Ladies and gentlemen, a wonderful good morning to all of you who are present here at our Capital Markets Day, to all of you who dial in virtually. As we have a virtual meeting as well, a hybrid, obviously, please be disciplined. We will take all of your questions, but after the presentation. We will make sure that all of you who listen in and, you know, follow us on the virtual side get the chance to ask questions, and you here as well, being present in the room. Take your seats, we have enough place available here in the front, so that Gerhard and myself don't feel isolated. From our side, Wienerberger side, obviously, my colleague, Gerhard, is here, who will speak with me this morning, about an hour, about Wienerberger, the development, you know, what is our strategy, our performance, and our targets.
And we will have Q&A, as I said, virtually and here. We will have a coffee break, a well-deserved one, downstairs. You just walk down the stairs. Down, you have a wonderful area for coffee and refreshments. Half an hour later, we will meet here again. My esteemed colleagues who are sitting here in the front, I will ask you to stand up so everybody sees you. Doris and Wolfgang, two senior managers from our group. Doris is responsible for the piping business all over the group, and Wolfgang is responsible for the Nordic region, which obviously englobes bricks and pipes. Thank you very much, both of you. On another note, organizational-wise, you have here Romana and Angelika, that run, obviously, all the administrative things.
If you have any questions here, from your side, transportation-wise, organization-wise, please address everything to the two charming colleagues of mine. Thank you. Then, obviously, from a checkout perspective, if you have not done so yet with respect to your rooms, please do so during the coffee break, so then everything is settled organizational-wise. Your transportation to the respective, means of transportation from, train to, plane will be arranged, and if you have here some questions, Romana and Angelika will take care of that. I think I've, from my side, done everything which is, recommended organizational-wise. I've just to say two other words. You find on your seats here, a brochure about Wienerberger, which gives you a good overview about our activity, what we do, what, our strategy is, and, our products.
Capital Markets Day brochure, you have as well. And by the way, you have also a very interesting brochure on our sustainability policy and how we implement it in a country like Belgium that is also to be reviewed by you. All the documents, presentations, and all the live stream is also to be revisited on our website, so you have all documented very well in the traditional form. Before I start, also, one thing you have realized already yesterday, our esteemed colleague, Daniel Merl, is not here. Unfortunately, the last minute, he got ill, so he had to stay at home. But as you see, Wienerberger handles also this in the last minute, so everything is fine, and he is well as well. So from my perspective, I think we can start.
And, ladies and gentlemen, yesterday, we gave you a, I hope, a very good overview over the new Wienerberger. Our solution business, our innovative products, how we actually engage with our clients. And obviously, based on this, I would like to walk you through the team I've presented already, but I would like to walk you through the ecosystem of Wienerberger. The Wienerberger company, today, our group, is a group that lives sustainability. It's part of our day-to-day management routine. From our perspective, it's a 200 years history that we have of sustainable development. Wienerberger is a sustainable company by itself. Why? Because the average lifespan of our products is more than 100 years.
That's not a lot of companies in the economical system that can say about their portfolio of products, that they last more than 100 years, and that more than 95%-98% of our products are 100% recyclable. So here, I think the circular economy, the aspect of longevity and durability are part of our business. We obviously have now been very strongly and outspoken about decarbonization. I will give you an update in more detail about that, and biodiversity. More than 240 sites that we run in 28 countries have a plan with respect to biodiversity and actions that we put in place. So a very, very responsible way of running the company, Wienerberger. Obviously, that's not enough for us, and our business is based on people. And employees matter for us. They are key for us.
They are key for the future success of the company and key for the development. You've seen yesterday how innovative Wienerberger is, and this comes from our people, because we put a lot of emphasis on education, on the way how we engage with them, and how they participate in the success of the company. We have an employee participation program, where they actually can buy into the company and get granted shares, and we have a reward program if the necessary KPIs or required KPIs are reached every year. So this is an important part of the development of this company. Obviously, also, we take their feedback very seriously when we engage in a dialogue, and obviously, try to improve our performance continuously throughout the process. Very important, obviously, innovation....
I can't stress this enough, because the success of Wienerberger today in declining markets and in difficult economical developments is our innovation skills, and is our performance when it comes to solutions. And here again, you have seen that Wienerberger has become much more a customer-oriented company, a company that is very close to its end decision makers, the ones who actually install our products, work with our products, or use our products. And therefore, I think it's so important to see also that the achievements in 2023 already are great. Great in one respect, this company, Wienerberger, has actually been able to achieve a very important transaction, the biggest transaction in its history, Terreal, without any major remedies with antitrust in its antitrust administrations throughout Europe.
We came through very well in all the major ones, like France, Germany, or Eastern Europe. You've seen us very thoroughly engaging in the process with them, and actually, we can say today that we have achieved all of this during 2023. We expect that our colleagues from Swisspor, who buy the Eastern European activities as foreseen, because it was never part of our deal, will get their approval also in this year. Towards the end of this year, this deal should close. A strong performance of Wienerberger throughout the first nine months of this year. Very strong, considering the sharp decline in certain end markets.
Innovation rate above 30% already, so again, strong focus on this organic development, and very good and very well done by the team of Gerhard that we successfully placed our first sustainability-linked bond in the range of EUR 350 million this year. So a strong performance. Strong performance also financially, with an EBITDA of more than EUR 450 million that we achieved in the first half. Proactive cost management, where we already adjusted the cost structure with a decreased cost base of about EUR 30 million in the first half of this year, where we outperformed the inflation cost increases by price increases, and they stick. Again, why? Because we are innovative, because we offer new services, new products to our clients, and don't, don't stand still in this environment.
We, as Wienerberger, invest in this difficult market environment, because we're going to get out stronger at the end of this cycle again. You see that our EBITDA margins have been stable, also on a very high level, above 20% in the first six months. Again, our company is committed, and really committed to do something good for tomorrow. Not just say it, not just talk about it, but do it. Do it for the planet, obviously, when we take solutions serious for zero energy housing, for better infrastructure, for the people out there, to, to make their lives better and more affordable. That's a big subject I will talk about in a minute as well, and for the convenience. Because there's lack of skilled labor, how do you install all of this? How quickly, how fast, the quality that matters, and the cost.
Therefore, Wienerberger is not only producing products, and that's why we showed you yesterday in our showroom, that's important, how we install products, and how quick, how fast, and from a quality perspective, how well are they installed. So from our perspective here, this matters, and as a company, we can say that 70%, 70, of our turnover and our products are already contributing to the zero energy performing our buildings. So here, again, a strong portfolio for the future. All this, ladies and gentlemen, is based on a very sound and very strong corporate culture in Wienerberger. We are active in 28 countries. People speak all sorts of languages, come from different backgrounds. We have about, in some of our factories, already more than 30 nationalities working. So this is a big challenge for us.
Independent of culture, religions, and other backgrounds, it's important to have key values. Trust and respect are important for us. Passion also drives us, and the creativity is important for the future of this company. So these are very important aspects because we are growing. We are growing by M&A, we are growing organically, and attracting the talents of the future is important, because all of this is placed under one umbrella, Wienerberger. Wienerberger is a very strong brand, and we explained to you yesterday that brand recognition is the key success factor of our business of the future. We told you yesterday, above 80% in this country, and not only by people that are active in the building industry, by everybody. So here we have really created a consumer brand in Belgium with respect to Wienerberger.
Brand recognition above 80% also in the different sectors, because we have a multitude of brands that we use in the different markets and in different sectors where we are active. All of them are well-positioned, high recognition with all the people who install them, use them, or actually draw plans, and, and, architects and others that are engaged in this process. Really, really important for the success of Wienerberger is the strong brand recognition in the market. Everything again, this diversity that we have is under one roof. Clearly, we are the leading company in the roof when it comes to pitched roof. It's not for the reason that I say this now, that Wienerberger is the roof for all of these different brands that we use.
The diversity, the local markets where we are active with local brands, are clearly put together under the world of Wienerberger, and I will show you why it's so important. Because we have clear structures in the company. We are one of the only companies in the building material sector that has chosen for a clear structure when it comes to IT platforms. That is very important to understand for you as well, from the perspective of Customer Cloud, where we have all the marketing and sales and services under one roof, the Industry Cloud, and also the Business Support Cloud. All of this is one Wienerberger. We have now, in all the different countries where we are active, one business service center in place or about to install it. We have one financial director who runs all the back office.
We have one human resource manager who runs all of the human resource activities, and obviously have professionalized all the processes and the know-how. Why is this so important, ladies and gentlemen? It's so important for the future growth of this company, because we can build on future acquisitions on our platforms locally. And so this is a key aspect and a key success factor for future growth. It won't limit us in the future. So this network is obviously a key factor on the back office side. On the front office side, we have worked as well. In the past, 10 years ago, Wienerberger was engaging actually with more or less one customer. Who? The distributor, the builders' merchants, the dealer. This was the key interface for us with the market.
But we actually, when you remember yesterday what I told you in the showroom, 20 years ago, we took the deliberate and strategic decision to move in a new era, to set showrooms up in different countries and regions, to be present in the local market and engage with more decision makers than just one. And you have, obviously, from the private individual to the contractor, everybody is, for us, a part of this decision-making process, and very important to have a touchpoint with these different decision makers. Because they play, dependent on the end market, if it's renovation, if it's infrastructure or a new build, different roles, but they play very important roles for us.
By using all of this, and if I take the architect as one example, for example, we have been able to increase our touchpoints substantially from social media, obviously, to websites and emails and exchanges and regular meetings, to also the social aspects, where we engage with them on a regular basis. It's not just on a project-to-project basis, but a continuous dialogue. That's so important why we can then be successful in implementing new solutions in the market step by step. We talked about this with colleagues of you here yesterday. The traditional communication, marketing, et cetera, doesn't matter that much anymore. You need to be technically skilled. The architect, for example, today, doesn't do a lot of things anymore as he used to do ten years ago. Technical design, advice, regulation work, et cetera.
Some of this stuff we take over and help him and assist him. This is a very important service aspect where Wienerberger has become stronger and stronger. Therefore, it's so important, as I said earlier, to have the right platforms. Here we have worked in the last decade extensively to create those. Not enough. We have moved also in the digital front, when it comes to production, have digitalized our whole production processes, have linked the different aspects of production, and therefore, have been able to professionalize this, this aspect dramatically over the last couple of years. If I show this to you in a couple of slides, and if you bear with me for one second. If we take, for example, a digital order intake, you see 14% in 2020. Today, 60%.
So we have dramatically shifted the business over the last couple of years. This is on the, on the customer end side. On the production side, you see how we have digitalized also our production lines. When you look at it in 2020, we had about 1% of the lines digitalized, now we have 55. So again, you see the fast and very, very strong focus on digitalization in the business. Again, the benefit is that we have one Wienerberger, one technology for the whole platform, for the whole of Wienerberger in the world of Wienerberger. And this gives us the strong confidence for further growth. I tell you this because obviously we are doing or about to start a major integration, like Terreal, with completely different cultures.
This group is not a group, by the way, they are different businesses that have been bought together over the years. But we, as Wienerberger, can put them on our platforms really fast and integrate them in our local businesses. So again, from our aspect, it's so important that we obviously can react very quickly to changing and developing local markets, because actually, there's not one European market, there are many markets. And even in Belgium, obviously, there's not one market. There's a lot of local markets in Belgium, even with different regulations and different dynamics. So the... As I said at the beginning, the ecosystem of Wienerberger is a very complex one, it's a very local one, and that's why we have to be fast and quick locally in order to achieve very good results and outperform our markets.
We are only able to do that if we have common, common platforms and where we have direct access to the decision makers. The ability, obviously, to sell system solutions is only possible if you have this direct contact to the customer and the system in the back office. Let's move on then, logically speaking, to the organic growth of our business. Organic growth means for us that there are mega trends. When we have to face these mega trends and offer the right solutions and products for these mega trends. Climate change. You have seen yesterday different solutions for, for example, rainwater solutions, other solutions for heating, for cooling, et cetera, for collecting water. Here again, the company has moved fast from a traditional piping supplier to a solution supplier. Regulation is driving us these days.
Obviously, numbers of regulations coming out of the EU, of national or even regional, legacy policy bodies, and also in the U.S., for example. Regulation is driving our business continuously, and we have to optimize our solution according to this regulations change. Energy transition is a top subject, not only since two years for us. Has been so, will be so for the future, and here we have the right solutions for obviously using and the transfer of energy and the transition from fossil to renewable energy when we talk about energy infrastructure in the house, in, outside the house, but also for ourselves. Obviously, as I said, the lack of skilled labor to automate a lot of processes, to make them more efficient and more highly performant.
One mega trend, ladies and gentlemen, that nobody's talking about yet in the building industry, is affordability. Wienerberger's top agenda is to make houses, renovation, infrastructure, still affordable. How can you do that? You can do that because you have long time solutions. For example, when I talk about infrastructure, what matters for a municipality is how long this lasts and how do they need a lot of maintenance or not? And here, we propose solutions that last for more than 100 years, with literally no, or very high, very low, maintenance costs. Again, very important also when you talk about housing and renovation, that these solutions last longer, have a very good carbon footprint, and a payback over a long period of time. This is the key driver also for, for people who invest.
We are living in difficult times when it comes to financing, so for people, affordability matters, and especially in one area where we grow now, as we speak strongly, social housing. Proposing solutions for social housing of the future, apartments that are not only cheap, but also healthy to living as far, as far as the indoor climate is concerned, for example. A very, very key subject for us in the future. As I told you already, the Green Deal, infrastructure deals, et cetera. Yes, ladies and gentlemen, they drive our business. Yes, they are important for our business. If they do the positive effect today, I doubt it, because there's a lot of discussions, and you all know what politics means: promises. Only promise, nothing else. The talk is something, action is a different story, but it's good to have them. It's good that people focus on them.
I'm pretty sure and confident that due to the fact that the EU will never meet its own targets of 3% renovation per year, because we are more in the range of 1% a year right now, they will need to do something. They will pressure, obviously, the member states, but the EU commission has no plan. Yeah, but that's another subject. It's just important that you see that there's a lot of potential still to be put in place, also for new housing, because there's a lack of housing. There's a lack of housing from Ireland to Romania, from Poland to Italy.
We don't have enough apartments to put the people in and to have here also apartments that are livable, because in some cities of this wonderful Europe, they are actually not up to the standards that people should live in in the twenty-first century, and they're too expensive also to live in. So here's a massive work to be done. And again, I think on the infrastructure side, I don't have to mention to you that in a lot of countries, the infrastructure is outdated. My colleagues will speak about it a little later this morning, and a lot of investments have to be done. So again, here you see that Wienerberger's portfolio is rightly positioned for this future growth that we will see both in North America and in Europe.
When we look at the strategy of Wienerberger, we've clearly said we want to increase our share of innovative products, and you see it clearly in the last 10 years that we've been able to do so. We are now about, little bit above 30% in percentage point. In absolute terms, obviously, much higher, because it has increased dramatically in turnover, the share of our innovative products. And we have set ourselves, again, a clear target for 2026, with 35% innovative products. So again, a strong boost with respect to innovation within our country, company. On the system solution front, also strong improvement from simple products to system solutions. And here, obviously, we have set 25, we target by the end of this year. We are on good track for this, and we set ourselves, again, new targets for 2026, with about 30%.
I've shown with my colleagues yesterday the system solutions to you, so they get a better feel what for Wienerberger system means. And obviously, we will integrate smart solutions. You remember that we have sensor businesses now within our company, and data transfer businesses into our solutions, and therefore, improve the performance even further. Obviously, and this is very key also that I mentioned earlier, that's the positioning of Wienerberger when it comes to net zero buildings. Here today, 70% of our portfolio contributes to this target, and we want by 2026 to increase it to 75%.
I think this is a very, very key driver, and for you, as analysts and investors, one of the measurements from, of our company of the future, because here we really make a change when it comes to our portfolio, and you can check if we have the right portfolio of the future. And again, I think here we have done a lot, a lot in all aspects of the business, from the roof to the facade, to the water supply, to the building solutions in the house when it comes to heating and cooling, but also to the infrastructure side. Here, again, a strong, strong performance of Wienerberger in the field of this positioning of our portfolio and the future target. So three major targets for Wienerberger on the innovation side, the system solution side, and the contribution to Net Zero Buildings.
With this, I would like to hand over to Gerhard to give you an update on 2023.
Thank you, Heimo. Yeah, year-end is coming closer, and we are constantly reviewing also our end markets. And what we have seen also since the summer, that end markets are quite volatile, stay volatile. One war is following the other. What we have seen during the last months is that especially on the new build side in Europe, that we have seen a slowdown, a further slowdown. So we expect from a today's perspective, a new build market in Europe of -35%. You remember, we announced in August, a -30. We confirm from a today's perspective, also, the renovation markets in Europe. So renovation, we see, is on a lower level, but still much more stable than we have seen in the new build sector of Europe. And we basically revised the infrastructure activity. Infrastructure improved.
We had our latest estimate was -10. From today's perspective in Europe, it is around about -5 for Europe. So it is much more stable and even better what we, in the beginning of the year, and let's, let's say, during the summer, expected. North America, more stable, on a low level, but still basically development, what we see is much more stable than what we see in Europe. So the -20 is also what we see from today's perspective. Renovation, -3, and, in the U.S., especially in the U.S., when it's about infrastructure spend, we are also benefiting basically from the, from the huge infrastructure program, which is up and running in the U.S.
We see for this year a more stable development on the infrastructure field, and we had, in August, a -5. We see here that volumes are picking up, so we see also here a more stable development when it's about our exposed end markets for 2023. I think important to keep in mind, we confirm our guidance, yeah. We don't see any need, yeah, to adjust guidance. We are confident to our guidance, what we gave also during August. It's the 800-820, despite this difficult market environment, yeah? Basically, we can only basically repeat, once more, yeah. We have a difficult market environment. On the other side, Wienerberger has a very strong financial performance. We do the necessary things.
We take out the costs, we take out fixed costs, we flexibilize the fixed costs where needed. So we take out shifts. Basically, we try to flexibilize all the fixed costs up to a certain extent. That means shift patterns, that means also temporary shutdowns, that means also taking capacity out, and important, to do that very fast. Because also, the markets are volatile, so you have to be in the decision-making process, you have to be very fast. And we succeed very well, I would say, because we see also that the fixed cost structure is fine. We stick to our pricing. So also pricing is very strong, and we work constantly on our cost inflation, yeah. In the beginning of the year, we assumed a cost inflation of +10%. Half year, I communicated a +8%.
I expect for the full year, a +6% on cost inflation. And you see already there, yeah, with basically working on your consumed cost inflation, and I consciously use this wording, consumed cost inflation, because it's the, the cost increase, which we have to digest via our P&L. We are working constantly, basically on the cost structure, on the efficiency of the fixed costs, but also basically on our purchase prices, what we have basically to consume. So we have strong margins, and we confirm, as I just mentioned, our guidance for 2023. I will give you also a first outlook on our net income, profit after tax, because I think also, yeah, this is a good chart where you see how resilient, how strong, and how different maybe also is compared to the past.
We had in 2021, and this year was one of the years which had, I would say, the highest billing activity, or let's say, the highest activity on the construction side, but also on the infrastructure side. And if you see basically the chart, what is basically in the chart, what, when you see the line, which is the market index, you see that the market dropped basically by 27%. And we are able basically to keep our net profit stable. Respectively, we expect by the end of the year to have even a slightly higher net profit compared to 2021. Net debt, financial leverage, I think a very solid financial position of Wienerberger. By the end of the year, we expect a net debt position below EUR 1.1 billion.
This comes along with a net leverage below 1.5x before Terreal. Including the Terreal acquisition, I expect a net debt or a financial leverage, which is below 2x. Heimo mentioned it before, first half, very strong performance with a EUR 450 million on EBITDA, operating EBITDA. We are consequent and very disciplined. It's about cost management. We are fast taking fixed costs out, flexibilize the fixed costs, and also bringing basically the necessary contribution from that side. We had EUR 30 million from the fixed cost or from the cost management side. We are still continuously implementing also our self-help program. We had round about a EUR 20 million contribution from there. We are very careful with our pricing because we had a cost inflation in the first six months, as I said, of 8%.
This will come down for the full year to +6, and pricing is very strong. So we are also clearly outperforming our cost inflation in the first half, and also we expect for the full year to outperform the cost inflation for 2023. And this finally results also in an EBITDA margin, which I would say for the first half year is even, I would say, exceptional high, with almost a 21%. I expect that the EBITDA margin will be basically more on the level of round about 18%-19% on full year base for 2023. So a very strong position, even in this difficult market environment where we are in. I think, on the ESG focus, Heimo, I hand over back to you.
Thank you, Gerhard. Ladies and gentlemen, obviously, ESG, as I said, sustainability is in the key of our management attention. We have decided to break down ESG into different projects, into different periods. We have launched, as you are well aware, a first program that took us into 2023, from 2020 to 2023. We have then a next one from 2023 to 2026, and then one till 2030. So why do we do this? For three reasons. First of all, we want to be clearly ensuring a long-term sustainability focus in the group, clearly communicating what we want to achieve, what are transparently and communicating it clearly, what are our targets? Yeah. Not just talk about them like a lot of people, but clearly say, what do we want to achieve, and make it part of our business expansion.
So these are three key elements, and if I walk you through, so the first program that we have, not every detail, but you see that all the different targets that we have put out in 2020, we are meeting it. Yeah? We are meeting the CO2 reduction, we are meeting the, the biodiversity and others, and the circularity. So here, a clear communication, what are our targets and what we achieve. We have worked extensively over the last 12 months. How do we need to adjust our second program that brings us into 2026? And we have engaged with the stakeholders, materiality analysis, and a strong communication with all the stakeholders. And clearly, you find here, for example, four elements, and I took only the four that are important for us here in this meeting. Revenue from products supporting Net Zero buildings. I talked about it.
It's a very important subject for us. Water management, waste management, and health and safety are also now newly part of this communication and target setting. And here, again, if I take only a few out of this, I take, for example, a decarbonization. We have again set ourselves targets. Baseline is 2020 when we talk about CO2 emissions. We say clearly up to 2026, 25% reduction. Now also Scope 3, 10% reduction, and 15% renewable energy use in the own operations. So here, also a clear target setting there. If we take water management, for example, and waste management, you see here, reduction targets also with respect to our business, clearly defined, to be then, communicated to you so you can follow the progress of our development. And I take here diversity and inclusion.
We have set ourselves also targets that all of our businesses, all of them, from India to the United States, have diversity and inclusion plans with equal action for pay and for opportunity in the company. So also here from a social perspective, as I said at the very beginning, people matter for us, and we are clear on this front as well when it comes to communication on these targets. So here, clearly targets for all the different aspects. And I don't want to walk you through all the details, you can find them, but I just wanted to put attention to this fact. I just want to go a little bit deeper into the focus when we talk about the products that are supporting Net Zero Buildings.
And here I said, obviously, it's important because there's a lot of regulatory work coming from the EU Commission, but not only from the EU Commission, national states, also the U.K., for example, has its regulations with respect to these products and these solutions. And again, here, we, with our portfolio, as I have explained already today, we are very, very well positioned for this promising future. The target is very clear for us, 75%. We are currently at about 70. We have also a Moody's second party opinion about our performance and how we set our targets. You see here, the rating is significant when it comes to contribution to sustainability, and the alignment to the principle is best practice from Wienerberger in the industry. So here we have set a new I would call it baseline.
Let me walk you a little bit more through the decarbonization strategy of Wienerberger. I hope with the next two slides, I give you a clear picture what the company is currently doing and where we are. When we look at the measures, switch to green energy, for example, is obviously a major target for us when we talk about mechanical use. That means, green energy in the production process, and the thermal use when we move more towards green electricity and green gases, for example. We have achieved already the mechanical use, and ongoing is the thermal one. That's a bigger part, and we'll talk about this in a minute. Raw materials. Decarbonization of raw materials, use secondary raw materials, all this is currently taking place, and we are running very efficiently on this part.
A lot of optimization comes from this in the near future. Efficiency improvement. You have seen us and heard us talking about the different Fast-Forward projects, et cetera. This is ongoing in the company and running. When we talk about new technologies in carbon capture, we have testing phase or planning in the company, where we have already the necessary investments done and testing them, and can obviously, over the period, report on it. If you look at the time frame here, 2023, 2015 is achieved, 2026, the target, 2025, and 2030, we will effectively have reduced 40% of our carbon emissions. Well on track with respect to this. What does it cost? This was always a question from all of you. What does Wienerberger invest here in this field?
And by the way, so that we have no misunderstanding on the hybrid meeting, the virtual one and here, this is integrated in our gross CapEx. This is integrated in our growth CapEx. There's no additional CapEx, so that you understand that very well from my perspective. We have obviously achieved the 15% with this EUR 100 million invested that we have invested already. The next phase is 25, which is planned, and we have estimated a CapEx of EUR 200 million, which is then in the guidance that I will give you at the end of this meeting, included in the CapEx. So there's no additional CapEx to be planned. And obviously, then the 30 is about 40% reduction, with the EUR 300 million. So I hope I'm very clear on this part. We are very confident at Wienerberger that we'll achieve our targets.
We have set here the different measures and put them in place and are working them. It's not a home run, as the American footballers would say. It's a very big challenge, but we are confident that we will achieve those results. And we also link them to our financing. As Gerhard has put it also yesterday in our meeting, and he will talk about it also today, the successful placement of the bond shows that clear KPIs are well-perceived by the investor community. And here again, decarbonization targets and the Net Zero Buildings contribution from our product and solution side are the key drivers for the KPIs of this bond. So again, here, we keep our promises throughout the whole strategy, throughout the whole development of and positioning of our business.
Let's talk a little bit about M&A and the future of the company. Two words. What have we done? This company has performed successfully more than 40 deals. Successfully, has integrated them. I've shown you we have common platforms. We have not just bought the companies and put it on the balance sheet. No, we have integrated them, have given them a strategy, have developed them, have integrated more than a couple thousand people. That's why I told you it's so important to have a common culture and not just say that you're part of the Wienerberger Group. When we set criteria for acquisitions, we set them clearly because we want to create value. We want to have a strategic fit.
You know our strategic fit, to improve our performance in renovation, water management, energy management, and also in the new build, when we go about efficiency in installation and a culture fit. So clear criterias when it comes to acquisitions. Let's just talk about one major acquisitions in the past. Sorry, I was too quick. This is Meridian in the U.S. A true success story, ladies and gentlemen. A payback of less than two years. And you can say, "Well, sure, you were lucky." Yes. Yes, yes, you need luck in life, but you need also hard work to get there.
And the people did a great job in North America to put this company on our platform, to restructure it completely, to put it in a, in a perspective where we have significant synergies coming out of this deal, significant, improvement in the plants and in the output, and much faster integration than, we originally planned, because two years it took us to get there where we are. You remember, just a little sidetrack, when I told you about the acquisition, that we will realize about $60 million cash in from real estate sales, and we will. By beginning of next year, we will sign the last deal, and we come to the $60 million. So we keep, again, our promises when it comes to, M&A activity. A very, very successful one.
If you look at the performance of our North American business, you can see it obviously, from the nearly 200% in turnover to the 400% in EBITDA. A very, very strong performance of our North American acquisition and the performance in all aspects of the business. Yes, ladies and gentlemen, it was the right timing. Yes, we were lucky, but it was a damn hard work to get there. But you show that we're that Wienerberger can do it, and we have the right platforms to do it. Now, let's move to the other one that we are currently in the phase of getting to an end, is the Terreal acquisition. Again, a very promising one, for not only one reasons, for a lot of reasons. First of all, we consolidate the industry, very important aspect.
Consolidation is a key driver of future growth and of margins, of pricing, et cetera. Here, again, being the one company that is really the leading one in pitched roofing and clay roof tiles in Europe is important. 29 sites, we have no remedies, no sites to sell. Very good for us because we can integrate the whole business that we buy. We will sell about 75 million square meters a year of roof, pitched roof in Europe. That's a lot. That's a lot. It's difficult to imagine what 75 million square meters are, but it's a lot. What does it mean for Wienerberger? Not selling only roof tiles. You've seen it yesterday. Accessories on the roof, under the roof, insulation, photovoltaic.
There's a lot of things to be done and a lot of people that are currently working in Wienerberger to get the whole portfolio right for the different markets. And it means also integrating 3,000 people with a different blood group, yeah? And being, putting them culturally in our perspective, giving them the passion to drive the business further. This is our key one, and we will be a French company in France and a German company in Germany, yeah. And that's how we are strong. Local business with a common platform. And this is the successful integration. The preparation has started already, even if we are still in the closing phase, and we'll have to wait formally a couple of months, but we are already engaging with the teams on the ground to do so. So here, the work has started.
We become a leading supplier, and here I have given you, because I anticipated your questions, your well-appreciated questions, about what you have to put as numbers. And here you have... I hope we give you the right numbers that you can then use. We take the baseline of the business is about EUR 100 million that we add to the, on the cash flow side to our business. We will achieve the synergies from the cost side and obviously also from building this new platform on the roof and get to the EUR 150 million by 2027. Is there somebody in the room or in the virtual room that will say, "Mr. Scheuch, are you a little later than expected?" No, I'm not. Just the closing takes also a little longer than expected, so we are fully in line with our original planning.
And as I said, we use the time wisely, and we've learned from the US. Preparation is everything in integration. Get the teams together. Gerhard is working very hard from Paris to Vienna, and obviously getting the IT platforms then already prepared for next year and the whole teams together. So this is the major part of the work that is already put in action. So here, again, I think you have a clear overview over the different steps of the integration and the synergies of the Terreal transaction. Again, if you look at it from a pure financial perspective, here, as I said, the run rate is about EUR 100 million, the post-synergy is EUR 150 million. If you take the multiples, it's about 6.6x multiple pre-synergies. Post-synergies, we go down to about four, and the payback should be around four as well.
Gerhard mentioned also the EBITDA, net debt to EBITDA level. The 1.9 here is without the EBITDA contribution. It would be, obviously, if we were to have this on the balance sheet, without the EBITDA contribution in 2023. So it's a pro forma one. Okay, so this is on the synergy side and the Terreal one, and now I hand over on the financial track record to Gerhard again.
Thank you, Heimo. Just, some slides on the financial track record for the last 10 years, because it's, I think, also impressive what we see and, what we can report, and, also how this transformation is paying off, basically. That we put a lot of focus in reducing the new build exposure, which was 10 years back in the range of 65-70%, and we constantly basically reduced the share of the cyclic business now below the 50%.... We are today, with the share of infrastructure of around about 20, renovation of around about 30, and the new build sector has an exposure below the 50. Taking now Terreal into consideration, how will this develop?
This will be next year already look a little bit different because we will further decrease the share of new build. As Heimo just said, the Terreal business is also a strongly exposed business to renovation, to roof renovation. This is a big share, around about two-thirds of the business is renovation business of Terreal. So renovation will increase round about to 35%, and new build will further come down more in the range of 45 and maybe slightly even below. Just some KPIs, how they developed during the last 10 years. Revenue, we started basically 10 years back with the revenues, which was round about EUR 2.5 billion. And you see with the average CAGR of 8%, we had last year revenues of almost EUR 5 billion.
On EBITDA, from EUR 0.2 billion up to EUR 1 billion, result, which we reported last year. Also concerning the cash conversion, we have today, let's say, during the last years, a cash conversion rate, which is around 85%-90%, which is also a very high and strong share, which also shows how strongly cash generative the business is. I think there is no better chart than this one, yeah, to explain how different, in the sense, how strong and how resilient Wienerberger is today. We just present here the last six years, and you see also the dotted line is the market index. You see how the market basically, according to our market exposure, meaning that's the weighted average of the market index according to our market exposure.
So meaning infrastructure, new build, and renovation. And you also see where the market is today. As I said in the beginning, we have a difficult market environment. We have a market index according to our market exposure, which is 27% below the record year concerning basically market activity of 2021. And you also see how EBITDA develops, yeah. As I said before, we confirm our guidance for 2023, which is in the range of EUR 800 million-EUR 820 million. And you see also where we have been, yeah, where markets were clearly stronger than what we see today or where we are in today and where the performance was. So it is also clear how this development of this clear transformation to a more innovative and also to a highly strong margin business is developing, yeah.
We had at that time, EBITDA margins, which was in the range of 14%-60%. We are today in the range more of, let's say, close to 20%. And we have basically an EBITDA, which is in the range of EUR 800 million-EUR 820 million for 2023. So a very strong performance when it's about 2023. Let us have a first look on 2024. What we see, as I said in the beginning, markets are volatile, the geopolitical situation is also very unstable, but still, we already have a first view also for 2024. And when it's about cost inflation, we expect the cost inflation, which is in the range of around about, let's say, 4%-5%. The major driver of cost inflation is, I think, without any surprise, is personnel costs.
We simply see also during the last years that the personal costs constantly increased, and it moved the cost inflation from more or less from energy to logistics, and also arrived now in the personal costs. So we the major cost driver for next year, as it is also one of our biggest spends, if I may say so, cost position in our cost structure is personal costs, where we expect a +5%. So this is basically what we feel in our cost structure, which hits us simply the hardest. We've seen the raw materials, a +6, which is also more driven by the indirect costs, meaning by energy costs, by logistic costs. Raw material itself are not increasing that heavily, yeah. And maybe even here, seeing further, maybe there is even a small, let's call it reserve.
However, maybe this is even a little bit slightly lower for 2024 on the raw material side. Energy, + 7. Yeah, we are benefiting simply by, out of our forward buying strategy on the energy side. And on the granulates, on the plastics, we expect a more stable development. The granulates were decreasing in the second half and are still basically on a decreasing path, basically in the second half of 2023. We expect that also the grains are stabilizing into 2024. What does it mean for our pricing? We are preparing our markets for a further price increase in 2024 in the range of 2-3%. This is also what we need to cover this cost inflation, which is in the range of 4-5%.
When it's about financial position, financial policy, we mentioned it quite often that we said, okay, basically, in the with the financial leverage in the range of 1.5x-2x , we, we feel comfortable. This is a range which is fine when you do an acquisition, it goes up to two point, to 2x , let's say that way, then we try to bring it back on a 1.5 x. As Heimo mentioned before. By the end of the year, we expect a financial leverage of below 1.5x . And also, thinking forward on 2024, it is what we expect it will be by the end of 2024, in the range of 1.6x , 1.7x, depending.
But, considering also basically the Terreal acquisition, what we have in front of us. Working capital swing, we will move back to a more normalized working capital swing. Please keep in mind, yeah, that the working capital ratios, what you have seen during the last years, especially after COVID, yeah? You remember, after COVID, basically, the Q2 of 2020 was a quarter where everyone basically was slowing down the production output, and then there was a very quick catch-up in the Q3 and in the Q4 . And then it started in 2020, that our working capital ratios was since then more in the range of, let's say, 16%, 17%, but this is for us, too low, yeah.
So we need a working capital level, which is in the range of 18%-20%. So that means also for the end of this year, for 2023, we will expect a working capital ratio of roundabout 20%, which is fine for us, which fits, which makes us ready also for 2024, to have the right products basically on our stockyards and to be ready to move into 2024. You also see that we have quite a significant swing in our working capital. You see that half year that we build up, basically, our working capital in the range to 24%-26%, and then basically, due to the seasonality of the business, we bring down working capital on a normalized level of, as I said before, to 18%-20% by the end of 2023.
CapEx, we also give already a first guidance on the CapEx, on the maintenance CapEx. You know, these are the CapEx, what we have to do to keep everything up and running, to keep our industrial base in shape, to do the necessary things. We guide for 2024, a number of EUR 150 million to consider. This is slightly lower than what we would normally invest into the business, and this is including the Terreal acquisition. So all the plans, what we mentioned before, are included from a maintenance perspective, yeah? So we had in the past, most probably you have still in mind, a EUR 140 million. This was our normalized CapEx before Terreal. Due to the difficult market environment, we will reduce this year our maintenance CapEx to EUR 125 million.
We will also move into 2024 with maintenance CapEx of EUR 125. We'll add a 25 for Terreal, and this is the number, 150, what we foresee for 2024, when it's about maintenance CapEx, yeah? A normalized maintenance CapEx, based on the industrial base, considering Terreal acquisition, would be EUR 170 million, yeah? So keep in mind, so after 2024, so 2025, 2026, we will come back with maintenance CapEx in the range of EUR 170 million. When it's about gross CapEx, gross CapEx, we keep going with our gross CapEx. You know that we invested during the last years in the range of, let's say, between EUR 150 million and EUR 250 million.
We also keep investing into the business, even if the market environment is difficult, yeah? We further invest and grow the business, so we foresee also in the next years, a CapEx program, a gross CapEx program, in the range of EUR 150-EUR 200 million. As Heimo emphasized before, important, this is an all-in number, yeah? This includes also our necessary ESG investments, what we have to do to fulfill basically our targets, what we have set in 2026, yeah. Keep in mind, -25% and -10% on Scope 3, et cetera, et cetera. This is an all-in number. Between EUR 150 million and EUR 200 million, we will invest in 2024 and going forward.
This is basically what we expect with a payback, with an average payback of five years, because yes, on the ESG side, the paybacks are not in the range of 4-5. They are a little bit higher. They're more in the range of 7-8, but we have many of other projects which are more in the range of, let's say, the good ones, the really good ones, are in the range of three. You have a lot of payback, CapEx in the range of four, so you come to a weighted average payback, basically in the range of 5x . Coming back once more to the integration of Terreal. Heimo, I think—
Thank you.
Some additional words on that.
When we talk about M&A and what Gerhard has explained, the gross CapEx is a CapEx that we can decide. It's discretionary, so we decide if we invest more or less in the business. The same goes with M&A. Obviously, 2024 will be marked by the integration of Terreal. But ladies and gentlemen, I tell you also, these days are interesting days, because a lot of companies are under pressure, have financing issues, have balance sheet issues, and for us, obviously, when we want to expand our business, that's the right time to focus on that.... Yeah, so we have, as we speak, a very interesting pipeline of smaller, mid-sized, and bigger acquisitions in North America and in Europe.
Doesn't mean that we have to do them, but we can do—we can, in a very relaxed way, look at them, prioritize them, and then come forward with the one or other acquisition. When we talk about performance, if we say that this year will close in the range of EUR 800 million-EUR 820 million, considering the market development, we foresee, as we speak, the end markets being as they are today, that we will be able, including the contribution from the Terreal acquisition, to end about in the range of EUR 900 million for next year. So a very clear, strong statement from us as of October. What is it today? Middle of October, I would say, yeah, for next year. With all the volatility that we face in the marketplace, obviously, but we love these stormy waters in Wienerberger.
We have always operated in this environment. It's, it's rather—it's not as nice as outside today there, yeah? It's... You can ask questions about pricing, about markets, et cetera. Yes, it's not easy. As I said, it's not a home run. Is it easy to raise the prices next year about 2-3%? Certainly not. Certainly not. Our teams are very committed, they're working hard, and they need to go out there with some innovation, not the same products, old stuff, et cetera, that we had in the past. You, as I said, you have to sell something more, something additional, in order to achieve that. That's our target, that's our commitment that we have in front of you.
So it is a strong statement of confidence and of strengths that we put forward to you for this year, especially when we talk about guidance, and especially for next year, when we give you a next estimation. But as I said, we at Wienerberger don't stand still. We just don't. We love these crisis times because you can create a lot of value for you as shareholders. And if we look at the midterm, you've seen our 2026 targets, ESG, other targets when we talk about innovation, about systems, about net zero buildings and contribution to them. What does it mean for us business-wise? Bottom building, I think, will be in 2024, next year. Why? Because obviously you see the permits are going down due to the simple fact that financing is not assured.
You know that a lot of people cannot finance today their projects, individually or project developers, et cetera. Literally, in some countries of Europe, the new build sector for apartments, for houses, has come to a standstill. That's what it is. It's a very dramatic situation right now. I don't, I don't shy away of saying this, because some governments actually caused a mess, like the German government, for example. It's a real messy situation there. So we would say that this will take us through 2024, with some bottom building year, slight growth in 2025, and then a sort of normalized level from a Wienerberger perspective. I'm not, I'm not a forecaster for, for the whole markets, but from our perspective, we see here a normalized level. What does it mean?
You remember the chart of Gerhard when he made the index 100% in 2001, and then coming down. We say that this normalized level is not going to up to the 2021 levels. We say it's about 86% of, of this index that we will reach in 2026. This is where we position ourselves today as Wienerberger. What does it mean for us, money-wise or financially-wise? As I said, we start with this guidance for this year, EUR 880 million, EUR 800 million-EUR 820 million. Ladies and gentlemen, let me say something. We won't keep this automatically in the years to come. We need to fight hard to keep this level, and this is only possible with innovation and continuous improvement in our business in order to keep this level and the margins.
As I said, in year three, and you have seen my chart earlier, 130 will come from the Terreal acquisition. 100 will come from the growth CapEx. You remember, between 150 and 200, we will invest in the business with a five-year payback. This is innovation, this is system solution, this is fast forward. There's a lot of sort of things that we do into the business, and we will grow it, therefore, organically, with about EUR 100 million over this period of time, in the next three years. And obviously, as I said, we anticipate a certain degree of market recovery over the next three years, from the 73% index that we see in 2023, up to about 86% in 2026.
So with normalized margins, with not improving margins, with normalized margins, so that we don't say that this here is outperforming the current situation. So this all together, obviously, you are better than myself when you do arithmetics, but I've done it for you, so it's easy, that at the end of today, we will end up more than about EUR 1.2 billion, estimated in about 2026. Is this achievable target for Wienerberger? Yes. Clear? Yes. That's what we commit ourselves to as management. You've seen us committing to numbers in the past. We do this also this time. As I said, we love stormy waters. Yeah, we love it. It's a good time to set new goals, to set new targets. It's challenging, but as I say today, in this environment, I'm optimistic. You know, I'm in this industry for more than 26 years....
I've seen a lot of declines in going things up and down, but I've never seen a Wienerberger stronger than the one that we are today. Enormous commitment from our management teams, enormous commitment from the more than 20,000 people working for us these days. They are highly committed to the targets that we have set. Keep in mind, ladies and gentlemen, over the last 10 years, we have significantly consolidated the industry. Significantly, yeah? There are a lot of players that have left. There's a lot of change that come, came to the industry, and there's a lot of performance that has changed, technology-wise, sales-wise, and otherwise, that we have, sort of brought to the company and to the positioning of Wienerberger as it is today.
This makes all of us very committed to these numbers and very optimistic that we will reach them. That's why, obviously, on this growth course, we will focus very strongly on portfolio expanding and expanding our portfolio when it comes to renovation and infrastructure. You've seen yesterday certain of our solutions. You have seen how we constantly focus on them, and I can tell you, when you look back personally 20 years, it was difficult to conceive where we are as Wienerberger today. Yeah. Some people in the market, they have probably still in mind, this is the old brick industry. Yeah. We've nothing to do with this old brick industry anymore. We are very modern and future-oriented company when it comes to solutions for our clients.
This is, I think, the major driver when we talk about, again, growth for this company in the future. Obviously, you've seen how fast we react. Ladies and gentlemen, last year, we were working with management to get as much products out of our production units as possible, because demand levels were very high. Today, we have to manage a completely different scenario. And as Gerhard has explained, we manage costs, we manage capacity utilizations, we manage margins, but it's very different from last year. You see how quickly Wienerberger adjusts to this situation, how fast we are, and we are preparing ourselves, as I say, also for the next three years already. This is what we focus on, and this is our major driving force within Wienerberger.
I do sincerely hope I gave you a good overview, together with Gerhard, about our company, what we are currently doing, what we are focusing on, and what our targets for the next couple of months, next year, and the next three years are. Thank you very much for your esteemed attention. I do hope that you will have some questions. Otherwise, we run all of us down for some coffee, for some well-deserved. Thank you very much for your attention.
Thank you. Gregor Kuglitsch from UBS. Thanks for the presentation. I guess my first question is maybe just on the markets and kind of what you're assuming. Obviously, you're saying sort of the current run rate. I just want to understand in terms of, let's say, 2024 versus 2023, I guess that still implies a decline, but if you can give us a feel, because the exit rate's lower, right? So if you can give us a feel, what kind of decline you're thinking for your business, maybe simplistically in volume terms for next year to get you to that sort of EUR 900 million. And secondly, I mean, we've seen some perhaps evidence of some local price cuts. You're kind of saying it's not really happening. If you just sort of tell us what you're seeing in pricing more broadly.
And then maybe a final question, which is strategic. You kind of alluded to it, but perhaps there could be some distress, maybe valuations come down. So, so what are you willing to do? I mean, you're obviously just about to close Terreal, which leverages the balance sheet a bit, but what, what are you prepared to do in case something comes up?
I might take, with your permission, your last question first. Yes, there is already some, sort of, signs of distress among, industry, colleagues, some smaller ones. You've seen us move on these targets, if we can, very quickly. This is not, a big, sort of amounts that we need to contribute to those transactions. So step by step in different markets, we will focus on them, and if some interesting opportunities arise, we will certainly do that. Yeah, but this is nothing to sort of, a big... We are not talking big numbers here. It's a couple of EUR million, to be honest, yeah. Mid-sized, transaction between EUR 10 million and EUR 60 million, for example, yes, they might come, and, we will look carefully at those because they are highly value creative.
Transformational deals, I think for the moment, it's too early to talk about those because we have, as you correctly say, one transformational transaction that we'll close and have to implement. So I think from the perspective of strategy, I think here, focus on smaller ones and mid-sized ones if they are available. So not, you've heard, my colleague, Gerhard, very clear on the balance sheet and our sort of target when we talk about net debt level, and that we are committed to this one. Pricing generally is stable, I would say. Obviously, in a company, when you are 28 markets, national markets, and a lot of regional ones, you have competitors left and right that sometimes cut prices and are very excited about this. So this is a thing, I think, which we have to deal with.
Nothing, I would say, to get excited ourselves. We are the market leader. We know how to act in such situations. You know, this is nothing where I should sort of say, I'm completely nervous, or I'm unrelaxed with this. This is a normal situation which we will have to face. Again, I said, we as the leader, when it comes to innovation, to solutions, we have to show the way forward and just to stick away from the commodity businesses. So far, I can say that the price increases that we have positioned and our prices stick. Do you want to say something to the first question?
I think I can confirm basically about the pricing, what we have seen, and I think what is important, we prepared also last year. The price increases for 2023, we realized them basically in the Q1 , and we see also prices are up, yeah, and they are stable. And I think what we are working on is more on the cost side. We see also that cost inflation, as I said before, we assumed the cost inflation of +10%, this will be +6%. Cost structure, taking out basically costs where needed and to have basically the margin, what we earn, stable and protect basically the margin, yeah. Because we know price is under pressure. It's not easy basically to go out with price increases, no doubts about that.
But then, basically, you have to first secure the price, setting what you have on the market. Secondly, you have to work on your cost structure. If it is on the cost inflation, on your procured cost inflation or on your cost structure, this is basically where we are putting a lot of focus on.
Your first question was relating to market development in 2024. Let me put it this way. When you talk about infrastructure and renovation, you will see more stable trends, I would say, for 2024, and that's what we have assumed, based on the numbers that we see, towards the end of this year. So this should continue into 2024 as well. On the new build side, I think you will have a mix, a mix, and it's difficult to predict at this stage because it's very early, but some markets might be slightly down next year, because they are entered the down cycle a little later, and some markets should stabilize.
If you want me to be more precise, I would say on the Eastern European front, that has seen sharp declines already in 2022 and into 2023, they will stabilize. We talk about Hungary, Poland, Czech Republic, those countries. And on the Western European front, you might have still some declines in 2024.
Thank you.
Yes.
Yes. Good morning, Markus Remis with RBI. Can you maybe elaborate a bit on the capacity adjustments and curtailments that you've implemented, and if you have more plans in the drawer? Also, on the walk down through 2026, what I, or what at least might be missing from my perspective, is the self-help, which you usually have penciled in in the guidance. Was it just me missing it, or is that some sort of buffer that you have baked in that waterfall chart to kind of have some leeway in case markets do not recover as expected?
I think if I may take this together with Gerhard, but, in the EUR 100 million, you find everything included. You see? That's the, that's the gross CapEx, as I said, that we put into the business. That's the automation, that's the energy efficiency things, that are the sort of short paybacks, also that, Gerhard was alluding to. Here you find this part of the, the fast forward going forward. By the way, for us, fast forward is a continuous project, yeah? To defend our margins, to improve the business, to grow organically. This is, something that you've, that you will see continuously going forward.
So self-help, self-help will not fast forward, however we call it. Basically, it is simply to work on your continuous improvement. This will not disappear, as we said, it is part of the DNA. We still have our program up and running. So many, many initiatives, what we follow up. We see a shift, more in the direction of manufacturing excellence. We see that there is also, with the energy transformation, a lot of things to do, opportunities where we can further improve, basically, our cost structure. So, it is a combination of manufacturing excellence and also basically out of innovation, because the new products are also contributing. And this is, how we also see the EUR 100 million for the next three years contributing basically to organic growth.
And, to coming back to your first question, when Markus, when we look at the market developments that we have shown to you, you have followed us, obviously, very thoroughly, how we came down, especially in the new build one since the beginning of the year, and adjusting capacity market by market. Yes, we are doing this proactively. That's why we have the EUR 30 million proactive cost management already, for the first half of this year. We will do so. It's included in the EUR 800 million and EUR 820 million guidance. It's included in the target setting for 2024 with the EUR 900 million. So we have obviously built this and factored in according to our market estimates.
As the markets are very volatile these days, and as we adjust, basically, I would say on a monthly basis, it would be, you know, very, very detailed to give you these numbers. But, you can assume that everything is included in our numbers that we've shown to you today.
Can you [inaudible]
Can you maybe just indicate the percentage of capacity you took out so far, and will you incur any major costs in the coming quarters?
... No, I think that's, I would say, it's pretty digestible from my side, yes.
It is a difference, yeah, because you have to distinguish between really capacity taking out with final closures, then we also go for temporary shutdowns, and we take capacity out by shift reduction. It is really a three-step approach, basically, and finally, even a fourth approach is to reduce basically the shift speed. This is a combination, yeah? Really to take out, finally, capacity, this is overseeable.
Marcus, I don't want to go in all details. This would go much too far with 28 countries. But for, for your benefit, if you take, and it's easy to assume, take the Hungarian market. The Hungarian market, everybody here in this room knows, is in the new build sector, down above 50%, yeah? 50 minus, compared to last year. That's what it is. So you need to adjust your capacity. What we have temporary standstills, we have sort of, taking vacation. We, we all do sort of plan this, yes? And there will be, obviously, longer standstills over the winter. That's what this is. We take out capacity, we manage it. But on the group level, we have. We have pulled it in, yeah. So this is a step-by-step approach, country by country.
Trust us that we know how to do it. Over the years, we have experienced it. You know, COVID, we had pre-COVID declines, we had after-COVID adjustments, now we have a very different setting. So we have actually already done the necessary homework when we come to these countries, yeah, and do it continuously, country by country. Tobias, you need to get the mic.
Thanks for this presentation, for—and for the long-term outlook. I appreciate it. Two questions from my side. When I look at the exposures, I have my own estimates. What actually is residential and, sorry, non-residential infrastructure? You only give it by new build and renovation. Can you just remind us what the renovation split would be into the subsectors, residential, non-residential, and infra? I suspect most of it would be probably residential on the R&M side.
Correct. Correct.
Yeah. And then the other thing, which I think is a very interesting trend, and the mega trend, as you rightly say, which has not been picked up, which is social housing. You see very diverging permits between private and public spending on the housing side. So it would be quite interesting to know how much exposure you, as a group, would think have to that side of the equation, i.e., public housing, for us to get a sense of how material that actually is. And then the second question is around pricing, just to follow up on pipes. When I look at the latest data to August, it seems to me that pipes year to date, or plastics, are probably up 3%-4% or something like this, 2%-3%, 3%.
Actually, sequentially, they are already starting to be down. When I look at your granulates number, at -1%, it would tell me that next year you'll struggle to maintain your margin on the piping side.
Maybe to start with the last one. I think, this is what we expect. How we steer the company, yeah, how we steer basically the business on, on the grains pricing and also how, how we set basically pricing to the market, can be something different, yeah? So we basically foresee stable margins also on the piping side. So we not foresee that basically our margins on the piping side will come under pressure.
Social housing, yes. If I may say so, bricks are red and red. You know what I mean with this. It's, it's, actually a product that is very much appreciated by social housing builders in certain areas. The urban construction, when we talk high-rise, obviously, bricks are not so much present when we talk about clay blocks. The good news for you, and I told you this over the last couple of years, that we get back into this market. In Austria, for example, we built the first multi-residential housing unit in Graz, in the city of Graz, with nine floors. This is an entirely brick building. Again, here you see a good, I would say, trend in social housing. The numbers, we will check, and Tobias give you the, what our exposure is to this sector.
There are a couple of questions. The ladies will handle that.
Hello. Mariane Senjak, Erste Group. I have a more strategic question. How do you integrate artificial intelligence already in your business, and what potential do you see out of this?
May I just say one thing? I don't want to go away from your question, but you have seen how we take digitalization seriously with the charts that I have shown to you, and how committed we are to set here the trend in the industry, and measure it clearly. I think it's a little early stage for artificial intelligence, and again, it depends a little bit what you understand by it, and some people understand different things. But I would say it will obviously play also an important role when it comes to our automation process, when it comes to administration, spec, invoicing and other stuff, for example.
The financial reengineering of the other field is the manufacturing excellence, where we discuss, brainstorm about first ideas, fields of application. But as Heimo said, it is, I think, stage too early to already speak about it, seriously.
Still, if I may say so, and I might sound old-fashioned, sorry about that. I'm getting older every year. But the personal contact is still very, very important in the construction, infrastructure, and renovation business. All the sort of back office things, yes, you can change, and we do this, but the personal contact and, for those who have been in the showroom yesterday, it's still key. Because a very important decision, building a house, renovating a house, infrastructure, even public, sort of, customers or institutions still look for the personal contact, so this is important. Yes, we will use it wisely. We must not be always the first company. That's what I'm trying to say. Yeah? Thank you. There was one question here in the front.
Yes. So two questions, maybe. First, a question on your roofing strategy. We see a lot of changes on the commercial roofing.
Mm-hmm.
And, part of the clients of commercial roofing are your clients, the roofing contractor. Do you think there is an opportunity for Wienerberger to do the same as BMI did, and to have both a flat roof offering and a high slope offering? And in the U.S. as well, the same standard industries as an interesting offering with asphalt shingle and flat roof. Is it something that you could consider to use your relationship with roofing contractor to move into asphalt shingle or to offer the whole range of a solution for your clients? That would be my first question. And then the second question on pricing. We start to see pricing coming up a little bit when we see the statistics in Germany, in Romania, for brick and tiles.
Is it your competitor offering discounts? And it looks like your, some of your competitor, at least the market, might enter the year 2024 with a pricing level which is lower than 2023. Is it something which is just affecting your competitor and not Wienerberger? And if it is the case, is there a risk of you losing a little bit of market share and underperforming a little bit the market?
Thank you for the two questions. I don't know if you want to jump in. Just one thing on the pricing. I'm very conscious that a lot of smaller, mid-sized competitors, and we talk here exclusively about brick and clay blocks, have used a model that is not, was not uncommon in the industry and still is not. It's not used by Wienerberger. They have set prices and have then included energy supplements, yeah? And they have basically increased and their prices set to the clients. "Because my energy is more expensive, I have to put up my prices with 20% or 15%," whatever. And now they're obviously having cheaper energy and reduced it. So that you see in the statistic.
We have obviously never used this model because it's actually a short-sighted one and puts you back to what I said earlier in the commodity race, because you're just a commodity, you're traded like this. So this is something where we have a completely different pricing approach to our competitors, first thing. Secondly, I think, market share-wise. When you have small competitors with one site, yes, sometimes they might... And I told you this when we talked about the extremely good result in 2022. I said we gained some market share in certain areas, you remember? Because we were able to produce and we were delivering products, where some of our competitors were not even in the market, yeah.
So we have estimated that some of these markets will be taken away from by the small competitors, but it's very regional things, so it's around their factories, et cetera. So it's nothing that I'm too worried about on the big scale. Hopefully, I addressed this one, yeah. On the roofing side, one other item. We carefully monitor our competitors, what they do, et cetera. Putting pitch roof and flat roof together is not a good option. Not a good option. It has not proven to be very successful. Sales, technical-wise, installation-wise, very different. Don't want to judge the esteemed colleagues of us and how their performance is in the market, but we get the feedback from the clients, we get the feedback from the customers, and we see their performance. It's not a good option.
When you go into this field of flat roofs, and you were alluding to commercial roofs, obviously, in Europe as well, then it's a different business with different materials that you use. We are about to look at it with certain solutions that we have already testing in the, in the market. So this would be an add-on. Obviously, you use your contacts, yes, your network, but it's a different sales approach. To your point here, on the U.S. front, I can exclude formally that we enter into shingles. Why? Because ESG-wise, this is not a product that Wienerberger feels comfortable with, yeah? It's not a long-term product. You have to change the shingles on the houses every 30 years or 25 years. It's, for us, not the right product to be in.
Could be that we come up with some other solutions on the pitched roof side in the U.S., but from our perspective, the shingles are not the right one. I hope I addressed this clearly.
Maybe a follow-up. Maybe a follow-up question on the system that you can sell.
Mm-hmm.
Part of it is, the underlay-
Yes.
- that you produce.
Correct.
But a big part of the system is insulation.
Correct. That's the point.
So would you- If you're generating EUR 1.2 billion of EBITDA, you would have a lot of free cash flow. Would it make sense to either build your insulation facilities or to purchase assets if some assets become available?
I think, I, I restate what I said already in other occasions when I talked to you or in other meetings, that when you look at the product portfolio of Wienerberger, insulation is obviously one item that is very interesting to have in our system approach. You use it in the façade, when you insulate, in the twin wall system, when you talk about the U.K., U.S., or here, this country, where if you've seen yesterday, also when you talk about the infill blocks on the roof obviously, or under the roof, as you correctly point out. So this is obviously one part that in the portfolio could be a very strong contributor to the system. Yes, we will look at it at the right time.
Thank you.
Thank you. Sorry, sorry about that. One second. I just want to know, is there one? No question from the virtual room, firstly. So that, to the guys who are listening, we are closing this in one minute or so, or already closed. If there is an urgent question, please make sure that you ask it now. Otherwise, we would call the day with respect to the virtual room, the Q&A session. Thank you. But here?
Good morning, Patrick Steiner from Kepler Cheuvreux. Just one quick question from my side. I mean, you revised down your expectations on European market volumes for residential new build from -30% to -35%. Can you just give us some insights on what happened in the last couple of months in the western and eastern part of Europe? Do you see already some kind of bottoming out in the eastern part and a further decline in western, or what's going on?
As I've said, yes, we, from our perspective, as Gerd and myself told you, it's a volatile environment. It's changing. I think the shock that the very fast and continuous increasing of interest rates by the European Central Bank is provoking in different economies is there, undoubtedly. You are absolutely right when we look at 2022 and 2023, it has started much earlier in Poland and in Hungary, because here, interest rates were shooting up already last year, inflation as well. So the markets got hit earlier than in Western Europe. Very, very strong contributor to the decline is Germany these days, yeah. To a lesser extent, Netherlands, Belgium, France. They're more, they're more holding up, I would say, and the U.K., but Germany is still the factor that has contributed to the decline overall.
I would say, if you ask me, it's—sorry if I say it, it's looking like a glass ball these days, but hopefully, the German government doesn't make another crazy move, but should be bottoming out, yeah. At the end of the day, what I feel in the German market already, that people are getting used to this interest rate environment and to the environment and want to build, yeah, because there's demand levels there, yeah. Probably some of the very big projects that you read about and that you hear about, the real estate development projects get delayed, but in the smaller units where we are present, I think there should be a bottom building then into the 2024 year. Yeah?
Thank you very much.
Ladies and gentlemen, if there are no more questions here and in the virtual room, I... Oh, there's one. I, I would have thought so. Would have been surprised.
Yeah, Till Hufnagel from Petrus Advisers. Quick question for me on the midterm plan that you've laid out. So basically, you are assuming the market will recover a little bit, and I think we imply a growth of about 5.5%-5.6% per year of the market. Just back of the envelope, we assume that you are targeting about 8% revenue growth over the same period. So an outperformance of about 2.5% per year. Just wanted to confirm that, and then equally wanted to confirm that assuming the market recovers more, let's say, back to 100%, which would mean 11%-11.5% CAGR out to 2026, you would still believe you can outgrow that by at least 250 basis points per year.
And then last question, should we assume in a scenario like that, the, your profitability would be higher in the outer years than the 18%-19% that you've sort of alluded to for the, for the second half of this year?
Maybe on the later one, on the profitability, what we did is, yes, we were growing the markets. We see from a today's perspective that we were also benefiting during the last years from, strong long-term contracts, when it's about on the procurement side, when it's about on the fixing side on energy. So we see, as I said before, 2021 was percent on profitability on the high side. I'm considering more 18-19, and this is also what I considered basically here in the EUR 170 million, which is a kind of when you only consider from, the market index to move from, 33% up to 68%, yeah? This would mean a +18% basically on growth.
This would have even a higher impact, only volume driven, and therefore, I took out, let's say, an overproportional margin, let's call it that. Not so much on the pricing side, more where we say, okay, the price over cost performance, what we see today, yeah, on 2026, I basically assumed a more cautious approach, yeah? Therefore, this is the EUR 170 million, how it is calculated.
If I come to you, what you were alluding to, this 170, I think it is clear, and you pointed it absolutely correctly out, that these things are in within our hands, yeah, the development, and this one, we gave you an indication. Best guess from today's perspective. From the potential side, and, you know, you can be super positive, and, you know, as we also put here, I think one thing into place. Keep in mind that, there's a limiting factor. You need hands to install the product, yeah? And, obviously, if the market comes back, we will see, and hopefully there are enough hands there on the construction. So we talked about this extensively, and in some countries, I fear that we won't have enough people to install that, why innovation is so important.
But I do believe that obviously, yes, we could obviously do more here, and if the markets are coming back stronger, this number will increase. Yes, correctly. Other limiting factor is our capacity then, yeah? And we will see, market by market, how much we can then deliver. But I think from a perspective of potential, we are fit to satisfy 100% demand level as we have seen in 2021. This is for sure. We can satisfy this with our current industrial footprint, yeah? So I think what we wanted to give you here is a clear indication, guys, we are ready for the future. We can satisfy increasing demand levels around Europe and North America. And this is also from a confidence, we invest into this industrial base to grow it into this difficult market environment.
So I think this is the clear message. If I may summarize it from our side, again, strong commitment to the numbers this year, next year, and the growth. Confidence with respect to our solutions and our sales approach, confidence with respect to pricing and the margin level, and therefore, ready to go. And I think, we will be out there as from tomorrow. Thank you very much for your attention. Thank you. Thank you. As, already said at the beginning, my two colleagues, Doris and Wolfgang, will now take over and, talk, about energy and water management at Wienerberger. Some of you being, there yesterday, afternoon and evening, had already a good overview. We will have now a deep dive in these two aspects from the two colleagues. Let me say a couple of words about the two.
Doris is with us now for a couple of years, a bit more than a couple of years, if I may say so. She has been in different roles operationally, especially in the piping activities of Wienerberger. Has now taken over the whole piping activity when it comes to the development from product to technology, from sales approach to, obviously, development of products. So a lot of things that are important and heads this division. Wolfgang is with us also for quite a while.
Almost ten years.
10 years, right? I remember still when the young Wolfgang worked with me for, in the M&A part, yeah, development part, responsible for a lot of transactions. Has grown also into his new role and is now heading the Northern European region, and a lot of focus also on the piping there. The floor is yours, both of you. Thank you very much.
Thank you very much. Yeah, good morning, ladies and gentlemen. As Heimo already mentioned, we will have a deep dive into the energy and water management part, driven by the piping division of the Wienerberger Group. It is quite an interesting ride, I would say, as our living space is changing quite fast, quite rapidly. The dynamics of our environment are really changing. And, of course, that is something we need to adapt to and provide the solutions we're talking about all the time for our customers. And this is where we'll give you this deep dive, show a little bit of what we're doing there, how we go about this. But first of all, let's talk about this changing environment. What is it? We all talk about climate change, something we hear all the time.
The effect on our clients is, for sure, on the one hand, the long, dry periods. That changes a lot for them. When it rains, we have extreme volumes of rainfall. Our road networks can't cope with this anymore. Airports can't. Sewage systems have not been designed to cope for this. So there is really a new reality out there. That also has an effect on our groundwater levels. You know, huge downpours just run off. They don't refill the groundwater level. So for our water companies, it means they have to dig deeper wells. They have to get the water from deeper levels, which increases their energy cost. The temperatures have an effect on that, as higher soil temperatures can stimulate microbial activity, so water quality has become a very different animal here. Talking about energy, this has a huge effect on cities....
Urban areas, on average, have 1-3 degrees more during the day, and between 5-10 degrees more during the night. So when we used to be huge energy consumption consumers in the cities during the wintertime because of heating, we're now adding the cooling effect during the summer. The energy levels, the energy requirements, are really growing extremely fast. And that, in an environment where we have shortages, uncertainties, huge price hikes, and we also see the dependence on water and energy. Dry summers reduce hydropower in Norway. They threaten nuclear reactors in France, and when that happens, our prices go up. So in this environment, our customers, be it the residential sector, the commercial buildings, or the municipalities, have to find their place in this new reality and cope with these changes.
Which is why we have adapted our portfolio, our solutions, to cater to these new requirements on the public side, but then also on the building side, which we will dive into right now on the example of renovation. The European building stock is responsible for more than 40% of the energy consumption, and between 36% and 39% of the greenhouse gas emissions. That is quite a lot. When we think energy consumption, you know, it's always the bad industry coming to our mind. No, it's the building stock that really consumes very much. Of course, regulations have an answer to this, and have very ambitious plans. As Heimo already mentioned, yeah, those plans are really, really ambitious, and maybe not everything will materialize in the short timeframe they have set, but things are already happening today.
CO2 emission reduction programs are in place. There's a goal out there to reduce the CO2 reductions by 55% until 2030, and of course, become completely carbon neutral by 2050. Now, what does this mean for the building stock in Europe? We have around 131 million houses in Europe. Far more than 200 million dwellings, but the housing stock, 131 million. Out of this, 92 million, or 70%, are in need of renovation. Now, what determines the need of renovation? There is a classification out there that we all know from washing machines and fridges. You see those A - G labels sticking on there. This is basically what we have for the houses as well, and those 92 million houses have a label of E- G, so rather low.
The European Union wants all houses to become at least label D by 2033. So that's a huge goal. Roughly 50% of the buildings that we have are more than 40 years old, so they have been built in the '70s and even before. The building materials were different then. So it, it really tells us that, you know, when you heat a building, a lot goes to waste. That's common sense. Well, it, has an even worse outlook because 35 million, 27% of all these houses, have the worst energy label of F and G. So those are the ones we really need to address at the very beginning. What does it mean to address it? What do you have to do? Well, you see here that, 80% of a building's emissions are generated during the operation.
The big, big, big portion being heating. So there is a necessity to switch to carbon-neutral fuels for heating, and with that comes a change in the heating system. You can't continue using with your heaters as you have, if you have photovoltaics and the heat pump. You need low-energy heating systems for that. The general energy demand has to be reduced in the housing by improving the performance of the building envelope, means the walls, the roofs, photovoltaic, combined with smart electrification. And then the last part, as you see it here, is the reduction of the embedded carbon in the construction and renovation materials to get to climate neutrality. So as Wienerberger, this gives a rather good picture because those are exactly the areas that we address with our solutions. This is where we are.
This is what we can offer to this market. And the European Union also provides a lot of support to do that. Up until 2029, EUR 66 billion have been dedicated to the renovation. Now, those are distributed throughout the countries, implemented on a national level. Additional measures are added by the different countries. Implementation rates are a bit different, and you see some examples here, where I would like to dive into Belgium a little bit, since we are here. The bill from the European Union for Belgium calls for EUR 1 billion up until 2029. Now, the housing stock in Belgium, about 4.6 million houses, is particularly poor. You have 95% of houses that need renovation.
You have about 70% homeowners, so you and me, single house, family owners, that do have an interest to renovate the house, because if you want to sell it, you have to make sure it is at the state D, at least, for the new owner, otherwise, he's not allowed to move in. On top of those, EUR 1 billion, there is local initiative, there is tax exempt, there is, supports for, grants from the bank. So a lot is going on here, but also in other countries. You see the examples. Now, what do we have to offer, and how do we tackle this decarbonization, energy transition of the buildings? We, as Wienerberger, look at a very holistic approach.
We start with the design of the building, then put on all the materials that we have, and then also look at the operation of the building. So we want to make sure that everything fits together, and makes sense for the homeowner. What do I mean with that? If you just talk about solar energy without the holistic concept, you might just calculate the need for heating your house without having the efficient heating in there. So that might mean you have a much bigger solar installation than you actually need. If you put this all together, one component fitting into the other, you, of course, look at the total cost in a very different way, and all of a sudden, you talk about affordable renovation again. We will have an example on a typical Belgian house here.
150 square meters that consumes in an energy rating the level F here about 34 MWh of energy a year. With current energy costs, a mix of gas and electricity, it's about EUR 6,000... just over EUR 6,000 per year. You can imagine, a year ago, this was much, much higher, much more than double the cost. And then we have about 150 cubic meters of fresh water that is used at EUR 1,000 per year. This is something we would like to bring to a label A. In order to do that, we take all the solutions we, as Wienerberger, have into account. This starts from the roof, the full roof solution. Of course, we're very much looking forward to integrating Terreal, because we have a much bigger portfolio, including photovoltaics.
We have the full solutions for the wall. If you go into the house, from the piping side, we provide the fresh water, we take care of the wastewater, and then we come to the core, which is heating and cooling. Prefabricated heating modules, prefabricated cooling modules, for the ceiling, for the wall, that come with a design service, so we always look at what is needed for the house, in order to optimize it. Now, if we take all of this together, this is how the process would look like. We first optimize the building envelope. We look at the wall, at the roof, and say what has to be done in terms of renovation, to reduce the heat loss. Some will remain. This is calculated.
Out of that, the heating and cooling capacity is determined, and lastly, we look at the energy generation. Photovoltaics, heat pump, what do you need? And then it's an iterative process because we say: Well, if there is 2 cm less insulation, we will save that much on cost. We'll need a little bigger photovoltaic roof, but the cost is lower. So this is what we will do to make the system work together and be affordable. Final goal, low energy consumption, minimizing the cost of ownership during the renovation, but then also during the ownership, during the operation. We have a little animation that shows you what we mean here. This is our house to be renovated. This can be a single-family house, but of course, any larger building as well.
You have, you know, 20, 30, 100 flats in there, can be an office building. We start with putting in the heat pump, battery storage, thermal storage, not necessarily everything, but it is available. This is what we have designed, what we purchase then on, on the market. We dig a deep well to use the geothermal energy for heating and cooling, install the low-energy cooling system, prefabricated, as you have seen yesterday. We do the same for the low temperature on the floor heating system. We exchange the sanitary installations. They are renewed, connected to the rainwater storage. The rainwater supplies the toilet flushing, and also the garden irrigation, if required. We replace the roof structure, we renew it, put in the photovoltaic system.
The rain gutter is connected to the rainwater storage, and then the electrical lines are connected by inverter to all the electrical appliances, like the heat pump, the battery, the pump you see for the irrigation, other electrical appliances in the house, and of course, to the grid. Finally, we work on the insulation and the facade, put on the facing bricks, pave our driveway, and with that, we have a fully renovated house with an energy efficient efficiency rating of A. This is what we're doing today. This is what we're capable of, and here we draw on everything you have seen yesterday. We have a showroom where we bring 10,000 people there every year. We have integrated systems that are capable of handling this.
This brings together the complete portfolio we, as Wienerberger, have to offer, and it adds on the design services that we have in various countries to make this happen. We could stop here because this is already something really, really nice, right? There is rarely any other company out there that offers that much, but we don't, and we do take a look into the future right now, something that is in a pilot phase at the moment, but this is the next step that we will go to. Based on, the capabilities of the software companies that we acquired in the last years, InterAct, Wideco, we also go into the management of the energy in the building while it is in operation. What you see here is a typical user interface that, that you would get.
You have the energy, the battery filled, the water tank is filled. So far, the monthly operating cost amounts to EUR 15, weather forecast is nice. We have a forecast of the energy price. And then, we look into a typical hot, dry summer day. What happens then? So the photovoltaic produces energy, it stores it in the battery. The room heats up, so we need to start cooling it. The heat pump is activated, it's operated by the battery and cools the room. The room cools down, as we want it to perform. In the evening, we water the garden because our storage is filled, to make sure that the lawn is nice, for the children to play. And then we switch into the automatic mode because we want the system to do more, right?
We see that our energy storage is rather full. We have peak prices during the day, which is a reason why we sell the energy, which reduces our monthly operating cost. Okay. The energy prices go down again. Our roof still produces electricity, and now the system decides to put it in the battery, so we can use it later on for cooling again. We switch to a very different day. Rainy, cold, heavy winds, really ugly day. We use it to fill up, of course, our rainwater management system. Our photovoltaic system, unfortunately, doesn't produce any energy, but since it is cold, we need to heat. So the heat pump is generating heat, the rooms are warming up, but the energy is taking not only from the battery, but also from the grid, which is increases our monthly operating cost again.
We again put it in the automatic mode. We see that the energy storage is rather full. Our rainwater system continues to fill up. And then we see that our energy prices drop into the negative because of the heavy wind. You know, so much energy is produced in the grid, which is why we get the energy from the grid, fill up the battery, and reduce our monthly cost again. So the system manages this in a way that you get and sell energy always at the time when it is most beneficial for the user to minimize the running cost. The rain stops, it's still cold, the weather forecast gets better. We don't need to heat because we have a well-insulated house, and we see that our monthly operating cost is at close to zero.
So this is where we are going, again, in a pilot phase, but something that we need to add on to the complete portfolio we have, because it's a very, very unique one. What have we achieved? We went from, oops sorry that was the wrong one, we went from 34 MWh to 6 MWh, so we still need energy, because we have also a higher comfort level. You know, we didn't have cooling before, now we do have cooling in summer, so we still need something. However, because of the active management, our cost is almost zero. And then we also reduced our water bill as we're using the rainwater for the toilet, for the garden. So in order to address the energy transition in the building sector, we really do have to offer a lot.
In this case, we have reduced the energy by about 85%, at increased comfort, as I said, because we have additional cooling installed. We changed from fossil fuels to green electricity, reduced the water consumption, become CO2 neutral in the operation of the building, are energy self-sufficient, and energy cost neutral. So if you have any spikes in the future, anything happen like we had last year's, it doesn't matter to you anymore. And of course, for anyone looking to sell the house, of course, it's a very, very valuable house, as it is fit for the future, as stated by the EU, that it should raise to a level of A and, and, and uncertain. So what is our way forward?
You've heard it a lot of time, that Wienerberger has moved on from product-based to solutions, and this is what we consider a true solution. It's not only a solution for the roofer or for the installer, but it is a holistic solution for the building, where we address the decarbonization needs of the building sector, we address the rapidly growing renovation market, but this can also be used for new builds, so this is not exclusive to renovation. It works for both. We have an integrated end-to-end solution, optimize the overall cost, differentiate ourselves with that by still being affordable. Thank you very much.
Okay. Thank you, Doris. Right. For the last part of today's presentation, let me take your focus outside of the building to the outside and underground, because now we talk about our infrastructure business. More specifically, I will give you an example from the Region North, on how we develop our business from, how we like to call it, from pipe into water management. If we look at Wienerberger's pipe activities today in the Nordics, I think it's fair to say that we consider ourselves the market leader on infrastructure pipe solutions. It's a business that drives revenues of about EUR 400 million, with a manufacturing footprint really across the region. So we operate seven plastic pipe extrusion plants. We have two locations where we have injection molding centers, where we produce the accessories and the fittings to our pipe systems.
Then we have four locations, three of them relatively new ones, where we produce the more technical products that I will talk about a little bit more during this presentation. Based on this strong footprint that we have in the Nordics, we've set ourselves the strategy that we want to grow into a more holistic provider of water management solutions for the municipalities. What we really talk about here is the fresh water side, the sewage water side, and the storm water, rainwater side. In going in that direction, first of all, we leverage the good position that we have on the markets, but we also leverage our strong brand that we have, with a high recognition rate among the end customers.
We develop the business from the pipe systems, where we're in today, into the more bespoke and technical assets that are needed in order to transport water from point A to point B. We really do that for three main reasons. First and foremost, we grow our addressable market in that way. The second reason is that we step into a business that is, on the one hand, close to our core, yet complementary to the business. And related to that, number third, we drive cross-selling opportunities between the core business and the new field in which we step in. And all the while, we do that in, what I would like to call, an attractive and structurally growing market segment.
If you look at the water sector in the Nordics, like in many other countries in Europe and globally, there's a number of challenges coming our way related to climate adaptation requirements in the infrastructure.... related to, at least in the, for the Nordics, an aging and also partially underinvested infrastructure, related to population growth and, of course, regulatory changes. But let's have a closer look into some of those underlying drivers. If you look at the network, and this is specifically the example of the sewage network in the Nordics, yeah, you will observe two things in there. Number one, 50% of the network in terms of kilometers is older than 40 years today. Partially, if you look at the chart, significantly older than 40 years, yeah.
The second point, if you look into the middle of that chart, you will see that almost 40% of the network was built during the 1960s and 1970s. And what that really means is that a significant part of the network will come into a natural reinvestment cycle over the next years and decades to come. If you ask the utilities how much are they spending today, they will tell you that, the renewal rate today is well below 1%. If you do the math, then, of course, your implied reinvestment cycle is somewhere between, you can see it on the slide, 120 years for Norway, up to 200 years in Sweden.
That is, of course, not enough in order to keep the network in a good quality, and the utilities realize that, so they need to increase their efforts to spend and renew the infrastructure. On top of the infrastructure coming of a certain age, you have population growth in the Nordics. The Nordics are net immigration countries today, and they're also projected to continue that in the future. And of course, additional population means they also need infrastructure, they need water, they need sewage infrastructure, and that puts additional pressure on the existing systems. On top of that, the people, you know, like, again, almost over everywhere in the world, they want to live in the urban environments, so they move to the cities, where again, that puts pressure on the infrastructure.
The North is no exception when it comes to climate effects, of course. I mean, we are used to having a lot of water, but, we do see more and more events of extreme rainfalls. Between the events of rainfalls, you now have dry periods. I mean, who would have thought that, you know, a water-rich country of Norway would run out of drinking water? Until it happened for some time last summer in Oslo, and the citizens were asked to actually safeguard water because the reservoirs were running on critically low levels. Unheard of before. And of course, with the high and extreme rainfall events, you have more and more issues related to floods. We've always had floods, over the years, but, the events and the magnitude just increases.
That, of course, puts a danger to our built environment as it is, and it puts danger also to our life and health. So the water sector is really challenged that they need to adapt the infrastructure to this changing environment. Partially, that means they need bigger solutions because they need more capacity to deal with the volumes. Partially, it means that they need solutions in area where previously you might not have needed one. On top of that, I think, it was mentioned already two, three times today, there's regulatory changes as well coming to the water sector. Doesn't matter if you look at the European level or on the national level, I think what the policymakers look at is first and foremost, to safeguard water quality and water availability. But nowadays, they also look into issues like pollution and pollution effects.
That means that the utilities will face stricter requirements when it comes to events like sewer overflows, a big environmental problem, when it comes to foreign water entering the system, when it comes to water purification levels, and so on. What that really means is that the utilities need to increase their efforts to monitor, control, and report on what's going on in their networks. That will drive the digitalization of the water networks, and we are positioning ourselves to be also part of that development in the Nordics.
So if we take it together, in the Nordics, we have aging and partially underinvested infrastructure that is challenged by growing populations, that is challenged by climate adaptation requirements, and by policy changes, which means that the utilities need to increase their spendings, and they report it very transparently themselves, that, they need to improve what they are doing in the networks over the years and decades, to come. A second point I think worth mentioning is if you look to the left-hand, side of the slide, is that every euro today that is invested by the utilities, two-thirds of that already goes into reinvestment, so the renovation of your infrastructure. Only one-third of each euro is, on new developed infrastructure today, and that ratio going forward, of course, might shift even a little bit more.
So before I show you how we in the North try to grow our solution portfolio, we have again, provided, or prepared a short animation that should show you how the overall water cycle roughly works like. It's a very simplified version of reality, of course, but it gives you an idea about all of the other systems that are needed outside of the pipe itself to transport the water. You typically start on the freshwater side with your freshwater source, and of course, depending on the geography, that can be a mountain spring, that can come from the groundwater, it can come from another water body, like a river or like a lake. You then have to pump that water out, and you go into a pretreatment normally in order to ensure a certain quality level of the water.
From there, you typically go into a reservoir or a tank, where you basically have an intermediate storage before you go into the distribution system when you bring the water then to the consumers at the end of the day. Along the way of bringing the water to the consumer, of course, you want to make sure that your assets are connected and remotely monitored, so that you have a good idea about the status of your network. The water then travels to the consumer side, in that case, depicted as a residential area, but it can of course be industrial area, it can be commercial buildings as well. Along the way, you might need also some pressure increase stations, again, depending on the geography, to keep the pressure in your systems.
You basically move the water to the consumption, which is in the house, which is the part that also Doris showed you before. Again, you want to make sure that you have good data available on your water supply network as well. The water then flows into the house. Of course, it gets used in our kitchens and bathrooms, and then the wastewater is discharged through our, again, soil pipes and going into the sewer system. From the sewer system, you collect the wastewater from the different buildings, and you then pump it with pumping stations, in many cases, to the next treatment plant, where the water then gets cleaned and it gets discharged to a water body. The final part of the water cycle is then when you look at the rainwater cycle.
Rainwater, of course, gets collected mostly through the roofs, but also other hardened surfaces, of course, like streets and pavements. You collect—at least you try to collect the, the water, partially go through a pre-filter, like we showed some of you yesterday evening. And then you go into, hopefully, an infiltration unit, where you can release the water in a controlled manner to the ground levels. Again, in other geographies, where you cannot do that, you maybe store it in an intermediate tank and then release it to the system in a controlled way. Again, you want to have your networks monitored at each part of the step. So how do we try to pro—to position ourselves as a solution provider in that field, in the region North? We think in four steps.
Step number one is where we are coming from. This is the pipe systems that we have, and our pipe systems cover all of the areas of freshwater, sewage water, rainwater. It's the pipes, it's the fittings, it's the accessories, it's the manholes. What we add to that is the more bespoke and technical solutions that are needed to transport the water from point A to point B. We showed you an example of that yesterday. That will be your pumping stations, that will be special chambers, where you have a valve in there, where you might have a sensor in there, where you have aeration chambers for sewage systems, de-aeration chambers. And of course, we also talk about large and XL tank solutions for the storage, or intermediate storage, of the water. So we go from products into full systems.
The third step is that all of your assets need to be connected and remotely monitored. And we're offering that in the region North, either through our own hardware and software solutions, or through third-party partners that help us with that as well. If you look at the steps one and three, how they are now on the slide, those are existing markets. That is more or less the state of the art of how a water network is built today. What it means for us, though, is that we extend our reach from the first pillar to the second and the third. The fourth step in that journey is where it gets, in my opinion, really interesting. This is when you add the smart solutions to it.
Today, the utilities have very good data on what's going on in their, in their treatment plants, and they have reasonably good data on selected assets in the network. Your larger pumping stations, your larger pressure stations, they are all connected. They can have reasonably good data also on the consumer side, if they install smart meters, which in the Nordics, they are doing. Other areas still need to grow a little bit in that respect. But when it comes to the network, the hundreds of thousands of kilometers of network, today, it's a big black hole. And just to put it a little bit into perspective, if you take the water and sewage network of the three countries, Norway, Sweden, and Finland, together in one straight line, you cover the distance from the Earth to the Moon and a quarter back.
That today is a big black hole. But that is about to change, because you have more and more affordable sensor solutions, you have the emergence of IoT technologies, and you have more affordable connectivity and battery solutions, so that you can today place hundreds, if not thousands of sensors out in your network and get a much better understanding of what is happening there. What you want to do, of course, you want to help the utilities to address the really important challenges: the water loss or non-revenue water. Where do I have leakages in the system? The overflow events, you know, the foreign water coming into the system, increasing my cost for cleaning, and those kind of issues. I brought to you also an example.
This is a real-life project from Finland, where you see basically our traditional pipe business and the new part that we add, in the new field of water management. I wanted to make two points with this slide. Number one, if you look at the value of the pipe in a project, it's typically less than 50%. So meaning if we grow our capabilities to offer also the water management part, we want to get also a sizable chunk of the other 50% that we cannot address with our traditional systems.... The second point is that if you look at the margin profile, then of course, the more technical and more bespoke solutions, they also come with quite attractive margins. Now, in that room, of course, I have to make two caveats to that.
Number one, if you look at the margin of, on the pipe part itself, of course, that's a little bit of an extreme example, because it's a PE pressure pipe that normally comes with a relatively low margin profile. Fortunately, we have other pipe systems that command significantly higher margins. And I think the second point is also that your cost to serve on the right hand of the slide, the water management part, is, of course, also higher because you need the design capabilities, you need to have the specialized technical sales persons to be able to sell that. But the point is, by going into that direction, we grow our addressable market, and we do that still at a very attractive margin profile. What have we done and what, what steps have we taken to get to where we are today?
We've really only started that journey about two, two and a half years ago. We built a new plant in Helsinki, where we added the capabilities to manufacture the more technical assets, like the pumping stations. Capabilities in that sense means not only the manufacturing technology that you need for it, but most importantly, bringing in the know-how and the competences in terms of product development, in terms of design, and then, of course, your access to the market as well. We've then acquired a business in Norway, a pumping specialist, to bring similar competences also to the Norwegian market. Most recently, we have extended our, what I would call, flagship factory in Sweden, to have similar competences and manufacturing possibilities to serve also the markets for Sweden and Norway.
If we look at the digital side, first of all, we draw on solutions from a group business that we acquired in 2020 called InterAct. They supply us with the monitoring and control solutions, and they also supply us with some of the smart capabilities. What we've added to that is, most recently, a business in Sweden called Wideco. They have their own proprietary IoT platform that enables smart infrastructure and smart buildings. They typically come out of the more energy side of the business. They do, for example, leakage detection on district heating pipelines. They do manhole monitoring for district heating, and together with us, they will grow their offerings into the water sector as well. So in conclusion, by going that way in the region, we want to develop from pipe to water management.
That enables us to grow our addressable market and thereby also grow our business. We've become a stronger provider within an attractive and structurally growing market. And of course, most importantly, we position ourselves as the solution provider to the municipalities, to offer them end-to-end solutions across all of the four verticals that I've shown you before. And of course, we've just started the journey some two, 2.5 years ago, so you will see us continue to build the platform, both through organic as well as through targeted acquisitions. And with that, I give back to you for your concluding remarks.
Thank you, both of you, Doris and, Wolfgang, and I hope the audience has seen how impressively we've changed the piping business within the last couple of years. And, when you look at the exposure that Wienerberger has, with now about 22%, and as I said earlier, it's one of the areas where we'll put the tension in order to grow this business further. Because it's a business which is absolutely in line with the targets that we have to improve the ESG performance, not only ours, but to contribute largely to a better living and a better planet.
Obviously, when you look at the mega trends that both Doris and Wolfgang have described, it plays perfectly in line with growing end markets, with the need of investments that we see in these different water management aspects. We obviously can do also a lot in order to improve our own business, operational excellence, and improve our solutions. Let's focus on this in a minute. What Wolfgang has alluded to when he talked about the region north, we have completely, and I would sort of stress this very importantly, completely changed the industrial footprint, yeah? By investing in the industrial footprint... He is obviously very shy and very conservative if he says it's a flagship factory in Sweden. It's the most modern and highly technological factory near Göteborg, in the north of Europe, when we talk about piping, yeah?
So here we show clearly that Wienerberger is a leading company in the sector. We have here regrouped different installations. Your question for earlier about artificial intelligence, obviously, here we use it already in the plant. It's a very modern plant, highly automated. And really, I would call it a state-of-the-art factory internationally. But we do so and continue to do so also in Finland. We have put the biggest factory in place in Ireland, for example, and all has happened in the last couple of years by increasing our performance. Efficiency improvements in all the different countries. By the way, just a little aside, is that we have built also one of the most modern factories in Turkey, yeah, in the recent years, in for agricultural irrigation, for example.
So here we have done a lot in order to set up a very competitive and a very future-oriented industrial footprint. When we look at about the products, and the colleagues have explained, we consistently have moved from products to full systems and smart, and we are about to change into the smart solution space. It's a very rapid, a very fast change. It's a generation change also when you look at into our sales forces, because obviously you have to communicate with all the customers from water companies to installers in a different way. Yeah, we've changed this dramatically. Obviously, here, also, the digital services help us.
If you've looked at what Wolfgang has explained to you when he was talk about the pumping stations or manholes, it helps dramatically, obviously, the water companies to have sensors so they can immediately go to the problematic areas, saves time, saves money, saves human effort here. So these are things that obviously play an important role in the future positioning of our company. Again, also strong growth on the M&A front. We have made quite a few acquisitions when you look at this slide, and again, the colleagues have mentioned it, in the smart solution and water management, especially in the North. Clearly, you see here also the focused approach of Wienerberger when we talk about increasing our footprint or increasing the penetration in certain markets. We focus on the area.
We just don't go in all areas at the same time and roll out the system first in the North. That's, for us, a hub where we really gain experience in this field and where we really want to be the market leader. And then, obviously, the in-house solution, Doris talked about, where we clearly have now gained momentum in the U.K. and in the Irish market, and where we will roll it out throughout Eastern Europe by acquisition, as you see it in Croatia, but also by investments in Central Europe. So all in all, I think it's very important to say that on this way to a value-creative M&A and organic growth with new and innovative products, we really are set for growth here.
From my point of view, if I look back, because with some of you, I had discussions over the last 10 years, is this the right industrial footprint for Wienerberger? Is this the right development? Just recall, when we took over the company, it was not even making about EUR 700 million turnover. We are now a little shy of EUR 1.5 billion, and we will reach the EUR 2 billion by 2026. I'm pretty convinced, because here we have good targets out there on an M&A front in the pipeline and also a strong organic growth rate. This is, in a nutshell, the deep dive with the two colleagues into our piping operations within the Wienerberger group. Thank you very much for your attention. If there are questions, obviously, we are eager to take them, I guess.
Please, here in the front, and then the second row, I have another question.
Yes, I've got a question on the piping business. So you got this water management, which is new business, seems very exciting. At the moment, can you disclose what percentage this new business make out of the division? And what would be your target to increase this, this percentage in the future? How do you think about Wienerberger in five years, in 10 year from now, when you look at, those, water management business? And also, correlated question, you see a lot of other company actually thinking about investing in this, in this area, in the water management business. I think we've seen Xylem doing some big acquisition in the sensor business. I think, Aliaxis and Uponor are also looking at, this, area. Do you see competition for assets?
Or do you think it's possible to get a good return on the, on the acquisition that you're getting?
I think I will leave one of the question at least to Wolfgang, and because he has a history in M&A. So on the acquisition front, I think we see numerous assets there.
Yes. I mean, if you look at the competitive landscape, and you think back about the slide that I showed you with the four verticals, of course, you have different players within the verticals. Yeah. So the pipe manufacturers, you have in the second vertical, the pump manufacturers, you have the third vertical with more the automation solutions and the smart solutions. So it's different companies within those verticals. How we try to think is cross-vertical, to really create the solutions from A- Z, yeah. But of course, you are right that there is competition also in that sector. I would say it's a mix between a couple of large European or even global-wide companies, and then a lot of smaller companies that provide those solutions within the local markets.
I think there are some, I would say, interesting targets out there that we will have a closer look at.
First of all, just to go back with you, there are smaller ones that you don't even have on the radar screen, the ones that we have been taking over. On the other hand, on the big picture... You have obviously the takeover war on Uponor that has happened this year. For us, really positive, because other competitors like Aliaxis, like Georg Fischer, like Uponor, are a little bit busy with their own stuff, and not so much with the development and with the market penetration. I know what they have said, I know their presentations. I have, we have obviously our people on the ground. I think when you look especially to the Nordic regions, what we have explained to you, we are here the clear market leader. Clear market leader, uh?
So here we have really developed from the company selling pipes to the one that integrates solutions and systems, and we will continue to do so. Roll it out step by step. I think from our perspective, we take note that there are strong competition out there, but from a growth perspective, we grow much faster than Uponor or Georg Fischer in this field right now.
In terms of proportion of your turnover, which is the new business, do you have any targets, and can you disclose-
I said to you, I said to you clearly, it's about a EUR 2 billion target that we want to achieve there. It's a very clear target, which includes the water management and includes the infrastructure, the in-house. There's a lot to be done. There was a question here.
Hi, Georgie from L&G. I just wanted to ask on that example you gave in Belgium, improving the house label from F- A. Just wondering, what would the total cost of that project be, including the labor, just to get a better sense of what the return for the customer is?
I certainly can't provide you the total cost. With the installation, you typically work with an installation company that would do it anyway. The big advantage you have here is that you have a system that is integrated and works with each other. Because the customer would have to do renovation anyway, you know, look at new insulation, probably put on new facing bricks, put a new roof, put on photovoltaics. If you get them bits and pieces from all over, they don't work together, and that is the big advantage we're offering here, that they are optimized within each other, and then also in the performance will work together and minimize the operation cost. So the installation cost as such is not gonna be very different.
It is just that it's optimized, and the customer gets it out of one hand, basically, the full design.
Thank you.
Before we take your question, I have one question from the virtual site, and I'm glad to have one, I must say. It's Miro, and I think I would like him to ask his own question.
Hello, can you hear me?
Yes, perfectly well.
Okay, thank you. I have one question only, and it's-- I think it's a question about the elephant in the room. It's we have, like, a significantly higher interest rates now in the world. I mean, I see your market outlook, it's especially renovation. Europe is a new build. I mean, it's strongly down. You mentioned, I think, Hungary, -50%. And, you know, if I think back into the Great Financial Crisis back in 2008-2009, when we had, like, a similar crisis in the housing segment, then many building materials companies, they went into the losses. You know, were like, I think you would be, you know, at that time, a different company.
I know what lost like a quarter of the revenues, lost around EUR 250 million in EBIT in 2009. Took two years to recover. Now, I think I appreciate the like, the bullish tone of your presentation and your outlook, your guidance that you have given even into 2026. But at the same time, like, the macro picture doesn't look very good outside. And I would like to at least to hear from you, from your perspective, what a like, say, a bad scenario could look like. Because you have now acquired Terreal, or you will consolidate Terreal at the end of the year. You're gonna have higher debt levels going forward.
At the same time, we see, we see peers, I think today, the latest peer issuing profit warnings and having difficulties to, to put forward the prices, coming under pricing pressure. And so, and so just-- and, and, you know, also looking at the valuation of your stock, I mean, obviously, the shareholders, they... It's priced at seven times earnings. I think nobody has EUR 1.2 billion in 2026 in, in his estimate. So, I think, like, the, the, your shareholders seem to be much more worried than you are, and I would like to hear from you your defensive scenario. So in case things would turn even worse than they are now, what are your levers that you can pull out, and how can you play defensive in such a scenario?
Thank you very much for your very interesting, and, I would call it challenging questions, to get the elephant out of the room. I think, I understand the tone of your question, your concern. I do hear it loud and clear. I do also hear your reference to history and historical events. However, I have to draw your attention that we had completely different events more than 10 years ago when we went into the crisis that you referred to. Because we had obviously overbuilt, we had, other events happening there. Today, we are in a different market environment. Market environment that is characterized by demand. We have no market whatsoever in the Wienerberger Group that shows tendencies of overbuild.
So this is, I think, a very strong statement here that you should keep in mind. Secondly, obviously from a company perspective, we are much healthier than we used to be. You remember, and I remember discussions with you personally about the balance sheet then, and about the industrial footprint then, and I refer to the years 2009 and 2010. So here we have changed dramatically the portfolio of the group. Dramatically, not only the industrial footprint, but the portfolio of products and end markets. I tried to make very clear today how we have moved closer to the customer, therefore, pricing is, I would say, much stronger than it used to be.
We moved away from a purely commodity-driven company to a much more value addition and very creative company when it comes to our products. So here, a lot of things have changed. Don't misunderstand me, I'm not, by nature, the type of guy who monitors very carefully what's happening around us. Tendency for me, growing up on the countryside, not to invite the elephant in the room, but to leave it outside, because he's better off in nature than in the house. Therefore, we keep our house in order, balance sheet-wise. You were referring to the transaction, Terreal. I think my colleague, Gerhard, and myself made it very clear how carefully we monitor our balance sheet and how strict we are when we call targets with respect to EBITDA to net debt.
You see also how we digest it. I showed you the example how we performed with the Meridian transaction. Focused approach, very much on cash generation, quick and fast paybacks. All this shows you that we are on top of things. Top of things also, when we talk about market declines. Don't underestimate, a 35% decline in new build in Europe is not an easy target to, an easy fact to digest, and we have already digested it in the sense of capacity, adjustments, of course, control, et cetera. Do we have to do more? You know, if we have to do more, we will do more. But it's... You need, as a group, also, to set yourselves targets, first of all, to address this situation within the company, outside the company, with our clients.
There's one thing, you can always be pessimistic about the future. There's no, no problem with it. But remember the discussions we had when we talked about COVID. Some people said the whole thing will collapse. At the other end, some people said it might stay stable. Nobody actually believed when we entered into COVID, that we would have a stronger demand level and we come out stronger of this. So we had to prepare for this as well. The events might change very rapidly. There can be a scenario, and I think one of your colleagues has asked this: Do we have enough capacity, and could it be even better than the, what you call it, bullish outlook with the 1.2? Yes, it can. The Ukraine crisis can go away very quickly, interest rates could come down, and then we have a completely different scenario.
In the scenarios that we have given to you, outlook 2024 and midterm target, we have built in, I would say, a very realistic scenario, what might be happening in North America and in Europe.
Thank you.
Thank you, Miro. There's no more question from the virtual side, but I would like to take yours here.
Thank you. Just on the pipes business, I guess a point of clarification, whether that part includes the North American business, the EUR 2 billion. And then I guess-
Yes. Clear answer, yes.
Okay. And then I think the margins sort of at the pipe segment, if you, if you include Europe and, and U.S., was quite high. I think mainly, correct me if I'm wrong, but there was a large contribution from the U.S., which probably will normalize down. So I want to understand, in your view, with, with this sort of whole new setup, what, what kind of margin should, should this business make? Is this a 20% margin business or 15, or, or what, what's the sort of ambition, I suppose?
You know, we've clearly said we've driven the margins up from a mid-sized single-digit number now in the double-digit number, and we will certainly bring this business in the range of about 15% EBITDA margin.
Thank you.
If and in the event there are no more questions, I really appreciate it that you have shared your time with us here in Belgium for this in Capital Markets Day. I really enjoyed, obviously, the gathering yesterday, the constructive and interesting discussions about our product ranges and the development of the company yesterday. Your active participation today, the interesting discussions also. Thank you for your questions. Obviously, as always, we are at your service when it comes to further questions in the future, and please don't hesitate to contact us. Otherwise, I would kindly invite you for a lunch that is here at the... available for us. And for those of you who have to depart before, I wish you a safe journey back. See you soon.
Take care of yourselves, and see you soon somewhere in Europe, either in Austria, in London, or in any other place. Thank you very much for your attention, and have a lovely afternoon. Thank you.