mentioned, Pacasmayo in Peru. We also completed two acquisitions in building solutions, one in Belgium and one in New Zealand.

Miljan Gutovic: We also completed two acquisitions in building solutions, one in Belgium and one in New Zealand. We have divested our operation in Lebanon at the same time. Also, we announced that in March, we signed an agreement to acquire a building materials and solutions operations in Colombia from Cemex that represent projected 2026 mix sales of around $360 million. This transaction is subject to customary conditions, and we expect closing around the end of the year. One slide on artificial intelligence. Well, it's known that artificial intelligence is unlocking incremental value and growth for Holcim, improving performance and driving customer-centric services.

Speaker #1: We have divested our operations in Lebanon. At the same time, we also announced that in March we signed an agreement to acquire a building materials and solutions operation in Colombia from Cemex that represents projected 2026 net sales of around $360 million.

Speaker #1: This transaction is subject to customary conditions , and we expect closing around the end of the year One slide on artificial intelligence well , it's a known that artificial intelligence is unlocking incremental value and growth for Holcim , improving performance and driving customer centric services Holcim will deliver benefits from AI off around 200 million CHF by 2028 , reflecting both cost savings and cost avoidance .

Miljan Gutovic: Holcim will deliver benefits from AI of around CHF 200 million by 2028, reflecting both cost savings and cost avoidance. To achieve this, we will make growth investments of around CHF 20 million per year, where we will be focusing on the four key areas: production, logistics, commercial, and administration. By investing in a large network of integrated sensor and data lakes, we are future-proofing Holcim today to unlock great value tomorrow. Currently, there are 38 large-scale AI initiatives which we are deploying across business, from our M-Predict intelligence for optimizing production processes and equipment performance, to our Foresight tool that optimizes our transport fleet and network utilization. With Holcim+, which is our AI-powered, always-on platform, we can offer customers a 24/7 service with real-time tracking and demand forecasting that will only become more attractive as we add to it over time.

Speaker #1: To achieve this , we will make growth investments of around 20 million per year , where we will be focusing on the four key areas production , logistics , commercial and administration .

Speaker #1: By investing in a large network of integrated sensors and data lakes, we are future-proofing Holcim today to unlock great value tomorrow. Currently, there are 38 large-scale AI initiatives which we are deploying across the business, from our end-predict intelligence for optimizing production processes and equipment performance, to our foresight tool that optimizes our transport fleet and network utilization. With Holcim Plus, which is our AI-powered, always-on platform, we are leading the way.

Speaker #1: We can offer customers a 24 over seven service with real time tracking and demand forecasting that will only become more attractive if , as we added , add to it over the time Meanwhile , our AI powered internal career Hub tool , matches Holcim people with business opportunities to create a value and also to nurture talents .

Miljan Gutovic: Meanwhile, our AI-powered internal career hub tool matches Holcim's people with business opportunities to create the value and also to nurture talent. With this, happy to say that we are confirming our 2026 full year guidance after a strong start to the year. Net sales and recurring EBIT growth fully in line with our NextGen Growth 2030 targets. You can see from the slides, organic net sales growth 3% to 5% and organic recurring EBIT growth 8% to 10%. We are also committing to an increase of our recurring EBIT margin and free cash flow before leases of around CHF 2 billion. We will continue to invest in recycling of construction and demolition materials with another 20% growth in 2026. Just to wrap it up, Holcim remains a highly compelling investment. It is important to remind you why.

Speaker #1: With this, happy to say that we are confirming our 2026 full-year guidance after a strong start to the year. Net sales and recurring EBIT growth are fully in line with our Next Gen Growth 2030 targets.

Speaker #1: As you can see from the slides , organic net sales growth 3 to 5% and organic recurring Ebit growth 8 to 10% . We are also committing to increase of our recurring Ebit margin and free cash flow before leases of I think , and not terrible volume trends across countries .

Miljan Gutovic: Today, Holcim is a leader in the most attractive markets with a leading sustainable offering for our customers. This enables us to capture the tailwinds from a powerful megatrend shaping the future of construction, such as population growth, urbanization, energy efficient refurbishment, and digitalization. We are unlocking significant growth opportunities across geographies and also in our Building Solutions segment, which will enable us to achieve above-market growth. Our talented people and our performance culture will continue to deliver a superior financial performance and value creation. All of this will allow Holcim to continue driving shareholder value through growth-focused capital allocation and, of course, attractive cash returns. Ben, you can now open it up to questions.

Bernd Pomrehn: Perfect. Thank you, Miljan and Steffen. With this, we can open up the line for questions. We will take now the first question from Julian Radlinger from UBS. Good morning, Julian.

Julian Radlinger: Hey, good morning, guys. Thanks very much, Steffen and Miljan. A couple questions. Firstly, regarding pricing. In Europe, pricing increased, I think something around 3% in Q1, but that didn't include price increases in all countries yet, and it didn't include much of the surcharges yet that you've implemented. And I also think the base for pricing is actually going to get easier in Q2. What does that mean for the kind of price growth that we should expect in Europe in Q2 and H2? And then the Middle East conflict aside, would you expect to see any kind of demand impact in any regions or end markets on the back of that kind of pricing? Any pushback or stomach ache from any of your customers in light of such strong price increases? That's my first question.

Julian Radlinger: Secondly, in Latin America, you had flat organic EBIT growth, despite very strong pricing in Mexico, I think, and not terrible volume trends across countries. Could you please dissect for us what drove organic EBIT growth down to flat in the quarter? I assume integration costs may have played a role, and maybe some price cost issues due to fuel costs and so on. How should we think about that in the next few quarters? Can we think about year-on-year growing EBIT margins again in due course in LatAm? Thank you very much.

Speaker #1: So could you please . Dissect for us what what drove organic Ebit growth down to flat in the quarter ? I assume integration costs may have played a role and maybe some some price cost issues due to due to fuel costs and so on How should we think about that in the next few quarters ?

Speaker #1: Can can we think about year on year growing Ebit margins again in due course in in Latam ? Thank you very much

Miljan Gutovic: Good morning, Julian. Thank you for your question. I'll start and then I'll ask Stefan to add as we go. I'll start with the pricing. Yes, Julian, you're correct. Pricing has not been completed in Germany and another one or two markets. We expect this to be finalized in April. Overall, I can confirm that we are seeing a very healthy pricing dynamic in Europe across all our regions. At the moment, we are within our expectations, which we communicated earlier around mid-single digit. Outside Europe, situation is pretty much similar. We have some markets where we are slightly above expectations, like in Mexico. But all in all, across all our key markets, pricing dynamic, I can confirm, is very healthy.

Speaker #2: Good morning Julien . Thank you for your question . I'll start and then I'll ask Stephane to add as we go . I'll start with the pricing .

Speaker #2: Yes . Julien , you're correct . Pricing has still been has not been completed in Germany . And another 1 or 2 markets .

Speaker #2: We expect this to be finalized in April Overall I can confirm that we are seeing a very healthy pricing dynamic in Europe across all our regions and at the moment we are within our expectations , which we communicated earlier .

Speaker #2: Around mid-single digit outside Europe situation is pretty much similar . We have some markets where we are slightly above expectations , like in Mexico , but all in all , the across all our key markets , pricing dynamic , I can confirm is very healthy .

Miljan Gutovic: Regarding the Middle East conflict and how it is impacting the market momentum, exception is GCC countries where we have relatively small operations, represents less than 1.5% of the net sales. We put priority on the safety and well-being of our employees and their families. We did stop operations for couple of weeks. Last few weeks, we have resumed. Other than that, I am not expecting any change in the construction market momentum as a result of the Middle East conflict. So far, we are seeing a healthy pipeline of projects in Europe. Same applies in North Africa, and I did give the outlook for Mexico, Central America, and Ecuador. On the LATAM, I'll start and then Steffen Kindler can add. First of all, just to address Mexico. H1 last year was slow. We saw momentum gaining in Q3.

Speaker #2: Regarding the Middle East conflict and how it is impacting market momentum. The exception is GCC countries, where we have relatively small operations, representing less than 1.5% of net sales.

Speaker #2: We put priority on the safety and well-being of our employees and their families. So we did stop operations for a couple of weeks last few weeks, we have resumed.

Speaker #2: Other than that , I'm not expecting any change in the momentum on the in the construction market momentum . As a result of the Middle East conflict .

Speaker #2: So far , we are seeing healthy pipeline of projects in Europe . Same applies in North Africa . And I did give the outlook for Mexico Central America and Ecuador on the Latam .

Speaker #2: I'll start and then Stephane can add . First of all , just to address Mexico H1 last year was slow . We saw in momentum gain in Q3 .

Miljan Gutovic: We reported some infrastructure projects that we have secured, and we have seen similar trend this year in Q1. We have secured a few of the big projects in Q1, end of the last year Q1, which is Guadalajara Airport and Salina Cruz Refinery, where we are already supplying our ECOPact ECOPlanet solutions. Our focus in Q1 in Mexico was on the pricing, and I am very happy to report that pricing dynamically, what we achieved, actually, outcome was slightly above expectation. For us, maintain the pricing, maintain the market share, continue with expanding the sense of our retail outlook. Just one fact that we have not communicated before, Holcim Mexico EBITDA margin currently in Q1 was around 44%. This is a very healthy level, and we want to maintain this. On the margin impact, I'll just mention scope and some extended maintenance shutdown in Argentina.

Speaker #2: We reported some infrastructure projects that we have secured and we have seen similar trend this year . In Q1 , we have secured a few of the big projects in Q1 end of the last Q1 , which is Guadalajara Airport and Salina Cruz refinery , where we already supplying our echo packed echo Planet solutions .

Speaker #2: Our focus in Q1 in Mexico was on the pricing . And I'm very happy to report that pricing dynamic is what we achieved .

Speaker #2: Actually , outcome was slightly above expectation . So I , for us , maintain the pricing , maintain the market share , continue with expanding the sensor , our retail outlook and just one fact that we have not communicated before Holcim , Mexico's EBITDA margin currently in Q1 , was around 44% .

Speaker #2: So this is a very healthy level . And we want to maintain this on the margin impact . I'll just mention and some maintenance extended maintenance shut down in Argentina .

Miljan Gutovic: Steffen, why don't you say?

Steffen Kindler: Yeah, thanks, Miljan. Look, hey. Morning, Julian, also from my side. Miljan basically gave the complete answer. The margin or the EBIT growth impact in Latin America was for scope, predominantly Guatemala and Peru, so the onboarding of our acquisitions and the entry into new countries. Argentina, we had some extended maintenance shutdowns. There was an operational issue that hit us in Q1, will have a bit of a lingering effect into Q2. What is important for us, the story for LATAM remains super positive. The strong price increase that Miljan just described, the good momentum across markets. We just talked about Mexico with a very high EBIT and EBITDA margin. Organic growth will be mid to high single digits for the full year, margin above 34%.

Speaker #2: Stefan, why don't you say.

Speaker #3: Yeah , thanks . No , I morning , Julian . Also from my side . Million million basically gave the complete answer that the margin or the Ebit growth impact in Latin America was was was scope predominantly Guatemala and Peru .

Speaker #3: So the the onboarding of our of our acquisitions and the entry into new countries . Argentina , we had some extended maintenance shutdowns .

Speaker #3: There was an operational issue that hit us in Q1 , will have a bit of a lingering effect into Q2 . What is important for us , the story for Latam remains super positive , right ?

Speaker #3: The strong price increase , that million just described . The good momentum across markets , we just talked about Mexico with a very high Ebit and EBITDA margin , organic growth will be mid to high single digits for the full year margin above 30% .

Steffen Kindler: Remember, there is a massive amount of scope coming in the H2 of almost CHF 400 million, with the acquisitions that we're doing. There is a very positive outlook for Latin America going forward, especially into the H2.

Speaker #3: And remember there is there is a massive amount of scope coming in the second half of almost 400 million with the acquisitions that we're doing .

Speaker #3: So there is a very positive outlook for Latin America going forward . Especially into the second half .

Julian Radlinger: Thank you very much, guys.

Speaker #1: Thank you very much, guys.

Miljan Gutovic: Thank you.

Bernd Pomrehn: Perfect. Thank you, Julian. The next question comes from Benoit Rulleau from Goldman Sachs. Good morning, Ben.

Speaker #2: Perfect . Thank you .

Speaker #4: Julian . Next question comes from Ben . Martin from Goldman Sachs . Good morning Ben .

Benoit Rulleau: Excellent. Good morning, Miljan, Steffen, and Bernd. Thanks for the questions today. My first question was another one on pricing, interested particularly in the pricing actions you've had to make post the conflict and the inflation that you're seeing. What kind of magnitude, I guess, do you expect to be additional to your original February expectations for pricing for 2026? The second one would just be on 2026 guidance. We're a few months into the year now, obviously some moving parts in terms of cost and pricing, but I'd be interested from your side, what do you think are the key swing variables that get you to the top end or the bottom end of the range? Is it more related to volumes or are there also things in price costs that you think are still up for debate?

Ben Rada Martin: Excellent. Good morning, Miljan, Steffen, and Bernd. Thanks for the questions today. My first question was another one on pricing, interested particularly in the pricing actions you've had to make post the conflict and the inflation that you're seeing. What kind of magnitude, I guess, do you expect to be additional to your original February expectations for pricing for 2026? The second one would just be on 2026 guidance. We're a few months into the year now, obviously some moving parts in terms of cost and pricing, but I'd be interested from your side, what do you think are the key swing variables that get you to the top end or the bottom end of the range? Is it more related to volumes or are there also things in price costs that you think are still up for debate?

Speaker #5: Excellent . Good morning million Stefan and thanks for the questions today My first question was another one on on pricing . Interested particularly in the pricing actions you've had to make post the conflict and the inflation that you're seeing .

Speaker #5: What kind of magnitude , I guess , do you expect to be additional to , I guess , your original February expectations for pricing for 2026 ?

Speaker #5: And then the second one would just be on , on 2026 guidance . You know , we're a few months into the year now , obviously , some moving parts in terms of cost and pricing , but I'd be interested from your side , what do you think are the key swing variables that get you to the top end or the bottom end of the range ?

Speaker #5: Is it more related to volumes , or are there also things in price costs that you think are still up for , up for up for debate

Miljan Gutovic: Good morning, Ben. Thank you for your questions. I'll start with the pricing. Look, nothing to add, actually. We have achieved what we aimed at. The impact of Middle East conflict, we could see some movements on logistics cost as a result of the diesel prices, but we are confident we can cover that through surcharges and pass it to the customers. I'm not expecting any significant impact as a result of this Middle East conflict. What I would like to reinforce is that we do get many questions on energy. This is what Stefan already addressed in the presentation. Really, all the hard work that we did in the last couple of years, where we have invested to phase out traditional fossil fuels from our business and replace it with alternative fuels, is now paying off.

Speaker #2: Good morning Ben . Thank you for your question . So I'll start with the pricing . Look , nothing to add actually . We are we have achieved what we aimed at .

Speaker #2: What the impact of Middle East conflict would have—could have—some, we could see some movements on logistics costs as a result of the diesel prices.

Speaker #2: But we are confident we can cover that through surcharges and pass it to the customers. So I'm not expecting any significant impact as a result of this Middle East conflict.

Speaker #2: What I would like to reinforce is that we do get many questions on energy. This is what Stefan already addressed in the presentation.

Speaker #2: Really, all the hard work that we did in the last couple of years, where we have invested to phase out traditional fossil fuels from our business and replace them with alternative fuels, is now paying off.

Miljan Gutovic: You see that we are close to 40% usage of alternative fuels globally and in Europe, which is where we are seeing the biggest impact on energy prices. We are up to 70%. All these investments are now paying off, and we will continue to invest in these initiatives with the aim to reach 90% of alternative fuel usage in 2030 in Europe and 50% globally. On the guidance, I think, you hinted at, if geopolitical situation stabilizes, we could see a significant upside on the guidance that we provided because the whole construction momentum will accelerate.

Speaker #2: You see that we are close to 40% usage of alternative fuels globally . And in Europe , which is where we are seeing a biggest impact on energy prices .

Speaker #2: We are up to 70% . So all these investments are now paying off and we will continue to invest in in this in this initiatives with the aim to reach 90% of alternative fuel usage in 2030 in Europe and 50% globally on the guidance .

Speaker #2: I think you hinted at I mean , if geopolitical situation stabilizes , we will see . We could see a significant upside on the on the guidance that we provided because the whole construction momentum will , will accelerate

Benoit Rulleau: Perfect. Thank you so much.

Ben Rada Martin: Perfect. Thank you so much.

Speaker #4: Thank you so much. Thank you, Ben. The next question comes from the line of Luis Piotto from Kepler. Good morning, Luis.

Bernd Pomrehn: Thank you, Ben. The next question comes from the line of Luis Prieto from Kepler Cheuvreux. Good morning, Luis.

Luis Prieto: Good morning, everyone. Thanks a lot for taking my questions this morning. I had a couple of questions. The first one is if you would be able to break down the organic growth building block of your Q1 recurring EBIT. So it's between price over cost and volume, at least a rough idea. The second one is with regards to you having committed significant resources to acquisitions over the last month, Xella and Pacasmayo. Does this imply that we should expect you to take some time to digest these businesses? Or you believe you have ample integration capabilities to do something sizable on the M&A front in the remainder of 2026? Thank you.

Speaker #6: Good morning, everyone. Thanks a lot for taking my questions this morning. I had a couple of questions. The first one is if you would be able to break down the organic growth building block of your Q1 recurring EBIT bridge between price over cost and volume, at least a rough idea. And the second one is with regards to you having committed significant resources to acquisitions over the last months, namely in Seller and Pacasmayo.

Speaker #6: Does this imply that we should expect you to take some time to digest these businesses, or do you believe you have ample integration capabilities to do something sizable on the M&A front in the remainder of '26?

Speaker #6: Thank you .

Miljan Gutovic: Good morning, Luis. Thank you for the questions. I will start with M&A, and then I'll hand it over to Steffen to break down organic growth. On M&A front, yes, Luis, you're right. We just closed Pacasmayo. We are planning, subject to conditions, to close Xella end of Q2 and Q3, and the plan is to close Colombian acquisition end of the year. All of this, it will take time and energy to integrate these businesses. Keep in mind, we are fully decentralized business. This is the power of our model, where local people take the ownership of the whole integration and achieving synergies. I'm not excluding that you will not see some additional big deals signed from us this year. This year, I would like to focus more on integration of these companies and continue with strong momentum on bolt-on side.

Speaker #2: Good morning . Luis . Thank you for the question . Questions ? I will start with M&A and then I'll hand it over to Stefan to the to break down organic growth on M&A front .

Speaker #2: Yes , Luis , you're right . We have we just closed Pacasmayo . We are planning to close subject to conditions to close end of Q2 and Q3 .

Speaker #2: And the plan is to close the Colombia acquisition by the end of the year. All of this—we know it will take time and energy to integrate these businesses.

Speaker #2: But keep in mind, we are a fully decentralized business. This is the power of our model, where we local people take ownership of the whole integration and achieving synergies.

Speaker #2: So I'm not excluding that . You will see that you will not see some additional big deals signed from us this year , but this year I would like to focus more on integration of these companies and continue with strong momentum on both on side , we have closed few free bolt on acquisitions already in Q1 , and I can confirm that we have a very healthy pipeline for the rest of the year .

Miljan Gutovic: We have closed a few free bolt-on acquisitions already in Q1, and I can confirm that we have a very healthy pipeline for the rest of the year. Steffen?

Steffen Kindler: Yeah. For your question, how to break down the Q1 EBIT. Look, as I said, price over cost is positive, but it's composed of a positive price of, let's say, mid-single digit. Then we have a bit lower energy still in Q1, so Q1 still has energy tailwinds, and we have a slight non-energy inflation of, let's say, around about 3%, which is distribution, raw material, structural cost, and fixed cost. Here's your breakdown. Volume, of course, had a negative impact on price over cost on the EBIT development in Q1. Price over cost positive, volume negative. That sticks it together.

Speaker #2: Stefan .

Speaker #3: Yeah . So for for your question , how to , how to break down the Q1 Ebit ? Look , as I said , price over cost is positive .

Speaker #3: That is composed of a positive price of , let's say , mid-single digit . Then we have a bit lower energy still in Q1 .

Speaker #3: So Q1 still has energy tailwinds and we have a slight non-energy inflation of , let's say around about 3% , which is distribution , raw material , structural cost , and fixed costs .

Speaker #3: So here's your here's your breakdown and volume , of course , had a negative impact on , on price over cost in the , on the , on the , on the development , in the first quarter price of our cost positive volume , negative .

Luis Prieto: Super clear. Thank you very much.

Speaker #3: So that's

Speaker #6: Super clear. Thank you very much.

Bernd Pomrehn: Thank you, Luis. The next question comes from Jon Bell from Deutsche Bank. He sent us his email. Do you think any of the strength seen in Europe in March was due to pre-buying by those keen to avoid price rises? Did you see the positive demand trend continue in the first three weeks of April?

Bernd Pomrehn: Thank you, Luis. The next question comes from Jon Bell from Deutsche Bank. He sent us his email.

Speaker #4: Thank you . Luis . The next question comes from John Bel from Deutsche Bank . He sent us his email . Do you think any of the strengths seen in Europe and March was due to pre-buying by those keen to avoid price rises ?

Jon Bell: Do you think any of the strength seen in Europe in March was due to pre-buying by those keen to avoid price rises? Did you see the positive demand trend continue in the first three weeks of April?

Speaker #4: Did you see the positive demand trend continue in the first three weeks of April

Miljan Gutovic: Thank you for the question, John. I would not say much was about pre-buying. Yes, we've had some upside because January and February in Europe, as you know, have been greatly impacted by better conditions. That lifted the momentum in March. I would like to confirm that April is looking solid so far.

Speaker #2: Thank you for the question , John . I would not say much was about Pre-buying . Yes , we had some upside because January and February in Europe , as you know , have been greatly impacted by weather conditions .

Speaker #2: So that’s lifted the momentum in March. I would like to confirm that April is looking solid so far. Okay.

Bernd Pomrehn: Okay. Thank you, Miljan. The next question comes from Rupesh Ghose from Bernstein. Good morning, Rupesh.

Speaker #4: Thank you . Milan . Next question comes from from Bernstein . Good morning Pucciarini .

Rupesh Ghose: Hi, and thanks for taking my questions. On the EBIT margin guidance, you have mentioned that you are expecting to see a continued margin expansion. Could you provide some more color about how we should think about the different regions in terms of the EBIT margin expansion, given what you've already seen in Q1? My second question is on M&A again. You've already announced some very big acquisitions as well as completed four bolt-ons this quarter with a couple of quite sizable bolt-ons in Latam. How is the pipeline looking? How are transaction multiples developing? Is there any impact of the war making it either easier or more difficult to do the acquisitions? How are you seeing the synergies develop? And finally, for the Latin American business, how does this impact the growth and the excellent margins going forward?

Pujarini Ghosh: Hi, and thanks for taking my questions. On the EBIT margin guidance, you have mentioned that you are expecting to see a continued margin expansion. Could you provide some more color about how we should think about the different regions in terms of the EBIT margin expansion, given what you've already seen in Q1? My second question is on M&A again. You've already announced some very big acquisitions as well as completed four bolt-ons this quarter with a couple of quite sizable bolt-ons in Latam. How is the pipeline looking? How are transaction multiples developing? Is there any impact of the war making it either easier or more difficult to do the acquisitions? How are you seeing the synergies develop? And finally, for the Latin American business, how does this impact the growth and the excellent margins going forward?

Speaker #7: Hi . And thanks for taking my questions . So on the Ebit margin guidance , you have mentioned that you are expecting to see a continued margin expansion .

Speaker #7: Could you provide some more color about how we should think about the different regions in terms of EBIT margin expansion, given what you've already seen in Q1?

Speaker #7: And my second question is on M&A again. So, you already announced some very big acquisitions as well as completed four bolt-ons.

Speaker #7: This quarter, with a couple of quite sizable bolt-ons in Latam. So, how is the pipeline looking? How are transaction multiples developing?

Speaker #7: Is there any impact of the war making it either easier or more difficult to do? The acquisitions? How are you seeing the synergies develop, and finally, for the Latin American business, how does this impact the growth and the excellent margins going forward?

Miljan Gutovic: Thank you for questions, Pujarini. I'll start and then maybe Steffen can add on the M&A. I'll start with M&A. Look, I think so far so good. Momentum is strong. Europe, we have very exciting projects in the pipeline, companies that specialize in recycling of construction and demolition materials. We do have few interesting targets in aggregates, where we have over proportional EBITs in Europe. I'm not seeing any negative impact. It's not getting more difficult to do acquisition as a result of conflict in the Middle East. On the EBIT guidance, I think Steffen can add a few things.

Speaker #2: Thank you for the questions for Jeremy. I'll start, and then maybe Stephane can add on the M&A. I'll start with M&A.

Speaker #2: Look , I think so far , so good . Momentum is strong . Europe , we have a very exciting projects in the pipeline companies that specialize in recycling of construction and demolition materials .

Speaker #2: We do have a few interesting targets in aggregates where we have over-proportional EBIT in Europe. So I'm not seeing any negative impact.

Speaker #2: It's not getting more difficult to do acquisition as a result of conflict in the Middle East. On the EBIT guidance, I think Stephane can add a few things.

Steffen Kindler: Hi, Pujarini. Good morning. For your regional understanding, let's start with EMEA. You saw a very nice margin growth in Q1. We explained the reasons for that. That story is going to continue throughout the year. We see a good margin progression here. Europe will turn positive in margin development. You know that we talked about the impact of the weather in January, February, good recovery in March, we just seem to have a solid outlook into April. That will also help us to come back with margin growth here. Also, I said before that the margin overall was impacted due to the effect of incoming acquisitions. That will also wear out throughout the year. Lastly, Latin America. Here, we always say we want to be above 30%. Latin America margin is so high, so it can vary between one year to the other.

Speaker #3: Apaturinae . Good morning . So for for your regional for your regional understanding , let's start with EMEA . You saw you saw very nice margin growth in Q1 .

Speaker #3: We explained the reasons for that . But that story is going to continue throughout the year . So we see we see a good margin progression here .

Speaker #3: Europe will turn positive in margin development. You know that we talked about the impact of the weather in January or February.

Speaker #3: Good recovery in March million just sent to a to a to a solid outlook into April . So that will also help us to to come back with margin growth here also .

Speaker #3: I said before that the margin overall was impacted due to the effect of incoming acquisitions that will also wear out throughout the year.

Speaker #3: And then lastly , Latin America here , we always say we want to be above 30% . Latin America margin can is so high .

Steffen Kindler: What is important here is that we drive growth in Latin America, sales growth, and that we get more of this very high margin into our numbers in terms of a mix effect. I think this is the way to think about it. Something we've also said repeatedly that the contribution from the right sizing of our corporate structure will probably also add on a full year basis, right around half percentage point. That gives you the algorithm.

Speaker #3: So it can vary between one year to the other . What is important here is that we drive growth in Latin America . Sales growth , and that we get more of this very high margin into our numbers in terms of a mix effect , I think this is the way to think about it .

Speaker #3: And then, something we've also said repeatedly is that the contribution from the right-sizing of our corporate structure will probably also add, on a full-year basis, right around half a percentage point.

Speaker #3: So that gives you the algorithm.

Rupesh Ghose: Okay, thank you.

Pujarini Ghosh: Okay, thank you.

Bernd Pomrehn: Perfect. Thank you, Puja. The next one on the line is Elodie Rall from J.P. Morgan. Good morning, Elodie.

Speaker #7: Okay . Thank you .

Speaker #8: Perfect .

Speaker #4: Thank you, Pooja. So the next one on the line is from JP Morgan. Good morning, Lloyd.

Elodie Rall: Hi, good morning. Thanks for taking my questions. I had one on AI. It sounds a bit like probably not a new initiative, but it's the first time you spend the most time giving us more color there. It seems like the focus is increasing. Is it fair to say that this AI initiative was not embedded in your Capital Markets Day guidance last year, and this could be source of upside to your midterm targets? Then I had a clarification question or point if you want. On those few surcharges that you're passing through, particularly on transportation costs, these are passed through. Should we expect that you give these back, i.e., pricing down? Should transportation costs come down with the oil price move at some point? Thank you.

Speaker #9: Hi . Good morning . Thanks for taking my questions . So I had one on AI . It sounds a bit like a probably not a new initiative , but it's the first time you spend the most time giving us more color there .

Speaker #9: So it seems like the focus is increasing. Is it fair to say that this AI initiative was not embedded in your capital market guidance last year?

Speaker #9: And this could be source of upside to your mid-term targets . And then I had a clarification question or point . If you want .

Speaker #9: So on those few surcharges that you're passing through , particularly on transportation costs , these are like pass through . Should we expect that you give this back ?

Speaker #9: If pricing is down, should transportation costs come down with your price move at some point? Thank you.

Miljan Gutovic: Good morning, Elodie. Thank you for the questions. I'll start on AI. Yes, this was not embedded in our capital market day. This is upside. Yes, you are right, Elodie. This is not new. We have been deploying these initiatives for the past few years. This morning, we are committing to a number that could be exceeded if everything goes according to plan. CHF 200 million in cost savings and cost avoidance by 2028. If you can see here from this chart, most of it will come from production where we have already deployed our key initiatives, and it's all about scaling. I am counting also that on logistics commercial side, we can see significant upsides in the years to come. To do all of this, obviously, we need to spend some money.

Speaker #2: Good morning . Thank you for the questions . I'll start on AI . Yes . This was not embedded in our capital market day .

Speaker #2: This is upside . Yes you are right . This is not new . We have been deploying this initiatives for the past few years .

Speaker #2: And this morning, we are committing to a number that could be exceeded if everything goes according to plan: $200 million in cost savings and cost avoidance by 2028.

Speaker #2: And if you can see here from this chart, most of it will come from production, where we have already deployed our key initiatives.

Speaker #2: And it's all about scaling. And I am counting also that on the logistics commercial side, we can see significant upsides in the years to come to do all of this.

Miljan Gutovic: Yes, as you can see, we are committing to investments of approximately CHF 20 million per year in order to accelerate AI adoption. Regarding the logistics COGS surcharges, this could go up and down depending on the fuel prices and what I said earlier. We do have our ability to pass this on to the customers, and this is the protection we had in place for a number of years now.

Speaker #2: Obviously , we need to spend some money . So yes , as you can see , we are committing to a investments of approximately 20 million per year in order to accelerate AI adoption .

Speaker #2: Regarding the logistics costs surcharges , this is this could go up and down depending on the fuel prices . And what I said earlier , we do have a ability to pass this on to the customers .

Speaker #2: And this is the protection we had in place for a number of years now.

Elodie Rall: Thank you. If I can just follow up on these cost savings from AI. Can you give us a bit of a color on the phasing of the realization of those cost savings?

Speaker #9: Thank you. If I can just follow up on these cost savings from AI, can you give us a bit of color on the phasing of the realization of those cost savings?

Miljan Gutovic: Oh, look, 2028. I would like to see next year 100+ possible. We will see, 100+ next year, 200 by 2028.

Speaker #2: Oh , well , look , 200 is 28 . I would like to see next year 100 plus possible . Yeah , we we will something hundred plus next year in 200 by 2028 .

Elodie Rall: Great. Thanks very much.

Bernd Pomrehn: Perfect. Thank you, Elodie. The next one on the line is Cedar Ekblom from Morgan Stanley. Good morning, Cedar.

Speaker #9: Thanks. Thanks very much.

Speaker #4: Perfect . Thank you . Elodie . The next one on the line is Cedar from Morgan Stanley . Good morning Cedar .

Cedar Ekblom: Good morning. Thanks very much for the questions. Can you talk a little bit more about your purchasing structures in place for energy, that which is not alternative fuels, just to get a bit of understanding of when we should think about higher spot prices actually flowing through your costs. Following or linked to that, just like to push you a little bit on your point that the sort of top end of the guidance requires geopolitical stability. If I think about your moving parts versus where you were when you provided that guidance, I would argue that the pricing backdrop is better. Obviously, there is some cost risk, but you do stress the points around alternative fuels, recycling, and hedging, et cetera. I do wonder how long it takes for these costs and how meaningful these costs are actually when they come through.

Speaker #10: Good morning .

Speaker #11: Thank you very much for the questions. Can you talk a little bit more about your purchasing structures in place for energy that is not alternative fuels?

Speaker #11: Just to get a bit of understanding of when we should think about higher spot prices actually flowing through your costs, and then following or linked to that, I’d just like to push you a little bit on your point that the sort of top end of the guidance requires geopolitical stability.

Speaker #11: If I think about your moving parts versus where you were when you provided that guidance, I would argue that the pricing backdrop is better.

Speaker #11: Obviously , there is some cost risk , but you do stress the points around alternative fuels and recycling and hedging , etc. . So I do wonder how long it takes for these costs and how meaningful these costs are .

Cedar Ekblom: It doesn't sound like you're really talking down the volume backdrop. When I put those moving parts together, it feels like actually the backdrop's better than it was when you provided the guidance, strangely enough. You're not sort of lifting your ambition. I just like to hear what incremental risk factors have come into the business. You're not talking down volumes, right? You sound pretty good on volumes. I just like to understand why the guidance upgrade is not there. Thank you.

Speaker #11: Actually , when they come through . And then it doesn't sound like you really talking down the volume backdrop . So when I put those moving parts together , it feels like actually the backdrop is better than it was when you provided the guidance .

Speaker #11: Strangely enough . But you're not sort of lifting your ambition . So I'd just like to hear what incremental risk factors have come into the business that , I mean , you're not talking down volumes , right ?

Speaker #11: You sound pretty good on volumes, so I'd just like to understand why the guidance upgrade is not there. Thank you.

Miljan Gutovic: Good morning, Cedar. Thank you for the question. I'll start with the guidance, and then I'll hand it over to Steffen to talk more about purchasing spend when it comes to energy. Cedar, okay, geopolitical risk can create tension in the system that could slow down investments in the residential, investments in infrastructure and so on. Early Q1 is just the first quarter. It's the smallest quarter in the year, so we are a little bit cautious. In March, what we saw in Europe, for instance, was excellent momentum. April is solid. On the volume side, on the whole marketing activity, I would say that I'm not expecting any significant changes since Capital Market Day. Hard to predict what can happen in the H2 if the conflict in the Middle East prolongs. On the LATAM side, yes, you're right, probably there is a slight upside.

Speaker #2: Good morning. Thank you for the question. I'll start with the guidance, and then I'll hand it over to Stefan to talk more about purchasing spend.

Speaker #2: When it comes to energy . So Cedar . So okay , geopolitical risk can create tension in the system that could slow down investments in the residential investments in infrastructure .

Speaker #2: And so on . Early Q1 , it's just the first quarter is the it's the smallest quarter in the year . So we are a little bit cautious much what we saw in Europe , for instance , was excellent momentum .

Speaker #2: April is solid . So on the volume side , on the the whole marketing activity , I would say that I'm not expecting any significant changes since capital Market day .

Speaker #2: Hard to predict what can happen in Q2 in the H2. If the conflict in the Middle East prolongs. So, on the LatAm side, I guess you're right.

Miljan Gutovic: What I personally witnessed during my last trip is that momentum is slightly better than we initially thought, and then the whole EMEA should be okay with some potential risk as a result of the Middle East conflict. I still maintain that the biggest concern today we have is this whole geopolitical situation, depending how it translates, if it continues for a longer period of time.

Speaker #2: Probably there is a slight upside. What I personally witnessed during my last trip is that momentum is better—slightly better than we initially thought.

Speaker #2: And then the whole EMEA should be okay, with some potential risk as a result of the Middle East conflict. So I still maintain that the biggest concern today we have is this whole geopolitical situation.

Speaker #2: Depending how it translates, if it continues for a longer period of time, and for—

Steffen Kindler: For energy. Hi, Cedar. Good morning. Look, we said previously that close to 80% of our energy requirements are secured for the rest of the year. How to understand that, in regulated markets, which are about 35%, we have contracts in place, so this is done. From the hedgeable portion, which is about 60% of our requirements, 70% is hedged. There you go. This gives you altogether a secured piece of almost 80%. What I would also say is for the remaining piece, we have plans in place. We have cost actions in place. We have commercial actions in place. It's always important also that our management stays sharp on this topic, so that we can stay nimble. For the balance of this year, we feel quite confident that we can deal with further pressures on the markets quite well.

Speaker #3: For energy , I . Good morning . Look , we said we said previously that close to 80% of our energy requirements are secured for the rest of the year .

Speaker #3: How to understand that in regulated markets , which are about 35% , we have contracts in place . So this is done . And then we from the Hedgeable portion , which is about 60% of our requirement , 70% is hedged .

Speaker #3: So there you go . This this gives you this gives you all together a a . A secured piece of almost 80% . What I would also say is for the remaining piece , we have , we have plans in place .

Speaker #3: We have cost actions in place. We have commercial actions in place. It's always important also that our management stay sharp on this topic.

Speaker #3: So that we can, that we can stay nimble. But for the balance of this year, we feel quite confident that we can, that we can deal with further pressures on the markets quite well.

Cedar Ekblom: Perfect. Thank you very much.

Bernd Pomrehn: Thank you, Cedar. The next one in the line is Arnaud Lehmann from Bank of America. Good morning, Arnaud.

Speaker #11: Perfect. Thank you very much.

Speaker #4: Thank you, Cedar. The next one in line is Arnaud Lehmann from Bank of America. Good morning, Arnaud.

Arnaud Lehmann: Good morning, team. Thank you for taking my questions. Two on my side, please. Firstly, coming back on the AMEA region, could you give us an indication of the contribution from Huaxin in China? And within that, was there a meaningful impact from Nigeria? That's my first question. The second question, I appreciate AI is more fashionable than carbon capture at the moment, but I think there are discussions around launching a large-scale carbon capture project in Europe, possibly in Belgium. Is it something that you're still working towards, and could you make an announcement this year? Thank you.

Speaker #12: Good morning Tim . Thank you for taking my questions . Two on my side , please . Firstly , coming back on the I'm e a region .

Speaker #12: Could you give us an indication of the contribution from Rasheen in China? And within that, was there a meaningful impact from Nigeria?

Speaker #12: That's my first question . The second question , I mean , I appreciate AI is , more fashionable than carbon capture at the moment , but I think there are discussions around launching a large scale carbon capture project in Europe , possibly in Belgium .

Speaker #12: Is it something that you're still working towards? And could you make an announcement this year? Thank you.

Miljan Gutovic: Good morning, Arnaud, and thank you for your question. We are equally excited about carbon capture as we are about AI. You are referring to our GO4ZERO project in Belgium, Obourg. You probably saw recently we did sign the agreement with Air Liquide for phase two. Currently, priority is to finish phase one, which includes a brand-new cement plant, which will indeed be state of the art with very high usage of alternative fuels, alternative raw materials, and the most efficient production processes. Nothing has changed. We are committing to commissioning in Q1. Recently, I have also visited the project. It is going according to plan.

Speaker #2: Good morning and thank you for your question . I'm equally excited about carbon capture as we are about AI . So you are referring to for our goal for zero project in Belgium .

Speaker #2: Oberg you saw probably recently we did sign the agreement with Air Liquide for phase two . Currently , priority is to finish phase one , which includes brand new industrial , brand new cement plant which will indeed be state of the art with very high usage of alternative fuels .

Speaker #2: Alternative raw materials and most efficient production processes. Nothing has changed. We are committing to commissioning in Q1. Recently, I have also visited the project.

Miljan Gutovic: Once we have completed commissioning of phase one, then we will start working on phase two, working with our partners, as well as I mentioned, Air Liquide on capturing, but we also have a partnership with another company when it comes to logistics, transporting CO2, and also storing CO2. Commissioning Q1 2027, and that means completing phase one of the project. Stefan, why don't you comment on AMEA and Vuogen contribution?

Speaker #2: It is going according to plan. Once we have completed commissioning of phase one, then we will start working on phase two and working with our partners as well.

Speaker #2: As I mentioned earlier, Liquide is working on capturing. But we also have a partnership with another company when it comes to logistics—transporting CO2 and also storing CO2.

Speaker #2: So, commissioning Q1 2027. And that means completing phase one of the project. Stefan, why don't you comment on AMEA and Washington contribution?

Steffen Kindler: Yeah. Hi, good morning, Arnaud. Look, it's a bit difficult to comment on Vuogen because it's a listed company, so I have to be very careful what I say. I cannot really comment on their results so much. What I can tell you is the JV contribution was positive. We had a positive OG contribution this year so far in our EBIT, mainly due to good developments in Australia and Vuogen. The good demand in Australia we talked about before. We saw good results here with good volume growth. The strong development in Vuogen is driven by their overseas business. It's not driven by their domestic business, it's driven by their overseas business. I'm not telling you something that the company wouldn't say itself. This is public. When I tell you that, then you can probably deduce that their investment in Nigeria was potentially not detrimental.

Speaker #3: Yeah . Hi . Good morning Arnaud . Look , it's a bit difficult to comment on Virgin because it's a listed company . So I have to be very careful what I say .

Speaker #3: I cannot really comment on their results so much, but I can tell you as the JV contribution was positive, we had a positive contribution this year.

Speaker #3: So far in Ebit , mainly due to good developments in Australia and tours in the good demand in Australia . We talked about before we saw we saw good research in here with good volume growth and the strong development in Virgin is driven by their overseas businesses , not driven by their domestic business , driven by their overseas business .

Speaker #3: I'm not telling you something that the company wouldn't say itself. This is public. And when I tell you that, then you can probably deduce that their investment in Nigeria was potentially not detrimental.

Steffen Kindler: Maybe we leave it there. The outlook for our joint venture business is quite positive for this year. We expect a strong contribution from all our three large JVs.

Speaker #3: So maybe we leave it there . The outlook for our for our joint venture business is , is quite positive for this year .

Speaker #3: So we expect a strong contribution from all our three large JVs.

Arnaud Lehmann: Thank you very much.

Bernd Pomrehn: Thank you, Arnaud. The next one on the line is Martin Hüsler from DSD. Good morning, Martin.

Speaker #12: Thank you very much .

Speaker #4: Thank you, Arnaud. The next one in the line is Martin from ZKB. Good morning, Martin.

Martin Hüsler: Good morning, everyone. Thank you. I have a short question. First, on the AI investments, I was just making sure that this is all OpEx, CHF 20 million, or is part of it CapEx?

Speaker #13: Good morning everyone . Thank you . And I have a short question . First on the AI investments . I was just making sure that this is all OpEx 20 million or is part of it .

Miljan Gutovic: Good morning, Martin. Thank you for your question. It includes both OpEx and CapEx.

Speaker #13: Apex

Speaker #2: Good morning, Martin. Thank you for your question. It includes both OpEx and CapEx.

Martin Hüsler: Maybe 50/50 split, or what is the best assumption here?

Speaker #13: And maybe a 50/50 split, or what is it approximately?

Miljan Gutovic: Approximately 50/50.

Martin Hüsler: Okay, thanks a lot. I have a second question. With the annual results, Steffen gave us a certain outlook, what he expects in terms of FX for the full year and consolidations and deconsolidations. I was just wondering whether those numbers are still valid or if something has changed there.

Speaker #2: 50 approximately 5050 .

Speaker #13: Okay, thanks a lot. And then I have a second question regarding the annual results. Stephan gave us a certain outlook.

Speaker #13: What he expects in terms of FX for the full year and cons, and I was just wondering whether those numbers are still valid or if something has changed.

Steffen Kindler: It looks up. Currently, in Q1, we see an FX headwind of 5.5%. We don't usually guide for FX, but if you need a guidance, I would go with current spot rates. Current spot rates, I think are on sales a bit above 3% and on EBIT a bit above 4%. That's your best guess, I would say at the moment.

Speaker #13: There

Speaker #2: It looks .

Speaker #3: Currently we see . We see in the first quarter we see an FX headwind of . Of five , 5.5% . We . We don't usually guide for FX , but if you need a guidance , I would go with current spot rates .

Speaker #3: Current spot rates, I think, are on sales a bit above 3% and on EBIT a bit above 4%. That's, that's, that's your best guess.

Martin Hüsler: In terms of scope, you were mentioning something like scope in CHF 120 to 150 and divestments roughly CHF -40. Is this still ballpark?

Speaker #3: I would say, at the moment,

Martin Hüsler: In terms of scope, you were mentioning something like scope in CHF 120 to 150 and divestments roughly CHF -40. Is this still ballpark?

Speaker #13: Okay . And , and in terms of scope , you were mentioning to something like scope in 120 to 150 and divestments , roughly -40 , is this still ballpark ?

Steffen Kindler: Yes. I would think you should stay with that. Yep.

Martin Hüsler: Okay. Thanks a lot.

Speaker #13: Yeah .

Speaker #3: I would think you should stay with that. Yeah.

Bernd Pomrehn: Merci, Martin. Maybe let's stay at the AI topic. We received two questions from Paul Roger from BNP Paribas. His first question is, how unique are your AI initiatives, and are they only being deployed internally? Could they be monetized with third parties?

Speaker #13: Okay. Thanks a lot.

Speaker #4: Merci . Martin . Maybe let's stay at the AI topic . So we received two questions from Paul . Roger from BNP Paribas .

Speaker #4: His first question is, how unique are your AI initiatives? And are they only being deployed internally? Would they be monetized with third parties?

Steffen Kindler: Hey, good morning, Jon. Look, the way we do AI is really the ideas and the concepts are driven by our people in the operations, in production logistics.

Speaker #3: Hey , good morning John . Look , the way we do AI is really the ideas and the concepts are driven by our people in the operations in production , logistics , commercial , and also admin .

Miljan Gutovic: Commercial and also admin. That's where the ideas come from. This is paired with technical and data know-how from our IT team, and a third pair is external expertise. What I would say is these initiatives are highly unique because they're based on our data platform. Super important for the deployment of AI is that you have harmonious data that's consistent over time, and over regions so that you can scale it. This is why it's very proprietary, and it's also based on the knowledge of our people. The underlying models that we use with external help. They may be standard, but then again, the algorithms are custom trained on Holcim's specific material.

Steffen Kindler: Commercial and also admin. That's where the ideas come from. This is paired with technical and data know-how from our IT team, and a third pair is external expertise. What I would say is these initiatives are highly unique because they're based on our data platform. Super important for the deployment of AI is that you have harmonious data that's consistent over time, and over regions so that you can scale it. This is why it's very proprietary, and it's also based on the knowledge of our people. The underlying models that we use with external help. They may be standard, but then again, the algorithms are custom trained on Holcim's specific material.

Speaker #3: That's where the ideas come from . Then this is paired with with technical and data know how and from our IT team . And a third pair is external expertise .

Speaker #3: So, what I would say is these initiatives are highly unique because they're based on our data platform. Important for the deployment of AI is that you have harmonious data that's consistent over time.

Speaker #3: And over regions so that you can scale it . So this is why it's why it's very proprietary . And it's also based on the knowledge of our people .

Speaker #3: The , the underlying models that we use with external , they may be standard , but then again , the algorithms are custom trained on wholesome specific materials .

Miljan Gutovic: For the time being, I would think this is highly specific to us and our situation, and it's based on A, our data and B, the know-how of our people and paired with external expertise. Therefore, we would think this is very Holcim specific.

Steffen Kindler: For the time being, I would think this is highly specific to us and our situation, and it's based on A, our data and B, the know-how of our people and paired with external expertise. Therefore, we would think this is very Holcim specific.

Speaker #3: So for the time being , I would think this is highly . This is highly specific to us and our situation . And it's based on a .

Speaker #3: Data and be the know how of our people and paired with external expertise and therefore we would think this is this is very wholesome , specific , perfect .

Bernd Pomrehn: Perfect, Stefan. Paul had another question on AI. He's asking, are the AI skills to develop these initiatives available internally, or is Holcim using consultants or attracting new talent? What makes the group an employee of choice for digitally minded experts?

Speaker #4: Then Paul had another question on AI. He's asking, are the AI skills to develop these initiatives available internally or are you using consultants or attracting new talent?

Speaker #4: And what makes the group and employee of Troyes for digitally minded experts?

Miljan Gutovic: In short, the answer is we are building AI capabilities mainly internally. However, we do complement this by selective hiring and selective partnerships with third parties. What's making a difference is the way we approach this. This is a part of our Holcim University, where we are preparing our people for the future. We are upscaling them, we are training them, and AI is part of these initiatives. When it comes to AI, I would maybe just mention that we have two key initiatives. One is AI Academy, where we have dedicated programs for our managers to really master AI leadership and also strategy. We have functioning AI modules, where we are targeting training built into every department, procurement, finance, logistics, and so on.

Speaker #2: So in short , the answer is we are building a I . Capabilities mainly internally . However , we do complement this by selective hiring and selective partnerships with third parties .

Speaker #2: So what's making us different is our the way we approach this , we have . This is a part of our wholesome university where we are preparing our people for the future .

Speaker #2: We are upskilling them . We are trading them . And AI is part of this initiative . When it comes to AI . I would maybe just to mention that we have two key initiatives .

Speaker #2: One is AI Academy , where we have a dedicated programs for our managers to really master AI leadership and also strategy . And then we have functioning AI modulus , where we are targeting training built into every department procurement , finance , logistics .

Bernd Pomrehn: Perfect. Thank you so much, Miljan. We received another written question from Anthony Codling from RBC. He's asking, can you please comment on CBAM, your thoughts about possible changes to ETS and your expectations for the new benchmark, timing, benchmark price, et cetera. Do you see these as headwinds, tailwinds, or no wind?

Speaker #2: And so on. And so on. Okay.

Speaker #4: Thank you so much . We received another written question from Anthony Codling from RBC . He's asking , can you please comment on sebum , your thoughts about possible changes to ETFs and your expectations for the new benchmark timing , benchmark price , etc.

Speaker #4: Do you see these as headwinds, tailwinds, or low wind?

Miljan Gutovic: Anthony, I can just comment on the rumors. What we heard is that the benchmark is around 657 kilograms. This is 5.5% below Phase 4, below the previous benchmark. I'll just say this is in line with our expectations, and we are okay with this outcome. Hopefully by September, European Commission will confirm and make it official. In our view, this does not change anything regarding CBAM. We welcome CBAM. We are happy that it's been finally implemented, and now it's all about verification and auditing when it comes to CBAM.

Speaker #2: So Anthony, I can just comment on the rumors. What we heard is that the benchmark is around 657 kg. This is 5.5 percent below phase four.

Speaker #2: Below the previous benchmark. I'll just say this is in line with our expectations, and we are okay with this outcome. Hopefully, by September, the European Commission will confirm and make it official.

Speaker #2: So in our view, this does not change anything regarding CBAM. We welcome CBAM. We are happy that it's been finally implemented and now it's all about verification and auditing.

Bernd Pomrehn: Thank you, Miljan. The next one on the line is Ephrem Ravi from Citi. Good morning, Ephrem.

Speaker #2: When it comes to Cbam .

Speaker #4: Thank you. The next one on the line is Ibrahim Ravi from City. Good morning, Ibrahim.

Ephrem Ravi: Morning. Thanks for taking my question. Two, most of it has been answered, frankly, but would like two clarifications, really. Firstly, disaggregating the Latin American business into Mexico and rest of LATAM. The context of the question is, I think Cemex reported Mexico up double digit percentage revenue in local currency. If you had similar growth in Mexico, and LATAM is up 7% organic, Mexico is roughly half of LATAM. It indicates a slightly soft rest of LATAM. You did mention the Argentina issues, but would it be fair to say that rest of the LATAM was significantly softer on a top-line basis compared to Mexico? Secondly, again, on the fashionable topic of AI, you're going to spend CHF 20 million per year on AI and expect CHF 200 million of recurring EBIT.

Speaker #14: Good for taking my question . So , two most of it has been answered correctly , but two , clarifications really . Firstly , Disaggregating the Latin American business into Mexico and rest of Latam , the context of the question is , I think Cemex reported Mexico up double digit percentage revenue in local currency .

Speaker #14: And if you had similar growth in Mexico and Latam is up 7% organic, Mexico is roughly half or flat. Damn. It indicates a slightly soft.

Speaker #14: The rest of Latam . You did mention the Argentina issues , but would it be kind of fair to say that the rest of the Latam was significantly softer on a top line basis compared to to Mexico ?

Speaker #14: Secondly, again, on the fashionable topic of AI, you're going to spend $20 million per year on AI and expect $200 million of recurring EBIT.

Ephrem Ravi: That implies an ROI of close to 200%, if you take the three years cumulatively and phase it. If you can stand by these numbers, then what is the limiting factor in accelerating these investments even more as it could be possibly the best ROI you could gain in this business? Thank you.

Speaker #14: That implies an ROI of close to 200% . You know , if you take the three years cumulatively and phase it , if you are if you can stand by these numbers , then what is the limiting factor in accelerating these investments even more , as it could be possibly the best ROI you could gain in this business .

Miljan Gutovic: Ephrem, thank you for your question. I'll start on LATAM. I think I answered it pretty much earlier, and Steffen also had few points. Just to summarize it, Mexico, we are expecting strong momentum in 2026. We are positive about the whole market, and this is based on the project pipeline currently we see. On the Mexico and our financial performance, I would maybe mention one more time, our EBITDA margin in Mexico is 44%, and this is where we want to maintain. We want to keep investing in the sector. We want to keep expanding and growing our business over proportionally. For the whole LATAM this year, we have a strong price increase. We will maintain EBIT margins above 30%, and we will have a positive scope effect of nearly CHF 400 million from Pacasmayo. Steffen, would you like to add?

Speaker #14: Thank you

Speaker #2: Thank you for your question. I'll start on lactam. I think I answered it pretty much earlier, and Steffen also had a few points. Just to summarize it.

Speaker #2: Mexico . We are expecting strong , strong . We . Momentum in 2026 . We are positive about the whole market and this is based on the projects pipeline .

Speaker #2: Currently we see on the on the Mexico and our financial performance . I would maybe mention one more time how appetite margin in Mexico is 44% .

Speaker #2: And this is where we want to maintain. We want to keep investing in the sensor. We want to keep expanding and growing our business over-proportionately.

Speaker #2: So for the whole Latam , the this year we have a strong price increase . We will maintain Ebit margins above 30% , and we will have a positive scope effect of nearly 400 million CHF from Pacasmayo .

Steffen Kindler: ROI. Look, what we gave you here, the CHF 200 million, is based on our current 38 initiatives. 38 is a large number already, and we're putting a lot of power behind that. There's no limitation to doing more. If we come back in a year from now, and Miljan and I work on 50 initiatives, then of course the benefit will be higher. It's the number of ideas we can generate internally and the number of projects we can generate internally. 38 is what we're working on right now. It doesn't have to be like that forever. There's potentially upside on that as well. This is where we are today. No limitation.

Speaker #2: Stefan, would you like to add?

Speaker #3: ROI ? Look what we gave you here . The 200 million is based on our current 38 initiatives , 38 is a large number already , and we're putting a lot of power behind that .

Speaker #3: There's no limitation to doing more . If we come back in a year from now , a million and I work on 50 initiatives , then of course , the benefit will be higher .

Speaker #3: So it's the number of ideas we can generate internally and the number of projects we can generate internally. Thirty-eight is what we're working on right now.

Speaker #3: It doesn't have to be like that forever . It can there's , there's potentially upside on that as well . But this is where we are today .

Miljan Gutovic: Thank you.

Ephrem Ravi: Thank you.

Bernd Pomrehn: Thank you so much, Ronald. The next one on the line is Yassine Touahri from On Field. Good morning, Yassine.

Speaker #3: So no limitation

Speaker #8: Thank you .

Speaker #4: Thank you so much. The next one on the line is Yacine from On-field. Good morning, Yacine.

Yassine Touahri: Good morning. Thank you very much for taking my question. Two questions. Last week, I think President von der Leyen in Europe commented on boosting the Market Stability Reserve as part of the ETS review in July. Do you have any updated view from discussion with Cement Europe or Brussels on where the EU ETS price could go medium term? And I think the question is, what CO2 price do you currently assume for the decarbonization investment, and what level will either accelerate or delay your carbon capture project? Second question on Latin America. I think you have a couple of press reports that have been confirmed by Chinese cement companies that suggest that large Chinese players are considering acquiring one or two cement companies that are currently for sale in Brazil. And this could mark the first meaningful entry of Chinese player into Latin American cement.

Speaker #15: Good morning . Thank you very much for taking my questions . Two questions last last week , I think president von der Leyen's in Europe commented on the boosting the market stability reserve as part of the ETS review in July .

Speaker #15: Do you have any updated view from discussions with the European Association or Brussels on where the EU ETS price could go in the medium term?

Speaker #15: I think the question is: What CO2 price do you currently assume for decarbonisation investment, and what level will either accelerate or delay your carbon capture project?

Speaker #15: And second question on Latin America, I think you have a couple of press reports that have been confirmed by Chinese companies that suggest that large Chinese players are considering acquiring one or two companies that are currently for sale in Brazil, and this could mark the first meaningful entry of Chinese players into Latin American cement.

Yassine Touahri: The question is, would this have any implication for your long-term regional strategy, or do you see this potential move as Brazil-specific, and therefore, it's not directly relevant for your portfolio because you exited the country?

Speaker #15: And the question is , would this have any implication for your long term regional strategy , or do you think or do you see this potential move as Brazil specific ?

Speaker #15: And therefore, it's not directly relevant for your portfolio because you existed—you exited the country.

Miljan Gutovic: Good morning, Yassine. Thank you for the questions. I'll start with ETS and CO2 price. We are still using EUR 120 and 150 per ton as indicative price when we do these business cases for carbon capture projects. Yassine, please remember that we are working on de-risking these projects. One option is what we saw in Germany, this CCfD, Carbon Contract for Difference. We need to have a backup option in order to de-risk the projects and to ensure that being a first mover, we will not be punished in the long term. Regarding LATAM and Chinese, yes, there is a reason why we exited Brazil. For someone to enter some of the countries where we have a dominating position, extremely hard. Extremely hard. I would not say impossible, but very, very hard because markets are consolidated, reserves have been secured.

Speaker #2: Good morning. And thank you for the questions. I'll start with ETS and CO2 price. So, we are still using €120 and €150 per tonne as the indicative price.

Speaker #2: When we do this business cases for carbon capture projects . Justin , please remember that we are working on de-risking these projects . One option is what we saw in Germany is this CC , AfD carbon contract for different .

Speaker #2: We need to have a backup option in order to de-risk the projects and to ensure that being a first mover , we will not be punished in the long term .

Speaker #2: Regarding Latam and Chinese , yeah , there is a reason why we exited Brazil for someone to enter some of the countries where we have a dominating position extremely hard , extremely hard .

Speaker #2: I would not say impossible , but very , very hard because markets are consolidated . Reserves have been secured . So for the someone to enter to build a start from scratch and build the cement plant , I do not see it .

Miljan Gutovic: For someone to enter, to start from scratch and build a cement plant, I do not see it.

Yassine Touahri: Thank you, Aleš.

Bernd Pomrehn: Okay. Thank you so much, Yassine. The next one in the line is Harry Goad from Berenberg. Good morning, Harry.

Speaker #15: Thank you very much

Speaker #4: Great . Thank you so much , Yacine . The next one in the line is Harry Goede from Bamberg . Good morning Harry .

Harry Goad: Yeah. Hi, good morning. Thanks for taking my questions. Can you talk a little bit around what you're seeing in Germany, please, and whether we're beginning to see any of the benefits come through from the stimulus program? Then I guess more generally, I know you don't like giving sort of individual country numbers, but can you give us a feel for what you're seeing in cement volumes across big markets in Europe like UK, France, Germany? Thank you.

Speaker #8: Yeah , hi . Good morning . Thanks for taking my questions . Can you talk a little bit you're seeing in Germany , please ?

Speaker #8: And whether we're beginning to see any of the benefits come through from the stimulus program . And then I guess more generally know you don't like giving sort of individual country numbers , but can you give us a feel for what you're seeing in cement volumes across big markets in Europe , like sort of UK , France , Germany .

Miljan Gutovic: Good morning, Harry, and thank you for the question. Regarding the German infrastructure spend, we are not budgeting anything for H1. We might see something in H2, but in H1, I would not put any numbers for H1. Regarding the whole market momentum, we do not comment basically per country, but just to give you a few regions, we see a strong Eastern Europe will continue to be strong. Probably Germany and France, we have started seeing some positive momentum in residential. Southern countries in Europe, Spain is strong, Greece is strong, and our whole market, I think in my view, Switzerland this year will be very, very strong. We have already secured some of the big projects last year, and we have secured two more this year. I expect Switzerland also to have a strong year. UK, hard to say at the moment.

Speaker #8: Thank you

Speaker #2: Good morning Harry , and thank you for the question regarding the German infrastructure spend . We are not budgeting anything for H1 . We might see something in H2 , but in H1 , I would not put put any numbers for H1 regarding the whole market momentum , we do not comment .

Speaker #2: Basically , per country , but just to give you a few regions , we see a strong Eastern Europe seems to be will continue to be strong , probably Germany and France have started seeing some positive momentum in residential southern countries in Europe .

Speaker #2: Spain is strong . Greece is strong , and our whole market , I think in my view , Switzerland this year will be very , very strong with .

Speaker #2: We have already secured some of the big projects last year, and we have secured two more deals, so I expect Switzerland also to have a strong year.

Miljan Gutovic: I would like to see Q2, but UK is probably the only market today in Europe where it is softer.

Speaker #2: UK are hard to say at the moment. I would like to see Q2, but UK is probably the only market today in Europe which is softer.

Steffen Kindler: Thank you.

Harry Goad: Thank you.

Bernd Pomrehn: Thank you, Harry. The next one is Harry Dow from Rothschild. Good morning, Harry.

Speaker #8: Thank you

Speaker #4: Thank you. How are you? And the next one is, how do we go from Rothschild? Good morning, Harry.

Harry Dow: Yeah, morning. Thank you. Thanks for taking my questions, just two from me. Firstly, on the alternative fuels in Europe at that high level, I just wonder whether you can give us some more color on the volatility of the prices in those alternative fuels. Are they effectively hedged? They're kind of fixed prices, or do they move with time, with kind of spot fossil fuel prices? And then just also coming back to demand and volume implications and sort of elasticity of demand to higher prices. I think when we started the year, cement being mid-single digit was probably at the higher end maybe of the overall build cost kind of environment. Now when I look at a broad range of building materials and products, actually mid to high single digits is probably where a lot of things are landing.

Speaker #8: Yeah. Morning. Yeah. Thank you.

Speaker #16: Thanks for taking my questions . Just two from me . Firstly , on the alternative fuels in Europe at that high level , I just wondered whether you can give us some more color on the volatility of the prices in those alternative fuels .

Speaker #16: Are they effectively hedged, their kind of fixed prices? Or do they move with time, with kind of spot fossil fuel prices?

Speaker #16: And then, just also coming back to sort of demand and volume implications, and some of the elasticity of demand to higher prices, I think when we started the year, cement being up mid-single digit was probably the high end, maybe, of the overall build cost kind of environment.

Speaker #16: And now, when I look at a broad range of building materials and products, actually mid- to high-single digits is probably where a lot of things are landing.

Harry Dow: If it's got a lot of energy inputs, it could well be into double digits, certainly in the summer. For the end users, they're now facing, so a home builder is facing more mid-single digit cost inflation this year now. Where is the elasticity in your view of that to demand? Can margins at the end of the chain compress further, you think, or are you still confident that volumes can grow in an environment where you see mid-single digit inflation across the board? Thank you.

Speaker #16: And if it's got a lot of energy inputs , it could well be into double digits . Certainly in the summer . So for the end users , they're now facing a homebuilder is facing more like mid-single digit cost inflation this year .

Speaker #16: Now , where is the elasticity in your view of that demand ? Can margins at the end of the chain compress further ? You think or are you still confident that volumes can grow in an environment where you see mid-single digit inflation across the board ?

Miljan Gutovic: Good morning, Harry. Thank you for the question. I'll start on the demand and the pricing. Look, so far we have achieved what we hoped for. We could be for the potential additional price increases that will go through the surcharges. I don't think any of this will have impact on the demand in 2026. Steffen, you are able to-

Speaker #16: Thank you

Speaker #2: Good morning Harry . Thank you for the question . I'll start on the demand and the pricing . Look , so far we have achieved what we hoped for .

Speaker #2: We could be potential up for additional price increases that will go through the surcharges. But I don't think any of this will have impact on the demand in 2026.

Steffen Kindler: I think the question was on. I didn't fully understand it, but I think the question was volatility in pricing of alternative fuels. If that was the question, the answer would be, it depends a bit on the market, but the volatility in alternative fuels is of course much, much less because it's trash, right, oftentimes. They are solid supply chains, they are local supply chains, and the price is relatively stable compared to fossil fuels in the open market. Something to keep in mind is as the prices of traditional fuels go up, or in some places, the use of alternative fuels also becomes even more attractive and more interesting, and the business cases become even better to pay back. As we said before, one of the main reasons why alternative fuels are attractive is definitely the lower volatility.

Speaker #2: Stefan, you can stick.

Speaker #3: The question . The question was on . I didn't fully understand it , but I think the question was volatility in pricing of alternative fuels .

Speaker #3: And if that was the question , the answer would be it depends a bit on the market . But the volatility in alternative fuels is of course , much , much less because it's a it's well , it's trash , right ?

Speaker #3: Often . And so they are they're sitting supply chains . They're local supply chains . And the price is the price is relatively stable compared to compared to classic fuels in , in the open market , something to keep in mind is as , as the prices of , of traditional fuels go up or in some places , the use of alternative fuels also becomes even more attractive and more interesting .

Speaker #3: And the business cases become even better to pay that. But as we said before, one of the main reasons why alternative fuels are attractive is definitely the lower volatility.

Harry Dow: Okay. Thank you very much.

Bernd Pomrehn: Thank you so much, Harry. This was actually the last question for today. I would like to thank you very much for joining us again. If there are any further questions, please reach out to the IR team. We are more than happy to help. With this, I hand it back to Miljan Gutovic for some concluding remarks.

Speaker #16: Okay. Thank you very much.

Speaker #4: Thank you so much , Harry . So this was actually the last question for today . So I would like to thank you very much for joining us again .

Speaker #4: If there are any further questions , please reach out to the IR team . We are more than happy to help . And with this , I hand it back to Amelia for some concluding remarks .

Miljan Gutovic: Thank you all for joining us this morning. Very happy with the strong start of the year. We will continue to execute on our strategic initiatives, and with our impeccable execution of 45,000 of my colleagues, I am confident that 2026 will be another great year for Holcim. Stay healthy, stay safe, and thank you very much.

Speaker #2: Thank you all for joining us this morning. Very happy with the strong start of the year. We will continue to execute on our strategic initiatives, and with our impeccable execution of 45,000 of my colleagues, I'm confident that 2026 will be another great year for Holcim.

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