Ladies and gentlemen, welcome to the Heidelberg Materials Full Year Results 2025 conference call. I'm Simon, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Christoph Beu
melburg. Please go ahead, sir.
Thank you, operator. Good morning, good afternoon, good evening to everyone listening into our full year 2025 conference call. Thanks for dialing in. As usual, we have Dominik and Rene with us, CEO and CFO, plus the IR team in the room. We have some prepared remarks. We're gonna go through them relatively quickly, and then, you know, take the time for your questions. Over to you, Dominik.
Chris, thanks a lot. Hello, everybody. Sunshine in Heidelberg, 20 degrees. That's a good time to have a conference call. Great setting. Welcome. Let's go into the summary first page. Very good year for us. Yet another record year. I think all the key metrics is going in the right direction. RCO reached a new record high at EUR 3.4 billion. EBITDA margin up, important for us, you know that we are very focused on improving the structural profitability, up to almost 22%. Also driven by a great success on the Transformation Accelerator Initiative. That has already encountered EUR 380 million of saving. Remember, the saving target is down the road, EUR 500 million by end of this year.
I remember very well our Q3 conference call. Here you go. European margins increased to 20.5%. Very good performance out of Europe, especially also in Q4. I think a fantastic entry point going into 2026. Free cash flow, Rene will further go into it, a strong level of EUR 2.1 billion, leverage stable at around 1.2 times. What is very good now is the ROIC that has surpassed comfortably the 10% mark. 10.4%, I think, is the highest we ever had. It's really well on track to our midterm guidance from the capital markets, where we said we go up to 12%.
Shareholder return up 10%, even more than the profitability increase, with a combination of progressive dividend and share buybacks, EUR 1.1 billion. The second tranche has been done, the acquired shares have been canceled. We are really continuing to make the difference, not only because we are the only global ones, not only because we are the heavy building materials guys, because we now turn this into superior differentiating products. evoZero hits the market as the world's first carbon capture near Zero Cement, the first customers are happily using it. Last but not least, importantly, the outlook for this year, we are optimistic.
We are gonna increase our result with a range that you know, from us is always cautious at the beginning of the year, EUR 3.4 billion-EUR 3.75 billion. ROIC again above 10%, the CO2 emissions continue to decline. With that, I think next page is basically just repeating what I just said. I think we don't need to go through that other than you know, it's green on basically all dimensions, and the adjusted EPS has also gone up. Rene will talk to you that in a minute . Overall, I think a strong performance. Rene, you want to say something on the transaction in Australia?
Thanks, Dominik. Hello, everyone. As from my side, you've seen 3 weeks ago, we have announced that we signed an agreement that we wanna take over the construction materials segment of the Maas Group in Australia. Here you see some numbers. It's 40 aggregates quarries, and you can read it. They've released their results, and it's a listed company, so it's 7-8 million tons of aggregates. It's 1 million cubes of concrete and has asphalt, and the recycling operations that complements our footprint on the East Coast very nicely. Important is to say that we stay in our strict finan cial framework.
You see it, the transaction value is AUD 1.7 billion. After synergies, the multiple is 8.4, which fits to our, let's say, our targets, what we have guided for. You have seen probably, two days ago, Maas announced the H1 result. We have put it here on the chart. The revenue is up 43%, and the EBITDA increased by 36%, which is on track to what we have assumed even slightly better. You see there's good potential in that acquisition. The only one is what we need now is authorities from the regulators, which will come probably Q3, hopefully. We see how that goes. Dominik, over to you.
Thanks, Rene. On the back of that, page 5. I think we need to pause here for a moment because I think this is a super important slide. Underpinning strongly the 7%-10% growth, the target we gave midterm on RCO. Where does it come from? Organic and acquisitions side by side. On the left side, you see the organic development, and we really have to take a couple of seconds here to digest this. 2022 versus 2025, the RCO went from EUR 2.5 billion to EUR 3.4 billion. I would say, sorry, guys, à la bonne heure, that's not a bad track record. It is solely driven by the triangle management of price costs. That includes both fixed and variable costs and some M&A.
A good contribution, strong contribution from their end. You go back left to the volume side, and with the decline of the volumes in the past couple of years, we got a headwind of EUR 1 billion result. EUR 1 billion result just driven by volume decline. Statistically, I said it this morning in the press conference here. Statistically, after 4 years of volume decline, we are coming nearer to the point where this will turn, and I will give you some further indications down the road. You can make the calculation yourself. If this only turns slightly on the much better cost base, I tell you, we're going to have some fun when it comes down to the RCO development. That's just the organic side.
You complement it with the acquisition side that goes on top of it. We've not been sitting on our hands, but we've told you we're going to accelerate, and Rene just showed you how we are accelerating already at the beginning of 2026, with a focus on all our key markets, North America, Australia, Morocco, Tanzania, Southeast Asia, and also Europe, including the recycling piece. Every market is now really focused on a very strong M&A pipeline. The pipeline is clearly full, and you should see more M&A as we go through 2026, more than in 2025. Transformation Accelerator Initiative. I mentioned it already. We said, I think in earlier calls, it's going to be backloaded, 40/60, between 25 and 26, and look what we have done.
It's been front loaded quite significantly, with a significant impact positively on the savings side. René will give you the impact that it also has on other financial metrics later on, but I think the EUR 380 million are really strong. From my seat, I am very convinced that we will surpass, well surpass the EUR 500 million when it comes to the end of this year. From my understanding, there is clear upsides on the TIE savings.
If you go to decarbonization, I think we are trying to stay on the floor, and we're trying to be modest, but I think it's fair to say all the numbers that we've seen so far, we are now the clear leader in decarbonization of the traditional levers, long before we even come to carbon capture and storage. So on net CO2 emissions, on alternative fuels, on clinker incorporation, on sustainable revenues, it's hard to beat us. So I think all are moving in the right direction. Look at the jump down alternative fuel rates, 300 basis points in just one year, guys. I think this is a very strong track record that will eventually also turn into superior results. **
Talking about sustainability, I think, it's clear that we want to make the difference on the back of this, on the product side. In the end, every technology is only as good as it turns into an advantage for our customers. So we are very focused on selling at the very interesting margins, both evoZero and evoBuild, all including evoBuild carbon capture, to make sure that we carry the technical advantages that we have built also to the P&Ls of our customers and to the advantage of our customers. We are going to build out our near zero leadership through CCS. We've done Brevik. Technically, it's running. CO2 gets captured. The product is in the market. Padeswood is the one that we have now kicked off.
We are going to continue to push Padeswood, and you know that we have gotten the funding for other projects in the EU, but the framework needs to still be adjusted in order for us to FID any of these projects. I'm sure we'll come back to that point later on in your question. What is important for me to understand, when you think about Heidelberg Materials, it's not just about CCS. Sometimes when I get some of your feedback, everybody says, "Hey, yeah, it's CCS." The rest, you know? Sorry, guys. CCS is well marketed, that's clear, and it's important for us for the future. It's the proof point that we get to near zero and net zero on concrete side, absolutely. Heidelberg is not built on CCS only.
As I showed you, it's built on a very solid decarbonization piece, it's built on a very strong and ever being stronger digital automation and AI piece. I just brought you this one example on autonomous trucks. I think we've shared with some of you already directly, and that is really now getting into being scaled up. We've completed the pilot. Before end of 2025, we have completed a 2 million tons haul package in our Bridgeport Lake Bridgeport quarry, and from there we expect significant savings out of this. This is not Mickey Mouse, guys. This is a huge addressable cost base when we talk about both CapEx and OpEx. You know, buying these trucks is very costly.
Operating them is very costly also because you need drivers and not only one driver, you typically need two or three drivers if you run on a three shift system. That means, you know, significant staff cost savings. significant savings on fuel and tires, significant savings on repair and maintenance costs, and by the way, also better productivity levels. If you put that all together, this has fantastic paybacks below two years. There's not a lot of projects where you can get two years. Again, very same mindset, like in decarbonization. We do these things to bring it down to the bottom line. If it doesn't create value, we don't t ouch it. Don't assume that we are just investing into these things to make a big, big marketing splash about it.
No, we make this to increase our margins, to accelerate our growth, and here's a good example. I could give you 10 more. You followed also the partnership setup that we have created to also switch the industry into the cloud and to move the industry so long beyond Heidelberg Materials into the cloud, with a partnership ecosystem set up between Command Alkon, Giatec, Pavewise, and C60 . That one is really going well, and with that both using that setup internally and also for third parties, the drivers are clear. We want to increase the stickiness for our customers. We want to boost their and our revenue and margins with us, with that setup. We want to really accelerate our evoZero and evoBuild sales by combining it with a very robust digital process.
Obviously, we'll also use it to automate the EPD, so you don't get it only once a year, but you get it basically real time. Again, here, only a couple of examples. On the operational side of things, I think important to note that Q4 was a good Q4, especially when it comes to EBITDA margins, and RCO. I think a strong exit point out of 2025 going into 2026. Of course, there is winter here and there, so I think it's fair to say that in Europe and also in the U.S., you saw the blizzard in New York during this week. There is a little bit in these small months and small quarters, there is always the risk of winter, and once things are frozen.
Today, you know, 20 degrees, as I said, sunshine in Heidelberg. We are moving in the right direction. If you go to the full year, I think we've shared with you the results. I think for me, that's okay. Let's go to the bridge on page 14 and 15. You see that the picture that we've seen for a while has not fundamentally changed. We see good price over cost, positive price over cost, even stronger than in Q3, I think. Q4 had a better price over cost development than Q3. You see the structural, the structural advantage of Q4, but a big volume hit again.
To my earlier remark, if that only turns flat, basically, that would be a significant advantage. If you go to the same page, on page 15, for the full year, you see that price over cost is very positive, still a hit on the net volume side, also to the very right, you see some good contributions from M&A now kicking in, EUR 65 million. I think that's good. If you go to Europe, I think Europe, convincing performance. Again, remember in Q3, we had a little bit of a question and answer TikTok around what's going on in Europe.
We, Rene and I told you, "Hey, hold your breath, guys." From one quarter to the other, we said there were some extraordinary shifts over the quarter, borderline. Here we go. I think Europe, despite bad weather, sorry, despite bad weather, especially in December, I think Europe pulled off a very strong performance in Q4. We are moving in the right direction, both in terms of EBITDA, but also in terms of EBITDA margin, and by the way, across all three business lines. North America, I think overall, okay, but I wouldn't say something to celebrate too much.
I think there is upside in North America, from my seat, I think we are working well on the EBITDA. I think that's okay, especially if you take the weather effect into account, because remember, our footprint is quite northern. We have a big footprint in the Northeast, Midwest, including Canada and in the Northwest, and that's obviously in winter always a little bit... Q4 and Q1 for us is always in North America, is a little bit volatile. I think on the EBITDA margins that on aggregates, good performance, I think 33.3%. I would say there is still upside on cement and ready-mix as we go into 2026.
The team has fully understood this as we have obviously discussed this internally. Asia Pacific, I think, okay, but I would say below my personal ambitions and expectations. I think, Rene, maybe you say something to Australia in a second, but I think overall margin moving up, that's good. That's a good sign that the structural profitability is moving. Cost management is being very good, despite the markets being really sluggish. China, Hong Kong, Bangladesh, Indonesia, difficult. Thailand and especially India, better volume growth, Malaysia, getting better throughout the year. Overall, I think the markets are still some what sluggish.
Nevertheless, the team has pulled off a good, very good margin performance. With that structural profitability as volumes come back, I think we should see also better result development. Maybe, Rene, you say something first.
For Australia, Q4, I think, was 10% up in Q4, which was very good, and then the full year also up versus prior year. Even if we, even due to the fact that the first six months were weak in Australia, so but the market is coming back, and January, February confirms that the market is improving, so outlook for Australia should be okay.
What do you want me to say? You enjoy this one on your own. What do you want, what do you want to say? You know, I think a fantastic top-line growth in all dimensions in the right direction. EBITDA, RCO, look at the margin level there, EBITDA margin in cement, 30%. I'm, I leave this for you to enjoy without a comment.
Africa, Middle East.
Yeah.
Okay.
Sorry, I'm talking about 19, page 19, Africa, Mediterranean, and Western Asia. With that, Rene, I turn over to you.
Thanks, Dominic. Let me go on slide 21. Just quickly, the highlights. Adjusted earnings per share go up 4%. The adjusted, as you know, we take the AOR out. In previous, in prior year, 2024, we had a EUR 65 million provision release in discontinued operations, which is really also is a purely one of which we've taken out. That leads to a 4% increase. Free cash flow, EUR 2.1 billion. We come later to that, why is this slightly going down? Cash conversion at 45%, which we said was the target for 2025. We've in the latest capital markets, so we've moved this to 50%. But I think with that number, we are on track. ROIC, 10 point, 1.4 at record level, as Dominic said.
That tells you a little bit that we manage the company very in a very disciplined way. Leverage at 1.2, no surprises, below our midterm target. Capital allocation, we said it, shareholder return went up 10% and will also further go up in 2026 because we set progressive dividend, plus we have the last tranche of the share buyback, so that will go up further. Asmenta Tamaran joint is closed, and Maas we have signed, so that's just a repetition. Let's go to the next slide. The P&L, until RCO, we have discussed. AOR is EUR 170 million better than last year, but still, you know, we have some impairments, some restructuring costs in the EUR 264 million.
As you, we have outlined in the Capital Markets today, we have, let's say, European master plan also, you know, and this needs to be prepared. There, there you have numbers in for restructuring and impairment, but the good thing is it's lower than in 2024. Financial result, I think, very, very, very low for the size of the company, EUR 193 million. I guess it's best-in-class number. Income taxes go slightly up, you see it, our profits go up, so we have to pay taxes. Net result from discontinued operations, that's the -EUR 80. What I said, there's a EUR 65 million in last year, so de facto, it's nearly flat. Then non-controlling interest, you see, is EUR 190 million. That goes EUR 50 million up. Why is this?
Because in Africa, we have countries where we don't own 100%, like Morocco or Egypt. Here, the minorities go out. We come to a reported group share profit of EUR 1.94 billion, which is EUR 160 million up. If you take the one-offs out, let's say AOR and the big provision release, we go up by EUR 0.50 per share, which is, I think, a very good result. If you go to the next slide, to the free cash flow, you see that here, EUR 2.1 billion, EUR 60 million lower. Two major, let's say, items. You see the CapEx goes up by EUR 80 million. Dominic alluded to that. We have here already some money in Q4 for Padeswood, which is good.
Yeah, we are building something that's very good, you know that we get here also support from the U.K. government. Another line is here, non-cash items and other. You see here, minus EUR 152, this is due to the fact that we have some cash out from provisions. Yeah, last for the restructuring last year, we have built up the provision, this year we have paid it out. Yeah, that's for restructuring. There's some obviously some bonuses if the company does record result, there's one-to-one-off payments for some litigations. There's nothing, you know, we have very good transparency here. Obviously, there's nothing of concern, and you have seen the Thai project. We, instead of EUR 250 million, we have delivered EUR 380.
That comes obviously with some cost, but, you know, we should see some relief here because the big things have been done. If you go to the next slide, net debt development, you see net debt is going up EUR 400 million leverage, I say 1.2-1.2. That's flat. How did we use the free cash flow? Net gross CapEx of EUR 1.1 billion, which was the biggest one was, giant investment, the Tamala. That's roughly EUR 8, EUR 900 million of this, or EUR 800 million of this. Dividends, we have increased, minorities, also share buyback EUR 400, so EUR 1.1 billion share return, which is +10%. Then some other investors releasing liabilities in there, which we have every year.
I think very solid number, EUR 5.7 billion for the company, comes to a leverage of 1.2. If we then come to the next slide, the earnings per share over a longer period. That moves up 12%. I guess it's a remarkable number. Obviously, the plan for 2026 is that this moves further up. The ROIC now at 10.4%. I alluded to that. It's a record number. RCO up, tax rate better, invested capital well managed. All three dimensions very well managed, leading to that number. Dominic, I hand over to you for the outlook.
Thanks, Rene. Let me go through the outlook before we come to your questions. Let's go from left to right. Overall, North America, positive outlook, as we have good, both good volumes and also pricing expectations for North America. Of course, residential is gonna continue to stay a little bit soft, but I think, you know, data centers, but also, you know, the real estate sector is coming back when it comes to the commercial real estate sector. Overall, I think a quite positive outlook for North America. Africa, Mediterranean and Western Asia, same thing. We kept it short, intact, organic growth, good management performance on pricing and costs should lead to another good year out of AMBA.
Europe, I think overall, continues to be strong, especially in Eastern and Southern Europe. I also do see some light at the end of the tunnel now for this home market here in Germany, and also our Northern European market, which is very important for us, that it comes back. Hopefully the same will then happen eventually in Benelux, France, and the U.K. Pricing, we have deliberately not put on the slide here in Europe because, you know, this is very competitive sensitive. That's why we are staying here very diligent when it comes to competition. Asia Pacific, I think good market momentum in Australia, as you heard from Rene, positive development in India, especially on the volume side.
Hopefully Thailand will recover after the election now has been done, was very quiet. I think this is should lead to a stable government. Indonesia and China will remain probably a little bit challenging as they are trying to find their foothold in the new setup both in China and in Indonesia. That's the picture for us, and that then turns into a positive guidance. We are confident on RCO. We'll grow our RCO between 3.4%-3.75%. As you know, from other materials, both cautious and a larger range at the beginning of the year, and then we'll continue to go through 2026. ROIC, we are confident that we can deliver again above 10%.
CO2 emissions should see a further slight reduction on the back of a global leadership already. CapEx, as Rene was alluding to, slightly higher than in 2025 for the reasons he gave. Leverage should gonna stay around 1.5 times in line with our midterm targets. That's it from our side, and then we'll get to your questions.
Thank you. Operator, can you start the Q&A process, please?
Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star 1 on your telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star 2. Questioners on the phone are requested to stay in the loudspeaker mode while asking a question. Anyone with a question may press star 1 at this time.
Okay, we have quite a few people on the line. Please, as always, restrict your questions to 2 at a time, if you will. We start with Benjamin Rada Martin from Goldman Sachs.
Hi, good afternoon.
Hey, Ben.
Dominic and Rene, thanks very much for the questions today. My first was just on the 2026 EBIT guidance. I wonder, can you talk through some of your assumptions when it comes to scope and FX? I noted, you know, you're talking about a better M&A year in 2026 versus 2025, just so we understand what's driven by those two buckets, and I guess what's organic. Then the second question would just be on the European ETS. I know we've seen, you know, a lot of uncertainty in the last few weeks, a range of outcomes.
I'd be interested in, I guess, how you internally see the outcomes that are on the table, and I guess if you're looking to incorporate any flexibility into your European cement planning at all, just when it comes to, you know, clinker rationalization , any investment. I know there's a lot of things being thrown up at the moment, but it'd be valuable to touch on that topic. Thank you.
Good. That, let me take the first one, and I'll do the second one, okay?
Hi, Ben. It's a deja vu here for me now. We had the same first question, I think, last year when we talked about our guidance. Although, guys, just for transparency, our guidance includes a EUR three-digit million negative FX impact, which is roughly 3%. The rest, you can do the math. If we add up organic and scope, we are coming to a growth of roughly 8%, which is fully in line what we told you at the capital markets there. The scope piece of this is probably rather on the 1% to 2%, 1.5% to 2% range. That tells you something. As Dominic said it, let's see how it comes through the year.
I think an 8% growth, not considering FX, is a very, very reasonable number. Maybe there's something in it. If it gets better, we have upside here on the fixed side. If you look at the rates, maybe there's something. In the scope side, Dominic said it, we wanna grow. MAF is obviously not included in that guidance, for example. I think there is some room if everything goes well.
Okay, Rene, thanks a lot. Ben, on the ETS, you know, you know, we are not, we are not the markets, but I can tell you, I'm shaking my head a little bit. I think, this I really don't, I really don't understand, quite frankly, what's going on there. Because for us, you know, to your point, the EU ETS system has been there for 20 years. Do you really believe that's gonna get scrapped? Forget it. It's, it's never gonna happen. Are they gonna make some adjustments? Maybe. Guys, you know, just remember, for Heidelberg, you ask about flexibility. Guys, we are daily able to shift between the different gears, and we have proven this, for many years now.
I think it's clear, to be specific to your point, rationalization of capacity will absolutely continue because we, you know, with or without CO2, we want to be the cost leader, especially in Europe, but also in other parts of the world. You can put the CO2 thing on top, and that may create even more dynamics. In the end, clear, the rationalization will continue. On the investment side, the general part of the investments, also the traditional decarbonization, will absolutely continue, obviously in line with returns. You know, if we have a decarbonization investment that depends on a CO2 price of EUR 100, and we don't have that CO2 price right now in sight, we hold off with that investment. That's nothing new for us. That's normal day-to-day business.
The same is true for CCS. You know, we always said we only FID these projects if there is a superior business case. If the government is spread some uncertainty, we just sit on our hands and wait until the framework is in a way that we can use it. That was the fact in Brevik, and that was the fact in Padeswood. That's why we've done those two. Guess why we have nothing done in Europe yet? Maybe there is not enough stability in the framework and not enough funding from either Europe or the national governments, we do not move. That's also why we said in the capital markets, "Don't get so excited," in last year in May. We are the clear CCS leader, CCUS leader.
We are gonna be that for the next five years. There is no rush for us to go into anything crazy. We are gonna stay financially disciplined. I really don't understand all this noise. For me, that's, I have to smile a little bit. Sorry.
Very clear. Thanks very much.
Okay.
Thanks, Ben. The next question comes from Luis Prieto from Kepler Cheuvreux.
Luis.
Luis, hello.
Hello, hello, guys. Thanks a lot for taking my questions, two from me today. The first one is how have price increases started this year in the context of declining CO2 allowances? Also regarding this, when do we know more about benchmarks and how the industry is suffering or not from the lower allowances? The second one is surpassing the EUR 500 million Transformation Accelerator savings target to an extent included in your current guidance range that you just commented on?
Okay, Luis. Let's Rene take the last one, and I'll take the first two ones. On the price increases, guys, again, calm down. There is no change to what we have told you before. Price increases get implemented across the world. That's also true for Europe. Obviously, as I said, you know, given the winter set up in Q4 and Q1, there's always, there may be some delay as the business is just not moving at this point. But there is no change in terms of what we want to achieve in terms of pricing, both in Europe and in the US and in other parts of the world. When it comes to the benchmark, Luis, we are not the European Commission or the EU Parliament.
You know the timeline around this. They are trying to get their arms around this in this quarter or at the latest, next quarter, and they will publish a benchmark. There are thousands of rumors around what the benchmark figure will be. Personally, and this is my personal opinion, don't quote me on this, I do not believe that the benchmark is gonna be tightened to the very limits. It's gonna be somewhere in the middle between where we are now and where it the the big speculation was in the past. I foresee that there may be some relief on the, on the benchmark versus the very extreme approach that was maybe discussed half a year or a year ago. It's.
Sorry, that's the normal review process that happens every year. Now everybody gets so excited about it. I don't know what's going on. Every couple of years, you have this review cycle. Then they play around with the benchmark, and they do a little bit here and there. That doesn't change anything fundamentally, guys. Then that's where we sit on the benchmark discussion.
Luis, regarding TIE, just one in advance. Although, you see our TIE numbers clearly in TIE savings in our P&L. We have reduced our fixed cost this year by EUR 40 million reported, even though we have EUR 40 million negative inventory. Like for like EUR 80 million reduction. That tells you that we see the net effect of the TIE in our numbers. That's number one. Number two, to your question, do we have more than EUR 500 in our guidance? I would say, obviously there is a big part in the guidance, but as we have written it on the slide, maybe there's some upside in that number also.
Excellent. Thank you.
Great. Next one comes from Elodie Rall from J.P. Morgan.
Elodie, hello.
Hello.
Hi, good afternoon. Thanks for taking my question, sir. My two questions would be, first of all, going back to European cement prices. I just wondered if you could just tell us if the discussions that have taken place or started to taken place on the EU ETS has impacted the outlook at all for you, for European cement prices, and in particular, the price cost spread that you do expect to generate this year and next year, if there's any change to that, in your view, and if a lower carbon price also impacts that? Second, on your guidance, it'd be helpful if you can help us understand, you know, what takes you to the lower and higher end of the, of the range in term of pricing, volume, or other assumptions that you've made there. Thanks very much.
Thanks, Elodie. To your first question, no, and no. No change, and we are, we are fully on track and also, no, whether there will be an impact to price over cost, from my perspective, no. Clear target will be again, to deliver a positive price over cost scenario, for 2026. In both cases, no, which means yes, in the end, no?
Okay,
Okay, regarding the guidance, Elodie, also, first of all, as a lower end, obviously, Dominic said it. I think we, and you see it on the slide. We have assumed volume recovery in a few of our areas, and we are sitting here last year. I said it also for Europe, volume recovery for the rest, and it didn't happen, but we still delivered the result. If the volume recovery does not happen, maybe we come to the lower end of the guidance. Yeah. If everything goes to plan, yeah, we can be probably a little bit better than the midpoint of the guidance. It's early in the year. I said it. We have some maybe TIE upside. There's, I think maybe something, there's scope, maybe something.
This can lead us probably to the upper end, to the guidance. I hope that's enough.
Elodie, you see, my team gets completely nervous with my no, and yes. Just to be very clear, you know, you asked whether there is any change on the pricing target and the pricing implementation, no. Whether there is any negative impact on the price over cost dynamics, no. That's why I said yes, because both goes in the right direction in pricing and also in price over cost, just to be clear about it, no?
That's very clear.
Thanks, Elodie. Next in line is Pujarini Ghosh from Bernstein.
Hi, Puchali.
Hi. Hey, thanks for taking my questions. One question is on the margin expectation for that's baked into your guidance for 2026. Could you provide a little bit of color around, you know, what range of margin expansion you're expecting, given, you know, the very strong margin expansion we saw last year? How this splits into maybe the TIE synergies, price, cost, operating leverage or deleverage, and anything else. Could there be some regional differences? I think my second question is around, again, going back to the ETS discussion, you know, you've already invested in Brevik, and you've started investing in Padeswood as well.
Last year at the CMD, you gave a very good, you know, explanation of the excellent profitability and returns from Prevezag. Supposing, you know, hypothetical prices collapse, then could you provide of, you know, your returns or, from these plants, to, like, every inch in the carbon prices?
Okay, Rene, maybe you want to start with the margins, with the margin question first, and then I'll help a little bit with the EU ETS, and maybe Rene can also add, with the financial.
That's a, that's a very detailed here margin question. I have to say, I'll give you a high level what should happen, obviously, what we said as well in the capital markets day. For Europe, our margins should move further up. You know, we do the, let's say, the plant optimization, the pricing should be reasonable, and if volumes come back a little bit, that is all obviously contributing to our margin, and you see this also in 25. That works and should go further up. We go to North America. You see, we have in cement, you have seen the number went slightly down in 25. That should obviously recover because the cement price increase in the US should be more pronounced than we had it in 25.
Also, on the cost side, the U.S. colleagues have a good, very good, cost target. In aggregate, you know, there should be decent pricing also. Margins in the U.S. should move further up. You know, in Asia or in APAC, the margins are already pretty at the bottom. That depends on a little bit what does pricing do, because cost management is very good. Let's see how that moves in APAC. For sure, Australia margins have to go up due to good cost and good pricing. For AMVA, you know, margin is already at 30%, let's see how we move there. Overall, the sentiment here is also good.
Overall, we should see the group margin obviously going up with all the measures we are taking.
... Thanks, Pujarini. The next question comes from Tom Zhang from.
Hold on.
sorry.
Yes.
Yes.
On the AOACS, you know, first of all, there is no sign whatsoever that the demand for our evoBuild carbon capture or evoBuild or evoZero products is collapsing or even the prices carbon is collapsing. Absolutely not. There is no impact whatsoever. Just to be very clear, and I think that answers then also the question, what's your hypothetical approach for us? That hypothesis is not one that we follow at all, and as you know, just as a general remark, our equity in Brevik is very limited. If you try to get to the downside protection, forget it. It's meaningless. That's always what we said.
You know, it needs to be a very, very profitable business case, and our skin in the game is not zero, but it is very, very small and reasonable. That's both true for Brevik and Padeswood. There is no impact for us on, on, in, on from that end.
The only, if I may add, we discussed it intensively, obviously, although if the price really drops to EUR 30 or EUR 50, you know, the only thing what we will do then is there will be a very hard review of all the CapEx projects we are doing. New CapEx projects, which are purely based on CO2 prices, will obviously have it very difficult to get approved because the business case just doesn't work. If at all this happens, then you should see an improvement in our cash flow because the CapEx spending will somehow go down. Yeah, that's a really because for the big projects, we will then put the brakes on and we said it today morning in the press conference also, uncertainty politically in the political environment is not helping, that Heidelberg is speeding up investments.
that's very clear, and if at all, our cash flow would go up.
Thank you. Very clear. Tom Zhang from Barclays.
Hey, Tom.
Tom, hello.
Hi, guys. Thanks for the opportunity. Maybe following on from your point around cash, actually, my first question was just, you know, you just about hit the cash conversion target for above 45% this year. I understand there was quite a lot of restructuring cash outs. Could you maybe talk about the phasing of that? Has the cash outs or restructuring, are we past the peak of that? Should that come off in 2026 now that the bulk of Transformation Accelerator is done? Do you have a view around, you know, can we get above 45% cash flow conversion next year, even though CapEx is going higher? Then the second question is just on your shareholder return policy.
I suppose you talked quite a lot about M&A as a use for excess capital. With a pullback in your share pricing, does that create an opportunity, I suppose to either pull forward the third tranche, extend the third tranche? Yeah, I would be curious of your thoughts on that side. Thank you.
Okay. Hi, Tom, thanks for the 2 questions. As a first, let's do the shareholder return policy question. You know, we will start the 3rd tranche after the AGM, as we have done the 2nd one, well, as we have done in 2025, there's no change. If you do the math, you know, we announced EUR 1.2 billion for that program, the 3rd tranche will be the biggest. That improves, let's say, moves the share buyback already up in 2026.
That's an important point, I think it's overlooked a little bit, because if we are gonna stick to the EUR 1.2 billion, and then you can do the math, and you can calculate that the last tranche is deliberately the biggest. In that respect, I think, I'm not sure everybody got that.
It will be EUR 450 million, the third tranche this year. That is a good increase. As we said, it also, from a dividend perspective, we said progressive, that means it will go up. You see, we'll see a nicely increased shareholder return also in 2026. For now, you know, no change to our return policy. We increased it. We will increase it in 2026, let's see how the year goes, what we then do the year after. In terms of free cash flow and there's some noise, and cash conversion, yes, we reached the 45%. Coming to your question about restructuring and cash out, as I would say, we should be near the, we should have seen the peak.
Yeah? The number in 2026 should be lower, materially lower than we have seen in 2025, which should help obviously at the on the cash conversion. We, as we said it, we wanna come closer to the 50%, but also we do CCUS Padeswood in 2026. You see it in our CapEx numbers, we always stay below our guidance. That is a little bit the thing in the CapEx guidance this year, we have EUR 1.2-EUR 1.3. If we will be below the EUR 1.3, which we've announced at the capital markets today, there's as well room for the cash conversion.
I think we are on track, Tom, and there's the big one of this restructuring cost this year, so we should be okay in 2026.
Thanks, Tom. The next in line is Ephrem Ravi from Citigroup.
Ephraim.
Ephraim?
Hi. Hi, guys. Two quick questions. Firstly, on M&A, you say the pipeline is very full, and you seem genuinely excited about it. Just to get to that 1.5x net debt to EBITDA, you're talking about, you know, probably about EUR 3.5 billion.
... cash headroom for acquisitions, and you've already spent about EUR 1.3 billion on Maas Group. Are we looking more like EUR 2.2 billion-EUR 2.3 billion sort of scale of acquisitions, or are you also looking at, you know, acquisitions that may require issuing equity? Just in terms of the scale of M&A that you're looking at. Second question, on your digital investments, and obviously, Command Alkon and those. A lot of the software companies or legacy software companies in the market have seen their share prices halve or more because AI is going to basically replicate all of that. Do you think you've got the right suit of digital tools for the AI world rather than sort of the legacy, you know, software world in terms of your digital strategy? Thank you.
Ephrem, thanks a lot for your question. On the very first one, zero equity raise on for M&A. Just to be very clear, if there's any speculation on your end, sorry, guys, no equity raise for acquisitions. We never indicated that, and that's clearly off the table, just to be very clear. Rene, you want to make and then I'll say something on the digital side.
Ephrem, also, the math, I need to understand, because you said this capacity of, what, EUR 3.5 billion or something. Our free cash flow is, let's pick a number, what we have this year, EUR 2.1 billion, and then we pay, or let's say, EUR 1.1 million-EUR 1.2 million shareholder return, dividends and share buyback, then there's EUR 1 billion left. If I want to move the leverage 0.3 up, there's another EUR 1.3 billion to come, so there's EUR 2.4 billion left for M&A. If I do that math, if I want to come to the net debt to EBITDA target, yes, there will be some EBITDA contribution also. The math number, I need to correct. You said EUR 1.3 billion.
It's 1.6, 1.7 billion AUD, which is EUR 950 million. Yeah, that's the math number. As Dominic said it, you know, we have more capacity to do that. If we spent EUR 1 billion, then the leverage would be still below 1.4. I did the math just right now, you know, the 1.5 is not our midterm target, you know. We can be maybe 1.6, or we can be 1.2. That's our midterm target, which we will keep. It's very clear we want to grow further, and there will be more M&A to come.
Okay. On the digital investments, Ephrem, I think you're right, from my perspective, and you see what the capital market have done in the last couple of weeks on the software side of things. Rest assured, we've taken diligent reviews on exactly that point. I think from our seats, it's clear that the software world will split a little bit, with all that AI discussion into, I would say, the general software companies and those who are deeply intertwined with the workflow end to end, with your customers. Those will rather profit from this whole discussion because we have a vast acceleration of product development and a much higher productivity in terms of coding.
The costs will lower, the time to market will be quicker, and you get a very sticky connection in the workflow. We have done this review also together with our partner, Thoma Bravo, and we have no reason to believe that Command Alkon gets any hit from this. It's probably rather the opposite.
Thank you.
Yeah.
The next question comes from Cedar Ekblom, from Morgan Stanley.
Hey, Cedar.
Cedar, hi.
Hello. Hi. 2 questions from me. Can you talk about the North American business? We've now had 4 quarters of consecutive negative organic top-line growth, and if I'm assuming that you had a little bit of positive pricing momentum in the 4th quarter, you're looking at sort of high single-digit volume declines across all product categories in North America. I'd like to get a sense of how we should be thinking about the development in this very important market for you in 2026. Are we actually seeing growth yet at a top-line perspective? Secondly, on the M&A, we've obviously debated a lot about the scope for M&A, which sounds very material. It sounds like you guys are really bullish on the growth opportunities. Can you just remind us about how we're thinking around sort of priorities, regionally, products, et cetera?
That'd be helpful. Thank you.
Yeah, Cedar, thanks a lot. Let me take those two questions, and then you jump in, if you want, on both. North America top line growth, you're right. Top line was sluggish in North America for a while. I don't think we are on our own. I think that tells you that the market, especially on the volume side, has not been our friend over the last couple of years, I would even say. I think the other point is that, you know, cost management has been good, but it needs to be super good because inflation, underlying inflation in North America is still fairly high. I think there you have that one element.
The relief on the energy cost side in North America, you don't get as much as in other parts of the world. Last but not least, when it comes to pricing, I think it differs quite market by market, quarter by quarter, and business line by business line. As I indicated earlier, if you look to the last couple of quarters, we are not entirely happy with the development on the cement side. I think there was some import pressure historically that I think has balanced out a little bit under the whole tariff discussion. We are more optimistic for pricing in cement in the U.S. That's what you saw in the guidance.
Obviously, anyway, for aggregates pricing performance was actually good. We are. That's the picture from our side, Cedar. You want to add to that?
Cedar, just, you made the comment, high single-digit, volume reduction. That is absolutely not correct.
In cement, it's even close to flat. In aggregate, it's low, low single digit. Although that's not correct, I just want to say this because if you look at also the competition, and we went through the transcripts, like for like, you know, we are the only one which is really better than everyone else is Martin. Okay, fair enough. We don't need to hide from the other ones because from a volume perspective, we are not, we are on par with the other ones.
So, and then-
Sorry, before we go on to M&A, so in the Q4, you had -3.6% like for like negative organic at the top line. If volumes are sort of flattish, that.
It was driven by ready mix.
Yeah. Okay, fine.
That was driven by ready mix.
Fine. We don't have to be worried about pricing trends in cement or pricing in aggregate.
No.
Quite comfortable with those pictures?
No.
Okay, fine.
Exactly. The biggest drop was in ready-mix, Cedar. Cement and agg is okay.
Okay, great. Thank you. On M&A, some color on targets.
Yeah.
Priorities, et cetera.
M&A, I mean, first of all, we're going to stick to the core markets that we have announced and that you know very well. We're going to tighten the net. We're going to stick to the business lines that you know, no endeavor into any other stuff like light sides or anything. We're going to stick to the heavy upstream, downstream, that we've always done. From a geographic perspective, as you saw on the earlier map, all our core markets are on the radar screen and in the pipeline. That's true for North America, it's true for Africa, it's true for Asia, it's true for Australia, and it's true for Europe. No exclusion from there.
From there, it's an opportunity-driven game. Wherever we have the best opportunity, we will jump, but all pipelines are being filled and compete against each other.
Thank you, Cedar.
Thanks so much. Thank you.
Thank you.
Next question comes from Julian Radlinger from UBS.
Hey, Julian. Julian.
Thanks very much, guys. Hey. Two for me as well. First of all, in Europe, the European margins in Q4 were really strong, especially in cement. Can you talk about what drove that? In Q3, I remember you had a EUR 10 million-EUR 15 million inventory phasing related one-off. Has that reversed now? Is that effect in there? Is there anything else that's kind of one-off, like CO2 allowance sales or anything like that? Is it a result of the Transformation Program? What drove that strength in Europe, organic EBIT in Q4? Second question, just to come back to the M&A once more, please. You said in the opening remarks that you expect more M&A in 2026 than in 2025 based on your pipeline.
Not that you've factored into the guidance, but based on what you're seeing. In 2025, you had EUR 113 million EBIT contribution on, well, yeah, EUR 113 million EBIT contribution. Does that mean your, based on your pipeline, you think you could possibly surpass that number in 2026? In that context, can you remind us, please, what the multiples were on average that you paid in 2025 and what you would expect for 2026? Thank you.
Okay, I'll have a quiet afternoon for a second. Rene, maybe you start with the Europe Q4, and are there any one-offs or anything?
Okay, Julian. As Europe Q4, I said clearly in the Q3 call, everybody was disappointed of Q3 margins, that I said, "Guys, calm down, it will move into Q4." Some phasing effects, which we have now, the positives in Q4, there's no one-off of CO2 sales or whatever. You know, why should we sell off our valuable certificates? No, we don't. Other the good thing out of Europe in Q4 was there was good pricing and very good cost management. That's in simple terms, that is the answer, it came out what we said, margins in Q4 will be good, and they were good. Number 2.
This is an important point, just to add what Rene was saying. This is TIE, this is, you know, the plant adjustments, the capacity adjustments, the FTE reductions. We always said we are gonna focus this on Europe, and you see clearly, by the way, you know, our year-over-year global fixed cost has come down in absolute terms like for like. I think that is really very strong and a good contribution, a strong contribution came from Europe, and you should expect more as we go along because we are probably going to even accelerate the second wave of the master plan in Europe. We are on it, and I can tell you there is more to come when it comes to margin expansion in Europe.
When we come talk about M&A, I don't know where you have the numbers from. On slide 30, they are the numbers. Scope for 2025 on EBIT RCO level/RCO was EUR 65 million, on EBITDA, EUR 115 or EUR 113. In the original, at the beginning, I said our guidance includes 1.5%-2% RCO scope, which you can do the numbers, it's probably between EUR 50 million and EUR 60 million. You know, additional scope is dependent on when do we close the acquisition. You know, the Maas acquisition is announced, that's great, but it's not in my hands when we get the regulator approval. That depends a little bit.
To put now some estimations, I'm reluctant to do because it's not in my hands. We have something in the guidance, if we do more M&A and the closing is at the right time, there will be more in there, but I can't tell you how much.
... Maybe to your multiples, you know, just a general market, we just closed the multiple in on Maas Group, and I think it's clear we are going to stay very disciplined on the M&A side. We are not going to do a 16x, 20x, whatever time multiple after synergies. That's crazy, guys. We are, you know, so you saw the math, it's just above 8x for after synergies margins returns. I think that's clearly the ballpark that we are using to commit or to stick in the framework that we have committed.
Because, you know, if you go outside of this to make, eventually, returns on M&A in our industry will be very difficult. That's why we're gonna stay very focused, to stay in that ballpark, yeah.
All right. Thanks a lot, guys.
Okay. Thanks, Julian. Thanks. Next one from Arnaud Lehmann, from Bank of America.
Arnaud.
Arnaud, hello.
Hello. Thank you very much, and good afternoon. My first question is about Europe, please. You mentioned your positive outlook for pricing and the fact that price increase are getting implemented. On the other side of that, is there any cost inflation to consider? We know that French electricity costs could go up. Are there any other cost factor that we need to account for, or do you expect the price increase to flow through in the bottom line? That's my first question. My second question is coming back on your acquisition strategy. I appreciate you've made some comments, but looking at the business historically, it was US.
We know you at one point, maybe you wanted to do a larger deal that did not happen. The more recent past, you've clearly focused M&A on, you've done smaller deals in Morocco, Indonesia, Australia. I think there was press articles about Turkey recently. Appreciate you've done Giatec as well in the U.S., so it's still on the list. What has changed in your M&A mindset to justify this, let's say, geographic diversification in your M&A strategy? Thank you.
Yeah, I'll do the second one and let René do the first one on pricing.
Hello, hello, Arnaud. Regarding Europe, you were asking about cost. Yes, you are right. For France, the oven electricity support, let's say, is not as cheap, as cheap anymore. That is gone, and now that hits us with additional cost. That is correct and no news. You ask about other costs. Obviously, there is certain inflation on salaries. It's clear there is salary increases for our employees in every country, which is probably, or what it would truly be, it's probably 2-3%, wage increases. That's probably the big, let's say, cost movements. On the other side, you, Dominic said it also, our wave two of our European spend plan optimization, let's say, is coming into play.
We will have the TIE full effect on the cost side also, and then we have the price increases. As we said it, the price of our cost for Europe should be okay and positive, overall, energy should be roughly flat. Obviously, January, February now was expensive because it was so cold, but the summer will come off again. Overall, for Europe, price of our cost should be good and margin should improve.
Arnaud, on the acquisition side, just to sit back, sorry to correct you a little bit, I can't see that we've lost the focus on U.S. We've done a giant, massive, big acquisition in the Southeast. We've done BURNCO, the assets of BURNCO in the Northwest. That we've, that we are not executing on North American acquisitions, I cannot follow. It's not like it's U.S., U.S., and U.S. only. Sorry, we are a global company, we can also create good or even better returns in other parts of the world, that's why we look at a global picture, that's why you also see, you know, acquisitions in Africa.
That's why you see acquisitions in Australia, and that's why you see also acquisitions in Asia and acquisitions in Europe. We always said in our core markets, and obviously there's not only U.S., U.S., U.S. I think to be fair, also, the U.S. market is challenging in acquisitions. It's very costly, and again, with the rigidity of our financial framework, we want to create the returns. That doesn't mean that we do anything in the U.S., guys. Very clearly, we are very, very focused, and we look at everything that moves in the U.S. market. We are very diligent about does it fit to our financial framework? You should see acquisitions in North America down the road, absolutely.
You should also see acquisitions in other parts of the world, as they complement our existing footprint, existing markets, drive good synergies, improve the market position, and with that, give us further growth potential organically and obviously, margin potential when it comes to better synergies.
Thank you so much.
Right. Thanks, Arnaud. The second to last question now comes from Harry Dow from Rothschild & Co Redburn.
Harry. Harry, hello.
Hello. Yeah, afternoon, everybody. Thanks for taking my questions. Just two from me. Firstly, maybe if we just hone a bit back on Europe and recovery and kind of volumes and those comments. I was wondering if you could just give us some more color on what you're seeing on the ground. I think the like-for-like in Q4, I think it was -2% at the top line. I suppose it's not signaling any great improvement as of yet, but you sound like you've got quite a lot of confidence. I suppose that things are turning a corner, so maybe just in some of the core countries, it'd be great to hear sort of views on what you're seeing at the start of 2026. Secondly, just around the comments on changing of clinker ratios and alternative fuels.
I think obviously that's seen as through the great lens of reducing carbon per ton and overall. I wonder whether you could comment also on maybe some of the economic benefits of that. I don't know how much some of those lower sort of fossil fuels and lower clinker ratios actually reduce costs, boost margins, in your view, and maybe where regionally you see the most opportunity on that. I know the U.S. starts from a higher base, but maybe there's more pushback from customers. Anything on the economics of those changes? Thanks.
Yeah. Good question, Harry. Let me just answer both and then Rene chips in if he wants. On the volume side in Europe, I think, you know, I think let's go country by country or let's say region by region, a little bit. Southern Europe, absolute intact, good volume developments expectation for 2026. Same is true for Eastern Europe. That's I think one part, one important part of Europe. We have, I would say Germany and Northern Europe. I indicated earlier, I think we do expect recovery in both parts of that part of Europe for 2026. I think the ones that are lagging a little bit behind are Benelux, France, and UK.
Let's wait and see how that volume develops in those markets. In general, don't forget in Europe also, Q4 and Q1 are always winter quarters. This time we had winter, you will see an interesting dynamic over the years now between the different quarters also in Europe, given the weather impact. Underlyingly, and that's importantly from a market perspective, I think we clearly see positive indications in some of our key markets that things are moving in the right direction. I said it earlier, I think in the Q4, for example, in Germany, we saw that the groundwork has really increased. Those companies who are working on the ground to lay infrastructure and everything, they have really a much better and more healthy order book and execute that order book.
That should also increase cement and concrete demand down the road. The early indicators, let alone the permits, that are going up on housing and everything, so I think there are some good indications for volume developments in Europe. Nothing is perfect over everywhere, but I think this is the color. On clinker incorporation, very interesting question that we have also internally, and I thank you for the question because I think it's important to clarify that again. Yes, we are the decarbonization leader, but we have combined this with superior financial performance guys, which tells you the clear message internally, which I'm happy to share with you. We are doing the decarbonization on equal or better footing financially.
If it's a worse footing, and for example, for whatever reason, the coal price would drop to minus where it's 10% or 20% cheaper, then we go for coal. Sorry, we are capital market-oriented company, and we don't throw money out the window. If there is an opportunity to make money, that sits within our strategy, but short term needs to be sacrificed for operational and financial performance, and then we have a clear mindset here to pull that advantage. There you see also how we play with this to make, to give, to create a full picture that you have seen here in the past hour or so.
Just if I, if I may add here, just you asked for the economics, no? As Dominic said it, alternative fuel, what does it do? Two things. In Europe, it is, well, overall, it saves everywhere CO2, but in Europe, there is a price behind CO2. We will save, in theory, that price, if you are short, you would save to use a part of a certificate, number one. Number two, if you replace fossil fuels, which are normally more expensive, with a cheaper thing, or even in some countries, we get a gate fee, so we will get paid to take alternative fuels. Yeah?
We have probably, we have a few plants in the group in Europe, where we have positive costs from fuel because alternative fuel is so high, and we get a nice gate fee. Also, I'll give you another example, also in emerging markets, give you Indonesia, the example, I think the alternative fuel we are using there is half the price of coal. They're not paying for CO2, fine, but we save 50% of the coal cost. This makes absolute sense to use alternative fuel to ramp it up. This is core DNA. We know what to do, and we can do it.
Clinker incorporation, it's even more pronounced because saving the percentage of clinker in incorporation saves between 8-10 kilo CO2 per ton, which is very valuable in the CO2 context, especially in Europe. Plus, using SCMs to replace the clinker is, let's say, the next cost advantage because the clinker burning is the most expensive part of the cement production process, and this you replace with a cheaper product. It makes all the sense of the world to hammer these two, let's say, KPIs like crazy, and which we have done. You see it's moving up, and we are number one in both of them, in of the big ones which publish. That's for the economics.
I think to build on what Rene has said, you know, clinker incorporation next to alternative fuel is a good indication of future structural profitability. Why? If you take out that costly capacity like we do in master plan wave 1 and 2, you build your cost position for the future because you get rid of both the most cost intensive, most maintenance intensive, and most CO2 emitting part of the... It's a Remy in all positive directions, and that's why we are so focused to be the leader here, not only in Europe, but globally. We do this in a very well-balanced decision by decision trade-off between CO2 impact and financial impact to the direct bottom line of the year.
I think that's, well understood, Harry.
Great. Yeah, thank you very much.
Thanks, Harry. We got time for one more question, that's coming from Yassine Touahri from On Field Investment Research.
Hey, Yassine.
Hi, can you hear me?
Yep.
Yeah. Thank you so much. My question, so I have 2. First of all, any early indications that cement price increases are sticking both the U.S. and Europe? In Europe, maybe are the mid-single-digit increases holding so far, and do you see them supporting margins through the year? Some of your U.S. peers have guided towards low-single-digit pricing growth in North America. Are you seeing similar trends? On the CO2 pricing outlook, so maybe through the 2 scenarios, what would it mean for the long-term CCS strategy and cash generation growth if CO2 prices were closer to EUR 30-40 per ton, as recently suggested by President Macron, versus the Europe, you know, the EUR 100 per ton assumption that was outlined at the Capital Markets Day? Thank you.
Hey, Yassine, thanks a lot for your question. Let me do the first and then Rene does the second. No early indication of any changes. As I said before, pricing and both in U.S. and Europe, are moving in the targeted direction. We are not looking left or right. We take our independent pricing decision both in North America, and we've indicated that we are clearly moving pricing ahead in all key areas and all product lines in North America, and the same is true for Europe. As you well know from the past discussions, we try to get out of the gate on a as early as even possible.
Obviously, with the winter, this may shift a little bit back and forth. Overall, there is no change to the original plan. We continue to execute on pricing as we really have a value before volume strategy, that has not changed.
For the second question, I guess we have answered it this already, but let's do it again. If the CO2 price goes to EUR 30, you know, there's no business case for CCUS plant. That's what Dominic and I said the same, the whole time. We do it only if there's a financially valid, good business case, and you can do the math by yourself, with EUR 30 CO2, there's no good business case. I think that answers the question.
Very good. Yassine, thanks.
Let's close this call. Thanks for your good questions. Just to remind everyone, we are going to be on the road, you know, together with management and on IR. Next week, we are going to go to the West Coast in the U.S. and to the East Coast. We're in London, Frankfurt and Paris with Rene, Dominic, we are in London again at the BNP conference, we also hit Vienna, Zurich, and Geneva. If you wanna see us, please, let us know. With that, have a nice day.
Hey, thanks for joining.
Thanks, everyone. Thank you.
Thank you.
Ladies and gentlemen, the conference is now over. You may now disconnect your lines. Goodbye.