Ladies and gentlemen, thank you for standing by. I'm Stuart, your Chorus Call operator. Welcome, and thank you for joining the Wienerberger conference call for the first half year results of 2018. 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. If you would like to ask a question, you may press star followed by one on your touchtone telephone. If any participant has difficulty hearing the conference, please press the star key followed by zero on your telephone for operator assistance. I would now like to turn the conference over to Mr. Klaus Ofner, Head of Investor Relations. Please go ahead.
Thank you, operator. Ladies and gentlemen, welcome also from our side to the Wienerberger earnings call on half year results 2018. Wienerberger representatives on today's call are Heimo Scheuch, CEO, and Willy Van Riet, CFO. Mr. Scheuch will open the call with a summary of the key developments of the first six months, our strategic priorities, as well as our outlook for the rest of the year. Following the opening statement, we will take questions. I now hand over to Mr. Scheuch for the executive summary.
Thank you, Klaus, and from the whole Wienerberger team, a warm welcome to this conference call and happy afternoon from Vienna. I'm glad to report on a very strong first half year for our group. We had a convincing performance as far as the numbers are concerned. A strong 5% rise in turnover, which comes from organic growth in the first six months, which resulted also in an 18% growth in EBITDA to EUR 214 million. Also on the net profit side, an even bigger extent of growth, which relates to 28%, to more or less EUR 53 million of net result in the first half year.
In a nutshell, in all of our divisions, we have seen a strong improvement of organic performance, and therefore we believe, and we see that happening, that we are fully on track on our goal for like-for-like EBITDA growth in the range of EUR 450 million to EUR 470 million by year-end. We confirm our year's guidance as far as EBITDA is concerned. It is also important that we note that all the profitability enhancements initiatives that we have been performing and putting in place with respect to our industrial portfolio are gaining full effect and momentum that we have done also in the first six months already a set of value-creating acquisitions. I will elaborate on this a little bit later.
That all the restructuring measures that we have indicated at the beginning of this year, beginning in February and then obviously after the first quarter, that all of these measures, be it in Germany, be it in Austria, be it in France, to summarize very quickly, the most important ones are fully on track and are implemented. Then on top of it, we are continuing and beefing up our process of asset sales around the group. Here also, we are in good shape. As such, when we see the overall development, the three pillars of our strategy, meaning organic growth with the 5% in the first half of the year, you see the strong track record of Wienerberger being able to realize this.
By the way, ladies and gentlemen, this 5% growth is not coming from the market only and supported by positive market trends, because we operate in markets where there is stability or a slight decline. As such, we show with our strategy and our strong commitment to innovation and to strong performance in the market that we are able to outgrow them and to have this strong organic growth in all of our markets. The second one is basically the main DNA of our group. Main because we focus on it in all different business areas. It's the operational excellence where we have obviously produced the improvements and have been able to do so over the last years in order to make our business more competitive, more effective, and more efficient.
Here, obviously, we will even improve and increase our efforts in the two years to come in order to bring the Wienerberger business to a different level and in even a more competitive one with respect to other players in the industry. The third one is obviously the growth that we see, the potential for our company to grow in fields that are linked to our businesses, to our platforms, where we can add on different products and different sort of businesses in a way where we create obviously very substantial synergies and secondly, improve the performance of these businesses due to the course of integration and add on to our ongoing businesses.
In this slide, we have, as we have indicated also after the first quarter of this year, reviewed very carefully all measures that we have been taking in our businesses with respect to the operational excellence. We have used external support for that, different sort of external supports, because we obviously have done and undergone a number of improvement efforts in different areas of our business. The good news that I can give to you is that all of these measures, and they have been carefully reviewed by external experts. They have been viewed as very positive, the right ones for our business, and the ones that bring us forward and have the right competitive edge, maybe on the cost side, but also on the strategy side, for example, in the field of digitalization of the business or on further innovation front.
Again, a very positive news that the management today is focusing on the right areas of improvement, and they have given us the comfort that we are moving in the right direction and basically have indicated two major things to us. We should even give it more emphasis. Emphasis in the sense of people, resources, human resources, to put the necessary structure on top of these improvements and these efforts to improve our business. Also provide, especially when we talk about manufacturing, to provide the necessary CapEx in order to realize these improvements. By doing so, it was the clear determination of all the people working intensively in the last weeks on this project that the group as such can bring up the potential on the EBITDA front to EUR 120 million by the end of 2020.
Actually from the originally, if you look what we have been communicating so far to you, EUR 45 million of EBITDA potential to increase this EUR 45 to EUR 120 million by the end of 2020. An impressive and substantial improvement of our efforts that we will undergo in the next 24 months. We are confident, and we obviously have gained this confidence during not only the last one month, but during the last years that we are able to realize it because we have proven so as a track record in the past. The measures that we have undertaken in the last years show the results, and we are therefore increasingly confident that we will be able to realize such savings coming forward. Obviously, this savings potential of EUR 120 million is linked to the cost structure of 2017.
The basis as a cost improvement is the structure to 2017, and therefore, we will be able to realize these cost improvements in already this year and in the next two years to come. As I already indicated, as a company, we will put a special team on top of it, not only to steer it, not only to realize it, but to track it and report on it. We'll have a regular report coming through because we believe as a company, Wienerberger, that it is important not only to set targets but to achieve them. Obviously, we'll link it also to the remuneration in management as far as the goals are concerned. Again, a very important step forward in the operational improvements for the company, Wienerberger.
Secondly, we have identified and we are working on a very attractive pipeline of deals of M&A activity for growth. Growth in the fields that we are active in and also fields that are linked to our business where we see obviously that we can improve our position in core markets, that we can create on top of our existing strong platforms additional value by this acquisition, and where we always will and are committed to strong discipline. We have shown so in the first half of this year by acquiring, for example, a pipe specialist in Norway that adds to our existing portfolio, a portfolio of products with insulated pipes that we can sell through our structures, not only in Norway, by the way, but also in Sweden and other countries.
Again, a very good example for value creation and margin improvement as far as products are concerned in this region. The next example, we have bought a family business in the Netherlands, two production sites and facing bricks, integrating it very quickly, fits perfectly in our corporate culture. By the way, as the markets are strong in the Netherlands, strong also in the U.K., we have created additional capacity in order to satisfy this increasing demand. Quick integration, fast production improvements, and obviously cost-cutting in the existing units and also full utilization of the plant. An ideal example for quick execution on the M&A front.
Last but not least, you have seen also an example of portfolio optimization, moving out of the Austrian activities of Semmelrock, the concrete paver producer, where we didn't see the necessary growth, where we have not been able to realize the improvements in margins that we had expected. We have successfully sold this business and have now sort of invested in the growing Eastern European with substantial margin improvement coming from obviously investments in the Hungarian market, the Croatian market, and also by the takeover of a smaller producer of concrete pipes in Romania, an area where we wanted to grow. Good examples for this execution of, I would call it a margin-driven and margin improvement M&A strategy that we put in place. This year, we still want to commit this EUR 200 million for external growth.
This is the growth potential that we see for this year and the money that we have allocated for M&A activity for Wienerberger. When we talk about the industrial portfolio, we talk about review, and we have indicated to you that we will, in the first half of this year In detail, review our industrial portfolio. We did so, we have seen that out of this portfolio, we want to dispose of certain assets and certain activities that are obviously not producing the returns and will not produce the returns that we expect from industrial activities that we don't see fit, strategically speaking, as far as the market position is concerned, the competitive landscape is concerned, therefore, we want to exit this business. We've clearly earmarked those, we have defined those, and we will in due time and course, sell those businesses.
Please, I strongly would ask you to actually rely on us, that we do it in the right way and to the right moment, and that we don't communicate right now which assets these might be. Together with assets that are non-operational, we see a potential of EUR 150 million in the time span from now till 2020 in order to realize this sort of disposal program. EUR 150 million on proceeds will come towards us that we can then reinvest in our business on top of the normal ongoing growth CapEx that we foresee for the business. If we look at 2017 and 2018, the first half, you see a strong improvement in margins, an improvement that is showing that Wienerberger has gained momentum in growth, momentum also in margin improvement.
The 140 basis points, meaning the increase from about 12% margin to nearly 13.5%, is a strong signal that we are not sitting there and waiting for improvements, but actually working hard in gaining these improvements. We will do so further as we speak. All in all, you have seen us moving from the 2017 EUR 415 million EBITDA to a guided range of EUR 450 million to EUR 470 million this year. You will see us move further in the next years because, as we communicate to you, we see this potential from our side, independent from any market development of EUR 120 million of EBITDA to come our way, doing the necessary improvements that we have identified. A strong signal again from our side that we are moving towards our midterm target of EUR 600 million as a company.
In a nutshell, Wienerberger is operating in a European market, infrastructure-wise and residential-wise, that can be characterized as a strong growth market in Central Eastern, especially Eastern Europe, and Western European, more stable environment. This is to be seen on a market perspective in two words, and this will continue for the rest of the year. Some of you will ask us questions about the U.K. We feel very confident with respect to the U.K. Again, this year, in the first six months, we have gained momentum in the U.K. We have gained market shares. Pricing is good and strong.
We obviously, as a producer of bricks, we call us European producer and not only U.K. producer, can satisfy this increasing demand in the U.K. with products that come from the U.K. and where we have increased already capacity, and which obviously distinguishes us a little bit to our competition, because Wienerberger invests into the future, sustainable and long-term vision. We actually don't sit and wait on maintenance CapEx, or we actually go proactively in and do this so that we are ready for all sorts of developments. Here also from the continent side, we have created capacity in the very important product segment of Soft Mud to have the necessary products ready for the U.K. The same is in Central Eastern Europe, where we have seen obviously a strong upward trade in the need and the requirement for clay blocks for construction.
Here we have almost doubled our capacity. We have increased our capacity and are also ready to satisfy the demand level. Again, here, a strong commitment from Wienerberger's side to the growth in the different areas of the business. All in all, for this year, we confirm the guidance on the EBITDA side. We see the normal CapEx level moving in the range of EUR 160 million for the overall business for Wienerberger and the growth CapEx in the range of about EUR 200 million. In a nutshell, I think I have summarized the most important events, and I think it's now about time to take your questions. Thank you very much for your attention.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. The first question is from the line of Yves Bomela from Exane. Please go ahead, sir.
Good afternoon, gentlemen. Thanks for taking my question. I'll have three I'll probably go one by one. My first one is on your full year 2018 like-for-like EBITDA guidance, which given the strong run in H1 implies only an 8% like-for-like growth in H2, which might seem a bit conservative given the Eastern European pricing and the Easter base effect in Belgium. I wanted to get an understanding of maybe what are the regions or products where you don't still have the utmost visibility on or where there could be a risk. I'm guessing from the outlook that France has become a bit worse. Are there any other markets or product where there's a bit more of a risk profile? Thank you.
Yves, at this stage, I think, the only thing I can confirm that obviously on the French market, we see some sort of decline in activity after the measures of the French government that have been put in place on the real estate side. Therefore, we see a certain decline in activity on the French market. On the other hand, I just want to draw your attention to the fact, and that what we communicated also at the beginning of the year, that the renovation market in especially Western Europe is softened. Obviously, there's less government initiatives with respect to encouragement of refurbishing and investment in sort of energy efficiency in old housing stock. On the other hand, energy prices are low at this stage the people have not the necessary incentive to invest.
These two things I think are important to note when you talk about the business as such.
Okay, thanks. My second question is on your Fast Forward 2020 program, when you mentioned that the EBITDA potential is increased from EUR 45 million to EUR 120 million. Yet your medium-term target of EUR 600 million EBITDA by 2020 is unchanged. I presume that your organic growth expectations have been revised downwards. Could you maybe run us through the medium-term view and also maybe the different components that you have identified in this program that you haven't identified before and why? Thank you.
First of all, let me draw your attention, and you rightly did so, that we said we are reviewing all our initiatives with respect to their potential and obviously to the fact that they can be realized. Again, I think here we have the strong feedback, not only from us but also from outside, that these measures are well on the way, that they will produce actually more than the original potential because we can go faster, quicker and allocate also resources. By doing so, we will allocate about between EUR 40 million and EUR 50 million of CapEx in the next two years in order to achieve them. There will be CapEx on top of it allocated to realize those EUR 120 million of potential in additional EBITDA. There are new efforts that we came up with in the last couple of weeks and months.
Again, here is a strong focus from our side to realize these improvements in EBITDA by our own. Let's say it in this way. When you talk about the midterm target, Yves, we have not revisited at this stage because we said it's important to let you know that we are currently undergoing these efforts. We will have a capital market day a little later this year, where we'll certainly sort of focus on strategy and especially on the midterm in order to update you on that. Let me be frank on it, I mean, this EUR 600 is now obviously when you look at it from the perspective to performance this year, adding this EBITDA potential, we are moving closer. I think what we are showing to you at this stage is only we are closing the gap by our own efforts. Yeah?
I think that's the strong message from the Wienerberger side. We were not talking about M&A. We were not talking about organic growth at this stage. We just show you that Wienerberger is able to achieve such a midterm target already by its own efforts and focusing on its own performance.
Okay. Thank you. Finally, my last one is on your strategy in the Pipes & Pavers division, where your recent acquisitions suggest that you're increasing more and more your exposure to higher value products. Has your appreciation of the more commoditized industries changed in the last few years? Would you be willing to consolidate the industry? Thank you.
I do think, from our perspective, we are well advised to move in the direction that we are currently moving in the sense that we upgrade our product assortment and move out gradually from the commodity side of the infrastructure business. Therefore, focus ourselves investment-wise and M&A-wise on this part of the business. You won't see us as somebody who is just consolidating capacity on the infrastructure side.
Thank you very much.
The next question is from the line of Matthias Pfeifenberger from DB. Please go ahead.
Yes, good afternoon. Maybe a couple of follow-ons on this EUR 600 million question and the pillars for it. You gave us these numbers for the three pillars in the past, basically it's a EUR 80 million delta from the OpEx that's really stepping up your A game, I guess. Also you kind of stripped out the FX impact from going to a like-for-like guidance. It's a delta of EUR 100 million. The guidance was more than EUR 600. It's more than EUR 600 now. Is this like You have been maybe slightly above EUR 600 before and you are now maybe closer to EUR 700, but not yet there. How can we see this? Also the M&A proportion is, I guess now time has passed and you have realized this, but overall it's more than the EUR 50 million that you quantified in the past.
It's really probably, I don't know, EUR 120 million delta and still you haven't changed the overall target. Maybe just some color there. Related to the M&A, we appreciate you speeding up and you've also quantified the multiples, for instance, last year, so we can be assured you're not spending too much, 6x, I guess. Can we also be assured that you're not buying kind of earnings at the cycle's high or peak earnings? Can you maybe anecdotally shed some color of what the integration opportunity is from some of these acquisitions? Thanks.
Sure. I think on your second questions, we as management and Wienerberger in recent years, have certainly not overspent. You've seen the multiples that we have paid in recent years with respect to businesses that we have bought and also successfully integrated. Again, when we look at this year's performance, they are all in line with this very strict and very sort of to-the-point management on financial criteria. I can only say one thing, we will stick to this policy and implement it. If we say that there's enough interesting opportunities out there, then it means that we are working on those. If we say that there's a potential out there for us, then we will grab it because it's the right moment to do so.
We don't see that in these markets that we operate, and especially when it comes to these products, that we are over the cycle or whatsoever. We are confident that we can realize growth in these areas, and that's why we do this. Allocating these resources means that we have a sustainable growth in these areas and we want to grow our business. I think it's a well-orchestrated move on the financial side with strict criteria on one end, and on the other end, strategically moving in the right direction as far as our portfolio is concerned. On your first question, I will hand over to Willy because I think I have already answered it in a way to Yves when I said that we have given a strong indication what we are capable of doing, but Willy will add to that.
If you read carefully what we have written as well, we've now added things like commercial excellence into the whole program, which if you appreciate, when we started with our EUR 600 million guidance, basically, we said, "Okay, that's going to come from the market. That's going to come from market growth." Now we are much more in a position to pinpoint and say, "Okay, which type of actions we're going to take and how we can improve the margins that we are going to make." That's a part of the whole business because the time horizon is shorter as well. We'll do other things in logistics we've also highlighted. We will be putting more flesh to the bone, so to say, on the next time when we meet each other, at the end of September, beginning of October, probably.
There we then will go into more detail on the whole thing. Markets are what they are. They are growing in certain bits and pieces, but as you appreciate, also last year, nobody had foreseen what was happening in the French market. The most important message is we are able to do things ourselves, and we do not have to wait for a recovery in the market. That was also initially our view on where the company is going, and that remains the whole thing. Whether that leads us to EUR 600 plus, we always said it's going to be above EUR 600. To quantify what markets will be after 2020, I think it's not the correct way.
Okay. Fair enough. Very helpful. Many thanks.
Next question is from the line of Stephan Trubrich from Kepler Cheuvreux. Please go ahead.
Good afternoon, gentlemen. Thanks for taking my questions. We were just in Fast Forward 2020, and I would like to stick with that briefly. Could you share with us, because you said it was this incremental EBITDA potential was found with the help of external support. After the AGM, you said that there is basically a new external support source coming in. Can you share with us, it was a very short period in time now, a couple of weeks, how much they contributed to this incremental EBITDA finding? This would be the first question. Secondly, I would be interested in IFRS 16. Obviously it's just around the corner. Could you update us as well on that, what the potential EBITDA impact would be and also on the net debt side? Because if I'm not mistaken, I think on EBITDA this will also add quite a chunk.
We could easily get to this EUR 700 million alone with, let's say the EBITDA uplift you get from Fast Forward plus IFRS 16. The third question I would be interested in would be in the Pipes & Pavers division now in the first half of the year, particularly looking into Q2. In Eastern Europe, the margins developed quite nicely, but also in Western Europe I've seen a margin improvement. Could you update us what have been the drivers here? Maybe on a negative note, in the Western European clay division, obviously margins contracted, volumes have been also down. What are you planning to do here? What are the drivers? Thanks.
Well, thank you for your questions there. I will try to deal with them one after the other. I might start with your reference to certain events with respect to reviewing our efforts. I want to state that I clearly said it at the beginning of this year in the conference call and after the first quarter also, that we are undergoing a strategic review process on the portfolio and also on the efforts that we undertake in order to determine, first of all, are we going in the right direction? Are we moving fast enough and is there more potential to be grabbed as we speak? It is to be seen independently from an AGM.
It's something that we are anyway doing and continuously doing because we are a company that monitors very carefully its development and we obviously see us in a competitive landscape, and therefore we want to be not in the pack, but the leader of the pack when it comes to the performance in cost and savings and potential. By the way, we want to be not only there for a week or a month, but on a sustainable level and obviously show the performance on the long run. That's why it's so important that we do this thoroughly and not only over two or three weeks. It took us, obviously, the first half of the year in order to review everything. Willy has mentioned it. It's not only focused on one or two aspects.
It's focused on the whole business, from purchasing to the manufacturing, to the sales admin, to the digitalization process. A multitude of efforts that we are currently undergoing and here to set clear targets for the company, come up also with a target. I think that's the major and most important message that we have given to you. I also tried to state at the beginning of my introductory statement that the consultants, not the only one, the consultants clearly gave us the feedback that the efforts that we were putting in place in different parts of the business are the right ones, have the right levers and create the right potential. The important message was obviously to intensify these efforts and put additionally resources in CapEx and in manpower into these efforts. Therefore we come up with this increased potential of EUR 120 million.
What consultants do, they give you frameworks. They don't give you solutions. They give you ways of thinking and way of approaching various things. That's also why we use various consultants at various stages, and they seem to confirm whatever they're saying. Secondly, the measures come from the people themselves because they have to be convinced that they can do it, otherwise we would not communicate it. It is not how much it comes from external, how much comes from internal. This is the figures we put forward and the figures we commit to. Basically, that's on the consulting side. Your next question on IFRS, we are of course now looking into that. We already do similar adjustments for rating purposes and roughly at this moment, but these are very preliminary figures that we do.
If we would apply IFRS, our debt position would be increased by something like EUR 200 million and we would have an additional EBITDA of EUR 45 million. Clearly, the EUR 45 million is not factored into whatever we communicated at this moment. Your question on margin improvement. First of all, if you look at the margin in Western Europe, you have to take into account that we, in CBME, we have some restructuring costs in there in Germany, so they're negative one-offs. If we strip those out, I see an improvement in the margin very clearly. Basically in every single business unit or region that we are active with every product, we have seen margin improvements over the last half year. That is a very strong message. That comes out a combination of price increases, which we have put through everywhere, but also efficiency improvements.
That's the main drivers of the general margin enhancements that we have seen.
Last but not least, let me add something to 2020. Ladies and gentlemen, I think it's important to note that from our perspective, we give you and try to give you a rather accurate year guidance at the beginning of every year in order to measure us. We just wanted also to say clearly when we put this package together, this 24 months package, that with respect to our performance, we see potential for further EBITDA growth in the years to come. Obviously this is linked with the 2020 midterm potential that we have determined years back, by the way. Let's say two things. First of all, I do hope sincerely that the world does land in 2020 and obviously all of it continues and Wienerberger will go beyond 2020.
That's I think our sincere wish to do so and that obviously we don't limit ourselves at only one number, that is the EUR 600 million number, because obviously I think we all are here to improve and get beyond that. I think we will make every effort, as you can see from a company perspective, to not be shy of such a number and if the right circumstances are there, be even above those. Yeah? This is, I think, from a clear best perspective from my side. As I said also, we have already indicated that at a later stage this year when we come together for a sort of strategic update/capital market day, we will go in more detail with you on this. Probably also on a target that is above or beyond 2020, and not only 2020.
Okay, fair enough. To cut a long story short, you would feel comfortable if consensus moves for 2020 to plus EUR 600 million EBITDA or at EUR 600 million EBITDA, ignoring IFRS 16?
Yeah. I think you have all the elements there that gives you the necessary comfort or not as you wish at this stage.
Okay, fair enough. Just the last follow-up question on the 5% growth we have seen in H1 2018 versus 2017. Usually, you had provided us with a revenue bridge. Could you share with us maybe how much of that has been volume, price, FX, and consolidation effects? Thank you.
The majority of the 5% is actually price increases. Because you have negative, where you strip out the consolidation effects and the FX, which weigh out each other more or less.
I have a price increase and a little bit of overall volume increase in the whole thing.
Okay. Thank you very much.
Next question comes from the line of Markus Remis from RCB. Please go ahead.
Yeah, good afternoon. You mentioned that this EUR 120 million savings target requires EUR 40 million to EUR 50 million of CapEx. Could you also elaborate on the associated OpEx requirements?
No. We will not have an increase in the OpEx requirements for this program, specifically in 2018, in the sense of restructuring costs or one-offs.
As Heimo mentioned also in his comments to the whole thing, we are adding headcounts to the group, definitely. If you want to realize certain things, you have to bring additional people on the ground, which then have to realize additional improvements. That's again, that's something we will go through and then give you a more precise indication of where we go to. I would say myself, from OpEx, it will only a small bit. It's not a big hit.
Okay. Interesting, because on recent cost savings, that always came along with quite some restructuring costs. Okay.
Just one thing. I think we are not talking here about the same, because efficiency enhancement programs and operational excellence programs are not about cost savings. I think we have always been very clear on that when we do cost savings, meaning cutting of capacity or adjusting, then we are talking really of restructuring costs. Whereas when we are talking here about improving the business as such, then it is about additional potential.
Okay. Clear. May I also ask regarding the buyback, which is almost completed. Do you consider stepping up this program? You're marking another couple of millions for buybacks after this 1% has been bought back.
I think we clearly communicated this 1%, and I think you will appreciate if I say at this stage, we have nothing to communicate.
Thank you.
Ladies and gentlemen, as a reminder, if you'd like to ask a question, please press star followed by one on your telephone. The next question is from the line of Florence O'Donohue from Davy. Please go ahead.
Thank you. A couple from me. One just on costs. Would appreciate an update on some of your main costs, particularly energy and in the case of pipes, maybe resins. Second question is pipes as well. I know you have a Turkish business there. Just looking for some confirmation on the relative size of your interest in Turkey. Finally, just in terms of Eastern Europe, obviously, which in all areas is going very strong at the moment. Is there any parts of the business in Eastern Europe or any regions where you're becoming capacity constrained, or you still have room to grow the business with the existing infrastructure? Thank you.
I will ask before Willy jumps in on the two first ones. On the Eastern European side, you see probably in certain regions, obviously, you know that our products cannot travel for enormous distances. I think at this stage, we feel comfortable with the setting that we have, where, as I said, we will do some debottlenecking left and right, and can satisfy the demand level in the local market. It goes without saying, if the pace of growth continues, we might have some shortages in certain areas. We'll try to manage them. It is not the most important concern at this stage.
The mothballed in the wall, everything that we still had mothballed in Hungary. We still have to bring that capacity into the market and have that as a possibility. To come to your other questions, energy, we have no headwinds because we covered forward, we'll be relatively flat on this year for the energy price. Resin fluctuations are very reasonable, that helps us as well on the price increases we put into the market at the end of last year and the beginning of this year, they come full into the market. To reassure you about Turkey is, first of all, it is a very profitable market. If I look at it in Turkish lira, because it's in infrastructure pipes and in irrigation.
It's a good business in Turkey, one of the top names in the Turkish market, and it represents less than 1.5% of our sales. It's just unfortunate that the lira is fluctuating as much as it is at this moment. Maybe we'll look at it to whether it's an opportunity to produce over there and then bring it to the rest of euro environment. That's for as far as it's for Turkey.
That's brilliant. Thanks, Willy. Thanks, Heimo. Thank you very much.
Next question is from the line of Miguel Borrega from UBS. Please go ahead.
Hi, good afternoon, everyone. I just got a question on the U.S. Obviously, you're seeing substantial organic growth here over the last couple of quarters. Can you give us maybe a little bit more color on the pricing environment? Have you seen any substantial changes since the Boral Forterra merger? Maybe a question linked to that, since you're now acquiring new plants, could you tell us about your aspirations for the U.S. market overall? Would you consider larger acquisitions to consolidate the market, or you're only interested in smaller deals? Maybe waiting for other players to consolidate. Thank you.
Thank you very much for this very interesting and helpful question. I think we always said that our North American unit is a strong one, that we have created a very efficient platform for growth there. As you have pointed out, we have seen strong growth not only in the last half year, but in the last sort of years there. We are moving in the right direction. We also see that by doing an acquisition like we did last year, taking over a producer in the Mississippi area, we grew our business not only regionally but also in the areas where we were already active. Adding on such family business on our platform proved to be very successful. EBITDA enhancement was there, and the profitability went up as well.
We will clearly look at these opportunities, and we believe, there are obviously interesting opportunities out there for us to grow our business in North America. We'll pursue this because demographically speaking, this is a market that is set for growth, and the overall economic environment is also set in the right direction. You will see us again, under the circumstances that I've mentioned earlier, meaning a strong financial commitment in order to gain here necessary payback and to pay low multiples, substantially lower than are obviously contemplated and paid in the U.S. in other construction and building material arenas. Here, again, a very disciplined approach. Yes, we will grow our business, and we believe we have a very strong platform and a very solid one for such growth. There are some very interesting opportunities out there for us to grow it.
Thank you very much.
Please press star followed by one for questions. The next question comes from the line of Saravana Bala from Berenberg. Please go ahead.
Yes, good afternoon. Just one left from me. Regarding the EUR 120 million EBITDA improvement, do you have any kind of visibility on the expected savings each year? It seems that some of this has already been implemented out of the EUR 120 million. Perhaps if this can be quantified as well, please. Thanks.
I think if you take this EUR 120 million, we pointed out that it is linked to the base of 2017. I think as a fair assumption, you can take into consideration the EUR 20 million I included this year, the rest will then be split over the years to come. Here we will give you a very clear guidance on this number, but you can, at your ease, split the number EUR 100 into whatever.
40/60.
60/40 or 40/60.
Or-
Yeah. Okay?
All right, thanks.
Excuse me, Mr. Ofner. There are no further questions at this time.
Okay, we'll wrap up the call. Ladies and gentlemen, thank you for your questions and for dialing in today. We hope that you will join us again at the latest on November 8th when we release the Q3 results. As was announced today, very likely end of September, early October, there will be the opportunity to meet up again and have detailed discussions at a capital markets day event for a strategic update. What is left for the day is to thank you for your attention. Have a nice day, and goodbye