Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to today's conference call on the first quarter results from January to March 2018. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session, at which time, if you wish to ask a question, you will need to press star one on your phone and wait for your name to be announced. In order for everyone to have a chance to ask a question, we do ask you to please limit yourself to two questions. I must advise you that this conference is being recorded today, Wednesday, the 9th of May 2018. I would now like to hand the conference over to your first speaker today, Dr. Bernd Scheifele. You're live.
Okay. Let's go.
Yeah.
Hello, good afternoon, good morning, good evening, everybody. Thanks a lot for joining us in the first quarter conference call from HeidelbergCement. As usual, I am sitting here together with Dr. Näger and Andreas Schaller and Othmar H. Khasr from our investor relation team. I will lead you through the operational results. Dr. Näger will comment on financial results. I will come back at the end on the outlook. As you know, I think we are the last in our industry who is publishing. Our key cement competitors have already published. Also Martin Marietta was out, I think yesterday or today.
You have seen that weather had a significant impact on our numbers, mainly in North America due to our footprint in the region north and also in Europe, where we had especially harsh and long freezing period in the months of March, which covered Germany, U.K., but also France. In France, we had the flooding in February in Paris. A second point which needs to be taken into account is the Easter effect. As you know, Easter last year was in April. This year it was in March. We lost, depending on the country, between one and two working days in the first quarter versus last year. Our group share profit is up due to mainly three effects. First of all, we had disposal gains from the U.S. pipe business and the German Kalksandstein.
Secondly, financial results, as expected, continue to improve because we are issuing bonds at a much lower interest rate than the old ones, which are expiring. Also, the tax rate is as predicted, coming down. Operationally, EBITDA on a like-for-like without Forex and consolidation effect is down by EUR 88 million. I'll come back to that. That is mainly due to four countries or four areas. It's the region north in the U.S., it's south, and that's Texas, which had a very bad February. It's the U.K. and Indonesia. They all together make up about EUR 81 million of EUR 82 million out of the EUR 88 million. April obviously looks much better. Heidelberg is in cement up more than 8% in April. In aggregates about 12%, already mid 13%. Backlog in core markets is pretty solid.
That's especially true for North America, for Germany, Poland, Northern Europe. We have no concern about the volumes. We have price increase announced in most of the markets. Pricing at the moment globally, I think is also okay. Even in Indonesia, in the month of April, pricing was up by about 1% compared to last year. That's also a first positive signal after a couple of very difficult quarters. Energy costs had a significant impact on our result in Q1, mainly due to the comparison base from last year, where we still had a lot of cheap coal and petcoke on stock.
We were negatively impacted, mainly in Asia, due to the fact that the Chinese, before new Chinese, were importing a lot. Pricing went up, especially for the Newcastle coal, significantly above EUR 100, which had a negative impact mainly on the margins in Indonesia, but also in Thailand. Free cash flow is up. Outlook is confirmed. Key operational figures you have seen, that's just what I told you. On the cement volumes, we are up 2.3%. That is mainly coming from good growth in Africa, where our volumes are more or less double-digit up by about 12%, driven by strong volumes in Egypt of about 22%, Ghana, Tanzania, 14% and 15% up. Also, Indonesia was growing more than 8%. That's what you see. Financial numbers I mentioned. Operating EBITDA bridge, I think that's the most interesting chart. If you look to it, chart five.
You might miss the synergy impact from Italcementi. Additional synergies in Q1 were small, because if production is low, production was low, the synergies are relatively low. It's a number of around EUR 6 million. The number is small, that's why we didn't mention it, especially in the chart. You see cost others is up by EUR 111 million. I look at it from two angles. If I look to the countries or areas, the message is very simple. North America, two regions are down by about EUR 50 million versus last year. That's region north. You add that all up, that comes up to EUR 81 million, EUR 82 million. That explains the negative deviation. If we look by cost, from a functional point of view, cement energy is up by about EUR 40 million. Maintenance repair, we had a negative impact due to a timing issue.
We had two big plants which were in winter repair this year in March. Last year they were in April. It's our plant Permanente in the Silicon Valley, which had a negative impact of about EUR 16 million, and it's our largest plant in Europe, is Slite in Sweden on Gotland Island, which is about EUR 10 million. That together has a negative impact of EUR 26 million. Chart six shows you a little bit what you already know, that Q1 in our industry is not so meaningful. Chart seven tells you what I told you. We are on the market volume side. Backlogs are okay. Negative impact working days, I explained. Energy cost, we expect to flatten, okay. After the Trump decision on Iran, that's obviously a question mark, since oil price peaked today again.
Indonesia, as I will tell you later, we expect a change in pricing, or we will go for a price change after the Ramadan season. If you look on the volumes, Chart eight, U.S., down -5%, Region North, -18%. South Texas, -6%, whereas the West was up by more than 30%. In the Western Southern Europe, U.K. was down by about 10%, and also Benin was down 9%, Germany 4%, Italy, Spain were up. Asia Pacific, Indonesia +9%, and India +5%, Australia +6%, whereas Thailand, the market remained weak with about 8.5%. Northern Europe volume is down 10%, mainly Norway, Sweden, down 10%, Russia down 10%, Poland up 20%, Kazakhstan up by about 6%. If you look to the results per area, we start with North America. That's the biggest impact on our negative deviation compared to last year.
You see it with about EUR 62 million. I explained about EUR 50 million, another EUR 6 million come from Canada. What we see is that we had a negative inventory impact also mainly due to the Region North, because in the Region North, especially the whole area around New York, New Jersey, Connecticut, Maryland, and then up to Ohio, and up to Chicago, had a lot of snow. We still have blizzards now, even in April. It was a really harsh winter, and that is about 40% of our cement volume. We are clearly at a footprint disadvantage. That's why our cement volume is -4.6%. If you compare them, for example, with our Mexican competitors, they were up 5%. That is absolutely consistent because they have no footprint in the North, they are much more in the South, and that's what you see.
Also Texas was weak, because Texas was very wet in February, and you saw that also in the numbers which were published by Martin, I think yesterday, where they were down in cement by more than 8%, mainly due to bad weather in Texas. You see we are a little bit in the middle of the road, which is a clear footprint impact. The outlook for U.S., in our opinion, remains solid. We see, especially compared to last year, much better state infrastructure programs, especially in core markets for us, like in Texas and in California, but we also see clear improvements in North Carolina and Indiana. Pricing is going overall okay. We see clear slowdown in pricing power, especially in the Boston and New York area, due to the impact of McInnis.
We will consider second price increase in July or August in some areas, especially California, but also maybe Midwest. In Canada, the Prairies were down due to weather, whereas the Pacific Northwest, Vancouver, Seattle, Portland, were clearly up, and we expect a relatively good run in Canada, and we have price increases, except for the Prairies, of about $5-$6 per ton. If we go to Western Southern Europe, that was the other market there where we see where we lost about EUR 53 million compared to last year. Major impact comes from U.K., with close to EUR 18.5 million. Benin was also down by about EUR 9 million, Germany by about EUR 7 million or EUR 8 million. Italy and Spain were up. Especially U.K., we had a clear weather impact and also an inventory impact.
Last year in the U.K., we had property profits in of about EUR 7 million, which we are missing this year, and we have a property gain in the U.K. in the month of April. There was a timing difference. That's about Europe. If we look to Northern and Eastern Europe, you see the result is down by about minus EUR 4 million. That's totally explained by the effect of Slite. I told you earlier that Slite had a repair shift. Was prepared in March. That's already EUR 10 million, so without seasonality for like, we are already up, and then we have between one and two working days less. If you look to Northern Europe, like-for-like, we are compared to last year, EUR 15 million up, if you take the seasonality impact and the working days impact out.
The markets overall are strong, especially Poland is strong. Volumes in Poland very strong also again in the months of April. Czech Republic, okay. Nordics, we are relatively confident, so this region should be okay. Asia Pacific, we're down EUR 26 million. That's mainly explained by Indonesia. I told you EUR 14 million. The EUR 14 million does not come from volume and pricing. Volumes are strong. In the first quarter, we were up by about 8.5%. Also, April is again up 6%, so we are growing. The market is back also in West Java, especially in the Jakarta area. Private projects are coming back to the market. This is okay. Pricing has stabilized. In April it's even up a little bit by 1%.
The main impact comes from the high coal price from the Newcastle coal, which is in the first quarter compared to last year, up by about 23% or 25%. I guess we have a chart maybe later or not. That's the main impact. India was also down for us by about EUR 8 million, mainly due to market weakness, especially in the region south. China, clearly up and also Australia, clearly up. If you look to Africa, we are above last year. Overall picture is good. Egypt was clearly better due to strong pricing. In Egypt, prices went up to EGP 720, EGP 740 per ton. Up 40% versus last year. Okay, we were lucky because the Sinai was closed due to the Sisi elections, and the army is now coming with the capacity, but also months of April overall, volumes and results were okay. Morocco is stable.
Tanzania market is okay. Pricing has improved. Ghana market was very strong with 15%. Pricing has stabilized. Overall, region Africa looks good. Turkey, good volume growth, 8, 9%. Pricing up double digit. The result is okay. Main impact comes from negative currency. On trading result is up. We have high volumes in the first quarter by about 21% up. The clinker price in Asia, FOB is up by about $5. We see the same in the Mediterranean. The Turkish exporters managed to get about $4 to $5 per clinker more than last year. The pricing is now about $35 USD. The threat, the exports from China has significantly slowed down.
Chinese pricing is extremely strong in China, in the regional center in Xi'an, but also in the south, pricing is up by about 40%. China has started to import clinker from Vietnam because pricing in China is so attractive. At the same time, exports from China last year dropped from 16 million to 10 million. We see this as relatively good signals. I think that's it a little bit from my side. I just hand over to Dr. Näger on the finance side.
Thank you very much, Dr. Scheifele. Good afternoon and good morning also from my side. I would like to lead you through the financial results, which start on slide 17 with a summary. You have seen that we have posted a profit for the period in the first quarter compared to a loss in the previous years, and on the bottom line, also, the share of the controlling shareholders has improved significantly. As outlined by Dr. Scheifele, this was, first of all, due to the success in our portfolio optimization, where we had a capital gain in the range of $100 million from the sale of the Kalksandstein in Germany and our U.S. white cement business. We have reshifted these monies then into the acquisition of Cementir of BGC in Australia and the grinding unit in Canada. We have really reused our monies here.
We have a continued and further improvement of our financial results, which will be a continuous effect. We have the same effect in the tax line, where we have a significant improvement of the income tax. We have strengthened our financial position by issuing a new bond for a 10-year term in April at quite favorable conditions. Cash flow up double digits. We continue to expect further improvement in the cash flow through the year. The music plays below RCOBD, and this really helps us to improve our earnings per share. If you look to the P&L, you can see this effect in the P&L on page 18, where additional ordinary result was EUR 118 million. Result of participations, pretty stable around the zero line for the first quarter. Here also the results come later.
Financial results improved to EUR 75 million, income tax improved to EUR 17 million, profit of the period, EUR 6, compared to a loss of EUR 35 last year. In the cash flow statement, you will see that, first of all, the gross cash flow has reduced by EUR 113 due to the lower RCOBD. Also the outflow for financing of our working capital is significantly higher than previous years due to the prolonged winter. We have this year a stronger seasonality, and this will, of course, flow back during the remainder of the year. Payout from provisions decrease as the major part of our restructuring is done, and the payouts have been done last year. We expect also this year a continuous improvement in this position. Investment, net minus EUR 448.
We have bought the three assets, Cementir, consolidate the Italian market, Fraser to improve our aggregates position in Australia, and the grinding unit for cement in Southwest Canada. At the same time, you see the proceeds from our disposals. We see currently a trend that all this M&A and CapEx is done to enlarge the footprint or to consolidate, is done a bit front-loaded. The activity in the first quarter is definitely stronger here than it is in the remaining quarters of the year. Cash flow total from investing activities, minus EUR 448 million. This is then reflected on slide 20, where you can see our net debt reconciliation and the use of the free cash flow. First of all, free cash flow has improved to EUR 1.18 million over the last 12 months, coming from EUR 1.039 million or EUR 1.038 million in the two previous years.
You can see the use of the free cash flow below, where we have a higher growth CapEx this time, and we believe that this will normalize over the rest of the year. We have the dividends of HeidelbergCement and the dividends to our minorities, which both are going up. Net debt, we have a balanced payback the last 12 months, but we suffer a negative accounting and FX difference from the strong euro in the magnitude of EUR 304 million, so that the net debt comes down at EUR 9.9 billion. We expect this currency effect to phase out from the second quarter, as currently we see a strengthening of the U.S. dollar against the euro. On slide 21, you can see the balance sheet. The balance sheet total goes down from previous year, EUR 37 billion to EUR 34 billion.
This is predominantly a currency effect as the euro has appreciated compared to the first quarter of last year. I just mean that the headings of the columns are wrong. December 2017 and March 2017 is wrong. You have just to exchange the labeling of the columns compared to end of last year, so the 1st of December 2017. The balance sheet total is almost unchanged. Fixed assets is unchanged as there is no significant difference. Working capital, as I said, is slightly higher due to the weather conditions in the first quarter, and we expect this to normalize over the remainder of the year. Net debt stands at EUR 9.9 billion, and we stick to our target to bring that down over the remainder of the year to a value of EUR 8.2 billion to EUR 8.3 billion.
That's it from the financial side. I would like to get back to Scheifele .
I come back to the outlook. We keep our guidance for the year, mid-to high single digits organic EBITDA growth. That's all obviously more ambitious now after a relatively difficult start. We see strong order backlog in the U.S., especially in core markets for us like Texas, California, Canada, and the whole West Coast, Seattle, Vancouver. In Europe, we expect a price recovery and price increase in Indonesia after the Ramadan period and also in Africa. We will push very strongly for pricing in all other markets. You have seen from our earnings that pricing environment at the moment is favorable, mainly due to reasons. Import costs from clinker are up, and also due to the rising oil and fuel costs, obviously, imports are less competitive than last year.
Question mark is the energy cost inflation we see in South Africa. In the Newcastle coal, a clear easing. Petcoke remains price-wise challenging, and we have to wait a bit and see a little bit what the oil price is now doing after the Iran decision of the U.S. government of yesterday evening. That's it from our side, and as always, we are now open. We are happy to answer any questions you might have. Mr. Schaller, if you would just organize that.
Thank you. As a reminder, ladies and gentlemen, if you wish to ask a question, please press one on your phone and wait for your name to be announced. If you wish to withdraw your question, please press the hash key. In order for everyone to have a chance to ask a question, we do ask you to please limit yourself to two questions per person. Our first question comes from the line of Paul Roger from Exane BNP Paribas. Your line is open.
Good afternoon, everybody. Just two questions then. The first one on your previous guidance for a few countries. I think you were guiding previously to flat profitability in Indonesia and the U.K., and then 10% like-for-like increase in profit in the U.S. I wonder if your guidance for those three countries actually still stands. Secondly, just ask you to clarify your comment you just made in the call about lower price and momentum in the U.S. Are you suggesting that you are now less optimistic than you were in March when I think you were going for 4%-5% price increase in cement? If that's the case, why? Thank you.
Okay. On the guidance per country. I think we are one of the last companies in the sector who are giving you some number on country level. We might review that practice, Mr. Roger, just to be honest to tell you. We stick to our commitment in the U.K. That's very clear. That remains high on the agenda. We have started what we call Action 25 plus 25 program. That means a profit improvement versus last year, 25 on gross margin and 25 on costs. We are on our way. Indonesia, I told you, we expect or I expect to see a trend change in the market after Ramadan as far as pricing is concerned. We will see how that might go. U.S., 10% like-for-like. Obviously, that remains also on the agenda.
In our industry, to change targets after the first quarter, in my opinion, is not the right thing to do because Q1, as you know, is always in our industry, especially in the northern world, is a little bit of weather report, so you have to be a little bit careful. On the U.S., on pricing, as I told you, it's a mixed picture. We see a clear, partially slower pricing trend in the region around New York, Boston, Connecticut due to the McInnis impact. On the other side, we expect pricing to be stronger in Texas because we expect the market to be very strong. We also expect stronger pricing in California. In California, we're going to review in June, July again, whether we go for a second price increase, not only in cement but also in aggregates because the market is very strong.
We had also, again, the region West in the month of April was again up 33%. That shows you the market in California is really hot, and we have to see what we can do. We will see what is going to be the average figure for the U.S.
Overall, you're not actually changing your guidance for the U.S. There's nothing you've seen after the April pricing?
No.
To bring it to.
U.S., I think that should work. In U.S., we are running a little bit against the clock now, because if you are in the U.S., you know that April in the region North was still weather-wise a problem. There was still snow and a lot of freezing temperature in April. In April, the North figures in cement there, again, are down against last year, 6.5%, whereas South, Texas, for example, was up by about 25%. That shows you that the market is still very regional, and that has to do with weather. It's not that there is no business in New York or Boston. It's the market is weather impacted, and that gives you a very diverse picture. For the U.S. in full in April, we were about up, I think, close to 6%. That shows you a little bit where we are at the moment.
Okay. Thank you very much.
Thank you. Our next question comes from the line of John Messenger.
Hi. Good afternoon. Two, if I could. One was just the picture on Egypt, Dr. Scheifele. I wonder if you could give us a bit of a view as to how you think things are going to evolve from here. Obviously, there has been quite a lot of talk about prices moving lower again recently because of the new plants coming on stream and maybe some easing in terms of the logistics challenges in the market. Are you still upbeat on Egypt, or is there more risk in terms of that capacity impact coming in the second half of the year and from here on? The second one was just coming back on your comments on Indonesia.
In terms of that shift in pricing behavior after Ramadan, do you take the view that there will be some consolidation between here and that point in time to help instigate that kind of change? Are there consolidation moves afoot, or is that just a view being taken around uptick in volume that you hope will see prices follow? Thank you.
Okay, Mr. Messenger. On Egypt, it's a pretty challenging environment. As I told you very plainly, we have been lucky in the way in the first quarter that the Sinai was closed, and we used that opportunity to push pricing very high, and our pricing went up to EGP 720, or you go back to [audio distortion], EGP 720 or even EGP 740 per ton, which is up versus last year, 40%, because last year we were around EGP 500 or EGP 540. The army now, with their famous 10 million tons or whatever it is, they are coming now to production step by step. Volumes in April were still okay. Pricing also in April was still okay, we expect pricing in Egypt to go down from that level. We're not going to keep that level at EGP 720. That's clear.
According to our calculation, if the army wants to pay the interest for the financing they have from Sinoma, including payback, they need also a cement price around 670, 680 Egyptian pounds per ton. That is our calculation. On the other side, there is a certain upside in Egypt because the Egyptian government has issued a regulation that they are going to subsidize exports from Egypt with 50% of the logistic cost to the export destination. That would be for us, mainly our African hubs in Tanzania and Mozambique, and that would bring us an improvement in exports on pricing by about $10 per ton, and we would export from our Suez cement plant. There is Egypt. You are right. We expect more price pressure in the coming months due to Sinai going away and the army coming in.
On the other side, we think there is some upside, especially on the export side. On Indonesia, what we see is that the local players are now in core markets on delivered costs to the market, including interest rates, interest to be paid for the investment they made because they are debt-financed. They are under the water. They are producing cash losses. Some of them have stopped production or are only running a couple of days, and they stop again because they are obviously short of financing. That what you see then in the market, that the price downward spill is starting to slow down. In the first quarter, pricing pressure did not come from Cementir or from a Chinese player or local building, and more from other international player.
At the same time, we see volumes clearly moving in the right direction in our core markets. Jakarta, West Java is back. That is for us, the core, and also the corporate sector. The private sector is back. That is why we believe there is opportunity to change pricing after Ramadan. Why after Ramadan? Because during Ramadan, typically, demand is weak. There is more volume in the market. After Ramadan, typically catch-up exercise. We would expect a strong increase in demand. Cement will be short, and we think that it would be the right climate to increase pricing. We will have a final discussion with the management on that in June. Okay?
Thank you.
Thank you. Our next question comes from the line of Phil Roseberg from Bernstein.
Hi, good afternoon, everyone. Just my 2 questions, please. On the potential to catch up, I know you mentioned that guidance is now more ambitious. We do a quick calculation, and it sort of comes to the need to get to about 8% like-for-like growth in the next 3 quarters in order to make the low end of guidance. How realistic is a catch up, let's say in Q2? Will we be able to see it already in Q2? The second question is just a little bit, if you could give us an update about Italy. You mentioned a EUR 10 price increase the last time we spoke, I think on March 1st. Can you give us an update on where that price increase is and on the, if you like, portfolio changes and bedding in of the Cementir assets, please?
Yeah, Mr. Roseberg, hello. First of all, catch up is always not easy. Normally, you try to be ahead of the game or ahead of your budgeted figures. Whether that's possible, you know I'm always positive and confident. That's what we are paid for. We will fight very hard to hit the numbers. I think we will have a clearer picture after Q2. You know that Q2 and especially Q3 are, for us, very important. Last year, for example, in Q3, we had the double hurricanes in Texas, which have impacted the business. We hope that we will have a normal hurricane season this year, and then let's wait and see. The other one is on Italy.
On Italy, it is so that we have started the price increase of about EUR 10, starting from March 1st. We also followed with about EUR 5 per cubic meter, April 1st, then in the ready mix. For our whole portfolio, meaning Cementir and Italcementi. The public works because there we have bidded the prices before, but the pricing is clearly up. We are also considering a move of another EUR 3 in July or August in order to come to a commercially sustainable pricing level in Italy. We will watch now the market developments with a lot of attention in May and June. In Italy on the portfolio, as you know, we had to make 2 disposals, according to the antitrust office decision. We have signed the deal, Maddaloni, with Colacem.
We are also close to sign a deal for the one terminal, how it's called, [audio distortion] or whatever, which we have to sell in Southern Italy. We're pretty confident that we will get that in. We are on track in that respect.
Thank you.
Okay.
Thank you. Our next question comes from the line of Arnaud Lehmann from Bank of America Merrill Lynch. Your line is open.
Thank you very much. Good afternoon, Dr. Näger and Dr. Scheifele. Couple of questions. Firstly, on McInnis that you mentioned as being a bit disruptive to pricing in the northeast of the U.S., do you have any action plans to try to ease this pressure? To be more specific, I heard that you were thinking of selling some import terminals to McInnis in the southern part of the U.S. to spread a little bit their production all over the U.S. and reduce the pressure from their imports in the northeast. Can you please confirm that? That's my first question. The second question is related to your reporting. You said a word already, but you have noticed that LafargeHolcim is now giving very little details on a quarterly basis, basically just a trading update for Q1 and Q3.
Could that make you revise the level of detail that you disclose to the market?
Mr. Lehmann, hello. Answer to the second question, very clear. I have been growing up in industries which were always oligopolistic. Normally you always follow the number one in the world. He sets the standard, you know what I mean? We have not made any decision yet, but I look in smiling faces from Mr. Käsberger and Dr. Näger. We'll let you know at our capital market stage. It's clearly it's not going to be in the future so that Heidelberg is the only one in Switzerland gives you very detailed. Our other friends are just watching what we tell them about the markets, and then they try to get advantage of us. Maybe we look stupid, but we are not stupid. Let's wait and see. Second on McInnis, the answer is very clear. We're not going to selling any terminals in the U.S.
We're not crazy. McInnis is something where we take a look at. You know that they have started a sales process. You mentioned rumors. If I read the market or I listen to rumors, there are some cement players in the game to watch as the target, and it's all about pricing, whether the price expectations are realistic or not. It is so that McInnis, obviously, they try now to increase their volumes in the U.S., and that has obviously an impact on the markets like New York and Boston. We are not the only one who are hit by that. I think the next couple of weeks, we'll see how this goes.
Thank you very much.
Okay.
Thank you. Our next question comes from the line of John Fraser-Andrews from HSBC.
Thank you. Good afternoon. My first question is on cost savings. Other than the EUR 26 million on plant maintenance that fell into Q1, can you confirm that was in Q2 last year? That's to come in to help with your guidance. You mentioned Italcementi that there was very little, I'm assuming there's the EUR 40 million or EUR 50 million to come through from there. On top of that, are there any other cost savings? You mentioned the U.K., we've got an initiative. Are there any other initiatives which will help you achieve your guidance?
Yeah. Also, it is so that, Mr. Fraser, you're right. What I try to explain, the EUR 26 million is a pure phasing effect of our winter repair planning in two big plants. One is, Cupertino, that's San Jose in Silicon Valley. That's a 2-million-ton plant, Permanente, the ex-Kaiser plant, which serves the Bay Area. That's a big plant for us, where we had a impact of about, whatever it was, close to EUR 16 million. That's a pure phasing effect. The second one is the Slite plant. That's our largest plant in Europe. That's a 2-million-ton plant on the island of Gotland, which had an impact of about EUR 10 million. That you will not see. You will not see that in the Q. That's a pure timing effect.
On Cementir, it is so that we're going to close the Rome headquarters in, I guess in June, and then about 70 to 80 full-time employees will go out, Here about EUR 350 million. As a purchase price for the Maddaloni plant from Naples, we have a price of about EUR 40 million or EUR 40 million. We end up with a final price of maybe EUR 270 after the other disposal of the terminal. We have pure cost synergies out of Cementir targeted for about EUR 28 million, EUR 25, EUR 28. That means finally the deal is paid by the cost synergies. No market synergies pricing included. Out of the cost synergies, management target is to get EUR 8 million this year. My number is rather EUR 10 million, and that's it. In North America, we are running a program to reduce overhead.
We target for about 130, 140 FTE out, which has, I think, a result impact of about EUR 20 million-EUR 25 million. We have already reduced in the first quarter by about 70-80. These are some of the initiatives which we are running. Okay?
Over and above those, are you still running on the continuous improvement programs and
Yeah, of course.
still-
Yep. Of course. Yep.
Thank you.
Okay, thank you.
Thank you. Our next question comes from the line of Rajesh Patki from J.P. Morgan. Your line is open.
Yes, thank you. Good afternoon, everyone. Just two questions for me as well. First one is on energy costs. You mentioned that Q1 was the most difficult quarter in terms of comparison base. Can you give us what the year-on-year impact was in percentage terms? Maybe also expectation for the remainder of the year, which could be difficult in the light of recent events. At least help us understand how the comparative base stack from the last year stacks up. The second one is on pricing. I know you commented a bit on Egypt, but if you can provide more color on price trends in other African markets, and are you able to, or are you comfortable in compensating for higher inflation in these markets? Thank you.
Yeah. On energy, that's a little bit a difficult picture. If you look to the pricing, you see that API coal, that's the South African coal, which is typically a benchmark for Europe, is in the first quarter up versus last year by about 18%, whereas the Newcastle coal index, that's Asia, was up by about 25%-26%. Newcastle even peaked above 100, 102, 103, and it's now down again to 92 or whatever. It's still up versus last year. What we see now that spot prices are coming down, maybe in Asia. Because for us, Asia is the main concern because in Europe, our alternative fuel rate is typically around 50%-60%, so we are not that dependent on coal. Just to give you an idea, coal in Germany, just so that you get an idea of the dimension.
In Germany, we burn coal, classical coal, about 20,000 tons. In Indonesia, we burn 2.5 million. You know what I mean? If Newcastle is up $20 per ton, that means $50 million on the margin in Indonesia. Whereas the impact on Germany is much lower. That's the one part. We see petcoke, is also still pretty much up, yeah. If you take high-sulfur petcoke pricing is now EUR 64, EUR 65, whereas low-sulfur petcoke is about EUR 92, EUR 93. The problem is that everybody in the market is now switching as far it's technically feasible to high-sulfur petcoke because there's a price difference of about $30 per ton. This product gets now short in the market with the consequence that the pricing is increasing. Typically petcoke follows also oil prices.
That's a risk now with the oil price movement. Overall, before the decision of Trump yesterday, after Forex impact, our forecast on energy was about all in EUR 2.02 billion, EUR 2.03 billion against the last year's number of EUR 1.97 billion. Just about EUR 50 million up, and that includes Cementir, which has made an impact of EUR 30 million. We will have to review that now in the coming weeks, how this is developing. Obviously we're going to push, especially in the U.S. and also in the U.K., on fuel surcharges in order to compensate for the higher gasoline costs. Pricing overall, Africa is okay. Ghana is pretty stable with about, what is it, 92, 93. We have increased prices in Tanzania quite a bit. We have now increased also prices in Congo. Overall pricing environment is good.
That's what you see also from our annex chart, that the diagrams for pricing are up. Overall pricing climate in the world at the moment is clearly up, yeah. We see Indonesia stabilizing, going upwards. We see Australia up, we see China up, we see Russia up 10%. Kazakhstan is up. Poland is up 5 PLN. Germany, Belgium and Netherlands pricing is up between EUR 2, EUR 2.50. Italy, I mentioned also Spain is up by about, in the south, EUR 2, in the north, even higher, EUR 6. Overall pricing is okay.
Great. Thank you.
Thank you. Our next question comes from the line of Josep Pujal from Kepler Cheuvreux. Your line is open.
Yes. Hello. My two questions, please. The first one is on acquisitions. These EUR 716 million in the cash flow statement. There is Cementir at EUR 350, BGC at EUR 133. What are, please, the remaining EUR 268 million? What kind of multiples did you pay? Were they already included in the guidance you gave about the scope effect? If I recall well, two months ago, the CFO said that overall there would be close to zero scope effect at the EBITDA level because the disposals would offset the acquisitions. Has that changed? My second question is about these winter repairs. If you can explain a little bit what is exceptional in what you are mentioning here. I think that you do winter repairs frequently, let's say yearly, in your plant. Why are you talking about those two examples? Is there examples the other way around?
Some things that were repaired in Q1 last year and which will be repaired in April or May this year. Thank you.
Okay. I take the second one. Why do we explain with the winter repair? The point is, if you look to our numbers on a group level, the main negative impact from our numbers comes from a high cost impact. Cost is up by about EUR 111, and we try to explain that. One important piece is, it is not about that we have done more or whatever. It's just a timing, a phasing effect. Last year, the winter repairs for Slite and Permanente were done in April, and this year they were done in March. Due to this quarterly reporting, it shows now up in Q1, and last year it was in Q2.
That's also one reason why I said to Mr. Lehmann, maybe we're going to follow our competitors on reporting because then all these detailed explanations about Q1 and Q2 will slow down because it's just a timing effect. That depends very much on technical planning. What is the availability of the subcontractors? How are we stocked and whatever, and what's the length of the winter repair we need? Do we need a kiln shell repair? Is it only a normal repair and whatever? That's something which is decided on plant level, on country level, and the headquarter has no say in it, and then we just see the numbers. On the M&A side, I expect you talk to the CFO, obviously, then the CFO should answer on that question.
CFO should know. Yeah. The EUR 720 is, as you say, EUR 315 Cementir, EUR 140 BGC, and then there is EUR 120 million, which is the normal maintenance CapEx.
Yeah.
The remainder is a number of smaller assets such as the asphalt plant in Australia and this grinding mill in Canada. That works out. Now, if we look at the Italian acquisitions, we have the EUR 315 from Cementir, and I said that we outbalance this with the disposal of white cement and Kalksandstein, are the limestone bricks in Germany, which together is in the range of EUR 220-EUR 230. We have a gap of EUR 70 million that is covered by EUR 40 million disposal of the Maddaloni plant and EUR 5 or EUR 6 million of a terminal in the south and a few other smaller things. That will work out in that respect. As I said, all the M&A activity is a little bit front-loaded now in the meanwhile, so that all happens in the first quarter.
The board will meet today and review a little bit how the M&A situation continues for the rest of the year. In general, we would like to keep the guidance.
Yep.
Thanks for that. Sorry, the question was on EBITDA. The impact of scope at the EBITDA level for the full year 2018 that you forecast today.
This I have to check.
Scope?
This I have to check. Call Mr. Katcha, and we will check that. I don't know by heart. On the scope level, if I look to it, obviously, BGC will have a positive impact on us. That's quite a good acquisition, we believe, at a very decent multiple. The major scope changes we have by half now in the region Western, Southern Europe, because on the one side, we are selling Maddaloni. We sold sand-lime brick business, which has obviously a negative impact. On the other side, we have Cementir, and we have also a pending aggregates acquisition in Belgium. That was the main remark that we think on Western, Southern Europe, the negative impacts on deconsolidation on new ones should level off. Whereas in U.S., the impact is not that much. It's the north.
It's six months more on the Cemex assets in the region northwest for the moment. Okay?
Thank you.
Okay.
Okay. That's it from our side. Thank you very much for your interest, Talk to you after second quarter.
Okay, thank you. Thank you. Have a good day. Bye-bye.
Thank you. This does conclude our conference for today. Thank you for participating. You may all disconnect. Have a lovely afternoon.