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. You. I must advise you that this conference is being recorded today, Wednesday, 9th May 2018, And I would now like to hand the conference over to your first speaker today, Doctor.
Bernd Scheifele.
Okay. Hello. Good afternoon. Good morning. Good evening to everybody.
Thanks a lot for joining us in the first call a conference call from Adelberg. As usual, I'm sitting here together with Doctor. Tomagel and Andreas Shalar, and it was from our Investor Relations team. I will lead you through the operational results. Doctor.
Nigger will comment on financial results and then I will come back at the end on the outlook. Okay. As you know, I think we have been we are the last in our industry who is publishing, our key cement competitors have already published in Martin 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 laws and also in Europe, where we had especially harsh and long freezing period in the months of March which covered Germany UK, but also France. And in France, we had the flooding in February in Paris.
A second point, which needs be taken into account is the Easter effect, as you know, Easter last year was in April this year, was in March So we lost depending on the country between 1 and 2 working days in the first quarter versus last year. Our group share profit is up due to mainly 2 or 3 effect first of all, we had disposal gains from the U. S. White business and the German Sand Line Brick. Secondly, financial result as expected could to improve because we are wish the issuing points at a much lower interest rate than the old ones which are expiring and also the tax rate as predicted coming down.
Operationally, EBITDA on a like for like without ForEx and consolidation effect is down by 88,000,000. I'll come back to that. That is mainly due to 4 countries or 4 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 UK and Indonesia. They all together make up about $81,000,000 of $82,000,000 out of the 88 April obviously looks much better. Our hydroborizes in cement up more than 8% in April aggregates about 12 ready mix 13. Backlog in core markets is pretty solid.
That's especially true for North America but also from Germany, Poland, Northern Europe. So we have no concern about the Williams. We have price increase announced in most of the markets and 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 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 pet coke on stock.
And secondly, we were negatively impacted mainly in Asia due to the fact that the Chinese before Chinese if you are new Chinese, we are importing a lot and pricing went up especially for the new Castle code significantly above $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 what 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, 15 falling in 15% up and 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 5, you might miss the synergy impact from it also meant the additional additional synergies in Q1 were small because if production is low and production was low, then obviously the synergies are relatively low. It's a number of around 6,000,000 Europe, the number is small. That's why we didn't mention it, especially in the chart. You see cost others is up to buy 111,000,000 and I look at it from two angles.
If I look to the to the countries or areas, then the message is very simple. U. S. Is down by about or North American 2 regions are down by about 1,000,000 versus last year that's reached a loss with about 7 and reached in South Texas by 12, U. K.
Is down by about 18 in Indonesia about 40. And if you add that all up, that comes up to 81,000,000 dollars, $82,000,000. And that explains the negative deviation. If we look by cost from a functional point of view, cement energies are by about 40 and maintenance repair we had a negative impact due to a timing issue. We had 2 big plants.
We were inventory payer this year in March. And last year, they were in April. It's our plant permanent in the Silicon Valley. Which had a negative impact of about 1,000,000 and it's our largest plant in Europe. It's sweeter in Sweden on Scotland Island, which is about 1,000,000 and that together has a negative impact of 26.
Chart 6 shows you a little bit what you already know that proven in our industry is not so meaningful. Chart 7 tells you what I told you. We are on the market. Volume side. Backlogs are okay.
Negative impact working days, I explained, energy costs, we expect to flatten, okay, after the trump decision on Iran. That's obviously a question mark since oil price peaked today again. And Indonesia, as I will tell you later, we expect changing pricing or we will go to a price change after the Ramadan season. If you look on the Williams, Charlie U. S.
Down minus 5, reached north, minus 18. South, Texas minus 6, whereas the west was up by more than 30% and in the reinvest on Southern Europe, U. K. Was down by about 10% and also Bainame was down 9% Germany, 4% Italy, Spain, were up Asia Pacific, Indonesia, plus 9 and India plus 5, Australia plus 6 whereas Thailand, the market remained weak with about 8.5% Northland Europe volumes down 10%, mainly Norway, Sweden, down, 10 Russia, down, 10% to an up 20% as I've Kazakhstan up by about 6%. If you look to the results area, we start with North America That's the biggest impact on our negative deviation compared to last year.
You see it with about 1,000,000. I explained about 1,000,000, another 6 come from Canada. We see what we see is that the 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, Ohio, and up to Chicago had a lot of snow. We still have missiles now even in April, it was a really harsh winter and that is about 40% of our cement volumes. So we are clearly at a footprint disadvantage.
That's why our cement volume is minus 4.6. If you compare them, for example, our Mexican competitors, they were up 5%. But then 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.
And also Texas was weak, yeah, because Texas was very wet in February And you saw that also in the numbers which were published by Martin and I think yesterday where they were born in cement by more than 80% mainly due to bad weather in Texas. And you see we are a little bit in the middle of the road because 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 the North Carolina and in Ghana. 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 MacInnis We will consider 2nd price increase in July or August in some areas, especially California, but also maybe Midwest. In Canada, the Paris fell down due to weather, whereas the Pacific Northwest Vancouver, Seattle, Portland, where clearly up, and we expect a relatively good run in Canada and we have price increases except for the breweries of about $5 to $6 per tonne Go to Western SaaS on Europe. That was the other market there where we see where we lost about 1,000,000 compared to last year, major impact comes from U.
K. Disclosed to 18.5%. And premium was also down by about in Germany by about 7 or 8, Italy, and Spain were out. Yeah. And, especially UK, we had a clear weather impact and also an inventory impact.
And last year in the UK, we had a property profits in, of about 1,000,000, which we are missing this year. And we have a property gain in the U. K. In the months of April, there was a timing difference. So that's about Europe And if we look to Northern And Eastern Europe, you see the result is down by about minus 4.
That's totally explained by the effect of sleete. I told you earlier that sleete had a negative repair shift or sleete last year was prepared in April. This year it was prepared in March. That's already 10,000,000 So, without see, the like for like, they are already up. And then we have between 1 and 2 working days less.
So, if you look to Northern Europe, like for like, we are compared to last year, 15,000,000 up. If you take the CDP impact and the working days impact out, so the markets overall are strong. Especially Poland is strong. Williams in Poland very strong also again in the months of April Czech Republic, okay, in Nordics, we are relatively confident, so this region should be okay. Asia Pacific were down 26,000,000.
That's mainly explained by Indonesia. I told you 40,000,000 to 40,000,000. That's not coming from volume and pricing. While 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 Charah especially in the Jacoba area private projects are coming back to the market this is okay. Pricing has stabilized in April is even up a little bit by 1%. The main impact comes from the high coal price on the newcastle coal, which is in the first quarter compared to last year, up by about 23% or 25%. I guess we have a sharp maybe later or not.
That's the main impact. India was also down for us by about 1,000,000, mainly due to mark 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 7.20, 7.40 Egyptian per ton up 40% versus last year, okay, we were lucky because the scenario was closed due to the CC 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. So overall, reach in Africa looks good, Turkey, good volume growth, 8%, 9% pricing up double digit.
So the result is okay. Main impact comes from negative currency. On trading, what you see trading trading result is up. We have high volumes in the first quarter by about 20%, 21% up. And what you see is that the clinker price in Asia FOBs are by about $5 We see the same in the Mediterranean, the Dutch exporters managed to get about $4 to $5 per clinker more.
And last year, the pricing is now about US35 dollars. The threat, what you always perceived as a market threat, the exports from China has significantly slowed down. Chinese pricing is extremely strong in China in the region, Central And Sierra Metals and the South. Pricing is up by about 40% and China has started to import clinker from Vietnam because the pricing in China is so attractive. At the same time, imports export from China last year dropped from 16% to 1,000,000 to 1,000,000.
So we see this as a relatively good signals. I think that's it a little bit from my side and I just head over to Doctor. Nagel on the finance side.
Thank you very much, Doctor. 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 the summary. So you have seen that we have posted the profit for the periods 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 a significant need as outlined by Doctor. Scheifele, this was first of all, due to the success in our portfolio optimization where we had the capital gain in the range of 100,000,000 from the sale of the Sandler Implicks in Germany and our U. S. White cement business. And we have re shifted this moneys then into the acquisition of Cementia of Fraser in Australia and the grinding unit in Canada.
So we have really reused our monies here. We have a continued and further improvement of our financial result, 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 and we have strengthened our financial position by issuing a new bond for a 10 years turnout in April at quite favorable conditions. Cash flow up, double digits. And, we continue to expect further improvement in the cash flow through the year.
So the music plays below RCOBD and this really helps us improve our earnings share. If you look to the P and L, then You can see this effect in the P and L on page 18 where additional ordinary result was 118 plus shows the capital gains from the sale of the 2 businesses, result of participations, pretty stable around the 0 line for the first quarter. Here also, the results come later. Financial results improved to $75,000,000 income tax improved to 1,000,000 and profit of the period 6 compared to a loss of 1,000,000 last year. Then in the cash flow statement, you will see that first of all, the gross cash flow has reduced by 100 and 13 due to lower RCOBD, but 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.
A payout from provisions decrease at the major part of our restructuring is done and the payouts have been done last year. So we expect also this year a continuous improvement in this position. Investment net minus 4.48. So we have bought these 3 assets, cementier, consolidated Italian market, appraisal to approve our aggregates position in Australia and the grinding unit for cement in Southwest. Canada.
And at the same time, you see the proceeds from our disposals we see currently a trend that all this M and A and CapEx is done to enlarge the footprint or to consolidate is done a bit front loaded. So the activity in the first quarter is definitely stronger here than it is in the remaining quarters of the year. Cash flow totaled from investing activities minus 1,000,000. And this is then reflected on slide 20, where you can see our net debt reconciliation and the use of the free cash flow. 1st of all, free cash flow has improved to 1,180,000 over the last 12 months coming from 1039 or 1030 8 into 2 previous years.
And then you can see the use of the free cash flow below where we have higher growth CapEx, at this time, and we believe that this will normalize over the rest of the year. Then we have the dividends of Heidelberg Cement and the dividends to our minorities, which both are going up. So 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 3.04 1,000,000 so that the net debt comes down at 1,000,000,000. 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, 1,000,000,000 to 1,000,000,000. And this is predominantly, currency effect as the euro has appreciated compared to the first quarter of last year. And I just mean that the headings of the columns are wrong December 2017 March 20 17 is wrong. You have just to exchange the labeling of the column compared to end of last year, so the 1st December 2017, the balance sheet total is almost unchanged. Also 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 this remainder of the year. Net debt stands at 1,000,000,000 and we stick to our target to bring that down over the remainder of the year to a value of $8,200,000,000 to $8,300,000,000. That's it from the financial side and I will I'd like to expect to talk to you.
I'd come back to the outlook. We keep our guidance for the year mid to high single digit 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, by Canada and the Open West Coast of Seattle, Wankuvo.
And in Europe, we expect a price recovery and price increase in Indonesia after the Ramadan period and also in Africa And we will push very strongly for pricing in all other markets we 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 of the imports are less competitive. The last few question mark is the energy cost inflation We see in the South African coal and in the, in the new castle coal that you're easing pet coke remains price wise challenging and we have to wait a bit and see a bit what the oil price now doing after the Iran decision of the U. S. Government of yesterday evening. That's it from our side.
And as always, we're now open we are happy to answer any questions you might have.
Thank you. And our first question comes from the line of Paul Roger from Exane BNP Paribas.
Yeah. Good afternoon, everybody. So just two questions then. The first one on your your previous guidance for a few countries, I think you were guiding previously to flat profitability in Indonesia and the UK and then 10% like for like increase in profit in the US. I wonder if your guidance for those 3 countries actually still stands.
And then secondly, just ask you to clarify your comment you just made in the call about lower price and momentum in the US. Are you suggesting that you are now less optimistic than you were in March, and I think you're going for a 4 to 5% price increase in cement? And if that's the case, why? Thank you.
Okay. On the guidance per country, so I think we are one of the last companies in the sector or guy who giving you some number on country level, we might review that practice, Mr. Rogers, just to tell you, We stick to our commitment in the UK. 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. And we are on our way. Yeah. Indonesia, I told you, we are 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. And then 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 Kubernet, as you know, is always in our industry, especially in the Western world, is a little bit of rental 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, Medicare 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 renew 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 30 3% that shows you the market in California is really hot and we have to see what we can do. So, and then we will see what is going to be the average figure from the U. S.
So, overall, overall, you're not actually changing your guidance for the U.
S. There's nothing you've seen after the No, the U. S. U. S, U.
S, I'm still, I think that should work. In U. S, we are running a little bit against the clock now because you are in the U. S, you know that April in the region was still weather wise a problem. Yeah, there was still snow and a lot of freezing temperature in May in April.
So in April, the north figures in cement there, again, down against last year, 6.5. There are stars, 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 better impacted and that gives you a very diverse picture. And for the U.
S. In full in April, we were about up, I think, close to 6%. So that gives you a social a little bit where we are at the moment.
Our next question comes from the line of John Messenger.
2 if I could. One was just the picture on Egypt, Doctor. 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 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.
So 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? And the second one was just coming back on your comments on Indonesia in terms of that shift in pricing behavior after Ramadan. I want to could you is that 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 or are there consolidation moves a foot or is that just if you've been taken around uptick in volume that you hope will see prices follow? Thank you.
Okay. Mr. Edenshoelho. On Egypt, as in Egypt, the predictability of the business is even worse. In Indonesia.
You know what I mean? So this is a pretty challenging environment. As I told you, very bluntly, we have been lucky in the way in the first quarter that the scenery was closed. And we used that opportunity to push pricing very high and our pricing went up to 7 20 or you go back towards that 7 20 or even 7 40, Egyptian pounds per ton which is up versus last year or 40% because last year we were around 500 or 5 40 The army now with their famous 10,000,000 tons or whatever it is, they are coming now to production step by step. Volumes in April were still okay.
Pricing also in April were still okay, but we expect pricing in Egypt to go down from that level. We're not going to keep that level at 7 20. That's clear. But according to our calculation, if the army wants to pay the interest for the financing they have from Sonoma, including payback, they need also a cement price around £67600 per ton. That's our calculation.
And on the other side, there is a certain upside in Egypt because the Egyptian government has issued a regulation that they're going to subsidize exports from Egypt with 50% of the logistic costs in Tanzania and with some big and that would bring us an improvement in exports on pricing by about $10 per tonne and we would export from our Suez cement block, yes? So there is, as you're right, we expect more price pressure in the money in the coming months due to Sinai going away and the army coming in, but on the other side, we expect, we think there is some upside, especially on the export side. On Indonesia, we what we see is that the local players are now in core markets on a delivered cost 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 are or are only running a couple of days and they stop again because they are obviously short of financing. And that what you see then in the market that the price downward spill is starting to slow down. And in the first quarter, pricing pressure did not come from cement pricing or from Chinese player or look at their team and more from a other international player. So at the same time, we see volumes clearly moving in the right direction in our core markets, Jakapa, best Java effect. That's for us, the core and also the corporate sector the private sector is spec.
That's why we believe there is opportunity to change pricing after Ramadan, why after Ramadan? Because during Ramadan typically demand is weak, then 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. Our next question comes from the line of Phil Rosenberg from Bernstein.
Hi, good afternoon, everyone. Just my two questions, please. On the potential to catch up, I know you mentioned that guidance is now more ambitious and we do a quick calculation in sort of comes to the need to get to about 8% like for like growth in the next three quarters in order to make low end of guidance. How realistic is a catch up in, let's say, in Q2? And 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. We mentioned a euro price increase the last time on 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 embedding in of the Cementia asset please?
Yeah, Mr. Roseberg, hello. First of all, catch up is always not easy. Normally, you try to be ahead of the game or to ahead of your budgeted figures. And that's possible.
You know, I'm always positive and confident. That's what we are paid for. So we can we will fight very hard to hit the numbers And 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. So then the other one is on Italy. On Italy, it is so that we have started the price in of about starting from 1st March. And we also followed with about per cubic meter 1st of April than in the ready mix.
For our whole portfolio, meaning cementio and it has cement the our pricing in April is up by about per tonne. Yeah. That does not include obviously 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 in July or August in order to come to a commercially sustainable pricing letter in Italy. We will watch now the market developments with a lot of attention in May June.
And 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, Madaloni, this colladsen, and we are also close receive a deal for the wind terminal or how it's called saclay or whatever, which we have to sold in Southern Italy we're pretty confident that we will get that in. And so we are on track in that respect.
Thank you.
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, Doctor. Nager and Doctor. Scheifele. A couple of questions.
Firstly, on McKinney 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 McKinney's in the southern part of the US to spread a little bit the production all over the US and reduce the pressure from their imports in the Northeast. Can you please confirm that? That's my first question.
And second question is related to your reporting. You said a word already, but you have noticed that Lafaser SIM is now giving very little details on a quarterly basis, basically just a trading update for Q1 and Q3. Will could that make you revise the level of detail that you disclose to the market?
I'm Mr. Lehman, a low answer to the second question very clear. I have been growing up in industries which were always polycomolic and normally always follow the number 1 in the world. He sets the standard. You know what I mean?
But we have not made any decision yet, but I look in smiling faces for Mr. Kaslar and Doctor. Megaw, so we'll let you know at our Capital Markets Day. But it's clearly it's not going to be in the future, so that Hyderabad is the only one tourist person, gives you very precise detail and our other friends are just watching what tell them about the markets and then they try to get advantage of us. Maybe we look stupid, but we are not stupid.
So, let's wait and see. 2nd on MacInnis, the answer is very clear. We're not kind of selling any terminals in the U. S. We're not crazy.
MattInnis is something where we take a look at. You know that they have started a sales process and You mentioned rumors. If I read the market or I listen to rumors, there are some cement players in the game to watch at the target. And it's all about pricing, yes, whether the price expectation are realistic or not. And it is so that McGinnis, 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. So we are not the only one who are hit by that and I think the next couple of weeks, we'll see how this goes.
Thank you. And our next question comes from the line of John Fraser Andrews from HSBC.
Thank you. Good afternoon. My first question is on cost savings. So other than the 20 1,000,000 on plant maintenance that fell into Q1. Can you confirm that was in Q2 last year?
So so that's to come into to help with your guidance. And you mentioned itaucementi that there was very little. So I'm assuming there's the 40 or 50,000,000 to come through from there. And then on top of that, are there any other cost savings? You mentioned the UK, we've got an initiative.
Are there any other initiatives, which will help you achieve your guidance?
It is so that, Mr. Fraser, you're right. What I try to explain, the $26,000,000 is a pure phasing effect. Of our winter repair planning in 2 big plants. 1 is Cubervino that San Jose in Silicon Valley.
It's a 2,000,000 ton plant permanently, the ex Kaiser plant, which serves the Bay Area. That's a big plant for us. Where we had an impact of about whatever it was $16,000,000 to $60,000,000 and that's cute phasing effect. And the second one is the slitted plant. That's our largest plant in Europe.
That's a 2,000,000 ton plant on the island of Scotland, which had an impact of about 10,000,000 and that you will not see and that will obviously, you will not see that in the coupon. That's a pure timing effect. On the cement here, it is so that we're going to close the Rome headquarter in I guess in June And then about 70 to 80 full time employees will go out. You know that we paid 17 year about 1,000,000. We have we get as a purchase price for the Madaloni plant for Naples.
We have a price of about 1,000,000 or 1,000,000 And so we end up with a final price of maybe $2.70 after the other disposal of the terminal and we have pure cost synergies out of Centimeters TiO targeted for about 20 1,000,000 Euro 2528. That means finally, the deal is paid by the cost synergies. No market synergies, pricing included. And out of the cost synergies management target is to get 8,000,000 this year. My number is, well, about 10,000,000 And that's it.
Then in North America, we have we are running a program to reduce overhead we target for about 100 and 30, 100 and 40 FTE hours, which has I think a result in of about 20,000,000 dollars, $25,000,000. And we have already reduced in the first quarter by about $70,000,000. That's our these are some of the initiatives which we are running, okay?
And over and above those, are you still running on the continuous improvement programs and
of course, of course.
Yeah, yeah,
yeah, yeah, of course, yeah. Thank you.
Thank you. And our next question comes from the line of Rajesh Patki from JP 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 more difficult quarter in terms of comparison base.
Can you give us what the year on year impact was in percentage terms and maybe also a expectation for the remainder of the year, which could be difficult in the light of recent events, so at least help us understand how the comparative base start from the last year stacks up? And the second one is on pricing. I know you commented a bit on Egypt, but if you can provide more color on price entrants in other African markets? And are you able to or are you comfortable in compensating for higher inflation in these markets? Thank you.
Yes. So in NLG, that's always that's a little bit a difficult So if you look to the pricing, then you see that API coal, that's the South African coal, which is typically the benchmark for Europe is in the 1st quarter up versus last year by about 18% Whereas the new cars with coal index, that's Asia, was up by about 25%, 26%, yes. New cars will even peaked, the back went under 2 went under 3 and it's now down again to 92 or whatever. But it's still up versus last year. And 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 eyes on a U rate is typically around 50% to 60%.
So, while not that dependent on COVID, just to give you all my idea, a coal in Germany, it shows that you get an idea of the dimension. In Germany, we burn coal, classical coal, about 20,000 tons. In Indonesia, we burn 1,000,000. You know what I mean? So if Newcastle is up $20 per ton, that means $50,000,000 bucks on the margin in Indonesia, whereas the impact on Germany is much lower.
And that's the one part. And then we see pet coke is also still pretty much if you take, high sulfur pet co pricing is now 64, 65 whereas low sulfur pet pet coke is about 92, 93. The problem is that, everybody in the market is now switching as far as technically feasible. To high sulfur pet co because there's a price difference about $30 per tonne. And this product gets now short in the market with the consequence that the pricing is increasing.
And typically pet coke follows also oil prices. So that's a risk now with the oil price movement. Yeah. And overall, before the decision of Trump yesterday, we will after Forex impact, our forecast on energy was about all in 20,000,000,000 dollars, $2,202,000,000,000 against the last year's number of $1,970,000,000. So just about 1,000,000 up and that includes Cementia, which has made an impact of 1,000,000.
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 fewer surcharges in order to compensate for the higher for the higher gasoline costs. Pricing overall, Africa is okay. Ghana is pretty stable with about, what is it, 9293 We have increased prices in Tanzania quite a bit. We have now increased also prices in Congo. So overall, pricing environment is good now.
That's what you see also from our index chart. That the diagrams for pricing are up. So overall, pricing climate in the world at the moment is clearly up We see Indonesia stabilizing, going upwards. We see Australia, we see China, we see Russia up 10% Kazakhstan is up. Poland is up 5% slow.
Germany is up 2.50 perme, which is significant improvement in Germany where in the last year's pricing was flat. In paying at Ocean and Netherlands pricing is up, it's been €2 or EUR 2.50, Italy I mentioned also Spain is up by about in the south, in the north, even higher. So overall, pricing is relatively is okay.
Thank you. And our next question comes from the line of Jose Pujal from Kepler Cheuvreux.
Yes, hello. My two questions, please. The first one is on acquisitions. 1,000,000 in the free cash flow sorry, in the cash flow statement, there is Chementier at 3.50 Fraser at 68,000,000, what kind of multiples did you paid and where they already included in the guidance you gave about the scope effect, Dave, I recall well 2 months ago, that the CFO said that overall, there would be a 0 close to 0 scope effect that they did the level because the disposals would set the acquisitions, has that changed? And 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 plants, why are you talking about those two examples? And is their examples the other way around things that were repaired in Q1 last year and which will be repaired in April or May this year? Thank you.
Okay. I'll take the second one. Why do we explain with the winter repair? The point is if you look to our numbers on a group ladder, the main negative impact from our numbers comes from a high cost impact. Cost is up by about 111 and we try to explain that.
And one important piece is it is not about that we have done more or whatever. It's just a timing of facing effect. Last year, the winter repairs for Sweden for Menendez were done in April. And this year, they were done in March. And due to these quarterly reporting.
It shows now up in Q1 and last year it was in Q2. And that's also one reason why I set them the layman might be, maybe we're going to follow our competitors on reporting because then this all these detailed explanations about proven and too will slow down because it's just a timing effect and that depends very much on technical planning what is the availability of the subcontractors, how are we stopped and whatever and what's the length of the winter repair we need? Do we need a kill shell repair? Is it only normal repair and whatever. That's something which is decided on plant level, on country level, and the headquarter has not seen it.
And then we just see the numbers And on the M and A side, I expect you talk to the CFO, obviously, then the CFO should also on the CFO.
So, the 7 20s, as you say, 31570 or 140 Fraser. And then there is $120,000,000, which is the normal maintenance CapEx, And the remainder is a number of smaller assets such as the asphalt plant in Australia and a disc grinding mill in in Canada. So, that works out. Now, if we look at the Italian acquisitions, we have the 315 from German here, and I said that we are, but this was a sales over the disposal, of white cement and white cement and Kaia Sandstein are the limestone bricks in Germany, which together is in the range of 2.20 to 30. Then we have a gap of $70,000,000 that is covered by a $40,000,000 disposal of the Madaloni plant and 5,000,000 or 6,000,000 of a terminal in the south and a few are for smaller things.
So that will work out, in that respect. As I said, all the M and A activity is a little bit front loaded now in the meanwhile, so that all happens in the first quarter. And the board will meet today and review a little bit how the M and A situation continues for the rest of the year. But in general, we would like to keep the guidance.
Yes. Thanks for that, but 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.
It's cope. It's cope.
This I have to check. I I am call Mr. Kaccha, and we will check that. I don't know by heart. On the scope level, if I look
to it, Obviously, Fraser will have a positive impact on our side. That's quite a good acquisition, we believe, at a very isn't visible. And the major scope changes we have by heart now in the region West on Sasol Europe because on the wind side, We are selling Madaloni. We sold Sandline Brick business, which has obviously negative impact on the other side. And on the other side, we have cementillo and we have also a pending aggregates acquisition in Belgium and that's what's the main remark that we think on West Southern Europe, the negative impacts on deconsolidation on new ones should minor should level off whereas in U.
S, the impact is not that much. It's the north 6 months more on the Cenex assets in the region of S for the moment. Okay?
Okay. That's it from our side. Thank you very much for your interest and talk to you after the second quarter. Okay. Thank you.
Thank you. Have a good day. Bye bye. After.
Thank you. This does conclude our conference for today. Thank you for participating. You may all disconnect. Have a lovely afternoon.