Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining the Heidelberg Cement Second Quarter 2021 Results Call. Throughout today's recorded presentation, all participants will be in a listen only mode. The presentation will be followed by a question and answer session. And I would now like to turn the conference over to Christoph Fremenberg.
Please go ahead.
Thanks, operator. Good morning and good afternoon, everyone. Welcome to our Q2 results conference call. I'm very glad that you all joined us before the summer break. As usual, we have Laurence So Neger with us, our CFO, who is today a little bit challenged with his vocal cords.
So spoke a lot this morning. So please be patient with him later on. And Dominik van Aften, you've all seen our press release and the Q1 Q2, sorry, trading statement. And we will quickly go through the presentation and then are happy to take your questions after that. With that, Dominik, over to you.
Yes, everybody. Hello. Welcome from Heidelberg. I hope you're all Safe and well, and thanks so much for joining us for our call this afternoon. Our time early in the morning for the colleagues in the U.
S. So a warm welcome to all of you. I would suggest, as Chris mentioned, to go quickly through the key points And some of the key slides, and then we should open it up for your questions. I think that's the focus of this call. As you saw in our Press release and also in your presentation, Q2 was a good one.
Okay, fair enough. We went also against a little bit After Q2 last year, driven by the corona lockdowns, we came up with a revenue increase of almost 20%, EBITDA up more than 20% and operating EBIT more than 35%. And margin improved also 76 basis Points on an like for like basis against last year's Q2. 2nd very important point for us during the quarter was The sale of the West Coast business, you know that the set price is €2,300,000,000 The closing for that transaction is Expected for October 1 this year. We have communicated In our Beyond 2020 strategy, the famous waterfall that we've discussed with many of you intensively and the other point that we Very much focused on during the Capital Market Day last year that we said we want to focus on deliverable, we promise.
And here we go again. So we said after we have basically kept our CapEx Guidance is we have deleveraged. We had the BBB flat rating. We went back to a progressive dividend. We've done the disposal.
Now it's between gross M and A and Shareholder return and cash returns to our sorry, share buybacks to our Shareholders, and that's what we've announced last night. Why last night? The clear reason is we have a very strict path in regulation here in Germany, And we didn't want to run any risk on the legal side. That's why we went out last night immediately after The decision had been taken in our Board meeting yesterday. But for corona reasons, we need to always do midday This is Wes and Kevin sitting in Australia.
So that was the plain reason to do it That way, I'll come back to the share buyback program in a minute. On the back of the good performance Operationally, we also continued the significant deleveraging. Laurence will go through those details. And then very importantly for us, we also continue our leadership path on the decarbonization within our industry and obviously, more importantly, also within We have decided to join the UN Race to 0, a very prominent initiative globally. You know that we are running a lot of local initiatives.
We are also very On European level, but this really cuts across the globe, also running up to COP26 in Glasgow this year. So both the business ambition for a 1.5 degree and also the race to 0 has been done and embraced by us also in cooperation with SBCI. On the East, obviously, we've just done our quarterly management meetings for the last two and a half weeks. And coming out of that And in the end, it's also the share buyback is an indication for that. We have a strong confidence going forward for the remainder of 2021.
And that's also why we changed our guidance from slightly to strong increase on operating EBITDA Both EBITDA and EBIT basically for 2021. With that, I would turn the page, and you see the different buckets of the results. Revenue, and that was very important for us, Also, the revenue now comes back up because you know that over the past quarters, especially last year, we had a little bit of a revenue challenge with the drop in volumes. So we are now coming back up. We'll come back to that in a minute, how it looks on a longer term view.
But like for like, revenues up In the quarter, almost 20% in the first half, more than 10%. Operating EBITDA is like Up 25% in the first half and more than 20% in the second quarter. Operating EBITDA margin, important for us. As you know, we are chasing our targets from beyond 2020 Strategy, we further advanced to now 23.7% globally with a slight increase even in Q2, but a major step Forward in H1. Last but not least, operating EBIT jumps up more than 50% like for like In H1 and more than 35% like for The development, you see the volume development on the next page.
That is really very balanced across the different business lines. Obviously, Q2 being stronger than H1. Why? Because we had the lockdowns April, May last year, so the comp was a little bit different. Overall, I think an okay, if not good and very good development on the volume side in cement, in aggregates, in ready mix And also in Ashford and you see on the right side that this is really also being contributed from most of our markets.
In the U. S, we're good. Canada is coming back on the back of a high oil price. There's always two sides of the metal. So the Western Canadian business is strongly coming back.
Europe stays on high demand, especially in the U. K, where that's one of the markets where material is even short. In some small local markets, we have a very solid demand still in Germany. Also in other parts of Europe, France is okay demand wise, so is Italy. Then also for us, importantly, going to Northern Eastern Europe, Poland continues to be on a very good level.
So is Czech Republic, Romania a little bit weaker this year. Northern Europe continues to grow strong. So in that respect, good volume development across Europe. Then Asia Pacific, Very hard hit now by COVID. We just had a call with our global managers a couple of minutes ago.
For me, a little bit encouraging news now coming out of Indonesia. Apparently, the situation in Jakarta is coming down again a little bit. So that was very encouraging for me to hear. This is really an hour ago. So we are very close to the situation there in Asia because India is picking up again after a very, very difficult month.
Then it went through Indonesia, now a little bit in Australia, only in a Few pockets, thankfully. But also Bangladesh, Malaysia, Thailand, they are still fighting the COVID because the vaccination rates are not as high as In Europe or the U. S. Africa continues to grow strong. Good news for us is also that Egypt has now finally turned positive even For the first time for many, many quarters.
So in that respect, we actually go in the right direction there. African team performing on a very high level. Also Morocco coming back, important market for us. If you could turn the page to Page 5, you see the details For Q2, you see that the FX impact was around €30,000,000 to the negative side. That's the weakening U.
S. Dollar. And then you see the net volume development, very strong, almost EUR 300,000,000 EBITDA contribution on the volume side. And you see the negative price over cost. I'm sure we'll come to that discussion later on, And we'll probably then touch on the details on that.
I would assume that many of you will have a question around that, just Yes. It is one of the key focus points for us. So we are fully aligned on that. Overall, EBITDA, almost €1,200,000,000 I think that's, Laurence, the highest EBITDA ever in the Q2 for Heidelberg Cement. So I think that was in So it was quite okay from our perspective.
Then if you look at it from a half year perspective, more than almost €350,000,000 volume, the other price of It's still positive. So I think that looks on from an H1 perspective, pretty good. So almost SEK 1.8 €1,000,000,000 or clearly above €1,700,000,000 EBITDA for the first half. And then I already shared The language around Page 7, you see that the EBITDA growth is very well balanced. We discussed Visibly, the discussion, do we need 1 region, 5 regions, 10 regions, we feel quite comfortable and well balanced with our 5 areas.
So in that respect, all of them have contributed well to this good result. You see the number C. I don't think I have to go through all the details. I think that's a little bit fair. So the important is then for Slide 8.
To my earlier remark, very interesting to see that on a revenue perspective, we are It's really flat to the end of December. There is we went through a trough there for the last five quarters. And now we are basically just exactly on the end of 2019. But in the meantime, the structural profitability of the company has improved 16%. That's a lot, 16%.
And you see it on the right side how we, quarter over quarter, improved our margins. A total of 300 basis points, and we are now on a rolling last 12 months of 22%. Then obviously, very importantly and also driving that financial performance is the execution of the portfolio optimization 2 smaller deals on the right side, Greece aggregates and ready mix. Hopefully, this will close during the remainder of this Here, we are working hard on that. COVID has already been done.
And then, as I mentioned earlier, the sale of our West Coast business, dollars 2,300,000,000 And the closing of that should happen October 1 this year. And then maybe a couple of 2nd on the share buyback because it is the first time ever that Heidelberg Cement in its history went on a share buyback exercise. I know some of you had expected that. Others were very, very skeptical whether we would ever pull it off. We had yesterday in the board clearly decided unanimously to go for it and to go for it in a meaningful way, so up to EUR 1,000,000,000 In basically 3 tranches.
The first tranche will start during the month of August, then continue 4, 5, 6 months Down the road, you know that from a regulatory perspective, it's not for us to manage the details. We'll have a bank with us that executes that Program. The authorization for that program has already been granted by the AGM in on May 6 this year. And it's currently planned to hold the shares as treasury shares going forward. Obviously, we have the normal flexibility in those programs that are completely accustomed to many of these share buybacks Programs if the moon comes down.
With that, Laurence, I would hand it over to you. Okay.
Thank you, Dominik. Page 11, you see the key financial messages. On a like for like basis, we see a significant increase in earnings per share. It's Also, if we adjusted for the additional ordinary results previous year, the earnings per share Increased that by more than 70% to €3.06 year over year. We have excellent quality of earnings.
So this comes with a strong cash flow generation. Our last 12 months Free cash flow stands at a record €2,300,000,000 and this represents a cash conversion rate 56%. So 56% of our EBITDA hits the cash register. So that's a good Very good development. And this then, despite higher dividends, translates into solid deleveraging.
Our net debt goes down by €1,500,000,000 That's the 2nd year in a row. Over 2 years, we deleverage by record 3,000,000,000 Euro, right now, as a consequence of this, leverage comes down to a very comfortable level. Towards year end, we target to the lower end or below our guidance of 1.5 to 2 times EBITDA on Slide 12, you see the P and L. You can see that each and every position Improved. We have positive additional ordinary result.
This comes from a reversal Of past asset impairments related to the U. S. West disposal, we have significant improvement in financial results. This comes to a smaller part from lower interest expense and then it's this IFRS 37 effect On the valuation of long term provisions, that's a pure noncash item. So it's irrelevant for decision making.
Income taxes go up to €3.25 and this is due to swing in the floor taxes from an income in previous year To an expense in the current year also noncash item, net result from discontinued operations, That's our U. S. Asbestos obligations. This business also includes a lot of long term provisions. So here we have the same positive effect as in the financial results around €15,000,000 roughly.
Non controlling interest up to €69,000,000 because our Businesses in countries where we have minority shareholders develop very good. That's Indonesia, Thailand and Morocco, very good development. So this brings our group share of profit to 755 €1,000,000 are adjusted for AOR, €6,800,000 up from €3.56,000,000 previous year. So we see here That the good operation development dropped through the P and L to the bottom line. Slide 13, you can see the cash development.
As I said, cash conversion rate, 56%, Relatively small interest payments, relatively small tax payments. Very solid management in the working capital, Distributed CapEx, that brings us to a free cash flow of €2,300,000,000 And despite a significant increase in dividend, that then translates into a substantial reduction In the net debt position. Sorry for that. So If you go to Slide 14, you then can see the situation which led us to the decision to make share buyback. We have more or less achieved all financial targets with funded disposals.
We keep the CapEx below €1,200,000,000 We have delivered to the lower end of our range in the leverage. We have received the BBB flat rating, and we have come back to progressive Dividend after our little interruption in the COVID crisis. So we have enough funds To finance our growth, so we have excess cash, and that's what we put into shareholder return, €1,000,000,000 until In 2 years' time, as of September 2023, and the first tranche will be €300,000,000 to €350,000,000 starting right now after setting up the program and lasting through the end of the year or Maybe January. So that's it. So I say goodbye to you.
That's my last press conference. Having fulfilled all the targets which has been promised, The only what we lack is that my successor, Rene Haldor, has to issue a bond at 0 or negative interest. That's the only what I wanted still to do and didn't do because we have too much cash in. I thank you very much for your trust. And that's it from my side.
Game over. Thanks a lot. And I give it back to Dominik.
Okay, guys. You see him in good mood going into his retirement. So let's We'll continue with our business, and we will obviously do with the equal or if not more energy level. So on the ESG agenda, next page, Page 15, you see that we have also put a big focus on this And not just in terms of announcement, but especially really to get going on these topics. We've Pushed our Quarry Life award that's been around for quite a while to really work on biodiversity.
The 3 d printing has really caught a lot of attention, Not only from a design perspective, but also from a production perspective. Material elasticity is very interesting. So there are a lot of quite interesting aspects of this, and we will continue to push in that respect. Nicolas Kim will join us September 1, And that clearly will put additional know how and energy to the management board also to drive the agenda going forward. 1st, female On our management board since the beginning of Heidelberg Cement.
We will then push also our world's 1st carbon neutral cement plant in Zlite. I know that some of you have questions on the recent developments there. I'm more than To answer them. And then we have the publication of our sustainability report that we shared with all of you that gives you all the details of our ambitions. I think there in that respect, we still have some in terms of reporting, but that's something that Reni Adler and his team going into his job.
Together with Nicolas Kim, we'll very much focus on. Firstly, we believe as a team, we believe that there is still some step up that we can do also in In terms of transparency reporting, we have the taxonomy stuff coming. So in that respect, bear with us. We will take also a leadership role in that respect. Many of you have seen the announcement on the Green Deal Fit for 55 from the EU.
Personally, I think it's good that the program is now out. Now the negotiation starts. We think it has a couple of good elements in there. We were pleased to see that CBAM is a balancing tool to counterbalance the Desires reduction of free allocations. And from our perspective, it needs to be closely tied to that.
So what we will fight for is We cannot allow reduction of free allowances without a full implementation of the C band being in place because otherwise, The European and Continental Europeans fight for a transformation of the industry. They obviously need to get paid for that in order to Pay for the investments, and that means we need some sort of an adjustment that we cannot have a global Import scenario in that respect. So I think that's the whole logic about it. The second piece from our perspective is that also the efforts of carbon capture utilization, carbon capture So it needs to get credit in the EU credited in the EU ATS scheme. That's the second point.
The third point, I think good news on the innovation front. The EU have understood this does Money, we have always said that we are fighting for that support, obviously, with our own together with our own contribution. And what really is very important that these funds are also available on rather short notice. We have seen some instances where this has taken from our perspective A little too long. I think that we can still altogether do better.
In that respect, we will also fight for making these funds available fairly quickly. Those are a little bit the 3 trigger points that we will Push for in the next negotiation rounds. Overall, I think we've done a fairly okay job in educating also the politicians in the EU and And helping them to understand the challenges of the industry. You've seen that we have further advanced our leadership role on the Sustainability front, you know that we have worked very intensively on national and on EU level. And as I said, we have now also moved To the global level, by signing the UN FCC race to 0 campaign that we strongly endorse, together with the business ambition for 1.5 A degree.
Basically, the idea is to get carbon neutral by 2,050 at the latest. And you know that a little bit of the governing body is a science based Targets initiative. We have worked with them for a long time, but we have decided on the back of these announcements to further intensify the collaboration with them In order to make sure that you also, as our analysts, investors, do understand that our targets are real targets and that we are chasing them and that we are diligently chasing them and that we are also getting to them. So we are more than welcome we'll be more than welcome the combination In the core operation with SBTI. And then on the outlook, last but not least, The reason for the strong outlook for the remainder of the year It's basically centered around good demand in most of the markets.
You see here U. S, Canada, I mentioned earlier, U. K, strong demand. Also Germany still with very good demand, especially on the residential side, also infrastructure now. The first projects are coming in.
Poland continues to be good on a very high level, also driven by residential. Egypt, as I That is now coming back after the market stabilization with the government intervention. Indonesia It was a little bit shaky, but I'm encouraged by what I hear now from Christian Carla Gevaia. So I think we should see the demand coming During the second half at some point. Australia also, I'm hopeful that they get the selected lockdowns Behind them in Sydney and Adelaide and then the demand overall in Australia looks to be healthy.
And also Italy Already the 1st infrastructure money coming in and also residential demand picking up. So overall, the markets from our perspective Pretty much intact. And that's why we then also turned to our guidance and said, guys, we move from a slight Strong in terms of our increase of operating EBITDA and operating EBIT. We are we can do that with even lower CapEx than originally Got it. So we will stay below the €1,200,000,000 on our core CapEx, net of investments of divestments.
We will even go higher in our rig. So we are very confident to get clearly above the 8%. And as Laurence already said, The clear message is also on the leverage, we will get very much to the lower end of our original guidance, 1.5 to 2 by year end. So overall, from our perspective, the clear message, we are Confident on the development for the remainder of 2021. Are there headwinds?
Absolutely. We'll come to the energy costs In a second, during your questions, but we are absolutely confident that we can deliver on our guidance From today's perspective and that's with that, I would love to get to your questions and we'll try to give you the best answers.
Thanks, Dominique. Thanks, Laurence. Operator, please start the Q and A.
Ladies and gentlemen, at this time, we will begin the question and answer session.
Thank you. I see a lot of So in the queue, so in order to make that most efficient, can I please ask you as always to Restrict your questions to 2 at a time, and please do not embed 5 other questions as a sub question that would only prolong the process? We have over a dozen analysts in the line. So please stick to that. And The first question, I think, Paul, you haven't been the first for quite a while now.
So the first question comes from Paul Rodgers from BNP.
Yes. Thank you, Chris. That's very generous. Hope Ed wants well. Well, I guess the obvious question is on price cost.
You have that €66,000,000 negative in Q2. Clearly, there's more inflation coming. Can you give a view of what that That would look like in the second half if we assume that price and cost stay where they are today. And is the scope to announce a second price rise In either Europe or the U. S.
To compensate later this year?
Paul, thanks. That's a very short and precise question. So thanks a lot. I thought you'd appreciate that, Dominic.
Yes, yes, yes, absolutely.
Thanks so much. Hope you're well as well. So price of alcohols, obviously, that's Obvious question, so thanks for raising that. I assume that's on everybody's mind just as it is on our mind. I would break the answer into 3 elements, Paul.
For us, it's a fixed cost issue. It's a driver cost issue, and it's a price Increased issue, that's basically the component of these three elements. Now in the Q2 margin Development, you have to keep in mind, and that's also a little bit maybe you are surprised, it's a WFE development. Last year, taking WFE as an example, we had very suppressed fixed costs because obviously, we put Put our foot on the brake on everything that's sitting on the fixed cost side. We had then also some government Support in many countries, and that obviously lowered our fixed cost base quite substantially.
And that's something where we always said, Guys, That's going to come back. And now you have to look at the current volume development. That means guys need everybody on board to Use the volume. So I think it was also not for us the decision to say, oh, yes, we keep our capacity low and don't deliver the volumes to the market. That was not the option.
So for us, we had to bring some of the costs back, and we did not get the single need from last year. And the delta, obviously, This year in the Q2 over Q2 view, it is also fair to say variable costs, Paul, there is a steep increase in energy costs That is visible, and you heard this also from some of our competitors who have already released their results. There is a steep inflation on the energy cost side that is Driven by coal, pet coke, oil diesel, it's basically electricity on the back of A higher CO2 cost. So it's the perfect negative storm in that respect. And if you want to put something on top, it's the freight rates.
The freight price also are now on an 11 year high. So currently, as you see in many other supply chains, There is there seems to be a little bit crunch around all these things. And the normal relief that you get typically going into the summer, we do not Yes. We had the flooding event across Europe. We had a fairly cold scenario, both in the U.
S. And in Europe now. So there is it seems to be a perfect storm. I'll come back to the outlook in a minute. And then we have, obviously, the Price increase issue, very clear message from our side, Paul, to your questions.
We Have already gone for substantial second price increases in our key markets. Some of those you have mentioned, But not exclusively to those. Wherever possible, we go for second price increases. We know this is difficult for our customers. This has been historically not the case.
The industry was tuned towards one price increase. We had huge discussions Internally, already April, May around this. Personally, I'm long enough around the table that I knew it. I saw it coming. So in that respect, we have reacted very early.
We've alarmed everybody in the group to move. And wherever possible, we have already gone for Increase is going to effect in July, August or September. That is not possible in all markets. But in quite a few key markets for us, we've already executed that, and we will diligently fight for keeping those price increases. Now going forward, I think the fixed cost element that I was describing should normalize because the fixed cost base last year I'm looking a little bit to Rene Aller, our new CFO.
The fixed cost base last year was fairly stable. We had Good volume development for the fixed cost. We are already back. Relief from the COVID was basically not very normal. So we are going against a fairly normal fixed cost base.
Absolutely. The variable cost base is on a substantially higher level versus prior year. Laurence can maybe say a little bit something to the Yes, specifically in a minute, but we've also obviously done some hedges. So we are not completely going in with open risks Into this scenario. And that's also, Paul, the reason why we have we are confident at this point to upgrade Our guidance from slightly to strong, that may have surprised some of you because can they still hold up?
Firstly, there is a risk. Absolutely, there is risk. Always in life, it's risk. But we are confident from today's perspective that We can in the combination with good price increases, good fixed cost control and a variety of cost development that for the H2, 2, we have somewhat hedged already going forward. We believe that this Works out okay and will lead to a guidance upgrade and a strong increase in operating EBITDA and Ebit, maybe, Laurence, do you want to say something on the energy costs?
Yes.
As I said last time, we were covered with relatively cheap Energy for the first half year, which we covered late In 2020. Now of course, we have worked, and we have now covered To a large extent, the second half year, but of course, at higher prices than we had it in the first Half year. But we are relatively safe on our forecast Because, as I say, almost all volumes have been covered, with exception of power In regulated markets and coal in Indonesia, where you cannot where that does not exist Effective forward buying market. And of course, diesel, which has no forward buying market. So that's the situation.
The remaining open volume are very little, so we are pretty safe on that. Now for next year, we will have to see and we will determine the forward buying policy in the coming months. So that's the situation Right now. Thank you.
Thanks, Laurence. Paul, I hope that answered your question quite detailed, but I assume many of you have the same question on mind. That's great. And also just
quickly, can I congratulate Doctor? Nager on his retirement and wish him all the best?
Thank you, Paul. What a pleasure. 17 years. It was nice. I appreciate it.
Thanks a lot, Paul.
The next question comes from Elvira from JPMorgan.
Hi. Thanks for taking my question and congrats Lars,
this is Senegor for retirement. So if you don't mind, could I just have a quick follow-up on Paul's question on Price cost. So you answered quite detailed on H2. But if we look at the full year, Does that mean that you're comfortable on a full year basis, basically the price cost will be flat and not down? And The next question will be on guidance.
Obviously, strong increase versus slightly decreased profitability.
You know concerns
Sorry, Anthony. The second
Sorry, you broke up with your second question. Can you repeat your second question? You broke up, Simon.
Yes. Can you hear me better? Yes. Okay. Sorry about that.
On guidance for the strong increase in like for like EBITDA, So obviously, an increase in guidance, but consensus expectation is looking for about 9% Like for like increase in EBITDA already. So do you think that's more or less what you're thinking about, is that achievable? Thank
you. Yes, Elodie, first of all, on your question of price, but cost, And I haven't done the math to be quite frankly. We probably have to follow-up on that point with the calculation. But if I get in my math The point the thing right then, the price over cost should not go dramatically negative in the second half. Otherwise, we would not come out in our we would not come out in our guidance.
That's something we have to double check. Sorry, we don't have that calculation done. What we don't do is we don't free calculate these Price of our costs, that's a retrospective development. We obviously manage our fixed costs and our varietal costs and our pricing, what I just Explained to on the back of Paul's question, but we do not basically look forward on the pricing of our cost Scenario, so this is something that we will follow-up with Chris and Ozan. They will come back to you on that to give you Some more flavor.
But as I said, it's our clear focus to fight for the positive price over cost Development. Because again, let's not forget the big hit here in the second quarter came from the fixed cost side also, right, Versus last year's quarter. It did come for also from the variable cost, but it's not that there was also a significant contribution from the positive side and the pricing And I think that's very important for you to understand. The price and variety side is still somewhat In fact, from our perspective, that's the message a little bit. And then on the guidance, it was not so easy technically to understand.
But I think you were asking a little bit slight and strong. What does that mean? When we discussed with many of our investors and also many of you as our analysts Beginning of last year around guidance in our industry, does this work or not? Then we always said, Guys, this industry is not tuned for very exact guidances, especially not in a year where we have such a high volatility on energy costs. So We had a long discussion whether we should do anything on the guidance.
We then said, guys, we are very confident, so we also need to share that with the markets. And in that respect, Don't get my answer wrong, but strong is better than slightly. I think that's the one clear message. But let's I believe it also a little bit to your fantasy now what a strong really means. We want to clearly show that We are more confident at this point to deliver what we are saying than we were at the beginning of the year.
That's why we upgraded our guidance. That's the whole purpose of the exercise. The reason that we did the share buyback should also indicate To you in the market that we are very confident that we are up for an okay future. So in that respect, you put these two things together, I leave it for you to speculate a little bit around this. But clearly, we are confident for the full year Of 2021.
That's our perspective on that. Okay. Thanks, Elodie. Thanks, Elodie.
The next question comes from Barclays from Nabil Ahmed.
Sorry, but probably another follow-up on the cost situation. I was hoping you could share a few numbers On what you are mentioning, which is making perfect sense, which is the unwinding of some development, supportive measures that you benefited from In Q2 last year and as well the fixed cost savings, those emergency savings we made last year, which were obviously not sustainable in the normal life environment. So how much is that into Q2? The second question, I was wondering if you could comment on the Supreme Court decision in Sweden to reject the renewal of the Langston quarry. Does it prevent you from operating the plants?
And if so, how would you supply the market going forward? And if you could help us to understand The potential financial impact that we should expect for next year? Thank you.
Yes, Nabil, thank you very much. Let me maybe take the Sreedhar And then Laurence, on the price over cost, how much fixed cost effect sits in Q2 that basically It's we'll give you an indication of that. But Nabil, please I understand that we are trying to balance things left and right and center. So but I'll let Laurence comment on the fixed cost impact In Q2, to give you a little bit more color. Now on Zlitter, we know that many of you have picked the topic up.
Now let's step back one second to the big picture. Obviously, Sile for us It's an important plant in our Northern European network, no question. All these plants go to normal permitting processes Every now and then, Sika was well known, was up for an extension for its permit until 2,041. And we had with everything in place, including the environmental impact study, the permit was granted basically the permit extension was basically granted and then challenged by the court in this famous court beginning of July with a new A surveyor that came a little bit out of the blue for everybody. So that led to this decision.
You have seen thereafter quite a splash in excitement across Sweden, even outside of our own company. I was a little bit surprised, but it shows you the impact of this business in the Northern European countries, especially in Sweden. So all the politicians are on the fence. Many, many stakeholders are on the fence, including unions, NGOs. So it's a big political issue at this point.
Clearly, it's our absolute focus. I just got off the line with Giffon, our GM in Northern Europe a couple of hours ago. On this, it's our absolute focus to make sure that we get our permit extension as originally planned and already granted Before that appeal, by October, it's clear that we will work on a plan B, but I would still put a clearly more than 50% chance on this that we get the permit finally To continue running by November 1, because this plant is detrimental would be detrimental if the plant would be interrupted To the Swedish construction industry, you know that that's basically the only oil plant that supplies the market there. In that respect, I'm very confident that we get the permit extended, but it will be hard work until October. It's clear that we work on a plan B.
The life is never without alternatives. That's also true in this respect, but I think it's too early to say What would be the impact of this? And again, we are for us, plan A is the 80% scenario To make sure that we get the permit extended as originally planned and originally granted. So That's the story around Sreedhar. Dorrance, do you want to say something on the fixed cost side?
Yes. I just wanted to remind you that in 2020, we had fixed cost savings as part of our COAP program in the magnitude of €80,000,000 in the first half year, but I don't know I think it's split between Q1 and Q2. Most of it, of course, was a wonderful thing. Of course, it was Q2 because in Q1, there was only 2 weeks of COVID crisis. And now we had reincreased coming back fixed cost In the Q2 of roughly €150,000,000 So still we are On the fixed cost side, €30,000,000 below 2019 levels.
So that's €130,000,000 You see that our Contribution margin, as we show, 66% as a total, so still shows positive Development in Q2. So what we fight for is now to keep the gross margin up in 2nd half year, in order to outbalance the energy price increase with Front end price increase of our sales price. So that's the dynamic.
Yes. I think, Navi, that very precisely answers Your question, I think we know that you're all, just as us, very concerned about the topic. And I think we've given you all the transparency to understand why we have increased our guidance because this Q2 effect is a specific Q2 effect.
Okay. That's clear. Thanks, Dirk.
Our next question comes from Gregor Kuglitsch from UBS.
Hi, good afternoon. Can you hear me? Hi, Greg. I'll be here you well. Hi.
Yes. And obviously, happy retirement, Well, not quite yet.
I think you still have to bear with a few questions. Yes. Two questions, please.
A couple, if I may. So The first one is on free cash flow generation. You've printed, obviously, a very strong number. Again, I think it So the question I guess is, do you think you can hold that figure? Or do you expect some elements Unwinding as we kind of think about the second half of this year.
If you care to comment, that would be helpful. And then the second question I have is On the emission trading scheme and if you could help us what the reduction in your sort of annual free allowances this Yes. And then I suppose in relation to that, how you see that kind of developing with the Proposals from the EU in terms of the reduction factor going forward. Yes. Gregor, thanks for your questions.
I would So maybe the second one, and Laurence will take the free cash flow one for H2. Now on the emission trading As you know, we are not commenting on any developments during the year. By the way, it's also not done yet. We saw It's far too early
to tell you this
is a science rather than us to fully understand the EU and manage the EU ATS allocation. So that's a very few and ongoing situation. It very much depends obviously also on plant by Plant view in terms of how much do you produce, what's the demand, how much do you sell, what's your capacity utilization, IIIA guys. This is a complex Topic and this will take the full year to understand exactly where we end up. This is not nothing you can even that's also That seems difficult to forecast that such a fluid system.
The second part of your question around The emission trading scheme, it's something we discussed yesterday intensively in the board. The current proposal, 5455, if I understand it right, is that They are planning not to substantially touch the allocations until 2025, so in the 4a. And then we'll try To reduce the free allocations by this factor as of 2025 going forward, and that's where my earlier remark kicks in, Where we are now helping them to understand, if we want to make this transition happening, We need a counterbalancing effect to safeguard the necessary price increases, And that's where the CBAM carbon border adjustment mechanism comes in. So from our perspective, this reduction of Free CO2 allowances can only start in a moment where the calm ball adjustment is Fully in place. That's the message from our perspective.
That's our targeted outcome. We will fight hard for it. Can we guarantee that we get there? I don't know. But the good news is they have understood that, that is a communicating development.
They've also understood that carbon border adjustment is a necessary, At least interim solution in order to allow for the industrial transformation in Europe. And in that respect, I'm pretty positive that we'll get there. And as you know, we are still a couple of years long on our certificates. That has not changed. And then we hopefully work on our CO2 emission reduction in parallel, and then we'll see where we come out.
But from our perspective, no major change to what we've communicated in that respect. Laurence, do you want to take the free
cash flow? Yes, the free cash flow. Yes, as we see, we are at record high right now. Yes. This is also driven by COVID measures in the second half of twenty twenty.
I just remind you that many countries had suspended tax payments. So for example, there is still this In the second half of last year, we virtually did not pay any taxes, very small amounts, yes? This will not come back. So that's why we would expect that the free cash flow would go down a little bit, would trend towards Maybe €2,000,000,000 to €100,000,000 which is still a very good result and We'll still continue to lead to strong deleveraging towards End of the year. Please keep in mind that we will receive the proceeds from the sale of our U.
S. West Business that will altogether, once again, substantially push down the leverage of the company. Even despite the share buyback program, which will be executed to a large extent for the 1st tranche Until the end of next year of this year end of this year, sorry. We will execute the 1st tranche Until end of this year, and that's already included in our guidance that we will end up At or below to lower level of our guidance from 1.5 to 2 times. Yes.
Thank you. Thank
you. The next question comes from Berenberg from Heligold. Yes. Hi, good afternoon, everybody.
Thanks for taking my question.
Actually, just following on from that point you were just making, Bert and Igor, about the buyback and about the balance sheet. And whilst I think the €1,000,000,000 buyback is clearly very well committed, Taking that point into account about receiving proceeds from the U. S. Asset sale and then I guess organic free cash flow through next year, it looks like Leverage,
even including
the buyback, will be well below that target range at the end of next year. So It'd be useful just to hear an
email about your thought process
on how you arrived at that $1,000,000,000 number, whether there's element of conservatism in there Or whether you're keeping optionality for perhaps M and A through 2022? Thank you.
Harry, thanks for that question. Guys, it's always interesting to discuss with you. I love the questions. But guys, let's take one step after the other. I think for us, it was, Harry, very important to deliver on what we have promised.
Laurence and myself and Rainer will do the same thing with me. We want to do the utmost to deliver on our promises. As I said earlier, there was, since decades, a question mark whether Heidelberg Cement would ever deliver on a share buyback. And here we are. Now €1,000,000,000 is, given the size of our company, not distinctly a number.
So we deliberately wanted to also say that if we forgo for something, we go for significant one. We will deliver it over 2 years deliberately because, again, we are in the long term business. So we don't do a 1 minute One off exercise. So we really try to have now these 3 tranches executed. And as Laurence was sharing with you in the waterfall earlier, this is a balanced that's what we are paid for, to take balanced decisions On and we are not catering only to one side of the matter.
In that respect, absolutely, we've understood that we want to Work and focus on total shareholder return, and this share buyback also works on that dimension. But let's not forget, We also paid and mainly paid for running the business. So in that respect, the question is how much do we invest into our core business, How do we ensure that our free cash flow development works? How do we ensure that our rating stays in investment grade? How do we ensure that our progressive dividend contributions come?
And how do we ensure, by the way, that we grow the company also through M and A In order to improve going forward because guys, absolutely, we are focused on total shareholder return, but also we are focused on growing the company And growing the profitability and structural profitability of the company. And that's what we also need to get to. So let's now take one step after The other, let's first deliver on this share buyback, and then we basically take the next step,
Very relaxed, relaxed. Just one point. The shareholders meeting has entitled us for Buying back 10% of our shares, 10%, yes? The program we have announced right now with €1,000,000,000 would already be Between 7% 8%, yes. So our 6% to 8%.
6% to 8%. 6%
to 8%, yes, something like that. So we are we for Balom, how you say, we really use in the very first shot 2 third of the total entitlement of the shareholders meeting, Heidel. We have in Germany, in southern Germany, we say we have to keep the church inside the village. So that's what we have to do. And we try, as Dominik rightly said, balanced approach, don't exaggerate, keep it in the middle of the road and Piano, piano, one step after piano.
Garry, you've got our CFO back on the tree. Yes, exactly. That's good. So in that respect, no, but guys, Just also one additional point from my side. One of the core reasons also for the share buyback is we strongly believe the company is undervalued, And we strongly also believe this is a very good investment for our broader shareholder base.
We will drive good returns out of this Investment, so leaving the finance guide, we're for it to say, guys, this can be also financially an attractive move at the current valuation of Heidelberg Cement. So in that respect, That was one of the also the key drivers to move at this point for the share buyback.
Yes. No, that's all very clear. Thank you. Thanks, Harry, and thanks for also only asking one question since we have roughly 2 handful of Gentlemen on the line, I please ask you to restrict your questions to 1 at a time now to give everybody the chance to ask a question. The next question comes from Tobias Werner from Stifel Europe.
Yes. Thanks for taking my question. Good afternoon, gentlemen,
Good luck for your future.
I was about to say thanks for the 2 questions, but one question here. Just sorry Come back to the price cost. I mean, let's keep it simple. In 2020, your energy bill was €1,500,000,000 the year before €1,900,000,000 the year before that, roughly €2,000,000,000 You hedged your costs. Should we assume that we're going to go back to the 2019 level?
That's the cost side of the equation or the energy cost side of the equation. The pricing Can you just give us an indication what the average price increase was seen in the Q2 for the group, Maybe a little bit of flavor for the regions.
Yes. Mr. Werner, okay. First of all, On the energy cost side, we have to go quite frankly. I don't have the energy cost number 19 with me.
So maybe, Laurence, you can check-in the meantime, if you look at the situation on the energy cost 'nineteen, and then Laurence I should basically work on that. Now if you talk about price development in the Q2, Mr. Werner. Obviously, as I said earlier, we are fighting hard To get the price increases done. So you should assume that price increases in our core market, If you take Western and Southern Europe, Northern Europe and also especially North America are more around the 5 percent mark, plus or minus, just to give you a little bit a flavor.
That does not incorporate The 2nd round price increases that we have announced now, as I said earlier, July, August, September. So that also gives you
a little bit you are
a long time analyst with us. That gives you also a flavor that we are pushing ahead In that respect, this is clearly higher than normal standards on price increases. And it also I'll continue to remind our colleagues Internally, like the overall sentiment in the markets in many other industries also is Clearly inflationary, let's face it. If I look at other construction materials, steel, wood, plastic, pipes, whatsoever, They talk about 20%, 30%, 40% price increases. And I think there is a clear pricing momentum now to be grabbed, and that's clearly something That we are working on.
And maybe, Laurent, you want to go to the cost energy?
The 2021 Energy pool will stay still below the 19 energy pool.
Okay. That's very helpful.
Yes. Like that? So the next question comes from Arnaud Lehmann, Bank of America.
Hello. Hello.
Hello. Good afternoon, gentlemen. Thank you for taking my question. I just wanted to come back on the disposal of the U. S.
West region assets. What are the strategic reason to sell this business? And I guess on the other side of it, you're planning to make bolt on acquisition in the rest of the U. S. I would have thought there may be There are other maybe underperforming assets in the rest of the portfolio, for example, in Asia, but you could have considered selling if needed some Cash to invest in the U.
S. So would you mind coming back on the disposal and if you're confident about the future acquisitions in the U. S. As well?
Yes. Anurag, thank you very much for that question. You know that not only the U. S. West Coast, but also the other divestments That we have already done and those to come.
We basically decided on the back of a very rigid portfolio review at the beginning and The first half of last year, where we basically put 10 to 12 criteria in terms of longer term profitability, Market position, compliance topics, performance track records, volatility of those markets, ESG criteria. So there were 10 to 12 criteria that we basically put to those markets. And then obviously, we also look into the relative performance in each area In terms of where do these markets stand, both in terms of historical performance and also potential going forward. And on the back of that, We have very solid globally and also within each area of what to divest from and what to not divest from. I asked for your understanding that we are not going through any substantial details on the West Coast sale.
I think that that is not Professional from our perspective, we should that's a decision between the seller and the buyer in the end. But it's clear that We for us, the West Coast was a market that we've been in for a very long time. We know the market and the assets very well. And for us, it was not the best market to boost our money in going forward. That was the reason we divested.
And that's then coming to the second question, clearly, and that's what we always said, We want to build out our other markets in the U. S. And in Canada. We are working obviously on potential transactions In the U. S, but also outside of the U.
S, not every transaction comes at the right multiple. You're absolutely right. There are transactions that are from our perspective too expensive. We will stay disciplined on these investments. But clearly, absolutely, that's still on the agenda that we used to continue to strengthen our remaining market in North America With both on acquisitions.
And to your questions with Asia to reshuffle money from Asia to the U. S, I think we've got nice proceeds now in the U. S. And let's see what we can do in reasonable financial restrictive terms To also continue to build our U. S.
Business, I think there is enough money at this time to spend for the U. S. And we have no restriction in that respect. So there is no need to reshuffle the portfolio from Asia To North America, we obviously will continue to work in each area on divestments and also investments.
Thank you very much.
Thanks, Anur.
The next question comes from Morgan Stanley from Societe
Hello. One question for me on pricing. I wondered if the decision to go for a second price increase this year could Set a potential precedent in some of your core markets in the future. Cement is an industry where you have had historically One price increase annually and yet your cost line tends to be more variable with more exposure to commodity prices. Would you like to see a scenario where you have some more flexibility in your pricing decisions in the future in order to make sure that we get a better hedge or better performance on the margin going forward?
Thank you.
On smart questions, Sita, you get a quick answer. Yes.
And can you give us some color on How that goes down with your customers? Do you see your competitors doing the same thing? Are your customers receptive? Because obviously, if you've got a traditional pricing relationship in an industry, changing that can be a little bit difficult.
I cannot comment on the competition. I don't know what they are up to, but I can talk about our own That we have with our customers and our country managers. Is this an easy exercise, Sida? No. Then everybody could do it.
And especially, You are right. Historical behavior has been different. And it's not like we push this pricing, at least for us. I can only comment for Heidelberg Cement. We don't have the culture to prove these price increases from both of our customers.
We are spending a huge amount of energy and time with our customers to explain the reason for the scenario that you just painted. And we do feel that our customers are not stupid. They are acting in their markets. They see also what happens on their end. They see other Construction Materials moving in similar situations.
They see massive increases in other materials. So in that respect, we are taking the customer along. We are explaining very well to the customer why we are moving. And it's not because we are greedy. It's just because that's exactly what you described.
And that's why we have to also Get out of traditional behavior and paradigms and need to shift the paradigm a little bit in order to respond to the challenges that Last but not least, the climate discussion has brought to all of us. So in that respect, We do see positive understandings. Obviously, not in every customer, that's clear. But it's a little bit breaking the ice that I suppose that's the important piece. You need to start in every market to take a couple of especially larger customers along.
And then our perspective, there is a domino effect on our other customer base. So let's wait and see. The game is not fully done yet. It's hard work, Sida, but we are determined to get it done.
Great. Thank you very much.
Okay. The next question comes from Matthias Freitenberger from Deutsche Bank.
Yes. Good afternoon, gents. Thanks for taking my questions, and congrats on the share buyback results. It's basically circling around Slide number 14, maybe just some clarification. What is baked in the lower end of the 1.5 times leverage, Doctor.
Nagel, you said it could even be below. You said the share buyback until year end is baked in. I guess, the U. S. Disposal is not included.
So is it fair to say all in, we are moving towards 1x rather than 1.5x? And then can you maybe update us On the remaining disposals, what are you still working on? Can we expect some news flow? Thanks.
Yes, Mr. Pfeiffer, let me
do the second one, and then one and then Laurence, I will comment on the deleveraging. Now as I said, The portfolio exercise is not a one off exercise. I have the clear desire to make this a continuous improvement because this only doesn't this It does not only happen on group level. It also happens on country and local level. So we are very much also working with our countries On working on optimizing their portfolio.
And even in the core markets, you can personally, I believe, you can still optimize your portfolio. I see some early good traction. So absolutely, there will be transactions coming down the road, smaller and bigger ones. But that's Too early again to comment, but the program is not done. I think to say that very clearly, there will still be a transaction coming.
Then there will also be obviously investment transaction coming that I was commenting on earlier. So Laurence, do you want to comment on the deleveraging? Yes, on the deleveraging.
The guidance factors in the Disposal of the U. S. West assets, we think as Dominic said, yes, are going to close at the latest Early in the Q4. So it also factors in the share buyback program. And The target is to come to the lower end of the guidance or even a little bit below.
That's a little bit what we do actually expect right now.
Okay. Thanks a lot.
Thank you. Thank you. Next is Yuri Serov from Redburn.
Hi Yuri.
Yes, hi. Sorry, good afternoon. I would like to actually continue on the topic that Sita just raised about price increases. And as you say, our customers are intelligent people and they also see your results. They look at your presentations.
Investors look at your presentations, but customers look at your presentations too. They see your margin going up. They see the margin up in 300 basis points. You say you have discussions with the customers and you try to seek their understanding why you need to increase prices. I'm trying to understand Why they would have an understanding?
Because they are seeing the Heidelberg Cement is not the case, and they are coming to increase the prices further so that they can increase the profitability. Why would they agree to it?
Yes, Yuri, that's an interesting follow-up question. I'm not sure What do we all do as customers of Amazon, Google and Microsoft? Are we if I just see there, I think we have still some room for improvement in terms of our profitability, I would argue. So I think, guys, Again, we are trying to be very we have nothing to hide to our customers. But one thing is also clear.
The industry and the material itself are up for a massive challenge. We've discussed this many times. So one is the volatile input cost development, but our customers also very much understand that we are up Altogether for a massive transformation of our beloved construction materials. So in that respect, We are clear. There are 2 arguments to your point, Juri.
First of all, if you have professional customers, they love to work with professionally run companies and a good profitability level is a clear indication that the company is run-in a very professional way. So if you are I'm not trying to hide something. If you'd say that with some price, but also some big respect, I think Many of our customers do understand that. And the second point is they also want the strong profitability to ensure that you have partners Delivering the materials that are in there for the long run and that they are also able to deliver that transformation even if it costs So there is a need to raise the prices also to pay the for the future challenges. We've discussed this many times.
So it's not just The argument of the energy cost inflation that sits there right now, but it's also the transformation going forward. And guys, it's very clear from our perspective, We need fundamentally different prices. If we factor in the CO2, everybody knows that. But I remind everybody, if you go for a Biological apple in your food store around the quarter, it costs differently, maybe sometimes double the price than your normal apple costs. And Why should this be different in our industry?
Yes.
Okay. We are approaching the end of our Q and A, we have 3 more questioners on the line. Next one is Sven Edelfeld from ODDO.
Sven?
Good afternoon, gentlemen. Thank you for taking my question. Obviously, thanks to Doctor. Neger for his contribution. So my question is, I think the North Asian government is planning a $2.20 per tonne tax for CO2 by 2,030.
We know you are working on a CCS facility in Bremik. So I just wanted to know more about your other plant in Norway, Shubsvik. Is there any plan to close or to transform this plant into a grinding facility?
Sven, there is no current plan on this. We have heard about these discussions In Norway, but a massive amount, if not the Clear majority of the Norwegian product comes out of Brevik. That's the Centerpark. Schjapzig is a fairly small plant. So this is not going to move the needle dramatically for Northern Europe and yet alone for the group.
And that's still some time to come. You know that our breakeven project is already under construction. So it's not a Feasibility study or anything? This one will go live by 2024, capturing 50% Of our CO2 up there and then there's still an option to upgrade and continue if everything works well. So I'm pretty relaxed about this discussion there in Norway.
And by the way, our Northern European colleagues have proven in the past They have a good customer base that also understands the challenges that are coming. Also, they live with very strict regulations, not only on CO2 prices, you look at other things. The Northern Europeans are flexible. It's a flexible society. They do understand if something needs to transform, then they need to pay for it.
So I'm fairly relaxed about the developments in Norway in that respect.
Thank you very much.
Okay. Next question comes from Yafin Touarey from On Field Research. Hi, Yafin.
Good afternoon, Guldtren. So my question would be on pricing. Do you see any risk On pricing at the territory of Europe in the next 5 years when you have no protection from imports Before the carbon border adjustment mechanisms implemented, I'm thinking of European Union countries around the Black Sea, Around the military and fee or countries with border with a former subcutaneous state, Which have no carbon taxes?
Yes, Ian, thanks a lot for your question. Clearly, if there There is a huge price gap in the countries. We always see material flowing from one to the other, and that's also true for the areas that you have described. That's exactly the reason why we say, guys, there is no what we cannot do in Europe is try to save the world from CO2. By the way, we cannot do it alone anyway in Europe.
But to set a very precedent example globally in how to manage industrial transformation in that respect, but then say, okay, we don't care About the rest of the world. So either there is a global carbon price that is, I would argue, not so easy to implement Or there is a carbon border adjustment to pay for the and ensure the transition and to also ensure the fact That's the there is also the effect that The carbon border adjustment basically safeguards the situation and that there is no reduction of CO2 allowances before
That's why I
said it earlier. Before, the carbon border adjustment mechanism really works. That's the key argument on the political Discussions, guys. Either it is the full allocation right now. And I said earlier, there is no change planned in the very short term, exactly for the reason that you have described.
So either there is the full 3 allowances allocation as in the past or there is a functioning fully functioning Carbon border adjustment mechanism, if there is a gap in between the 2, there is a clear risk, and that's something that we will 5.4 in order to let the politicians understand those dynamics, and I'm confident that they will take then the right Decision. Thanks, Jatin. Thanks, Jatin.
And then the final question comes from David O'Brien from Goodbody.
Hey, David.
Afternoon, guys. Congratulations, Doctor. Nager, on a long and healthy retirement. And just a question on sustainable Products, I guess, what is your experience in how they priced or the pricing environment for them versus your more traditional products over the last In 6 to 12 months. And maybe if I could tag on, how are the demand for sustainable products varying from Infrastructure end markets into residential and then nonresidential as well, too.
Yes. Important question, David, for the end. I think let's talk about the demand first, and then we'll come to the pricing because the one has the correlation with the other. The demand is high and there are not too many people who are able to produce them, then you also have a pricing power coming with it. I think That's also clear.
Now we see quite a dynamic on the demand side That has kicked in over the past couple of months because now the things are coming closer. And At least in some of the European markets, our core customers have understood, if they want to find now I talk, for example, commercial And even houses that are rented out, if they want to find for the new builds tenants, You better make sure that you have a very tight certificate on your sustainability Efforts and your CO2 footprint. And that also drives, obviously, the demand for lower CO2 concrete. And I would argue that for the time being, in that discussion, the pricing discussion is going is clearly not the first point they discuss. It's the matter what's the real CO2 footprint, how do you deliver it, how sustainable It's the way you can deliver it.
What's the way you deliver it in terms of CO2 footprint? So this has clearly gone to the forefront of some of Of the key core customers, now has this reached the broad element of the market? Not yet. But again, go back to the food store example early on. I remember very well, 5 years, You have had maybe 20% bio and vegern food.
If you go today in a food store, at least in Germany, You have 80% bio and digital. And I would assume that's a little bit the same cycle we will go through. But if the politicians really mean business and it gets to the point that are basically currently sketched out, Then I'm absolutely confident that there will be a significant demand for these CO2 products. And as I said earlier, David, It is clear that if there is rising demand and it's not so easy for everybody to deliver that in the right quality, In the right consistency, in the right sequence, at the right location, then I'm confident that you have also enough pricing power to defend or build out your margins.
Okay. This concludes our call. Thank you very much for dialing in. You've seen on Page 25 of our presentation that we are active on quite a number of conferences in September, and we hope to see you all there. Once again, thank you, Laurence Meege for contributions over
the last
17 years, and speak to you soon.
Yes. Thanks a lot. Have a good summer, and then we'll speak in the fall. Thanks a lot. Bye bye.
Bye bye.
Ladies and gentlemen, the conference has now concluded and you may disconnect your telephone. Thank you for joining and have a pleasant day. Goodbye.