Ladies and gentlemen, thank you for standing by. I am Yanni, your course call operator. Welcome and thank you for joining the Titan Group conference call and live webcast to present and discuss the first quarter 2025 results. Please note this call and presentation is intended for analysts and investors only. All participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a question-and-answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mr. Marcel Cobuz, Chairman of the Group Executive Committee, and Mr. Michael Colakides, Group CFO. Mr. Cobuz, you may now proceed.
Thank you. Good afternoon, everyone, and welcome. Very excited to share together with Michael a good and confident start of the year 2025. We are reporting numbers for a solid quarter, which is building a nice momentum into the year, which is marked by sales growth, but also overproportional growth nearing almost 12%. That's thanks to strong performance in the US, where we have higher profitability, in Greece, but also in Egypt, where we have a remarkable turnaround. Michael will go more into details on our pricing resilience, but also cost performance, thanks to logistics, alternative fuels, and other maintenance-related investments for the past year, which partly offsets the adverse weather impact in our end markets in the US and Southeastern Europe. A few other highlights to share on the status of the business and our strategy execution.
As you know, we have completed well our IPO of Titan America on New York Stock Exchange. That obviously is impacting positively our debt leverage, which is reaching a record low multiple to EBITDA 0.5 times, and is giving us flexibility in capital allocation decisions going forward. We have continued our bolt-ons, and we have announced recently another aggregates business in Greece, adding significant reserves to an important segment in this part of the world. Similarly, we have announced a new joint venture and a partnership in alternative cementitious materials, a joint venture in India for sourcing and trading fly ash, as well as a partnership on pozzolanic cement technology with EchoSet. Digital investments, our investments in Optimity marks again a sustained effort in terms of digitalizing our operations and therefore improving the efficiency gains.
We have announced this week as well that we are refreshing our corporate identity. After the purpose, the refreshed values, we have also proceeded with a changing name and the visual identity of the group. Towards the end of this intervention, we will also provide a couple of thoughts on the outlook of the year. I pass the floor to Michael to walk us through more financial details.
Thank you, Marcel. Good afternoon and good morning from you as well. Welcome to the Q1 results presentation. Earlier this morning, we had our annual general meeting in Nicosia in Cyprus, and I'm very happy that we are kicking off another year with a positive momentum, with growth in sales, with sales reaching EUR 638 million, up 2.4% compared to a very strong Q1 last year. Of course, Q1 is always a quarter with lower seasonal activity compared to the rest of the year. Increased sales were a result of firm pricing, sustained volumes in cement, and growth in volumes in other core products, despite the adverse weather conditions impacting the US and the Southeast European markets.
EBITDA grew strongly and reached EUR 122.6 million, up by 11.7% compared to Q1 of last year, thanks to sustained performance in the US, Greece, and the Egyptian markets, and very much as a result of investments delivering operational efficiencies as well. Pretax profits grew by 2.9%, or EUR 1.9 million, despite higher depreciation expenses and hyperinflation caused from Turkey, while net profit after taxes minorities reached EUR 43.7 million, down by EUR 8.7 million as a result of EUR 4.2 million increased minority income in Titan America, which goes to minority interests, and EUR 7 million of higher taxes, part of which also attributed to hyperinflation. On net debt, our net debt declined by EUR 280 million, thanks to the funds raised from the IPO of Titan America, and the leverage dropped 2.5 times EBITDA. CapEx was flat year on year at EUR 53 million.
Now, amid the heightened global macroeconomic uncertainty, we retain our overall cautiously optimistic outlook, thanks to our presence in high-growth markets that support sales growth and our EBITDA margin expansion. On the next page, we show how our 12-month rolling sales, EBITDA, and net profit continue to grow. As you can see, the growth trend is extended and points towards an improved performance for the group in 2025. Moving now to the volume slide, demand for the group's downstream products continued to show strong dynamics, with aggregates growing by 18% and ready-mix by 6%, while cement sales were quite resilient and remained just slightly below last year, a drop of 2%. The impact of severe weather conditions in both the U.S. and Southeastern Europe for most of the quarter did weigh on cement sales volumes in these regions.
However, the strong performance in Greece, as well as a significant rise in cement exports from Egypt, mitigated those effects at the group level. Now, moving to the cash flow. On the left-hand side of this slide, you can see that operating free cash flow recorded positive inflows of EUR 10 million in the first quarter. CapEx remained at last year's level at EUR 52.5 million, as given the global environment of volatility and uncertainties, some project launch has been deferred by a few months. Capital expenditures continue to focus on the increasing use of renewable energy sources across our regions, the integration of cement issues and alternative materials into our supply chain, and optimization of our logistics networks. Thanks to the funds raised by the IPO of Titan America in February this year, the net Q1 liquidity impact was EUR 342 million positive, which resulted in the equivalent of inner debt.
On the right-hand side of this slide, you can see the evolution of the group's net debt, which stands now at EUR 280 million. The leverage ratio is a low 0.5 times EBITDA. Now, taking into account today's General Assembly approved payout of the EUR 3 per share in July, we expect the group's net debt to remain low and below the EUR 500 million mark, and the leverage ratio to remain well below a multiple of one, allowing ample firepower to fund growth opportunities. Now, let me take a look at the regional performance, starting with the U.S. Against the backdrop of uncertainty in the U.S. economy, the group's results in the region during the first quarter remained solid and witnessed varying dynamics across market segments.
Sales reached $393 million, down by 1.9% in euro terms, or EUR 372 million, excuse me, up by 0.5% in euro terms, thanks to the firm pricing in cement and aggregates and increased pricing in ready-mix. Volumes in cement and ready-mix continued to be affected by unfavorable weather conditions, coupled with softer conditions in the residential construction sector. However, volumes of aggregates increased in this quarter, supported by investments in added capacity in Florida. Our performance was supported by sustained activity in public infrastructure projects and commercial construction activity, benefiting from solid fundamentals in industrial center, energy assets, and other projects. EBITDA improved by $10 million and reached $77 million, thanks to resilient pricing, growth in aggregates, the timing of the seasonal maintenance outage of the plant in Florida, as well as the implementation of targeted efficiency initiatives despite the seasonal weather-related headwinds.
Now, turning to Greece, which started another year strongly with volume recording growth in double digits across all the main products. Price increases were successfully implemented in cement in January to offset the higher production and electricity cost environment of the last couple of years. All construction sectors performed strongly, supporting demand. Activity in the residential segment continued unabated, as did investments in the hospitality sector and in energy. Infrastructure remains a major driver of demand, underpinning growth in both aggregates and ready-mix sales. Sales in the first quarter grew by 15.9%, and the EBITDA reached EUR 19.4 million compared to EUR 12.7 million last year, reflecting the top-line growth and the cost-saving actions in the forms of higher alternative fuel utilization rates and lower clinker-to-cement ratio, mitigating the higher electricity costs.
Moving now to Southeastern Europe, where the beginning of this year was also characterized by adverse weather across the countries of the region. Compared to a record high first quarter of 2024, with the region having benefited from mild winter, the activity this year reverted to more normalized seasonal levels regarding lower volumes, yet in most cases still above those of 2023. We have been able to sustain overall pricing at 2024 levels. Sales reached EUR 82.6 million, down by 13%. A spike in electricity costs in the first two months reduced profitability margins, and therefore EBITDA for the quarter reached EUR 21.6 million, down by EUR 10 million compared to last year. The overall dynamics of the markets remained broadly unchanged despite the temporary conditions at the beginning of the year. Both infrastructure and residential development underpinned demand, as well as the buildup of cross-regional transportation networks.
Our investments continued to bear fruit, with alternative fuel utilization rates increasing further in Bulgaria and North Macedonia, and new investments in Kosovo and Serbia underway, translating into operating efficiencies. In the Eastern Mediterranean region, the first quarter's performance reversed the previous year's trajectory. In Egypt, a subdued market environment in the first quarter of last year, domestic demand after a subdued environment in Q1 of 2024, domestic demand increased this year, mainly thanks to private projects, while domestic prices, both in local and in euro-reported terms, increased. Export activity grew significantly, with pricing also being very favorable. As a result of these developments, profitability in Egypt showed a significant improvement and a turnaround. In Turkey, following a strong increase in volumes due to unusually mild weathers last year, this year's first quarter saw cement demand decline as weather patterns returned to more typical conditions for the period.
Consequently, cement consumption volumes decreased in both the Marmara and Turkey markets, while exports were also reduced. Similarly to Egypt, pricing in Turkey continued to follow inflation and grew both in local and euro-reported terms. At this point, let me remind you that in February, the group announced a divestment of our cement assets located in the Turkey market. This transaction is expected to be finalized in the summer of this year. In closing the regional performance, let me briefly comment on Brazil that we consolidated only on an equity method. As a result of growth in demand and in pricing, our joint venture experienced a 7% sales growth in local currency, while in euros, sales reached EUR 28 million, while EBITDA surged by 42% to EUR 6 million. With this, I complete the review of the regions and the key financials, and I turn you back to Marcel.
Thank you, Michael. You have seen our press release, and in our analyst presentation, we reiterate what we said a couple of weeks ago when we published the full-year results with a rather optimistic outlook, reconfirming the sales growth and EBITDA margin expansion for the remainder of the year. In the U.S., we see the underlying strength in our markets despite volatility. We see accelerated investments in infrastructure projects, growth in data centers, which continue. Commercial and industrial demand remains strong, as well as pricing showing resiliency. Of course, the macroeconomic uncertainty and impact on business and consumer sentiment, and we witness continued soft demand in residential, driven by higher for longer interest rates and housing affordability concerns. In Greece, the construction sector is set for further growth. Of course, we already highlighted to you the significant investments on the ongoing rollout of EU funds absorption.
We expect, again, sales and profitability as infrastructure initiatives along the large projects like Ellinikon and other increased demand projects for both housing will continue to drive higher demand. As Michael mentioned, the construction sector in Southeast Europe is set to benefit from continued infrastructure projects, again, energy initiatives, but also the early EU integration efforts. There may be political uncertainties, and global economic conditions may pose risks to sustain growth. However, for the remaining of the year, we expect sustained performance. Egypt, thanks to the turnaround of the operations, the reorientation to a good part of our production towards exports, in addition to the public-private partnerships and increasing foreign direct investments, we see those as key contributors to growth. We expect, again, improved performance backed also by the growth of our exports.
In Turkey, where we have proceeded with a divestment of our eastern activities, we maintain our presence in the western part, and we witness a construction sector which is rather resilient. Again, ongoing economic challenges, but the demand is sustained by the construction needs, particularly in the Istanbul area. With this, we open for questions. Operator, please moderate.
Yes, thank you. Ladies and gentlemen, at this time, we'll begin the question-and-answer session. Anyone who wishes to ask a question may press star followed by one on their telephone. If you wish to remove yourself from the question queue, then you may press star and two. Please use your handset when asking your question for better quality. Anyone who has a question may press star and one at this time. One moment for the first question, please. The first question is from the line of Ravi Efrem Mutsidi.
Please go ahead. Thank you.
Two quick questions. Firstly, can you talk through the rationale for the sale of the Eastern Turkish plant and give us a sense of the annualized impact on revenue and profitability from a scope perspective from that sale? Secondly, is this kind of the, or what we are seeing in Q1, the kind of year-on-year drop we should expect for the rest of the year in Southeast Europe? I appreciate it was a mild winter last year, and hence the base was high, but how is the rest of the seasonality for 2024 as a base to kind of work from for 2025? Thank you.
I will start with the rationale of the divestment and then a bit of Southeastern Europe, if you can comment on the scope impact. We are present for more than a decade in Eastern Turkey.
We have improved the operations there. We have built export capacities which are serving the group. At the same time, this was always a position at the periphery of our traditional markets. We believe that our position in Western Turkey is there to stay, and it's much more complementary to our other positions in Southeastern Europe, as well as for export needs. We are staying in Turkey, and we are actively contributing to the development of the country, as well as making sure that we perform a good operation there. Southeastern Europe, as you mentioned, much better winter last year, so we are comparing to a much better quarter. Quite some large precipitations and snow, much longer in the year. However, we see all the good ingredients for the demand drivers to renew as of April and the first days of May.
Again, there are infrastructure projects, and we are positioning ourselves in all the large projects, just to mention the railway projects, Belgrade-Budapest in Serbia, the Expo 2027 in Serbia, which is a highly cement-intensive project, but also energy initiatives in North Macedonia, as well as residential development and high-rise in Albania. All these countries are also in different stages of accession to the European Union. There, again, the fundamentals push in the direction of a good demand. We continue our investments to maintain cost leadership, but also our capacity logistically to serve the needs in the market. We remain positive on the sustained growth in this market. Michael, you want to add?
Just to add some data that you asked. The sale of Turkey, very roughly, in terms of sales, it will reduce annual sales by about EUR 80 million. Total sales in Turkey are EUR 180 million.
This is the Turkey. Very rough breakdown. In terms of EBITDA, that is a significant decline. That is about 15-20 million, depending on the timing as to when it will happen.
Thank you.
Please, yeah, get in contact with our investor relations bureaus, and bureaus will have all the exact details on this. Thank you.
The next question is from the line of Athanasoulias Nikos with Eurobank Equities. Please go ahead.
Hello. I have three questions on my end, if I may. The first one is, given the financial strength and the firepower that you have gained from the business IPO in the US and the upcoming investment in Turkey, are you considering any major acquisitions? If so, in which regions would that be? My second question is regarding the US and foreseeing moderate performance of the residential sector.
Do you expect infrastructure spending and commercial to offset this weakness, even in an extreme scenario? The third one is regarding the increased finance costs and income tax effective tax rate. Are these due to the IPO in the US? Thank you. Thank you for the question. Yes, our cash positions, leverage, and firepower is increasing. We are displaying very healthy balance sheets for both organic and inorganic investments. As announced in 2023, when we launched our strategy of growth 2026, we announced the criteria, financial discipline, which will guide us in any M&A. We constantly look in the market for opportunities.
We have been successfully completing a number of fourth bolt-ons, particularly in aggregates, but also in alternative cement issues, one in the US, if you remember, Diem Commerce, the other three in Greece, in different parts of Greece, the last one in the Italia region, and which are adding overall more than 160 million tons of aggregates with an accretive positive impact. I think as part of our strategy, when it comes to development, back in 2023, we announced that our primary focus is in developing capacities both in the US and Europe. Of course, these capacities, they could be supplied from the domestic market as well as from markets in proximity. More to say when these transactions will happen.
Regarding your second question on the U.S., look, we have published the results of Titan America two days ago, and we reaffirmed, again, the full-year 2025 outlook despite the macro uncertainty. We reconfirmed the mid-single-digit revenue growth, the modest improvement in EBITDA margin, and we also guided that 2025 results will be expected to be weighted towards the second half of the year. As you are rightly pointing out, this is on the back of infrastructure and commercial projects. Just as a point of reference, in Mid-Atlantic, where we are well positioned, close to 70% of our sales go into infrastructure, and Virginia is the capital of data centers. We are supplying with rather sophisticated solutions already, data centers of Amazon. Not later than a couple of weeks ago, we have also signed an agreement to supply our product in a SpaceX project in the Eastern U.S.
On the increased finance costs, actually, all the increase attributed to hyperinflation charge. Now, there is one positive thing that may come out of the disposal of the East Turkey assets is that we would get rid of the hyperinflation impact on our financials, so it would streamline things out. Finance costs are expected to decline further as our leverage has declined. We have less interest expense, and we also have some interest income. Taxes, about half of the increase was attributed to increased profitability in Greece as well as in the U.S. There were a couple of hits in Eastern Europe, partly having to do with having hyperinflation as well. Improved performance in Egypt also attracted more taxes.
Now it is very clear. Thank you very much. Thank you.
The next question is from the line of Golias Vasilis with Badelike Securities. Please go ahead.
Hello. Good afternoon. I have three questions from my side. The first question is regarding the margin expansion at the group level. I would like to clarify how much comes from operational efficiencies and how much stems from resilient pricing across the regions. My second question is about the Southwestern Europe, and I would like to add more color about the heightened competition mentioned in the press release, which remains subdued the previous years. My third question is about the East Med region regarding the exports from Egypt and from the cluster as well. In which countries the exports from the East Med were channeled? Thank you very much.
I will start from the last one regarding the Egyptian exports, which is indeed a significant development.
We have been also investing in expanding the export capacity of the Alexandria plant, and the bulk of exports is now done from Alexandria. Egypt, sorry, Israel is a main client. As you may be aware, Turkey has forbidden the Turkish companies from exporting to Israel. Israel has turned to other suppliers, including Egypt and Greece. We are exporting from Egypt to Israel. Libya is also a destination which absorbs cement produced in Egypt. Of course, we do a very scrutinized suction test that saves the Egyptian to go to the Egyptian suction. There is potential for further exports out of Egypt. We are growing the capacity, and also we see.
This is the I think on the question on margin expansion, Michael, is a combination of, of course, mix of markets. We have markets like US where we have margin expansion from aggregate.
We have markets like Greece where both the pricing but also cost efficiencies have contributed to margin. Here, just to give an example, our previous investments in alternative fuels platform, the Kemptziner of Kamari, are bringing the plants today close to 80% utilization of alternative fuels, which are cheaper in average per cost of energy versus traditional. There is also a change of mix of products. I mean, the margin on aggregates is much higher than the margin on ready-mix, and the growth in volumes is not in parallel. Even within cement, products with lower clinker content and higher alternative fuels content also have higher margins. It's very difficult to analyze breakdown specifically with decimals the margin expansion where it comes from. Yeah. On Southeastern Europe and the Balkans, overall, Western Balkans, I think, again, this is a small quarter impacted by adverse weather effects.
We do not see any major imbalances in the competition dynamics. Our teams are working hard both on the cost front by improving, as I mentioned, the alternative fuels, the digitalization-driven efficiencies, but also in bringing new products, bringing cement issues or blended cement to the market, which overall produce higher margins. Nothing to report on that front, again, on a very low quarter. The only point to mention about competition is that in Albania, for a series of quarters, we had higher sales because our main local producer competitor had operational problems and had less production. Of course, when the operations now are fully back recovered, they are gaining back their market share.
Thank you very much. That is clear.
The next question is from the line of Gurtesia Akolos with Barrier Securities. Please go ahead. Yes. Good afternoon.
My first question has to do with the U.S. and the impose of tariffs by the new administration. Do you see any negative impact in your exports there, or do you feel that the impose of tariffs, taking into account that there is deficit in cement in the U.S., further helped your pricing, thus leading to higher levels? Second question has to do with your CapEx. As far as I remember, you mentioned that for full year 2025, your CapEx estimate is for $300 million if you remain on this figure. Thank you very much.
Thank you for the question. No impact visible from the announced possible changes on the tariff policies in the U.S. or even the shipping rules. We will continue to watch out, but again, no immediate impact on the market.
At the same time, as published both by Titan America, but also by the holding company, we witness resilient pricing in the market, and we do have also pricing increases scheduled for the next quarters. On CapEx, the plan is still for over EUR 250 million.
Of course, if some projects are shifted by a few months, that may reduce the cost for the year. This has already happened in Q1 by something on the order of, let's say, EUR 20-25 million of projects did not start at the time that they were intended, but the annual target remains in excess of EUR 250 million. Uncertainty sort of eases a bit. Of course, if interest rates continue to decline, that will trigger an acceleration of CapEx as well. Thank you very much.
Ladies and gentlemen, there are no further audio questions at this time.
We will now move on to our webcast written questions. The first question is from Dimitri Vlasonov with Wood & Co. I quote, "What are the key pricing and volume trends are you seeing in April and May? I am particularly interested in the U.S. and Balkans. Do you still expect circa EUR 300 million CapEx this year?" Thank you.
Thank you. I think we already answered on the pricing, so maybe you want to comment on that.
As I said, on the CapEx, I just mentioned that it will be over EUR 250 million, maybe not up to EUR 300 million.
Thank you. The next question is from Ethan Cunningham with Onfield Investment Research. "Have you announced a price increase in Florida?
What is the impact of the tariffs on the profitability, in particular in the Southeast Coastal US region?
I think we already answered on both, particularly to the resilient pricing and the coming quarter's pricing schedule, as well as the impact on tariff, which is not currently visible. Thank you.
One last question from Mr. Cunningham. Could you provide some color on recent volumes in April in the US? Is it fair to assume that it's getting a bit worse than in Q1 given the uncertainty on tariffs? Could you see an uptick on cement pricing in the US in the coming quarters as you implement price increase in April?
We are not commenting on the quarter two. What I would suggest is that the gentleman is getting closer to Siros Kamizulic, and of course, we will provide much more color at the publication of the results of Q2.
If they wish, they may also contact Titan America. They have their own IR team and IR response too. If they wish to contact Titan America, Siros will be glad to give you contacts.
Ladies and gentlemen, hold on one second, please. Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Cobuz for any closing comments. Thank you.
Thank you, everyone, and thank you for the very good questions. Again, we reported solid results, a good start in the year with confidence, operational resilience. We are well positioned across all key end markets, and despite the macroeconomic announcements and volatility, we look confidently in the underlying growth prospects. With our strategy 2026, Titan today is stronger and faster, and of course, well positioned for value creation in 2025 and beyond. We'll see you.
We'll hear you all again at the end of July 2025. I think we have on the 31st of July when we will report the performance of quarter two. Thank you.
Thank you.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for calling, and have a good afternoon.