Wienerberger Aktie

Ladies and gentlemen, welcome to today's conference call of Wienerberger's Q1 2026 Results. I am Judith, your operator for today. [Operator Instructions] The conference is being recorded. [Operator Instructions] And with this, I hand over to Therese Jander.

Good morning, everyone, and thank you, Judith. Warm welcome to our Q1 results call. My name is Therese Jander, and I'm pleased to be hosting this call today from Vienna, our headquarters. And I'm joined here by Dagmar Steinert, our CFO. We will begin with a brief presentation of the key developments and our financials for the quarter, and then we will open the line for questions. So with that, I will hand over now to Steinert.

Yes. Thank you, Therese. Good morning, everyone, and a warm welcome from my side as well. Our CEO, Heimo Scheuch, is still recovering from an infection, and therefore, he is not participating today. So yes, let me start with the presentation and jump directly into it. And our first quarter is not a surprise at all. The soft start in the year is fully in line with our expectations, and it was driven by weather-related weakness, especially in January and February. Very important, we saw a clear recovery already in March and volumes picking up and our performance was back to prior year's levels.

At the same time, of course, we are operating in an environment of increased geopolitical uncertainty. And of course, that's related to the conflict in Middle East, and that is heavily impacting visibility. Under these circumstances, we reiterate our full year guidance, while, of course, we see that visibility remains limited. But of course, we focus on execution, particularly in integrating Italcer, where we had the closing by the end of April and our disciplined cost and margin management.

Now coming to our numbers. Our revenues are down by 7%. That reflects the soft start into the year and as you can see, our volume development, the market was down by 6%. Our operating EBITDA is close to EUR 100 million, which is significant below previous year's levels, but we've already seen a clear recovery in March. And let me just repeat it, it's not a surprise. We expected that. Important is maybe to mention that the first quarter 2025 was a strong quarter, so we compare a soft start in the year with a very strong quarter of previous year. So it's more like a transitional quarter rather than an indicative for the full year performance.

Let me now come to the market conditions, starting with Eastern and Central Europe. As you can see, our volumes are significantly impacted by, let me say it again, the severe weather conditions early in the quarter and housing starts remained flat year-on-year. The renovation market was also temporarily affected by the weather conditions and especially in the roof segment. On the other hand, our infrastructure market in that region remained broadly stable. So overall, the region shows a mixed picture with selective recovery. For instance, Poland is a good example where the weak start was mainly weather-related. Underlying demand remains intact. In the Czech Republic, we saw early signs of recovery in permits and starts, but on the other hand, very aggressive competition continues. Austria and Hungary, the demand remains subdued, but of course, with affordability constraints and therefore, it's a mixed picture.

Turning now to our region, Europe West. There, again, we see a mixed picture. And of course, volumes overall are down. Housing starts remained at a low level, while the renovation-driven demand was solid in that region. Infrastructure and energy transition supported overall our demand. But of course, the bad weather was the same issue in that region. And to give you a little bit more of a flavor from some countries, Germany was a very soft market in the first quarter and construction activity was still at a very low level, although we are expecting early signs of recovery.

In the U.K., the situation continues to deteriorate, and we see declining construction activity and weak consumer confidence. Ireland, on the other hand, is positive. We see public investments on a better level. And yes, Netherlands is showing signs of recovery. And France is still a mixed picture, but we expect an early recovery as well. Belgium, for instance, was quite stable. Overall, the same picture, January and February soft and March far better.

Coming now to North America, the North American market, and that was the most impacted region in our first quarter. We see a double-digit volume decline, and that was, of course, driven by the severe winter weather and as well weak new residential activity. The new construction activity remains subdued. Single-family market is stabilizing, but the multifamily market is at multiyear lows. The mortgage rates in North America remain at a high level. On the other hand, our roofing business benefited from a strong backlog and that allowed some more solid production volumes. In the piping business infrastructure, market remains somehow positive, but of course, due to the weather, we've seen there a strong volume decline. And in Canada, the situation is even more challenging.

So coming now to some acquisitions. We bought the NEWS Group, and that is an activity with a turnover of around EUR 20 million annually, and we had a closing by the end of April. The NEWS Group that will strengthen our position in water management in the water management segment. It's a very attractive niche for us, and it's a growing market. It's a perfect strategic fit, and it complements our infrastructure and piping portfolio. It's a small transaction, but long term, we see there a big growth potential.

Coming now to our recent acquisition, Italcer there as well, we had closing by the end of April. And I just would like to repeat a little bit to finance that acquisition, we don't need a capital increase. We have a strong balance sheet, and we will finance it by ourselves. We have a clear road map, integration, deleveraging, and of course, next year, we have with this call option, the opportunity to get the full ownership. With Italcer, we enter the high-end tiles market. It's strong in the renovation segment. And of course, we see synergies which will rise. And on the other hand, Italcer is active in the facade market, and that will even turn our synergies, which we see on a quite high level. Italcer in total is a company which is at the high-end, has high margins and is a strong multi-brand -- has a strong multi-brand position, not only across Europe but also in North America.

Turning now to our numbers. Starting with revenues and EBITDA. Our revenues, as already mentioned, are down by 7%. Operating EBITDA even further, it came in at EUR 97 million. That is far below the previous year's number. But to remember you, the first quarter 2025 was a very strong quarter. The key driver for that, of course, is the reduced volumes we have seen. And here, again, March far better compared with the soft start in the year.

Having a look at our revenue and EBITDA bridge, as you can see, of course, volume driven, we have a negative organic growth. So organic growth, our revenues are down by 6%. We lose a little bit on the currency side. And regarding our operating EBITDA, again, you see quite significant negative organic growth. But that's all volume driven and related to the soft start into the year, and that was already expected when we published our outlook. So it's not a surprise at all.

We have seen in the first quarter overall a cost inflation of 2%, and that is, again, mainly driven by labor and energy cost. And we don't see in the first quarter more or less any impact of the conflict regarding the Middle East. That will be visible in the second quarter and of course, rest of the year. Our cost inflation with 2% is somehow moderate. And on the energy side, as you know, we have our fixed positions in not only natural gas, but as well, of course, in overall in energy. And there, more or less now 80% of our needed volumes are fixed. Therefore, we are there in a quite good position. We remain to focus on, of course, cost discipline and operational excellence. We are still working on optimizing our production. And of course, we are driving an active margin management to overcome all the pressure we see in the running year.

Coming now to our regions, starting with Europe East. Revenues are down by 7%. That is in line with the group development. Operating EBITDA quite weak because it's even below the decrease within the group. There, we had not only the decreased volumes, what we've seen, but we've seen on the cost side, a higher inflation than regarding the group average and the volume decline hit all segments, all markets in the Eastern region, especially the pricing in that region was under pressure. But towards the end of the quarter, we are seeing here recovery as well.

Western Europe, our, let me say, most stable region in the first quarter, revenues only down by 3% and operating EBITDA by 14%. As already mentioned, we've seen quite a strong renovation demand and that, of course, supported the performance of that region. Energy transition continues to drive our roof and piping demand. And the weakness was mainly in the beginning of the year from new build and, of course, the severe weather conditions. It's a mixed regional picture, but the most stable development in our first quarter.

Coming now to our North America segment, that was the most challenging region because markets have been very soft, very weak and revenues are down by 21%, our operating EBITDA by 37%. As already mentioned, the very soft new build market with weak residential construction is still a topic in North America. And in combination with an ongoing pressure on prices in piping, of course, that's not a nice environment. The U.S. single-family market is stabilizing, but multifamily remains very, very low. And within North America, especially Canada, is more challenging than ever.

With that, I'm coming now to our outlook. And just to remind you a little bit on our assumptions for the current year, we are expecting not a structural recovery in residential construction, flat infrastructure and renovation market. And of course, we expect that we cover the inflation, which will increase, of course, during the year due to the Middle East conflict, but price increases. But the Middle East conflict gives us as well a really limited visibility of the total year impact so far.

We have mitigation measures already in place, and that's not only price increases. Of course, it's a strict and strong cost management with cost discipline. We have a strong execution. We are ongoing working on working capital management as well as having a focus on our CapEx and spending. And still the Fit For Growth program, which we implemented in autumn last year is, of course, in place and is running. And despite the high volatility and everything, we believe we are well positioned to deliver. And of course, we are supported by our mitigation measures.

And with that, I would like to close the presentation, and I'm open to take your questions.

[Operator Instructions] We have Ephrem Ravi.

So firstly, could you quantify a little bit the volume recovery that you're seeing in March, maybe by region? I understand from your comment that your results were back to normal. Is it -- does it mean that the volume were stable in March? Or do you see a recovery? Do you have any -- also on the volume side, do you have any color on what happened in the month of April?

My second question would be on the cost inflation. So I understand that you are hedged on gas and electricity, but you've got about 1/3 of your revenue, which is pipe, where costs have been historically correlated to PVC prices and oil price. When we integrate the recent move in oil price and PVC cost, what kind of cost inflation do you expect for 2026 at a group level? I can imagine it's going to be more than the 2% in Q1.

And the third question would be on the magnitude of the price increase that have been announced. It looks like prices was relatively flat in Q1, so not much going on. What kind of action have you taken notably in the pipe business to recover the cost inflation? And do you see any traction on the ceramic business to increase prices in April or later during the year?

Okay. Thank you for your questions. There's a bunch of questions. Let me start with the volume. Overall, in March, we have in the whole group, middle single-digit volume increase and it's continuing in April. Looking into the regions, we see just March, we see a strong increase of volumes in Eastern Europe and Western Europe. So overall, in Europe, it's double-digit number. And we still have a decrease in North America. That is our weakest region so far.

Coming to our like end markets, new residential, renovation and infrastructure, we see in March overall an increase. So that's a very nice development. Our cost inflation, the 2%, of course, for the first quarter will not be the number for the full year as originally expected because we will have an impact from Middle East, higher energy prices, but there, the impact for us is limited as we are fixed or most of the volume we need and just remaining volumes, we have to buy on the spot market. And prices, of course, for energy are going up and down. So it's highly volatile.

On the other hand, we've seen in the first quarter a strong decrease in raw materials, plastics for our piping business. And due to the Middle East conflict, of course, that turned around, and we have a strong increase in plastic resin prices in the -- we will see it in the second quarter and ongoing. So therefore, of course, the development changes turns. So therefore, there will be a much higher inflation in the next quarters to come. And of course, we are increasing our prices. And overall, in, let me say, in Europe, we are talking about a middle single-digit number in -- regarding our infrastructure, our piping business, of course, we are talking about double-digit numbers. Does that answer your questions?

On the -- just on the cost inflation side, so we will see a much bigger cost inflation. Is it too early to quantify or maybe at least for Q2, is a number of something like 4%, 5% reasonable at the group level for inflation?

It's too early to quantify that. And on that there's a strong movement, not only, of course, on the raw material side, we have an impact on more or less every material we buy. We see higher logistics, higher transport costs. So therefore, it's across like more or less the whole P&L, and it's too early to quantify it. [indiscernible] we are working against it with price increases, which are already implemented and in place. And we are talking about single digit, but double-digit price increases, and it varies from country to country, of course. And for instance, in some Eastern countries, we are increasing our prices by 20% and of course, piping business, but it's across our whole business.

And do you have a view on the number that you mentioned that double digit for piping and mid-single-digit price increase for ceramics. Were those price increase announced in April? Do you have a view on how much of those announcements are being realized? Or is it again too early to say how much we will take?

No, that's too early to say it. Of course, we announced price increases, not all in April. We started at the beginning of the year. But of course, it takes some time until you see it in our P&L. And therefore, in the first quarter, there is not a big impact visible on pricing, but there's more to come. We will see much more in the second quarter and of course, in the quarters to come.

And to follow on that -- if you look at all the different parameters that you already know, how confident are you in your ability to recover the cost inflation related to the war? Is it one of the main uncertainty that you're mentioning in your press release? Or do you feel comfortable that the price cost dynamic could be neutral?

So far, we are quite confident. That's, of course, why we reiterate our outlook. On the other hand, I would like to point out there is a low visibility regarding the impact of Middle East. And therefore, we have to see how market develops. I mean we had a strong volume growth in March and April. On the other hand, there might be, of course, some advanced sales purchases due to expected price increases. So we have to -- we will see -- we will have a better visibility with the second quarter regarding the development of the full year.

So the question is more on the volume side, where it's unclear whether the mid-single volume -- the mid-single-digit volume increase that you see in March and April are prebuying or whether they reflect the better market. But on the price -- on your ability to offset cost inflation, you would say that there is -- you don't see a risk that competition prevents you to do that in a context where everyone is increasing prices. Is that the right way to look at it?

Of course, there is nothing without any risk. On the other hand, we are increasing our prices. Our competitors are increasing their prices. So that's absolutely normal operating business. And it depends now how the market develops and how big the impact of the Middle East conflict will be. I mean, so far, we don't have any bottlenecks in our supply chain and so on. But of course, it's possible that, that all turns into inflation.

And maybe if I may, a very last small question for modeling. What kind of EBITDA contribution do you expect from acquisition this year?

Well, in our EUR 810 million operating EBITDA is a number of EUR 50 million included for acquisitions for Italcer. And the NEWS Group, of course, is not included, but it's a very minor acquisition. It's more strategic with a big potential to grow, but the impact -- the positive impact we will see in the running year will be very limited.

We will move on to Anna Schumacher from BNP Paribas Exane.

So you mentioned at full year, you would implement cost savings of, I believe, roughly EUR 30 million this year. And you've mentioned you will increase that this year. I was wondering whether you could tell us by how much you expect that to be now? And can you give us some examples of what you'll be doing? And secondly, on M&A, given the more volatile macro and that you've announced two acquisitions, is your appetite still the same for more M&A this year? Or should we expect less?

Well, I will start with your second question regarding M&A and our appetite. My appetite is done because I'm looking at our balance sheet, and I have a focus on remaining or keeping a solid balance sheet. And therefore, of course, our ability to finance acquisitions with -- now with Italcer is somehow done. There might be another very small acquisition in the running year, but nothing medium-sized or nothing bigger because I want to keep our net debt on a -- for me, a solid reasonable level to have a leverage 2.2x, and we have a strong commitment towards our investment-grade rating.

Regarding cost savings, of course, that is something which is an ongoing activity now for years. And with our like Fit For Growth program, we are streamlining our organization. We are getting like, let me say, more closer towards our customer and with all our, let me say, processes and operations. And that results, of course, in better performance, better processes and that saves costs. On the other hand, we are, of course, always looking at our production setup. We are bundling production sites. So we are going to taking out maybe one or the other capacity, but that will save costs, of course, but not resulting in as a burden for our customers that we are not able to serve them. On the -- another thing what we are doing this year, what I didn't mention so far is, of course, that we are going to sell noncore properties to support, of course, our cash flow. Does that answer your question?

Yes. Just on collection of this EUR 30 million that was roughly mentioned at full year, should we expect that to be a little bit more this year?

Well, the EUR 30 million, they are still well. It remain in place. And of course, we are trying to achieve already even more. But within the first quarter, it's too early to give you, yes, an updated number, but the EUR 30 million, that's definitely our commitment.

And we will move on with Julian Radlinger from UBS Limited.

So just a couple from me. So first of all, you've reiterated the EUR 810 million guidance, which after this Q1 means EUR 90 million more operating EBITDA year-on-year in the remaining three quarters versus last year or about EUR 40 million, excluding Italcer. So could you just elaborate -- I think you've touched on all the points already, but can you just elaborate what the main drivers for that year-on-year increase are now going to be, particularly if volumes won't be a big tailwind, and you still have that sort of locked in energy headwind that you've called out? And maybe related to that, if we think about price cost, so that was obviously negative in Q1, but I think that wasn't a surprise. You told us that was going to happen a couple of months ago already. When do you now think -- when should we think about price/cost flipping to positive? Is that already a Q2 story? Or is that more of an H2 expectation? So that's kind of my first question, the guidance and the price cost.

And then just a couple of quick ones on nat gas. So first of all, how should we think about the unhedged portion? I know it's not big at all, but is there any headwind from higher spot or 1-month forward prices in TTF that's going to impact you at all? And then secondly, may I ask in how far Italcer is hedged on nat gas? Is it similar to your level? Or is it different?

Yes. Thank you for your questions. Regarding our performance in the current year, 2025 was a year where there was a stronger start. And during the year, the market came down. So the start of the year 2026 besides the weather, of course, was on a lower level. And we expect a stronger second half of the year compared to the first half of the year, and that reflects overall, let me say, a flat volume. So of course, there will be a volume or we expect a volume increase during the year 2026. But as we start at a low level, overall, that our expectations are that it remains then on the same level like previous year. And yes, that is reflected in our outlook, and that's still our expectation.

The question, price over cost and when it flips, of course, we have a burden from our first quarter, which we have to carry, and we will see a much better second quarter, of course. And -- but as already mentioned, the second half of the year will be stronger than the first half of the year. Regarding the natural gas, we are fixed for roughly 80% in some countries a little bit more, in some countries a little bit less, but overall, it's 80%. And headwind from remaining volumes, which we have to buy from the spot market that will be very, very limited because, first of all, natural gas prices on the spot market came down. I'm not aware where they are today, but last week, it was around EUR 45. So it's not EUR 60-plus anymore. Therefore, it is -- the impact will be limited. Does that answer your questions? Or -- Italcer? Well, Italcer, of course, needs a little bit less energy than we do. But there, we have fixed volumes as well.

Okay. Perfect. That's really helpful. Can I just do one quick follow-up? So just to definitely get this right. So in Q2, when you're saying that price cost is going to be much better than in Q1, are you saying you would expect price versus cost to be positive already or just less negative? And I think this is an important point because as some of my colleagues already pointed out, raw materials are going up quite strongly. I think we all understand that. So for you to get positive price/cost would mean that you increase prices very, very fast sort of ahead of that, which when speaking to most other companies sort of in the construction industry, they're all kind of saying, even if price cost is going to be positive, there's going to be a little bit of a lag in the first few months. And so I just want to clarify that for Q2.

Well, for Q2, I mean, we are now in the middle of May. Therefore, of course, I have a visibility regarding April, but there is still half of the quarter to go. And I'm confident regarding price cost for Europe, but the North American market is for us at the moment, a difficult market. And therefore, I'm not able to give you a concrete or detailed answer on your question regarding the group performance, but I'm very confident for Europe.

And we will move on to Markus Remis from ODDO BHF Securities.

I would have a question related to the cash flow and your leverage target. I mean, can you remind us of your investment budget for the year and also shed some light on the kind of working capital trajectory that you expect over the course of the quarters? And if you feel still confident in the 2.2x EBITDA leverage by year-end? That will be the first one.

Yes. I feel still confident. And looking at our leverage target, which is 2.2x, of course, it's two sides of a coin. On the one hand, it's operating EBITDA. Of course, therefore, we have to deliver the EUR 810 million. And on the other hand, it's net debt, and we are working on both sides of the coin. We are working to optimize, to strengthen our profitability. On the other hand, of course, to strengthen our cash flow and to reduce net debt. We will see positive cash inflow or to reduce our net debt in the second half of the year because the second quarter will have the cash outflow for not only the purchase price of Italcer, the 50 plus -- 50% plus 1 share, which is EUR 160 million.

We have as well the cash outflow, but that's minor. That's less, of course, for the other small acquisition. Therefore, with our half year figures, you will see a much higher net debt figure. And in the second half of the year, we are working on decreasing it. Looking at our working capital, in the first quarter, we already managed to reduce our working capital, let me say, a little bit slightly by volumes. But of course, there is a pricing impact due to inflation included, which, of course, has an impact on the working capital as well. But we are working and still our targets remain to reduce it. It will be supported by the disposal of noncore properties that will strengthen our cash flow. And our CapEx expectations for the full year is EUR 160 million, which we will spend for maintenance CapEx plus another EUR 20 million, which is our budget for improving health and safety in our plants. And for growth CapEx, which included our ESG CapEx as well, there is a number of EUR 100 million.

All right. And how much leeway would you have to reduce CapEx in case, earnings or working capital development is not kind of panning out as expected?

Well, we are having a focus and we, of course, monitor our CapEx and our projects. First, what is necessary, what do we have to do? And the second thing is that we are looking at our supply chain, do we have the right suppliers? Are we able to get better ones, which might help with some cost savings. But of course, nothing to reduce quality or something like that. But of course, there's always a possibility to cut a little bit to get some reductions. On the other hand, maintenance is important, and we have a focus on both sides and on quality as well.

If I may round it up with another question related to the cost picture, talking about energy. I mean, what's your strategy now looking beyond 2026 in terms of forward buying? Can you help us understand if you just carry on with the kind of rolling forward as usual? Or are you a bit more hesitant at this stage when it comes to forward buying for '27 already?

Well, our strategy is that we cover volumes for a period of time of, let me say, 3 years. But of course, everything which is beyond, let me say, 12 months with much lower levels. And of course, we are having our, let me say, energy committee where we meet like twice a month and if necessary, even more often, where we discuss how the prices going to develop? Are we going to increase our level to fixed volumes for '27 or '28? Or are we waiting a little bit. So that is something which we closely monitor.

And on the price increases, should we expect kind of a time gap between pipes and the ceramic part? Or do you see that being implemented at a similar pace?

No, that's implemented at a similar pace. Of course, the price increases regarding the pipe segment are more visible, yes, they are much stronger.

And we will move on with Daniel Khajenouri from Morgan Stanley.

Just a few follow-ups from me. First of all, you commented on some noncore property sales this year. Is that part of the guidance? And if so, could you comment on how much that is? And I also wanted to ask if there were any carbon credit sales during the quarter? It'd be useful just to understand if that happened or not when the underlying performance is. And I just wanted to have a follow-up question on some of your comments on the volume trends -- on the recent volume trends. Did prebuy and the positive volume development continue into May?

Well, starting with the noncore properties, of course, it's included in our guidance. And what we expect a number of -- it's more included in our cash flow than regarding our earnings. And my expectation is that we will gain something between, I don't know, EUR 20 million, EUR 30 million out of the -- as a result, out of the sale of noncore properties. And yes, there are no sales of CO2 certificates.

And just a follow-up question to the volume -- the comments on prebuying volumes into May. Did that continue this month?

Well, we've seen quite a strong volume development in March and April. But of course, it's difficult to identify what portion is like a prebuying and not. And so far, what I see regarding the beginning of May, it's still continuing like March and April.

That's very useful. And perhaps maybe just one more, if I could squeeze it in. On Italcer, the slide deck says it will be closing April 30, so I assume that's closed now. Is that correct?

Yes, that's correct.

And you said the hedging exposure for '26 has already been locked in for energy.

Yes.

And the last one is a follow-up from Julian Radlinger.

Yes. Just a very quick follow-up. I hope I didn't actually miss this, but back to the price increases. So on -- in the slide deck, you write that you're increasing prices across Europe, and you didn't mention it regarding North America. I'm not sure if you said it or if I just didn't listen, but is -- I assume you're also increasing prices for, at least for pipes in North America. Is that right?

Well yes, it is right. In the first quarter, of course -- not of course, but in the first quarter, prices came down in the piping business and turning the situation that raw material prices for piping are increasing, but that's mainly Europe. That's not the case in that extent in North America, of course, then prices are increased. But it's more a question of Europe. And in North America, we expect far less price increases.

And a quick follow-up from Markus Remis.

Yes. On the gap between reported and operating EBITDA, did I understand correctly that you assume something like EUR 20 million to EUR 30 million of one-off gains from the real estate disposals? And is there already any kind of visibility on, well, restructuring costs and the like? Any kind of indication you can share with us?

No, that's too early.

Right. But the EUR 20 million to EUR 30 million positive effect that might be realized?

Yes.

And with that, we do not have open questions left, and I will hand back to Therese.

Thank you all for joining us today and for all your questions. We hope to welcome you again in our next results call, which will be in August -- on the 12th of August. So with that, thank you, and goodbye, and enjoy your day.

Thank you very much. Goodbye.

Ladies and gentlemen, the conference is now over, and you may disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to today's conference call of Wienerberger's Full Year 2025 Results. I am Judith, your operator for today. [Operator Instructions] The conference is being recorded. [Operator Instructions] We are looking forward to the presentation. And with this, I hand over to Therese Jander.

Good morning, everyone, and a warm welcome to the Wienerberger Full Year 2025 Results Presentation. My name is Therese Jander, and I'm pleased to host this call today from London. And I'm joined by our CEO, Heimo Scheuch; and our CFO, Dagmar Steinert.

We will begin with the presentation of our key developments of 2025 and the financials of the year and an update of today's news as well and an outlook for 2026. And afterwards, we will open up for your questions.

So with that, I hand over to Mr. Heimo Scheuch.

Thank you very much, and lovely good morning from our side from Wienerberger's team. I'm glad to have you on the call. Let's walk quickly through the results of 2025, here. You have received them actually a week ago, so I just focus on the most essential points.

If we look at '25, I think it was again a year that has to be characterized by a lot of volatility, politically speaking, financially speaking and also business-wise. The guidance that we actually delivered to you midyear with the EBITDA number has been fully reached. We have, considering the circumstances that we operate in, I think, shown a high degree of profitability with an EBITDA margin, which is more or less flat compared to last year, 16.5%.

Keep in mind that all of this comes at the market level when we talk a combined market level new build, new residential housing, infrastructure and renovation that even dropped compared to the year before. So we had a drop in the relevant markets from about 70%. You remember that we give indication that '21 is our reference here was 100%, so we dropped to 70% in '24 and to 65% in -- when we talk about '25. And again, here, Wienerberger has shown basically through the very strong cost discipline and the efficiency improvement, this strong margin in the year 2005 (sic) [ 2025 ].

Keep also in mind, and Dagmar will elaborate on that a little bit more, that we had quite a substantial cost inflation also last year, which we could counter with these measures in order to keep the level of profitability. Profit after tax, very good and strong performance. We more or less doubled it to EUR 168 million. And the free cash flow, this is, I think, a very important step forward to reach nearly EUR 500 million last year. So, again, we showed here the discipline in managing cash, managing the capital allocation throughout the business, especially and therefore, being able also to reduce debt further.

So let's move on a little bit when we look at the debt structure as such. We came in at net debt level about EUR 1.6 billion. So that's 2.2x. Considering what we have achieved with the acquisition of Terreal a year before and digesting it, it shows actually, again, the strength of Wienerberger to self-finance such transactions, to digest them, to integrate them and especially also financially also to be able to handle those.

Again, one of the important step next to the cost discipline, next to the efficiency improvements throughout the business, which contributed largely to these strong numbers was the reduction of working capital to 20%. Also, again, a very important step in this volatile time to focus clearly on working capital. So this -- all of this, I consider that has been a very strong approach, very firm approach of Wienerberger on the discipline side when it comes to the financials.

I already explained a little bit the market decline. And here, we have obviously the market decline when we talk about new residential housing. Here, again, you see that we have seen further declines in 2025 that have occurred, especially in the second half of the year. And we come obviously already when we look at the current status with a lower level into '26 compared to the year before, '24 to '25.

And again, at this stage, I just want to draw your attention because probably we are the first ones in the sector, but I don't shy away to make frank comments because it's no use to sort of wait and see. We had very harsh winter this year. It's an extremely strong winter, not only in North America, but also all around Europe with not only cold weather, freezing, snow, ice, but also flooding. So all of this has to be digested in the first quarter and will certainly have its effect in the second quarter as well.

So all in all, I think when we talk then a little later during the call about the outlook, which is, again, a strong outlook that Wienerberger will provide, but it comes in at the basis of, I call it, a weaker start in the year due to the weather conditions, the harsh one that we have to face this year.

Let's move on then a little bit to the different regions where we have seen in West, I think, I call it a stabilization throughout the different businesses. And you see also that, again, Wienerberger from a housing perspective and the new build segment outperformed the market with 2% volume increase. So very disciplined approach on renovation and new build when it comes to this part of the ceramic business, and also the pricing was very much in line with our expectations.

Again, also on the piping front, we were able to improve our performance, grabbing some market shares left and right. But again, you see here that the Western Europe has performed considering the market as such very well. And you see also the share of the business, which is, I think, very important to show that Wienerberger has emerged as a player, not only new resi, but also one in a stronger and even increasing share in infrastructure and in renovation.

If we move now a little bit to the East, a little different picture. Obviously, depressed markets when we come to the new resi markets with about 2% down. But again, here, we have sort of increased our activity and being a little bit more active in the market when it comes to volumes, so a plus 1% here and also from a pricing an okay situation throughout the year '25.

I would say on the piping front, the minus 3% in volume effects, yes, that's due to some of the projects get delayed when the European funds don't finance in certain countries where there's political turmoil. So these projects, the bigger ones tend to get delayed. So this has an impact on the volume. And therefore, the minus 3% when it comes to the volume in piping. And here, you see also that we have already from a revenue split improved our revenues in renovation and infrastructure, but not to the extent that we've done it in other areas. So this is some work in progress, I would say, as far as the share of different activities is concerned in Eastern Europe.

Now let's move across the Atlantic to North America. I would say a very -- from our perspective, was a very tough environment that we faced throughout the year, '25, in North America, both in the U.S. and especially in Canada. And in Canada, we had a drop of new resi of more than 30% to digest in the market. So that was rather dramatic, I would say; and also in the U.S., around 9%, 10%, depending on the states that we operated in.

So this affected obviously our new residential housing business essentially facing bricks. And you see it also on the revenue split that we are very much exposed to this sector yet or still in North America. The piping operations are doing well. We consider in this context that we only have one pipe factory in North America, but performing very well on the volume side. We extended our presence there due to investments in the production. So we grabbed a little bit of market share again in the piping segment. And above all, I think we performed even in this market where the margins are coming down from this very high level during the last couple 2 years now to a normal one and a very satisfactory trend still in the piping business in North America.

So all in all, I think driven by weak markets, North America suffered the most in our portfolio, and this is obviously then to be seen also in the profitability. But still, they have done a good job North American management in managing efficiencies and cost structure.

I think when you look to summarize the introduction, before I hand over to Dagmar, you see the strong development, how we have improved, again, our share in the different segments, and Wienerberger is now emerging as a strong player when it comes to the piping business in infrastructure, especially in the water management and energy management and in the renovation due to our strong growth in the roofing business.

So this is, I think, from my side, this introduction, and I hand over to you, Dagmar.

Thank you, Heimo. Yes, a warm welcome from my side as well, and I will give you a deeper insight into our financials.

It's now 12 months I'm with the company, and it's my first conference call for a full year, and I've seen how resilient and strong our business model is, and we delivered a solid set of results and that even in this really tough market.

So having a look at our revenues and operating EBITDA, we are delivering. We are delivering our guidance. We've seen a stable profitability with still a remarkable margin of 16.5% despite quite a high cost inflation. On the revenue side, Heimo already elaborated a bit about the market situation, about the volume overall for the whole group. On average, volumes are flat as well as prices. But of course, we managed to again increase our revenues with innovative products, which are now standing at 34%. And that, of course, is as well paying in for our profitability.

If we now go on further to the bridges, revenue bridge and operating EBITDA bridge. That, well, is dominated in 2025 by our growing exposure to our roofing business, especially in Western Europe, which pays into our strategy and shows that we are growing in renovation.

On the revenue side, yes, it's a flat development with overall plus 1% and a negative organic growth. So we already explained the volume softness in different markets, especially in North America. We've had some modest headwind from the currency side and the scope, the EUR 120 million scope that reflect our increasing exposure in roofing. On the operating EBITDA, we delivered. We delivered despite these rough markets and again, markets coming down, remarkable earnings, and we managed to absorb the overall cost inflation we faced, and that is a very strong result.

So how did we do that? Of course, overall cost inflation was plus 4% in the year 2025, and that accounts for more than EUR 100 million. And that's quite a big chunk we should -- we had to manage. This cost inflation was mainly driven by higher labor and energy costs, as we elaborated during all our conference calls already. We managed to have EUR 30 million overhead savings from ongoing strict cost discipline. That is something which we are doing since years, focusing on a strict cost discipline.

And if you have a look at the markets, which are softening year-by-year, it's quite a challenge to really deliver out of that some gains. What did we do? We delivered from structural simplifications, and we had a high focus on tighter spendings. And with that, as already said, we managed somehow to deliver EUR 30 million savings. Additionally, we are focusing on operational excellence. What does that mean? We have a look at production measures and capacity optimization, especially in the ceramic business in Europe.

We improved our operational performance through improved shift patterns, improved throughput and of course, one or the other energy savings. That helped quite a lot. And on the other hand, we started our program Fit for Growth in the third quarter 2025. Fit for Growth is about streamlining processes from holding to operations so that we are improving our culture, how we work together, that we become much more agile, that we are faster and that everything is towards the customer in a better optimized structure and way.

With that, of course, we will have -- we will see annual savings in the range of EUR 15 million to EUR 20 million once it is in a full swing. We haven't seen EUR 15 million to EUR 20 million in 2025. It was a bit less, but overall, that is sustainable and it will continue.

Coming now to our operating segments, starting with Western Europe. Western Europe had a really good performance in 2025 due to roofing and the renovation portion of that business. Renovation accounts for nearly 50% of the business in Western Europe, and it's dominated by our roofing business.

On the operating EBITDA on the profitability, of course, we had beside our strict cost control, we took capacity out, and we managed to have a higher utilization. We showed a strong operational excellence and with our well-balanced portfolio in Western Europe, as already mentioned, the roofing business is the main contributor.

In Eastern Europe, the picture is a little bit different. Markets are dominated by our new build business, our wall business, and that's a difference compared with Western Europe. Our exposure towards renovation and infrastructure is less. But anyhow, we managed to keep our revenues on previous year's level. And regarding the profitability, we had quite to digest a big jump from inflation, but we managed to have a recent operating EBITDA margin with 18.1%.

We focused a lot on cost efficiency and on capacity reductions, where we had one or the other winter still stand as well.

Coming now to North America, that is our segment where we have the highest exposure towards new build and Heimo already mentioned that the market is in 2025 in North America and Canada, especially, well, a disaster. So markets have been down significantly. And on the piping business, which accounts for roughly 20% of our business, we've seen volume increases. But on the pricing side, we faced due to deflation in raw materials, price decreases. Therefore, our revenues are significantly down by 12%.

Of course, that has a high impact on operating EBITDA, on the profitability, and we came in with EUR 132 million operating EBITDA and a remarkable strong margin of 19.0%.

And with that, I would like to go further to our free cash flow. Our free cash flow is the second highest free cash flow in the company history, and it's the second year in a row with a remarkable free cash flow. And I would like to put your attention on the change in working capital. We managed again to have a significant cash inflow from the reduction of our working capital. And that, of course, a high free cash flow is the basis to reduce net debt and to be ready for further growth.

With that, I would like to elaborate a little bit about our net debt development. We managed to reduce our net debt by roughly EUR 120 million, and therefore, our leverage by the year-end is 2.2. Beside our really good free cash flow, we had a strong focus on growth CapEx because we focused on high return projects, and that underpins again our future growth, which will be self-funded.

We've seen some smaller bolt-on acquisitions where we paid in total EUR 24 million in 2025. And of course, we, as always, have a significant amount, which we pay on dividends and share buybacks to our shareholders. And with all of that, I must say, we have a disciplined CapEx and cash management, and that is ongoing.

If we have a look at our balance sheet, don't look at all these numbers. It's just to give you an impression that we have -- that our fundamentals are in a really good shape. We have a robust balance sheet, a solid balance sheet, and we even managed to improve our equity ratio by 1% from 45% to 46%, despite different headwinds we faced. One headwind, of course, the really weak market and the other headwind regarding our equity ratio, the swing in negative currency impact.

On the other hand, positive, we reduced our gross debt by 10%. We reduced our net debt by 7%. And that, of course, goes hand-in-hand with the reduction of working capital where we improved the ratio towards revenues to 20%, coming from 24%. So as you can see, our fundamentals are in a really good shape.

We have an attractive shareholder return, paying dividends, which are solid, steady and reliable. Our dividend proposal for the year 2025 is EUR 0.95 per share, as we had in the last year. As you can see, if you look at the development of our dividend payout and share buyback, our dividend is stable and -- is stable or is even growing and never comes down. Our payout ratio is 28% of the free cash flow, and that is in line with our 20% to 40% range.

Now I would like to come to our outlook. What are the key assumptions? If we have the macroeconomic view, we expect, again, flat residential markets, no structural recovery. We see flat infrastructure and renovation markets, so there will be no real movement. And as well, we don't see any decline in long-term interest rates. Markets stay difficult, volatile and are not growing. Inflation is expected to be around 2.5%, and we will cover that by price increases up to 2%.

What are we doing to manage all these key assumptions? We focus again on optimization and efficiency measures. First, I would like to mention our Fit for Growth program. That is a cultural transformation. Our people are empowered to take on more responsibility and accountability to be more responsive and agile with a view to delivering future growth and profitability. We will see further consolidation of our plant network, and of course, we will see a payback of expanding our industrial footprint with new products.

Just to remind you, we are growing year-by-year our share of revenues from our innovative products. But we will have some special topics in 2026. And one I would really like to point out, put your focus on, is our energy inflation because that energy inflation is Wienerberger specific. It will be a burden of EUR 30 million in 2026. We faced highest energy costs of the past 10 years, and we will be not able to compensate these higher energy costs through price increases. It's not homemade, it's externally driven, and I will explain on the next chart why.

Here, you can see the development of the market price. Natural gas, which is the most important energy we use and the price we pay in our portfolio. As you can see, the market price came down from 2025 from EUR 37 in '26 to EUR 33 on an average. What we pay or paid for our portfolio in 2025 was an average price of EUR 24, and that goes up to EUR 32, maybe EUR 33, so it goes up to the market price. And out of that, we face this EUR 30 million extra one-off energy inflation, which we are not able to compensate.

If you look at the capital expenditure, we expect overall EUR 280 million. EUR 100 million will be growth CapEx for high profitable projects. On the other hand, we will spend roughly EUR 180 million, which is with EUR 160 million maintenance CapEx and additionally EUR 20 million for improving our Secure Zone Action Plan, which is to support the safety of all our plant workers.

A little view again on the market. Our assumptions are: we don't see a recovery of the market. 2026 will be flat, not only in new build as well -- but as well in renovation and infrastructure. I would like to draw your attention on the development during the year 2026. We start at a very low level in the first quarter, and the first quarter due to these really bad weather conditions will be a quite weak quarter. And therefore, we expect the first half 2026 to be below the second half 2026. And of course, the first half 2026 will be below the first half of the previous year. But that's all in line with the development of a flat market.

So coming now to the numbers of our outlook for the ongoing business. You can see here a bridge starting at our delivered guidance 2025, the EUR 754 million operating EBITDA. You will see out of organization and profitability measures, EUR 36 million, that includes everything, like our Fit for Growth, our operational excellence, what we do regarding operations, where we are improving our profitability in our processes towards better shifts, better mix and better utilization.

Then we would have an operating EBITDA of EUR 790 million. But unfortunately, we have this one-off in 2026 regarding our own energy inflation. And therefore, our guidance for our ongoing business for the year 2026 is with the assumption of flat markets, EUR 760 million operating EBITDA. But of course, that's not all because the future is going on, and we have our next chapter, and that's a growth chapter.

And with that, I would like to hand over again to Heimo.

Thank you, Dagmar. And ladies and gentlemen, I think what you have seen in the presentation of Dagmar is very clear. We have performed very well in the light of declining markets, in the light of sluggish, I call it, recession development over the last couple of years. Wienerberger has been very good. And on a personal note, with sadness, I sit here in this call because I remember 4 years ago, this dreadful invasion of the Ukraine by the Russians. And a lot of things have changed in business, not only energy costs, and not only the way how we do business, but we had to adjust in a lot of aspects of the business, and we adjusted very well as Wienerberger.

If you look at the performance of North America that Dagmar has shown in detail, I mean, when I compare the housing starts that we had last year in Canada and the U.S. and the performance of EBITDA wise to the ones that we have 5, 6 years ago, how strong we have been able to improve our EBITDA performance, our margins in North America, it's impressive. Impressive how we work on this every day, and our people put a lot of effort in making our business even more performant in the future.

Secondly, and that's also, I think, something to really -- before we go into the new chapter to stress is the innovation rate. It's a very strong rate above 30%, actually around 34% that we have in the group. We push through our systems more successfully. Otherwise, actually, if you sell only bricks, pipes, roof tiles, we wouldn't be able to make these margins in such depressed markets. So that's the system approach that helps us to increase margins, and we continuously do so.

Thirdly, and most importantly, you see also the strict discipline when we come to M&A. We have delivered over the last 10 years a lot of deals coming in, very disciplined when it comes to the pricing of the deals and also the payback. And every cent has been paid back, and that's why we have the strong performance.

If we look now at the new growth chapter that comes our way, we have the ideal fit for our business to grow and to improve when we talk about the Italcer acquisition. Why? And let me just summarize this in a nutshell. This is -- Italcer is the leading business when it comes to high-end solutions for tiles, for floors, for walls, for facades, for the inside, for the outside and especially in the renovation segment, which is very highly performing, modern production hubs in Italy and Spain. They are growing, not only in the local market, but especially with respect to exports.

It's not a new business for Wienerberger. I call it an adjacent business. Why? Because actually, we use the same raw material. It's clay. We have more or less the same technology. Obviously, these colleagues in the wall and floor tile industry are more specific, highly technology when it comes to the surface treatments, the colors, the structures. So this is a great addition to our facing business that is obviously very strong in North America, Western Europe and also increasingly strong in the renovation.

Here, we have an ideal sort of growth space for the future in order to improve our footprint there. Clients are more or less the same in a lot of countries. So we can sort of improve our footprint in the Southern European Hemisphere and also in the Western Hemisphere. And obviously, Italcer is a leading company when it comes to technology, as I said before, in manufacturing; also in capturing CO2 and improving the footprint there. They have the first kiln when it comes to electrified kilns in Spain, high performance.

And again, you see it's an ideal fit for Wienerberger on the growth path in the future and gives us a more and even stronger performance and a footprint in the renovation part of the business. So as I said, these are the reasons from our perspective to enter Italcer. We have here the leading company, solid growth, outperforming its markets over the last couple of years, very strong and committed management team that will stay in place and fits culturally and also from a performance very well with ours. So it's an easy integration, if I may say. So we will put the guys also on our platforms and integrate them as we did in the past with others on our back offices and business support centers and then therefore, ensure obviously, the growth in the future.

When we look further to this business, the transaction structure that we have put here and Dagmar has stressed this item very carefully and duly when we talk about financing. Again, we focus here on self-financing and support. So this is, again, an acquisition that we realized in this way in order to ensure this financing, buying 50% plus 1 share now. And then we will have the necessary approvals that are for such transactions. They are not the EU application as it's only in Germany and Austria and in other countries. So this will run through rather smoothly. We all expect that and then start the consolidation from Q2 onwards.

So again, it's a fully cash transaction funded from our existing liquidity. We have all the facilities in place in order to finance this transaction. When we look at the -- from our perspective, the integration as such, as I said, it's going to be a rather quick one on the back office side, on the front office side because in these markets, Italcer is very strong. We can obviously help them in order to improve the business throughout Europe and also in North America, where they have a strong business also exporting to the U.S. and our strong footprint with our outlets and sales offices throughout the country will help us to improve the performance.

On the financial front here, we see about EUR 10 million of synergies rather quickly to be grabbed here on the commercial side and a little bit on the cost side. But more will come in the future, but this is, I think, a good starting point.

When we summarize, again, in a nutshell, it's an ideal sort of addition to our portfolio. It's easy to manage, easy to integrate. We understand the business. We can handle it in our product assortment, can use it to improve our footprint in the facade business throughout the world, actually. It will strengthen our footprint also in the renovation segment, which is very strong. It helps us with architects, with planners, with designers in order to have here even a better footprint for Wienerberger when it comes to new build, but especially renovation.

We will get quite a substantial amount of synergies in, as I said, very quickly. It's a highly attractive financial profile because from a perspective of EBITDA, about multiples, we have here about EUR 82 million EBITDA that Italcer will provide us full year in 2026. We will come to this in a minute, but a strong sort of performance here, which gives us a multiple a little higher than 6, but nothing sort of that we look at comparable transaction in the past. So very attractive for us. We'll bring it down when we look at the EUR 100 million that we think we were able to achieve rather quickly to a multiple in the 5-ish for such an acquisition, I think a very strong track record, again.

So let's move on to the next slide. And here, you see from what has been presented by Dagmar on the outlook of the ongoing Wienerberger business, now the integration of Italcer. Obviously, when you look at the outstanding performance in 2025, all these measures that Dagmar has explained will make us performing in this scenario rather well.

Let me say one thing on this. Dagmar and myself used the word flattish, stable markets. Yes, that's an assumption. If the markets gets better and if something happens this year, we are ready. Don't worry about that. We have capacity in place, we have structure in place to satisfy. Only if you see all this volatility, and I think it's wise at this stage of the year to say clearly, let's see what comes our way, but we, as Wienerberger, we don't wait for the cycle. We create our own growth by doing the right things and improving our portfolio, focusing on the cost side, focusing on the organic growth side and therefore, reaching then the EUR 790 million when you talk about performance.

The EUR 30 million of one-off effects on the energy front, I think you have understood that. It's a result of our buying-forward strategy. Basically, it helps us in a long time, and then it comes a little bit against us, but I think it's a one-off, we digest it. So the EUR 760 million is a strong guidance for this year operating wise, and we will add the EUR 50 million coming from Italcer on top. That's, as I said earlier, provided that we get the necessary approvals in Q2, and then we will consolidate the EUR 50 million from this date onwards and then at the operating EBITDA guidance of EUR 810 million for the whole year of 2026.

If we look at a very important point because some of you will obviously ask these questions anyway. On the financing, Dagmar has clearly explained how we have brought down our debt in '25 to 2.2. The Italcer acquisition will bring in additional debt of about EUR 400 million. So we'll end up a little bit above EUR 2 billion of debt, it's about 2.5. If I then calculate the EUR 810 million as a reference already, and then we bring it down as to -- with very specific measures, as you have seen in '25, we have now already in place our reduction in working capital. We have also the CapEx adjustments that we will bring in and some real estate transactions where we have nonoperating real estate that we will sell off.

All of this brings in about EUR 220 million. So we will reduce towards the year-end 2026, again, our debt level to about 1.8. You see a very disciplined approach and how we can finance such a transaction and expansion of our portfolio rather quickly, fast and very efficiently throughout this year.

Again, when we look at the EUR 810 million outlook, it's in the light of a persistent geopolitical and macroeconomical uncertainty that we face. Guys, all of you that are listening in every day, there are other news on tariffs, on other things, we need to live with this. And this is something I think we have learned to do so, and therefore, we remain very optimistic, very positive and just do our work well and cut costs where we can, focus on margins.

And as I said, we assume right now that there's no real big recovery in the new residential housing market. There's somehow flattish infrastructure and renovation market. It might be better then towards the mid of the year. We will see. But as I said, we are prepared. We have a lot of attention to grow fast and react very quickly. But at this moment, the financing environment, the banking, how they react with real estate, I think, remains very restrictive. So there's not the green light that I see here or the tailwind that some of you talk about that is here in the market in order to boost the business.

Again, we will outperform, by this guidance, our markets. We'll focus on the debt reduction that we told you. Strong cash generation, obviously, goes by itself and integration of Italcer and therefore, expanding our earnings base. So a strong focus on the business again this year.

I think from my side, this is -- summarizes the year 2026. We will obviously have our Capital Markets Day a little later this morning, where we'll elaborate about the strategy in much more detail in the future. But this is, I think, from a perspective of year '25-'26 what we had to tell you today. So I hand over to all of you for further questions.

[Operator Instructions] The first question comes from the line of Cedar Ekblom from Morgan Stanley.

Can you hear me now?

Yes, we can.

Perfect. That took a while on my side. So I've got a couple of questions, please. Can we just go back to Italcer? I'd like to get some final details around the purchase consideration on a 100% basis and the implied multiples pre and post synergy. I appreciate in the slides, you've got the cash impact of EUR 400 million in 2026. But my understanding is that is only for the initial 50% plus 1 share. And so it would be helpful to get a sort of a fully acquired impact to the gearing and the multiple and the cash impact. Do we multiply EUR 400 million by 2 to get to the sort of 100% EV implications for the business? So that's question one.

Question two, also around Italcer. To be honest, I'm not 100% sure on the sort of channel overlap here on the products. Maybe you can talk a little bit more about it. My understanding is that Italcer's products are sort of luxury high-end ceramic products for internal sort of design applications, fancy bathrooms, fancy tiles, et cetera. I don't get that how that overlaps with your external brick roofing product categories. I get that there's a regional overlap, but I don't see the end market overlap there. So a bit more color around how you see the fit would be helpful. So those are the 2 questions on Italcer.

And then there's 2 questions just on sort of the outlook or financials. Can you confirm if you had any benefits from carbon credit sales in the 2025 results, any positive impact there? And then just on the energy side of things, you have guided to this EUR 30 million impact, which I understand is around the way you purchase energy. Is there any way that you could soften that impact by doing some contracts, some hedging, et cetera, that you wouldn't normally do in order to try and soften some of that headwind? So quite a lot to unpack there. Those are my 4 questions.

Thank you, Cedar, for the questions. I will hand over and then come in if it's needed on the Italcer financials because Dagmar will take over right now, and then I will answer the rest.

Yes. Well, regarding on the Italcer financials and the additional EUR 400 million debt we will put on our balance sheet. Of course, we buy 50% plus 1 share. And with that, we are going to fully consolidate the whole group. And with that, we are taking debt over. Therefore, in 2027, when we make the second step to acquire the minorities, it will be far, far less than EUR 400 million. We see overall equity value of EUR 560 million.

And with that, I'm very confident that we will not only manage to bring our leverage by the year-end '26, again, down to 2.2, but we will see further improvement in the years to come, 2027 and ongoing.

Sorry, Dagmar, just before you go on, apologies. So I just want to be 100% clear here. You're saying EUR 560 million equity value?

No. Enterprise value.

No, enterprise value.

Enterprise value. Okay. So EUR 560 million. Okay, that's helpful. Apologies.

And as I said, Cedar, it's EUR 82 million full year EBITDA contribution from Italcer in '26, yes? And we will only consolidate EUR 50 million because we have the processes to go through on the approval side from antitrust authorities in Germany and Austria. Understood?

Understood.

Thank you. And let's now go into the 1 -- you had 2 questions, actually. The one was the channel question, distribution; and the other one was obviously the positioning of Italcer. First of all, let me start with the positioning. Yes, they started with the sort of -- I wouldn't call it only luxury but high-end sort of applications, tiles for floors, for walls and in the inside and renovation.

Yes, you are right. This is a business which is strong in renovation. There are some special dealers around Europe that sell those products, but they are also big distributors. I will refer to, for example, to a French one that is very well known to you. It's POINT.P, the Saint-Gobain distribution structure in France that sells all of their products. So here, Wienerberger products and Italcer products goes through the same channels.

Also in Italy, for example, we have the same. Also in the U.S. So there's a lot of common when we talk about distribution as such. Obviously, we will have a specific sales force as we have for facing bricks or for clay blocks or for also the roof tiles. So we will have the special and continue to have the special sales force for the tiles in Italcer. On top of it, and this is, I think, a very important aspect, I said, that strategically, you will see emerging very strongly in the next couple of years.

This company is leading when it comes to treatments of services, digital printing, colors, et cetera. So where do we need it? We see that the facing brick business moves towards a thinner product business. That means the bricks get thinner and thinner. We call them thin bricks or slips or whatever throughout the different markets. So here, we have a very ideal addition to our business where we can produce these products and replicate old bricks very easily through the Italcer channel.

So there's a lot of manufacturing synergies there and where we can improve the business because there's a lot of renovation work going to be on the outside in Europe of the old housing stock. So replicate those bricks that we do today burn in our kilns traditionally, cut them, have some waste and then put it to the market. We can produce it much quicker, much faster through the manufacturing base of Italcer. So this is something -- a growing business already for them. So they have here a business, a good business already, and due to the addition to ours, in Western Europe, especially and, above all, also in North America, this will play out as a very strong growing business for Wienerberger in the future.

So I hope I have addressed this part of Italcer for you strategically.

You had some questions about our energy pricing and ask if you are able to fix energy at lower prices with like future contracts. Of course, we do that. We did that in the past, but always like ongoing for the next years to come. And in the face of decreasing energy prices, of course, our level, what we fix is below what we did in the past. And we feel quite comfortable how we manage our risks and what actions we are taking. But 2026 will stay as it is.

We will pay energy prices on market level. And the years to come, of course, it highly depends how our energy prices are developing, what is going on with the war and so on. So that's a volatile environment.

But to add something what -- Dagmar, what Cedar has asked, there is no softening possibility of this EUR 30 million.

No. No, that's not.

This is, I think, what she wanted to understand. And here, we have done the utmost in order to bring it down to EUR 30 million. Yes?

Yes.

And could we get some color just on the carbon credit sales? I'm not sure if you disclose these numbers, but it would be helpful to know if you have been selling excess credits in the market in the last couple of years and put some numbers around what those benefits might have been?

Well, we are always selling some carbon credits, which we don't need for our ongoing business. And we have some gains out of that, but that's normal business, nothing unusual.

And what is the quantum there? Are we talking EUR 50 million or...

No, no, no. By no means, such high numbers. No. It's -- as Dagmar said, it's a normal sort of ongoing business thing. So it's not a few million euros. It's a double-digit amount, if I may say so, but nothing in the range of what you were referring to.

We now have a question from the line of Markus Remis from ODDO BHF Securities.

Can you hear me now?

Yes.

Okay. Excellent. I'd also like to start with a question on the '25 financial statement. And I'm trying to better understand the cash conversions because when I look at the receivables, the ratio compared to sales was the lowest since 2010. So can you maybe disclose the level of factoring by year-end to get an understanding to which extent this was operationally driven or how much financial engineering stands behind the receivables reduction?

Well, we have 2 effects on our receivables. First of all, regarding our working capital management, we focused on our trade payables and receivables, and we faced lower -- much lower sales volumes in the months November and December. That, of course, was one aspect of a reduction of receivables. On the other hand, we increased our factoring by roughly EUR 30 million towards year-end, but that's normal operating business as we had our Terreal acquisition integrated in our group and therefore, a bigger portion of that refers to the integration of Terreal into our factoring business. And the focus -- just to add, the focus for the year 2026 for the reduction of working capital is strongly on inventories.

Okay. And so factoring at year-end '25 was then close to EUR 200 million?

Yes.

Okay. That's very helpful. And then if I may follow up on the cost inflation part, you've flagged 2.5% of cost inflation, excluding this energy burden, this EUR 30 million. Can you shed some light on the remaining drivers? How that 2.5% is composed? Some indications here would be helpful. And then on the other hand of the price-cost equation, for which parts of the business are you most upbeat to raise prices to get to this 2% on the group level?

Well, I can answer that. For example, we are certainly on the roofing segment, which is a stronger segment than the new residential housing right now. So there, obviously, I think, we will have no problems bringing up the prices.

The 2.5% on an average inflation, it's just a normal inflation you face more or less in every country. In some, it's below. In some, it's even higher. And therefore, it's an average number, 2.5%. You see it on personnel expenses. You see it on -- yes, on everything more or less. So nothing specific, nothing...

Labor is the most important one.

Yes.

All right. And then the last question, again, to get it straight on Italcer. The EBITDA multiple that you mentioned. So it's like just over 6x. I think that was just mentioned, how is that derived? Because if I take the equity value and then assume something like...

Enterprise value.

Enterprise value.

Sorry, enterprise value. The EUR 70 million of current EBITDA, I get to quite a different...

No, no, you take EUR 82 million EBITDA, EUR 82 million.

Okay. So that's the kind of annualized contribution in the current year.

Correct. Correct.

And next in the line is Isaac Ocio from On Field Research.

Can you hear me?

Perfectly well.

So 2 questions regarding maybe '26 and 2030. So the first one would be, so is the current inability to pass on cost inflation behind us after the EUR 30 million hit in '26? And maybe my second question would be what is the pace of recovery in European residential construction you're expecting since we're seeing kind of some green shoots in Germany and France and maybe give a bit more color regarding that.

Thank you for the 2 questions. Yes, I agree with you that this one-off, as Dagmar has explained it, the EUR 30 million energy is then this one-off that we have to deal with this year. The rest is then a more, call it, stable development when it comes to inflation that we can digest with price increases on a yearly basis in the years to come.

Now from the future and if I may, we will do it, and I will speak about this in the Capital Markets Day presentation in more detail. But I've given you a base case that you will see in the presentation, where basically I say, it's a stable case in the future, where we, Wienerberger, can generate growth and don't wait for green shoots, as you have explained or you have referred to in France and Germany, et cetera.

So we say Wienerberger has the capacity to digest and to grow very quickly when it comes to better markets or stronger markets in new residential infrastructure and renovation because we have the capacity there. We have also, if the Ukraine war ends and there's more demand, also the possibility to substantially grow our business quickly, and that will have a huge financial impact. But at this very moment, obviously, these are things that might occur. We don't know when and how and there's a lot of volatility. So we don't want to put our business model only on this. But as I tried to explain on our own strengths and what we can influence and drive, therefore, the growth independently for this. And you will see the numbers that I'll present to you in a minute.

And I am moving on to Julian Radlinger from UBS Limited.

So a couple for me. First of all, could you help us with some of the moving parts in the 2026 guidance, please? What should we assume for D&A and net interest costs? I'd love to better understand the implied EPS guidance, either excluding Italcer or preferably including it?

And then secondly, so you're alluding to H1 '26 being particularly tough for a lot of reasons that makes sense. Could you elaborate on that a little bit, please? So historically, your adjusted EBITDA seasonality H1 versus H2, something like 48%, 52% of full year EBITDA. Are we thinking something like 45%, 46%? Is that the right kind of ballpark or should we think about it differently?

Well, first of all, I would like to start with our interest costs. Our interest costs in the year 2025 amount to EUR 100 million, and we usually build up during the year working capital. Therefore, we take more debt during the year on our balance sheet to bring it down by the year-end. And so the EUR 100 million, of course, are, first of all, like the basis. And then we will see additional EUR 400 million in the second quarter.

And our interest costs on average are between like 3.5% and 4%. So the impact will be digestible. But of course, we have to refinance the net debt of Italcer. Italcer pays a much higher interest rate. Therefore, we will see overall for 2026, of course, higher interest rate.

Okay. That's helpful. And the D&A?

The D&A, of course, is increasing as well. But if we look at the P&L of Italcer and the strong margin they are delivering, that will be less -- yes, I would say, a little bit less impact than we have on average in our business.

So that you're saying they have lower D&A as a percentage of sales than you do?

Slightly. But of course, we have to see regarding the purchase price allocation, what we identify in assets which we have to amortize. So what is like the split between goodwill and like customer lists and know-how and so on. And that work isn't done so far. So therefore, it's still a little bit, of course, of a slightly black box for us.

Understood. And then regarding the H1 '26, please?

H1 '26?

Yes, you mean your EBITDA split. I think historically, you're right, you can deduct this from all the information that you have available. But I wouldn't sort of count on this for this year. It's a very different year. We have never seen such a winter for the last 20 years or so. So I think we'll have to cope with it in the sense of how the business will start in March, when it starts, how quickly it takes off and how it develops, we will see. I think I don't want to make too many predictions. As we said, we give you a clear guidance for the year, which is already, I think, a very strong message from ourselves in this volatile market.

Thank you very much. There are no more questions at this time. I would now like to turn the conference back over to Therese Jander for any closing remarks.

Thank you very much, and thank you for joining and your interest in Wienerberger. And we hope you -- we welcome you back again for the first quarter call in May 13. And I hope you will also find a lot of useful information around our Capital Markets Day that we will now receive on our website. So thank you, everyone, and goodbye.

Ladies and gentlemen, the conference is now over. You may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to today's conference call of Wienerberger's Q1 to Q3 2025 Results. I'm Sarah, your operator for today. [Operator Instructions] And the conference is being recorded [Operator Instructions] We're looking forward to the presentation.

And with this, I hand over to Therese Jander.

Good morning, everyone, and warm welcome to Wienerberger's Q1 to Q3 Results Update. Thank you for taking the time to join us today. My name is Therese Jander, and I'm pleased to be hosting this call from the headquarters in Vienna. I'm joined by our CFO, Dagmar Steinert; and a special welcome also to our CEO, Heimo Scheuch, who is calling in today from Hungary. We will begin with a brief presentation of the key developments and the financials for the period and afterwards we will open the line for questions.

With that, I will hand over to Mr. Scheuch.

Thank you, Therese, and a warm welcome also from my side. You will wonder why I speak from Hungary. As you recall, we explained to you that the roofing is a very major attention point for our future development. And as you are well aware, we have been working on 2 new factories for concrete roof tiles and one is in Hungary, one is in the Southeast of London. Both of them are now operational. The one in England is already fully on the market and the one here in Hungary is about to go on stream. And so we are glad to say that in the record time of more or less 1 year, we have put 2 new factories up in this market and we grow our exposure to this very important segment of ours, the roofing segment in Europe. So that's why I'm here today with our Hungarian management. But let's go now to our set of results for quarter 3.

Ladies and gentlemen, if you look at our results and operating EBITDA with EUR 202 million EBITDA in the third quarter comes in more or less or roughly on the level of 2024, so in line with last year's performance, a slight margin expansion when you compare to last year, and the revenue is pretty much on the same level of last year as well. All of this is a very strong performance if you look at the underlying market. Why? Because we have seen, as we have told you, in the new residential housing segment, no major developments as far as uptick is concerned. On the contrary, if we move, first of all, to North America, the North American market has suffered considerably in the segment of new residential housing 1 and 2 family houses especially.

Let's start for a change with Canada, Ontario, the Toronto market, down compared to the previous year, 2024, this year with more than 30%. So we had to digest quite a significant decline in activity in this very important market. That's the major market of Canada anyway, Ontario. So you've seen here a strong decline in the new residential housing market. The U.S. as such has also suffered due to a lot of reasons. The mortgage rates are still pretty high. You have here also the instability, volatility, politically speaking, I don't have to expand on that. Everybody follows it very clearly and in detail. So this is obviously also an impact on the new residential housing market in the U.S. And therefore, we have a decline of about 10% in this market as well to digest when it comes to our activities. Keep in mind that this North American operation is the most exposed one to new residential housing market as it comes to Wienerberger because this is where we still have a majority of our business is exposed to new residential housing.

If we move now more to Europe, we have here, I would say, a situation where we see in the U.K. and in Ireland different market development. We have seen that especially now in -- after the summer, that the U.K. is also dropping in activity rate that's due to mortgage rates have not come down as everybody has expected. There's also some instability in the marketplace. And here with about -- when we compare running rates about 9% down in new residential housing market when we talk about September, October in this period of the year. So we have seen no pickup, on the contrary, a decline in activity. And also in Ireland, a slight decline in this new residential housing market. However, and this is now important because this is a major difference.

If you look at the U.K., Irish operations of Wienerberger, they have a majority of its exposure already in the roofing and in the piping business. So renovation and infrastructure plays an important role. And therefore, this business has performed overall better because here stability in turnover and in profitability. So we have not suffered so much when it comes to the profitability of the business in this region due to this new business that we have, a business that is far more oriented to renovation and to infrastructure. So a very important point to mention here to the respect of U.K. and Ireland.

On the continent, as such, we have seen a mixed picture. All of us have expected a better running rate when it comes to new residential housing in all of the European markets, this has not happened. The only market actually that performed according to our expectations is the Netherlands. So the rest of Europe, Western Europe especially, was down. There's no sort of uptick in the market as we speak. There are, however, some encouraging signs, if I may say so, in Germany and France because the permits are up in these 2 countries. So we can expect, hopefully, into the next year, a little better development in new residential housing.

Renovation has supported the strong roofing performance in the region. So there's a lot of activity, as I may say so, on the roof maintenance. So this has helped our business there. And infrastructures have been more or less stable, the spending. So here, a trend that we have basically built on, on the beginning of the year. And if you look now to Eastern Europe, Eastern Europe has been also a market where we have not seen any expansion of new residential housing. So I would say a rather stable, subdued market in a lot of these Eastern Europe economies. The only country where we have seen a little uptick is the one I'm currently in, in Hungary. This is to political reasons. Next year, we have Hungarian elections. So the Hungarian government has launched a special initiative to give sort of better mortgage rates to be first-time home builders and buyers.

So all-in-all, when you look at Wienerberger's performance in these geographies, and we have added some charts in the presentation. I don't need to go into the details, but you see actually 3 things. First of all, that the mortgage rates have not come down as we originally expected them to do so in order to stimulate new residential housing. So that's the first very important point. The second one is that the new residential housing markets, nearly in all of the markets, except, as I mentioned, the Dutch market and the Hungarian are down. So there's no uptick in these markets. So we were confronted with markets that are below the '24 levels.

And thirdly, which is also very positive, that Wienerberger in ceramics and pipes outperformed the underlying market due to our focus on innovation, very strong focus on our customers, and therefore we were able to outperform the underlying market. So I think this is the nutshell of the current environment that we are in. I don't see any major changes, by the way, for the rest of the year. So after the third quarter into October, November, December, we'll see the same trend. So this declining environment will continue for the rest of the year. So this is, I think, from my perspective, the major sort of underlying developments.

If we now move a little bit on from the macro and the sort of performance-oriented one to some of the numbers that Dagmar will elaborate a little later. So from a revenue perspective, you see here that we have more or less a little bit up by 4% compared to last year to about EUR 3.5 billion. EBITDA is slightly down from last year. This is obviously due to the fact that we have a lesser contribution from the new residential housing segment and also some cost pressure when it comes to labor cost and energy costs. But here, Dagmar will elaborate a little bit more in detail on the profit after tax side and the earnings per share side with a strong increase due to the fact that, obviously, there's no impact on some of the balance sheet issues that we had due to the sale of the Russian business last year. This year, obviously, is a normalized year. So here, we have strong uptick in these 2 aspects.

If we now move on a little bit more to the migration, as I call it, from Wienerberger's perspective, you see here that over the years, and I explained this already a few times, but you see it especially in these tough market environments that Wienerberger is operating in, how important it is and it was to migrate the business from a purely new residential housing business to now a much stronger resilient business based on new build infrastructure and especially renovation. So I think this has shown clearly that from a strategic path, we are on the right way forward. We will continue to do so. And I think the current environment offers us opportunities.

Let's move a little bit on in this external growth field. We have done several acquisitions. I mean when we look at Wienerberger over the last 10 years, it's by far more than 41 acquisitions that we did. So all of them are very strongly value enhancing. We have been very disciplined first of all, with the purchase price, with the integration and the synergies. When we take the biggest one that we did, Terreal, last year, we are fully on track with respect to synergies. So all the synergies that we have originally planned for are coming in actually a little bit better already. The market as such, the underlying is obviously weaker. I don't have to explain that I did it already at the introduction. So here, in this difficult market environment, from a pricing perspective and synergy perspective, we are doing better as we originally planned. So here, we see the strong operational leverage that we have when we do such acquisitions.

So they are from the first day onwards value enhancing. When you look at Terreal, I would say, what the difference or what the changes in prediction is that we see that the full contribution in EBITDA due to the fact that the markets are not yet picking up will be probably a year more that we gain this EUR 150 million EBITDA contribution. So we have put here the chart clearly in line for you that we expect this contribution a year later. However, as I said, from a synergy and cost perspective, we have already achieved all of it.

Let's look a little bit what we have done so far in this year 2025. Again, here, an interesting set of development because we have focused on water management clearly when it comes to all sorts of innovative features like creating a scalable platform for capturing growth when it comes to water quality to measure the volume of water and to help water companies in managing the water system. So that's WIONIQ, a strongly growing business when it comes to IT-based and artificial intelligence-based solutions for water management.

Then we have done a very important step in Ireland in order to consolidate further the market when it comes to infrastructure, drainage, roofline and cable ducting systems as a consolidation in this market, so fully effective there as well. And then we have bought 100% of our GSEi business. That's a framing business for solar panels. That's not solar panels as such. It's a framing operation where we have now 100% which is growing fast because here, we have this integrated solution for roofs and we grow, not only in France, but especially also outside France very quickly.

So when we look, strategically speaking, infrastructure and renovation are the key drivers also this year in this market circumstances where new residential housing is under pressure. So we will focus on this more in -- when we talk about infrastructure, it's the expansion of our piping operations, water management, especially. Here, we see a high degree of growth potential in all of our markets that we are active in. Keep in mind that Wienerberger is now with its operations in the north of Europe, now clear #1. We grow our business strongly in U.K. and Ireland, and we are also very strongly growing in the Benelux, especially in the Netherlands. And the next focus areas will be the eastern part of Europe where we want to grow this business and obviously also in Western Europe where we see still potential for further growth. So here, organic and inorganic growth is on the list for Wienerberger in the years to come.

Let's move then a little bit to the renovation market. The renovation market is for Wienerberger, especially the roof market. Here with the acquisition of Terreal and now the framing business for solar panels, we see here a strong potential for further growth. We will focus on accessories and parts that the roof needs on the roof and under the roof. We have here the necessary platform to do so. And we have seen that especially in situations where the markets get a little tougher, we have now strong market shares in order to have pricing power on one side, but also to push innovation and solutions through. So these are 2 especially very important markets for growth for Wienerberger.

And if I may, before I hand over to Dagmar, say a general word with respect to acquisitions as such. When we look at the current market environment in North America and in Europe, it offers unique opportunities for Wienerberger for attractive growth. Why? Because a lot of small and midsized companies, family-owned businesses in such difficult moments, they are not only driven by the macroeconomic development, but also the regulatory development, especially in Europe with all the new regulations coming its way. So here, we have a strong potential for further growth in order to expand our operations and to deepen the value creation when we talk about solution businesses on the roof and in the infrastructure field, but also in new residential housing.

So I think here, we are ideally positioned as Wienerberger to grow. We have shown that we are world-class operator when we integrate all these sort of operations very quickly, very efficiently on the platform side when it comes to systems like the whole back office, but on the front office as well due to our strong sales approach in the different geographies that we are active in, so a good base for further growth at Wienerberger.

So Dagmar, I may hand over to you to elaborate a little bit more on the financials. Thank you.

Yes. Thank you very much, Heimo, and a warm welcome from my side here from Vienna as well. I will go now a little bit more into details about our financials. And just to sum it up a little bit, our first 9 months result shows a really solid performance in this weak new build market, as Heimo explained. And our group revenues increased to EUR 3.5 billion, and operating EBITDA came in at EUR 584 million. Our margin amounts to 16.6%.

So let's now look a little bit more into detail and let's have a deeper look at the revenue and operating EBITDA bridge. Our revenue development. We increased our sales by 4% and that is driven, as you can see, by scope. And that's mainly due to our Terreal acquisition where we have a strong roofing performance, and which pays off in the renovation volume increase. Organically, we grew by 1%, what we lost as well on the currency side via translation. If you look at the operating EBITDA, it is slightly below previous year. And organically, we missed our previous year's performance and show there minus 4% and that's due to still ongoing cost inflation and that our pricing overall for the whole group is more or less in par with previous year. And therefore, we didn't manage so far to cover our cost inflation. On the currency side, it's minus 1% or minus EUR 5 million. And our M&A activities gave us EUR 13 million additional EBITDA. Overall, our profitability remains robust, and it's overall demonstrating the flexibility of our operations.

If we now have a look at our segments, starting with Western Europe. There, as you can see, our revenues increased by 8%, and that's a result of strong renovation activities. Roofing is the main driver and Belgium, Netherlands as well as France remain there the top performers. The new residential housing market, of course, is, as already explained, really weak, but we see a meaningful growth in Netherlands there. The U.K. market is difficult for us, especially in new build. But as we are strong in renovation and piping activities there, we outperformed that market as well. Looking at the operating EBITDA, it's up 15%. Of course, part of that is a result of our acquisitions of scope. But we continued to show a solid performance. We have a solid cost management. And therefore, due to higher utilization, we managed to increase our margin.

With that, I would like to come to our development in Eastern Europe. In Eastern Europe, our revenue grew by 2% and that was mainly supported by slightly higher clay block volumes. On the earnings side, operating EBITDA, it's down by minus 7%, but we are still showing a margin of 18.1%. In Eastern Europe, we have very high burdens on cost inflation, especially on the energy side. And there, it's mainly gas. There, we increased, there we had to face very deep increase of prices. Markets are difficult in Eastern Europe as well. And in the new residential housing market, only Hungary shows significant growth and that's due to government support because there they support fixed interest rates for first-time house buyers.

Let's now turn to the development in North America. North America at the moment is quite a difficult market. And of course, what you see in these pictures as well is a negative impact from currency translation. Our external revenues came down by minus 8% and that is due to weaker brick demand and, yes, the difficult markets. Our piping volumes improved, but we faced there due to lower raw material prices as well. Lower prices on our side. Operating EBITDA came in at EUR 106 million, and we still show a very healthy margin of 19%. North America remains for us a really profitable and strategically important region, and we are well positioned for recovery once new residential housing market returns.

In this challenging environment, we have set up a new program, Fit for Growth. And that program, Fit for Growth, that will deliver structural savings across all regions. And what are we doing with that? We are focusing on processes. We want to simplify processes. We want to reduce overhead. We want to become a much more agile organization, and we want to be as fast as possible towards our customers. Part of that program as well is the topic of optimizing production. We target EUR 15 million to EUR 20 million annual savings. That definitely is a run rate. And with that, of course, we want to ensure that we are best-in-class with serving our customers and have a really lean organization.

I already said -- mentioned in our half year call, and of course, it still remains as it is, we face very high-cost inflation, especially on the gas prices. And therefore, I would like to give you a little bit deeper insight how it works. As you know, we are fixing prices for our future volumes of gas which we need and, in the past, we benefited from that quite a lot. So in the years 2024 and 2025, for instance, we are buying gas for prices below market price. Anyhow, the prices we are paying today in 2025 are far above the levels we used to pay in the last year.

Giving you a little bit of an outlook for the year 2026. Due to the development of the market prices for gas, prices compared with the year 2025 came down. We still, of course, fixed a certain amount. But there, in the next year 2026, as far as we are able to see it, as of today, we will not benefit as much as we did in this year and the last years. I hope that will give you a better understanding how energy costs work within our group.

With that, let me turn to our free cash flow. Our free cash flow came in at EUR 155 million, and that's reflecting a solid cash generation for the first 9 months. As you might see, we are a little bit more investing in our working capital compared this previous year, but that's just a seasonal thing because, as you know, we are always building up inventory during the year, especially during the first 9 months. Maintenance CapEx is on the level of previous year, and there's no bigger change in lease payments as well.

Having said that, I would like to move over to our net debt development. Our net debt at the end of September amounts to EUR 1.9 billion and the leverage of that is 2.5. By the year-end 2024, we showed a number of 2.3. As you can see within the development, we have our free cash flow of EUR 155 million. Our growth CapEx and M&A amounts to EUR 105 million. And of course, we paid dividend, and we did some share buybacks, which amount to EUR 135 million. And I can assure you we have an ongoing disciplined CapEx and cash management, and we will keep the leverage stable. And of course, I'm sure that we won't increase last year's number.

So with that, before we come to the outlook, I would just like to sum up the -- for me, most important topics of our performance for the first 9 months. Looking at our macroeconomic environment, we are still facing high mortgage rates. On the other hand, new residential housing market is developing not as stable or positive as we originally expected, except the Netherlands and Hungarian market. And I would like to point out with our performance with these 9 months, we, as Wienerberger, outperformed the ceramic market and the pipe market regarding the market environment.

And with that, I would like to hand over again to Heimo.

Thank you, Dagmar. And I think you made it very clear, and I can only sort of add to that, that in this complex, volatile and really fast-changing environment, Wienerberger has proven that our not only strategy mid and long term, but our sort of proactive management style, focusing on costs and being very quickly when it comes to adjustments and efficiency improvements have proven right. Some of you will say, why didn't you start earlier to talk about a change in the outlook? Because at half year, we said, listen, from a perspective that we see summer months, July, August are always weak months and don't give a lot of indications.

When we look at the performance of quarter 3 and the September especially, we were hopeful that actually the markets as such were picking slightly up or developing in a better way. However, we have unfortunately seen that especially in North America and the U.K. were driving in the other direction. So again, we had here, obviously, to experience not only further declines but a much weaker environment in new residential housing that we originally anticipated.

Obviously, when we gave the full year guidance we said at the beginning of the year, under 2 assumptions, that interest rates would come down and that the new residential housing market will slightly improve, especially in the second half of 2025 and show positive trends. Both didn't materialize. On the contrary, and this is, I think, the strong message that we can send to you. We had to suffer a completely different environment that we originally planned for. And under these circumstances, I think this performance that we show that we are actually better performing than last year in an even lower market environment shows that we really work hard on our things that we can influence.

As Dagmar has shown, we have already implemented the Fit for Growth project again in order to make us even more efficient in more of the businesses. We have proven that from a pricing point of view, we are very disciplined when it comes to pricing and obviously also in digesting a very significant cost increase when it comes to wages, especially labor costs and on the energy side. So all of this coming our way, we had to digest this year. And so I think it has to be seen under these circumstances that we have a very solid, strong performance. The renovation markets are the only markets that remain stable as we have foreseen it. The infrastructure markets took a slight hit also due to the budgeting constraints that especially European countries imposed due to the shift more into defense budgets and to defense spending away from infrastructure. So these are things that we have to look at also from a perspective of current development.

Let's then summarize everything as the performance goes for the rest of the year. Some of you will ask Dagmar and myself already in a couple of minutes, are you really sure you will achieve the EUR 750 million? Yes, we will. The impact of FX, as Dagmar has explained in detail, is also an important one which we need to consider. But like-for-like basis, I think the EUR 750 million is the number that we will achieve. We are working hard. It means also for us a good and very strong quarter 4 where we work on right now and where, as I said, all the measures that we implement ourselves and with which we can influence are playing out in our favor. The rest we have to take as they come.

So this is, I think, a very important and clear message that Wienerberger does everything in order to improve its business in this, I would call it significant slowdown in new residential housing around our market. However, if I think -- and very important also, I think that what Dagmar says, she's keeping really a strict discipline in the company on the net debt position here. You have seen how disciplined we are on the CapEx and the spending side. So at the year-end, we will be in the range of 2.2 to 2.3 EBITDA to net debt. So here, again, strong performance when it comes to the financials of the company and the balance sheet discipline.

Let's not keep out of mind also the midterm and our development. Some of you will say, do you still have the EUR 1.2 billion as a midterm target in mind? Yes, of course. Why? Because obviously the company has this potential to grow to this number, provided that some criteria play out. And we've put here, I think, 4, that are very clear to determine on this slide. First of all, further interest rates cuts have to happen. You have seen how high actually the mortgage rates are. So we need to keep more an eye not on the interest rates in general, but especially mortgage rates and the mortgage policies in the different geographies that we are operating in because it gives a signal of affordability for people to buy into the house -- new residential housing market or not.

Then something which is very interesting to monitor for us is this European Social Housing Plan that might kick in. There's a lot of discussions. We have meeting at the month end again in Brussels with the commissioner and the commission about this. So this could also be of a very important part for the new residential housing market for us in the not-too-distant future. Obviously, potential peace in the Ukraine will boost the whole region of Eastern Europe. And therefore, we hope for that and for the people, especially in the Ukraine. And then also the U.S. market recovery because the potential and the demand level is substantial also in this geography in Canada and the U.S.

However, as I said earlier, the mortgage rates need to come down and a little bit more political stability should be also in the U.S. in order to stimulate the new residential housing market. Under these conditions, I think we are very well positioned in order to achieve this number. And Wienerberger, from an efficiency perspective, cost-based perspective and also the very important industrial base that we have now is a very strong one that we can work on and continue.

I think what you should take away from this call, that is more than a quarter call because we gave you some update on strategy, also the importance of the migration of this business, Wienerberger, from new residential to a much broader business and the resilient business proves right, gives the group a very strong direction when it comes to stability in cash flows and in margins, but also growth base for the future. And I think the U.K. and Ireland is a very, very good example. If you compare the 2, the U.K. and Ireland to North America. North America, we are still very exposed to new residential housing. That's why we'll take a hit there as far as profitability is concerned. And when we look our performance compared to the competitors that are more into new residential housing in U.K. especially, it's a much stronger one, it's a much more resilient one and margin-wise, a much better one because the business is already very balanced when it comes to infrastructure and renovation.

So I would like to close on these statements strategically and thank you very much for your attention. And Dagmar and myself, as always, will take your questions.

[Operator Instructions] The first question comes from the line from Yassine Touahri from On Field Investment Research.

I think I would have 2 questions. First, I think you had cost inflation of 4%, 5% in 2025. You're expecting, I understand, a bit more energy inflation in 2026. Should we expect more of a mid-single-digit cost inflation next year? Or should we expect something similar to what we've seen in 2025? That would be my first question.

Then my second question is that we've seen so far that prices has been very broadly stable. So I think you've not been able to offset this cost inflation and all the benefit from the savings that you've been implementing have been absorbed by this cost inflation. How do you think about next year? Have you already started to announce price increase?

Do you see your competitor announcing price increase in an environment where the volume is a bit more muted that you were initially expecting? Do you believe that any price increase that have been announced could stick? Would be great to get a sense of the scenario that we've seen in 2025 where a lot of your efforts are absorbed by cost inflation could be [ overproduced ] or not next year?

Thank you very much, by the way, for these very important questions. I will leave, if I may, Dagmar, to you on the cost inflation side, and we'll focus on the price side to start with. I think we have shown a great discipline in pricing throughout the group this year. And you are absolutely right in such an environment, especially the new build sector, it's difficult to increase prices. However, we were able to do so in some geographies, so that cannot be sort of said with respect to the whole group right now. And 2026, it's too early to give here a statement.

However, as always, we start in November working on the markets, working with our customers to prepare them. So you will see a more detailed picture, I would say, in March of next year. If they stick or not, we will certainly do something in the pricing. It's not going to be huge steps, but I would say sufficient steps, and this is what we are going to work on for '26. But as I say, it's a difficult market environment when we talk about new residential housing. So I don't expect here big jumps, but we always work on this very hard in order to improve renovation and infrastructure will be a little different. I hand over to Dagmar.

Yes. Well, regarding cost inflation, yes, we face cost inflation between 4%, 4.5% for the running year. And yes, we will see some cost inflation, of course, next year as well. But I don't expect it to be at the level of the cost inflation 2025. And regarding the energy, what I try to explain regarding our gas price, what we are paying in the year 2026, that will be not above market price. But as we benefited from energy fixing in the running year, we will face some kind of inflation regarding the energy prices in the year 2026.

So just to understand on inflation, how the -- the 4% to 4.5% that you're seeing in 2025, is it mostly -- it's a mix of labor costs and energy costs. When you look at 2026, what would be the difference? You would see less labor cost inflation and energy inflation, something similar. So overall you would expect something which is less than the 4% to 4.5% that we're seeing in 2025. Is that the right way to look at it?

That's the right way to look at it, yes.

And -- but it's too early for you to give an idea if it's closer to 2% or 3% or 4%.

Yes, that's too early because we are still in the phase of preparing everything. And of course, there are price movements on the cost side as well. It will be below the inflation of the running year, but it's too early, far too early to give you a decent number.

So -- and then we have the next question from the line from Cedar Ekblom.

I just had a question on that cost point again. Just to confirm that 4% to 4.5% is across all buckets of costs, so energy, labor, et cetera. Could you give us a little bit of color on what the actual portion was for your fixed cost buckets? So that's the first question, just get a little bit of differentiation there. And then can you just remind us, there's a couple of cost-cutting programs that are now in the business and we've got the new announcement today. Can you just remind us how to think about efficiency gains into next year? Is it just the EUR 15 million to EUR 20 million or is there anything also coming from other programs that have been in place in this business for some time?

Thank you, Cedar, for the very spot on questions. Let me say something on the cost saving side and the program. The Fit for Growth is obviously, as Dagmar explained, a new program that will be added onto the existing ones. You remember that we said that the existing ones have come to an end and have proven to be very effective in the business. So they will obviously produce some additional input also next year because they are running these programs and they're not finished yet, as you correctly pointed out. So these will be to be added on, and Dagmar will give by all due means and respect a number at the beginning of next year. And I think if you bear with us a little bit, I think we are putting together budgets right now and in this volatile times, it's not easy.

We have also indicated to you that we would like to give you a much more detailed outlook and overview of the business early next year in a Capital Markets Day. So I think if you can sort of be patient with us on this subject to give you here a clear update. But to answer the questions, the EUR 15 million to EUR 20 million will be the new program running rate for -- as we speak from next year onwards and some inflow comes also from the existing program, Cedar. And for the cost structure and the fixed cost, I hand over to Dagmar, please.

Yes. Our cost structure is mainly dominated by personnel expenses. They account for roughly above 30% of our overall costs and our energy costs are 10% of our overall costs. And these 2, yes, portions dominate, of course, our cost inflation and all the rest, if it's like raw material, if it's rents, if it's consultants, IT costs, whatsoever, of course, there we face cost inflation as well. But on the other hand, if we have a very disciplined way to approach that, we manage to keep it low. And therefore, I would like to reduce for you our main cost drivers regarding inflation just to energy and personnel expenses.

That's really helpful. What I'm trying to understand is, can you give us a bit of color on what the sort of personnel expense inflation is? Because what I'm trying to break out is cost inflation on items that are within your control relative to cost inflation on the energy side of things, which obviously you can do your hedging, but to some extent that's much more a factor that you can't control. So could you give us a number for personnel cost inflation if the overall cost is 4% to 4.5%?

Well, the cost inflation regarding personnel expenses in the running year in 2025 is roughly for the group overall at 5%, and it will be below 5% 2026.

Cedar, keep in mind that we had higher cost inflation, obviously, in Eastern Europe also this running year. You remember when we told you that there is pressure in the labor market and especially in Eastern Europe, strong increases on labor and the collective bargaining agreements. So this is, I think, what Dagmar was referring to.

We now have a question from the line -- by now the last question from Julian Radlinger.

A couple ones left for me. So first of all, the implied Q4 guidance means that EBITDA in Q4 could actually be up year-on-year, despite all the headwinds you've called out. And so if that's the outcome, I'm just wondering what would that be driven by? Is that volume? Is that cost management? In what scenario would EBITDA be up in the fourth quarter?

And then secondly, so your margins actually expanded in Western Europe in Q3 on a year-on-year basis. Is that a clean result? Is that just higher capacity utilization like you wrote in the presentation? Or is there any kind of one-off effects in there that we should be aware of? And then just maybe a very quick last one. How much of your energy costs are now fixed for 2026? So how much visibility at this point do you have? I know it's usually quite a lot on a 12-month forward basis.

Dagmar, may I hand over to you to do this or if you want me, then you say.

No, no, that's fine. I do it. I will start with the energy. There, we fixed roughly overall for the whole group between 50% and 60% of the volume. And so there is still a lot of room for movement. Your question regarding our Q3 results, if there are any major one-offs? No, there are not any major one-offs included in our Q3 results. And it's a result of our strong performance in renovation and outperforming the market environment. And of course, regarding our cost discipline, things starting to pay off. And if we look at our adjusted full year outlook for the running year, if we deliver EUR 750 million operating EBITDA, that, of course -- it's mathematic. It's very easy.

It means that we have to reach in the first -- in the fourth quarter of the running year something between -- above EUR 160 million EBITDA. And that, of course, is above previous year. And I mean, we -- yes, at the moment, we are overall in our pricing more or less stable on the previous year's level. But as we told you, we see markets where we a little outperform even on the pricing side, the markets, we have, our initiatives, the running ones, the Fit for Growth, where we benefit from. And therefore, we are confident to deliver.

There are no more virtual hands at this time. I would like to turn the conference back over to Therese Jander for any closing remarks.

Thank you. I would like to state firstly that our -- you should save the date for our next Capital Markets Day, which we have scheduled now for the 24th of February next year. So just wanted to add that to the conversation and we will get you more information when it's a little bit closer. And by this, I would like to thank you all for joining us today and for all your questions, and we truly appreciate your engagement. And therefore, we also hope to see you again for our next results call, which is on the 18th of February. Until then, take care and goodbye from all of us here at Wienerberger.

May I just add something, Therese? In the name of Dagmar and myself, we all wish you a happy ending towards the year because with some of you we won't meet personally. So enjoy this season and all the best in this very volatile times and exciting times. But I think we gave you a good outlook for Wienerberger as far as our markets are concerned and be assured that Dagmar and myself will have our hands full for the rest of the year, as she said. So all the best and see you soon.

Ladies and gentlemen, the conference is now over. You may now disconnect your lines. Goodbye.

Good morning, everyone, and warm welcome to Wienerberger's Half Year 2025 Results Update. Thank you for taking the time to join us today. My name is Therese Jandér, and I'm pleased to be hosting this call today from London. And I'm joined here by Mr. Heimo Scheuch, our CEO; and our CFO, Dagmar Steinert. We will begin with a brief presentation and of the key developments and the financials for the first half year. And afterwards, we will open the line for questions. So with that, let me hand over to Mr. Scheuch.

Thank you very much, and also a wonderful morning from my side. We have indeed a very satisfactory set of results for the first half year of 2025 in, I would call it, rather challenging market environment, we were able to increase our turnover by 6% and this shows the resilience of our business model, which is obviously not based only on new residential housing, but more and more on renovation and infrastructure.

So these 2 parts have contributed throughout our geographies very nicely to this growth in revenues. On the EBITDA front, we are in line with our expectations coming in a little higher than EUR 380 million for the first half. And this shows here again, we were working hard on our cost structures and efficiency improvements that contributed nicely to this robust margins that we were able to achieve.

On another note, obviously, very satisfactory. We have improved our profit after tax about EUR 100 million. So we're a little above EUR 100 million when you look at the profit after tax for the first half. And the earnings per share have risen to about EUR 1 per share. So also here very, very satisfactory performance. But let's look a little bit into the different geographies. You remember that we said at the beginning of the year that we expect interest rate cuts. We expect a better underlying market development due to this fact. Unfortunately, we have to draw you aware of obviously, that in the North American market, especially in the U.S., there were no such changes in interest rates. So we have still very high mortgage rates that are above 7% in the U.S., which are harming the new residential housing market.

So we have seen here quite a substantial backdraw or drop in activity in the new residential housing segment affecting our deliveries. First half of the year in the U.S. has also seen bad weather conditions. So here, 2 aspects that have, to some extent, affected our deliveries and the volumes that are sold in the U.S. market. On the other hand, the infrastructure was okay. So the level of infrastructure activity was still good. We have made also a nice increase when it comes to volumes of pipes at the south of the U.S.

On the pricing side, both aspects, meaning on the brick side under pressure due obviously the fact that the market is down and on the piping side, the prices are down because raising prices, meaning regular prices, but also margins are still on a very satisfactory level in the U.S.

Let's move a little bit to Europe. First, our preferred country, the U.K. and Ireland. Ireland have done well this first 6 months of the year. Underlying the trends are positive. They are not as strong as originally anticipated. The pickup of new residential housing, but it is a slight pickup and a positive development that we see in both geographies. Therefore, a very satisfactory performance of Wienerberger, especially in Ireland when it comes to pipes infrastructure. We have taken over also a competitor and integrated it already successfully in our operations. So it was a nice step ahead, clearly bolt-on transaction, very satisfactory executed by our management.

And on the brick side in the U.K., a very sort of strong trend when it comes to sales. So we have improved again our performance here with good trends. And if I look at our competition locally, companies listed here, we have quite a substantial difference when it comes to margins. Wienerberger margins are substantially higher for us, our 2 colleagues listed on the stock exchange here in the U.K.

Also, the infrastructure business of Wienerberger in the U.K. has done well. So we have improved our performance again in this segment. Continental Europe, a very different picture when you look at different countries and geographies. Let's start in the North. North has been rather stable in infrastructure and in housing, no major sort of differences to last year. Moving down further south, we have seen good trends in the new residential housing development in the Netherlands, so positive trend there when it comes to our brick operations. Also the piping operations have done well due to the fact of the integration of Grain Plastics that has been acquired last year. So Netherlands, we see that this is now a country that moves in a different way, positively speaking, when it comes to new residential housing infrastructure and renovation.

Also, Belgium is now sort of stabilizing on the level, and we see slight improvements there, especially in renovation and then hopefully also new residential housing a little later this year, but the trends are encouraging. The French market, very important for us, and we are progressing very positively with the integration of Terreal. We have now sort of seen a very good performance of the French roofing business within Wienerberger, good contribution EBITDA-wise, profit margins are also very satisfactory. Market has somehow stabilized. We see also better trends now in new residential housing in France. So here, I would say the market has bottomed out and will probably a little bit improve in the second half of the year.

If we then move to, I would call it, the Germanic countries, Germany and Austria, it's more problematic. These 2 countries are really not turning the corner yet when it comes to especially new residential housing. If it's multi-residential housing or it's individual single-family housing, it's still on a very weak level in both countries. Has to do with financing, has to do with affordability, has to do with the banks granting loans, et cetera. So this is something which has affected us in the first half of the year, especially Germany is not yet there where we want it to be. And I don't think that this will change during this year. So from a perspective of volumes and prices, Germany is still sort of spot where we need to work hard in order to improve our efficiencies. And I don't see anything coming through from the incentives of the government that I've discussed. And there's a lot of noise out of Berlin, but there's nothing really materializing yet.

So this is the German-speaking countries. When we move East, East is from Poland to Czech Republic, Hungary, Slovakia. Here, we see some good encouraging trends in the new residential housing front. So from a very low level, a little gradual improve, but it helps. We gained some momentum there as well. So I think here, mixed with the efficiency improvement, mixed with our sort of focus on production and sales and improvement of the solution concept, we have gained a little bit of momentum here in this region. You see also that in certain areas of Eastern Europe, and this has to do with obviously economical situations that certain cities are doing better than others and also regions are doing better than others. And obviously, this will continue throughout this year. This is in Romania, for example, this is also in the Southeastern part of Europe where we see good trends.

But generally speaking, let me say this also if and in the event we see more of a stabilization piece talks evolving in Ukraine, this region will strongly then come back and develop much better than we see it today. So from my perspective, I think here, we have seen an underlying market trend, as I called it at the beginning, as challenging. This will remain so for the rest of the year. We'll come to the outlook a little later. But I think when you look at Wienerberger today with our exposure and the resilience of our business model, we show clearly that we can handle such situations.

On the acquisition front, we have again completed some very important acquisitions. I spoke about Ireland with MFP that's a local producer of pipes that has ceased production. We've integrated it in our own network in the U.K. and in Ireland and have successfully executed it. And on another note, we have obviously taken over 100% of the solar supplier in France, GSI, where we have now 100%. So we are continuing this growth path.

I do see a lot of opportunities right now because it's more, I would call it, a buyers market right now in this area where a lot of certain volatility still remains. And for Wienerberger, a great opportunity to increase our footprint around especially Europe and also North America.

With this note, I hand over to Dagmar, and she will run you through quickly through the different financials. Thank you.

Thank you, Heimo. Good morning from my side as well. So let's dig a little bit deeper into the numbers and our solid performance in the first half year of 2025. Our group revenues increased by 6% year-on-year, reaching EUR 2.3 billion. And this growth was driven by volume improvements in Ceramics Europe and contributions from our recent acquisitions. Our operating EBITDA came in at EUR 383 million. That's 4% lower than last year. But of course, this decline reflects the burden of cost inflation, but I would like to draw your attention on our margin, which is very robust with 16.3% and especially if you look at the difficult macroeconomic environment.

Looking a little bit deeper into our volume growth of 2% for the whole group, that is clearly driven by European ceramics development. And regionally, Europe delivered plus 3%. Heimo already elaborated about the market and the increased demand in the U.K., Netherlands and of course, Eastern Europe. In Western Europe, our main driver was the roofing business and in Eastern Europe, the wall business. North America, however, a difficult market for us at the moment, saw a decline of 4%, and that was mainly due to weaker brick volumes. Pipe volumes remained strong during the period.

And I just would like to somehow repeat, this volume development reflects really our strategic focus on renovation and infrastructure. Now as you can see on our EBITDA -- on our revenue bridge -- sorry, I missed it on our EBITDA bridge EUR 133 million increase in revenue is driven by a combination of organic growth and of course, of our M&A business. And organic growth contributed EUR 30 million plus that was mainly supported by volume gains in to repeat Ceramics Europe, but it was partly offset by pricing, especially in Germany and North America, both difficult markets for us at the moment. Scope effects added EUR 112 million, and that is primarily from the integration of Terreal.

And again, this bridge illustrates our strength of our M&A strategy and the value of our diverse portfolio. Now coming to our operating EBITDA bridge. And there, I would like to go a little bit deeper into our organic growth of minus 7%, what is impacted by the cost inflation, which was higher than originally expected, especially in rising costs of energy and personnel expenses. The currency effect had a modest minus EUR 2 million impact that was mostly from the weak U.S. dollar, and that is increasing month by month. Therefore, I'm sure we will see a higher negative impact of that in the full year.

From our acquisitions, we got another EUR 30 million plus compared with previous year. So that's quite nice performance. If you look a little bit deeper into our cost inflation, I already mentioned energy is up 15% year-on-year, and that was driven by global price trends and regional volatility. In some countries, we even saw an increase in energy by 30% or even more. Our personnel costs, which amount for a very high portion of our overall cost increased by plus 5%. And that is reflecting, of course, wage adjustments and inflation-linked contracts and so on. And that is a little bit higher than we originally expected.

On the raw material side, it's a little bit a mixed picture. For Ceramics, we saw an increase of plus 3%, while raw materials for the pipe business for the half year remained flat. You might remember in the first quarter, we still had there a slightly increase. And in the second quarter, we saw a decrease. To a certain extent, of course, we managed to give it -- to pass it through these cost increases. But of course, we have ourselves given targets. We have our self-help measures, and we have a very, very strict cost discipline.

Let me now look at the performance across our regions. So starting with Western Europe, we saw a strong 11% increase in revenues and revenues reached for the half year, EUR 1.4 billion. Operating EBITDA rose plus 12% to EUR 205 million and showing a margin of 14.9%. This growth was driven by higher volumes in renovation-focused products and roofing, of course, and the contribution from Terreal, which continues to integrate well. In Europe East, revenues grew plus 3%, but our EBITDA declined 8% to EUR 1.3 million, but still showing a margin of 17.3%.

We have seen in Eastern Europe quite a high cost inflation, particularly in energy and personnel, which we see over the whole group, but there, it was a little bit stronger. North America faced the most pressure with revenues down by minus 6% and our EBITDA came in at EUR 75 million, which is, of course, significant below previous year. But as well here, I would like to draw your attention to our robust margin of 19.9%, and that's a very good level.

As already mentioned, in North America, we've seen severe weather conditions. And of course, that has impacted construction activity and the overall negative market environment. Overall, these results reflect our strength of our diversified regional portfolio.

Turning now to our free cash flow. Free cash flow for the first half year was minus EUR 51 million, and that's in line with prior year. That, of course, reflects our typical seasonality of our business, and we've seen a strong second quarter contribution of EUR 124 million. The main driver for the negative figure, of course, is our seasonality in building up working capital. And there, we spent in the first half EUR 244 million. In the previous year, it has been EUR 230 million, a little bit lower, but we started with a lower level of inventories in the year 2025.

Let's now turn to our balance sheet. We have a very solid balance sheet, as you can see in our KPIs. We see a seasonal increase in our net debt. That's absolutely normal to EUR 2 billion. That's up EUR 250 million roughly compared with year-end. This increase is driven by working capital buildup and of course, our dividend payment where we paid out, including our share buyback, EUR 136 million to our shareholders. Working capital rose to EUR 1.3 billion and reflects, of course, our higher inventory levels and trade receivables. Growth CapEx was EUR 49 million, and our M&A spend was EUR 24 million.

Our net debt-to-EBITDA ratio remains within a comfortable range, and we continue to maintain strong access to liquidity. So with that, I would like to come slightly to our second quarter results. There, you see a decline in revenues, but it's more or less on last year's level, while our operating EBITDA fell to EUR 253 million. And that reflects just somehow the seasonality and different cost inflation and of course, the seasonality and weak market development compared in the second -- in the first quarter with the second quarter and -- but we feel very confident for our second half year that we will remain with a good performance with a solid margin and that all will be underlined, underbuilt by a strong cost cutting measures and of course, a better strong development in renovating, roofing business, what we've seen in the second quarter.

And with that, I would like to hand over for the executive summary again to Heimo.

Thank you, Dagmar. From what you have heard from Dagmar, dear colleagues, you see that from a perspective of balance sheet, the financials we're very solid and robust, and this will sort of continue to be the case for the second half year as well. I mentioned at the beginning that obviously, the markets show a certain positive trend in certain areas of Europe. This will continue. We feel that we see that also in the summer months. Also from a pricing perspective, we have seen in the second quarter that we are turning the corner here on certain things when you look at the overall pricing in the different product groups compared to last year. So the comparables are now putting in the right direction.

Cost inflation was a little higher than originally expected. That has to do with labor cost increases that have been negotiated with the unions and also with energy. Dagmar has referred to higher energy costs, especially in Eastern Europe. Keep in mind that in certain countries, we cannot hedge, and therefore, we have been also exposed to this. So these are things that obviously were affecting our results in the first half, but they will ease out in the second half. So we are confident when we look at our planning for the rest of the year. that we will considering our local currency, achieve this sort of more or less the EUR 800 million.

So that's something which we head for and we keep our guidance where it is. We work hard on the business, the cost efficiencies. The strategic growth through M&A will continue. We will work on good sort of deals in the pipeline, work on them, and you will see us move on one or other target even this year. So this is, I think, in a nutshell, what it is as such. As I resume and I want to make this very clear, when we look at the beginning of the year, we were certainly like all of us more positive about potential interest rate cuts. We were more positive about underlying market trends when it comes to new residential housing. We had to see that these didn't materialize, especially when you look in North America and in certain parts of Europe.

But -- and that's the strength of our business model and how we manage the business, we will still come close to our EUR 800 million target, considering these different developments from the originally planned ones. So again, I think a strong message from us as a company with respect to our ongoing business. So if you have any questions, we're obviously happy to take them and available for you any time. I hand over to the operator.

[Operator Instructions] And with the first question coming from the line of Markus Remis from ODDO BHF.

Thank you for the presentation. I would like to start with a question related to the EBITDA margin that you gave as an indication upon the Q1 release is 17.5%. And on the same matter, you were back then guiding for growth CapEx, EUR 150 million, maintenance, EUR 140 million. So can you confirm that these numbers are still intact?

Yes. Yes, we can confirm that these numbers are still intact.

Okay. Then I would turn to the topic of cost inflation and maybe to get a better understanding where the deviation compared to your initial expectations when it comes to energy and personnel cost comes from. If you could maybe provide a bit more granularity on the business lines and on the regions. You mentioned Eastern Europe, but if I'm not mistaken, those parts that are unhedged are rather minor compared to those where you are able to buy forward. So more granularity would be appreciated. And especially then on energy, if you could shed some light on the 2026 forward level. So maybe an initial glance on your forward buying, what it means in terms of year-on-year cost development?

On the energy front, you have seen obviously a development of higher energy, especially in electricity also. In Europe. You remember and you know well that we are not always 100% hedged throughout the whole business. So obviously, when you take the unhedged part, then it affects us on this unhedged part, the price increases. You also appreciate that when we talk about our buying forward strategy, obviously, we have bought forward for '25 and '26 already at higher prices. So this is normal at this development.

What we see from a company perspective that the prices are coming down when we now look in the future by '27 or so that here we have substantial decreases again. So I would say that from an energy perspective, the highest price level that the group will see is '25, '26. That's where we have to cope with those. You're right that the unhedged parts that we -- where we are not able to buy forward in Eastern Europe are limited. However, keep in mind, I mean, Bulgaria, Serbia and some other parts in Romania where we cannot do this, they affect also the result. And immediately when it comes in full effect, then it has quite an impact. So couple of million that's always the case then Wienerberger is hit with this. But it's nothing to worry about.

And as I said, we will work it off on the price side as well, but it will take a little longer than expected. So that would be my sort of contribution to your question on the energy front. The labor one, yes, we had these sort of issues meaning labor costs are up. The tariffs and the discussions are obviously not always at the end of the year and then for the next year, starting in January 1, so they are delayed sometimes and they obviously come a little later. So this time, we had some of these in Eastern Europe, where we have substantial rises in salaries for the workforce. But that's normal also in this circumstances. And as I said, these are volatile times where we have to deal with those things. But I think generally speaking, we handle this pretty effectively and pragmatically.

Can you maybe give the direction of the cost inflation that you expect for the second half? So that is 4.5% for H1 would be like the direction...

Well, if you look at the main drivers, personnel and energy costs, we expect it to stay on a high level, and we won't see there a big relief. But of course, we are working against it with cost measurements and other cost savings to cover that as well as, of course, as we expect one or the other gain on the pricing side.

All right. That's already prelude to my last question in terms of cost cutting, can you kind of detail out where you're going to step up the savings measures? Does it also kind of comprise some capacity adjustments now thinking about those markets like Germany where still particular weakness?

Yes. Obviously, I think the major -- as Dagmar and myself have mentioned, the major attention point in Europe is certainly the Germanic part and Germany plays an important role there. But obviously, we review this currently, and there will be some sort of changes there.

The next question comes from the line of Ephrem Ravi from Citigroup.

Can you hear me now?

Yes.

Just a couple of questions. Firstly, on the personnel cost measures that you mentioned, can you give some more color in terms of -- are you looking at increasing volume and spreading that over a wider volume base? Is that how you are planning to reduce your kind of cost impact from personnel costs? Or are there kind of headcount reductions or contract reductions kind of that are planned? And then on the products themselves, from the notes, it looks like kind of pipes have had a fairly strong growth while -- or stable growth while roofs and roofs where most of the delta was in terms of positive and most of the negative like-for-like delta was in facades. Is that sort of a fair characterization for the group as a whole rather than just by geography?

Yes, that's [indiscernible] obviously, but you're absolutely right, all products that are exposed to new residential housing and especially when you talk now about facing in North America, where we have only facing bricks that are exposed to new residential housing, obviously, volume-wise, they are down. And a positive trend in the Netherlands and in the U.K. cannot compensate, for example, the drop of volume in the U.S. because the market as such and the volumes are that high. So this is a fair conclusion that you draw.

Keep in mind also that clay blocks, that's our Continental European business, clay blocks for new residential housing, they actually go with a very high percentage point, meaning about 80% or above of their sales goes into new residential housing. And again, here, we have seen in certain countries lower activity. But as I said also, we see some brighter spots in Eastern Europe where we grow currently. So this is from a perspective of products and geographies, this is linked. So from this new residential housing market perspective, this is our exposure. On the infrastructure perspective, pipes, as you correctly pointed out more resilience. That's what Dagmar and myself mentioned also when it comes to volumes and also pricing.

The same goes for the roof, where we have seen very good price trends also and from a sales perspective, also a very good one because exposed with about 60% of our sales in roof go to renovation. So this is, as I said, from our perspective, how the group has changed over the last years has proven to be the right way forward to make us more resilient in times when housing is still sluggish or as we have currently a certain weakness in the North American market.

Yes, I come back to your first question. Sorry about that. Thank you. That obviously, any measures that we do will include also review of headcounts and also addressing this by measures that we are currently implementing. So you will see some adjustments.

We have the next question coming from the line of Ethan Cunningham from [indiscernible] Investment Research.

So your guidance of around EUR 800 million for the EBITDA implies around EUR 30 million or EUR 40 million uplift in H2 versus H1. What are the key drivers of this uplift? Is it sequential volume recovery? Or is it cost improvement or a mixture of both?

I think you need to see it as a mixture of both, as I addressed earlier, I see some positive developments in some markets that should continue into the second half of the year. The measures that we took in the first half of the year will play out nicely in the second half. And from a cost base, we will have a better cost base in the second half of the year. So this is, I think, the things that we see. As I said, from a pricing perspective, also to have a little bit of a positive trend that we see over the summer going into the second half will help us here.

Okay. And can you update us on the restocking and destocking trends and any of the CO2 sales? And any other accounting items that might affect your recurring cash generation for the full year '25.

I don't see any right now.

No, I don't see any as well.

Okay. And it looks like you couldn't fully offset the cost inflation for the price increases in '24 and '25. When do you expect the cost inflation pressure to ease? And in 2026, how do you see the planned price increases versus the cost inflation?

'26 is too early to tell. We will see, as I said, from an energy perspective, and that was the major point. We referred to that the highest prices we will see this year and next year on the energy front. So we will manage with more efficiencies, better running rates and cost measurements to tackle this issue. But I think from our perspective, we have this well under control.

Okay. And just finally, what full year scope and FX impact should we be expecting at the EBITDA level? And how much will this come from cost cutting?

Well, our FX effect on EBITDA level, what we show in our numbers, that's from translation, not transaction. And of course, it's mainly the weak U.S. dollar. It has been minus EUR 2 million overall in the first half year. It was more or less nothing in the first quarter. So the number is increasing now month by month. And I personally expect a higher single-digit million number for the full year. Well, scope, what we show now is from -- mainly from Terreal, our acquisition in 2024 and the impact from our acquisitions now in 2025 will not be that big as Terreal.

Basically, to answer your question, scope is done in the first half. Yes.

Yes.

The next question comes from the line of Grigor Koppensteiner from Raiffeisen Bank International.

I have only one question left as the other one's have already been clarified. Also about the U.S., the latest macroeconomic data points suggest that the long-awaited interest cuts could now be underway. And my question is, when do you expect to see here a positive impact on your North American business? And what segment could there be benefiting first?

The segment there will be the facing brick segment our brick operations in North America. So this is clearly the answer to your second part of the question. The first one is a little bit more complex. First of all, the interest rate cut must be significant to really move the needle. Why? Because 0.5 percentage point or a couple of sort of minor movements don't help. We have a rather high mortgage interest rates above 7%. It needs to come down below 6% to really move the needle. So this is something which I -- from my experience, I can tell you that.

Secondly, if we have some -- and it looks, as you correctly pointed out, it looks like it that in September, the Fed will move a little bit the interest rates down. But if it's only a small one, as I said, then it would not immediately affect the real estate market, first of all. If it moves down, it will take also some time to get settled. So really major input in '25, I don't see it coming. I think this is then more for '26. I hope I have addressed your question.

[Operator Instructions] There are no more questions at this time. I would now like to turn the conference back over to Therese Jander for any closing remarks.

Thank you very much, and thank you, everyone, for joining us and for all your questions today. We truly appreciate your interest and your engagement with us, and we look forward to stay in close contact as usual. We would also hope to welcome you back to our call next results call in November, November 13 for our quarter 3 results call. And until then, take good care and goodbye from all of us here at Lindberck.

Thank you.

Thank you.