SigmaRoc Stock

Good afternoon, and welcome to the SigmaRoc plc Investor Presentation. [Operator Instructions]

Before we begin, I'd like to submit the following poll. I'd like to hand you over to the management team. Max, good afternoon, sir.

Good afternoon. I hope everybody can hear us well. Thank you very much for joining SigmaRoc's First Half 2026 Results Presentation. We've got slides for you on the screen. You can download those through our slides also on our website as well as more materials. A short presentation of half an hour with the 4 usual chapter headings on the next page, an overview of the group's performance, finance review by Jan to my right, subsequently strategic delivery and an outlook at the end, and we're happy to take any questions you might have.

If we go to the first part then, group performance for the first half. Fantastic first half of 2026. Strong results, EBITDA up 11.3%, EPS up 12.2%. Margins, EBITDA margins at 25.1%, an evolution of 200 basis points. All of that pointing to a great first half in terms of trading, volumes, evolution of our business. It didn't start smooth. There were some headwinds at the start of the weather, but that was recovered very nicely in Q2. Balance sheet strengthened further, 1.66x leverage at the end of the first half, very nicely at the bottom end of our target range and return on invested capital on an LTM basis at nearly 12%, again, 0.5% up from last time. And therefore, confidence in the full year outlook.

And strategic delivery was also solid. Operational excellence, as you can see from the margins, continue to be driven through. Synergies program has delivered, and there's more self-help to come. We've done a phenomenal acquisition with the help of our teams. I'll come back to that point in a minute, in dolomitic limestone, dolomite. The Belgian aggregates production setup, new aggregates plant is being there to be launched on time, on budget for a fantastic 2 million tonnes of production capacity in Belgium. We've extended our quarries in Klinthagen on the island of Gotland in Sweden with high-quality mineral. And then we keep focusing on the quality of our business through the rating, the MSCI rating at AAA at this point in time.

We move on to the news of the day, which is the Dolomitas acquisition in Lithuania. To give you a bit of a background, further slides on this deal at the end of the slide deck, but some quick points, 3.5 million tonnes of dolomitic limestone dolomite per year. It's a high-quality limestone product that we sell -- we will sell into the Lithuanian market, 45 years of reserve and resource planned, permitted and further to come and then beyond that, of course, as well. EUR 70 million turnover, 25.7% margin for an EBITDA of EUR 18 million.

We've paid EUR 110 million for this business, which equates to a 6x multiple, a very, very attractive multiple, therefore, immediately earnings enhancing, and that is pre-synergies. And very interesting as well, is that the sellers requested to be paid in part in shares at a very attractive price when this deal was done. Again, all those points, I will come back to in the further sections of this presentation.

If we move on to the performance of the first half. First half was solid, as I said. On Slide 6, an overview for the group and then by geography for revenue, EBITDA and EBITDA margin. Every single region performed very nicely. Two little points to note, the 2 red arrows that you can see, 1% year-on-year revenue drop in the UK & Ireland. That's a mix question in terms of residential construction. Same point, in fact, in the region West, where we sold more aggregates, slightly lower margin, slightly less dimensional stone. But these are tiny, tiny changes versus the fantastic performance of the group put in on every other metric.

And you can see some attractive double-digit growth figures in EBITDA and some very attractive increases in margin as well. All that very positive regional performance. If we look at the same performance numbers, but now split differently, split now by segment on Page 7. Revenue up in industrial and environmental applications and quite solid increases there. Industrial, predominantly driven by the steel sector. As you may have read, the steel sector received some support from the European Union in the form of quotas and tariffs, and that has made indigenous steel in Europe quite a much more attractive proposition for the local steel producers, and that translates for us into more volume and better sales.

The other segments, pulp & paper, chemicals, mining and so forth were good, stable, steady year-on-year. Looking at the Environmental segment, second segment where we apply our products, again, as a purifier to waterways, to flue gas, as an agent in agriculture. And again, very nice revenue increase 7% year-on-year, and that's driven, again, water treatment is one. And then secondly, the performance in the flue gas treatment segment. And then the last sector, construction, 42% of group revenues, softness, obviously there. Residential construction in Europe has been weak for years. It has shown some tendencies of recovery, but those tendencies have not yet translated in a full recovery of volumes and pricing, and that's what you see in that last bucket.

The signal there is clearly that when this will recover, there's quite a bit of upside to be had in the construction segment. And then lastly, a third sort of cut of the same results, but then now by product type and volumes. 1% core volume increase, and that is a first in many years. The volumes have decreased over the last years, predominantly because of weakness in European industrial and construction markets, but now we see a core volume increase. If you take all volumes combined, there's a discontinuation in certain businesses, and that translates into some reduction in high-grade volume. That's where we stopped certain contracts, certain production to sell volume in higher-end applications when those become more available. That's what you see there. All in all, a very attractive performance also from a volume perspective. So I hope that gives you a flavor for the business' performance in the first half.

And now with some detail on the financials, I'll hand you to Jan on my right.

Thank you. Let's move to Page 10, where you see the metrics, how we track them to assess the performance of the group financially. A couple of them are already mentioned in the intro, all green arrows here except for free cash flow at the bottom end there. We'll get to that in a minute. Very nice progress over time, very good growth year-on-year in the right direction, debt down, business-related metrics up and very nice increased percentage as well year-on-year. So we're doing very well on that with the range of leverage where we wanted to be at 1.66x of leverage, which is nicely in the band that we like to be in.

The only thing that is red here is on the free cash flow side, which is the pre-growth part, which we used to show. If you look at including growth, you'll see later on, we went actually up from 45% last year to 46%. So it's still very nice cash generation for the group when we make operational results, which we use then to partially to fund the acquisitions when we have an opportunity to do it. This is a status at the moment, though.

What I like is the set of graphs on the next page, Slide 11, where you see the same metrics for trade over time, all developing very nicely in the right direction. The CAGR values are very solid. ROIC is very solid over time. You see there in the middle block at the bottom part, there's a slight dip in '23, but that was because of a lot of acquisitions that we did in that year. So the rest is performing really well over time where you see from '26 to '25, that 0.5% increase that was listed on the front page. EBITDA percent very well and the leverage, you see how we operate within that band of 1.5x to 2x-ish. So all metrics in a good shape.

If you look at the next page, I'm going fairly quick here as the metrics are showing good numbers, revenue on the left side and the EBITDA bridge on the right side by region. UK & Ireland somewhat down year-on-year in revenue side, which is the construction industry primarily and all other regions very well upwards, nice growth there and then some help on foreign exchange rate as well as the euro strengthened over time. You see the same thing on the right, where EBITDA is listed, all regions up, including UK & Ireland. Part of that is because of a change in contract structure of our haulage fleet that we changed now is now one of the leases where the cost base is now ending up in the depreciation line.

If you take it out, there was GBP 4.8 million in that bar, there's still 2 left, which is nice, 7% growth in EBITDA year-on-year in that region. So well done with the team on the ground in a difficult market. Same applies for West where construction is also difficult and in particular, residential is still fairly weak across the European landscape. So showing and delivering these numbers is a good performance on the team on the ground, in Nordics and in particular, on the central block where pricing was actively picked up and delivering. So all in all, growth on the top line, even more growth relatively on the bottom line on EBITDA. So very good shape there by region.

The next page has it by component, the driver from GBP 117.8 million to GBP 132 million. As you can see, volumes slightly negative. Overall, volumes were down 3%. Now this is the effect of that on the bottom line, but all other items are positive, in particular, pricing in a difficult market, so very well done by the team, very well managed commercially. And then we continue to work on our synergies and self-help projects. It's delivering. As you can see, we're not fully done yet. There's more to come as we execute the whole list of projects that we have listed. So it's favorably delivering, which is nice. And then we have a reclass on the haulage, which we've separated out here to be transparent what it triggers to EBITDA. So it is a help there, but not an EBIT, but it's here, it's help. And then we have a few others.

That leads to an all P&L on the next page, Slide 14, where there's a lot of detail. You see the top line growing from GBP 510 million to GBP 523 million. Operating profit up from GBP 81.4 million to GBP 81.7 million (sic) [ GBP 87.7 million ]. And then we have done quite a bit of work on the items below operations. Finance costs have come down with the refinancing. So a significant help on the cost side there. Last year, we had a few other gains to positive at that time. They don't repeat typically. So we have a few left, which is the CO2 result. So we still have an expert center that drives volumes there and benefits, but the others are missing. And then we have tax expense is going up because of improved profit, which is a good thing.

On a percentage basis, it reflects roughly 20% of profit before tax, which is somewhat lower than what we typically guided, which is at 22%. So we had a few refunds from previous years, which were favorable for us. So we'll take it and underlying profit in good shape. EPS up as a consequence as well, 12% plus in a market that's still not helping. We're very proud of it.

If you look at this chart on the right, it's an area where we get some questions in particular around the variable cost split. So you see 5 buckets there and in particular, around energy, fuel and carbon, which represents around 26%, 27% of total cost of sales. We have mentioned it a couple of times in communications. We deal with it in our way that is on the next slide. So how do we do that? One, we do it in the first bucket there at the top, we do it quite successfully because during the times that these energy crises manifest themselves, we were able to increase margins in both cases. This is a reflection of the Ukraine crisis at the bottom there, the 10 basis points.

And then the second now where we're in the middle of the Iranian and the Middle East crisis, and we were able to push prices up -- push margins up, sorry, with over 200 basis points. So the prices in the market of energy are clearly going up. They're visible, but not so much for us, though. And why not? That is because we have put hedges in place where we basically secure pricing from a certain point before it happened this year, and we're paying those, not the market prices. So we're -- we've taken action on the cost side, that's one. And then secondly, we've put them into the contract with customers that we pushed the prices that we have to pay pushing through and basically securing us from negative margin impact.

Now there are a few other things that we do to minimize the fuel expenses. We're trying to make our kilns much more efficient than what they already are. So working on programs there on efficiency itself and then biomass conversion because they don't track CO2 credits.

Now if you look at what we do versus what others have as a statistic, we've said we've included 2 charts on the right. The left of the 2 is an indication of our company with an intensity of energy in gigawatts per million pound EBITDA, that is about 15, 16 points. Other peers in our building materials group are actually substantially higher. In this case, it's 40% almost based on their intensity versus ours. So we're not overly exposed to energy versus what others have. So we're actually not in a bad place at all if you look at this intensity picture.

And then combine it with the actions we can take and we have taken on the left, we're in good shape. Same applies for carbon. We're dealing with it as we should. And if you look at our carbon intensity relative to others, we're lower, less lower than energy, but still substantially lower in over 30%. So overall, if you talk about exposure to energy and other relevant costs, it's mitigated. It is actually less than others in our peer group, and we're managing it really well. And you see it on the pack, which is the margins that we were able to deliver.

Now if you look at it over time, which is always a good position, these are 2 charts on the next slide that represents first, on the left side, margins over time from 2008 on of the lime business. So that is a portion of what we have today, but that is lime. Now as you can see, it hovers around 20% plus every year, and there were crises in those periods. So it's steady business. It has diversified end markets. It has a diversified customer profile. The regional split is helping. So it's very stable and delivering good results.

Now after 2020, we were able to purchase lime and combine it with the rest of the group, which was more aggregate based. So if you combine it, the average margin has come down to 18% as a start, and that's where we were able to move it upwards up to 25.3% this year with 25%, and we're at that point more or less again at midyear. 720 basis points up, not in easy years, nowhere near Ukraine crisis and the current position in Iran is this business and very nice trajectory. So we're able to do good deliveries on the margins and absolute amount. So we're dealing with it as we should.

Moving on to the last part of finance, which is helping Max in his third case. We're generating very healthy cash flows with our business. From an EBITDA perspective, around 50% to 46% if you take all cash flows that we have to pay. Of course, we have sometimes an investment in working capital. Next quarter can be a contribution, which is always going a little bit back and forth. We pay our taxes and CapEx. Maintenance is about GBP 20 million, and we have the cost of financial funding that we have to pay. And then we have a few cash outflows on leases that were previously in EBITDA now part of EBIT. So overall, free cash flow conversion, pre-growth CapEx over 50%, and then if you take growth CapEx into account, it is particular spent on a large project in Belgium for an aggregate crusher.

You take that into account, it's 46%, and this metric was 45% at the midyear last year. So good progress there. Very healthy CapEx, which then feeds our acquisition trajectory. And the last part here is that we do that with degearing in the back of the head, and we're carefully managing both. So far, we're in a very nice range, moving from 1.8x at the beginning of the year to 1.66. And you see the buildup of that, there are some cash outflows. But overall, very controlled and very manageable towards managing cash in both from a funding perspective and performance perspective.

Thank you very much, Jan. That was a good summary. We are now moving on to Section 3 on to Slide 20, the strategic delivery of the business. We'd like to take you back to the Capital Markets Day we did in May 2025 when the team went on stage and set out a series of objectives. And these objectives were, first and foremost, deliver the synergies program that we've launched and to keep improving our business from there on. Results today show you that, that program was successful, successfully implemented with a fantastic evolution of our margins.

The second thing that we said is that we would invest in our assets and make sure that the assets stay in good shape. And that is clearly successfully implemented to date with 64 million tonnes of high-grade mineral added to the Gotland operations in Sweden. And an additional crushing aggregates plant back in Belgium, which is on budget, being launched as we speak pretty much. The third thing we said is that we would continue to develop our footprint through very attractive M&A. And the attractive M&A clearly today is a first step into that direction again with the Dolomitas transaction, which I'll come to in a minute. Further aspects we set out were keeping our balance sheet healthy, refinancing very attractive terms, keeping it go. The leverage going down to 1.66x. And then the overall quality of the group emissions, safety, relations with our neighbors. And there, again, we invest time and resource to make sure our business is well set up for the future and the AAA rating with MSCI gives you that confidence.

Now if you look at the M&A piece, which is the news of this morning, we have a good track record of M&A. We've done a lot of work in the segment, plenty of deals all the way between the start of the group and then 2023. Then we did a very large transaction, the CRH deal, where we bought lime and limestone assets right across Europe. We implemented the synergies and integration program, streamlined the portfolio with some divestments at very attractive multiples in '25 and then now in '26, have gone back on the M&A trail. And that is with a deal of size, the Dolomitas Group. And the details of that are on Page 22.

So we're talking here the Lithuania. We're talking Lithuania, which is a country you can see with all the dots on the map. It's 1 of the 3 Baltic states. We have a very attractive and well set up Baltic business already, and this business will fit right into that mix. The group is -- the Baltic Group is run and managed by our Head of the Baltic states who have an intimate knowledge of the business we've just bought. He ran that business for many years before joining us and kept a very good relationship with its prior owners, the two gentlemen who have sold us the Dolomitas Group.

Now what is the Dolomitas Group? It's the largest quarry group in Lithuania. It's the largest limestone-based group in Lithuania. It's the largest dolomitic lime dolomite group in Lithuania. It sells predominantly into various infrastructure, industrial and environmental applications. One of those which it doesn't sell to yet would be green steel. Dolime, which is lime made from dolomitic limestone or dolomite is an essential ingredient in electric arc furnace-based steel. It's essential because it protects a refractory brick, the lining in that electric arc furnace from degradate -- from degradation as you produce steel. And this particular product is high-quality limestone subgroup of limestone is an essential ingredient in exactly that production.

Now if you look at the business in detail, the one that we have or agreed to purchase this morning, was set up in the 1960s, has 40 different types of limestone products and dolomitic limestone product and grades that it sells in the various end markets. Sells for about EUR 70 million in terms of turnover generated in 2025, EUR 18 million in EBITDA. Reserve life is solid, 25 to 30 years existing reserve under permission and ownership and a further 15 to 20 where permits are required, which we will obviously obtain over the years to come. 3.5 million tonnes of production per year with the capacity to do more at 25.7% EBITDA margins. We expect this to complete at the end of Q3 and into Q4 as the regulatory filings are going through.

Obviously, the management team is very solid, and we have the intimate knowledge of the business through our staff member who ran the company for a long time. The 2 owners were very pleased with the fact that they requested to take shares and have taken those shares at a clear premium to the price at which this was agreed, 129p per share. And then in particular here, and I know that some are on the phone here as well with you, this transaction was entirely run and managed by the teams internal to Sigma, a fantastic effort, a fantastic process, well run, well executed, and that shows the capabilities we are developing internally. And obviously, on the side of the sellers, they did a fantastic job, too.

Now a few slides on what dolomitic limestone and dolime all means. Dolime versus lime, again, the critical difference is the magnesium oxide content in that particular product, and that helps with steel production, helps with feeding soils, pH control. And it also helps just as a hard stone limestone variant for construction. Now Dolime itself is on the next page, a fantastic material to be part of. It is scarce when you look at the European footprint. There's not many pockets of this material available. And we now start to be part of that club that produces this product. It's a subgroup, dolime that is -- which is in demand and growth in the volumes are clear when you see the predictions on the slide, 4% per annum, which is quite nice and it outpaces this usual 1%, 1.5% volume growth that we have flagged in the past, and that is all because of the trend towards electric arc furnaces.

And we've given you a slide on 25 where those electric arc furnaces are placed, where we have the various dots dolomitic limestone production and where we obviously now are placed ourselves with the inclusion of Dolomitas. Plenty of our electric arc furnaces already up and running and plenty more coming. And last point that is important is with the Dolomitas Group, we also purchased a large section plot of land in the economic free zone of the ports in Lithuania, which will allow us to both import and export of product into the region. All in all, a phenomenal acquisition, a fantastic synergistic acquisition, which fits perfectly within the remit and the objectives that we set for our group.

And that leaves us the last few minutes of this presentation for questions, the outlook. While the outlook is a positive one, we have a fantastic business, great staff, great resources, scarce resources, inflation proof in some say, resources right across Europe. We have fantastic customer base who we serve with both product and additional services. The business is predictable through cycle. And the reason for that is that we don't have just one sector we sell to. We sell to pretty much every sector of the economy and those sectors evolve with their own cycles, and that makes this business so predictable and so smooth. And then we're very well placed there for Europe's reindustrialization and the tailwinds that come from additional infrastructure.

And as a result, second half, which is typically a stronger half than the first, has started well ahead of last year. We're obviously watchful. The Middle East crisis, which we hoped would end in the summer is obviously still continuing, and we are keeping an eye on how that impacts end demand. And the reason for this is if interest rates go up because of inflation fears, does that impact the housing demand, those sorts of things we keep an eye on. So far, we're trending very nicely, as you can see from those results. The CMD priorities from last year are nicely being executed. And as a result, the Board's view and our view here is that we're on track for another solid performance as a group. And now with the additional benefit of M&A, the synergies that will bring and the earnings enhancement, fantastic deals like the Dolomitas deal we have announced this morning.

And on the back of that, I'd be happy to hand it over to you for any questions you might have.

[Operator Instructions] Max, as you said, we have received a number of questions during today's presentation. So if I could just hand back to you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end.

Thank you very much. Yes, Elisa will take us through the questions screen.

So first question is from Henrik. Please explain the corporate cost in the chart on Slide 21. Does it only relate to Dolomitas or cumulative M&A?

The corporate costs are just -- Slide 21. That's a different slide. But generally speaking, corporate costs in the waterfalls that we have, and Jan can expand, is just all the central functions that the group has. So you have a buildup of very EBITDA components and then the corporate cost by division, by region and then the corporate cost over the top.

Stephen P. Could you expand on the courtship of Dolomitas and were you in competition?

No, this was a very nice transaction as the ideal scenario, 2 fantastic sellers who were happy to consider what the next -- the best next step would be for their business, a business they've been running for decades, their family has been owned for decades. They obviously knew our CEO, Baltics from his previous tenure with that business. And so it was a direct relationship there. And there, I would say that both the seller and our M&A teams have done a stellar job. We did all the diligence with some support, obviously, on legal and finance from outside counsel. But all the other work streams were in-house, and it was a very good well-executed deal.

Another question from Stephen P. You have not declared any synergy ambitions regarding Dolomitas. What areas are the most promising?

We have a sort of a blanket synergy ambition for any deal we do, and that's not new. It's been there for about 10 years, which is to say that we always hope to achieve about 25% EBITDA increase on any deal that we do and that we then hope to -- aim to outpace that increase in the years following transaction. So that's the guidance that you can take. And you can look at the deals we've done in the past, and that's always where we've ended up, even much higher.

And what's the ambition or what's the main source? Again, prior deals has always been a combination of operational market presence, integration into the wider structure. It's never a recipe that is exactly the same. So it depends on every time on the local context. And again, here, that will be the same. But take those numbers as a guidance.

Question from Peter W. You state that the synergy program has delivered EUR 45 million of EBITDA improvement to date. How much was incremental in H1 2026? How much remains? And when will the program be substantially complete?

Yes. I can take the first one. The incremental part was on one of the slides on the bridge was EUR 5 million for the first half. We've said on the full program of synergies that we have delivered the minimum that we said we would. We lifted the minimum twice from EUR 30 million to EUR 40 million. So we've done that last year, year-end. This is another EUR 5 million on top. But we continue to work because they're still not fully finalized yet. And we said we will do our best to get to the EUR 60 million, which means that there's EUR 50 million more to go after.

And the EUR 60 million -- by the way, to complete Jan's point, EUR 60 million in synergies on the CRH deal would be near enough 50% EBITDA uplift from the acquired EBITDA. So we are well in our target range already, but obviously, the target is to get to the full EUR 60 million.

A question from Mason S. Today's acquisition is very exciting. Can you comment on the strength of the pipeline for further acquisitions and the likelihood of closing another deal in the next 12 months?

All right. So next 12 months, no doubt. Yes, there's no debate. The pipeline is full. The pipeline is always full. What you want to do as a business of our type is you want to buy the best companies at the best value. Dolomitas this morning is an example. I mean the valuation is attractive. The quality of the group is exceptional. The deal process was fantastic. The sellers took equity and fully subscribed to all of us and what we are all trying to do here and the confidence in the limestone and lime sector in Europe. You want to do those deals. You could obviously buy anything and everything that comes around the corner, but then you don't build a quality business, and that's not what we're after.

Question from Carl P. Could you give us a bit more color on the GBP 8.2 million other and FX contribution in the H1 revenue bridge? How much of it is FX? How much is other? And what is included in the other component?

Other and FX is GBP 8.2 million. The bulk is foreign exchange. Others is, for instance, if we charge some revenues to customers that is not related to volume, which is incidental and you put it there, but the majority is foreign exchange.

Question from Vishal B. You spent GBP 27 million of CapEx in H1. This includes growth. What is the annualized run rate of the group here over the medium term, please?

Annualized number based on the current size of the group, which is around -- the actual leases is around 65-ish dependent on growth. With the new acquisition added will go up slightly because they have CapEx needs as well. But that's, I think, 10% plus is realistic. So you, preleases 65, 70-ish is a good number.

Question from Conor M. Thank you for the excellent presentation. When do your energy hedges mature? And have you modeled what kind of an impact this will have on earnings when you need to put on new hedges given current prices?

Yes. Well, look at that actually right now, this is the period where we normally would look at it following the budget process for next year. The hedges that we have put in place vary in terms of expiration dates. And they vary also by country because every country has a different energy profile and thus, you need to do that on a country basis. Today, what we don't want to do is lock ourselves in at prices that are at current levels. So we will be a little bit more -- we'll have a different approach now towards hedging more layer based than at a moment in time.

So we'll be acting cautiously on the hedging just for the sake of being mindful of cost development. That's one. But on the other hand, the prices will be going up with it because of the contract structure that we have. So there's not an exposure per se for us, but we are still mindful managing the cost base because if we can avoid pushing it through customers that is well received by them. So it's a bit of both.

Another question from Vishal B. You invested GBP 14 million in working capital in H1, and you will now also integrate Dolomitas Group. Should we expect you to continue to invest in working capital this year and over the medium term as well?

No, it's an investment now. Last year, it was an investment of half the size. There will be a benefit at some point. So working capital is working capital. It's not always going negative. And if you add, of course, the company, then you have just the balance sheet that comes along and then you'll go up. But it's not an endless spot in that sense. So we're managing it from an operations standpoint where we have an eye on the typical receivable days and the like and payment days. So -- but overall, if you look at what it reflects, it's 5% to 10% of revenue, which is a steady, which is very manageable, I would say.

Just to add one point. We own our resource. And if you compare a business like ours to a business that doesn't own its resource where it has to buy it on input, you have major working capital swings and absorption. And obviously, this -- the working capital, whether it's GBP 10 million or not, it's effectively a nonevent in that context. So it's a very manageable point. We also ramp up and ramp down stock. We ramp up things depending on what we see in terms of demand. So those sort of where you position the business to take better advantage of certain fluctuations in certain end markets. And those things sometimes come along in that working capital figure. But all in all, it remains a nonevent, as Jan said, 5% to 10% of revenue.

Okay. Other question from Vishal B. On the 129p agreed for the share component of the acquisition, can you please give any transparency as to the process to arrive at this price, Dolomitas shareholders were willing to accept. Does this also become a blueprint for future bolt-ons? If there is a share component, it's a direct issue to target company?

So this -- the 129p is the VWAP, the volume weighted average price set at the point when the deal was closed and completed essentially, which is Thursday last week. And at that point in time, the opening price that day was 120 or something like this and the VWAP was 129p. And so the shareholders accepted immediately a price 9p ahead of the price at the point where we fixed this. And so that's a fantastic statement or a testament of confidence in the group. Is it a blueprint? No. In this case, we have 2 private individuals who own the Dolomitas Group, who are obviously limestone fanatics because they've been in that business for their whole life pretty much and who wanted to continue to hold exposure to our sector in Europe. And so it's more than anything, a vote of confidence both in the sector, in the group, in their own business to put a substantial amount of the money you've got into the business. Now...

It was the price the day before the deal completed.

Yes, first, the deal was closed finally, but you need to, at some point in time, fix these numbers to feed that all through all the SPAs and documentation. That's the day before we close the transaction.

Two questions from David T. Could you update us on your dividend policy? And any further thoughts on the pros and cons of AIM versus full listing?

Dividend policy, if -- as we said this morning, if we can buy companies as we have just done this morning with Dolomitas, it is obviously the most attractive way to spend the free cash that we generate. Very attractive business, very attractive multiples, adds directly to our footprint, synergies to be extracted. So if you pay 6, then you have a good run on synergies, you may be ending up at 4, 4.5. That's where I think the ROIC growth potential comes from. And so if we run out of ideas, then the dividend becomes a logical second option. But for as long as the M&A piece generate this kind of value, that's where we should go.

Question from Richard E. If we look at Page 8, high-grade volumes up 8.5%, with revenue up only 2%, suggesting prices down. This seems surprising. Could you explain why? Aggregates and stone revenue up 11%, up on flat volumes. How have you pushed through such high pricing?

Sorry, where is the revenue up and the volume down? Page 8. No, I'm not sure if that's correct.

2% year-on-year revenue in the...

Yes. So the revenue -- so the high-grade volumes that you see there include discontinued business and so business that we have stopped to supply. And then there's a bit of a shift also between the columns, high-grade and aggregate stone. And so where some contracts were stopped and other contracts were picked up. Why is it up? Because we obviously sell at a better price, volume down, but we sell the volume that we do sell at a better price. And then aggregates and stone is both construction stone and industrial stone. And there, the industrial stone goes into some industries that have had a good run.

A question from Salam A. Could you remind us how exposed you are to steel overall? And within that, how much is flat steel sold into the automotive industry?

12% of turnover is steel, and that is steel in all the markets we operate. So that's Germany, Czech Republic, Poland and Scandinavia, a little bit of the UK. So it's right across. The amount of that going into automotive is not necessarily clear to us because the orders or the client portfolio that our steel customers have is not disclosed to us in detail. Obviously, the German steelmakers have a large component in automotive. The other ones have large components in other sectors as well.

Question from Richard E. UK revenue was flat, but EBITDA is up 24%. What were the key drivers here?

Well, there's a -- so EBITDA, if you take it net-net, it would be 7-or-so percent up EBITDA, flat revenue. The remainder is the internalization of the haulage function.

Question from Richard F. Products, processes to reduce CO2, how are these developing?

They're developing well. The predominant strategy is biomass, so conversion of fuel source. That's a big component of the CO2 input or output that we have that we are in progress with, and there's a whole plan and program for the next year is to convert all our operations to biomass, multifuel, one of which being biomass. So that's all going fine.

Question from Salam A. How do you explain the underperformance of the construction segment in what appears to be a relatively stable residential construction environment and a fairly supportive infrastructure market? Are you seeing any substitution towards alternative products? Or have you lost market share?

So the residential market isn't -- well, it depends. There are pockets and there's countries where it's different. The Holland is, for example, more stable, but there's other countries which are tough. Residential markets are tough. There is an increase in permitting and so forth, but it doesn't translate yet in actual house build. And the U.K. is very bad. The Finnish market is not great. The Swedish markets did better. So it's not a great market to evolve. And as a result of that, you have a mix effect and you sell other products. So that's one.

Infrastructure is stable. Yes, that's a correct statement, but it's stable year-on-year, and it doesn't actually do much addition at this point in time. And so as a result, the construction segment is weak. Now, the down -- that's the negative. The positive is it's been here at this level for 4 years now, 3.5 years, 4 years. And so we're still waiting for that recovery to come through. And once it does, then you will see a significant amount of additional volume through that segment.

Question from Lauren C. Can AIM continue to be a suitable place for the listing? Or do you have ambitions to move to the main market?

Yes, I forgot to answer that question on the previous question. We focused our attention and time on basically running the business synergies, development, M&A rather than being very excited about where we should be listed. The AIM market has done a great job for us over the last 10 years, been a great home. There's some rules changes in the AIM market, which hopefully make slightly more attractive. It's a big job if you want to move. And so it's a question of resource allocation. And we find that at this point in time, the resource allocation to M&A and developing the group is a better one.

And the benefits of moving to the main market is not clear.

Yes.

Question from Vincent R. If the organic growth you have seen in Q2 continues in H2, is there any reason H2 margins would be down year-on-year as guidance currently suggests? Or are you just cautious regarding international situation?

Caution, that's it, nothing else. There's a lot of uncertainty around that is not just around. There's all sorts of other things that are there, and we prefer to be cautious and keep guidance as it stands and then revise later in the year.

Question from Carl P. Could you detail the main drivers of corporate segment underlying profit? And what will be behind the GBP 10.4 million year-on-year -- year-over-year swing in corporate segment underlying profit for H1 2026, GBP 5.25 million versus GBP 5.13 million in H1 2025?

Corporate costs, like Max said, is just the cost and headquarters. What we do label in there are sometimes one-timers. And you see it on the P&L slide where there was a GBP 5 million favorable other gains that didn't repeat. So that means that if you have a gain or a onetime gain, for instance, insurance premium, you won't have it the year after, which happened this year. So we're not raising -- so we're not going up in corporate costs by the corporate team. It's just one-timers that do not repeat, lifting the overall -- we actually bring the overall cost down, the consolidated cost level, but that is not because that is an increase in the cost of the headquarters. It's just the absence of favorable gains that don't repeat. So it's not that we're structurally spending more.

That's it. We've answered all the questions.

We answered all the questions. Okay. That's excellent. Thank you so much for your time and for taking time for us today. We have fantastic business, fantastic asset footprint, fantastic reserve, great position to take advantage of all the tailwinds that are coming down in terms of European reindustrialization. And then obviously, an M&A transaction now, which was -- which is very welcome and will add to our already great setup. So thanks for your attention. Thanks for listening, and thank you for your support.

Perfect. Thank you. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations. On behalf of the management team of SigmaRoc plc, we would like to thank you for attending today's presentation, and good afternoon to you all.

Good morning, and welcome to the SigmaRoc plc investor presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to the management team. Max, good afternoon, sir.

Welcome, everyone, to the 2025 SigmaRoc results presentation. We have a slide deck for you, which will run in 4 sections. We'll give you an update on the group's performance, operationally focused. Jan will take over for the financial section. I'll take over again after that for strategic delivery and outlook. The slide presentation was fundamentally run in 2 main themes: theme on the left, integration completed, theme on the right, ready to scale.

What do these mean? Integration completed, we are one group, one culture with, of course, local specificities with 3,000 people strong who have contributed materially to the results we post for 2025. The results of 2025 show us that this group can perform, is resilient with whichever market conditions are in front of us. We have delivered synergies, 2 years ahead of plan with more to come on that front. We've optimized our portfolio by selling several assets to owners better placed to make those assets work for them. And we innovate, we invest, we decarbonize, we find further potential through those levers.

And with that, we have a group which is ready for the next steps. And these next steps are, first and foremost, our position in Europe, our position vis-a-vis reindustrialization, the focus on infrastructure, on industry. We have operational leverage in place for market recovery. That operational leverage, that was built in through our synergies programs and our optimization of our footprint. We have a large number of loyal long-term customers. We look after them, and they help us in our growth. We have obviously a better and new finance facility, which Jan will deal with in his section. And all of that allows us to continue our disciplined capital allocation model as we have done over the last 10 years.

If we go for the first section then, operational review of the business, a slide with lots of numbers. I will leave you to digest the various individual figures separately, but there's a few points I'd like to highlight. First and foremost, overall green arrows everywhere. Every business progressed from an EBITDA and a margin perspective. Where you see some slight weakness in turnover, you can see them in the Nordics and in Central Europe, these are predominantly to do with us stepping out of certain nonoptimal supply relationships where we have reduced volume to those contracts. More on that later on.

Main figures to look at year-on-year, over [ EUR 1 billion in turnover, EUR 262 million ] in EBITDA and 25.34% EBITDA margins, all very nicely ahead of plan, ahead of expectations. If you look at what the business then delivered when it comes to the various sectors, we can look on the next page by sector performance. Industry, Environment and Construction, the 3 main pillars of our activity. Industry, 7% revenue down, predominantly due to weaker demand in automotive and some construction outputs. Chemicals and mining remained robust and stable. Paper, office paper, in particular, saw some weakness as well.

That said, those sectors, in particular, will be the ones benefiting from the German infrastructure and defense spending, which is coming through as we go across 2026. Environment, on the other hand, nice performance, 6% up year-on-year. Water purification, flue gas treatment, the food and agricultural sector, all of those performed very well. This is a sector which will take more of our focus as we move forward.

In Construction, lastly, residential construction, generally weaker at low levels across the piece. Infrastructure, however, stable and sometimes growing as we look at the Pan-European footprint. Here, as a result, flat turnover for the year. If we take the same revenue, but now broken down by end use, high-grade minerals first. This includes lime, limestone powders, industrial limestone supply. Slight weakness in volume, 400,000 tonnes reduced which leads to 1% revenue down, but that is expected in the markets that we supply with weakness in steel and weakness in paper.

Generally speaking, the resilience and robustness of this subsegment should be noted, and it's also 70% of our turnover. Aggregates and stone, the middle segment, 11% down. This is obviously the construction exposure and the low-value industrial stone exposure. Here, you can see the volume weaknesses or the volume reduction. I will come to those specific volumes on the next page to give you further clarity.

And then fantastic performance in the last segment, value-added products. Here, you will find dimensional stone, asphalt concrete, increase in volumes, but most importantly, increase in turnover. We've done a fantastic job in Belgium for dimensional Stone, in Wales for the new asphalt setup, in the U.K. for concrete products. where we have taken some market share and driven the performance of that business forward.

Now I mentioned on the next page, the volume picture, 2.4 million tonnes of reduced volume overall, which splits down into 800,000 tonnes core volumes where the market dynamics inform the reduction in that volume and 1.6 million tonnes of reduction when it comes to us rejigging, reorganizing our footprint. Now that last point is important. We have shut down certain plant capacity. We have shut down certain supply deals because our resource is precious. We have 2 billion tonnes plus of reserves, but it's still expensive to mine them, expensive to sell. We sell those to the right users. And so certain supply deals were simply no longer of interest or in the wrong place. That's 1 million tonne of the [ 1.6 milion tonnes ]. We had also 600,000 tonnes, which was a short-term supply arrangement to help someone an industry out where mining permits were removed for a certain period of time, we obviously helped out where we could. And so that gives you the reduction of 1.6 million tonnes.

As you can see, the core volumes and the main reduction in volumes was only 800,000 tonnes on 20-plus million tonne of production. It's therefore not material. Now there is obviously a series of initiatives we took to even in this slightly weaker volume environment, perform, perform well, perform well ahead of expectations. And that's the synergies and self-help programs.

You see a breakdown on the left where it gives you the year-on-year performance of the synergy program. We came out in '23 with a target of [ EUR 30 million ] as a minimum. We upped that target to [ EUR 40 million ] as a minimum by 2027. 2 years ahead of plan, we have delivered that full minimal delivery. That delivery came through in part in '24, but mostly in 2025, as you see on the left. And how this compares to the acquired EBITDA, so the business we had plus the CRH assets in 2023, you see on the right. It gives you a breakdown of volumes and some pricing effects on the lower-margin products that we've seen and then the effects of the synergies coming through.

And you can see this nice staircase up the [ EUR 262 million ] with the full delivery of the synergy program well ahead of plan. Now there's more synergies to come. There is more self-help to come as this plan is for sure, not yet fully delivered. that we will talk about in the outlook. And then there's the other lever we use to boost performance.

And that lever is CO2 innovation investments. We are switching over our kilns to biofuels to have multi-fuel flexibility and that we can take advantage of the lower CO2 footprint and the multi-fuels that we can use in each operation. We are obviously increasing our fossil-free electricity consumption to 86% up from 71%. We optimize our kilns in terms of production process so that we reduce the energy use.

We are part of some CO2 storage and capturing programs, particularly in the U.K. We drive our CDP, our ratings, environmental ratings and have again moved forward to our rating B. And we have a very exciting little unit called Screenhouse, which invests in start-ups. There's a few investments that we have made across this year. Most importantly, however, the statistics on the right 6% reduction year-on-year in total emissions, 10% reduction in emissions intensity and fantastic performance again when it comes to our CO2 footprint. And that gives you a first review of the business from an operational perspective.

And I'll hand over to Jan on my left to give you the financials for the year '25.

Thank you, Max. If we move to the slide with all the -- another set of green arrows. It's the result for the group when you combine all the news flashes that Max walked us through, EUR 1 billion revenue in the meantime, down year versus the pro forma. But these sets of numbers are the actual numbers. So you'll see later on in the bridge, there is some full year effect of the acquisitions that we did in '24. They do have an effect on the '25 numbers. We were able to grow the volumes year-on-year with 4% and EBITDA with 16% year-on-year and not just year-on-year in actuals, but also on the pro forma side. So the activities and all the efforts that went into the synergy project execution as well as the self-help project execution clearly contributed to those.

And that's not the only thing that moved up very nicely. If you look at the EBITDA margin moved up year-on-year with 280 basis points and versus the pro forma 210. So significant improvement on our execution to upgrade the quality of the portfolio is very visible in this way. And that all contributes as well to record EPS for the year, 10.5% ahead on expectation, ahead of last year, basically beating all the comparables. So very well on the operations side and on the results.

If you look at then on the impact on our metrics for returns, 70% basis points up on ROIC clear improvement there. And the net debt side, cash management also worked out in our favor as you see in the coloring of the arrows. Net debt is down to [ EUR 472 million from EUR 510 million ], and the leverage is in place where it needs to be based on our cash generation profile, which we said we would then turn 0.5 point on an annual basis, and we're under 2 in the meantime, 14% up year-on-year -- or low -- yes, down year-on-year, but improvement.

So all in all, excellent metrics that we are proud of to deliver over a year, which was also marked with difficult market conditions. If we move to the next slide, it is the bridge on the revenue and on EBITDA. And they're kind of different in the way it they develop from left to right. The left one is revenue. You can see there on the bar on the left, there was an effect on the acquisition side in the numbers. This bundled under the M&A/divestment bar, substantial for revenue, and we saw the market effect on Nordics and Central with the shaded sales there in the middle, reflecting the volume effect in these markets regionally.

Different story on the right on the EBITDA side, where basically all regions contributed to the growth in EBITDA, one more than the other, but all contributed in a positive way, finding every means to work the bottom line despite market conditions that do not always help. So very nice improvement in all regions and everybody contributing. If we look at the bridge year-on-year for pro forma, so not on actuals, excluding the effect of the acquisition because that's already baked into the starting point of [ EUR 242 million ]. You see there a market effect combined on the left. Volume had an impact of minus 17%. We were able to offset that with commercial projects, synergies offsetting the volume loss sometimes by design and a little bit on the core, that helps offsetting those. And we had minor pricing effect in low-priced margin business on the aggregate side that we were also able to offset fully with synergy project that on the pricing side in the different geographies.

So all in all, help from the synergies commercially additional help, if you look at the network that we took the actions last year to restructure a few sites that we closed down to restructure the group on the white collar side as well. So all in all, good offsetting mechanisms in place. And on top of that, we did extra cost actions just on the self-help side. So difficult market, good activity around overall business management that allowed us to deliver improved EBITDA year-on-year up to [ EUR 262 million ].

In more detail, the P&L at statutory level. Again, this is on the axles that you see in the RNS with the effect of the acquisitions that play a role. It does play a role in the middle there on the administrative expenses side, basically the full year effect of those costs coming in. And then we were able to grow net operating profit underlying up to [ EUR 182 million. ] The finance cost is coming down for 2 reasons from [ EUR 45 million to EUR 36 million ] because we refinanced the bridge loan early in February '25 with a low margin profile with the U.S. private placement for [ EUR 125 million ]. So that drove the interest cost down and Euro working down during the year.

Now later on, I'll walk you through the effect of the refinancing that we've done recently. That will lead to another interest cost profile improvement for over 10%. So that will be a very nice movement for the scaling that we're going to do in the coming years with a competitive funding and capital structure in place in order to do that. So all in all, good progress on the underlying profit and earnings per share, as you can see at the bottom.

And then on the right is more for info, how we move from EBITDA to underlying profit. How did we get to good results in the years '24 and '25? We benefit from the structure that we have in terms of cost. There's a high level of variability in our cost structure that we utilize to rightsize where we can in order to manage our bottom line results, and that is working.

And as you can see, there's some turmoil in the world around energy. We have 26% of our cost is linked to energy, fuel and carbon combined. Half of it is carbon, so not in energy. And we have a safe position there. We're fully hedged for quantity and price up to 80% of our use locally, and we always allow for some extra percentages to allow for production losses drops if we need to, and we want to benefit from opportunistic local sales if we can. So it's not always 100%, but 80% is fine as well. So overall, good position to have, and we're using it to make the bottom line numbers.

If you look at cash management, we convert our EBITDA to free cash around 51%. So very healthy for us. It allows us to de-gear. It allows us to operate the business, and it allows us to work ourselves into a position that we will be ready for the next chapter in our history. If you walk through the building blocks, there was a little bit of use in our working capital funding because of some provisions that were created last year with the restructuring that were unwound this year, so it was slightly negative. We, of course, paid taxes. per the consensus runs at around 22% as a tax charge, so in line with those.

And then we have 2 blocks of spend levels, CapEx, maintenance about [ EUR 50 million ], which is in line with normal guidance of D&A, around 75%. And then on the right, we have a growth CapEx, which is basically an investment in Belgium for a new crusher that is coming live somewhere over the summer this year. And then I talked about the net financial cost coming down from 45% is moving down and the expectation is with the new refi in place, this will come down further with a more than 10% improvement if Euribor stays where it is.

So all in all, good cash management, hitting the targets there, excluding growth. We have some work to do on the net side, but overall, good cash generation, and that also helps us on our debt management as you'll see on the next slide. So we were able to move it down from [ 510 last year to 472 ] with a leverage of 1.8x EBITDA. Good position to be in already. It could have been better even if the euro didn't appreciate as much to the pound that it did.

And you can see there on the right, there's a large bar, EUR 26 million, where the euro foreign exchange effect had an impact on debt. not a risk for us. Bulk of the business is in euros. The loan is denominated in euros, and we pay down in euros. So no financial risk, but there is translation impact that we take into account when we go out with numbers in pounds.

So overall, good management and target levels, you can see on the right, we're in the middle of it. So we're basically ready to go on the next chapter in our history, where we want to drive additional value with the activity that we do well, which is do M&A and grow the business. In order to do that, we have looked at our financing structure coming from the acquisitions in early 2024. We did some divestments this year, and it was a bit cumbersome administratively just to run the process. So the flexibility was not really there that we wanted. The capacity is coming down that we repaid the facility. So that was potentially an area where we wanted to improve the securities were cumbersome administratively.

So we wanted to see whether we had an option there. And we went out with the syndicate banks that we had, and there was a lot of support to create a much more flexible structure that we were able to get commitments for, and we're pretty happy to announce that we have something new in place. It's simple. It's investment-grade clause facility, higher capacity infrastructure coming down and there is an ability to absorb some spikes. So flexibility overall is guaranteed in the structure. So we're really happy that this is -- this will come to signing soon, but the commitments are there, and it's a big help for us doing what we are good at to M&A and integrate.

That is it for finance for delivery and back to you.

Okay. Thank you. We'll get into the second part of this presentation, which is to do with the scale-up chapter. And first, we need to look back at what is it that this business does? Well, first and foremost, we help build infrastructure and homes through the lime and limestone we sell to that sector. We also help to produce basic industrial goods like steel, like pulp, -- so the lime and limestone we sell to that sector. And we help to clean up the environment, again, with agricultural liming, late liming, the treatment of flue gas. And those 3 big segments benefit from structural and cyclical trends. And if you put some numbers to this, these numbers are quite substantial, [ EUR 500 billion ] to be spent on the German economy.

Steel tariffs and quotas implying much more domestically produced steel, EUR 130 billion on environmental initiatives as we electrify the economy, [ 9.6 million ] dwellings shortage in Europe, defense, which is clearly the focus of the day and then lithium batteries and other green investments that will further enhance our products. All in all, a phenomenal environment to evolve in as a lime and limestone operator. And so in that environment, we look to deliver value for you as shareholders. We have over the next 5 years, 3, 4, 5 years, more than EUR 500 million in free cash that could be deployed in markets which benefits from structural and cyclical trends up.

And if we then look at our operating model over the last 10 years, we see that the pillars that we have exactly align with those sorts of priorities. We invest well, we buy businesses on good multiples. We improve them both by absolute EBITDA generation and the margins they generate per unit. We are able to integrate them into a group that then subsequently drive synergies. We have a fantastic involvement with our stakeholders in, first and foremost, our local communities and our customers, 90% have had lime supplies from us for over 10 years.

We make sure that we look after them. And then we innovate by investing in a variety of small technology companies, technology and new products within our group. And those 5 pillars help us to deliver the midterm targets we announced at the CMD, good organic growth, good margins, good free cash flow, leverage under control and return on invested capital ahead of 15% safety reductions and improvements year-on-year.

And if you then ask as an investor, well, what does that imply when it comes to capital allocation? The capital allocation model, therefore, basically follows First and foremost, organic investment and M&A. If the markets grow, if the industry will benefit from cyclical and structural trends, surely, we should expand our footprint to take most advantage of those trends. But we'll do that with responsible leverage. Leverage always kept between 1.5 and 2. And when there is either weakness in our share price or excess capital available, we will look at other shareholder returns, buybacks, dividends as appropriate.

And if we execute those as we have executed over the last 10 years, we can drive our profitability, drive our returns, improve our scale, drive synergies and make this business a better business every year as we progress. So looking forward then to the year ahead, we started the year well. The year has traded exactly as we hoped up to the end of February. Of course, the winter, winter happens every year. And of course, there's snow. There was a bit more snow this year, in particular in Poland and in Scandinavia. And if you want to build motorways and there's 50 centimeters of snow, you can't really start. So that volume is to come further into this calendar year and start the construction a a bit slower, but industrially and environmental demand were good. We expect to see recovery in H2 driven by the German stimulus programs, driven by housing and demand recovery.

As a result of that, we think that the operational gearing that we've built in and the but the drop-through of the additional volumes to the bottom line will be very attractive. We have rightsized our group. We've done synergy programs and optimization programs. And so for the benefit of additional tonnes will absolutely be crucial and be fantastic for the bottom line. There's obviously the macro trends and developments to take into account the Middle East and what is happening there needs to be monitored. But on the right side of the slide, you can see that we've had this sort of a scenario before 2022, we had energy shortages and spikes.

And in that environment, we obviously already had a fantastic setup, but we also learned our hedging is in place. we're able to deal with volatility. We're able to deal with energy shortages. We're able to deal with changing energy use in our kilns. And so there, we do not see much risk. And then we have our priorities, improve safety, improve our operating standards across the sites, protect our margins and strengthen them further as we have done every year, convert the improving environmental and industry setup into further profitable growth, lots of self-help still available if demand remains a bit sluggish and then grow our business organically and inorganically by taking advantage of both our footprint, our setup and the M&A pipeline, which is very active.

So that gives all of you, hopefully, a great picture on what '25 looked like in detail, why it was such a successful year and how our business is very well positioned for not just '26, but the next decade. And before I leave you to Q&A, I thought it would be good to show you 2 rather fun images. This is 1902. This is in Belgium, our workforce back then leaving site. In the middle, you see the large office building. On the left in the background, you see the production halls. And on the foreground, you see the stopping area where stock was ready for delivery. And then we have 2026. our workforce at the same site. In the middle, you see the exact same office building. In the background on the left, you see the exact same production holes. And in the foreground, we have slightly modernized our stocking area. The same business, assets which in 1902 were relevant and which are still relevant today to help build Belgium and Europe.

Thank you very much for listening.

[Operator Instructions] I'd like to remind you the recording of this presentation, along with a copy of the slides and the published Q&A can be accessed by investor dashboard. As you can see, we have received a number of questions about today's presentation. Can I please ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end.

Okay. So one question from[indiscernible] . I appreciate 86% of your kilns are fossil-free electricity. Could you please discuss the impact of a sustained rise of oil prices beyond the GBP 120 mark on market capacity? How does this scenario impact the market share of your sites?

Okay. So from the input cost perspective first, we have a very active hedging program right across the group. We use different sources of energy in different locations. We have adaptive hedges in place there. The full year '26 is hedged, '27 is hedged in large parts. This is a learning from '22, where we had good performance, and it's also a standard practice. We always leave a little bit open so that we can take advantage of some spot opportunities. If we look back to 2022 and '23, in some cases, there, the hedges forward were more expensive than running spot. So you always want to have a combination. That's the first thing.

The second thing is our kilns are multi-fuel. Again, the learning from '22. In 2022, in some cases, coal was no longer available, it had to be gas. Gas was not available, it had to be oils. Our kilns, by and large, have opportunities to use different fuel sources. That gives us further flexibility. Second point. Third point, we have contract structures where we allow 2 things: first and foremost, to pass on spikes in energy, but secondly, also to look after our customers where they sometimes benefit from a proportion of our hedges.

And also, they have learned from 2022 and have hedges in place themselves. So from an input cost perspective, there is -- we're in a great place, absolutely great place. Where we need to look at is what does this energy spike do to overall demand in the European economy. And that's a question of how long does this trouble in the Middle East continue. If it's short-lived, it will not be a great impact. If it becomes a larger, longer conflict, then the higher energy prices might see economic activity impacted. It's difficult to assess what that looks like and how long and how big that would be.

On that point, we've demonstrated in '25 that we have incredible flexibility in our cost base. Jan just mentioned the variability in our cost base. We've also got a synergies and optimization program, which was only delivered to the minimum amount. There is still further synergies and savings to come. And so if you ask us, what do you think your group can do, I think our group can deal with the inputs. And if the inputs start to hamper volumes, we can also deal with the consequence of that. So I think that we are just very well positioned.

A question from. Will the rebuilding of homes in the Middle East have an effect on the company's markets?

The markets for building products are hyper local. And so any rebuilding to be done in the Middle East will be done from local sources. On the margin, maybe it will divert imported cement from Turkey in other directions, maybe I do not know. I think that for now, this is a predominantly local effect. Rebuilding in Ukraine on the other side will impact us because that's obviously next door that will help us.

A question from Stephen P. Any plans to move to a main market listing?

So we have this constantly under review. As you know, the A market has been a fantastic home for our business. Our focus at this point in time is taking advantage of the cash flows that we generate from an organic and inorganic expansion perspective. And so a main market move would be slightly distracting in that sense. And so for now, we're happy where we are, but we keep it under review.

Another question from Vishal B. Is there a potential impact to consider on infrastructure projects if the private credit market struggles for momentum this year and next?

Yes, perhaps it's hard to assess that one. A lot of the infrastructure spend that we look at by both in Germany, Poland and so forth is government-based government programs. And so the private infrastructure investments would be, I think, less impacted by this -- sorry, would be less impactful from us from our perspective. Now there are obviously private infrastructure-like programs, but those are usually the more risk averse, the more conservative type investments. And so therefore, I would think that it's perhaps less impacted. But again, less well placed to assess those sorts of comments.

A question from[indiscernible] . Can you give a bit more color on the supply contracts in the Nordics that you have been withdrawing from? What kind of mismatch prompted this?

Yes. So they're not just in the Nordics. Some are in the Nordics, some are elsewhere. And there's a few reasons to exit certain supplies. Reason one is we sell high-grade pure mineral into a contract where that mineral is only used as a fill or a subbase underneath road construction, for example. That is not the right use for that mineral. A high-grade mineral is highly valuable. It can be used for a multitude of processes and just to put it as a fill material doesn't help. And the customers there are in some way also logical, they cannot pay more. They cannot pay the high-grade prices for the material that becomes a foundation. And so there, we just stop the supply and then divert the volumes to other locations and other clients. That's one.

There, obviously, you will see that, that volume then starts to grow again as industrial demand in Europe starts to grow. So that's the first thing. Secondly, it made -- it has been the case across the group that we have repositioned our business and exited certain locations where we had a plant and we shut it down. That plant was not fully optimally used. It was running at half volume or less than half volume, and it doesn't make much sense to keep that going. And so as you do this, your margins and your profitability benefit, but your volumes suffer a bit. That's just for the overall profitability of the group that made a lot of sense.

And also in the context of CO2 credits, it makes sense. That's the second one. And then thirdly, we've had -- we've exited or had to exit certain short-term supply deals. And this was that 600,000 tonnes, you could see from the slides. This is really where we have been a help to some other locally located suppliers of materials who have trouble in their mining operations. And you don't leave those people just hanging. You try to be supportive of them because you're also then supportive of their customers. So on a short-term basis, we help them with certain local supply. But obviously, when they find or get their mining licenses back or the quarry runs again or has opened up again, then obviously, they do not need our supply anymore. So that's what the supply arrangements, which we exited entail.

A question from Clive. Share price has been significantly affected by the current conflicts in the Middle East. what can be done to mitigate the effects? Or do you just let it play out?

Yes. It surprised us a little bit, too, because maybe there's some overreaction or some nervousness in the share price or in the market. With this conclusion, if you don't know our business well, this is a business using energy. Energy is not coming through the Straits of Hormuz. Therefore, this business must suffer from that situation. But as we explained, the hedges that we have in place cover us for the input cost. The contract structures we have in place cover us from a general commercial perspective. Where our customers are in that mix, we pass on either some of the cost or we help them with their inputs, too. So it seems slightly overreactive from our perspective.

Question from Stephen P. Acquisitions. Could you give rescale geography?

Yes. We've always said that the target here for acquisition work is internally funded. We have [ EUR 500 million ] in free cash over the years, internally funded predominantly bolt-ons and additions to our footprint in the places we've already got an established footprint. And then obviously, if there's new geographies to be added, then we would go into those markets with new acquisitions. The main message is we can fund this expansion, attractive expansion from our internal free cash flow. When it comes to sector, will be quarries, will be lime kilns, it will be value-added products. It may be an adjacency to what we already produce so that we come out with a footprint and a portfolio which is even more attractive to our customer base when they deal with us as a supplier.

A question from Thomas. Could you discuss the M&A environment today? What you're seeing in terms of valuation multiples for potential target companies and how you are weighting inorganic growth versus potential share buybacks given the implied forward valuation for SigmaRoc?

Yes. The environment is similar to what we've seen over the last 10 years. There's only really been 1 year where there was significant weakness in valuation aspirations, which was end of 2022 and early '23. And if you remember, we took full advantage of this back then by launching a short-term program to purchase 8 or 9 businesses in one go, small business in one go. So now it's just the same as we've had since 2016. Valuations range depending on the quality of the company, depending on the location, depending on the seller. So it's just the same sort of thing as before.

When you look at how do we prioritize organic growth, share buybacks and so forth, if the share price has significant weakness, we will certainly consider buybacks. Organic growth typically has multiples of 3, 4x EBITDA effective because you're basically not buying goodwill. The business is being built. But you also need to be careful with organic growth. We are a territorial business. The market sometimes sustains 4 players perfectly fine, 5 players perfectly fine, but you add a sixth one or fourth one, whichever situation it is. And suddenly, nobody makes any money anymore because the capacity is too large for the demand. So you need to always be careful how you approach the organic piece. As I said, we will -- we keep our share price under review to see whether we need to look at buybacks.

That concludes questions.

That's great. Thank you for answering all those questions you have from investors. And of course, the company can review all questions submitted today, and we'll publish those responses on the Investor Meet Company platform. Just before redirecting investors to provide you with their feedback, which is particularly important to the company, Max, could you just ask you for a few closing comments?

Yes. So first and foremost, thank you very much for joining our 2025 results presentation. I think the main takeaways are on that first page of our slide deck. We've completed the integration. We've demonstrated that regardless of volume outlook or market conditions, this business will deliver. And this business is now evolving into a market which has a series of structural and cyclical drivers which will, for the next 5 to 10 years, drive the performance of this group.

On top of that, we are well placed when it comes to energy, hedging and input costs, which are mostly variable. And we are obviously looking to expand our group through some targeted M&A as we have done over the past 10 years. Thank you all for your support, for your continued support and hope to see you again at the next results presentation.

That's great. Thanks for updating investors today. Please ask investors not to close this session as will now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This may take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team, we'd like to thank you for attending today's presentation, and good afternoon to you all.

Good afternoon, and welcome to the SigmaRoc plc Interim Results Investor Presentation. [Operator Instructions] Before we begin, I would like to submit the following poll. And I would now like to hand you over to CEO, Maximilian Vermorken. Good afternoon to you.

Good afternoon, everyone. Thank you very much for joining our interim results call for the first half of 2025. We have 30-odd slides for you in five sections, which I will run you through highlights, performance, finance, strategic delivery, and outlook at the end. We turn to Slide 4 now, some highlights to start with. First and foremost, phenomenal performance all around in a market backdrop, which was far from obvious. And I know that the teams in the business have done an exceptional job to deliver synergies, integration, the net zero road map and the development of the group more generally. The management of volumes stands out here.

We had quite some headwinds in various markets, core volumes down 3%, additional volumes by choice or by exiting some contracts a further 6, which made the first half from a volume perspective, a challenging backdrop, but we did perform very well through that first half through the delivery of synergies and therefore, financial performance on budget, margins up, EPS up, leverage down. CO2 has remained in focus, and I will come back to some of the initiatives that we've taken over the first half in that space further down in the presentation.

And most importantly, there's a lot of talk of recovery in Europe, and we are ready to take advantage fully of that recovery, 2.7 billion tonnes of high-quality mineral reserves, mostly limestone right across Europe. And so we are positioned to take advantage of a series of structural tailwinds that I will highlight further on. And so therefore, at this point in time, full year expectations unchanged, and we're ready to deliver another good year in '25. We go through some highlights in more detail when it comes to group performance.

Let's have a look at the various components. First, group, GBP 510 million in turnover for GBP 118 million in EBITDA. That's 2% up year-on-year proforma, so including all acquired entities across the first half of '24. Some regions stand out when it comes to their particular performance. And so these regions are, in particular, the U.K. and Ireland, 4% up year-on-year, this in a tough market backdrop. We've seen how the U.K. economy has suffered through the first half, in particular in terms of construction, yet the business has outperformed our expectations and some of its peers. West Europe has also done a very good job. And here, we see the impact of some of the synergy programs in particular coming through.

I need to add here that West Europe includes also some of the smaller development units, particularly Spain, which did a very good job there. The Nordics, flat on EBITDA in tough market circumstances. That this in particular when it comes to paper and pulp and some other customers, so a very good performance there, slight drop in the Central European economy. A few non-structural impacts here, delayed start of the agricultural season, which is quite a big component here, some elections in Poland, some breakdowns or customer-specific slowdowns in Germany led to this, but nothing structural here. This business is performing well as we hoped.

We look at the performance of the group when it comes to end markets, a number of points that I'd like to make. First and foremost, the industrial sector, which includes steel, paper and pulp, chemicals and mining. The steel sector obviously still suffers from weaker auto demand and the effects of some of the tariffs selling into the United States. This is expected to stabilize as we go into 2026 when the infrastructure funds and defence spending start to come up. Paper and Pulp, tougher first half. These conditions continue to be the same for the second half. Chemicals were largely stable. Mining robust, some of the critical minerals we supply to.

Environment, second segment, water treatment, consistent demand. Flue gas treatment, interesting evolution there. We mentioned this a number of times last year when we had very low exposure to the sector because of preponderance of wind and solar energy. I want to note here the coal and gas power generation is always a sector that we are keen to supply, but allocating capacity to these sectors is always something that we need to carefully consider as they switch on and off as the wind and solar energy comes through. And then the Food segment, which is, again, the agricultural segment has done a good job. The third sector, construction, there, a lot of the weakness is present.

That weakness is predominantly residential construction, which has been weak across Europe, some improved performance here and there in the U.K. in our businesses because of the setup of the companies that we have. Holland has seen slight increase in demand, but it still remains well subdued, in particular in Germany, Scandinavia, and more recently, a little bit in Poland. The infrastructure spend generally remains stable. No new or large new projects have come on stream yet. This is probably going to happen only when the German infrastructure spending starts.

We then look at things from a product perspective, there the picture changes again. High-grade minerals, which is high-grade limestone and lime, 100,000 tonnes in lime loss over the first half. The largest loss of volume is in the middle section, aggregates and stones, the construction materials predominantly GBP 1.1 million lower. I'll come to the explanation of how this happened later in the slide presentation. And then the value-add products, slight uptick there. That's predominantly the [indiscernible] precast and so on where good work has been carried through. So this gives you a little bit of a matter-of-fact perspective of the group's performance so far.

I'll hand you over to Jan for the finances.

Thank you, Max. Also a number of facts here on the slide. I'm very pleased to show very good results for the year, especially considering the market circumstances that Max talked about. This is an overview where the important financial and other metrics are listed versus the actuals of last year in '24, the light blue blocks there as well as a comparison with our proforma numbers being apples-to-apples for the composition of the group, which is for the actuals, not really because there are some extra acquisition financials coming through this year versus last and not all the acquisitions came in at the right time. We passed the GBP 0.5 billion mark this period.

Revenue came in over GBP 500 million, 13% up year-on-year versus '24, but 1% down on the comparison to last year on a proforma basis. This is mainly due to our revenue following lower volumes, so revenue pressure there. We'll get back to that on later slides where we provide some details, but that was only 1% as that volume drop was in specific areas of our business. Despite the pressure on revenue, our EBITDA is up for the year, both versus '24 as well versus our proforma numbers, 21% and 2%, respectively. This is primarily due to the delivery of our synergy results that were projected a year ago, and they are actually coming through in our numbers.

[indiscernible] some details to the discussion later on, but that's very helpful for us hitting our results. That higher EBITDA level also translates into higher EBITDA margin. We're up 150 basis points versus the last year and 60 basis points versus our proforma results. So very good development there, upgrading our portfolio, which is done on an active basis, looking at our contract structures in the geographies and actively work on those. If you look at that on the rest of the P&L, we'll get to that in a minute where we show more details. Overall, most of the line items are positively contributing to the bottom line. And the bottom line here is reflected in our EPS number.

It's 4.7p for the half, which is a record for the company. It's up more than 50% year-on-year from 3.1 to 4.7. And from a proforma comparison, they were also up with 9%. So every metric is going up further as soon as you walk down the P&L. So very nice performance there despite the difficult markets that we have seen ourselves confronted with. ROIC also up following EPS, we're at 5.9%, now 100 basis points up year-on-year, a very good position to be there where we are. And then if you talk about cash, we have a business that generates healthy levels of free cash flow. We have GBP 53 million for the year.

We'll see that on the later slide that translates in a 53% free cash flow conversion as well, 740 (sic) [ 640 ] basis points up year-on-year. So a good position there on the conversion side. And that translates into a good net debt position under the GBP 0.5 billion mark, down 6% year-on-year. And leverage, we came down from 2.6x last year to 2.0x now. We say that we can turn 0.5 point per annum. Well, this is a nice proof that we are able to do that with the teams we have on the ground. And proforma basis, we were also up nice -- down nicely, sorry, from 2.3 now. So all in all, very good results in difficult conditions.

So this is a testament to all the teams we have on the ground in different geographies that are able to deliver under difficult circumstances. If we move to Slide 11, which is a slide where two bridges are shown, revenue and EBITDA. This is versus the actual results. Next one is a little different versus proforma. Here you see clearly the contributions of our acquisitions from last year that are still having an effect because they came in during the year in '24. So for Buxton, we have an extra quarter. They came in late March in '24. So we have an extra quarter in the first half of this year. And then Poland, we were totally missing their results in the first half of last year, they came in, in September.

So we have there an incremental EBITDA number from those business units that are now part of the group for the full period. West came in very nicely as well, good progress there because of some cost actions taken in the later half of 2024, which is now contributing to the bottom line on EBITDA. So from GBP 97 million to GBP 118 million, so good position to be. If we move to the next one, Slide 12, where we show EBITDA versus the proforma, GBP 116 million to GBP 118 million. And this is the core slide that basically tells the story in one picture. Tough markets out there.

There's pressure on volumes in -- especially in steel and residential industries across regions, GBP 9 million hit on the financials. But with all the teams working very hard to offset that in the different regions with our synergy program, we have been able to mitigate that for a pretty decent number, as you can see in the light blue bar going up with GBP 7 million. This is a series of projects that the teams are working on, and they are successful in delivering good results of that, almost fully mitigating the volume pressure. On top of the volume pressure, typically goes hand in hand with some pricing pressure here and there.

We had a hit of GBP 4 million in Poland because of some pressure on price coming from imports from Belarus and Ukraine. In order to stay in the business, we have to move prices a little bit here and there to not lose the business, which was successful, but you do see some price effect there. But on the other hand, we turned it into negative overall because the same teams work on taking costs out where they can in order to maintain our margin or improve even in this case, we're improving on a net basis on the margin side. So that's a good performance and that positions us also very well for the coming years. We have a few other bits and pieces in our results that were positive.

We organized a new Carbon Expert center in the Nordics has started to deliver positive results, as you can see here. And we had a slight negative foreign exchange effect. It's a minor side, but that will reverse in the second half. So all in all, good performance for the company in the first half on a relative comparison with the proforma numbers from last year. So still delivering results, although the market has not really given us free gifts. If we move on to the next one, Slide 13. This is details on the P&L. A couple of points there. This is a comparison actual. So on proforma basis, you'll see then the revenue goes up again with the bigger amount.

In the middle there, you see an underlying profit from operations increasing with GBP 13 million, about 19%. So a little more than EBITDA because depreciation is mentioned in there, and that's a bit light in the first half. So it does help from operation line item, but we do expect a little bit of an uptick on that in the second half. Net finance costs came down, which is very helpful for two reasons. One is we were able to refinance the bridge loan early in the year at lower interest rates. So the cost for us is coming down there. And then secondly, as it is a Euribor denominated loan, needs to be [indiscernible] to the Euribor throughout the first half of the year. So the interest rate came down there as well.

So that is a good position for the second half of the year with the rate now around 2% and then we have a margin also based on the banking facility we have, but down from last year, helping the bottom line as well. We have, of course, the tax line that we need to deal with. Tax expenses are going up because of higher profit before tax. So we pay a little more on an absolute term. If you look at it from a relative perspective, that represents about 21% or so, which is slightly under the consensus that we have out there in the market is around 22%. So good position there with underlying profit going up to GBP 53 million, that then translates to an EPS of 4.7p based on the outstanding shares we have.

So good P&L, good performance across all the areas of the P&L with a record EPS, which we're proud of, and the market is still not helping us really with a tailwind at the moment, but still good performance. If we move to the next Slide 14, where you see one of the reasons why we're able to deliver good results. If you look at the different items of the income statement, we have basically five buckets. And three of the bigger ones, materials and production, energy, fuel and carbon there at the top right and then the distribution part are cost buckets that have a variable nature. So if we have to scale down production, these costs go down with it.

So it makes our income statement flexible and is especially resilient when it comes to difficult circumstances. So that helps us maintaining a healthy margin overall, and we executed in a very disciplined manner to make sure that we cut all the outflows where we can. The next one is around cash flow that is the result partially of the cost mindset. And we're able to translate our EBITDA of GBP 118 million to a free cash flow position of GBP 53 million. There was a little bit of a hit on the working capital, which was related to the restructuring program that we approved for in the later part of '24.

That's now in execution where we have the people moving out of the company with some payment as a consequence. We, of course, paid the taxes, like I said. And in the middle there, you see maintenance CapEx, which usually runs at 75% of D&A. This first half, it was a little lower, 15%, but we do expect that will pick up in the second half as well. And then we have a deadline, which is now 6% of debt, which is GBP 60 million of interest. So overall, very good cash generation in total. And that also brings down our net debt, which is on the next one, where we moved from GBP 509 million on a net debt basis at the beginning of the year, running at 2.1x leverage to GBP 498 million running at 2.0x leverage. So the delta there is not as big.

It could have been bigger because in that middle section there, you see a large bar of foreign exchange result. That is the euro strengthening versus the pound, which basically means that our debt in euros is higher in pound than at the end of the last year. However, it is a natural hedge. That's why we chose that it was Euribor-based -- euro-based. And it basically means we have a debt in euros, and we earn our money in euros for the most part. So that 24 is not a financial risk per se. It's just the translation of an existing euro-based loan into pounds. And then we can easily deal with that risk profile there. If you look at the building blocks, free cash flows coming in.

We sold the second tranche of the business of France concrete business in the first half. So there was an inflow there. And we have two cash outflows, a few non-underlying costs related to some earn-outs on the M&A side. And we invested GBP 10 million through our EBT to buy some shares during the CRH clearance that happened in February this year. So all in all, a very good position on the leverage side, 2.0 at the end of the period. That brings us in an overview with the most important conclusions for the first half. We delivered results and our operational improvement was achieved during our synergy program. We actively worked the business mix, looking at large contracts that contributed.

So that was a good performance there. It also helped together with other items in the P&L that we managed to record EPS position. So that's good, ROIC improved, and we continue to demonstrate that we can generate strong cash flows and bring our leverage down. And that brings us to the question, okay, what do we do with the money? We have four buckets there. M&A is clearly back in focus. We talked about that during our CMD in May. Same applies for capital investment. There's now a large CapEx project going on in Belgium to invest in a new crusher, a bit anticyclical, which is usually helpful when it comes to returns. So we're positioning ourselves to benefit from a recovery that is upcoming in the different geographies. I think that's the most important part of the story.

Thank you very much. Okay. We go through Section #4, the delivery and the delivery levers that we use to perform in the first half. There are seven -- six key points here -- seven key points here at Slide 20. First and foremost, volumes were weak. This led to a reduction in EBITDA per bridge that Jan showed you just now. We utilized commercial synergies, operational synergies to recover from a P&L perspective, the loss that was made through the volume picture.

We also positioned the business for the future, continue to develop our CO2 strategy, Net Zero roadmap, fuel switching and CCUS. I'll come back to those later on. We continue to invest in strategic projects, and we focused quite a bit on innovation as well. If we look at those drivers individually, first and foremost, the volume piece. Volumes went down by 1.1 million tonnes in the stone and aggregate section. We lost EUR 9 million of EBITDA in that reduction in volume. That reduction was concentrated in two buckets, core volumes, 400,000 tonnes roughly, which is basically softer steel market, softer construction markets.

And then a second part, which is a realignment of our portfolio, exiting some temporary contracts, reducing supply and lower margin. That's a further 700,000 tonnes, 9% reduction in total, of which 700,000 tonnes were intentional. We recovered, on the next page, the loss of EUR 9 million in EBITDA of this volume backdrop by being very active on the synergies. First and foremost, top line synergies, optimization of pricing, pricing mix, customer, customer mix, selling channels right across the group, about GBP 5 million contribution there.

And then selling additional -- into additional markets, for example, the Baltics, for example, waste-to-energy here in the U.K., very proud to be good suppliers to that industry and then further product development leads to another GBP 2 million EBITDA on top. Additional to this GBP 7 million synergies on the top line perspective, we worked very hard and the synergy teams in particular, worked very hard on the bottom line synergies. And this concluded three big programs. First and foremost, the realignment of the headcount right across the group, 6% of the headcount reduced, shutting down certain operations, shutting down or reducing in West Europe.

This is to realign the business in those areas to what the demand outlook looks like from a volume perspective in these regions. That program is now closed. These programs are now closed and will not be continued. Secondly is optimization of kilns -- kiln network, improved production and yield valorisation and tighter cost control, which led to an additional GBP 1 million in savings. And lastly, we have a much more dynamic network of kilns at this point in time where we clearly look at which kilns are best suited to supply what customer and what location. That goes up to GBP 6 million increase, GBP 13 million now in total. So we then look to the next Slide 24 to see how this then maps on to our development synergies.

You can see we have delivered so far GBP 13 million in synergies with a total program of 30 -- this is pounds, GBP 13 million in synergies with total program of GBP 34 million, EUR 40 million, and we are targeting the total program to deliver about GBP 60 million by the end of 2027. Full year guidance, therefore, is expected to exceed GBP 21 million for '25, which is nicely up from our last update. We now look at the future further up. First and foremost, Net Zero and our Net Zero ambitions by 2040. We're progressing along the three axes that we've identified, fuel switching, recarbonation, and CCUS. Fuel switching, we have one kiln and in the future two kilns running fully on biofuels.

We have replaced 75% of our diesel use in Germany to HVO. We're using kiln optimization software. These are programs, mostly driven by artificial intelligence to reduce fuel use. And lastly, we signed up to the Peak Cluster, which is one of the U.K.'s foremost due to pipeline initiatives to decarbonize the cluster of companies there, several cement plants in our lime stakeup. This is all successful and keeps going. In the meantime, we've increased our scores for CPD -- CDP, sorry, and the other scores MSCI to increase our rating. We've also worked on strategic initiatives from an investment perspective. Two in particular are currently ongoing.

New aggregates plant in Belgium is on track, slightly behind, but slightly below budget and on time delivery in 2026 first half. Civil works are starting, all plant supply is identified and signed up. So this is a nice project and well on track. Second project is our JV with ArcelorMittal in city of Dunkirk, where we are constructing or will be constructing new kiln capacity to 600,000 tonnes of lime, half of which roughly will benefit ArcelorMittal Dunkirk steelworks. The other half will be absorbed into our, in particular, Nordic lime network where we are shutting inefficient capacity down as we improve on our Net Zero road map. These new kilns will be highly efficient, fueled by biofuels.

It will be, therefore, green lime as the CO2 hub is fully set up. And lastly, we're very proud of having done two further investments within our SkreenHouse venture capital unit, a small unit that was set up to invest in technology that is beneficial to our business. We've led two investment rounds for two very appealing start-ups, Adaptavate on the one hand and Koncrete on the other. This is plaster board replacement, reduces lime, where we led a funding round of GBP 2.7 million and Koncrete is the platform for the delivery of construction materials where we led a EUR 1 million investment round.

In both cases, these businesses were looking for scale up, industrial validation and therefore, also fundraising to get to the next level, which we help them achieve. When we look at the outlook now and the next steps for our business, along the three main sectors we supply, the industrial sector, the metals, steel will remain subdued because of low demand in the short term, but we see that the German infrastructure programs and defense programs will boost that demand in 2026 and on from there. Same will go for the mining sector, the chemical sector, where the currently decent demand will hopefully increase with the additional demand coming from those programs.

Paper and Pulp. Pulp generally robust outlook, but paper sees rationalization of capacity in certain areas, and we're looking what that will imply from a demand perspective for our Finnish business. When we look at the second segment, environmental and agriculture, the season for agriculture was delayed slightly, but it has now started, and the outlook is improved. So stabilization is still going very well. And then when it comes to desulfurization of flue gas, flue gas treatments, coal and gas fire, as I mentioned earlier, requires very intermittent capacity. So we're always managing the amount of capacity to that sector.

Waste energy is much more stable in its running and therefore, is easier from our perspective. When it comes to construction, last segment, residential has stabilized at very low levels, extremely low levels, and we're waiting for that to improve. The improvement will come, we believe, as the mortgage applications, which we see coming through translate into actual transactions subsequently building or renovation. Yes, there's a slide in the back of the slide deck, which gives you improved mortgage picture versus some of the low levels we had earlier in the year, and therefore, we're optimistic for next year.

Infrastructure, politically driven with new infrastructure programs coming through as Germany starts to spend, as Poland continues to focus on the development of its infrastructure, we will see those increase. And that drives essentially two headwinds -- two tailwinds, which will mitigate the headwinds that we have within the group currently. The first tailwind is EUR 500 billion infrastructure stimulus that Germany has announced. And of that, they will increase. They already spend EUR 100 billion per year on infrastructure, which will increase to EUR 120 billion, a 20% increase, quite substantial in that year-on-year for the next years.

Secondly, the additional money spent in this bucket will go to the digitization of the economy, green economy initiatives and money to the specific states in Germany, all of which will benefit further construction spending. So from that perspective, we're extremely optimistic that the German stimulus will benefit our business quite nicely. We are exposed to that particular part of the world and its neighboring economies to a degree of 44% of our EBITDA. So we stand -- clearly stand to benefit. When you look at the Ukrainian reconstruction, we have provided you at the back of the slide deck with an estimate.

This is all public data that we put together to give you an idea of the scale of the effort required when hopefully peace returns to Ukraine. A $170 billion worth of infrastructure of various types was destroyed to date. This is an estimate, obviously, but that equates to 21 years of total prewar construction output for the Ukrainian economy. It's an absolutely colossal effort that will be needed, which we will, if we can help to provide some materials. And then there's obviously a few headwinds that we still have. There's the global uncertainty when it comes to the economy, trade tensions with the U.S., et cetera. We're actively managing the effects that this generates and delivering synergies.

And there's obviously two sectors that are clearly still seeing some weakness. In the shorter term, construction until that recovery starts. In the shorter term, the paper sector as they rationalize capacity and then steel from the auto sector, but that will very likely recover. So we then conclude the slide presentation, with the last page here, seven key bullet points that we would like to give you as a sort of a wrap-up. First and foremost, the performance in the first half of this year was really excellent in very tough conditions and the whole business has performed extremely well. We thank everyone for the monumental effort they put in.

The proactive management of volumes was very effective and the delivery of synergies to deliver the financial results that we've just shown you is a testament to that. Even as we're busy managing our business, we're still focusing on the future. CO2 is never far away. CapEx investments are being progressed at speed, and we're, therefore, well equipped for a recovery with a fantastic resource base, 2.7 billion tonnes of material available. If there's growth in Europe, we will certainly benefit from it. For now, full year expectations unchanged, plenty of optimism for '26, and we'll keep you informed as the business keeps delivering. Thank you very much, we take questions.

That's great. [Operator Instructions] We have received a number of questions throughout today's presentation. And then Elisa, if I may just hand back to you to chair the Q&A, and I'll pick up from you at the end.

So there's a first question from Vivian, where is the focus on M&A [indiscernible] division.

The focus is currently developing our business. We're clearly a growth company that is still in the phase of expansion. It's -- if we are entering a decade of stimulus -- fiscal stimulus across the European continent, it's wise and it's good to be positioned to take advantage of this. So the focus currently is clearly expanding our footprint.

And then the second question is effect of German infrastructure fund and Ukraine on the business and what will it come through?

We sort of touched on that in the slide deck that these are the clear two tailwinds that the business will have. There's a video that I also released this morning, which gives you a further detailed explanation of how the impact of those two programs will come through that's available on our website and on LinkedIn. And I suggest that you have a look at that because it's quite instructive.

Final question from Vivian. Is H1, what we expect in terms of the usual H1, H2 split?

Yes, that's completely in line with a normal year of evolution.

Next question is from David. Why is free cash flow conversion still low at 50%?

So our target of free cash flow to EBITDA is 50%. It might be that cash conversion ratio is the ratio you've picked up in other presentation. It's a different calculation. Therefore, those ratios would be in the 90s. When you take free cash flow, it would be 50.

Next question is from Delsie. When do you expect the first contract for the German infrastructure program to be signed?

So the German infrastructure contracts will be signed with those who develop and lay infrastructure work and asphalt and road. So we will be signing those. This comes through us supplying into those contracts. So it's a question of months. The German government is developing all these plans at speed. They've given us guidance on the amounts and the next step will be guidance on location of spend. We see this starting to benefit our business in the early part of '26.

Next question is from David. In the financial review, you noted that the margin over Euribor on the private placement bridge loan is 4.93%. In note 15 to the accounts, you say that the interest margin on debt facilities is 2.25%. I'd like to understand the reason for the substantial differential?

Yes, those are different. The private placement was the refinancing of the previous bridge loan. The bridge loan had a margin over Euribor, but that changed. So it's now a fixed margin. Euribor is not relevant anymore. It's a fixed margin for the duration of the facility, which is 5 years. and it's 4.9% -- sorry, 4.93% throughout the period, not over Euribor but just 4.93%. The normal debt is a debt structured with a margin over Euribor, the term loan that is the 2.75% now as we are higher than 2.0x levered, which will come down as soon as [indiscernible]. Details are in the different publications, in our annual reports online.

Next question is from Mark. Will part of the future free cash be allocated towards dividends now that leverage is falling below 2x or it's preferable to wait until it's approaching 1.5?

Proposed to wait to 1.5. We're conducting -- obviously, our strategy is to prioritize M&A, and we like to create balance sheet capacity to do that out of own funds. And so dividends will become a topic as we are below 1.5.

Next question is from Bruno. Please explain how total energy costs changed in H1 versus last year…

That's a basket of arguments. The main driver there is the energy pricing, which has come down versus last year. So that brings the cost down. There are individual cases where we hedge the energy in Belgium and in Germany, for instance, where we take position where we can. So that is to secure the level that we have. It's a mixed bag basically of the different initiatives that we -- that allows us to keep control over the energy cost.

The second question from Bruno. The cost of CO2 permits on your P&L. How do you expect this to develop in 2026.

Well, the cost in the P&L on CO2 credit is the deficit that we have. We emit certain quantities of CO2 and the EPS system that provides us with a certain level of reallocations. The deficit that we have versus what we emit and what we get as reallocation is the cost for us in the P&L. That's what we do. We buy the CO2 credits on the market. We have an expert center now running to make sure that we do that effectively and efficiently on pricing and that we do that on a daily basis. So very close monitoring there to keep these costs also under control.

Next question is from Thomas. Could you discuss the M&A environment? Any changes in the tone of discussions and willingness of sellers to engage given the growing awareness of structural problems discussed at your CMD?

Similar tone, similar environment as before. You shouldn't forget that we have, I think in our history now looked at 160 deals overall, if you take all the projects together. And so the tone is always varied across all of them. Some people want excessive amounts of money, some don't. Some are very willing sellers; it's just always a mix. So it's fairly similar to before.

Next question is from Solomon. Could you comment further on the pricing pressure you have experienced as well as on mineral imports?

We have not -- mineral imports are not necessarily something that we see all of. There's a little bit of limestone of different types of grading that used around Europe for certain applications that always has to happen. There's nothing new. There is a little bit of lime that comes over the border from Belarus into Poland and from Ukraine into Poland. These are typically lower quality lime and that impact the lower quality uses of lime, so soil stabilization and so on, about 3%, 4% of total demand, and that puts pressure on that segment, so the lower segment of the demand there. Nothing particularly of scale and has happened before and not something that we think will continue much or grow much compared to this.

The last question is from Ron. The 50% free cash flow conversion is something we should expect this year, or it has been a long-term target.

It is a long-term target. We have two versions of free cash flow conversion and excluding growth capital. Excluding growth capital, we have hit that mark, we are at 53%. The long-term target is including growth CapEx, and we are at 45% now. So there's still some room to improve on.

That's great, Jan, Max, if I may just jump back in there, and thank you for addressing all those questions from investors today. Of course, the company can review all questions submitted today and will publish those responses on the company's platform. Max, before I redirect investors to provide you with their feedback, which is particular important to the company, could I please just ask you for a few closing comments.

Yes. Happy to close comments out here. Just we've done -- we've delivered on a first half, which was a challenging market backdrop right across the group. We were integrating the various companies that we bought across '24. And you can see what the potential of a group of this type now is as you see what we can deliver even in tough circumstances where plenty of initiatives are going at the same time.

We thought we've kept thinking about the future, the future of this business when it comes to CO2, when it comes to capital investment, when it comes to development. So all those things together mean that the ingredients for future success, long-term success are clearly present in the business that we have now put together. So a big thank you to all the teams that have contributed to the first half. We look forward to the second half and then in particular also to the years to come when some of these tailwinds will help lift performance further. That was it.

Fantastic. Max, Jan, thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the Board can better understand your views and expectations. This only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of SigmaRoc plc, we would like to thank you for attending today's presentation, and good afternoon to you all.