Ladies and gentlemen, thank you for standing by. I am Vasileios, your Chorus Call operator. Welcome and thank you for joining the TITAN Group conference call and live webcast to present and discuss the first half 2025 results. Please note this call and presentation is intended for analysts and investors only. All participants will be in a 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, Chair of the Group Executive Committee, and Mr. Michael Colakides, Group CFO. Mr. Cobuz, you may now proceed. Thank you.
Welcome. Welcome all. Good morning. Good afternoon everyone. I'm joined by Michael here but also by John Ioannou our designate Group CFO who will be taking over from Michael and will be presenting our quarter three results as of November 1st, 2023. Welcome John. Very excited to report another growing first half of the year. That's the third year in a row of growing TITAN. For reference, over this three year period we have doubled our absolute EBITDA, growing first half with increasing sales and over proportional EBITDA growth. 2% in local currency, that would be the equivalent of 3.5% in sales and 4.9% in EBITDA growth. Quite good performance. We have outperformed the market in the context of rather difficult weather events. Considering the number of lost days in the Western Balkans and across the U.S. market, we could count at least an impact of $13 million in sales.
We had also recorded resilient pricing in our key market as well as pricing up potential well seized in key markets like Greece and Egypt. I think throughout the presentation we will also illustrate the cost management focus, particularly on the energy side, which has improved also our cost base. Very happy to report that as part of our TITAN 2026 strategy we are well on track to deliver in advance our strategic KPIs and our strategic initiatives are well implemented. First, I will refer to the IPO successfully completed of Titan America earlier this year, which has also resulted in a record dividend payout of the year at EUR 3 per share, including an ad hoc dividend of EUR 2 per share. We have also executed, announced and executed the divestment and repositioning of our Turkish assets from Eastern Turkey to Western Turkey with full divestment of an integrated cement plant.
Other chips on the cementitious materials part, on alternative cementitious materials, we have announced new business model approaches with a joint venture in India for trading purposes of fly ash. Another partnership and investment in the U.K. on a site to be decommissioned of a coal-fired power plant where we are leveraging a proprietary technology to reclaim landfill fly ash. These two partnerships will give us access to ample fly ash sources in excess of 15 million tonnes. We pursue our organic development in aggregate cement and ready mix with a number of initiatives in increasing capacity but also beefing up the logistics coverage. This first half of the year we have announced two more bolt-on acquisitions, both in aggregates, both in Greece, and that's adding close to 145 million tonnes of aggregates to already important reserves of the Group.
Finally, the roadmap is well on execution for both decarbonization and digital. As clear enablers of our strategy, we have published today an improvement on our CO2 footprint, decreasing by 18 kg or close to 3% our CO2 footprint per tonne of cement, while we pursue the improvement of alternative fuels usage, which has reached record high 22%, lowering also the power consumption, increasing the cementitious usage in our blended cements. On the digital side, we are pursuing now with more than 50% of our assets under real-time optimizers, which allow increased reliability, lower cost everywhere where we operate. Overall, a good first half with our teams managing in an efficient way, our assets a lean way and execution focus. Michael will give more color on the financials, and then I'll take position on the outlook for the second half of the year. Please, Michael.
Good morning and good afternoon everybody from me as well. We are pleased today. We are pleased to report today our first half results with the Group reaching higher EBITDA profitability levels, supported by solid sales performance. In the first half of the year, sales reached EUR 1.329 billion, marking a 0.4% year-on-year increase thanks to strong performance in the U.S., Greece, and Egypt. We are very happy that we have managed to record sustained levels of volumes and pricing despite reduced U.S. dollar value versus the euro, adverse weather conditions mainly in the U.S. and Southeast Europe, with weak U.S. residential market performance, and also the market uncertainty surrounding all these tariff threats and negotiations. Group EBITDA rose by 2% to EUR 287 million, with resilient margins supported by cost discipline and operational efficiencies.
Net profit after tax reached EUR 68.4 million after recording a one-off scope change of EUR 51.9 million due to the sale of cement operations in Eastern Turkey. Net income attributable to minority shareholders of Titan America of EUR 10 million as well as high depreciation cost and incremental taxes at this moment. Let me please comment on the one-off scope change of EUR 51.9 million related to the sale of Adocim in May, of which EUR 38.5 million represent previously recognized net FX losses in equity which, at the time of Adocim sale disposal in line with the IFRS requirements, were reclassified through P&L and then went back to equity. In the end, this accounting treatment has no impact on net equity.
Our liquidity position has further strengthened on the back of the execution of the two corporate transactions mentioned before, with net debt standing at EUR 137 million at the end of June and a debt leverage of 0.2x EBITDA. Following the EUR 3 per share dividend payment made on July 3rd, the current leverage ratio stands at 0.6x EBITDA. Additionally, on July 1st we launched a new EUR 10 million share buyback program, reinforcing our commitment to delivering value to our shareholders. Our CapEx reached EUR 127 million, marking the fourth consecutive year of elevated capital investments as we continue to invest for growth, focusing on capacity improvements, energy mix enhancements, advanced technologies, sustainability initiatives, and expanded storage capacities.
We also made significant strides in our TITAN 2026 growth strategy, having formed new partnerships in alternative cement materials, while TITAN's venture capital fund has invested and committed EUR 25 million in total in the startup ecosystem in building materials. We also completed bolt-on acquisitions of two more aggregate quarries in Greece, further strengthening our vertical integration. In terms of sustainability, we made progress in decarbonizing our footprint. Specific CO2 emissions declined by 18 kg from 618 kg- 600 kg per tonne of cementitious product, and our thermal substitution rate reached a new high of 22.6% while our clinker to cement ratio stands at 76.6%. Lastly, we are proud to share that TITAN Group was recognized by Time Magazine for the second consecutive year as one of the world's most sustainable companies. Looking ahead, our outlook remains cautiously optimistic.
We expect robust volumes and firm pricing to continue, supported by efficiency gains from our ongoing investments in digitalization and decarbonization. Moving on to the next slide, at the top of the page we present the graphs of the first half of 2025 illustrating our improved sales and EBITDA performance despite FX translation impact of EUR 41 million on sales and EUR 8 million on EBITDA. At the bottom of the page you can see our performance during the second quarter of the year, which was solid despite the shift in timing of the annual maintenance outage and the weather-related headwinds. In the U.S., performance was supported by the volume growth in cement, ready mix, and aggregates, and the firm pricing across our products.
On the following slide, we highlight the 12-month rolling figures for sales and EBITDA comparing June 2022 with June 2025, showcasing our growth performance trajectory and resilient profitability levels as we are operating now at a double EBITDA environment compared to three years ago. We are at EUR 586 million compared to EUR 269 million three years ago. Our income statement on the next slide, you can see that our sales remained robust despite the FX headwinds, while the improved cost performance and further operating efficiencies resulted in resilient and 2% improved EBITDA levels. Moving to the next slide, we present a few charts on some critical cost factors for our business. Based on futures, we observe an overall stable trend in solid fuel costs, while electricity prices, especially in Europe, are on the rise.
Now turning to our sales volume, domestic cement volumes reached 8.6 million tonnes, a slight drop of 1% year on year. However, adjusting for the sale of hydrogen, volumes were equal to those of last year. Volume growth in Greece and Egypt did offset softness in the U.S. and normalized demand in Southeast Europe. Volumes of aggregates rose by a strong 14% supported by recent and targeted capacity investments in the U.S. and Greece, while those of ready mixed concrete grew by 5%. Export volumes to our terminals in France and the U.K. improved but were softer in Italy and the U.S. In the second quarter, overall volumes were higher in all key products, domestic cement, in aggregates, and in ready mix.
Our capital expenditure, looking at the next slide, were high at EUR 127 million compared to EUR 109 million of the same period last year, with investment focused on leveraging technologies to support long-term growth and enhanced cost competitiveness. In the U.S., investments were also directed towards core expansion, new ready mix and block plants, and logistics upgrades. In Europe, the focus was on the cost saving initiatives, particularly in alternative fuels storage enhancements. With establishment of new silos in Egypt, CapEx was primarily allocated to strengthening our production and our export capabilities. Now looking into our cash flow, where the high EBITDA levels despite the increased CapEx led to the strong positive operating free cash flow of EUR 102 million. Additionally, the proceeds from the U.S. IPO along with the divestment of Adocim have contributed to a large reduction of net debt by EUR 485 million.
Looking at the next slide, this reduction of net debt led to a June net debt position of EUR 137 million, down significantly from the EUR 602 million at year end 2024, with debt leverage reaching the low of 0.2x . EBITDA, which after the payment of the dividend in early July has grown to 22, has grown to a leverage ratio of 0.6x . It is reminded that there is no significant bond maturity in the next two years, with the next one being of EUR 250 million maturing at the end of 2027. Now some comments on the individual markets performance. Let's take a look at each region individually, starting with the U.S., where our U.S. operations demonstrated resilience among adverse weather conditions and headwinds. In the residential sector, sales and EBITDA declined by a small 1.3% in U.S. dollars, reaching $825 million and $175 million respectively.
Despite this slight drop, profitability margins remain stable, reflecting disciplined cost management and operational focus. Firm pricing in cement helped offset volume pressures, while increases were achieved further down the value chain, particularly in aggregates, ready mix, and fly ash. Cement and ready mix volumes were softer, impacted by persistent unfavorable wet weather conditions causing more lost sales days and continued weakness in the residential construction sector. Public infrastructure and heavy non-residential construction activity remained robust with a solid order book, while significant growth was seen in aggregates and fly ash. Capital expenditure was focused on growth and cost efficiencies, while digital transformation efforts continue reshaping the business with breakthroughs in logistics optimization, customer portal enhancements, and AI-driven manufacturing improvements driving efficiency and customer engagement.
Turning to Greece now, TITAN's operations in Greece and its EU terminals delivered a strong performance in the first half, with sales increasing by 14% to EUR 258 million. This growth was driven by volume increases across all product lines, supported by robust pricing that reflects the positive momentum in the country. EBITDA grew to EUR 38.7 million, marking a 20% increase, with profitability supported by lower fuel costs, which were partially offset by higher electricity charges. Cement market demand saw close to 10% increase, fueled by major infrastructure projects, a booming tourism sector, and continued expansion in warehouse and logistics. Ready mix and aggregate sales grew but at an even higher rate. TITAN continued to invest heavily in its Greek operations, with capital expenditure allocated to aggregates and ready mix expansion, logistics upgrades, and cost-saving initiatives.
Sustainability remained a key focus, with improvements in the thermal substitution rate following targeted investments, while the clinker to cement ratio remained low, supporting the Group's decarbonization goals. Moving now to Southeast Europe, TITAN's operations in the region faced some headwinds in the first half of the year, with sales declining by 5% to EUR 197 million. While the drop was mainly driven by adverse weather in the first quarter, which disrupted construction activity and weighed on volumes, the comparison is also skewed by an exceptionally strong first half. In 2024, EBITDA reached EUR 66.5 million, reflecting the combined effect of lower sales and the rising electricity cost. However, the Group was able to maintain and continue delivering higher EBITDA margins. Market fundamentals remained stable, supported by ongoing infrastructure and housing projects as well as the rollout of trans-regional transport initiatives that continue to provide a reliable demand base.
Pricing strategies varied across the region, with adjustments made to reflect intensified competition in some markets and rising production costs in others. Let's now turn to East Mediterranean, which presented a nice positive surprise. East Mediterranean region delivered a strong performance with sales, despite massive currency devaluations, increasing by 5% to EUR 120 million, driven primarily by the construction boom in Egypt. EBITDA surged to EUR 23 million despite the divestment of Antioch in Turkey, and this performance reflects mostly the rebound of Egypt. In Egypt, domestic demand was supported by increased foreign investment in mega tourism-related developments and the resumption of public infrastructure projects, including hospitals, schools, and transportation. Prices rose significantly in both local currency and euro terms, while cement exports expanded, benefiting from higher margins enabled by recent investments. As a result, Egypt's EBITDA increased by EUR 20 million.
As a reminder, TITAN's operations in Turkey as of June consist of the grinding unit in Marmara region and the Pozzolana quarry in Bezih on the eastern side of Marmara. A couple of comments on Brazil, where as a reminder, we consolidate figures on an equity basis. Year- to- date, cement demand in Brazil grew by 3.5%, with a stronger momentum in the Northeast region where our joint venture operates. Sales closed at EUR 50 million compared to EUR 55 million last year. However, sales rose in local currency, supported by strong pricing and higher volumes. EBITDA increased by EUR 3.5 million, reaching EUR 12.2 million, assisted also by lower energy and freight costs. Now let me turn to decarbonization and digitalization for a couple of comments.
In the first half of the year, TITAN Group made significant progress in our TITAN 2026 strategy, achieving a new high of 22.6% alternative fuel substitution rate and specific CO2 emissions dropping to 600 kg per tonne of cementitious material, marking an 18 kg per tonne reduction year on year. A key step in the TITAN 2026 strategy was TITAN's investment in a supplementary cementitious materials platform at the former power station in the U.K., where TITAN will build an operating facility to process ponded fly ash into high quality material using STTS, our subsidiary's proprietary technology to make lower carbon concrete. Additionally, we signed a strategic agreement with Ecosym to co-develop low carbon cement products initially targeting the Greek market to reduce the carbon footprint by up to 70%. This year TITAN earned multiple awards, including recognition by the Financial Times as one of Europe's climate leaders.
For the second consecutive year, TITAN was also included in the CDP A- List for Climate Focused Supplier Engagement and awarded an EcoVadis Silver Badge, placing it among the top 7% of companies in its industry. Further distinctions included the Best Corporate Governance in Greece 25 Award from the World Finance Awards. Now, on digital, in the first half of the year TITAN Group made strong progress in advancing its digital transformation across manufacturing, supply chain, and customer experience. We have now completed the end-to-end installation of our proprietary AI-based real time optimizers at six cement plants, and we're on track to deploy this technology across all our cement manufacturing assets by the end of next year. Alongside this, our machine learning failure prediction system is fully rolled out and continuously improving, enhancing reliability and remote service capabilities with significant savings from failure cost avoidance and less stoppage downtime.
Following successful pilots in the U.S., we're also expanding new AI-driven cement quality optimization tools across our U.S. operations. On digital business, GenAI continues to grow its global customer base, offering fast returns through reduced downtime and maintenance cost to our actual cement company customers. It has also commercialized its own RTO-based process optimization solution. On the supply chain side, we've completed the rollout of a dynamic logistics platform for Ready Mix in the U.S. This AI-powered solution significantly boosts supply chain productivity and customer service and is now being prepared for deployment across other key markets. Lastly, on the customer experience side, the Group continues digitalizing the way it interacts with customers, with digital customer portals operating in all business units in Southeast Europe, France, and Greece. With this, I will turn you now to Marcel for our outlook comments.
Thank you and thank you Michael for complementing the financial view of our performance with highlights on decarbonization and digital which are changing, transforming the business model of TITAN. Regarding the outlook, you had seen our press release and you may remember what we have said a couple of weeks ago when we published the full year results and we maintained a rather optimistic outlook, reconfirming that this is a year with 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 investment in infrastructure projects, growth in data center which continue. Commercial and industrial demand remain strong as well as pricing showing resilience. Of course, the macroeconomic uncertainty and impact on business and consumer sentiment.
We witness continued soft demand in residential which is driven by higher for longer interest rates and housing affordability concerns. In Greece, construction sector is set for further growth. Of course, we already highlighted to you the significant investments on the absorption of EU funds. We expect again sales and profitability as infrastructure initiatives across the whole country along the large projects like Helinicon where we have a presence on site with a dedicated ready mix unit. All this being increased demand from projects as well as from housing which will all continue to drive higher demand. As Michael mentioned, the construction sector in Southeast Europe is set also to benefit from continued infrastructure projects mainly related to energy initiatives, but also the pre-accession to European Union efforts. There may be political uncertainties and global economic conditions which may cause risk to sustain growth.
However, for the remaining of the year again we expect sustained performance. Egypt, thanks to the turnaround of our operations, a big thanks to the team there. We have reoriented a good part of our production towards exports which is monetizable and that is in addition to seizing opportunities as key contributors to growth, thanks to public private partnerships and increased foreign direct investments that we have seen in the past months. We expect again improved performance backed also by the growth of our exports. While we are watching out all the developments in Turkey, we have proceeded with the divestment of our eastern activities. We maintain our presence in the western part where we are seizing opportunities to grow. We also witness a construction sector which is rather resilient. In a nutshell, we are optimistic for the second half.
The order books are solid both in the U.S., Greece, and other markets backed by the infrastructure. We had lower comparables last year due to weather events, and we still have resilient pricing everywhere we operate. The fundamentals remain strong everywhere we operate, both in terms of housing needs. Residential, even in the most challenged market, is expected to stabilize and go upwards in 2026. The decarbonization push in the European Union in preparation of CBAM is going to act as a key driver for growth. We maintain a high level of CapEx for the year, higher than 2025, 2024, and of course we will be increasing the faster return projects and the growth and efficiency projects where we are aiming at least 50% in the overall number of projects. Given our low level of leverage, we are well positioned to seize opportunities and continue investment in our strategic drivers.
In conclusion, growing top line and growing EBITDA for the rest of the year. Having said that, open to questions. Operator, please moderate.
Thank you, ladies and gentlemen. At this time, we will 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, 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 comes from the line of Katsios Nestoras with Optima Bank. Please go ahead. Yes, hello.
Congratulations on your results. One question from my side. If I remember correct, you had mentioned the investor day coming up this year, later this year, obviously. Do you have any update on this matter? Thank you.
Thank you. You are anticipating. I was keeping this news for the end of our conversation. Yes, we will be publishing our quarter three results on November 6 and we will be calling for an investor day. I hope you will all be there on November 11. So, 11 11, we will have a nice investor day.
Okay, thank you.
The next question comes from the line of Kollias Vasilis with Pantelakis Securities. Please go ahead,
Hello and thank you for taking my questions. I have two questions. The first question, I would like you to provide us more color about the volumes trajectory in the U.S. during July. Is there already a rebound in volumes? The second question is associated with the tariffs imposed by Donald Trump to EU exports to the U.S. If you see any pricing pressure which will benefit your sales in the local market. Thank you very much.
Thank you for your question. I'll start and then please, Michael, on the tariff. On the back of a good order book in the U.S., we see good demand, particularly in infrastructure and high-level commercial projects, but also data centers. Our position in, and you know, I just came back with Michael, the number of cranes you can see across Miami, both in infrastructure projects, flyovers, bypasses, but also investments in high-rise business. There, our integrated model of being able to supply the market with cement, with aggregates, but also with ready mix, is really bearing its fruits. In Mid-Atlantic, where we are present mainly with cement and ready mix, we have dedicated ready mix plants for the large projects, and we have secured a number of data centers in Virginia.
We should also be reminded that last year we experienced the sequence of three hurricanes impacting our sales in Florida, so we have a rather low comparable to last year. Tariffs, we are watching out on everything which happens. We already have booked a minimal impact in the first half. They kicked in April. By the time the imported material is still in, exactly, the vessels reached, so that's less than $2 million overall impact. For the second half, the expectation with the latest forecast, Michael?
It is still early days because not the whole tariffs menu has been completed and there are other regions, other geographies which still haven't been finalized. The competitiveness of imports and the cost of imports is still out to see where it will end up. The U.S., no matter what happens, is an important country. It imports something like 25% of its needs and whatever will happen it will continue importing for a long time. How the prices will adjust domestically? Obviously, importers will be pushing for a price increase. I suspect that locally produced cement players who are very much close to being fully sold out will welcome this opportunity. Our expectation is that we will see price increases as a result of the tariffs implementation as is happening in other products as well.
We are running a long supply chain being integrated where the largest part of our volumes needed in the U.S., the ones which are imported, are coming from our Greek plants or from Turkish sourcing. We can act on efficiency both at the source as well as at the destination. We continuously minimize this impact, and of course t he price increases will support the locally produced cement by increasing the relevant margin.
Thank you very much.
As a reminder, if you would like to ask a question, please press star and one on your telephone. Ladies and gentlemen, we will now move on to the written questions from our webcast participants. The first written question comes from IIakovos Kourtesis with Piraeus Securities , and I quote, what is your expected CapEx for full year 2025?
Thank you, Michael. Suspect the audio was maybe on holiday if he's joining not directly live. The expected CapEx is below $300 million for the year. There is a number of investments which is, I would say, on hold depending on how the market outlook develops. I would say the outlook is between $250 million and $300 million.
Thank you. The next written question is again from IIakovos Kourtesis with Piraeus Securities , and I quote: What is the current trading for the third quarter 2025 in the U.S. and Greece? Thank you.
I think we answered for us. As for Greece, we see continued growth in demand and good pricing conditions across all business lines: cement, ready mix, and aggregates. For those who live in Greece, you could witness a large number of infrastructure projects, including here in Athens, but also in Thessaloniki and in Crete. These are there to over the midterm.
Thank you. The next written question comes from Wim Hoste with KBC Securities, and I quote, how does the JC joint venture in India align with TITAN Group's broader strategy, and what are your growth expectations targets in the Indian low carbon cementitious materials market? Thank you.
Thank you for the question. I think our diversification strategy in terms of revenue streams going more and more into cementitious materials will answer a double objective. On the one side, we are promoting increasingly blended cements everywhere where we operate, and therefore the needs to own the sources of cementitious materials are increasing. On the other side, we are increasingly a trader of cementitious materials using multiple channels for this product, which is extremely important not only to optimize the cost but also to decarbonize the footprint going forward. We are very happy with the project of a joint venture in India. India remains a large producer of fly ash given its decarbonization roadmap until 2060. JC, our partner, is a regional ash supplier with existing facilities in the eastern part of India already with bulk exports mainly in Saudi Arabia, but increasingly in the U.S. and Europe.
I think that's an opportunity for us on a strategic partnership. We will be starting with volumes which will be north of 500,000 tonnes a year, going at more than 1 million tonnes per year. We do have contracts which go for the next decade.
Thank you. The next written question comes from Ethan Cunningham with On Field Investment Research. I understand the Egyptian government has removed the cap for the production of cement to ease the supply shortage and threatens to cap exports. Do you have any update and do you think we could see sequential decline in cement prices in Egypt in the second half of 2025? It seems there is a tight supply in the Mediterranean Rim and the spot export price for cement has increased by more than $10 since the beginning of the year. Do you think we could see a $10 increase in FOB price in 2026? If so, what would be the positive impact on your Greek operations and what could be the negative impact on your U.S. operations? Thank you.
I think for digits we are watching the regulatory environment and will be adapting our both domestic pricing or export pricing policy as they materialize. In the meantime, we are proceeding with our investments to boost our export logistics capacities and securing volumes at destination in several markets. Back in 2023, you may remember we've been extremely active on the clinker market and the team has achieved significant turnaround with volumes which now are laboring 600- 800,000 tonnes of cement export and that's not a given. That means finding the customers in viable export markets which also monetize our investments. We remain positive on this shift while we are seizing opportunities on the domestic market and on the export market with excellently located operations.
Our Alexandria plant is 2 km from the port and our Venezuela plant is also well located to continue its exports, both land but also seaborne.
The overall eastern Mediterranean market development has changed rapidly over the past few months. There is increased demand from Israel, from Libya, now from Syria and Egyptian demand. Egyptian production is trying very hard to keep up with demand. The reason the government lifted the constraint on the domestic production is because they want everybody to sell as much as possible. In the domestic market there has been increasing demand and signs that there may be a shortage of supply. The scene has changed very much, almost 180 degrees from what we were witnessing a year ago. Now regarding the export prices, yes indeed, there has been an increase in the export prices by some $10 and we keep getting more and more requests for volumes. There is an upward pressure on export prices.
Thank you. The next written question comes from Dmitry Vlasov with WOOD & Co. and I quote, does your positive outlook for the U.S. in the second half of 2025 include interest rate cuts? Would you remain optimistic if there will be delays in cuts? Thank you.
I think we remain optimistic for the second half mainly on the basis of a solid order book, as well as lower comparables and resilient policy. I think the issue of interest rates is today doing the first page of many, many newspapers. I think that will have a positive impact on the residential segment, which we expect that in 2026 will go upwards.
Thank you. The next written question comes from Auguste Deryckx with Kepler Cheuvreux and I. Hi, congratulations on these results. In a context where your debt is very low, what is your capital allocation strategy? Are there M&A opportunities in promising countries that are experiencing short term difficulties? Thank you.
Thank you, August, for your question. Same message like the one when we published the result. We remain financially disciplined in seizing opportunities and accelerating fast return projects, first organically, and I think with our five-year CapEx plan that we highlighted at the time of TITAN 2026 strategy in the last investor day, we will give much more color when we meet in November, both in terms of criteria but also areas of investment priorities given to aggregates development, cement capacity expansion in the U.S., the blended cements like we discussed during the IPO and listing of Titan America, and logistics capacity. While on the European perimeter, we are investing in CapEx which is designed for low cost, and that's mainly alternative fuels improving the thermal substitution rate, which you see a nice trajectory over the past few years, on the digital as well as customer centricity.
Now, when it comes to M&A, again, same financial discipline on making sure that the IRR, the payback of the projects, the synergies with the existing perimeter are well on track. Indeed, our low leverage level is making us ready to seize these opportunities. We will continue with the bolt-ons, I think. Last year, we had aggregates in Greece, and we had the clay quarry mid-sized ticket in the U.S. This year, we have already completed two transactions in Greece, and we will pursue this avenue of small to mid-size targets complementing our aggregates and cement issues footprint.
Thank you. The next written question comes from Mayrik Barker with CAMMESA . Please provide an update on what progress has been made on furthering the IFESTOS CCS project. What are the key items that need to be resolved prior to fully committing to the project? Thank you.
We remain very excited about the carbon capture project. I remind all of us that TITAN is pursuing a hybrid strategy using conventional methods of improving our costs, but also decarbonizing our product portfolio using more cement issues. Therefore, you have heard us today and in the previous meetings obsessively talking a bout o wning the sources of fly ash, partnering with fly ash suppliers as well as pozzolana and clay or calcined clay. We have a number of projects in each of these areas. At the same time, we do invest in studying and assessing the new technologies, and I think both the projects of carbon capture in Athens as well as the project of calcined clay in Roanoke, Virginia are excellent testimonials for our strategic approach.
The project has successfully entered its engineering phase both for pre-combustion and post-combustion. Whatever is within the perimeter of the plant, we are mastering much better the details, the profitability, and the OPEX estimates. A lot of things need to happen also outside the plant on the regulatory framework. It's not only in Greece but across the European Union. The contract for difference, the carbon contracts for difference, is a key regulatory topic where we will see with the government of Greece and with the guidelines from Brussels where we will land in the next couple of months. Similarly, the long-term agreements in terms of storage, as the storage is under the seabed, we are pursuing several options there. All stars need to be aligned so we can make a go/no-go decision. This go/no-go decision leads to end of next year, but so far very optimistic.
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. Thank you for attending our conference and for your many questions. Wishing you all a nice summer and seeing you again on November 6th for quarter three results and on November 11th for a very exciting investor day. Thank you all. Bye bye.
Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for calling and have a good evening.