Ladies and gentlemen, thank you for joining the Wienerberger conference call on the full year 2022 results. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. If you would like to ask a question, you may click the Q&A button on the left side of your screen and then raise your hand. If you're connected via phone, please press star followed by one on your telephone keypad. I would now like to turn the conference over to Daniel Merl, Head of Investor Relations. Please go ahead.
Good morning, ladies and gentlemen. I hope you can hear me well, and I hope you're all well. A warm welcome to the Wienerberger earnings call on the results for the full year 2022. Our board representatives today are our CEO, Heimo Scheuch, and our CFO, Gerhard Hanke. They will lead you through our presentation and will discuss our strong performance in the 2022 business year. I would also like to welcome Therese Krenkel, the newest member of the Wienerberger IR team. She also participates in the earnings call today. After the presentation, as always, we are ready to take your questions. I will now hand over to Heimo Scheuch for the presentation.
Thank you, Daniel, and good morning from London this time and not from Vienna. To all of you, thank you for joining the call. Let me sort of walk you through briefly together with Gerhard through the year 22 and then address your questions a little later. Let's make a little recap of 2022. If we look at 2022, obviously a lot of things have happened, and geopolitically speaking, financially speaking, inflation, et cetera. Before we go into the detail, let me say one thing. At Wienerberger, we take the environment, we take the world and our planet serious and the challenges. We have worked very hard on decarbonization, on circular economy, and on biodiversity, three of the major pillars of sustainability. Here again, we have made very good progress.
We are well on track in our first program, ESG program, that comes to an end by end of 2023, this year. Are well on track with the decarbonization target, with minus 15% of emission, CO2 emissions by the year-end compared to 2020. Here again, have achieved with more than 13% already a great step forward, and we'll do so this year again. The circular economy also by 98% of our new products are 100% recyclable, so again, also here a great step forward. On biodiversity with nearly 70 sites of our more than 200 already with a plan of biodiversity, and by the end of the year, all of our sites will have a very detailed biodiversity plan.
I'm very enthusiastic because I see a major change within Wienerberger, the attitude of our more than 20,000 people towards the subject of ESG and sustainability in particular, and the progress that we make. Here again, I think when you look what we really do here, in the field of technology and production, just integrated two examples here. A highly efficient green electricity when it comes to new kilns, for example. We are not only testing them, we are installing them in the UK and in Austria with respect to the production of clay blocks and roof tiles. We have here a nearly zero carbon footprint when we talk about production of the future. Heat pumps in order to reduce significantly our energy consumptions, in the production, because we recover heat from our dryers.
Capturing of CO2 when it comes to kiln flue gas also already installed in Belgium. You see, we are not testing technology, we're already implementing it. That makes me confident that we will achieve our very ambitious targets 2030 with 40% reduction in CO2 emissions. Electrification as we go, syngas and biochar that we install already in certain countries and biogas that we use, for example, in Denmark, are examples how we switch away from the fuels, the existing ones, fossil ones, to more sustainable ones that we can use in different countries. This will be a more local approach again because we have local operations, and here the availability of alternative fuels is very different throughout Europe, especially.
There has been also some changes with respect to the ETS, and I think you have heard out of Brussels that they will change the framework when it comes to the ETS grants of CO2 certificates. Again, we have tackled this problem already. We are far ahead of our colleagues in the industry, and we'll see these things coming our way as a challenge and have already addressed them and feel that we have taken all the necessary measures in order to address this. Just one insight on this ETS will change. We will get further reduction targets in 2024 and 2028, and then another step up in 25, if I'm not mistaken, or 2026, they will sort of implement this on the European level.
As I said, we are prepared to this internally and with our measures that we implement in the company. When we look at 2022, as I said earlier, a lot of things have happened, and I don't want to go into a lot of detail. However, one thing is very important, that we have seen a softening of the end markets already in 2022, as we speak.
We have adjusted our cost base, we have adjusted our production sort of capacities in the way that we have been able to produce and to deliver to our markets throughout North America and Europe, because a lot of our colleagues in the industry have not, and we were capable of doing this, and therefore have used this operational leverage wisely, and have also satisfied the demands and were the ones who had available products throughout the marketplaces. All in all, it led to an impressive increase of revenues on the back of these softening markets with 25%, approaching nearly EUR 5 billion turnover in 2022. The operating EBITDA strongly up with nearly 50% to above EUR 1 billion. That's a historical high in the performance of EBITDA in the Wienerberger history.
EBITDA margin above 20%, ROACE above 18%, and a very strong net result and the cash conversion that was extremely high, above 85%. Again, here, I think a very strong and solid set of results for the year 2022. When we move to the markets as such, I mentioned that Wienerberger's end markets in new build, renovation and also infrastructure, saw its highest market demand in 2021. After the COVID crisis, we had obviously North America and Europe, very good demand levels, they came down in 2022. When we compare this 100% market in 2021, we had a reduction of roughly 10% in the end markets already in 2022. We have been able, again, organically to outperform such markets with our system solutions and with our innovation.
I think this is the strong message that we can relate to you, that in declining market environments, Wienerberger is able to outperform such macroeconomic developments. Especially when you look into 2022, we had an extremely strong increase on the cost inflation side. The market as such, when we look the overall building material market and especially our competition, they had sort of cost increases above 20%. We, due to our sustainable and forward-looking purchasing policies with raw materials, with other materials, and especially also with energy, we were able to come down to about 15% of cost inflation for Wienerberger. We were able to, obviously, outperform the cost inflation with price increases and the good margin management. This was a significant part of our success story in 2022.
Also, and as I mentioned earlier, we continue to perform well on the innovation front with more than a third of our product ranges and products in being innovative. Less from a perspective of age, less than 5 years old. We obviously roll this out in our 28 markets. Here again, a very strong step forward in rebuilding a completely new portfolio for Wienerberger. Above all, you remember that we mentioned last year that we want to tackle more the system and solution market, and we increased our share to about 25% of our revenues in this field. Here, I think we make very good inroads. We see it also in the pricing front and the margin front, that we make great steps forward with respect to the solution business.
It addresses also one major concern that the industry has throughout North America and Europe. It's the lack of skilled labor, where we obviously have here with the solution business, a strong in-road and built here substantial momentum. When we look at the self-help program, you know that we are continuously now focusing on improving our cost base. We have done so in the years 2021 and also now in 2022, and have had a considerable contribution with EUR 48 million coming out of this. When you look at it in a more detail, innovation and organic growth, about 50 contributed % to this, and the rest comes from manufacturing, procurement, and the general administration part.
Here on track, and again, when we talk also, and we will look at it very closely on the outlook front, and Gerhard will also go a little bit more in detail through it. We foresee for this year another EUR 45 coming from this self-help program. Continuously focusing on our cost base and improving it further. On the M&A front, we have been active. We clearly have a very selective approach when it comes to M&A to improve our footprint when it comes to the solution business and the system business, and obviously to further consolidate our operations in Europe and North America.
We have been, I think, very successful in different parts of the business, piping solution, building solutions, and obviously also by divesting some businesses like the French piping business and obviously the Russian business for the political situation that we were exposed to. A successful implementation of our selective and very focused M&A strategy. I will come to the bigger deal of Terreal in a minute, but these are the more important sort of steps in the portfolio that we develop further. One sort of word about our most important acquisition in North America, the Meridian Brick one.
A true success story, fast integration, very efficiently, sort of folded on this acquisition in the different markets, in the back office and in the sales, and have led to a significant increase of not only revenues, but especially operational leverage and the EBITDA at the end of today. You see how strongly we improved here our performance in North America, and this is not on the back of a rather solid market development because obviously we have seen in some areas also some declines already last year, but especially due to the strong performance of management in increasing our operational levels and increasing the activity here around the sales and creating synergies. When we look at the performance of Wienerberger, we have obviously used the cash last year in order to launch a significant share buyback with nearly EUR 300 million.
Sorry, EUR 200 million, the dividend obviously returning to investors about EUR 300 million and boosting therefore the EPS. If you look at our proposal of dividend with EUR 0.90 on a share, if you take the 3% canceled shares and the dividend for 2022 that we foresee, we will have a 30% payout on the free cash flow, so well in line with our policy between 20% and 40% payout of our free cash flow. Here again, a strong commitment to the return of the investments to our shareholder. When we look at the disciplined balance sheet management, here again, CapEx very well maintained at EUR 135 million on the maintenance CapEx side. The discretionary spending when it comes to special expansion CapEx and ESG CapEx, little bit above EUR 200 million.
The M&A also very well allocated. All in all, we kept the net debt level to EBITDA at about 1 time. A very good and solid balance sheet for Wienerberger. When we look at the overall performance, and let me spend a little bit of time here. I think it's important that I explain where we stand as management. We have had a great run last year. We have, obviously all of our employees, 20,000, worked hard throughout the year in order to satisfy demand. We were, in this sense, well-positioned to take advantage of the good demand levels in Europe and North America. We were able, considering the crisis, and I, you know, I recall only the major sort of setback with the Ukraine war starting and nobody knowing if we have energy, et cetera.
You've seen how sustainable Wienerberger organizes the purchasing front and how strongly we can react and quickly we can re-react to demand levels, positively and negatively. Still here we have shown the market how we can take also market share if it's possible, and this obviously impacted our results. If we take now a longer approach, a more sustainable approach to EBITDA, I would exclude about EUR 110 million. You might call it over-performance or one-offs. You know, the wording is here of not so relevant.
It is just to show you that we, as management, we grab opportunities in the marketplace. This came in North America with the purchasing of raw materials, very positively impacting our business here with EUR 60 million additional in EBITDA and EUR 30 and EUR 20, especially in Europe when it comes to the Building Solutions side. If I deduct this EUR 110 million from the more than EUR 1 billion EBITDA, we come to a sustainable operating EBITDA level of EUR 910. I would take in the long-term perspective, if I may say so, as a reference for 2022. Obviously, when we look at the portfolio, and this is also important to note because Wienerberger changes and is changing rapidly. You see how important now renovation and infrastructure are in our portfolio. We are less cyclical.
We are a different company when it comes to end markets and play here, obviously, also very strongly our renovation card because it's something that we will see as a more resilient business for Wienerberger. Now with 30% renovation and 22% in infrastructure, we have a very strong base in these two fields of activity. Let me have a quick look also on the last 10 years, the decade. Over a decade, Wienerberger was significantly outperforming our end markets. You see it on the revenue front with the average growth rate per year about 8%, and on the EBITDA with 17%. A really strong decade that we can look upon, and I'm confident that we will do so for the next decade as well. Wienerberger is well-positioned to outperform its end markets as we speak.
With this sort of message, I would like to hand over to Gerhard for the financials.
Thank you, Heimo. Happy to report, I think, quite a strong and a solid set of numbers for the last three months of the year, despite this quite challenging environment and also these declining end markets, which we have seen. Revenues in the last quarter up by 5%, above EUR 1 billion. EBITDA, above EUR 200 million, up with 10%+. I think, which is remarkable, an operating EBITDA margin in the last quarter, which is close to 18%. Looking a little bit closer to the last quarter of the year, we see revenue-wise, this 5% growth, 3% organically.
What we have seen in the declining end markets that also we have declining volumes across the group of around about 14%, which we have seen whereby we see stronger volume declines in the piping segment despite some lower or softer volume declines in the ceramic business, more or less a -10% in Europe and in North America, and a slightly higher volume decline in the piping segment. We will also speak about later on about for the reasons why we have seen different decline on volumes in the same markets. This volume decline has been overcompensated by a strong pricing performance, so it was offset. We have still seen in the last quarter pricing, price increase in average of +70%.
This basically led also to a 3% organic increase in revenues. We had also, due to the strong dollar, a positive FX impact during the year of around EUR 11 million. Out of the acquisitions, what we did in 2022, we also had a contribution on revenues, which brought us finally to this EUR 1.1 billion for 2022. EBITDA-wise, we increased by around 10% the EBITDA to the EUR 200 million, which I mentioned before. What was driving the 9% organic growth in the last quarter? As we mentioned earlier, we were running our operations more or less on a high level, on close to full capacity. This led also to very favorable production costs, still also in the fourth quarter.
I think what is also important to mention here that we were able to protect the gross margin, to protect basically the gross margin of the business, especially in the ceramic business, that we did with our cost management or respectively, keeping the efficiency of the fixed costs high and thereby offsetting the volume decline. I think this is something which is also then reflected in a EBITDA margin, which is around 18% in the fourth quarter. This brought us then also to the EBITDA of EUR 200 million in the last three months of the year. For the full year, as Heimo mentioned, we were able to bring revenues close to EUR 5 billion, which means a 25% revenue growth.
Organically, this means a plus 15% we had out of the M&As from 2021, strong contributions from the Meridian deal. You see here, 9 months in the scope impact from the Meridian deal, 6 months from the Flowplast and Cork Plastics deal, which we did in 2021, and also the impact out of the acquisitions and divestments, what we did in 2021 and 2022. Organically, the 15% plus, as I mentioned before, we had a strong development on the sales price development and the which could offset basically the volume decline across the group. We have seen in the year 2022 a volume decline which was around -6% across the group.
This was clearly offset by pricing, which was round about the 20% across the group and along the year. EBITDA-wise, exceptional strong EBITDA, the EUR 1 billion, what we have seen before, and also where we see that there are some exceptional items in it which are not sustainable, the EUR 110 million, what Heimo just mentioned. Still, when we look to the organic growth of the 34% of the EUR 236 million, this is driven by a strong performance in our production operations, by a strict cost management, and also by our forward-looking procurement activities, what we are doing on the energy and on the raw material field. This helped us and supported the strong organic growth of round about 34%. Scope-wise, we see the EUR 77 million.
Here, a strong driver is simply the M&A activity, what we did in North America during the year 2021, which is the main contributor here in the scope impact of EBITDA 2022. This brings me to the reconciliation or presentation basically of EBITDA, of reported EBITDA to operating EBITDA. You see no exceptional items in between. We had, like the years before, some asset sales, so the sale of some non-core assets in it, of close to EUR 20 million, which we deduct. We also had some structural adjustments in the sense that we had some restructuring costs for optimizing our plant network, which was round about on the same level like it was in 2021.
This then finally brings us to the EUR 1.021 billion for EBITDA and operating EBITDA for the full year 2022. Looking to the income statement respectively to the primaries, which we also announced today, just taking out some lines of that, I think we spoke about the revenues, we spoke about EBITDA. I think also a strong development on EBIT, up with more than 70%. The financial result, which you see is significantly better despite an increasing environment, interest environment, so meaning higher interest rates. Still, on the one hand, we had last year a one-off in the EUR 46 million in the financial result in it.
This year, we had also some positive currency effects in the, from the US dollar, which is also supporting the $33 million on financial results. On the income tax, I think nothing special to report. Slightly higher than last year with slightly above 17%. Last year, we were also close to 17%. On the long run, I expect also that income tax rate, effective income tax rate will more move a little bit to 17%, 18%, more to in the range of close, coming close to 20% in the future. This brings me to basically to the cash generation of the business. We have heard it before already that there was a high conversion rate, above the 85%.
The free cash flow, which is exceptionally high with almost EUR 600 million, which is 40% above. We have seen a net debt which is basically in line or even slightly below the year 2021. You know that the main cash outflows, what we had is the share buyback program, which was around about EUR 200 million. We had a dividend of around about EUR 80 million last year. We had also some gross CapEx, which was slightly above EUR 200. This finally brought us to this free cash flow of EUR 600 million. Working capital management, I think, very, very solid with 16% in line with prior year.
The working capital increase, what we see is mainly driven by a higher value in inventories. It is, in fact, really the value which increases. Volume-wise, we are still, I would say, on a low level. You see it also here on the slide that the 17% increase in the inventories is mainly driven by the cost inflation, plus 15%, only 2% driven by a volume increase of the inventories on the stockyard. Still we have some of the countries where we wanna improve basically also the inventory level in the next years. This brings me to the cash flow statement, as just mentioned, exceptional high gross cash flow. The change in the working capital of the EUR 155, what I just mentioned, is mainly driven by an increase of the inventories.
Here, as mentioned, due to the cost inflation, a strong impact here, what we have to report. A free cash flow of EUR 600 million. As I mentioned before, the free cash flow was mainly used for gross CapEx, for M&A activities of EUR 50 million round about, the share buyback program, which was round about EUR 200 million, and the dividend, which we distributed in 2022 for the year 2021. With that, Heimo, we move further with the acquisition of Terreal.
Thank you, Gerhard. Ladies and gentlemen, obviously, we announced this takeover, this important one, at the end of last year. We are actually very enthusiastic with respect to this deal because it brings us forward in the growing renovation segment, and especially on the roof. 'Cause here we create, and this is, I think, the exciting story for Wienerberger in the years to come, the expert for the pitched roof throughout Europe. We are actually moving along nicely and growing our presence in France and in Germany, the biggest markets in Europe. Here we see obviously huge potential for us to grow. The group that we will take over, it's not all of the operations of Terreal. We are not taking over Central and Eastern Europe, just focusing on France and Germany, Italy, and obviously the United States.
Here, obviously, it will be about EUR 740 million of turnover that we take over, roughly EUR 100 million of EBITDA. A 6x multiple when you look at this deal. In the roofing business, this is a very attractive multiple that we are here paying for this business and which will create immediately value for our shareholders. We target about EUR 150 million coming from this acquisition after synergies, because we create here a platform, not only on the, on the cost side with efficiencies in production technology and also the back office, but especially also when it comes to sales, because we can bundle more products and sell over this, increase sales over this platform. A huge potential for Wienerberger in the years to come.
When you look at the financing of such transaction, as Gerhard has put it, you see our solid balance sheet, you see our cash that we have available, we have agreed with the shareholders that we will pay them also with shares. In Wienerberger, we have about 6 million of shares that we have available in treasury shares, at a price of EUR 26 a share. Here again, we think we can create value. As far as the transaction as such is concerned, by the way, we got a positive approval by the unions, the French ones yesterday. On this side, we are cleared. We have also some clearances already from antitrust authorities like the German one, very quickly.
We are now dealing with the French and some other jurisdictions. We already have foreseen that it will take a little longer in France. We see a clearance of the transaction towards the third quarter of this year, end of third quarter of this year. Obviously are prepared to then integrate the business very quickly. You have seen us doing this in the United States with Meridian. We can do more or less the same here in Europe. Move very quickly, put it on our software bases and IT bases. Then run the business as a fully integrated one in Wienerberger. This will bring us, obviously, again, in an even stronger position. You remember I told you earlier that renovation was growing. This will grow above 30%.
To be correct, 34%, therefore being a major part of our business in the future. Here, I think we have created a strong Wienerberger, a very resilient business. This leads me to give you a little bit of a insight on 2023. 2023 is going to be a difficult year to predict. We are a little bit into it already, as you all will agree with me, it's an instability that we still face, an up and down, with all the ongoing instability, politically speaking, financially speaking, still high cost inflation, above 10% in certain areas of the world where we operate in, and especially the increasing interest rates that we are facing, obviously.
This has an impact on our end markets, and it's without any doubt that I need to say that these end markets will soften further in 2023. How much? We don't know. I've put here a scenario for you, and this is not a guidance. It's a scenario that we currently are sort of looking at with about 15% down in new build, 20% in the US. I just come back from the US and had conversations with our leading customers. From their perspective, they see not such a decline right now. They are more positive in this, especially when you look at the Southeast and the Southern part of the US, except Texas, they see a much more positive trend. We will see, and we are prepared as Wienerberger for all scenarios.
We would like to give you this one just as a sort of a hint what can happen if the markets go down in this direction, that we are prepared for this and that we obviously do all the necessary and measures that are necessary to tackle these issues. In Europe, you will see also in the new build a decline. We have seen significant declines already last year in countries like Poland, like Hungary, Czech Republic, also, and a little bit in Romania. We will see certainly some declines also in Western Europe and in the UK this year in new build. This is a fact, and I think we don't know right now how much they will be, but I'm just saying softening, and it's difficult to assess the size of this.
In renovation, more or less stable, slightly down in both sort of end markets, North America and Europe. Infrastructure, also a little bit down in Europe, especially because obviously the financing in Eastern Europe for this coming from the EU is on hold for countries like Poland and Hungary. In the US, obviously, size-wise, the investments will sort of come in from this public institutions, but we will see a little bit of decline too throughout the year. When we look at the inflation side, it will be significant under the inflation that we have seen last year. We at Wienerberger think it should be around 10%, coming very much actually from the wage side, personnel cost side. We have here increases throughout Europe and a little bit also in the US.
So that you get a feel for it in the range of 6%-9% or so in the wage side. This is what we have to work with, and obviously some other inflationary costs that we have to digest. However, this is, I think, the strong message that we give you at the beginning of this year, the price increases of Wienerberger for the solution and for the products will cover such cost increases that we have to digest. If we look at the energy again, here, as I said at the beginning, a solid, sustainable purchasing policy that brings us in a situation that we have insured already the volumes at prices that are very competitive for this year, 93% of the volume that we can actually buy forward, we have done so.
I recall only for those of you that don't follow us that closely, that in some areas of the world, we can't do this because it's regulatory. Some countries, I give you an example, like Serbia and Bulgaria, this is not possible. This is on spot market that we have to deal with. The rest, as I said, is covered by forward. You see also that in 2024 and 2025, we have already a significant amount of this insured buy forward or buys. When we look at the different aspects of innovation system, again, we tackle and work on our targets. This will continue this year and make the necessary contribution as far as margin is concerned.
As I said at the beginning, the 45 coming from the self-help, we are confident that we will achieve this as well throughout the year 2023. If you look at the disciplined capital allocation, Gerhard gave a good overview over 2022. When we look at 2023, EUR 140 million will go into maintenance, EUR 5 million more than last year. You need to appreciate that the asset base has again come up, and it is stronger and more important again compared to last year. We are very disciplined on the maintenance CapEx with EUR 140. The discretionary side is obviously on the growth front with ESG CapEx reduction of energy consumption, self-help program, and others that we put into the business. This year, you need to sort of count about EUR 160 million.
We always say that the payback here is a very strong one and a good one. It's on average about four years. Then on the M&A, we will certainly continue. Obviously, you see Terreal on our list that we have to then to close this year. We can't give right now a guidance on this, but keep in mind that on the average, we have a five year payback here on these investments. Again, the dividend as we propose it with EUR 0.90 a share falls perfectly into this payout ratio for free cash flow. A very disciplined approach when it comes to capital allocation. When we take this scenario that I've mentioned to you, and please don't see it as a guidance, I just want to give you a hint where this can go.
You see obviously the market development. We come down at about 80% of the markets that we have seen in 2021. Again, here, a strong performance for Wienerberger considering the softening of the markets with good performance throughout the businesses. We will outperform such markets due to our sort of better innovation rate and system approach and the margin management, not to forget also the cost side of the business. Here again, I think from a perspective where we look at, we digest such market trends well, and Wienerberger has improved its cost base significantly. You see, if you compare those markets, we will be in 2023 with respect to the scenario that we are showing you here, under the markets that we have seen in 2019, for example, or even in 2016.
18, sorry. Here you see the better performance of Wienerberger in such market environment. This is to show you how we have improved the cost base, and this is the major message that I would like to give you. On the upside, obviously, better markets, and if they come, then I think we are ready for it. Gerhard has told you that we obviously look very carefully to have enough inventory to satisfy potential higher demand. Remember that we did so also during the COVID crisis, where we took the benefit of doing this in 21, and I think here we are ready for both sort of potentials, upside and downside. I think we are protected more on the downside here with this scenario that we showed to you. Finally, a word on the future.
I think from the outperformance you have seen clearly over the track record the last three years, that Wienerberger consistently outperforms the, its end market, that we focus on the gross margin by strict cost management and proactive margin management. The contribution as far as M&A is concerned, you have seen it from Meridian, you have seen it from the smaller deals that we do and will continue to do, and you will see it also from the Terreal group that we will integrate, as I said, towards the end of this year, with another EUR 100 million coming from this business, pre-synergies. I think Wienerberger is well set also for this, certainly instable market environment that we face currently.
We will see as the winter goes away, and hopefully the spring comes, a little bit more and better visibility coming towards us for the rest of this year. Thank you very much for your attention. It has been a longer presentation, but I think it's worthwhile to walk you through the different aspects of the business, and we are ready to take your questions. Thank you.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may click the Q&A button on the left side of your screen and then raise your hand. If you're connected via phone, please press star followed by one on your telephone keypad. If you wish to remove yourself from the question queue, you may press star followed by two, or please press the lower your hand button. Anyone who has a question may click the Q&A and raise your hand button or press star followed by one at this time. One moment for the first question, please. The first question is coming from George Clark from BNP Paribas Exane. Please go ahead.
Morning, gentlemen. Hopefully you can hear me okay. My first question, I'll just take 2. Could you just give an idea of the current volume trends? Are you still seeing a slowdown accelerate, or are there any signs of stabilization?
Shall we answer this, or do you wanna give us the second one as well, so we'll do it all in one?
Let's do that one first 'cause it's sort of related. Let's do that one first.
Okay. I think from our perspective, as I've mentioned it from my trip, to the US and also the numerous trips around Europe, I think we don't see here a trend that is more negative. We are more in line with what we have seen in the fourth quarter, and that what has been explained by Gerhard.
The fourth quarter, as we said before, was already quite, we had, I mentioned it's minus 14%, little bit lower on the ceramic business side and a little bit higher on the piping side. What we have seen from the January and February numbers, we are in line basically with the fourth quarter numbers on volume-wise, yeah.
Okay. That's really helpful. I guess related to that, clearly, like capacity utilization coming down in that environment and gas costs are now back to 2021 levels. How sustainable do you think pricing is in the market more generally at its current level? Do you have any expectation that you might have to give up pricing gains in any certain markets or certain products?
I think maybe not speak only about pricing gains. I think what we managed very well is that we adjusted our basically operating leverage so that we are able to keep the cost efficiency of our fixed costs high, and by that also offsetting basically the impact of the volume decline. I think this is why we also were able to secure the gross margin in the fourth quarter and also keeping EBITDA margin on the 18% what we mentioned before. I think this is also our clear ambition for the first quarter or basically for the year 2023.
I think I can only confirm what Gerhard has said, and keep in mind that obviously when you talk about pricing, there is inflationary cost increases for all industries and also for the colleagues in our industry for this year, ongoing year, yeah, coming, as I said, from wages and others. Not all of them will be in a position to adjust very quickly their pricing. You're right that energy prices come down, but they will take also some time to come down in the sense because it's not the gas price as such, it's the distribution costs and others that are related to it. Don't keep, don't forget also the ETS that I tried to mention at the beginning that plays an important factor as well for them.
Can I just take you up on that last point, actually? Are you able to quantify at all the EBITDA impact on Wienerberger from the ETS scheme?
Yes.
Would you be able to disclose to us or no?
Oh, the... sorry, then I misunderstood you. I don't see it as a major impact. That's what I'm saying.
No.
Sorry about that.
All right.
Yeah.
Okay, that's fair. Thanks, guys, congrats on today's release.
Thank you very much indeed.
The next question is coming from Matthias Pfeifenberger from Deutsche Bank. Please go ahead.
Yes, good morning, gents, and thanks for taking my questions, and congrats to the results. It's basically volume and pricing follow-ups. You're saying the piping business was down more than 10% or I guess that's correct. Looking like something like -20%. Is that also including some destocking or what's happening there? How does that really fit with the -5% you're putting out as a guide for infrastructure? I guess the weak part, it might be, I don't know, oil and gas, desalination, something like that. On the pricing, we had pricing up 22% at Pipelife this year. You mentioned an average of 20% for the year and an exit rate of 17%. Is that all a higher pricing base last year, or is that already like-for-like price declines?
On the gas prices, maybe you could just tell us directionally if you're still competitive versus spot prices for this and next year. Thanks.
Taking up your third question immediately, yes, very competitive. Very competitive on this one for this year, next year. This is I think gives you a good answer to your question. On the first one, when you talk about piping volumes, just keep in mind, Matthias, that we exited the low margin business in France, quite a huge volume. Obviously, you have some volumes also from the exit in Russia and Greece in it from a comparable standpoint of view. Volume-wise, yes, you're right, it has been quite down, but, it was, well, low margin businesses that we exited it here. On the front of international project business, long lengths, and also Soluforce for the oil and gas industry, we have seen, on the contrary, a very positive development trend in 2022. Yeah. This is-
Okay.
I hope addressed you a little bit.
Okay.
Infrastructure was down, obviously, because of these hiccups with Poland and Hungary, especially in Eastern Europe. Here also, I think this will continue this year, as I tried to explain. We are deliberately, as I said, also on a long-term perspective, exiting step-by-step the low end of pipe production. We are moving into a more high end with accessories, et cetera. This is a logical development for the piping part. Yeah.
Would you say underlying, without your deliberate mix, it would also have been down maybe something like 10% in terms of piping volumes rather than more than 10%?
I would say yes, below 10%.
Right. Okay.
Please keep in mind, Matthias, that basically as Heimo mentioned, we exited some markets, the volumes what I mentioned for the fourth quarter are definitely not representative for the whole year. We have seen in average a volume decline, which is more in the range of the -10%, comparing basically or looking at the whole year. Also what we did in the, especially in the second half, that we also choose left and right for price and not for volume. This also led to maybe a slight underperformance on the volume side, but definitely overcompensating our margin development when we look for the full year of the piping business.
Okay. On the pricing question?
Just help me once more. The question was, the pricing impact was +20% across the year, basically, what we realized.
Yes.
And, uh-
Yeah. I think in Q2 you had 22. Now you're saying 20 on average for the year, and the exit rate was 17. My question is, are there any like-for-like price declines already happening, or is it just a higher pricing base last year in terms of year-on-year perspective?
I think what you have to keep in mind is also the pricing impact of the North American piping business, which is also quite volatile and is also coming down a little bit. This is also impacting basically the average price of the piping business and also consequently of the whole average price of the 17% what we mentioned before for the fourth quarter. For the whole year, as we mentioned, we had +20, and we reported after half year 2022, and I think after the first 9 months, 2021, and for the fourth quarter, 17.
Yeah.
-weighted through brings us to the 20%, what we report for the full year pricing development.
No like-for-like price declines from peak levels in bricks and roof tiles and so on?
No, on the contrary. No.
No.
No.
No.
Okay. Thanks a lot, and congrats again.
Thank you, Matthias.
Thank you.
The next question is coming from Preetoj from HSBC. Please go ahead.
Hi, good morning, gents. I have three, if I may. The first one is just a clarification in terms your, for your scenario number of declines which you put in by end market. Could you just split that out between Western Europe and Eastern Europe? What, what kind of assumptions in that scenario are in terms of new build volume decline?
Not really.
And, uh-
Not really. I'm sorry.
Yeah.
Obviously we have seen last year a stronger decline in Eastern Europe when it comes to new build. You remember the Ukraine crisis led immediately to a downturn in Poland and especially Romania and Hungary. This will be a little bit less important this year. We have had also very strong interest rates increases that affect this year negatively the project development market.
Ladies and gentlemen, there is some issues.
Yeah.
Give me a second.
Okay.
They are back. Okay, please go ahead.
Thank you.
Sorry.
Sorry.
Sorry.
There has been a technical interruption, but I was trying to say it's very difficult to give you a clear indication Western, Eastern Europe for the year. I think, as I said, it's a scenario and with this scenario will work.
Okay. Okay, fair enough. Just coming to the split, between, I mean, from EUR 1 billion, you kind of stitched out EUR 110 million as the non-recurring as such. If I look at, it's really the EUR 60 million, which is the forward purchase and piping that's kind of not continuing. I mean the markets had gain as well as, the EUR 20 million, in terms of production efficiency. Those are kind of embedded into your volume decline assumptions. From where I'm coming is kind of I'm trying to marry this number with what you are guiding EUR 800+ million.
Are you saying that, you are from EUR 960, you are going to, EUR 800, that's EUR 160 million delta, which is predominantly, with your volume decline, if you beat a bit. Still that itself is fully then price cost is neutral. That's how you're thinking?
Well, I think you are to some extent, right. I mean, the $60 million in the U.S. is something which is a one-time fact, and you are absolutely right to point this out. You know, when you talk, and I don't want to argue too much on the EUR 20 million and EUR 30 million with volumes and better capacity utilization. Obviously, you will appreciate if I say, if you run your factories above 90% capacity utilization, you have a very good cost base. You run them because some of your competitors are out of production due to the high energy costs. What I assumed is that some of these competitors come back and are in the market again when the energy costs go down, and therefore these market share gains are not 100% achievable again in the future.
That's what I did for the assumption purpose for this scenario. You can take it as you wish. I mean, it's up to you. At the end of the day, you are right. A certain degree of market decline, and as we've put it in the scenario, if it's 20 in the US on new build and 15 in Europe, you can... I mean, it's only, you know, now mathematics and Excel sheets, if I may say so, but obviously they lead to a certain decline in margin and obviously in volume as at the end of the day, more in the, on the volume side, if I may say so. Which brings you in the range of about EUR 800 million plus. Yeah, you are right.
Okay. just to confirm that you do expect to beat your overall 10% market decline, with a lower volume, and you expect to cover your cost inflation through price increases.
Yeah. It's absolutely confirmed to you on the price increase in cost side and also on the operational performance. Yes, indeed.
Okay. Well, I just have one last on the Terreal acquisition. The EBITDA margin, which Terreal is currently generating is around 13%. If I look at your roofing business, which is having around +20% EBITDA margin. Yeah, it's clearly much below the group level. I appreciate you are kind of giving EUR 150 million EBITDA guidance by 2026. If you could just split that, you know, EUR 50 million into cell sites and, I mean, I guess it's all cell sites or anything else you are building because from the face of it looks like a EPS dilutive rather than accretive.
Not really, no. There I don't agree with you. Sorry if I say this directly. On the other front, from a perspective of performance enhancement, obviously when we are in a position to take over the business, we will immediately start by improving its performance technology speaking, cost efficiencies, and also especially on the energy consumption front. I think these are the biggest ones. You will see us doing this, and we will, as we did in the past, for all of our business, transparently report on the targets and how much we achieve. At this stage, I think it's an assumptions that we pace mostly on the platform, as I said, grows with additional products and the platform.
Okay. Okay. All right. Thank you very much.
Thank you very much indeed.
The next question is coming from Gregor Kuglitsch from UBS. Please go ahead.
Hi, good morning. I've got a few questions too, please. The first one, if you could help us, I guess, on pricing. Just sort of a scenario, I guess, if pricing holds where it is today, what do you think is the year-over-year increase you'd get in 2023, appreciating that you had sort of sequential increases throughout last year? Correct me if I'm wrong on that. I guess the related question is, how much more pricing do you think you sort of have to implement on average to sort of get to your, I think, crudely price cost neutral, which is I think what you're gunning for. Coming back. I don't know if you wanna take that first.
Yeah, we'll take that first, William, if I may. Then I think you see us, and you have followed us that closely that you understand we have done already the price increases and are working on that. So I can say from our perspective, it's a single-digit number. It's a higher decile. It's in the range of about 6%-7% where we position ourselves these days, where we can sort of pass on the cost increases to the market. I would say at this stage, we are very successful in doing that.
Okay. Thank you. Can you remind us how much the North America pipe business actually made in terms of EBITDA, so we can put the EUR 60 million reduction into perspective? I mean, I think that's not unexpected. You know, the question I guess is, you know, where did it come from? Where is it going? Do you think once that EUR 60 million unwind is done, that that's sort of a sustainable run rate? 'Cause I remember looking back here, this used to be a business making EUR 20 million. I reckon it made well north of EUR 100 million last year, so I wanna understand sort of the sustainability of the very extreme.
I understand. I think we need to clarify this for once, I'm usually not that direct, but this time I think I will give you some numbers so that you can work with. You were saying with the 20 was the usual run rate, but we improved the business. We obviously expanded our capacity also. From a perspective of additional margin, we were above EUR 100 million in this business, so above EUR 100 million. The EUR 60 million that you deduct, that then leads you to a more sustainable run rate. Yeah?
Okay.
is a little bit above the double of what you have indicated from an.
You think that happens in 2023? That's happening now.
Yes, exactly. We are getting into a more closer to performance to a sustainable one now. Yeah?
Okay. That's clear. Thank you. Then, you know, sort of final one, I guess, on maybe sort of longer term sustainability of profitability. I mean, if I read you correctly, you're saying EUR 900 would be the number if markets were stable. Okay, markets are now going down, so therefore it's going to EUR 800. In principle, you don't feel that there's more unwind coming in due course because, I don't know, hedges helped you out or something like that. Is that the right way to interpret what you're saying?
I think you're absolutely spot on. As from our perspective, the EUR 900 million, a little bit above EUR 900 million is the run rate as we call it, and I think we have established this sort of business. We have taken the outperformance, the more than EUR 100 million to be above EUR 1 billion this last year. If you base yourself on the sustainable EUR 900 million, obviously the market declines. How strong they are or how sort of pronounced the softening of the markets will be, we don't know yet. That's why we gave you a scenario and to work with. We at least think that we are well hedged with such a scenario, if I may say so.
Well prepared. Basically, we do our exercises, what we have to do, and adjust our cost structure accordingly to the end markets, to the declining end markets.
Thank you.
To protect margin. Yeah.
Yeah, and if Your assumption is absolutely right. If the markets don't move, then obviously the 900 is a clear sort of run rate.
Understood.
Yeah.
Final point, 'cause you made a point of it on the ETS. Can you remind us in the ETS scope, what are your emissions and sort of how much short are you now? I guess you're in balance now, can you just tell us what your actual emissions are so we can calculate ourselves what sort of the potential impact is if the free allowances get reduced?
Yeah. For the moment, actually, we are not short. I mean, we are well covered. What I'm trying to say is it's roughly around 2 million emissions that we have in the CO2 base tonnage. That's what I'm trying to say, the European Union has not published yet, you know, the final set of regulations that they want to change. The further reduction targets that they want to implement till 2030 and obviously this doing away with free allocations, we are well prepared for that, and we are completely in line with our reduction targets here. That's what I'm trying to say. It will not further impact anything on the results.
Okay. You're trying to match the reduction in free allowances that's coming down the pipe.
Yes, exactly.
Okay.
Okay.
Thank you.
Thank you.
The next question is coming from Tobias Woerner from Stifel Europe. Please go ahead. Tobias Woerner, you can ask a question now.
Probably we have a technical problem, and if Tobias is not connected.
Tobias may be not here anymore. We can take the next question from Pam Liu from Morgan Stanley. Please go ahead.
Thank you. I have two questions. I'll ask them one by one, please. The first one, Heimo, you already touched on the competitive landscape earlier. Can I just check, are you currently seeing any competitors cutting price hard or coming back to the business because the gas cost position is getting better for them as gas price fall? That's the first one. Thank you.
A clear answer to this one, no.
Okay, cool.
It's a short one. I'm sorry, but.
That's okay. That's clear. Yeah.
Yeah.
The second one is, obviously the strong results in Wienerberger Building Solutions we've seen here clearly demonstrate the benefit of having a diversified pro- market exposure with a good market share. If we apply the same principle to your U.S. business, I think on the market share front, Meridian has been progressing very, very well. Am I right in thinking that perhaps the next task there is about more exposure to renovation and more solution selling? If so, could you tell us more about how to grow, how to penetrate into the renovation market there, and how quickly can that be done? Thanks.
You're absolutely spot on on this one, I think our homework has been done on the front of the new build side. We have consolidated our position. That was our first target. Now we are moving in the next one. Solutions, one hand is on the facade with the integrated panels, for example, when we talk about thin brick, yeah. You glue bricks on a more sort of panel system, and here reinforce our position on new, not only residential, but commercial and also on renovation side. This is one part of it. The second one will be the small acquisition for U.S. standards of the Terreal business in the. They have only one roofing factory in Ohio. It brings us the platform to actually enter the very interesting roofing market in the U.S.
If you see our performance now in the new build segment with respect to facade and facade bricks and solutions, to add on the roof in the U.S. will be the growing subjects for us, because they have also a lot of pitched roof, as you know. They have different materials. Still, I think here we can make good inroads. It will be over the next years that we will grow our exposure to this. You are right that we want to have here also a more balanced portfolio in North America.
Okay. Thank you.
Thank you.
The next question is coming from Markus Remis from RBI. Please go ahead.
Yeah, good afternoon. Most of my questions have been answered. One is remaining on the topic of share buyback. I mean, post the cancellation of a couple of weeks or months ago, how's your thinking about kind of stepping up the buyback activity again? The second question centers around kind of your energy hedging strategy, given the recent decline we've seen. Is there any kind of more opportunistic stance now capitalizing on the lower gas price? How should we think about your own gas storage? Is that to be kept, or will that be kind of a more of a trading aspect to that as well? Thank you.
Well, I think, no, First, let me answer this very clearly. On the gas side, we are not speculators. We are not trading things. We are trying, and as we have been in the past, ensuring the supply. It's very important for us because we continually produce, so the supply is very important and to have it for competitive prices. As you have seen in the charts, we have done so also for the years 2023, 2024 and also partly 2025. You will see us now in the market for 2026 onwards because the prices are coming down, and we are capable of ensuring good volumes at very competitive prices. This is, we will re-enter, if I may say so, our strategy in buying forward.
This is on the energy front and on the share front, I think we have used. You see now the full picture because we've related to you, Gerhard and myself, that we have overachieved our results and our own targets with more than EUR 100 million. We used the cash already buying shares also last year. We have seen how quickly we move on that. We have also announced a major deal for us and the growth, obviously. We see that here growth for Wienerberger is important, so we need to digest the Terreal acquisition first. I think opportunistically, you will see us probably a little bit in the market, but not in this scale that we have done in 2022.
All right. That's very clear. Final question. I mean, just thinking about the expected volume decline and, I mean, at which level you would start to consider, I mean, taking out a bit of capacity, or is that already kind of needed in the framework of the current market expectations?
No, we clearly said also when we did our planning for 2023, there are this winter sort of standstill where we do maintenance and where the production is the most expensive one, especially when it comes to bricks or its clay blocks or facing bricks. We are right in the middle of this at the end of February. We will decide market by market when we start production again. You know, roof tiles, I can already relate to you. This is running full speed already because demand levels are strong. In facing and bricks and clay blocks, we will come back as needed. In certain countries, probably the standstills will be three or four weeks longer. This is what we will adjust and how we will adjust production capacity.
Okay. Thank you very much.
Thank you, Marcus.
The next question is coming from Yassine Touahri from On Field Investment Research. Please go ahead.
yes. Can you hear me?
Perfectly well, Yassine
Good morning, and thank you very much for taking my question. I have a couple of question on prices and then on the, on 2023, and then a little bit more long term. First, did you manage to increase prices already in January 2023?
Answer is yes.
Yes. Yes. We see.
And, uh-
The prices which we have announced are fully arrived in the P&L respectively on the market.
In order to achieve the 6%-7% price increase in 2023, do you need to increase prices further or does it assume price stability?
Exactly.
compared to, today?
Yes.
The later one, right. We expect price stability and from a today's perspective, no further price increase needed.
In January, you increased prices by what? A couple of % because you already had a lot of price increase implemented in 2022, so I can imagine that you had a good rollover effect from the price increase from last year.
You had a rollover effect for sure, we also basically assume from a today's perspective to do a one-time price increase, which we announced already by the end of last year, which is effective or which was effective by the beginning of January. This one we see. This arrives in the P&L. This is there already. From today's perspective, if we keep going and the cost structure stays as we said, that the cost inflation is round about the 10%, we also see that the prices which we have announced and implemented so far are basically the one which we will keep for the rest of the year from a today's perspective. Yeah. It depends definitely how basically cost inflation develops and also how the market further develops. Yeah.
Is it fair to assume that the 6%-7% pricing, it would be half the rollover effect from last year and half the price increase that you've announced in December, January?
You get the rollover effect, right, from last year, which is, most probably. Yeah. This would fit basically, yeah. I think it is a fair assumption. Yeah.
Do you see a risk of price pressure in the second part of the year, if you've got energy prices that continue to fall, benefiting the smaller brick producer or if PVC prices continue to decline?
I think basically when it's about PVC prices, we already see today, already in the fourth quarter that PVC prices were coming down. Basically, the resin prices were coming down in the fourth quarter, and also we see that resin prices are sort of further softening also for the first quarter we expect that. We have to see. We also see that the production output from the resin producers are also limiting their capacity, respectively, their output. From a today's perspective, we don't expect a strong decline in the resin price development for the whole year of 2023. For the other part of the business, for the ceramic part of the business, Yes, there will be some more price pressure than what we have seen in 2022.
Simply also, as we mentioned before, that some of the competitors will restart. When? We will see. It is most probably after the winter. For the moment, it is still, let's say, quiet on the market.
What you're suggesting is that you would try to keep the prices stable.
Right.
keep prices stable and accept to give back a little bit of market share.
This is, definitely at the moment our approach, to keep profitability, to go for price, not for volume. This is a kind of a basic approach where we move into the year.
When we look at the medium term, what we see is that if I look at the price of cement or lime, it's increased quite dramatically over the past couple of years, and it's probably going to increase much more in the next 5 to 10 years because the cement plants will probably lose their free allowance. So does it mean that the price of high-rated concrete and calcium silicate could increase at a faster pace than clay blocks and tile? And does it mean that you could gain market share over those products?
I think, Yassine, our strategy is not that we will try to gain market share fighting over price, because this is certainly not the way forward for us in the future, and we have not done so, by the way, in the last couple of years. It's more on proposing the market a long-term solution, efficient solution. You have seen that we have changed our product portfolio, high insulating blocks or façade systems or, as I said, on the roof, more system approach there. Again, here it's more the solution approach that we favor than price competition per product. This is the way forward for Wienerberger. I fully reckon that some of the colleagues will have input costs that differ from ours, and they will differ even further in the future.
This is their problem, not ours, if I may say so. We will certainly position our product more as a very long-term solution. You know, life cycles above 100 years is important. Technical high in energy, Reducing solutions that we put in the marketplace and therefore ask a different pricing.
A very last question. If you see that other products such as wood or for example in the U.S. you are talking about roofing, asphalt. If you see that some other product are quite interesting, could you change the portfolio of Wienerberger and diversify into new products?
Yasin, I think we have done so in the past. I think the move of Wienerberger, that we moved away from clay blocks into roof on one end, even if they are clay, and then after that, into pipes, now will make more sense for all of you because you understand that Wienerberger views the building holistically. For us, it's important not to see just the product, but the solution to the roof, to the facade, and to the wall. This includes obviously also, Yasin, other products, and we do so already today. We bundle things, and we... For example, if you take the 75 million square meters that we will sell on roof tiles in Europe in the future, we sell obviously in certain areas already insulation with it that we don't produce, by the way.
In the future we might even sort of produce certain things ourselves and/or make acquisitions in these fields. I think here the platform for Wienerberger is a very different one than it used to be due to our high competence on the sales front, doing project sales, and being very fast and very early in the process when projects get developed and designed. It gives us the opportunity to sell different products, bundle them, and sell it as a solution.
That's very clear. Thank you so much for your answers.
Thank you.
Thank you.
The next question is coming from Matthias Pfeifenberger. Please go ahead.
Yes. Sorry to extend this call. Just 2 follow-ups, more on the longer term. Now you're showing us 2 years climb. My question is, will 2024 definitely be a year of growth in new build residential given we're still in the upward cycle on rates, and there might be a substantial lag for this to be reversed? The second one, your scenario on renovation deteriorated a bit. What's the underlying development? Is that more in the piping or is it really also on residential renovation in the ceramics? Thanks.
Matthias, if I may start with a joke. Sorry if I do this, but as you know, and additional questions cost a little bit more. You get a higher price.
Fair enough.
No, I'm just joking. Thank you very much for these very valuable questions. I think what differs today from past scenarios, and I refer probably to 2008, 2009, and 2010, the underlying markets, and especially in the new build, North America and Europe, you still and you have a lot of demand, yeah? We have a need of housing, we have a need of new apartments. There's good level of demand. Even today, we have inquiries throughout all of our markets that are strong. They don't result immediately in permits or in activity obviously, because people are waiting and probably pushing a little bit back projects because of higher financing costs and instability. The need is there. This, I think, is very important that we keep this in mind.
We have not overbuilt, and in no markets we have a saturation, for example, right now. We, I think, are confident that the demand levels in all of our markets will remain strong. If it's, that's why I'm saying I give you only a scenario for 2023 because actually we don't know how this will play out in the later part of this year. In 2024, it's even too far away for me to make any predictions. As I said...
Yeah.
There's a good underlying mark. Renovation, you know, the decrease is also mostly related to financing and also related to the affordability in the sense of labor. Do we have skilled labor around Europe, especially and also in the US? This is, I think, things that matter more right now in the renovation side. Again, demand is huge. There's an important factor there. If I look at alone on the roof, for example, we lack today thousands of roofers in Europe in order to implement the project. This is, I think.
Yeah.
A serious concern that we have. Yeah.
Okay, perfect. Thanks a lot.
Thank you.
The next question is coming from Tobias Woerner from Stifel Europe. Please go ahead.
Operator, I think if Tobias can't make it, we will take his question after the call. He will call us. Don't worry about it.
Okay. I'm sorry for that. We have no further questions. I will hand back to Daniel Merl.
Thank you, operator. Ladies and gentlemen, thank you very much for taking the time to dial in today. As a little reminder, on the 27th of March, we will publish our combined annual and sustainability report for the business year 2022, as well as our online annual report. For today, I can only wish you a nice remaining afternoon. Stay safe and goodbye. Thank you.
Ladies and gentlemen, the conference is now concluded. You may disconnect. Thank you for joining, and have a pleasant day. Goodbye.