Ladies and gentlemen, I hope you're all well. A warm welcome to the Wienerberger earnings call on the results for the first half of 2022. Our board representatives today are our CEO, Heimo Scheuch, and CFO, Gerhard Hanke. They will lead you through our presentation, and will discuss our strong performance in the first half of the year. After the presentation, as always, we are ready to take your questions. I will now hand over to Mr. Scheuch for the presentation.
Good afternoon and welcome from London from the whole team. Ladies and gentlemen, I have the pleasure to walk you through very quickly the major points of our set of results for the first half of 2022. You've seen it's a strong set of results, with turnover up by 38% to EUR 2.5 billion. The EBITDA has been up by 79%, up to nearly EUR 550 million, and a strong increase in net results to more than EUR 320 million. The EBITDA margin for the first half of the year is above 20%, to be precise, 21.3%.
Ladies and gentlemen, this is a strong set of results, especially if you look at the circumstances and the market environment in general in which we are currently operating. It's obvious, and unfortunately for all of us, we live in a very volatile period of our lives, with geopolitical instability, with war in Europe. There's a lot of turmoil in the financial market, and with an effect that has to be seen in all of our lives, with high inflationary cost increases that are now obviously a major issue for not only the economy, but for the population in a lot of countries. The rising mortgage rates have hit especially already the eastern part of Europe, countries outside the Eurozone.
We talk about Poland, Czech Republic, Hungary, Romania, where we approach today interest rates between 9%-10% already. This unstable global market environment has created a certain impact on our end markets. I recall the end markets for Wienerberger are the new residential housing market, the renovation market, and the infrastructure market, both in Europe and North America. We have seen on a group perspective, in the new residential housing market in the first half of this year, a slight decline. Decline in between 2%-5%, depending on the market. We have seen stable environment in renovation, and we've seen stable environment in more or less in infrastructure. The good news that we can convey to you is that our performance, Wienerberger performance in these markets is a positive one.
We were able to increase volumes compared to last year in the new build one, in the infrastructure one, and in the renovation one. We have clearly outperformed our end markets. Obviously, and it goes without saying, one of the major discussion points and the tension points was the theme of energy, especially natural gas. Natural gas, why? Because the dependency of the European economy on Russian gas was heavy and has obviously played a major role with respect to supply, availability, and especially cost. Wienerberger has done two things. We have done so in the past. We've always bought forward our energy and also gas, and therefore we have a clear buying forward strategy, which obviously has enabled us to be here more flexible and have a better cost base than competitors or other industries in the sector.
Furthermore, we have also decreased the dependency on Russian gas dramatically from group's perspective to less than 20% as of today. We have ensured, and that was, especially true for the first half of this year, the supply and the availability of natural gas in all of our locations, because we are running at full capacity. I will elaborate, and my colleague, Gerhard Hanke, more in detail how we tackle the situation currently and for the months to come. At this stage, and I have a special thanks to make to all our 19,000 employees, because they have done a great job. A great job this year because we are running at full capacity, as I said earlier, and we are delivering every and any product to construction site and clients and customers around the markets that we're operating in.
As you have well appreciated, we have not increased our inventory level. Working capital has slightly increased because obviously the value meaning the inflated value of the end product, but not the volume as such. The workers have been tremendous in the way of output and commitment to the company being able to work full time and without any delays to transfer our products to construction sites. We have, as Wienerberger, transformed successfully the company to a more resilient one. One that more than 50% is active in non-residential housing activities like infrastructure and renovation. This is important when you look at the company's risk profile today and especially for the future.
We have dealt with increasing costs due to inflation and have successfully implemented price increases. The operational excellence has helped us in order to perform strongly through the first half of the year, and will continue to do so for the rest of the year. As another aspect, the disciplined M&A policy that we've put in place in recent times and in last years, where we have bought companies at relatively low market levels or multiple levels, have integrated them rapidly, and especially also the ones from last year. We have clearly seen a very positive impact from such M&A activity. If we look at the cost base for Wienerberger, it has increased because of the high inflation by 16% in the first half of the year. This is the Wienerberger increase.
If you would sort of compare it to the market, it would be much higher. Higher, why? Because the market is not privileged to have such a strong purchasing department as we, that has been able to offset these sort of activities in the past in the sense of forward-looking and the procurement at lower costs than the market. We have been able to ensure lower prices for Wienerberger, not only in energy, by the way, but in other materials as well. This puts us in a very unique position. We are able to substantially deliver, as a reliable partner, products to our customers and installers in all of our markets.
We have a consistent pricing policy, and with us, the people can plan their projects and can be sure they not only get the best quality, but also the best price. Price increases have been in the range of 22% on the group level. We clearly outperform our cost inflation. When we look, obviously, at the current levels of activity and also the environment around us, the market, the financial market, and a lot of you see a major recession coming our way. Due to geopolitical instability causing volatile times and the lack of security with respect to energy supply causes a lot of headache. However, we at Wienerberger don't sort of look away, and we see this and we take sort of this into our consideration.
However, the business as such is running well. We have strong order intake. We have changed the business into a more resilient one. We have innovated our product range. We continue to operationally work on our cost structure and improve it tremendously. We have learned to successfully and fast integrate value-creating M&A. Therefore, due to the fact that we have reassessed the situation, we've reworked on those sort of all the energy mitigation plans and risk plans, we are comfortable to give you a guidance for the rest of the year that is EBITDA of above EUR 900 million. Again, and to basically say one word on this guidance. The guidance is again, not a conservative one.
It's one that is to be compared to last year, 2021, where we have seen growing markets, where we have seen a strong business, especially in the third and the fourth quarter, due to the fact that we have increased prices in the fourth quarter of 2021 already. The order intake has been and delivery very high. We had mild weather in the fourth quarter and of course, as I said, growing markets. This year, we foresee markets with up to a decline about 5% in new residential houses and house building, and a Wienerberger performance that is more or less in line with last year performance. A fairly strong statement for this year for the rest of the year.
When you look at 2022, we therefore will focus especially on the operational business, operational excellence, satisfying the demand level, trying to deliver the products to our clients, which essentially also in a way that they can plan and they can ensure the projects. We will continue to work on the contingency plans with respect to energy, 'cause it's very important that we manage this aspect well, and we have to do it on a plant-by-plant level in the different countries, because every country is dealing with this differently. In this context, it's very important to say that our ESG policy, long-term policy, is helping us. We've clearly said we want to reduce CO2 emissions by 2023 with 15%.
We also say we want to decrease our fuel and our energy consumption, especially when it comes to gas, by 15% till 2023. Again, a very strong statement for Wienerberger, fully in line with new policies. We will focus on growth. We have done so in the first half. We'll continue to do so in the second half. The current market environment opens us new opportunities when we come to M&A. We see this as an important factor to grow our business in the renovation and infrastructure, and we will do so. As I said, when we talk about energy, we focus not only on the energy as such, availability and the way, the sort of certainty to get the energy to our plants. We first of all think, work, and act on the reduction of consumption.
We have done so in the recent years, and we continue to do so by investments. You see it in the presentation, that we actually work on this. We use green electricity, highly efficient for the kilns, for the dryers. We integrate heat pumps in this sort of new approach when it comes to technology. We use CO2 capturing. There's a lot of activity on our more than 220 sites that we're currently implementing. We're doing it fast, we are doing it consistent and efficiently, and make here a major effort with respect to performance when it comes to energy reduction in the production process. When we talk about ESG, especially the availability of different sustainable resources of energy, be it electrification, be it also biogas or syngas.
Here, very differently from country to country, we focus on different aspects or even hydrogen. Again, we need cooperations with states, with institutions, with public bodies that or institutions that give us the possibility to have access to this. This is something we currently implement. Wienerberger is going to be more independent when it comes to the energy that is available to us in the future, because we focus here on energy on a sustainable way and green energy in general. Our ESG agenda remains fully in place. Decarbonization is one of our top priorities, especially when it comes to reduction of fuel in production processes. The circular economy is a major attention point for all of us, and we focus on this. We've introduced new products that are 100% circular.
Biodiversity as a plan for every site is to be implemented in 2022/2023. We have made a major step forward when it comes to our ESG performance as Wienerberger. Finally, to discuss again bolt-on acquisitions and the way forward. We do a lot, especially when we talk about solutions. The recent acquisition of Vargon, a leading provider of piping solutions for the in-house sector in Croatia, is a good example for that. We combine it with our existing walling and roofing activities in Croatia and create here a company being able to provide systems. We tackle the issue of labor shortages by prefabricated wall systems with an acquisition in Austria of a prefabricated wall plant. We increase the exposure to renovation by acquiring a small accessory producer for roofing in Germany, Meyer-Holsen.
On top of it, we focus on our portfolio. As we said in the past, and as we continue to do so, we exit and divest businesses with low margins, with low profitability rates, and problematic areas where we don't see a strategic future for the business. The French piping and the Russian brick operations are a good example. All in all, you have seen that we have again moved dramatically forward in 2022. My colleague, Gerhard will walk you through the different units and the financial performance.
Thank you, Heimo. Ladies and gentlemen, the performance of the business units, respectively of the Wienerberger Group in the first half year. As mentioned already by Heimo, was exceptional growth, a very strong performance. Let me start with the building, with the business unit, Wienerberger Building Solutions. We have seen, as we heard in the beginning, in the relevant markets, which is, on the one hand, the new build residential market, on the other side, the renovation market. We've seen, in the new build market a slight decline around about 3%-5%. The renovation market we have seen in a stable development. We as Wienerberger, and this is I think important, we were able to beat the market.
We were able to increase the sales volume by around about 3%. In total, when we look how revenue developed, which went up by more than 20%, part of the 20%, namely 3%, is corresponding to the increase of sales volumes in a slightly declining market of the new build. We were able to increase the prices around about 14%. A 2% mix upgrade also thanks to our Fast Forward initiatives. We had only a slight FX impact in Europe, which partly was concerned by different developments of the currencies of Western Europe and slightly weaker currencies in some parts of the Eastern European countries.
We were at any time able to secure our supply chain, respectively, to manage our supply chain. We had at any time secured the availability of raw materials and energy. We were running our plants at full capacity in the first six months, and this also led to the strong EBITDA performance in the first six months. Next to that, our Fast Forward program was also contributing. What we see is an extraordinary strong EBITDA margin of more than 25% and an EBITDA of more than EUR 340 million in the first six months. Looking to the business unit, Wienerberger Piping Solutions, we see also there a very strong revenue and earnings growth during the first six months. Revenue were increasing around about 30%.
We know that we had an acquisition in 2021 in U.K. and in Ireland, which contributed to revenues which around about 9%. Pricing went up by more than 30% and we had slightly lower volumes in the piping due to that we exited last year in Greece and in the Russian business. All in all, as I said, a strong revenue development of about 30%. Looking at the operational EBITDA development, EBITDA increased by more than EUR 90 million in the first half year, knowing that there is also a contribution in it from the acquisition of Cork Plastics and FloPlast in U.K. and in Ireland. Also due to the management of the supply chain, having secured availability of the resins on the one side.
On the other side, having a proactive, margin management in place led that also the profitability in the business unit went up to an EBITDA margin of more than 12% in the first six months. Coming to North America, the North American business unit had also a very strong performance in the first six months. Market wise, we have seen that the U.S. market as well as the Canadian market, the new build market, which is relevant for us, was slightly declining also there. Looking to the Wienerberger performance or comparing the market development to the Wienerberger performance, also there we were able in the bricks, in the clay business, in the traditional, to increase slightly volumes in a slightly declining environment. The infrastructure segment was performing still on a very high level.
We kept there the volumes according to the market development on a stable level. What was also driving the revenue increase was on the one hand, the acquisition of the Meridian Brick, which makes up almost half of the revenue increase is due to the Meridian acquisition, and part of it is volume development and price development. Concerning the profitability, respectively, the EBITDA development, we see that the integration of Meridian is progressing faster than expected. We see higher cost and also commercial synergies in the first six months.
The profitability also of the piping business is on a still high level, and we realized in the first six months an EBITDA of more than EUR 110 million and an EBITDA margin, which is close to 24% in the first six months. All in all, basically in every business unit, we have seen a very strong performance, and it's about demand development, respectively, our daily supplies and deliveries, but also our pricing performance during the first six months. That means on the group level, that we were able to increase revenues by almost 40%. I think the important one is that the big part of the revenue increase was done organically.
As Heimo already said, we were able to increase prices by 22%, but also there is a slight increase on volumes in it, which is mainly driven by the strong performance in our clay business unit. EBITDA-wise, we were increasing the EBITDA to EUR 545 million. Also there, I think important that a big part of the EBITDA contribution is coming from organic growth. We have here contribution out of the Fast Forward program of EUR 27 million. The big also there driver is also the price over cost development, which we were able to realize in the first six months.
The reconciliation about reported EBITDA and operating EBITDA, I think is, as there are no material positions between the reported and the operating EBITDA, I think is something what I will not further explain. I think more important is, let us have a look on the energy position of Wienerberger, on the energy forward buying policy, as this is definitely an important asset also of Wienerberger. What we have in place, we have secured for this year, 2022, almost 100%, to be precise, 96%. But also for our 2023, we have already secured almost 90%. 90% is at the moment based on the output of 2022.
We feel comfortable with the positions, with the secured or with the forward bought position, and this also brings us in a position to have a very controlled and stable price development, also in the next year into 2023. Our Fast Forward program, as I mentioned before, is an important pillar of our organic growth. Also this year, the Fast Forward initiatives even outperformed basically the expectations. We have strong set of results. Also what we see is that part of our initiatives basically outperforming, especially these initiatives which are linked to volumes or to margins. Also here we see that in the first six months, that we were able to realize EUR 27 million in the first six months.
We stick to our full year program plan, which is EUR 135 million, which means that also for the next year, for 2023, that we go for EUR 45 million on EBITDA contribution for 2023. Just to remind you, our Fast Forward program is a program which we have in place, which have round about a 1,000 initiatives in place, which we constantly measure and which are constantly also contributing to our earnings in different fields of our business model. A big part is coming from the innovation side, and also a second big part is coming from manufacturing excellence. Let me summarize these financials or this strong set of financials. As I mentioned in the beginning, a strong increase in revenues, organic revenue growth, thanks to our clear and consistent strategy on innovation and system solutions.
Earnings growth in EBITDA by +79%, on EBIT by more than 120%, and the net result is almost 3x as high as last year. Self-help contributed with EUR 27 million, and we also already see a EUR 46 million in M&A contributions. I think what is important to keep in mind, a very strong balance sheet position. We had a high cash conversion rate in the first six months of more than 90%. A free cash flow already after six months, which is above EUR 130 million. Our financial leverage, Net Debt to EBITDA, is with half year closing at 1.4x, and according to our guidance for the whole year, we are expecting.
At that EBITDA ratio, which is around about at 1x, which is also extremely strong and is showing also our strong cash generation and also our strong balance sheet, what we have in place. Finally, but very important also is the shareholder return. You know that we have since March, the beginning of March, a Share Buyback Program up and running, which will end by the end of September. We have spent so far by half year around about EUR 150 million in the Share Buyback Program, and we're expecting to buy basically 'til the end of September, around about 7.7% back on treasury shares. We're expecting a total cash out, which will be around about EUR 210 million to a maximum of EUR 230 million.
All in all, also there, a strong shareholder return out of the dividend and also out of the SB Program, which is up and running till the end of September this year. With that, I'll hand over back to Heimo.
Thank you, Gerhard. Ladies and gentlemen, you see with the numbers that obviously in this volatile times, Wienerberger was able to improve cash flows, which is very important. Free cash flow is strongly up. The cash conversion above 90%, as Gerhard pointed out. We have entirely financed the share buyback and the dividend by the cash generation of the first half by not increasing debt. This is the strong statement of Wienerberger in the first half of the year. When we take the outlook, we see obviously that the current negative trends that we have politically speaking, financially speaking, due to the financial markets and the continuous discussion about interest rate hikes, etc. , has somehow influenced the market.
Especially in the new build, we see on a group's perspective that our end markets in new build will decline up to about 5% on, depending on the individual market, some less, some more. This is what we see as of today. We see that the renovation market and the infrastructure market remains stable. Stable under the definition of Wienerberger means -2% to +2%. That's where we expect the markets to be for the whole of the year. Again, as we said at the beginning, Wienerberger will outperform these markets. With all the necessary other assumptions that we keep in place, we think, and we are confident that we achieve a result that is above EUR 900 million EBITDA for the rest of the year.
Again, if you compare this to last year, it will be more or less in line with the performance of Wienerberger in the second half of 2021. Keep in mind that in 2021 we had stronger end markets in new build. We had a phase of strong price increases hitting the last part of 2021 for 2022. Here, obviously, sales that were improved strongly in quarter four, and we had a long period of mild weather towards Christmas of 2021. All in all, I say we're going to make a great year. We'll keep our margins where they are and are confident to have a good performance for the rest of the year.
You see our guidance with respect to the market in one of the charts that we have addressed in the presentations that you have available. Let me just finish on a little thought on 2022 and beyond. Because there's years that come and after 2022. If you look at Wienerberger, I just want to draw your attention to a couple of things. First of all, the new Wienerberger is different from the old one. We have a stronger exposure to infrastructure and to renovation, which is more than 50% of our turnover. We have a much more effective and efficient production network. We have a highly innovative product portfolio, which we increase every day.
We have a very disciplined M&A track record that we find throughout the group for the last couple of years, and a very fast integration that we run, like in Meridian, for example, where we get cost synergies and benefits from the transaction very quickly through, and especially also in FloPlast and Cork Plastics in Ireland and in the UK. As a company, we are much leaner, quicker, and faster to adjust to any sort of changes in the demand on the demand side, on the markets. When we look now what is going to happen, it's I think the fair assumption as of today is that both the renovation and the infrastructure market will stay more or less stable throughout the years to come. There's a strong demand there.
There's a lot of initiatives, and especially incentives in place on the EU, American, and Canadian, and U.S. and U.K. level in order to do so, to improve the old housing stock and to change the old infrastructure, especially when it comes to water and energy. On the housing front, ladies and gentlemen, we have a very different scenario compared to the past. Recent years have shown that we are not overbuilt. Not overbuilt in the U.S., not in Canada, not in the U.K., not in Ireland, not in Continental Europe. There's a strong demand and pent-up demand in the countries that we are active in. There is obviously an aspect of affordability, there is an aspect of financing, and there is an aspect of land availability and labor availability.
We are aware of that, and that's why we think that at this stage in August of 2021, we see a potential development of about -10% in new residential housing in 2023 for the Wienerberger Group. This is what we are currently working on when we look at capacity planning and planning of the availability of materials for our production. We will still sort of optimize our structure, and I think when you talk about energy, and I'm not talking about natural gas only, because it would be shortsighted to do so. I understand that everybody talks about it, and it is important, and we obviously work daily on this issue.
Energy comprises for us also electricity and other resources, and therefore it's so important from country to country to work on these plans that we are currently doing so in order to ensure availability of energy for our production. This is for any aspect of energy. Our top priority is reduce the energy consumption. That's what we are investing in, that's what we are planning for, that basically are driving our targets. Therefore, I recall - 15% till 2023 is an important target. Obviously, -40% in CO2 emissions, which basically also aligns with a sort of sizable reduction in fuel consumption till 2030, is obviously a very important target as well.
We'll do it as fast as we can, as fast as technology is available, as fast as other fuels are available. Again, we have reduced the dependency of Russian gas dramatically for the group, which is under 20%. All in all, when you look at Wienerberger today, our continuation on the proven track record and growth strategy comes from the digitalization, innovation, and the system solutions. Ladies and gentlemen, when we talk about order intake, more than 70% already we do digitally. We have driven the change in the business dramatically with respect to client contacts, creation of leads, working with the sales force, with our clients and customers in BIM and other proven tools with respect to planning, to logistically working the deliveries, etc .
Wienerberger has been becoming a fully digitalized company, and this is driving our organic growth with an impressive 23% organic growth only in the first half of this year. Performance in operational excellence, Gerhard has referred to. He has, humble as he is, not mentioned that EUR 180 million have come in this operational excellence program since we have started it. EUR 180 million. We have delivered every cent and every penny. On the M&A one portfolio optimization, we have bought companies for extremely interesting multiples. We have integrated them well, and obviously this is also contributing to the value creation. You see that our ROCE is strongly up. It's above 12%. This comes from this disciplined approach that we will keep also in the future. We are aware that different scenarios could eventually hit us.
We are not afraid of them. We see the transition of energy as a potential, big potential for us, as an opportunity to distinguish us from competition, to make us stronger, to consolidate the market further. All of this is a unique opportunity for Wienerberger, and we view it like this. The performance of the first half of the year is not a performance because the markets are so good, because we have changed the company and the company is reacting swiftly and rapidly to this change. I think with this degree of optimism in a world that is driven by negative news and by all sorts of monsters that look at us, I would like to terminate our presentation and ask you for your questions.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. The first question is from the line of Yves Rombart with BNP Paribas Exane. Your question, please.
Good afternoon, gentlemen. Thank you for your presentation and your last words, the high morale of optimism and longer term thinking. I'm afraid I'm gonna be a bit more short term. Sorry about that already. My first question is on demand. I just wanted to know in anticipation, sorry, of your 2023 initial thoughts already in terms of that -10%, could you maybe break down some of the markets that you're more worried about compared to maybe some of the markets where you think it might be more resilient? My second question is on energy, and here, I just really wanted to understand sort of your contingency plans, and whether you've already done sort of a sensitivity if there was a complete gas shortage in Germany and Eastern Europe.
How fast and realistic is it to assume that you can use sort of other energy sources? What can you do in that scenario, and what would be sort of the earnings impact or the revenues impact? Have you done that work already, and can you communicate on that? Lastly, on the U.S., you've obviously reached a record high margin, and the margin is actually above the European Building Solutions division now. I just wanted to know, where do U.S. brick margins stand today? Have you already been able to bring it above the 20% threshold? Thank you very much.
To your first question, Yves, and thank you for the questions, by the way. The markets will be very, very different. We have seen it already this year. This year, obviously, due to interest rate hikes, to the strong link to Ukraine and the exposure there, the Polish market has seen the strongest decline in the first half of the year. The Polish market is certainly down double digits. Yeah, I don't want to sort of surprise you, but this is a matter of fact, so we have to deal with it. Is it going to be down another double digit number next year? Potentially not, but it has seen obviously a huge impact this year. The Hungarian market has seen a strong uplift this year. Why? Because of initiatives by the government.
Tax ones and other subsidies that they have bumped into it. The Czech market has done very well also this year. The Romanian market has been suffering, especially in the project one, because interest rates are highly up and therefore project developers have refrained from doing some of the project work. Is it going to be down next year in the same degree? Probably not. You were referring to markets that are more resilient. A Dutch one, a Belgian one will be more resilient because they have not been overbuilding either in the last couple of years. The French market is probably going to be a little bit more down. Why? Because government is changing regulations and rules.
Some of the, as you know very well, permits have been up, and people have been trying to build or start building process rapidly to fall under the old regulation and not to the new one. Is the U.S. potentially going down substantially? You know, I don't think so. The demand levels are strong, and this distinguishes us from the former crisis in the construction or in the new housing segment. If you take some numbers, housing starts, housing completions before the crisis in 2008-2009, obviously we'll say Heim, but it was different. At least we have some of this track record. More than 2 million housing starts in the U.S., we are far off this. The U.S. has under-built for numerous years, as you are well experienced with.
This year we have built a little more last year. Have we overbuilt? Definitely not. Certainly not in the areas we are active in. Do we see a little slowdown? We see that, American national tract builders probably don't start whole subsections in one go as they probably did a year ago. I mean, 10,000 units or so. They basically start a couple of thousand units because half of it or more than half of it is already sold. That would be also the same approach than, for example, a German or a French developer does these days. They wait till more than half of the project is sold and the apartments are sold till they really start it. Have we seen a major change in the U.K. market? Not yet, nothing indicating. Obviously, it will get a little slower.
Slower because there's lack of labor, there's lack of availability of materials still, and obviously the cost part also plays an important role. I think I'm not so worried that markets will drop off a cliff or something like this. We will have a certain adjustment, and that's why I come to my best guess and of markets, and I hope I gave you a little color to your first question. To the energy mitigation, you see again, it's very different from region to region. We have in the U.K. a very different mitigation plan or a plan of availability than for Norway and for Austria and Hungary, for example. Yes, we have dealt with this, the availability. We have discussed with national institutions, etc .
I give you a couple of very important elements. First of all, the EU has decided that our industry, the ceramic industry, is not to be an industry to be shut down immediately, so not in phase one. They have clarified this, so for all member states. We are in a certain sense, system relevant, so we stay running because of our kilns, about our infrastructure throughout the first phase. That's, I think, a very good statement. The second statement is in the second phase of emergency, we can be considered as an industry to be cut, not off, but cut with respect to supply, not cut off entirely. Obviously, then in phase three, it's a different story because then obviously, as you are well aware, only hospitals and others, and the whole industry goes down.
At the end of the day, what we have seen up to now, good supply. Every site has sufficient supply. We have in certain countries where we are now able to stock, and Ger can elaborate on this a little bit more. We can also stock for the winter months. We have also in our plan, made a very clear assessment that we run full speed right now. We have not stopped in the summer months for maintenance. We go through till the winter months, if it be November or December, depending on the country, and then go down for maintenance. We usually go down in a plant for four to six weeks of preparation, and that's the yearly sort of record that we have. We will do it during the winter months.
This gives us the opportunity, first of all, to provide the state or the institutions that need the gas for, from, with our gas, so they will be very happy and see it positively. It's not about money, it's about also the contribution to the local system. Secondly, it will give us the potential to see how the markets develop in beginning of next year, how strong they are, how sort of they will start up, and then be able to start up after the winter break, either in February or March, depending on the demand levels. Here again, I think we are in good shape with the alternative fuels. We can use coal, we can use heavy oil, we can use liquefied gas, et cetera. We have tracked this. We have tracked availability.
We have tracked investments that would be required to do in certain countries to switch over permits that we get or not, tanks that we can install. All of this has been assessed. Step by step, when we have a critical installation, for example, where we see that there is a potential risk, we'll move on this investment rather quickly in order to ensure supply. For the moment, actually we have a list of things that we can do quickly, but we have not started anything of this because we have no indications yet that we will have to do it. This is important that you know, but we have everything in place, and we can move very quickly. Now, the last, I think I touched a little bit on the U.S. market and how it performs.
Yes, we have improved the margin, but this was also necessary because they have been on a low level. We have potential to grow further, and I think the 20% is reachable when we talk about the brick margins, because obviously here, I think with the consolidation that happens, with the performance and production and the in operational excellence projects that will now follow under the direction of Gerhard will come there gradually. Very important, the track record of the integration or the expectancy of profit and EBITDA coming from this and the integration is moving much faster than expected. We are not there yet, but we are in a very good way, and we still have we know where we can get the last synergies out to reach the 20%.
This is our clear goal, to reach the 20% margin in the brick business. We simply keep consequently implementing the integration, working on the supply chain, on the plant networks, on the logistics, on the profitability in the sense of pricing. We are positive basically to come there and also bring it on a 20% profitability in the U.S.
Fantastic. Thank you so much for your detailed answers. Thank you.
Thank you.
Thank you.
The next question is from the line of Brijesh Siya with HSBC. Your question please.
Hi, good afternoon, gents. I have two questions. The first one is on energy again. Now looking at your availability and the previous question you answered about, you have a lot of options in terms of alternative energy like coal and others. If you could just give us how much time it takes for you to kind of shift from one to another for gas to other alternative one and what's the cost associated with it? The longer term question is about your ambition to move towards clean energy or green energy per se. How, with this scenario of gas shortage, are you planning to accelerate those CapEx efforts?
Would we see a change in your CapEx numbers in terms of the Green CapEx, which we are planning to spend earlier? Do we see an acceleration in the coming two to three years? Now the second one is on the Meridian, right? That's been a pretty good performance. Obviously, certainly it looks like it's been much better than expected. Looking at the 24% margin in North America, would you say that all the Meridian synergies has already been kind of fully delivered much ahead of your three-year target?
Is there anything left? Are you being kind of more confident about retaining this 24% margin in the medium term at least?
Thank you for your two questions. I think from an energy perspective, you know, it depends a little bit what sort of energy you're moving towards. If you're moving towards, for example, biogas as we did in Denmark, then it doesn't need a lot of time, and it doesn't need a lot of CapEx. Yeah. This is EUR 200,000 per plant and nothing to worry about. It can go rather quickly. If you move to light oil or light oil burners, if I may say so, it's also the burning has to be changed, the availability, the tanks have to be installed. Yeah, you're not talking about millions of euro here again, and you can do it rather quickly. It's more a permitting issue. It's more an issue of the local authorities granting you to do so.
If you then move to completely different ways, like electrification, that would make a difference and cost you also much more. As I said earlier, let's not draw too quickly conclusions what is green and what is not, because I think we need our time to prepare it, to assess it. First of all, we will reduce the energy consumption because gas will be available also next year. We shouldn't be worried about that. We should be more focused on reducing it, and getting it at a cheap rate. That's what is important. Then step by step over the next years, you will see us moving in different, sustainable, that's very important, sustainable and available energy resources. Because today, some people think that it is sustainable, but it's probably not. We will see.
I mean, I'm talking like this because it is no use to go to hydrogen that is made out of gas installations that make electricity, for example. This is not, for me, a sustainable way of producing hydrogen. That's my comment. Yes, we can do it on a small scale investment in certain areas. When we move big time, then it is a major change, and this is a major change, and we will do and address it accordingly. Giving you CapEx on a big change is not possible today because we have not assessed it. It's in a test phase. When you talk about Meridian, you say it's a pretty good acquisition. I would say it's a very good acquisition 'cause the payback is very quick, and it is a very strong one. Yeah.
From my perspective, it's not yet all the synergies there, yeah. The North American operation consists of piping and of bricks. Obviously, we're in the piping we have for the reasons that we have explained already. A lot of times a very good margin. Therefore, I think, as your colleague from before has pointed out, we are gradually moving up the ladder when we talk about margins in the brick business, and there's still more to come in the future.
Thank you very much.
Thank you.
The next question is from the line of Matthias Pfeifenberger with DB. Your question, please.
Yes, good afternoon, gents. Congrats to your results are really impressive. The first one is on the -2% to -5% versus the -10%. You're mentioning that some markets are already at -10% run rates. The -10% for next year, is that basically implying the assumption that you expect markets to not decelerate further from the current exit rates? Is that a realistic scenario when you look at, for instance, U.S. housing stock increasing as we speak?
Listen, I'm not commenting what is realistic and not, Matthias. That's, you know, I'm not the type of guy who speculates. What we are doing right now, we are assessing markets, we are assessing the demand level. There are so many issues out there, like interest rates, political instability, geopolitical events still that might play a role. I think from, I call it a best guess at this stage, that what we are implying. That some of these markets will certainly decline more than others. For group level in new residential housing, we have assumed -10%. Yeah. That's what we have done for the moment. We would like to provide you with this thinking moving forward.
Right. Just maybe for clarity, this in the first half year, -2% to -5%. In the second half, -5%. 2022, we expect a -4% to -5%. On this -4% to -5%, we expect, as Heimo Scheuch said, this is really a best guess from today's perspective, up to -10% in the new residential.
Okay, thanks a lot. The second one is really on price cost spread. I still remember when I asked you, are you approaching clients with your hedged costs or spot cost increases? This was maybe two, three quarters ago. You said definitely with the hedged cost increases. Now, looking at the spread, +22% on the top line versus +16% on the cost, which is only like is obviously less than 100%, then what was the key source of the surprise here was +EUR 150 million price cost spread. My question is, I mean, I guess it's fair to price towards the spot increases because maybe your competitors are doing it, but how sustainable is that in light of two things, decelerating demand and obviously higher hedged gas costs next year and beyond?
Will you stick to those prices? Will you have to give back? It seems like a lot of windfall profits that at least we haven't seen any time in the last 15 years for Wienerberger.
No, no. I think I strongly oppose the term windfall profits. Nothing to do with it. I think the 16% increase in inflation is a Wienerberger increase. Wienerberger only. We are very transparent with you guys. Wienerberger. Nothing to do with what the market. It's much higher, the market, yeah? The market actually would hit us much higher if we had not this forward buying. We are not talking about energy. Everybody is talking about energy, but we have a lot of other input costs also. Here again, 16% on a group level, all input costs, yeah? That has been up 16% in the first half.
We obviously, wisely, and we have not outpriced ourselves from any sort of competition or the market or such, because actually some of them are much higher than 22.
Absolutely.
Because if we were on spot in any of the products from steel to other materials, mortar or whatever, then we would be much higher than 22%. Again, I think we were very reasonable. We are looking long term, and we are obviously, as you can see from a market perspective, -2% to -5% in the first half as Gerhard has pointed out correctly, and we were growing with 3% volume, as Gerhard said. You see that we have really positioned ourself well for the volume growth, yeah? Again, here there's no windfall. This is nothing to worry about. These are defendable margins that we have put in place.
Okay, thanks.
The next question will be from the line of Pam Liu with Morgan Stanley. Your question please.
Thank you. I have three, please. The first one is about your market share gain demonstrated in the first half. I'd like to understand how permanent these are. To what extent are you seeing competitors unable to operate in today's perhaps cost or volatile environment and simply go out of business, therefore, perhaps some of these sort of market share gains are more permanent than cyclical? The second question is on your target to reduce energy consumption by 15%, can you tell us how much of that come from savings in operating your buildings and plants? And how much of it coming from the actual saving on energy requirement for manufacturing? If that is significant, how should we think about that impacting your production output?
The final question is, I understand that the percentage of gas sort of reliant on Russia is less than 20%. Is that possible to understand the percentage of revenue that runs on assets that run on Russian gas? Thank you.
The percentage of assets run on Russian gas or on turnover, I would call it more better if we can agree on turnover, is probably, I would say, in the range of about 10 or a little bit above 10%, yeah? If we say this today, yeah. Right. On the market share issue, the longer this inflationary scenario lasts, the better for us. Yeah? Because obviously at this high in cost inflation, others have a difficult time to produce, to be there and to be competitive. I think this helps us. Here we can gain market share not only with our direct competitors but also indirectly. Keep in mind that, for example, timber has been up dramatically this year.
Timber prices, there's a shortage of timber, and people have moved away in one- and two-family houses from timber when they build new houses. Again, here we have quite some good indication as far as market share gains in the clay blocks are concerned. In the roofing material, it's an issue of availability. We are running at full speed, so actually today we might not be even able to grab additional market share because we are already at full speed in roofings, in the roofing segment. In the clay facing brick segment, I think it's more or less the same. We are running at full speed. Here we have the market share that we have. From a perspective of additional one, I think we are probably limited by the capacity.
Any little dip in demand level helps us because we can digest additional market developments or work harder on gaining some momentum in the market. Then I had the second question was about the saving of energy.
-15.
Would you like to comment on that?
Yeah. Just to be sure, Pam, the -15, you know, we had realized after we are comparing the -15 always compared to the year 2020, and we realized so far I think a -8 already now it is halftime. We are positive basically to realize also the rest what we are aiming for, the -7 in the next, let's say 1.5 years, we are on a good way. We keep going with the -15% as a target. Your question exactly, where have you pointed on the energy saving, Pam?
Oh, yes. My question is, I was just wondering whether that further saving were mostly coming from, you know, having your own buildings swapped to a heat pump, etc. , or actually coming from some sort of, energy reduction from your manufacturing, whether it's increasing energy efficiency or, simply reflect on outcome, what you think the decline is gonna be?
Yeah. I think what Heimo said in the beginning is important, yeah? That we will go also. I think in the first step it is saving also the consumption. This is also what we said, we are running at the moment on full speed. We will keep going most probably till October, November, but thinking then about in the beginning of December to go for a standstill, for a maintenance standstill. We still have to do that, we have not done that so far due to the strong demand. What we have seen in the first six months, so we will also reduce basically part of the consumption, simply that we go for maintenance standstill.
We will most probably shift this from December to January, and also seeing how the winter is climate-wise, and also how demand starts up next year. We will most probably start again, especially on the new build dependent clay block and facing brick business, most probably in January, February, dependent how market and how weather is. There is part of it is simply also consumption-driven, and for the rest we are simply consequently investing in our carbon neutrality roadmap, bringing the CO2 and the gas consumption down. As you said, yeah, there is also, we keep going with heat pumps, we keep going with investments in energy autarky. We keep going with investments in electrification. Basically, it is a mixture of that.
Part is consumption and part is simply alternative energy sources.
You are right, the most part come from the initiatives that we are doing. Yeah.
Thank you.
Uh-huh.
Thank you.
The next question is from the line of Yassine Touahri with On Field Investment Research. Your question please.
Yes. Good afternoon, gentlemen. Thank you very much for taking our questions. Firstly, I'd like to get a bit more color on the cost inflation that you are expecting for the second part of 2022, and maybe a first view on 2023. Would you continue to expect 6%-16% cost increase approximately in H2? I understand that you have hedged most of your energy costs for next year. What kind of inflation do you envisage or would you consider realistic for next year? That will be my first question.
Your second one?
What's the second one? I lost.
No. The second question. First question on your overall cost inflation for H2 and next year.
Okay.
The second question is on the number of shares. You were extending the number of shares to 7.7%. So what does it mean? Does it mean that you could buy some more shares, you know, in H2? Or are you done with what you've delivered in H1? It looks like you could buy. When I look at the 6.4 million shares that you have in your balance sheet, it looks like it looks based on your comments this morning, it looks like you could buy a couple of million of additional shares. Is it a good calculation?
Maybe I'll start with the second one. The number of the shares. We have, as you said, extended the program we started directly after the war, or basically when the Russian invasion of Ukraine. We extended it two times now, and we will stop by the end of September with the share program as it looks, as of today. The maximum shares what we are buying is 7.7% of the share capital, yeah. We have an opening balance of around about 0.3% and we will end up by end of September by 8% of treasury shares, which we will have basically on our balance sheet. For that moment then, that's it.
We will close then the Share Buyback Program and the idea is also to use it for transactions as a transactional currency. We will not have it for the next years on our balance sheet. It's more basically we wanted also somehow to use also the moment of the cheap share price, which we see today.
On the inflation, we have clearly pointed out on slide six of our presentation in the first half, it has been about 16%. We are of the opinion that the inflation for 2022 probably, and I use the word probably, will slightly decline. It's not sure yet, but that's what I would assume at this stage. To your question about 2022, we have said basically we have not given any indications there, but we have said that from a cost inflation perspective, it will be also slightly down compared to 2022.
However, please consider that in 2023, we expect as management that inflationary cost increases on wages, for example, will be higher than this year because obviously you have this labor backlog there when it comes to the wages. Other things might be down, but like the wage or personnel cost might be up.
Yeah.
That's the best guess that we see from it.
What we can do today, yeah.
Yeah.
We expect based on.
When you say.
Go ahead.
Just go ahead.
No. When you say will slightly decline, it means that you would expect, assuming that there is no crisis, that the cost inflation would be slightly less than 16%. Is that correct?
Correct.
Yeah. Thank you.
Thank you.
For next year, the price on the pricing side, if you've got double-digit cost inflation, how confident are you in your ability to fully offset the wage increase and the increase in energy costs and all the other costs?
We are confident. We have done so in the past. We think that we are able to do so in next year.
Next year. Yeah. Thank you very much.
Thank you.
The next question is from the line of Tobias Woerner with Stifel. Your question please.
Good afternoon, gentlemen. Thanks for taking my questions. I have three questions if I may. The first one relates to the guidance which you previously broke down into scope, organic, and then the one-off effect of the pricing side. We no longer do that. In the first half, you delivered scope of EUR 46 million. You guided to EUR 60 million previously. Can you sort of give us a sense of what these numbers look like under your new guidance? I mean, 46 delivered on scope would imply that you easily beat the EUR 60 million previously guided on the organic side, 50- 70. Again, same thing. Then what's happened to the one-off negative effect from the piping side?
The second question, just to clarify, and I'm sorry if I haven't listened properly, but 2023, you assume capacity is to be down 10%. Does that mean across the board or is that only in the new build side? That's number two. Number three, I mean supply shortages, is that still an issue? Are you seeing this starting to ease for your customers? With volumes down, I mean, I'm surprised that you're so confident on prices because, you know, input, the input costs are coming down. Oil, you know, steel prices are coming down in the industry or for the industry and so on, so forth. I'd like to get a little bit more flavor there. Thank you.
On the 10% decline we talked about end markets in new build in 2023. That's on a group level and is only in the segment new build. The two others we have considered as stable. On the shortage of supply, your third question, from what we see, we had no issues in the first half of supply issues. We got everything we needed in our production and in our sort of bundled products that we sell with our products. From our clients' perspective and customers' perspective, I've not you know, some of them have issues with steel and glass and insulation in the first half, so they and timber especially, so there have been some issues there. From our perspective, we've not seen any sort of shortages in the first half.
We don't assume any shortages in the second half. From a pricing perspective, I think we are confident because we have not increased prices because of energy or this and that. We have given general price increases to the market, so they will stick. I think from our perspective, we've also linked them to an increase of value added of our products portfolio. Again, this is for the clients and customers, something that they can accept and we will keep this for the future. Your first question was the EUR 900 million and the breakdown.
Right. I think you're referring, I guess, to the last guidance which we had out of the EUR 760 million, where we had, I think, an organic growth out of Fast Forward and of market development. Then also, I think we had the EUR 60 million out of the M&As. I think yes, we increased guidance to more than EUR 900 million and I think coming back to that, you can shift a big part of the increase in the guidance to organic growth. Yes, there will also be a better performance out of our M&As which we did in 2021. The EUR 60 million will most probably move more in the direction of an EUR 80 million or EUR 90 million for the whole year 2022.
The last point, what you mentioned, was also the headwind, what we mentioned also at that time, on the piping in North America. No, this did not materialize in 2022, and we are still benefiting from a high margin level in the U.S. from the piping business.
Great. Thank you. Just one more follow-up question if I may. The 20%, 22% price increase across the board in H1, were there any supplements or items on your invoicing which you would give back if, let's say.
No.
Came down?
No. We are not doing this.
We don't.
This is not a Wienerberger policy. No, we're not. We are not making these special invoices like other companies. No.
Okay, thanks. Well done.
Yeah. Thank you.
The next question is from the line of Pam Liu with Morgan Stanley. Your question please.
Hello. Hi. I have a follow-up question, please, regarding your earlier comment about the treasury shares that you are going to keep on your balance sheet. Given the sheer size of it, does that imply that you are considering a rather large acquisition somewhere, in the near term?
Well, I think we are evaluating a lot of possibilities and looking at, especially in this downturn phase, at certain potential interesting targets. As Gerhard has said, we looked at the opportunity to buy the shares for a very reasonable price right now. If we can use them in a potential transaction as transaction currency, we will do so because it would immediately create a lot of value for our shareholders. If it's not the case, we won't keep them very long on our balance sheet and then therefore delete it. I think, yes, you can assume that we are working on things and that we are looking at it, and we will use it if the right moment occurs. We won't keep them too long in our as a treasury, so on the balance sheet.
Thank you.
Thank you.
Ladies and gentlemen, there are no further questions at this time. I hand back to Daniel Merl.
Thank you, operator. Ladies and gentlemen, thank you very much for taking the time and dialing in today. Next conference call will be on the tenth of November on our Q3 2022 results. For today, I can only wish you a nice remaining afternoon. Stay safe and goodbye.