Buzzi Unicem S.p.A. Stock

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Buzzi Half Year 2026 Results Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Mr. Pietro Buzzi, CEO of Buzzi S.p.A. Mr. Buzzi, you have the floor.

Okay. Thank you. Welcome, everyone. Good afternoon. The idea, as usual, is to go over our presentation that was made available for you. And like the operator said, starting later on some Q&A session on the matter that can be more of interest to you. The results that we released this early afternoon, are I would say, not as true as the previous 2 years but still pretty sound, at least in our opinion. We were able to stabilize the turnover basically remain at the same level as last year, even considering some very challenging conditions in some of our geographies.

The cement volumes, if we consider the reported figure are actually 5% above last year. It is true that there have been influenced quite significantly by some scope changes. But still, they are showing favorable trend. We are instead somewhat lower than last year if you look at our ready-mix volumes, about 4% low. And this is also due to the fact that the -- our ready-mix presence, most of our vertical integration is located in the market. So the reason that suffer the most in terms of, let's say, demand softness.

In terms of EBITDA, we are going down about [ 8% ] versus the same period of last year. There is some impact coming from let's say, scope effect and also currency, which we will describe better later. And obviously, a bit disappointing, but somehow associated to the trend of the geographies -- of two geographies, in particular, which performed, let's say, worse than last year that are usually also showing margins above average or stronger profitability in absolute terms in the U.S. and Russia.

Some other geographies actually performed better than last year or at the same level for some times much better than last year. So we are also some more hopeful that in the second part of the year, we can recover at least in part the decline that we -- in the first six months.

Moving to the analysis of our turnover, which you find on Page 2. You can see that in Italy, the performance in terms of sales volume remain somewhat weak. You certainly remember that the first quarter across Europe was characterized by wet and cold weather. So it was not helpful the first three months of the year were not helpful in terms of sales delivery and cement ready-mix deliveries. But also in the second half -- in the second quarter, sorry, so for the full six months, we did not see really nearly in Italy or Germany or Central Europe, clear recoveries or the gap that somehow was accumulated in the first quarter.

Yes, it closed somewhat, but not to the extent that we were budgeting. So -- and this is something that we believe, is likely to continue also over the next six months, although maybe to a somewhat minor extent. But likely to see really the design the difference, let's say, the various turning favorable or turning positive for the full year.

Instead, going back to the Italian situation, we do have a favorable price effect. And of the minor favorable, let's say, scope effect that there is associated with asset purchases in the ready-mix business.

Similar situation in the Central Europe with the volumes suffering some and price effect positive, favorable, not as much in Italy to a lesser extent and also some benefit coming from the scope changes again, associated with asset purchasing in the readiness in the vertical integration of our cement business.

Europe is a bit, I say, the impact -- I mean, it includes, as you know, area that performed a real different way from one another because the Eastern Europe countries within European Union overall, they did well, okay, let's say, according to expectation. I mean Poland, Czech Republic. Poland, yes, declining in terms of volumes, but also -- or mainly due to the fact that our comparison base was extremely high last year. And it's a country where we believe or it's a market where we believe we can actually close the gap going forward in the next six months.

The Republic stable to slightly positive, and instead a significant drop in Russia, which I was mentioning at the beginning that is affecting the overall, contribution turnover of that macro area.

The FX impact was particularly favorable in Russia. So Russia perform definitely worse than last year if you look at volume, prices and profitability. But in part this negative unfavorable performance was, let's say, partly offset by the strength of the ruble in the first six months.

You say they did well, also, I would say, better than expected in terms of volumes. We are slightly above last year with the first quarter was definitely stronger than the second one. But still, we continue to remain at a higher production and delivery level than last year. We suffered some on the pricing side. The regional -- it's time a regional effect mainly, I would say, the difficulties in the price level remains mainly in Texas.

In other parts, in other states, we had some improvements or any way no declines. But on average, we are showing a slight favorable variance. And in addition to that, the weakness of the dollar was affecting the turnover by about EUR 50 million, so a relatively large amount.

Going to Brazil, everything okay, so far so good. I think volumes could have been even better. Because in the Southeast, and particularly, the rainy season was more, let's say, rainy than usual. And so again, the prospects for the second half are probably better in terms of volume for the Southeast region than what we have experienced, let's say, so far.

And the pricing level was definitely improving, quite significantly driven by higher capacity utilization, higher demand, but also some rising costs, but certainly, the spread was favorable. And we had also the currency impact favorable, which is normally or normally, I mean, not always so particularly for, let's call it, a currency like the real that -- can have a lot of volatility. But in this case, the volatility was giving a favorable sign, so improving further our turnover.

The UAE is -- represents, let's say, the only significant scope change for the first half. You may remember that last year, we had two months, basically May and June. So first three number, volume, negative 1; price, positive 7; and FX, negative 5% referred to the comparison between this last May and June, let's say, months.

Meanwhile, the EUR 53 million is the first 4 months of coming over. Of course, the UAE is the is the most affected directly by the geopolitical retentions. So definitely suffering in terms of volume. But I think overall, the management of the new acquired company took some was able to take, let's say, some interesting measure to offset any way, these advantages coming from the situation and making sure that our results, we perform in the right direction.

Of course, it's you may say that it's relatively easy to do better when you start from a low level. But I think that we have to give merit really to the strategy that was applied and to the results that have been achieved. It's not so evident, I would say. So I think we can be fairly happy with the results, particularly in the current situation.

Moving to the following page, we have the EBITDA bridge. So the difference between the EUR 526 million of the first half of last year to the EUR 483 million. Volume impact overall somewhat negative, because as we mentioned at the beginning. Price impact overall favorable. So most of the country were able to achieve an improving the pricing level. Unfortunately, some important ones did not like we said.

Variable cost, in part of a, this is associated to the lower, let's say, somewhat lower volumes, lower production level. But actually, we had some significant benefit, for example, in Italy for the cost of power. We will maybe comment briefly later on the so-called the release factor, which was definitely a big plus for the Italian profitability. And also fuel so far in the first six months, even if there is some cost pressure on the fossil fuel remain more or less at the level of last year.

On the fixed cost instead, we had an unfavorable variance. This is mostly related to staff cost, maintenance also in part to the scope changes, clearly, which are adding some of the -- some stuff to the previous setup. And these were more difficult to keep under control. Just to give you an example, in the U.S., the tariff impact on the maintenance cost on the spare parts, the better that we buy and that are subject to tariff itself themself they accounted for about EUR 2 million, which is not little, if you consider the overall favorable variance.

On the other unfavorable changes, we had to consider mainly the inventory adjustment, which is affecting -- has been affecting also the cash generated from operation, the working capital impact. This is -- we basically absorbed during the first half more clinkers of our clinker inventory went down during the first half quite significantly and this translated into this kind of, let's call it, unfavorable impact of about EUR 15 million, out of which the inventory is well.

Clearly, this is also something that during the year over the next six months can the opposite way if we have a, let's say, different -- not necessarily a different management of our linker inventory.

CO2 so far has not represented any cost similar to last year. The reason is associated with the way we account for CO2 rights. So we do not consider them at a cost until we go -- we enter into the so-called deficit. So since the free allowances are usually able to cover in full the first half of our production and also somewhat more going on the CSP cost will appear in the second half probably in the last quarter or between the third and the last quarter.

And we keep our, say, forecast of about EUR 35 million to EUR 40 million of CO2 cost for the full year, depending, of course, on the production of how the different countries will perform, et cetera. The foreign exchange impact on the EBITDA has been EUR 9 million. That's a net between the different countries again. So negative for particularly for the dollar, positive for the real, positive for the ruble. And -- yes, I mean a net result, a negative result of EUR 9 million. And then we have the EUR 9 million of scope coming from the UAE, we were commenting before in terms of, relatively speaking, a good performance for this newly acquired entity.

If we move to the next page, we have an overview of our, let's call it, cash flow statement. And again, what I was mentioning before, cash generated from operation is, I would say, not as good as one might expect or somewhat lower, you can see also on the right comparing to the previous year. It's true that our margins went down, but net cash flow from operations suffer, as I said, mainly from the working capital adjustment. This is where we absorb more liquidity cash flow than we did versus last year. So inventory adjustment, as I said, also the trade receivable, the trade payables. So the combination of these two factors is what mainly drove drop down the net cash from operations.

CapEx are slightly higher than last year, this was expected. We are in line or maybe even somewhat below our budget for the full year. But we are -- I mean nothing unexpected there. Equity investment, there are small, let's say, position of entity either capital increases in joint ventures or a subsidiary, but these are all, let's say, related clearly to the industrial footprint of the company.

Dividend payments remain even with last year, also, let's say, due to the fact that the dividend per share did not change. Dividends received they are somewhat greater than last year, but this is mainly a temporary disalignment regarding the -- from the Mexican joint venture. So over the year, they should more or less match what we received in the previous year.

Share buyback was an important item during the period because it was a use of EUR 180 million in the first six months, which was then became EUR 200 million by the July '17, if I recall correctly, when the -- we officially closed this tranche, which was opened in late February. We expect it to run potentially until the end of August, but it was closed somewhat earlier. So right in the 6 months, the interim report. And other item of various origin, different origin, EUR 462 million, which brought the net cash position, bringing the net debt position to EUR 896 million at the end of June, which is obviously very sound that give us a lot of flexibility as usual.

Moving to the focusing a little bit more on the geographical area on the main markets. The U.S., as I said at the beginning, were also due to the size the business there, we suffer the most in lower EBITDA, lower -- and coupled with lower turnover. So the increase in volumes was not sufficient to keep the turnover at the same level, mainly because of the currency impact. You see that on a like-for-like basis, we are minus 0.6. So even, but the weakness of the dollar then impacted quite significantly, about EUR 50 million.

And on the EBITDA like-for-like, minus -- 15% with a negative foreign exchange impact of about EUR 13 million. The issue there was the, certainly, the negative, price level or the unfavorable price level, which we faced during the six months.

And second, production costs that remain not very different from the previous year in terms of variable cost, also unit fixed cost. But yes, increasing logistic cost to transfer, let's say, cement across the distribution network. And other fixed cost the same as we mentioned before, not -- partly related to production, partly related to general expenses like labor cost or property taxes, which went up quite significantly.

And we don't have here. We are not sure. We usually don't show a split between the profitability of the cement business versus the profitability of the ready-mix business in the U.S. But thirdly, we can say that profitability of the decline in the profitability of the ready-mix business was much more significant than the decline of the profitability investment business.

The ready-mix business is located mainly in Texas. Texas is the region that suffered the most during the first six months. The revenue business typically has greater volatility versus the result of the cement business. And this was clear certainly in the first half, the kind of -- this kind of decline which we faced particularly in that business.

The EBITDA margin went down about 4.5%. This is not a good result, but again, is the outcome coming from the variables and the trend that I just mentioned on the, let's call it, revenue and prices and cost.

Jump a little bit forward looking down the road in the next six months. We are, I would say, somewhat more confident that we can recover not in full versus last year because this is very unlikely. But to a large extent, the unfavorable variance of the first six months, particularly in terms of EBITDA margin.

So -- yes, we will remain below because the market situation is such that it does not allow for a full recovery, plus we have the foreign exchange impact. But we do believe that the second half will be definitely less penalizing than the previous -- than the first one.

On the Italian situation, which almost next, basically more favorable. We are same level actually a somewhat lower level in terms of turnover, but we improve EBITDA and, of course, also EBITDA margin. What is the reason? The reason is mainly a cost trend, which was particularly favorable if you look at the power cost. So our cost enjoy quite a significant decline coming from the energy release program.

The synergy release programs had an impact both on the 2025 and 2026. So we are actually including in this 26%, a nonrecurring item of about EUR 7.5 million, if I recall correctly, which is the energy release accrual for 2025. But we have another Machinery is for this year 2026...

Around 11%.

For the full year?

For the full year, yes.

For the full year, we expect another EUR 11 million, EUR 12 million which is already in part included in the first six months, so more or less half of it of advantage on the power cost. So if you consider basically these benefits on the power cost and you cleared from the first six months you come to a level which is very similar to last year. So not very different. But however, is certainly a good result, which we can confirm also in the in the following months. And the price level was also somewhat better. So on one side, yes, lower volumes but better pricing and lower cost, in particular power cost, low margin expansion, certainly confirm and with the possibility to confirm it also in the coming months.

In Central Europe, a little bit disappointing also here. Main reason is the weak demand, with demand conditions with declines both in cement and ready mix in some region, also quite significantly, like the Netherlands ready-mix volumes went down by approximately 8%. So we are in a situation where particularly in Germany, I would say, which is the largest contributor to this region.

The expectation for recovering demand has not been met yet at least. And the pricing trend was, yes, somewhat favorable, but only slightly favorable, so unable really to offset the demand decline. And again, on the ready-mix results, which are normally similar to what we said to the U.S. and more volatile and more affected when the volumes are going down. We have been suffering in Germany, but also in the Netherlands. And that's why the cement margins came somewhat under pressure, and they were impacted by the cost inflation in the region without the possibility really to improve pricing or is likely.

And also so you recall that in Germany, we are still -- we were already running low capacity utilization level. And this trend was not counter affected, let's say, in the first six months. So to regain a certain margin level, we definitely need to have some improvements in the capacity utilization because pricing can be helpful, but capacity utilization is certainly even -- it's normally even more helpful. That's why we are currently in a situation which is not satisfactory.

On the Europe, again, a mix with Poland below last year in terms of volumes, not with a better past comparison base. So looking for equalizing last year in the second half, take good expansion of the construction activity and of our volume stable to slightly improving, let's say, results. And again, Russia, which is part of the region. But obviously, it's a kind of different and several features suffered from quite a significant volume decline, about 9% and also pricing pressure.

The ruble helped somewhat, but not enough to really offset the profitability decline that we experienced in Russia. So I would say no big worries. Actually, good feelings from Poland and Czech Republic also for the second half. Russia, probably not changing much in the second half, but could be somewhat better as the second six months versus the first six.

Going to Brazil, which is Page 10. Very favorable conditions overall, even in a market which has not been growing very significantly because we are talking about volumes up between 3% and 4%. There's actually a regional difference between the Northeast and the Southeast. I mentioned already before the more difficulties in the Southeast due to weather and also to a different -- an actual a different trend of the demand. So high capacity utilization anyway, particularly in the Northeast but also the Southeast is starting to get closer and closer to full capacity organization, which is also giving possibilities or more possibility to improve prices.

Costs went up, mainly logistics associated with -- cost associated will be minimum transportation there, I will call it, tables. So there are some transportation cost in Brazil are somehow regulated and clearly also with the changes in the fuel cost and the daily cost. Brazil is almost basically not using any kind of logistics means difference from trucks. So they don't have distribution by river or by train. So this cost has an immediate impact on the back logistics, which is basically the only one.

And following that, clearly, the price -- the deliver price went up, but also the price at the plant went up, and we were able to let's say, bring the margins to a nice improvement because when you compare with last year or anyway, 2 years ago, you had kind of, let's say, 4%, 5% improvements in the margins, which is quite nice.

Also EBITDA. In this case, the help from the currency was about EUR 2.5 million, but still almost 50% increase in like-for-like condition. So prospects for this year remain favorable. Yes, Brazil is going through the Presidential election, which is certainly favorable overall, let's say, at least until the Presidential election. After the election, we don't know, of course, it depends partly from the outcome. But anyway any potential changing trend will not happen right away. So we remain pretty confident that the country and also the company is considering enter into positive phase of the cycle, which can last certainly longer than 1 year.

The rates are okay, relatively small addition to the group. Not much to add versus what I was just commenting before. The domestic construction activity continues to be quite strong. Clearly, there is a decline or a slowdown in the residential or touristic projects, but investment in infrastructure and energy projects continue to be pretty strong and will remain so also in the coming years, also as a consequence of the attention between U.S. and even -- the price growth was an outcome, let's say, of two variables. One is actually the price of cement itself. But another one -- important one is the mix. So the fact that the company has been shifting its focus on -- its commercial focus more on cement, less on export, less on clinker. So more domestic cement, less on export and less on clinker. And this translating into a mix which is giving us a more favorable average price level.

In addition to that, we also the cement price went up some. So here, you see the figures -- we were starting from a low level last year, but the improvement is quite significant. And the second half unless really the overall situation worsened significantly can continue to perform in a similar way.

Mexico, our JV extremely good, I would say, extremely favorable results for the first six months. Good performance in terms of cement volumes. The pricing effect is also somewhat favorable. We are running at a high capacity utilization. Production costs, yes, are increasing, but they have been offset or mostly offset by the price effect. And that's why you see that the margins, the EBITDA margin continues to be at the level -- basically at the level of the previous 2 years.

And EBITDA overall is reaching EUR 265 million, which is an extremely high value. Here, we are talking about 100%, let's say, of the company. So obviously, our share results reflects basically 1/3 of that. But still in terms of the effort and involvement, we are -- we consider ourselves at 50%, which is actually the case together with our Spanish partners. So there are some uncertainties.

Let's say, going forward, the macroeconomic situation is acceptable, but it's not really too strong. And the relationship with the U.S. and the signing or not signing or signing a condition of the U.S. MCA treaty is a critical path. But let's say, for the development of the country and also the cement industry going forward. So if satisfactory these will be signed soon. I think the expectation and the forecast will continue to be favorable, not as much if this is not -- this goal is not -- will not be reached in a short time. But so far, I would say, very positive performance and very good numbers, nothing really be able to do something better.

On the outlook, well, I tried already to cover it when I was speaking about the different geographies. So what can we add. We don't see big changes in the trends through year-end versus what we experienced, we faced in first half, we see trends that should be pretty much consistent with the H1 performance. Probably, in general, slightly better than the worst, I mentioned already, a country where we have to do better. But the overall underlying trend should be pretty similar.

U.S., we spend I think the first half was affected by some factors and reasons and customer situation, which were particularly damaging in a sense. And things are looking somewhat better for the second half. Italy, the energy incentive, the power cost incentives are extremely significant, should continue. And residential activity, not rate infrastructure slowing down. But overall, I would say, a good balance between volume, price and cost.

Central Europe, this is probably the most disappointing situation in terms of demand because we're still waiting for the support of the federal infrastructure plan in Germany. Will it become visible? Will not, when it's a bit of a question mark, but certainly, it's very much needed to improve capacity utilization and through that lower production cost in the country.

Eastern Europe, no big issues, fortunately, good support from government initiatives in Czech Republic and Poland. Russia programmatic -- problematic situation, which I'm not sure whether it will adjust. And Brazil we said, hopefully, there will be also some efforts or some decision by the Central Bank to lower interest rates, which is way it is the direction, but the absolute level is still very high, and it is affecting the construction activity. But there is a low unemployment overall in the country. Demand for residential is supported by the government. The government is also involved into some infrastructure projects, and we are seeing good development for cement demand going forward, as we said.

UAE, just -- they are contributing positive results in line with maybe even a more in line or -- yes, more than what we were expecting initially, at least, and particularly consisting the critical situation in the Gulf and the -- how much this has affected the traveling, the tourism, et cetera, in the region.

Mexico, yes, very strong performance first half. USMCA development, we'll see can change somewhat the picture, but for the moment, the trends are quite favorable.

So here, we are in a situation which is not excluded in the previous two years, but still quite favorable in our opinion. And the weakness of the U.S. dollar, yes, is an important factor, but this may also somehow reduce versus the original forecast. And overall, this takes us to a level of profitability which we project in the range of EUR 1.1 billion, EUR 1.2 billion. If we ended up at the upper level of the range, it will be, yes, a decline versus last year. But in my opinion, not so significant or not so negative, considering the overall situation that we have been facing and we are facing during 2026. So we are totally shipping or trying to do as much as possible to stay in the -- not only in the interval, possibly at the upper range of the interval -- partly will be depend on us, partly not as usual. But again, not a year with results as excellent or outstanding the last two, but still, in our opinion, they found very favorable and giving us, again, a good cash flow generation, good flexibility to move forward -- look at the cement market and our geographies for CapEx road map expansion. I mean, we have picture from us that as to this result, we can manage and achieve very well.

In the following pages, there are more details which maybe we can use the Q&A session if you need it. So we have an over by country, EBITDA by country. The full income statement, the cash flow statement, which we commented pretty much already and the detail of the net cash position between short term and long term.

It took almost one hour, so I think it's enough to let -- to give, let's say, the floor to the listeners and to the ones that are willing to ask some questions. So please, let's go to the Q&A session. Thank you.

First question is from Ben Rada Martin, Goldman Sachs.

I've had three questions, please. My first is on price costs into the second half give us valuable to hear some of the moving parts, I guess, in the first quarter or the first half, gram-positive pricing in some of those savings on variable costs. I guess as we look into the second half more pressure from energy inflation. Do you still expect to offset some of these costs? Or could we see incrementally a little bit more pressure in terms of price cost than the first half? .

The second question would just be on the because you've seen more details in the last few weeks on potential changes there. Does that change your decarbonization business cases at all in Europe? Are there any areas that you think are more interesting now in some of those changes around funding and conditional allowances in particular?

And then my final question was just around M&A. I know we've seen some time at the last results speaking about some of the opportunities that it'd be worth doing from you, how I guess you see the opportunities at the moment in any regions in particular where you think there would be a good fit for your portfolio?

Can you repeat the third question because we were not fully able to understand it.

Sorry. Third question was just around M&A. I know we spent some time at the last results, speaking about the optionality within M&A in each regions. Is this something that you're still looking at closely. Are there any regions in focus?

Okay, good. Okay. Well, on the power cost, well, I think that in Europe, there is certainly a trend, they need pressure coming from the -- well, particularly energy-intensive businesses. But in general, to somehow make energy, particularly power, let's say, more available in somehow at a lower cost versus what been so far and also when you compare towards other geographies. Certainly, the competitiveness of the European industry is related to a large extent to the cost of power.

So my impression is that what -- this is could see benefits or some subsidies in a sense that were introduced in the first half will continue, [indiscernible] which we are following was not yet say fully achieved in the sense that we cannot yet recognize from an accounting standpoint, the benefit because we are working on it. But there is a possibility or already, I would say, in the second half of this year to enter into the program and then to receive this kind of benefits.

So for Europe, I think, fairly confident that we will see a new level at the energy cost in the biggest market, like Italy and Germany that should stay for some time.

On the fuel, it's different because the fuel is clearly more an international market. This is more affected by the fossil fuel trends. So there the volatility, there are increases. And the only way we have -- or the main way we have to offset is to introduce as much as possible waste-derived fuel, which is also part of the decarbonization road map. So this is, again, significant management effort, which has been, I would say, successfully certainly so far in almost any countries where we operate our substitution rate has gone up. And we need to continue to go that way, let's say, as much as possible according to our targets that are valid both for decarbonization, but also for cost management. It's one of the few items were a couple, let's say, road map target with lower cost.

On the I think it's a little early to really discuss in detail what has been what has been proposed by the way because it's still a proposal. So not necessarily, it will remain the same. Yes, in Canada is pretty much what we expected. There are give some more time in a sense. So we if you wish, postponed -- certain postponement moving forward, decreasing somewhat the reduction factor of the allowances. So that would be -- which is good, being a little more time to achieve the target. And then, yes, they are also introducing some new or different funding and the possibility to some extent, to use -- to create, let's say, credits outside of Europe and being able to use it in Europe, and these are all, I would say, decision which we agree with, and they go into the right direction.

The full details are not clear. They have to be well studied, well identified. So the actual availability and possibilities to be -- has to be -- they have to be clear very well. But again, it's a small step but probably more step, let's say, in the right direction. I think it will not be the last one. But for the time being. That's the available step and say, the new advantages that we can. [indiscernible] We have seen movements, particularly in the U.S. at multiples that are very, very high, difficult, let's say, to justify.

So at the end when you see this kind of multiple, you also compare them, at least, we compare them with the possibility to improve significant your industrial footprint through either vertical integration or also in the equipment modernization of the plants because it's true that your M&A target can increase your size from one day to another. But also by keeping, let's say, your industrial footprint in good shape and particularly very cost efficient or as cost efficient as possible is even more helpful in times when maybe the cycle terms that or I can give you, let's say, a lot of possibility in terms of managing your overall production network and logistic cost, for example.

So there are a number of interesting things to do besides the M&A. There are other countries where the multiples are not as crazy where maybe there we can take a closer look at what comes on the market. So I would say, rational approach certainly more interest into reinforcing the existing either through internal growth. And yes, always compare, let's say, internal growth, internal expansion with external because country, as I said, this comparison, in my opinion, is somewhat shifting.

Next question is from Ephrem Ravi, Citi Group.

Sir, two questions, specifically on Brazil, there was a very strong performance. The acquisition of the rest of the 50% was -- it looks like it was very well timed. Congratulations for that. But do you have plans on growing significantly in Brazil, especially given that there are some of your competitors who are looking to sell assets? Is there given the outlook for the market and your performance so far? Is that one place where you are, in particular, kind of looking to grow?

And secondly, in terms of the U.S. outlook. You kind of mentioned the weakness in residential and nonresidential demand and offset by data center infrastructure investments, North Texas is supposed to be one of those data center hubs is -- are you looking to further grow volumes in the data center aspect? And can you give a sense as to what percentage of your sales go into that particular subsegment of the market there?

Okay. Yes, Brazil, we are already there. I think in some years, like you said, moving from a JV to a fully owned company timing, yes, I don't know if it was good. But of course, the external conditions, we always play a significant role. The advantage now for the country is the recovery in volumes. The higher capacity utilization and also the fact that they were starting from a relatively low level, both in volume and prices. But I'm -- yes, I think the industry structure is going and will go under some changes, also significant, potentially significant.

So -- yes, we are interested in following this kind of development. And -- yes, to find possibility to grow our foot footprint there. There is certainly one of the countries where we think we have, yes, the possibility because sometimes you would like to do something, but you cannot because there are no options on the table. In this case, there are probably on the table. So it's up to us, let's say, to -- yes, somehow find the right option or the right solution. But yes, there is certainly an interest to do that.

There are data centers are all over. We have seen, let's say, projects across the country many different states different market is -- yes, Texas is certainly due to the size of the economy, in the population, the side of the town of destination for this kind of projects. It's not that we can always choose whether because like on any construction project, it depends on who is building the relationship with customers, with the specific customer. Is there a bidding process? How do they select the cement or ready-mix supply? But yes, I mean, we are well there. We have a large significant, let's say, market share in the state. So we can certainly participate.

If we look at the previous -- I mean in the first six months, actually almost 10% of volumes in the country went into this kind of project, which is a lot. And -- so it was probably one of the main reasons of the market grow, not really even forecasted correctly by the American Cement Association. Other changes or American Cement Association changed a bit. It's forecast. They came out just lately with their summer forecast, which is showing an improvement in volume versus the previous forecast and it's certainly driven to a large extent by this kind of hubs or, let's say, yes, big tent. So we try. We'll try to lower debt supplying them. Yes.

Next question is from Yassine Touahri, On Field Investment Research.

I have a few on the U.S. So on U.S. pricing, are you planning any increases later this summer or in the second half? And with GCC bringing around 1 million tonnes of new capacity, would you prioritize maintaining pricing even if it means giving back a bit of a market share? And have you already seen more competition from GCC in West Texas, I mean, San Antonio and Data Fort Worth?

And then regarding the Section 301 tariffs, what was your view on the impact of the 12.5% tariff? Was it lower than what the industry was hoping for? And what would be your view then on the likely outcome of an antidumping investigation on Vietnam imports? What do you think the timing could be?

And maybe on U.S. volumes, how are your volumes in July? Has it improved in the second -- versus the second quarter given the Texas weather disruptions are behind us? Maybe if I can ask the last one on capital expenditure. If the Texas plant upgrade goes ahead, is around EUR 500 million CapEx for the year, still a reasonable assumption? Or could it increase to maybe EUR 700 million if you have to go through with the CapEx on the take subgrade?

Okay. There are price increases in U.S. Again, particularly in the Midwest area, there is they attempt or more than an attempt to go up. So it's quite scattered, let's say, the pricing situation is not -- there are definitely area like -- like South Texas really with the imports in Houston that continues to actually somewhat increase or putting pressure on the prices. We have also in as -- it's not a new player, but in a sense, a new player because when quickly took over, let's say, the middle of plant. It's another potential point of self-supply versus maybe buying from other competitors. So which again, is somehow translating into some conflict, let's say, between producer. But yes, I think by year-end, probably if we look at the average price for the U.S. we can move from a slightly negative sign to slightly positive. But it will be quite differentiated between states and regions. .

As you see, yes, of course. It's a new -- not really a new player because in part, they were anyway bringing cement from Mexico to prepare for the commissioning of the new line. I think most of the competition in this case is an cement, not so much on the gray cement, which is kind of an issue but a profitable one and -- but also very volatile in terms of demand because it's strictly related to the number of active, let's say, oil wells. And yes, there we need to defend ourselves. I think we can because our let's call it, quality and service is pretty good, but it will be certainly more challenging.

On the -- the following question was...

On the Section 301, tariffs?

Yes, exactly. Yes, I'll let -- can intervene because it's more knowledge than me on this subject.

As we've been discussing throughout the 6 months, we haven't really planned around that. We were just waiting for the outcome alone came end of July and substantially nothing has really changed. For most countries, the tariff increase was just 2.5% [indiscernible] And when you convert it to like dollar per ton, it's basically nothing, so not impactful. So it's not going to help us, but we weren't really forecasting or around that...

What was somehow unexpected was additional tariff on the Canada the last one.

Yet the Canadian tariff, the 60% on is going to be somehow replaced by action...

Exactly. But of course, if a significant increase on Canadian tariffs can have an impact on the Northeast [indiscernible] favorable, if you wish, for the domestic producer. But -- is it I mean to be seen, if it actually will remain like this because the trading between Northeast in the -- great lakes area has always been pretty significant as a kind of a necessity for the country.

July volumes, U.S. said slightly up versus last year. So I would say, okay. And there's plans. Well, we have approved the first phase, which is the execution implementation is not so quick. I think we are biting about EUR 70 million this year coming from $30 million, let's say, coming from the phase, which is the new grinding capacity that you finish grinding, let's say department meal together with a number of other related jobs which I cannot -- well, it's not worth mention in describing in detail that they are in a specialty for not only the new grinding mill, but to prepare the plant for the potential, let's say, or likely future installation of the line.

We need to do a lot of changes in the, call it, the landscape or the structure of the building, the location of the building, the electrical substation. I mean a number of items that are coming together. But -- so we are starting but the impact on this year will be relatively minor. So I think if we end up at EUR 550 million, EUR 560 million, all -- I mean, for the entire group, I think this is the likely number.

Next question is from Alessandro Tortora, Mediobanca.

[indiscernible] I have a follow question, okay. The first one is just a follow-up on what you said before -- so you said this year, maybe we land at, let's say -- 50 or something in terms of CapEx. Now -- if we take into account that we have the ABL phase of this CapEx plan in the U.S. in the coming years, which kind of level of CapEx do you see maybe still, let's say, close to this, let's say, EUR 0.5 billion level. So just to understand the trend going forward because this is just, let's say, the start of the from this CapEx plan in the U.S.?

If we move on with the new line, but I think it will take another years, let's say, before really designing. We need to finish the finish meal, we need to finish the okay, terminal, let's say, embayment, which has to do with the new line, but not necessarily, but anyway, it's undergoing. And when we are -- and we will, I think, -- start also inside the San Antonio plant, the railway terminal. So finish and terminal -- plus the new terminal in the import terminal, which is not store can be necessarily for cemented also for other materials in -- Once we have this, let's call it, new taxes set up running and also looking at the trend of the demand expectations, et cetera, we can decide on the new line. So I think for the next 2 years, I think we will be in that range can go up 1 year to [ 600 ]? Yes, it can, but probably not beyond that level. And if we really start then the second -- the new line, it will become more significant.

Then the second question is on, let's say, the situation in Russia. Clearly, I know that you don't have the cell disclosure about the underlying performance. But considering the huge drop into the EBITDA we saw in the first half. Can you give us a sense of what is happening there? Is it cost? Is it, let's say, this decline in prices now you mentioned the press release. So just a because it gets a -- let's say, held up pretty well, decent in the past years and now we are disclosing the domestics?

It's true. We came altogether, I think was a general consequence of the -- general impact from the long period of war, where at the beginning, there were some, let's call it, excitement and more production mode and now less and less than you had the interest rates rising to 15%, 16%. And there is also certainly some competitive situation, which is making things worse. There was a change of ownership in one of our competitors, not too far in sensor in terms of Russian geography, but let's say, somehow competing on the civil market in Russia. As you know I mean as opposed to Brazil, you all cement by train, so you'll go very far. So -- and this new ownership is clearly targeting increasing market share, which we are not willing to give up and is effecting the prices. So the volume trend is something general more and more related to the macroeconomic environment. The pricing trend is kind of specific could have been better in a normal situation, which is not right now due to competitive price pressure.

Understood. Then, let's say, the third question is on -- you mentioned for capital allocation, you discussed belief, the M&A opportunities. But recently, you canceled that your treasury shares, let's say, a good buyback. Is it something that -- this kind of measure, is it something that we should consider as a one-off? Or can become a sort of a regular have capital allocation to buying back and then continue?

I think the two -- I mean, we decided to cancel because we did not see, let's say, in the foreseeable future clear use of the shares. We thought that it would be more meaningful. We make more sense to go with the cancellation. However, doesn't mean that we are not open, let's say, to a transition or a M&A opportunity that could also involve our equity in a sense that more or something really compelling comes about, and there is a sense -- it makes sense, the financial and strategic sense to use the shares, we could always do it. I mean simply instead of using shares that are already in your pocket, you issue new ones.

But to keep those shares in portfolio for probably a long time. It didn't appear to us like we thought it was preferable And as I said, remain, however, open to interesting combination if they come about.

Will this happen again? I don't know, it depends pretty much on the, I would say, on the CapEx plans, certainly a more tangible and more significant for the reason that we just mentioned, decarbonization U.S. modernization, et cetera. So probably and also results less good. So I mean, still a very strong financial position, results but maybe not as good yes, not as good as the previous 2 years. So we don't have to rush. I mean, we will check. I think that if we go -- if we open a new buyback program, then yes, probably we are more likely to cancel the share than the opposite, yes.

Okay. Okay. And the last question is on Germany. Considering the let's say, a country not performing, let's say, can we say your expectation. Do you see -- do you see at least do you have any evidence from the let's say, commercial your sales for that we may have some positive impact in the coming quarters. So even, let's say, in Q1 next year from these long-waited inflow program. And on the pricing side, do you see the possibility now mentioned before U.S., but do you see the possibility to increase a little bit pricing this year or considering the current demand level, maybe we should think about you have to try to raise again from a bit?

Yes, the pricing in okay. In U.S., it's mostly related to the market situation. And again, the regional where volumes were more affected or you have wider range of supply like area like used on you need some, let's say, stronger recovery in the demand, I think, to be able to go up. But we're not -- I mean, we're not entering, let's say, a price war or something similar was simply kind of unable to apply certain increases.

In Germany, it's a little different. But Germany is opposed to Italy. Right now, it's a little more difficulty in price increases also due to the low capacity utilization, which is true also for -- it but also to the highly fragmented industry structure, which in many regions. I mean, it's clearly or can clearly damage the price level. That's also the vertical integration, let's say, of the producer is not as significant as we have in Italy. You haven't, again, a number of customers in remix that can correctly. I mean, can play a game on prices by addressing or asking, let's say, offers from different producers, which is the work to do. And again, is absolutely correct. But in a situation where the capacity utilization is underutilized sometimes foreseeing it say, or not forcing, but inviting, let's say, producers to try to sell more by offering discounts, et cetera.

So we hope -- yes, we do hope and we are pretty confident that what you were mentioning. So the greater demand coming from the same infrastructure plan should -- shall change, let's say, the picture a bit. When? We don't know. There are the ceilings, the sensation is that, yes, something is already moving that in the right direction. It's certainly needed because the economy -- the strength of the economy is not very high. You can see also in terms of the industrial footprint suffering, et cetera. So without some help from the development of projects, it's difficult to imagine a significant recovery of the volumes, which is so very much needed to stabilize the price and maybe also being able to increase them a bit.

Next question is from Julian Radlinger, UBS.

So two quick ones, a lot of them have already been asked. So the first one is, so looking at the guidance range, I think a lot of the moving parts here are quite clear. You've been relatively open about all the variables. But could you just specify what are the assumptions, especially the big ones like price volume, that kind of thing to get you to the top or the bottom end of that EBITDA range exactly? What are the big differences?

Mainly, I think, it will be mainly the volumes. On the pricing, what we have at in the U.S., maybe, as I said, there could be a second half or slightly more favorable for the -- if not a widespread, let's say, increase, yes, some improvements in the area. But for the rest, it will be volumes. So a trend in volumes, particularly in Europe, somewhat, let's say, better than what we -- than the first half, which was I would say, overall.

And we assume a cost trend, which is like -- and for some area for power and also fuel, still relatively favorable. So kind of no significant disadvantage on the variable cost. So if we can go up with the volumes immediately, particularly in the area where the fixed costs are represent a significant portion, let's say, of our production cost. And clearly, there are differences between, I don't know, Brazil versus U.S. or Germany, where the weight of cost is much greater. There to really achieve, let's say, your target, you need to possibly more. This is what will make the difference together with the pricing level, which will remain anyway favorable because it was already, I mean, overall, it was already favorable in the first half, and can be slightly more favorable in the second half in countries like the U.S. where we had a negative variance.

Yes. Okay. Perfect. And then second question, can I ask about your hedges. You've spoken about it before, I think. But what's your hedging level for H2? And how does that compare to H1? I think I recall in the original guidance, one of the reasons for your assumption about an EBITDA decline was that in the second half of the year, you're a little bit less hedged than in the first half of the year. So what you're having level at -- your hedging level for H2? And also, have you bought forward any power for 2027?

Yes, yes. It's kind of rolling. So we are -- on average, I think we are around 50% -- 50% to 60%, maybe on fuel a little bit more on electrical power little bit less. There are some are some plants where you actually cannot because there are some plants, particularly in the U.S., where the energy supply is regulated and you take -- I mean, you cannot -- you cannot buy from someone else and then you take the price that they're setting. So there's really basically no hedging possibility. But in general, I think we keep kind of rolling. Sometimes, there could be months or quarters where the hedging will increase because we see maybe the pricing be more attractive, particularly on the power cost. But yes, you can consider physically, yes.

Is that then -- so based on what you're saying, I would think that you are a bit hedged for 2027 already at this point, but it will probably be at higher levels now. And -- Yes. Okay. Perfect.

Correct.

Next question is from Allison Sun, Bank of America.

Just one question from my side. So I know you guys are pushing hard for your U.S. plants convert to natural gas for Net Zero Go. I wonder how the progress there? And are you expecting to benefit from the reason, I mean, the natural price gas price coming down in the second half, do you expect any like margin improvement on this front?

No, we don't have the thing that forecast really any margin improvement coming from that. The program is absolutely going on. We will have, if not all, 95%, let's say, of the plants being able to use switch basically from 1 day to another from either petcoke or call to gas. So this is something, yes, which has been -- the main driver originally has been the decarbonization, but it could also become something interesting from an economic standpoint. Already some clients like me in Texas, we mostly use already gas because it's more advantageous. In others, it's still not yet, let's say, more advantageous. But with the rise of the oil and depositive fuels might well become. So -- but to answer your question, there is no specific bonus, let's say, included in the forecast.

Next question is from Cedar Ekblom, Morgan Stanley.

I've just got a question on cash generation. It was weak in the half. You have flagged the increase in CapEx, which I think is understandable. However, that doesn't talk to what is quite a meaningful decline, EUR 100 billion year-over-year in the operating cash flow line. Could you give us a little bit more color on what's going on there? Is this a working capital build and how to think about cash generation in the second half?

Yes, it is mainly working capital. I mean on the -- on the changes in working capital, last year, we absorbed basically plus EUR 100 million, which last year was much less because we had EUR 50 million approximately. So -- and this is coming from the trade receivables and trade payables, although. If we look at the, let's say, days outstanding, it's not that we had been cashing, let's say, money in a worse way. The terms of the receivables have not changed.

In part, it's seasonal. But it's true that also last year was seasonal and same, let's call it, period of the year. On the trade payables, there were some specific reasons. For example, in the -- we had some all -- all the payments due to suppliers, which were you say, over overview, and we wanted to clear. So they are certainly -- this made quite a different than is a one-off in a sense that is not recurring. But -- yes, I would give the -- the main reason is really the working capital changes. So inventory trade receivable and trade payable. .

Okay. And why did you have such a shift in your payment terms like -- why were you paying people later and now paying the like what's going on there?

No, this came with the acquisition. I mean, it was a situation included in the books of the company before us.

Okay. Understood. And in cash in the second half, do we assume that your receivables and payables days stay the same as they were at the end of the first half? Or do we get a nice working capital inflow? Or how do we think about that?

No, I think we should reverse, let's say, trend. So this we don't see a reason why we should not achieve cash generated from operation in terms of ratio to net sales, which is similar to what we had last year. So we can lose maybe okay, 1 percentage point or maximum 2 percentage points, but not as much as it happened in the first half.

[Operator Instructions] We have one more question from Davide Longo, Independence AM.

Maybe one question concerning the CapEx plan in the CO2 capture in Germany? Are there any updates? How is it going that you presented the project to the authorities for the to try and get the subsidies? I think the window closes in September, but any more color would be very much appreciated.

Okay. No. Basically, the carbonization project, which we started for the plant is on hold at the moment. So that we don't -- we are not able to, as we say, to the risk, let's say, completely both the, let's call it, technology, but also even more important, the logistics and the storage. So at the moment, we cannot proceed. We are -- a number of other projects which are not carbon capture. So in on, for example, we are planning -- completed the same modernization of the plant which is, we think, a better idea because if tomorrow, we will be able to get back to the carbon capture. We will apply the carbon capture to equipment, let's say, a production facility, which is already modernized. So let's say, best available technology, traditional, let's say, technology versus attaching carbon capture equipment to something that was built in the '70s, which is okay. I mean it's still working. It's a good plant. But we make a big difference in our opinion to do that. So to apply, let's say, carbon capture to a modern plant versus an older one, assuming that all the, let's say, surrounding conditions are there.

[Operator Instructions] Mr. Buzzi, there are no more questions registered at this time.

Okay. Thank you. Probably there are no more listeners, but they are. Thank you for listening, and have a nice summer vacation, if more all of you have to enjoy the summer holidays. So thank you so much for listening, and so on.

Ladies and gentlemen, thank you for joining the conference is now over. You may disconnect your telephones.

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Buzzi S.p.A Full Year 2025 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Pietro Buzzi, CEO of Buzzi S.p.A. Mr. Buzzi, you have the floor.

Thank you, and good afternoon, everyone. Welcome to our conference call. And again, thanks for participating. We do publish a presentation, which I will follow at least in part, if not in full, that is available on our website. So I will mainly refer to that and to the page.

So starting from the first page, we have a brief summary of what has been 2025 for Buzzi. Overall, a good year, although not as good as the 2 last one, so with some decline in profitability, but still showing, let's say, very strong results and very significant cash flow generation. So as you can see from here, we had a slight improvement in our revenues, in our net sales. This was already disclosed at the beginning of February with an impact -- positive favorable impact coming from the changes in scope.

EBITDA is falling somewhat short of last year, minus 3% approximately, which would be actually minus 6% like-for-like. So the overall impact again of the Forex and the Scope changes was favorable. EBITDA margin, we are losing some profitability, which is mainly due to the fact that the additions, let's say, to the perimeter to the scope at least initially for the first year, they are coming in with an average profitability, which is below the one of the, let's call it, traditional scope perimeter and to the fact that one of the -- or the strongest country for us, U.S. declined somewhat.

CapEx are, let's say, similar to last year in terms of industrial CapEx, a little bit lower than last year, considering also the equity investment, and we can let's say, enter into that later in the presentation. Net financial position also with the help of some lower CapEx improved significantly and cash flow generation was very close to last year regardless of the slight decline in profitability.

We have -- we propose to the next AGM to keep the dividend unchanged versus last year. But -- and we will comment later the shareholders' remuneration in 2026 is anyway going up significantly, thanks to the buyback program, which is underway. As you can see on the following page, let's say, Page 2, one of the key feature, let's say, of 2025 was the Scope changes, which included an Asset Swap, if you wish, which occurred in Italy and Italy and its bordering country, in particularly Austria, where we sold, let's say, the Fanna plant in the Northwest, is in the Pordenone province for those that are a little more acquainted with the Italian geography.

And Alpacem is the owner, is part of the Wietersdorfer group. This group, which acquired the Fanna plant is composed basically of 3 parts. It includes 1.5, let's say, plant in Austria, which is quite strong, let's say, locally. The Slovenian plant where we have already -- we used to have already a presence since some year, which is a very stronger plant just on the other side of the Italian border. And some Italian assets that now includes also the Fanna plant. So quite a strong and integrated group in the Northeast of Italy.

And then we expanded our presence internationally between starting from March, April until December, it's an ongoing process, if you wish, by acquiring initially over, let's say, a 30% stake in a listed company in the Emirates name Gulf Cement Company, which is a single plant, let's say, entity, but with a quite significant capacity, very powerful in terms of machinery, let's say, and equipment.

Then through the OPA, the ownership was increased. And later on, December and also something more will follow during this year. We achieved a gradual improvement in our ownership, which at the end of the year is around 66% indirectly is a little less because we participate to this investment together with a partner in a specific entity called TC Mena Holdings, where we see as 90% and the partner as 10%. So the, let's say, economic ownership is a little less than the 66% at the year-end. On the following page, you'll see the bridge, let's call it, of the turnover -- 2025 turnover by regions, so by main regions where we operate. And Italy had a fairly good year, I would say.

If we do not consider -- so excluding the scope impact, actually, our volume and pricing will remain basically the same, prices slightly better. So this was quite a strong support in Italy coming from the infrastructure project of the so-called resilience plan of the European funds, let's say, allocated to Italy.

Central Europe was kind of mixed. So there was a recovery in volume, but prices suffered mainly in Germany. And this translated into, let's say, an offset of the progress that we achieved in the volume in our cement, let's say, shipments. Eastern Europe, I would say, good results overall.

There was a negative impact -- unfavorable impact coming from the deconsolidation from the sale of the of the Ukrainian assets. So this was the first year without Ukraine included in the scope of consolidation. But the remaining countries overall performed well, in particularly Poland and Czech Republic. And we did have also some benefits from the strengthening of the local currencies, both zloty, Czech koruna and also the ruble in Russia.

U.S. was, in a sense, the worst performer also due to the size. So every time that something, let's say, negative happens to U.S. in our case, impact on our figures on our numbers is inevitably more significant. What happened in U.S., we had a minor, let's say, decline in volumes more in ready-mix actually than in cement.

Pricing fairly stable, but no improvement if you look at the average or there were some improvements in specific geographic areas, but some declines in other ready-mix prices were a bit under pressure, particularly in Texas and the overall result was a little negative. And the dollar lost us some of its value affecting the translation.

So around EUR 70 million or EUR 70 milliojn negative on our net sales figure.

Brazil is coming in for the full year for the first time. So the comparison of the first 2 bars refers to the last quarter of 2024. But the impact is, I would say, overall positive with the exception of some unfavorable variances coming from the Forex. -- and is bringing in additionally, let's say, EUR 2,065 million of turnover.

Same reasoning more or less for the UAE, which is smaller in terms of turnover and is also including -- included -- it's been included starting from May, so about 6, 7 months. And this brings us to the EUR 4.5 billion approximately level up to EUR 4.3 billion of last year that you see in the bar at the right. Not top, right side of the slide.

And then if we move to the main, let's call it, operating figure for the results, which is the EBITDA. What you can see from here is, again, fairly simple, if you wish. So volumes good trend. A favorable variance of about EUR 44 million, but a number of, let's call it, negative items or unfavorable items associated, first of all, with the price environment, which was overall slightly negative besides what happened in the U.S., particularly, I would say, in Germany. So Germany and the U.S. were the 2 countries where we suffer actually Germany, more than U.S., we suffered the most in terms of pricing trend. Variable cost not so much coming from energy and fuel or electrical power.

It was more related to raw material and other variable costs, for example, logistic ones. And fixed cost, typically labor, maintenance were also going up, difficult to fully, let's say, control versus the volume and price trend. Other mixed cost also showing a favorable figure.

CO2, basically not an issue last year because we still remain -- this refers, of course, to the countries under the ETS scheme. And in those countries, we basically remain in line with the free allowances received with a few exceptions and a minor, let's call it, negative variance versus the previous year.

FX overall negative, mainly in the U.S. And then Scope changes that refer to, okay, on the positive side, Brazil and Emirates on the negative to Ukraine, rebalancing somehow the negative impact that you see on the center of the slide by EUR 61 million. So overall, the decline is what we mentioned at the beginning, and this is the -- in brief, let's say, the explanation and more explanation can be given, of course, country by country or region by region where things did not behave, let's say, or happen in a consistent way.

We had, of course, some regions more affected by costs, some regions more affected by prices, et cetera. In the following pages, the cash generation and capital allocation. You can see that operating cash flow, as I was mentioning at the beginning, remained very, very close to last year besides the EBITDA decline.

CapEx industrial slightly lower than last year, not really because of our decision to decrease them was actually somehow related to the execution phase, which on more complex projects usually takes than you might budget or when you, let's say, translating the design in the engineering phase into implementation and execution usually takes longer.

And remuneration of the shareholder was quite good, I would say. You can see the split between, let's say, dividend and buyback. We have an ongoing program, which started at the end of February, which has been more or less so far 50% completed and we should get to the end. We will see, of course, it depends on the liquidity of the shares on the daily trading.

But normally, with this kind of trend, we should be able to complete it by the end of May or maybe even earlier. We will see. It's well advanced and likely to be completed in maybe 2 more months. There is also a proposed resolution taken today by the Board of Directors to cancel the shares that will be in portfolio, let's say, in treasury at the time of the AGM.

So we don't know exactly the number. But anyway, both the shares that were already in treasury at year-end and the ones that are being bought currently will be canceled, which is also, I think, overall a positive news for the shareholders.

Just to give you a little more color on the different geographic areas, we move to Page 7. The U.S. always, let's say, a very strong contributor to our results. But last year, they were not able to keep up with the same level of profitability that we enjoyed in 2024.

Basically, in terms of EBITDA margin, as you can see, we went back to the level of 2023, which is anyway a very good one, both in absolute terms and also in relative terms when you compare to other peers operating in the U.S. But the trend was slightly negative. We faced difficult volume part of the year.

Then in the second part, there was a recovery, but not full. So we were unable, let's say, to close with a favorable volume trend, minus 2.2%, I think, very similar to the overall market trend. And ready-mix volumes suffer like we were a little bit more in terms of shipment deliveries and also pricing ready-mix, as you know, as you recall, in our case, they are mainly in the Texas area, which was one of the -- yes, I would say, more difficult in terms of market environment also due to the presence of the significant presence of both incumbent and new importers into the -- along the coast from Houston to Corpus Christi, et cetera. So we have a structure in the U.S., a cost structure which is compared to our countries, skewed in a sense of more significant weight of the fixed cost.

So when you lose also slightly volumes, this has an immediate impact on our profitability, which was the main case. So cost not really going down, volumes going down a bit, pricing not moving or more, let's say, moving unfavorable than the opposite. And this was the result.

On top, we had the negative foreign exchange impact following the devaluation of the dollar, which on the EBITDA -- on the EBITDA means around EUR 26 million, not a small amount.

Moving to Italy, which is the following page, more favorable situation, support, as I was mentioned before, mainly from the PNRR programs. So public building and infrastructure projects, which also are typically enjoying a greater cement intensity versus either new residential or residential renovation. So there is a decline in cement volume, but this is a direct consequence of the Scope changes that we were commenting at the beginning. Meanwhile, for example, our ready-mix concrete subsidiary has been able to increase volume by around 6%.

Pricing performance was okay, some improvements. And our cost, both fuel and power were definitely under control. So we did not suffer any significant, let's call it, inflation -- energy inflation during 2025. The changes in scope on EBITDA means 13 million -- EUR 14 million let's say, about EUR 14 million of impact, which is not very different from what you see in the EBITDA variance actually.

We are showing plus 3.5% like-for-like. So it was fully offset by the good trend or the stable trend in volume and favorable trend in pricing. In Central Europe, which means for us, basically mostly Germany plus Luxembourg and ready-mix operation in the Netherlands, quite a different trend if we look at Germany versus Benelux. Unfortunately, Germany has a much greater weight on the area because the performance of Luxembourg was -- and in the Netherlands was growing, was okay, was improving. Meanwhile, Germany did improve some. So there was a rebound in the volumes, but there was no rebound. Actually, there was a decline in prices, which started already on the previous year.

Actually, we entered 2025, the exit price, let's say, of 2024 was already lower, and we were unable to recover or to change it significantly or just slightly to 2023 and '25. And this was the major impact on the -- I mean, the major reason for the EBITDA decline together with a cost situation, cost environment, which was not favorable or quite different from what we experienced in Italy, mainly on the -- we suffer mainly on the energy cost, on the power cost, not so much on the fuel.

But yes, on power, this is also somehow related to the -- to an hedging, which was made in advance so to cover the purchases for 2025, which at the end was not, if you wish, successful in a sense that maybe it was a bad timing. But of course, I mean, the reasoning behind hedging is not to pick the right timing.

Just in this year, I mean, in 2026, we will see a totally different trend because the market condition has changed in the meantime. So the change -- the favorable change in Benelux was able to help somehow the region. But Germany, clearly is waiting significantly on this specific portion of the business. And the performance in terms of EBITDA certainly was not was poor overall. I mean there are reasons behind it, which explains it, but was overall quite poor.

In Eastern Europe, on the following page, we are, I think, continue to be on a steady, let's say, profitability outcome. Of course, these businesses are not as big and as significant. So their contribution, let's say, to the overall profitability of the company is not as significant as Germany or U.S.

But the good news is that there is a positive momentum, both in Poland and in Czech Republic, which should also continue in the coming year. So strong cement volume dynamics in Poland was clearly -- I mean, it was quite meaningful. Czechia, it's smaller, but also stable. Our ready-mix business in Czechia performed very well. We lost cement volumes in Russia. That's the only area where I think also after some years of war, let's say, the impression is that the economy is starting to feel more, let's say, the pain than in the previous year.

And also probably in Russia, the prospects for the next year are also quite difficult or more difficult than in other Eastern European countries. Ukraine is not part of the region anymore. So -- but its contribution was not very significant anyway.

So if we exclude Russia, there is a margin expansion. And driven by higher production and also, in this case, lower energy cost, which did not as opposed to Germany that we commented before. Exchange rates also favorable, if you wish, not a minor, let's say, contribution, but anyway, a favorable contribution.

And the impact of the deconsolidation of Ukraine was, I would say, totally absorbed and also the negative contribution from Russia was totally absorbed by the strong performance of Poland and Czech Republic.

Brazil, which is a newcomer, let's say, first year in the group. So let's say that we are on a pro forma comparison here because last year, actually, only the last quarter was included in our figures. We had a volume trend, which was favorable, 2%, 3% up again compared to the full year 2024.

Price trend in local currency also favorable. This translated into, I would say, significant margin expansion. Our cost also were particularly the energy costs are lower than the previous year. So -- as a first, let's say, year of full operation in the group, I think we can be fairly happy with the overall performance.

There is room to do better in the coming year if the external condition and also the industry trend will go in a certain direction, which is possible. And the only negative factor, the only negative is the exchange rate trend, but not so impact. I mean, not so dramatic on our -- on the overall figure with minus EUR 5 million on net sales and minus EUR 1.5 million on EBITDA. And currently, actually, if we look at the -- of course, it's not necessarily a trend that will continue for the entire year 2026. But what we are seeing lately is actually a more stable real versus the euro since the beginning of 2026.

So if the local currency -- if the trend in local currency will perform better, which is what we expect also in euro, we should have -- it should be reflected, I mean, also in euro terms in likely absence of negative FX impact in the coming -- in the current year.

Mexico is not part, as you know, of the group is not line by line consolidated, but it remains a very important part in terms of, let's call it, also management involvement, but in particular, in terms of results -- net result contributed to the other company. The Mexican performance was mixed, but overall, still very good.

We [ suf ] a bit on the turnover on the EBITDA in euro terms. But when we clean up, let's say, from the foreign exchange impact, actually, both figures were better than last year. And this is one of the few countries together with the Eastern European country, Poland and Czechia, that is -- was able to achieve an improvement in the EBITDA margin, which is already very, very high, as you can see.

So I would say that we cannot complain about the Mexican performance. The only complaint is that it cannot be included in the line-by-line consolidation. But for the rest, very strong performance coming from this country.

Some comments on how we see [ 2020 ] also on the light of what has happened so far and also recent change in the macroeconomic environment. I mean, we are -- we were, let's say, but we still are pretty confident that we can continue to perform fairly well during the year. There are uncertainties.

There are certainly geopolitical tension, potential inflation pressure for how long this difficult, let's say, situation in the Middle East will last and will affect particularly the energy cost, but not only because there are anyway also impacts on the demand in part directly like in the Emirates or indirectly like in Europe or probably less in the U.S. and Brazil. But anyway. So by major, let's say, regions like we showed before, U.S., the expectation are for -- the association is, let's say, forecasting some additional decline in demand. probably in the range of 2%, 3%, something similar to what happened in the previous year.

But of course, if this happens, it would be already the 3, 4, 5, 6, 4, at least fourth year in a row of decline versus the previous peak which was not historical peak, but anyway, the previous peak of the cycle in 2022. And this is something that clearly is not, let's say, helping the overall price environment because there's most of the regions of the state, some capacity available.

And as I said before, due to our cost structure to lose some volumes almost immediately translates into a margin construction because the fixed costs are quite high in the area. On the other hand, we have seen also at the beginning of the year, particularly during the month of February, demand quite resilient.

So it's true that on one side, you have residential weakening, but there are definitely in the nonresidential portion of the demand or yes, some kind of projects that are going well that require cement and concrete. Typically, just to mention one, which is, of course, very much on the fashionable the data center construction, but this is actually happening. It's happening and it's relatively intense in terms of cement consumption.

So again, a mixed environment with the nonresidential segment and also the infrastructure probably supportive and maybe even better than what the association has been forecasting for the full year. So we will see. There are, of course, other factors to be considered in the U.S., which we mentioned in the comments of the press release that are a bit disturbing or potentially disturbing, let's say, the price environment.

But okay, a situation or a scenario which is, I would say, moderately optimistic. I would be optimistic about the outcome for the U.S. in the current year.

Italy should be a year very similar to the previous one as long as we continue to have demand coming from the infrastructure plan, let's say, or the European funds, there are good chances that we can more or less repeat last year results and also Italy is more likely probably than the U.S. to be able to improve somewhat the prices.

There are underlying reason related to the introduction of the CBAM, the scarcity or the less availability of CO2 allowances, which also translate into a higher cost. So there are -- there's probably more room than in the U.S. on the pricing side to be a favorable variance.

Central Europe, we should see some rebound. We are forecasting some rebound in Germany. The federal infrastructure plan should start -- will start to have some impact also on cement demand. We are coming from a year where the prices, as we were commenting before, remain fairly weak.

So there is -- there should be a possibility also couple being within, let's say, the ETS system similarly to the -- to Italy, there should be a possibility to recover something on the pricing side. Clearly, this means also additional cost for CO2, but more chances, let's say, to gain something on the price level. Eastern Europe, with the exception of Russia, which is probably entering a much more difficult phase than what we faced in the last 2, 3 years.

We don't see a reason why Poland and Czechia should be worse than the previous year. These are also countries where as opposed to Germany, Italy, we are operating at a very high capacity utilization level. And so we are definitely optimizing, I would say, our profitability, thanks to the capacity utilization, which is -- we think they have to stay.

In Brazil, we mentioned it already, we see a positive trend overall, particularly in the Northeast, which has been growing in terms of volume and prices more than the Southeast. But if there is an easing of the monetary policy, which today represents significant constraints for the construction investment with interest rates at 15% or 16% the number of projects that are -- that have been on hold so far should start. And clearly, this has even more impact in the Southeast where most of the consumption and the population actually are because this is where the bulk, let's say, the cement consumption of the country is located.

In the Emirates, we will certainly suffer from lower cement consumption until at least -- we will see until something different happens. But that's the country with more direct impact coming from the local, let's say, turmoil or conflicts going on. But on the other hand, we are -- we have a number of initiatives of projects that are -- that have been put in place last year and will continue this year to improve the profitability.

So even with the lower cement volume, we may be able to do something better in terms of EBITDA. Mexico craze not affecting directly our numbers. But we are seeing -- we're, let's say, more positive versus last year in terms of volume trend and profitability should remain at a very, very high level.

This is for the, let's say, the top line and the volume prices scenario. The risk or the, let's call it, the uncertainties are definitely more related to the cost side, where it is true that many components or many items are -- have been contracted for a certain number of months. So we have certainly some stability for a good part of the year.

But it is clear that on the energy cost, in particular, the current situation is creating an environment of rising cost driven by renewed inflation like we mentioned here. So there is volatility, but volatility mainly on the high side in a sense of more expensive side. This is difficult to, let's say, assess completely right now.

We ran some number, taking, of course, kind of sensitivity analysis. And there is certainly an impact that we don't know if we will be able to offset with the price improvement or not. It will mainly depend on the specific situation, demand, pricing demand, let's say, competitive environment, what is the attitude of the competitors, et cetera.

So the idea is, of course, to try our best to preserve the margins. But how much we will be able to do that and how much actually the cost environment will be unfavorable is difficult to assess. In general, we do see a significant risk of rising cost, in particular, the energy component in the coming months.

The FX foreign exchange is very difficult to somehow forecast. Initially, in our budget, we introduced an exchange rate for the dollar, which was definitely weaker than the 2025 average. Is this going to be true? It's not going to be true. We don't know. So far, again, not as much as we forecasted, but this could change in the coming months and can certainly move, let's say, the variance from positive to negative if the dollar will weaken more than what we expected or more than what is showing up to now.

So overall, again, reviewing our numbers, reviewing our budget in a quick way, we think that it will be quite difficult or actually as of now impossible to achieve an EBITDA greater than in 2025. So our view right now is to as we wrote, let's say, marginally decline by how much is difficult to tell right now. But I think the message, which is important to give today is that looking at all the variables, looking at all the available information as of now, it is -- this is the best, let's say, forecast that we can make, and we think that is a correct one, which means that, okay, there our profitability will not improve in 2025.

But if it is a marginal decline like we expect, will remain anyway at a very good level. And we would be happy, of course, to change this view as soon as possible. And -- but this, realistically speaking, is likely to occur if it does occur only after more months of actual results available.

So with, say, 1 quarter or maybe let's call it, 6 months behind us, we will have definitely a clearer view on the full outlook. But I think it's important to give this message today, which has been, I mean, analyzed in a very deep and serious way with, again, running several sensitivity analysis that are giving us this kind of outcome at least at the current stage.

So I think I spoke for almost 1 hour. So probably -- in order not to be tedious and to make the conference a little more interactive, I would let you read the following pages by yourself and open now, let's say, the Q&A session. Thank you for listening.

[Operator Instructions] First question is from Ben Rada Martin, Goldman Sachs.

I've had 3, please. My first one was on CapEx. I know in the release, you spoke to an increase planned in 2026 versus '25 and some of the buckets in terms of decarbonization and production.

Would you be able to talk to what kind of quantum you expect for 2026 CapEx and then in terms of the medium-term CapEx expectations as well?

And then the second would just be on the guidance assumptions and very much understand how uncertain the backdrop is currently and very helpful to kind of talk through some of those impacts. But if we look at that moderate decline or slight decline in EBITDA expected, is it right to assume that there's limited energy impacts so far in that number? Or I guess, what kind of pressure do you see embedded within that forecast?

And then finally, would just be another quick one on energy. When would you expect to see, I guess, pressure come through the cost base? Is it more of a second half story at the moment?

Yes. I mean the last 2 questions are, I think, related. And the answer, yes, is that definitely, we have -- as usual, I mean, we have in front of us about I mean, starting from January more than today because already 3 months past, but usually 5, 6 months of fairly stable energy cost or at least as we budgeted because of, let's call it, hedging policies, which is different from one country to another. So -- but if you look at the mix or the weighted average, in general, we have 40%, 50% more or less of our cost already hedged for electrical power or fuel.

So yes, the trend if it changes, which I think it will change, unfortunately, will be more evident in the second half. By how much, it depends because we have, for example, also countries in Europe, typically Germany and in Europe, the debate about power cost is really significant.

I mean there's a lot of political pressure on power cost being too high to reduce even talking about how to amend the ETS. Tomorrow [indiscernible] will speak about that. Let's see what he say. But -- so specifically in Europe, the big countries like Italy and Germany, we don't see a big risk on power cost.

The [ famous ] also energy release has been approved. So there, we should be okay. On fuel cost is different, of course, also even if our share of so-called waste-derived fuel is increasing gradually, we are still strongly dependent on pet coke. So let's say, a price which is somehow linked or index to the -- to some extent, certainly to the oil price. So there, easily, you could see an increase of, I don't know, 20% or so.

And unfortunately, this is well possible. It will impact only partially, as I said before, the full year results, let's say, 6 months, but it's well possible. On the CapEx, our trend, I think -- I mean, we are always very kind of ambitious. We are approving the budget. And then as I was explaining before, some of the biggest projects are actually taking longer to be executed to come to the execution phase.

Engineering is more complex versus the initial -- I mean, at the time of the initial approval. So if you want to take an average of the next 2, 3 years, I would move it to between -- I mean, to be -- except for -- I mean, just the industrial CapEx, then there will be other kind of equity investments or M&A transaction is different. But I would move it to between 500 and 550 is probably a number that considering the major projects that we have underway, including some expansion projects is likely to be the right one.

The next question is from Elodie Rall, JPMorgan.

So maybe you could talk to us a bit on the price action that you're taking in Europe to start with to offset indeed the increasing inflationary environment. You talked about your hedging strategy. Are you pushing prices a bit more? Are you seeing the industry pushing prices and where are we at, at the moment in terms of price increases in Europe?

And same question for the U.S. You talked about better demand year-to-date. So how do you see scope for price increases? I guess April will be the big start in the U.S. And then I had a clarification on your buyback plan. You did EUR 200 million very recently, I think. And now you announced another EUR 300 million plan. Is that the correct way to understand it? You can do another EUR 300 million from here? Okay. I'll stop here.

Yes. On the buyback, in theory, well, first of all, we have to complete the -- undergo, let's say, EUR 200 million. And then the idea is to renew, let's say, the authority to ask for a renewal, to ask the AGM a renewal for the authorization to authorize an additional EUR 300 million. This EUR 300 million still will -- I mean it doesn't mean that we will necessarily, let's say. exercise the authorization. This is a preliminary authorization, which is given by the AGM, and then the Board will have to decide whether to actually start the program or not. What I think is likely to -- I mean this is unless, again, the market changes completely, but I think we will complete the undergoing EUR 200 million. And then we will have an opportunity or a possibility for another, let's say, EUR 300 million in the 18 months, -- is lasting, let's say, 18 months after the AGM resolution or authorization.

On the price section, well, there are some countries, I would say, in Europe, mainly which are also -- the biggest one Italy and Germany. The winter has been difficult in Europe. In general, what we saw and what you also will see when we release our, let's say quarterly summary. There's been cold rain. So particularly January and February was not a good time, let's say, to go for a price increase and March is better. And also the weather has been improving. And of course, January and February are not big shipment months anyway. So the attempt in Europe to increase prices is driven yes, mainly by the cost trend, which includes an additional cost for CO2 like we mentioned in the beginning, probably an additional cost associated with the CBAM, let's call it, also a decline of allowances because you have the 2 components. And yes, more, let's say, today than yesterday, of cost pressure on the energy side, mainly fuel, as I said before, than power.

The magnitude, I think, it's moderate. We have to make sure, let's say that we will not be, let's say, losing volume or market share, either against the import or local competitors. But I think there is at least in these 2 important countries in Europe, there is a chance to a price improvement and being able to offset the additional costs like we were commenting before, let's say, on the -- on our policies to at least keep the margins.

In the U.S., very differentiated from area to area. There are -- okay, we don't have the ETS, but we have other issues that are associated with the, first of all, okay, the imports where they are strong. That continue to be, let's say, have a very competitive approach in terms of pricing. Second, the industry structure has changed quite significantly. As you know, in particular, I think, the growth, the presence of QUIKRETE as a cement player has changed the picture quite a bit. Also QUIKRETE being major customer of cement from us but also from other competitors.

And the fact that the declining, let's say, capacity utilization is clearly for them, let's say, an opportunity to self-supply cement to their, let's say, mixing operation as much as possible. It has to be obviously, economically feasible. So if they are too far away from one of their plants, they will continue to buy from another competitor. But if they can, they will obviously buy from themselves. And this is something that is putting pressure because if you lose volume, you have to look for volumes somewhere else, to look for volume somewhere else maybe -- I mean, pricing is a tool. And this is one of the changes we have to -- which again is very regional, but can have a significant impact.

Another point which we also briefly mentioned in the press release is the product mix. There was an effort 2, 3 years ago, particularly by the European player in the U.S. to move as quickly as possible to the so-called 1L product. So with a lower clinker content for limestone, which is actually a very good product, but more capacity available and again, players in the market that don't have maybe European parent, like, again, QUIKRETE, their interest in developing or in pushing 1L is much less.

And this is also translating into a competitive pressure, which is different from the past where you compete not only on pricing, et cetera, but you compete also on the kind of product that you're selling. So again, a mixed environment. Anyway, if the demand stays, I think that maybe not everywhere, but some price improvement we can get also in the U.S. And then we will see how much the cost pressure -- how much cost pressure there will be on the margins. But it's a complex -- it's a more complex landscape than 2, 3 years ago certainly.

Next question is from Emanuele Gallazzi, Equita.

I have 3 questions. Well, the first one is on Germany. Can you just discuss a little bit more on your expectation for the German market in 2026. You mentioned a gradual recovery supported also by the infra spending plan. When do you expect the first contribution from it to kick in? The second one is on the capital allocation, very clear on the buyback. I was looking at, let's say, the M&A, can you just update us on your M&A strategy at this stage and the opportunities that you see in the current environment? And the last one is a clarification on the guidance. I probably missed it. But on which euro-dollar exchange rate is based your current guidance?

Okay. We are at [ 120 ] right now as an average for 2026 versus [ 114 ] -- was [ 113 ] approximately in '25. So this of course, can be -- as I said before, can be better. If we look at the trend so far is better. Will it last? I don't know, anyway. M&A, yes, is the focus. I mean it is a focus in a sense that our idea is to be, of course, continue with a stronger financial discipline and consider only, let's say, targets that are -- can represent a real opportunity, not only on a strategic view, but also on the financial, let's call it soundness of the overall proposal. I think that today, but also before, it really hasn't changed much.

The focus remains countries where we already are. So the opportunities -- if there are opportunities where we already have a presence, certainly they are -- we give them much more investigation, but much more, let's call it, focus than versus opening totally new country or venture with someone else. I say something that is publicly known publicly available, certainly in Brazil recently there have been movement announcement, CSN is announcing -- more than announcing, I think, it started actually a sales process of its cement division. And is it -- is this a real opportunity or not for us? Difficult to tell. I mean, we have to -- but certainly, again, looking at the main strategy, which is reinforced in a disciplined way.

The presence where we already are, it could represent, let's say, an opportunity. It has to be investigated. I mean the process is at the beginning. So we need to understand a little better. But generally speaking, this kind of, let's call it, opportunities are more interesting than others. And basically, that's it. In Germany, it's not totally clear how much of the, let's call it, public infrastructure plan will translate into a greater consumption already this year. We think that something will show -- is starting to show, will start to be available.

In terms of quantities, let's say, of cement coming from these kind of projects. It's difficult to tell, but maybe I don't know. I don't have -- I don't want to spend a clear number without support. But what we are seeing that, yes, there is a rebound due to the normal, let's call it, cyclicality. The fact that after 2, 3 years of declining consumption, it is rebounding. There is more, I think, also optimism let's call it, confidence within the country after the change of government. And there is a potential, but more than potential consumption coming from the infrastructure plan.

So what we can do maybe is to look at -- again come back with some figure with you looking at -- because last year, the association was giving some information of some -- was somehow trying to assess the overall impact, but was more on a longer time horizon. So in the next, let's say, 5, 6 years. Maybe there are more recent, let's say, population assessment of what could be or what will be -- what can be, let's say, the impact already in 2026. But I think certainly, there is some.

Next question is from Arnaud Lehmann, Bank of America.

So I have 3 questions, please. Firstly, on CO2. Do you have an idea how much reduction in free CO2 allowance you will get for '26 relative to '25, that's my first question. The second -- yes, go for it.

No, no. Let's take...

So the other one is, I think you're announcing a stable dividend for 2025, even though your net cash position is above EUR 1 billion, it seems very comfortable. So maybe we could have hoped for a little bit of growth in the dividend. And lastly, on your assets in Russia, we've seen some competitors in different sectors are seeing their assets being seized. Do you think that's a risk for Buzzi as well?

Well, it is a risk. It's probably the largest or the greatest or the biggest risk that we have also in our, if you call, enterprise risk management tool. The probability, extremely difficult to tell. I think -- because this thing really depends on one person now. He wakes up on a certain morning, and if you ask me, I don't see it very likely. I believe that we can continue this way, which is not great because, unfortunately, we are not able to manage the way we would like. But to see really political attack of this kind, in my opinion is unlikely. Anyway, the risk is certainly there. And it's, I think, yes, the biggest risk we have currently in our system, in our -- the second question, tell me again was...

So the other 2 were how much reduction in free CO2 allowances and why a stable dividend?

Okay. Reduction is about 1 million less for the group, 1 million tons less. And I think we estimate to be in deficit, certainly in Poland and, I think, in Czechia too. And in Germany, I don't recall if we will be in a deficit also, yes. Yes. In Italy, probably slightly deficit, but not as important. And I think we will continue with our internal let's call it, guideline, which is to use the bank or the inventory of free CO2 allowances in the countries where they were coming from.

So meaning in Italy, we will continue to use them and in the other country, also the way of somehow hedging the cost by CO2 rights to the extent needed. But we are also able to secure some already at the beginning of this year when the prices went down. So I think we should have a yes, of course, a cost -- additional cost versus last year, but probably a per ton cost, which is still, let's say, favorable. On the stable -- the idea behind a stable dividend was quite simple.

Our net income is the same of last year. It is true that our payout is not that great, and there would be room for improvement. I think there is room also in the coming year is basically -- is basically -- and overall, to let's say, examine and to consider the overall shareholder remuneration. So it is true that on one side, we did not increase the dividend. But we do have the undergoing buyback, which makes the overall -- okay, maybe not for everyone because it depends if you're selling your shares or you're keeping your shares.

But in general, I think the buyback is beneficial to everyone. And also the decision to cancel the share will adjust at least in -- finally, in a definite way the EPS with an improvement there, which should translate sooner or later, providing, let's say, that the markets are also becoming a little less volatile and improvement in the share price. So we thought that this would be a balanced decision. And also looking at the coming year, where our outlook is not for an improvement. It seems to us that to keep the dividend, which is, yes, same as last year was a balanced decision.

Next question is from Yassine Touahri, On Field Investment Research.

I would have 3 questions. First, a question on pricing. I think in Germany and Italy, some of your competitors have announced price increase of 5% to 10% as soon as April. Have you seen price increase later -- in the U.S., I think it was outside of Texas. You had also price increase of like, I think, between $8 and $12 per ton sent by many of the largest players to ready-mixed concrete producer. Again, have you announced similar price increase?

Then I would have a second question beyond the price development. On your vertical integration strategy in the U.S. I think that a lot of your competitors are vertically integrated. And you can see -- I understand from your comment that the lack of vertical integration, for example, versus QUIKRETE has been an issue. Is it something that you could consider addressing in the next 5 to 10 years with potentially more acquisition in aggregate of ready mix? And the last question would be on Russia. Could you give us the amount of cash which is currently in Russia when we're looking at your net debt position?

Okay. Russia, I will check it and let you know quickly. In the U.S. as well, we are not totally, let's call -- let's say, without it, in some area, actually, our vertical integration in Texas and San Antonio, Houston, Austin, et cetera is quite significant. We don't have a presence in the aggregates. I mean, this is true. We have some aggregate production, but not -- never, never considered a business in itself and always somehow related to our ready mix activity. So as a way to supply our own ready mix activity. This will become more significant in the coming years. I would say yes. I think initially, at least more oriented towards ready-mix than aggregates because is the most important in terms of keeping your production levels steady, again, not losing customers or avoid losing customers.

So it can be seen more, I would say, as a defensive move than strategy, devoted to additional vertical integration in a market which is -- has been shrinking, let's say, in a way or another in a market that's changed like we mentioned before and also changed in terms of big ready-mix producers that are importing cement for their own supply. The number -- I mean, the risk of losing customers and not being able to replace it with another customer, particularly in the ready-mix environment is great. So it can certainly make sense to add the vertical integration, as I said, more as a defensive move than something else. But it is a defensive move that will allow you to keep your volumes and also to keep your -- again, to keep your margins. On the pricing environment, I think, we moved that, but not by the same percentages there.

I think the percentages are mentioned, where the price increase announced. Not the price increase that are expected to be realized. I suspect that the message, I think, of the larger -- of some of the large cement players in the U.S. would be that a low single-digit price increase being expected which I suspect means like maybe half for the price increase...

Yes, probably this is, again, not everywhere, but probably this is the most likely outcome, usually. You have protection, you have anyway, as I said, many players that are behaving maybe not exactly as the big ones that are particularly in this moment where the output is not going up. So clearly, looking very much to their capacity utilization than versus just even if economically speaking, it could make more sense sometimes to lower your production and increase prices in the long run. This is not necessarily a good move because if you lose a customer and you're not able to recover it in the long run, this will translate into lower profitability, too. So yes.

And another question was, have you sent a price increase letter for April in the U.S., Germany and Italy?

In the -- so-called price increase letter is more a technique of -- more common in the U.S. than in Italy or Germany. In Italy and also in Germany is more case-by-case, customer-by- customer, let's call it, discussion or any way proposition. So...

If we look at -- if you look at your own vertical integration into concrete in Germany and Italy, are you increasing prices in April substantially to offset the higher fuel costs that you're expecting and the CO2 alone?

Is not yet the higher fuel cost. It was more, let's call it, decision taken already at the beginning of the year. And yes, we have price improvement in place, which I don't think will be the magnitude that you were mentioning, right. Like I mean, for the reason that you were mentioning. But yes, we think it's likely to stick also because again, more recently, people are feeling pressure also on other cost factors. So it's more -- it's easier, let's say, to accept also an increase of the cement price if there is a general inflation rebound.

And maybe following on this situation. I think like the importer in Europe, especially in Italy, they will probably have to pay a CBAM cost, but it's a bit unclear they don't know. I think what kind of cost they will have to pay because the benchmark is not public. What do you feel? Do you feel that the independent importer are being a little bit careful because they might have EUR 10, EUR 15 extra cost, but they are not yet increasing prices?

No, I think they've been already increasing in general. It is like you're saying, it's not totally clear what will be the -- it depends actually on their CO2 content. And yes, each importer can have a different impact according to the kind of product that is bringing in. But yes, I think everyone is considering just maybe as a conservative move to make sure that they are not losing, let's say, versus the previous price. So that they will be able somehow to offset the additional CO2 cost associated with the CBAM scheme.

And on the pricing as well, I think, on one side, you've got the imports that are making it difficult to increase prices. But at the same time, I guess, the cost of importing is probably increasing a lot with the oil price making shipping more expensive? Is it something that could be helpful for you to either increase prices or get back the market share that you lost versus especially the big bag imports?

Yes, yes. It is a chance. The -- anything that makes the import more expensive will allow, let's say, or will help, let's say, domestic supply to be more and more competitive, certainly. Yes, it is a chance.

On the other side, on Texas, you've got a new cement plant. I think it's the first time there is a cement plant in Texas for many, many years in West Texas. It looks like it's 10% of the Texas capacity, so it's a lot. And the -- it looks like they're going to -- it looks like the cement plant could be -- I guess, do you see a risk for your market share in West Texas? I think where there is a lot of oil well cement. Do you see a risk as well in your market share in the Dallas Fort Worth area where I guess that if they want to ramp up, they will have to sell to Dallas and Fort Worth. Is there a risk for sure?

Of course, there will be more competition, particularly on the oil well. On the other hand, it is true that GCC was already preparing, let's say, the commissioning of the plant by importing cement from Mexico in the area. So it's not totally new. I mean, of course, they have more capacity locally, so they are more competitive, and they can be more aggressive, but they were anyway preparing the commissioning already before. And on the oil well, yes, at the end, the oil well is really a matter of what is the oil price.

So if the oil price stays or goes up, I think, yes, okay. There can be more comments. I think this kind of customer is a little different. I mean, being really special products with a very strong significant quality requirements, consistency must be difficult -- it's much more difficult for a customer of oil well to change supplier versus the normal ready-mix customers. So there must be -- okay, there is a huge pricing difference they will consider it, but then they have to test it. I mean they have to go through their quality department is quite complex. So -- and again, the demand is driven purely from the cost -- from the price -- oil price.

Okay. Is it fair to assume that in the U.S. in your forecast, you've assumed maybe a bit of a price increase in land, but no price increase in Texas at this stage?

Correct.

Maybe on Russia, on Russia, you don't have the number on even approximately the amount of cash that you have in Russia?

EUR 150 million.

Next question is from Alessandro Tortora, Mediobanca.

A few questions, if I may, as -- so the first one is on you made a comment on a very significant margin expansion. Clearly, volume were up, let's say, low single-digit prices, let's say, not slightly up. So the game changer not to stay in this, let's call it, new level, very good level. So you -- it was the work you did on the cost side. And the real mission of the market is I don't know, to be structurally above 30%. So just to understand that clearly, I understood your comment on we need, let's say, more, how can I say, disciplined competitive landscape and for the CSN deal could help on this. So just your thoughts on this because clearly, the margin expansion, especially in the second half was very, very good operationally.

Yes, yes. It was driven, yes, by -- well volumes were good, let's say. So capacity utilization is some plant is really pro capacity, which is giving the best operating leverage. So this is always -- the energy -- power cost, in particular, we save some. We are also becoming in a sense, indirectly, but let's say, producer of renewable energy. We have now an investment into a renewable energy company, which is allowing us to enjoy, let's say, better -- lower, let's say, power cost. And pricing, not a great change. I mean you don't see such a significant improvement. But there are some improvements in prices.

Also again, because the market is quite brilliant, let's say. And yes, CSN could be an opportunity besides -- I mean, whoever buys it, will buy anyway, we'll have to invest a significant amount of money because -- okay, relatively speaking can be cheap or expensive. It depends on how much we want to take. But in absolute term, is any way sizable company. So -- and yes, CSN has been certainly more aggressive, let's say, than other competitors on prices, particularly in the Southeast region. So we hope that this could translate into a more disciplined competitive environment that is certainly a chance, let's say.

Comment on pricing strategy discussion client by client in some countries. So is there at least with some clients in some countries, some kind of indexing with, let's say, CO2 price and so on? Because we saw the decline in CO2 price recently. So just to understand if there is or not.

No, there's not. It would be too dangerous in our -- I mean someone definitely did it in the past, but it's very dangerous. I think in our opinion, will not be the right commercial marketing strategy.

Okay. Because there are different opinions on that. And on the CapEx side, the question is, first of all, you mentioned this run rate for the next 2, 3 years with EUR 500 million, EUR 550 million per year CapEx. Does this include the, let's say, U.S. expansion project you had in mind?

Yes. Yes. Correct.

And which is...

I mean, which will start, but we'll start at a slow pace, let's say. But it will start, yes.

Okay. Okay. And secondly, in theory, we should have, let's say, a second round of grants, let's say, in Europe also for, let's say, some innovative carbon capture projects. Is it something that you're still monitoring? Do you believe that maybe you can take, I don't know, a decision on developing at least one single project for this technology? Or let's say, the approach is to be extremely, let's say, conservative and maybe waiting a little bit for technology getting more mature?

Monitoring, yes. Lorenzo, you want to add something?

No, I mean, again, monitoring for sure and -- but let's say, at the same time, we need probably more clarity on the regulation and also on the criteria that will be, let's say, considered by the commission when it comes to the evaluation of the project.

Let's see if there is -- what happens on the ETS side, I say tomorrow, but not tomorrow, I mean the so-called revised ETS by June, I know it's, if I recall correctly, let's see what happens there. Because still, we believe that the cost benefit of a carbon capture project is unjustifiable, let's say, today. So what you are focused much -- is -- and also to -- okay, if you build a totally new plant, but again, cost benefit very difficult to justify, it can make sense. I mean you build a totally new plant. You introduce also the carbon capture installation. But to add the carbon capture installation to an existing plant, which dates to maybe the 70s or the 80s, they are not bad, but let's say there's plenty of room for improvement in energy consumption and also fuel consumption before carbon capture installation.

So we are a little bit shifting our focus on projects in countries like Poland or Deuna. Deuna, where we put on all the carbon capture projects to something that will reduce, let's say, maybe CO2 emission by 20%, 25% and modernize the plant. So being ready to possibly at a later time, which I think it will be inevitable because the deadline that are set today are realistic at a later time to introduce a carbon capture on a plant, which has already been optimized, instead of doing it on a plant, which is again 30 -- 40 years old.

And maybe if I may add, with a return -- I mean, return on investment definitely much more interesting than a single installation, carbon capture installation with, let's say, a business plan, which is at the moment and with the current situation is not really flying.

It's a better way to lower CO2 emissions for sure.

Okay. Okay. Just if I may, sorry, you mentioned that the financial, let's say, income was not pretty high this year. Can you help us to quantify, sorry, the FX gain component in that number?

Yes. Well, one item, which is included into that figure is also the bad will of the UAE acquisition, which is EUR 44 million positive. If you look at the fewer net interest expense and net interest income in this case, we have EUR 60 million and last year, it was EUR 55 million -- EUR 60 million, yes. Last year it was EUR 55 million. So it is EUR 5 million up. This is the cash portion. The noncash portion, the 2 big items are [ 75 ] of ForEx, so nonmonetary. And -- well, I don't know if it nonmonetary, the bad will because we paid anyway. So -- but we paid less than the equity -- book equity. And so we have [ 44 ] positive that we are also inside the same line item.

[Operator Instructions] Mr. Buzzi, there are no more questions registered at this time.

Okay. Good. Thanks, everyone, for listening. I don't know how many are still listening. But anyway, I hope it was somehow helpful. And we stay in touch, of course, with our Investor Relations team and looking forward to meet you personally in the coming months. Thank you.

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