Status Update

Oct 12, 2021

Slides

Ladies and gentlemen, thank you for standing by. I'm Haley, your Chorus Call operator. Welcome and thank you for joining the conference call on closing of Meridien. Throughout today's recorded presentation, all participants will be in a listen only mode. The presentation will be followed by a question and answer And I would now like to turn the conference over to Elizabeth Faulkner, Head of Investor Relations. Please go ahead. Ladies and gentlemen, a warm welcome also from Wiener Berger on today's call on the closing of the Meridian acquisition. Our Board representatives today are our CEO, Mr. Helmut Schuch and our CFO, Mr. Gerd Hanke. They will lead you through the presentation provided on our website and give some further insights on the acquisition. After the presentation, we are ready to take your questions. I will now hand over to Mr. Helmut Schuyt. Thank you, Elizabeth, and a warm welcome from all of us here out of Vienna. I'm delighted that you the The acquisition of Meridian Brick represents a major step for Wienerberg, the A major step for a couple of reasons, because we've worked on this acquisition for quite some time. It is a strategic compelling the acquisition and financially very attractive one for Wienerberger. It enhances our presence in Canada and the U. S. Significantly. It represents obviously an acquisition where we consolidate the North American industry substantially, but that's not the only very important reason. The reason is also that we can offer our customers the throughout North America, a very compelling product range consisting of renovation products, new build products the Infrastructure Products. And I will elaborate on this a little later. Obviously, such acquisition contributes very positively to our EBITDA development in the future and Gerhard will sort of elaborate on this in a minute. And finally, it shows that the acquisition that we have now successfully closed and it's the biggest single acquisition in the last 15 years for Wienerberger. The And again, we as management have been very sort of reluctant to implement our the targets as far as payback is concerned and you will see how low the multiple is compared to other transactions that other companies carry out in this field of activity and how disciplined we as management of Wienerberger have been performing our M and A strategy in the last the Yes. It's obviously a good example also from a strategic point of view how we want to grow the company and how we obviously aggressively the Q1 of 2019. Some of you might ask the question, Yes. Hi, Mo. Why did it take so long? And again, I must say also myself, and this is obviously comes very transparently to you. I was the surprised how long such a procedure takes in the U. S. But I had to learn as well that changes in administration, you perfectly are aware that we had a substantial change in administration in Washington. And obviously, this had an effect also on the Department of Justice and their way of dealing with It was not that it was complicated in per se, but it took longer. It took longer for a couple of reasons, the home office, for example, getting the information across, digesting it, the whole sort of question and answer process the But at the end, obviously, I understand if you see the multitude of projects that are currently in front of the antitrust authorities in the U. S. We have handled it rather well and got the approval in an acceptable timeframe. We have also and this is important to know, got a remedy package that is still very positive the call. We have only to sell 3 production sites. The These 3 production sites are located in the states where we obviously have a significant overlap. That's why we have to dispose the Of those, and I will elaborate in a second where they are and what effect it has. And obviously, certain distribution centers and outlets. The These are small sort of distribution yards, I would call them, where we distribute locally and obviously they are linked to these production sites. The So all in all, everything lies within our expectations. It took a little longer. We have found and that's obviously also very important, a the suitable buyer for those assets. I have to remind you that obviously the Department of Justice is here very thoroughly the following this procedure and have worked very closely with us in order to find a suitable buyer. It has to be one buyer for those assets the that qualifies certain criteria. That means that they can run the business for a long period of time that they successfully the sort of are active in the market and develop it further. And we are glad that we could provide with U. S. Brick, the That's a South Carolina based company out of Columbia, South Carolina, a local manufacturer, the traditional one, the family business that will develop these three sites further and be active in the marketplace. When we look at these sites, they are located obviously in what we would call the northern part in Indiana. The We sell off one production site of Wienerberger called Mooresville. Then we sell one site in Tennessee, the and also a site in Alabama coming from the Meridian site, the that is active in this region of Alabama. And as I said, these production side. We have also distribution outlets linked to them and the 13 will go. So this is all within our expectations the And we have already negotiated also a package from the perspective of SBA with U. S. BRIC Where they will buy these assets for USD 23,000,000 And I think all in all, the Therefore, we have successfully completed the transaction as such, have faced this lengthy procedure, are happy that we could the provide the American authorities with these sort of remedies and can now concentrate fully on the integration. Before we go in more detail, I will hand over to Gerhard, who will give you a little overview of our performance in North America. Gerhard? Thank you, Heimel. Yes, looking back to the last 10 years, the North American business developed very strongly and we show a very strong and good the earnings performance. We were able to achieve an average 24% EBITDA growth the Per year, when we look back to the last years whereby housing starts basically only developed by roundabout 10% on a yearly basis. We optimized the last 10 years our industrial footprint, our commercial structures. And this is also, I think, now a strong platform, what we have for the new combined business, which Heimer will explain you how the new combined business will look like. Thank you, Gerhard, and we are thrilled and excited for a couple of reasons. First of all, let me start with a country in North America that we don't speak the Canada. This transaction brings us in the number one position of masonry products in the most important market the in North America in the region of Ontario in Toronto. Here we obviously have done 2 manufacturing sites for facing bricks And we have already a very big site for artificial stone, ARIS craft. So we will operate under our trade and brands ARIS craft and we will sort of established the old or which we would call the traditional brand Canada Brick. So we will be active in this region the With a number one position of masonry products in this area with a lot of new products and solutions for the facade, the for newbuild and also for public buildings. So again, it's I think important to note the call. In this very important area that is growing fast, that is still sort of the major growing agglomeration of North America. And also by the way, in the French speaking part, we have a clear number one position in the Montreal area, where we'll grow our business significantly. So all in all, I think this is, 1st of all, a very good transaction where we can combine our forces. We have strong sales forces in Canada the Canada because we see here unique opportunities for Wienerberger to grow. Let's move to the U. S. In the U. S, we have actually 2 main areas the Where we will be focusing on. First of all, let me start with the West. West, in our definition, is obviously all the region from Denver down to Texas. The With this acquisition, we move in a clear number 2 position in this area and again in Masonry Products, the a clear innovation leader, because obviously our colleagues are more focused on traditional facing bricks. The Why I do say this because obviously we have now the highest capacity and are the leading producer of slimbrick in the U. S. The Slimbrick is a growing segment to be used in commercial applications together with concrete panels, especially for big the football stadiums for public buildings like schools or hospitals or other applications And for renovation especially, renovation do it yourself, but also on a big scale because you are absolutely aware of Big storms in the U. S. That are currently damaging a lot of houses and where vinyl is not the suitable and sustainable material. The Therefore, our solutions for renovating these houses that make them storm resistant, and by the way, also from a climate perspective, the So with our locations in Texas and in Colorado, we can the serve this market and deliver the products in these growing markets. Keep in mind also that especially the The areas in Texas where we are active are growing ones. We have a good, a very excellent industrial footprint there and where we can grow on. The And obviously with our expertise, Wienerberger general share expertise, we can sort of debottleneck the existing locations, the Make them more efficient and also from an ESG perspective, improve their performance overall as we speak. So again, an exciting opportunity to get a strong foothold in the biggest facing brick market of the U. S, meaning taxes and with the opportunity to grow there substantially on an organic level. The Then we will obviously have our own brands in this region as well. We will not continue with Meridian. We see that our brands that we have currently the And a brand called Red River Brick will be utilized in this area because it's closer to our customers. We will also apply all our digital solutions that we have successfully tested in the eastern part of the U. S. And will the increase our presence there also on the direct sales activities in Texas and the surrounding states. Then let's move in the region of the The Southern and Eastern States of the United States. Obviously, to already General Shale had a strong presence there and together the combined presence with the old MRIdian activity is creates a very I would call it a powerhouse in masonry products the So we will build on this in order to successfully create a very modern and very the future oriented product range for the applications, as I said earlier, in renovation, in newbuild, In the commercial applications, when we talk about public billings, especially to have here the right solutions and also With respect to infrastructure, you know that we have a very big plant in piping in this area performing very well as well. The So all in all, a very strong presence that will focus on optimizing our industrial footprint, the Rebranding, as I said, and streamlining our commercial activities and a very strong focus on ESG improvement Throughout our operations that we have successfully implemented also already in our existing Vineyard operations and very lean back office functions the that are coming out of the eastern part of Tennessee where we have our current headquarters. And again, I hand over to Gerhard, who will sort of give you a little bit of the update where we want to end with our EBITDA potential, right Gerhard? Right. I think we still see and this I think is important to mention, we see this significant potential for further profitability. The What Heimer mentioned, yes, there is not only to harmonize and to take out synergies out of the the back office functions. I think the more important thing is to optimize the supply chain from the plant network optimization to harmonize the commercial the strategy. And out of that, we stand to our promise that we will see in the next 3 years an EBITDA potential of more than $120,000,000 What we already communicated also in December last year the As also the operational business is developing stronger than we expected. We confirm the target EBITDA potential of more than $120,000,000 until the next 3 years, which means in 2024. And again, I think we need to mention, Gerhard, that this After Remedies already. So, we consider this after Remedies. Yes, exactly. Thank you. Good. I think we spoke about the product portfolio, the the commercial rationale behind. Let me elaborate a little bit more on the purchase price. As Heimer mentioned in the beginning, this acquisition we see as financially very attractive. And you see, we have a cash multiple, which is the Around the 4, which is I think uncomparable also when we compare the multiples what we see in the States and what we see for comparable transaction. We ended up with a net cash purchase price of $230,000,000 the for the whole acquisition of the U. S. And Canadian Meridian business, we will get for the remedy package the 23,000,000 which finally ends to a net cash out of roundabout $200,000,000 as net purchase price. The We expect after 3 years contribution from the MRIdian assets of $50,000,000 which finally ends the I think outstanding cash multiple, which is around 4 times. And I think what is also important to mention is that our the ratio of net debt EBITDA by year end for the group stands also after this acquisition below 2 times at year end. What are the next steps? The next steps basically at the acquisition, the closing of the acquisition Took quite a while. I think we are perfectly prepared for a fast integration process. So we already started with the first integration steps the And we will keep going with integrating the assets of MRIdian as quick as possible. And I think important to mention also Secondly is the disposal of the remedy assets. We have now a timeframe of 30 up to 60 days That also the second transaction, it is basically a second transaction will be closed the Well, I think this completes a little bit our sort of summary on this the We are excited as I said, it's one of the biggest deals that we have done in the history of this company, especially in the last 15 years. And again, I can only underline the fact that we as management again have been very disciplined on the M and A front the As Gerd has explained in detail now shows that we will create significant not only synergies, the performance improvements throughout the business and with MRIdian cash contribution of about $50,000,000 a year from this business shows that with a multiple of 4, we are substantially below multiples that have been and are currently paid in North America. So this high degree of discipline creates a lot of value for our shareholders. We are thrilled and excited that we will build on this basis an even stronger North American business and grow it further. To anticipate your questions with respect to future growth, there's plenty of potential out there. The We have a good underlying market right now in the U. S, obviously taking advantage of a growing housing market of a very sort of sustained the Spending in infrastructure, our running rates in also in the Q3 are very strong and continue to be strong. So we look with optimism into the next year obviously with the combined business to Gerhard and myself will be traveling in the next 2 weeks to the U. S. In order to sort of the get everything together with the local management on the integration front because obviously acquiring and closing a trench the is 1 and the other one is then obviously getting the synergies and obviously the integration not only starting but going and Obviously, effective already from next year onwards. So these are things that are very exciting for us. We can position Wienerberger's the activity completely differently because we have a stronger base now with a lot of innovation and a lot of new solutions, as I said, especially for the renovation market the Well, as for the commercial one in the U. S, so this brings us into a very different situation than we have been in the past, stronger, more diversified. And if the new residential housing market declines a little bit, where I don't see any reason why it should in the next the foreseeable future, but we have here then a stronger other business that can sort of balance this out and be more resilient. So again, from an all over perspective, a very good move for Wienerberger, strong in order to enhance our profitability and make the call. So for the moment, I think this summarizes our activity around Meridian and the closing of the transactions and we are obviously ready to take your questions with respect to this transaction. Ladies and gentlemen, at this time, we will begin the question and answer session. And the first question comes from the line of George Speke of Exane BNP Paribas. Please go ahead. The Hi, there. Hopefully, you can hear me and good afternoon. So just one question for me for now. So just given the low price tag, obviously, as you said, it's a great deal with great multiple. But could you give us a bit of color about how much of that asset base might need reinvestingmodernizing. And does that have any impact on your CapEx guidance going forward? There's a clear answer to this and thank you very much for this question. I should have answered it in my presentation. But due to the fact that we had so much call. I'm very pleased to say that the former owners invested well in the business. We have no backlog at all. The And therefore, we can run these units and the asset base 100%. And there's no sort of the change in our future guidance with respect to CapEx. Obviously, and it's I always said that if Wienerberger grows with respect to an asset the Q1 of 2019. We will also grow our CapEx maintenance CapEx as such. But for the moment, there is no need for further or whatever called backlog the Canadian and its CapEx. Brilliant. Thank you. And just a quick follow-up on that. Will you take Will there be any sort of rationalization planned as you sort of start using these assets and start running them at full capacity? Or are you kind of happy with the The footprint that you have post acquisition. I think from the short presentation that we provided you with and you find on our website, You can see basically that in the regions West and North and Canada and the East from an overlap perspective, the most overlap is in the East. The Yes. And step by step, I think that has been always the case within our company that we look at optimizations and further improvements in performance enhancement and then you will see us move on this. But there's no substantial one. And I think from a restructuring cost perspective, there's nothing that you should sort of take into consideration for the moment that is substantial. Brilliant. Thank you so much and congrats. Thank you. Thank you for the questions. The next question is from the line of Briej Sia of HSBC. Please go ahead. The call. So I have two questions. The first one is with the immediate measures. So what kind of revenue impact I know you are talking about EBITDA being at similar level in 3rd year, but does that have any revenue impact the consideration you're getting almost 10% of what you originally agreed to. I'm awfully sorry. When you spoke, the line dropped a little bit. Probably could the I'll do that. Conference call. So what's the impact on revenue from the Remedil measures? You mean the revenue impact? The Yes. After remedy the revenue impact of the remedies is around US70 $1,000,000 Okay. Okay. And what kind of the And EBITDA contribution you are expecting for 2021. For 2021, we expect the It's around US10 $1,000,000 Okay. The And thirdly, on this asset rationalization, I previously recollect that when the And on the deal, you talked about restructuring cost of around $10,000,000 and some SSL, which might bring you the Couple of tens of millions as a cash in. Is that the same thing right now? Because The last question was, I talked about no more restructuring costs. So if you could just clarify that. As I said to your colleague For the moment, I think from a capacity standpoint and demand standpoint in the U. S, we need all the capacity that we have available to satisfy the demand level. The If it changes a little bit and if we see further optimizations that can be achieved throughout the network, we will do so, but it's not immediate. Yes. So there's nothing to be planned right now for this. Yes. So I think we can take this as an assumption. And the As we move on and as I said, when you look at Wienerberger and our for example, over the last decade, when we close certain factories and we bring the capacity to others, then we sell off the real estate and then you will get some sort of inflow from these sales of real estate. But For the moment, we keep the sites that we have available and use them. Got you. Thank you very much. Thank you. The next question is from the line of Tobias of Stifel Europe. Please go ahead. Yes. The Good afternoon, gentlemen. Thank you for taking the questions and congratulations on what seems to be a Just to follow-up on the number side of the equation. Can you give us a sense what the 12 month run rate is of those MRIdian assets you're keeping in terms of revenues as well as EBITDA Just to get a sense. And also, did I understand correctly that there's no further the asset disposals envisage, there's no surplus land or anything else which And then with regard to the working capital, the third question, the What sort of or is there further potential to reduce that if call. And then just lastly, you got your feet on the table in the U. S. Now and North America with this the transaction to make you really the leader in the country. Where do you see your piping business go or piping solutions business go in the U. S? The Obviously, you have asked a lot of questions to me as I expected you to do so. Let me just take the strategic one first and then work together with Carehead our way to the more operational ones. From our respective we see, as you have seen in Europe, we move through the business and now creating a masonry the sort of leading company in North America, Canada and the U. S. In regional markets. We want to consolidate this position over the, what I would call it next 5 to 10 years. Being a solution business also in the housing and renovation, the There are a lot of applications that we can think of and where we can certainly use our European expertise as well. The energy performance in housing the It's not the greatest one in the U. S. So here we see potential eye down the roof in the facade or also on the walling side, the more intelligent solutions, smaller solutions, accessories, etcetera, that we could sell with our current portfolio. So I think if you were listening earlier, I was very excited when I talk about Canada. I was excited about the Texas region that is growing. So There's a lot of things to be done. And you have seen and just sort of giving you some hints when you look at the recent acquisitions of Wienerberger the especially in the U. K. And Ireland, where we are focusing on from rain to drain, if I may say so, where we the quarter management around the house and with the house. So a lot of areas in the U. S. Have the same issues. And probably here we can move the business also further not only focusing on infrastructure and being sort of dependent on infrastructure spending, but also in these areas of applications around water management. So these are some thoughts. They are obviously preliminary thoughts, but this as you can see, Wienerberg is very consistent the in our approach and therefore we'll sort of create a stronger business over the years to come also in North America. So this would sort of talk about the The Piping Business and the Future Growth. You were saying something also to the working capital and running rate. Right. I think, yes, I fully agree. We see also the potential to further optimize the working capital in the combined business. I think it is the Logic looking to the footprint, what you also have seen on the map that there is optimization potential when it's about logistics production planning the To further basically optimize the whole plant network, especially in the Southeast of the U. S, I think here the We see the potential for further optimization also on the working capital side. And I think one question was also about the performance of the Piping business. No, the running rates of MRIdian. Correct. The run rates of MRIdian Yes, meaning the whole year sort of the What they achieved. They basically had a I think the figures are officially or they are public available basically. They have the financial year which ended with half year. So the financials of 2020, 2021 are published the And they basically will they realized an EBITDA, which was in the range of US35 $1,000,000 for this year 2020 to 2021. Thank you very much. And this is before the Before the remedies. The remedies, yes. The next question is from the line of Amy Giler at Citi. Please go ahead. Just a couple from me. I was wondering if you could give us some color in terms of the brand positions, the relative brand positions of Red River versus Meridian? And is there a sort of a price differential as you that you benefit from as you kind of retain the broader Red River brand versus Meridian? Also in terms of the thin bricks versus the facing bricks, is there any difference between EBITDA margins between these two product ranges? The Are you what you're really talking about is really broadening the portfolio to your existing customer base? First of all, your second question is thank you very much. It broadens our customer base because it gives us access to new markets. So what we are really doing is growing our business organically. And obviously, you are right also from a margin perspective, the slim bricks have a higher margin than the traditional bricks, yes, because the They are easier to install and we install them basically with the system. And when we talk about renovation and the renovation system, it gives us here an access to a new market the with the new pricing potential. So again, I think we will elaborate a little bit more in detail on the Capital Markets Day, so the And then your second question was related to the sorry, the brands. The brands, yes. And the brands, the differential in pricing and what we have seen in North America It was already a couple of percentage points, if I may say. So between 3% to 10% the Depending on the product range. But I think when you take it as such, it's not the 10% all over. So it is, I would say, very cautious, But between 3% 5% was the pricing sort of that we realized as the market leader and with respect to our premium products and the branding. The Thank you. That's very helpful. The next question is from the line of Miro Zuzak of JMS Invest AG. Please go ahead. Hello. Can you hear me? Yes, perfectly well. Hello, gentlemen. Thanks for taking my questions. The I'll take them 1 by 1, if I may. The first one, in December, when you announced the acquisitions, you also said that you expect the Around €50,000,000 from the sale of non core assets. The Is this still the case? Do you still expect the €50,000,000 from the sale of non core assets? As I confirmed to your colleagues the Who was asking the same question, I said, I have no reason not to do that. It will take probably a little longer because we are running full speed right now with our capacity and on the closing down and shutting down sites at this very moment. Okay. Thank you. Then secondly, you had this closed box the So basically the cash or the business, you already basically had the risk of the business since the since basically the announcement of the acquisition, how much was the positive cash flow from the Iridium break since December basically. As you mentioned, there was a lockbox mechanism agreed in the SBA and We got the US20 $1,000,000 basically as a cash contribution during closing. The Thank you. Then the US50 $1,000,000 potential that you see, how much the of synergies are in these $50,000,000 and how much is basically growth and market growth and business growth? Well, I think from a market growth perspective, we don't put market growth in our analysis so that you understand this. We don't otherwise you sort of can put everything you want. So we stay stable. We We'll see obviously no major changes for the moment, yes, that we understand each other there very well, the Because we can't change the market or influence the market. The only thing we can influence is the synergies basically on the And commercial synergies, meaning pricing. So when we look at the current performance and what we expect from this Coming through, you can calculate very easily because my colleague has given you the numbers for performance of MRIdian that is the Without remedies, 35, you deduct remedies. We gave you a sort of not an indication there, but you can deduct the Some millions from these assets that we have to sale and then you obviously have the performance that we can realize through optimization and through synergies. So the If you situate yourself a little bit under $30,000,000 and you see the $50,000,000 you have a $20,000,000 that comes from this sort of the Optimizations, synergies and others and growth of the business. But without the Without something which I don't see as something which we should calculate upon when you do a payback coming from market growth the This market growth can change every year. I think, are we in an agreement on that? Yes, that's fine. No, thanks a lot for the question. You've answered the call. Perfect. I have just small ones, 2 small ones. First of all, at Or actually I think one left, no, 2 left, sorry. Meridian Brick, you mentioned the level 2019, 2020, So mid-nineteen to mid-twenty 20, but that was like the lockdown year. Was it a similar €35,000,000 the The year before or was it much lower in 2019 2020? It was lower and the figure what I mentioned was 2021, the 30 the What I mentioned before, Al. And what would be a kind of normalized level or what has been a normalized level? There was no normalized level because this is a joint venture that came about, about 2 years ago. So it is a new animal, if I may say so. Yes. So it was it had its low performance and Gerhard made reference to a normal year, the 1st normal year of this joint venture, which ended on June 30 this year. Okay, cool. So one last one left. The The U. S. Business is doing very strong at the moment. I mean, you see what's happening on the energy on the pricing front, on everything is going up. So the SEK330,000,000 that you probably mentioned last December, There are probably something like €360,000,000 or even €370,000,000 at the moment. Can you give us an update on what's happening the right now and what the new pre remedy sales level is in 2021. I think from our perspective, we've never given and it's very difficult to give sort of guidance on turnover levels. When we guided for Wienerberger, we guided for the whole group and not for North America. You're absolutely right that obviously the first half has been a very strong one. We continue to having good running rates in the Q3, as the I said earlier, also in the U. S. And especially from our Piping segment, because infrastructure is doing very well and we have a the Very positive effect from raw material prices there for a change. The overall gas the situation when I can sort of say a word on this and speak under the control of Gerhard is we are hedged on this front. I think we mentioned that and communicated this already earlier. We are hedged for this year, but also for the next year. As you know, the energy prices are the Totally, though we're doing crazy if you're allowed to say that in that way because I think we are in a the comfortable situation with hedged volumes, hedged prices and have also planning certainty. And this also the Brings us in a comfortable situation when we speak about cost inflation, coverage of sales prices of our cost inflation. The next question is from the line of Roland the FIG Partners. Please go ahead. Hello. Good afternoon, gentlemen. Follow-up actually on what you just commented on energy prices. Especially in Europe, we have seen very big increase in energy price. I think it's less in the U. S. It's very good that you are hedged. Can you maybe just give us the numbers about what percentage you have hedged for 2022 and 2023? And then more important, do you have an idea about how your competitors are hedged? Do you have a similar hedging level than you? Or if not, would you expect some price increases on the back of that one, which then would be a net positive for you as a very well hedged Let me start with how much is hedged for 2022. It is almost 100%. We are hedged above 95% for the next year. And this what I mentioned also for 2021, we are fine the And for the next year also, we are hedged for almost 100%. And No, as we the Let us focus on 2021 2022 for the moment. Okay. I think from our perspective, it's very important to note that When we talk about hedging, it's for our Building Solution or Brick Business only, yes, where we use natural gas. The Secondly, our competitive landscape is a very different one because it's family businesses, one site, two sites. So we don't keep we don't have an intelligence service that keeps us updated who is hedged for what. Some are on spot. The In certain areas of Europe, we can't hedge either. So there are certain countries that where it doesn't allow the hedging or don't allow the hedging. So there's a multitude of approaches. Certainly, some companies will see stronger impact on the price increases from the energy front than others. And for Wienerberg, I think we are in a good position in order to sort of the tackle the issues for 2022 coming our way because as correctly, Gerhard has pointed out, we are hedged with the 95% of our sort of demand level that we have for energy. The Okay. Thanks. And would you expect on the increasing energy prices that there will be some above normal the increases in prices next year because competitors do not have as much hedges as you are and you will see the price increases. Is there already some talk about it or do you see some indications? The First of all, I must make clear on such a call, which is accessible to all authorities around the world that Wienerberger is not having any discussion with anybody And this is very important that I underlie this three times. Yes, we have been setting our prices over the last years the In a way where we cover cost inflation, I think we've made this very clear. We'll do it also for 2022 again. And what the other competitors are doing in the billing material areas that's up to them. Okay. Perfect. Thank you very much. Thank you. The next question is from the line of Gregor Kugrass of UBS. Please go ahead. The Hi, good morning. Well, rather good afternoon actually. A few just clarification questions. So Essentially what you're saying is the business is going to make €30,000,000 of EBITDA give or take post remedies now and you think it can make €50,000,000 on a the 2 to 3 of you, right? If I remember correctly, at the time, you kind of called out the revenues the call. At the time to be around €400,000,000 and now you have to take €70,000,000 off that. I just want to understand if that's the correct understanding Because there was one mention of a €10,000,000 contribution next year, maybe that would be incremental synergies or something like that. But if you could just clarify on that, please? I think we have to clarify one thing that you mentioned at the end. The $10,000,000 is the contribution on the EBITDA level this year, the 2021. So that's just for the final quarter. Okay. I understand. Okay. So in principle, if I look at consensus this year, It seems like people have €65,000,000 for the U. S, that's maybe $75,000,000 We add €30,000,000 So you're kind of the Starting base to get to that $120,000,000 let's say it's $100,000,000 $100 plus just so pro form a, the The business is making around $100,000,000 call it, and you think that can go to $120,000,000 assuming flat housing starts, if I understand that correctly? The You're absolutely right in your assumptions. There's one thing I would like to add that the infrastructure business is doing extremely well the Due to the fact that there's a lot of money pumped into this part of the economy in the U. S, so I would say this is and also from a raw material price, We had a very positive effect. So I think here you have to be a little bit more cautious when you take €100,000,000 as the baseline. Okay. So you're saying this year perhaps is a little bit inflated for that reason? Okay. Yes. For this reason. How does that convert into margin? So if we say 100, I think from memory, when I look back at the initial presentation, we're sort of saying $800,000,000 So that suggests the normalized, you're talking about this business being around 15%. Is that correct? Yes, I think what our own targets are that we move above the 15% step by step in North America due to the upgrading products and this. So I would say that from a perspective of further margin improvement, We move towards a higher number than 15. Okay. And then a final question well, sorry, one detailed question, if you could just tell us post all the remedies and with purchase price the and so on, what do you expect the depreciation to be on the asset? That would be helpful. And then finally, I see in your presentation you're talking about the being sub 2x leverage. I mean my perhaps rather crude math, probably not as sophisticated as you would suggest that you're going to be closer to 1.5 the Just want to see if you have any major disagreement with that idea. Thank you. Basically what we expect for the end of this year will be Round about 1.8, 1.9 what we see. Okay. And I think we guided this also with half year closing. I think the That we gave an indication in case we have Thornbury, in case we have the closing of MRIdian and the The disposal of the treasury shares, I think we guided this that it will be around 1.8, 1.9. I think if I may, probably you should take into consideration that we carried successfully out and completed the The transaction of cork plastics and plastics in the U. K. And Ireland also. Yes, which was $150,000,000 roughly. The Yes, correct. On the D and A, sorry. Sorry. Go ahead. Appreciation charge. The The depreciation charge, if you could help me. For the depreciation charge, we have to calculate. I think we started the purchase price allocation where we also define the fair values of the fixed assets of the industrial base and the Out of that and due to the depreciation rates, what we will define within our accounting principles, then we will get also a depreciation charge. So we still need some more time, most Probably with quarter 3, our latest Capital Market is I can give you more guidance on that. Okay. Thank you very much. Call. Thank you. Thank you for the question. Thank you. The next question is from the line of Adrian Catley of Cape Fear Capital. Please go ahead. The It's fine. My two questions have been answered. Thank you. Thank you very much indeed. And the next question is from the line of Ceta Ekblom of Morgan Stanley. Please go ahead. Thanks very much. Hi, Jaime. Just one question from me. Aside from the synergies or the remedies that you have to dispose of, are there any other revenue dis synergies that we should be thinking about? In other words, Are there any customers of MRIdian that are also customers of your own businesses that have potentially thought about shifting their supply to alternatives now that the businesses will be combined. Thank you. No, thank you very much for this very good and strategically important question, and I know actually from all the discussions we had the North American management and we with the top clients, they are not only supportive, they are enthusiastic and I must say with the the strong portfolio that we have and provide to them in the future. It will be actually a bit little bit a positive impact and not a negative one. So I'm sure the that we can handle this very well with our existing client base and our management has proven to be very good and Strongly linked with our client and customer base. So I'm very optimistic that we gain momentum and we don't lose momentum. There's no slippage rate or whatever you call it. The Great. Thanks very much. Thank you. And there are no more questions at this time. I would like to hand back to Elizabeth Faulkner for any closing comments. The Thank you very much, operator. Ladies and gentlemen, thanks very much for dialing in today. The next conference call will be on November 9 for our Q3 results. The call. I would also like to take the chance today to invite you to our Capital Markets Day on November 25th. Invitations will be sent out shortly. The So today, I can only wish you a nice remaining afternoon. Thank you very much for dialing in again and goodbye. The call. Ladies and gentlemen, this concludes the Vini Bear conference call. Thank you for joining and have a pleasant day. Goodbye.