Cementir Holding N.V. (CEM) Earnings Call Transcript & Summary

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Cementir Holding 2024 First Nine Months Results Conference Call. [Operator Instructions]. At this time, I would like to turn the conference over to Mr. Marco Maria Bianconi, Head of M&A and Investor Relations. Please go ahead, sir.

Thank you, and welcome to Cementir Holding Nine Months Results Presentation. My name is Marco Bianconi. I'm here with our Chairman and Chief Executive, Francesco Caltagirone. And I will go through about 11 slides of our presentation deck, and then Francesco is happy to take your questions at the end. Starting with the first -- Page #2 of the presentation, key takeaways. The first 9 months 2024 results are in line with our expectations with volumes up and a decline in both revenues and EBITDA also due to foreign currency headwinds. Cement volumes were up 0.6%. Ready-mix volumes were up 4.5%, and aggregates volumes were up around 4.9% versus the same period of last year. Revenues and EBITDA declined by 4.6% and 9.3%, respectively, impacted by weak volumes in some areas and a foreign currency headwind. If we exclude EUR 15.5 million of one-offs, the EBITDA would have declined by 5.4% versus last year. After several quarters of contraction, signs of a market turnaround in some geographies emerged in the third quarter of '24. 2024 cash flow was impacted by perimeter change about EUR 48 million, a higher dividend distribution and a higher CapEx, mainly linked to the Belgium Kiln 4 upgrade in line with the industrial plan. The guidance for 2024 is confirmed. Moving to the next page on the financial highlights. Revenues reached EUR 1.235 billion, down 4.6% year-on-year. Non-GAAP revenues were EUR 1.227.3 billion, down 4.8% year-over-year. Cement volumes were up 0.6%, mainly because of Türkiye, Malaysia and the U.S., offsetting volume reduction in all other regions. Ready-mix volumes were up 4.5%, driven by the positive performance in Türkiye, Sweden and Denmark. Aggregates volumes were up by 4.9%. Lower revenues were due to volume decline and strong foreign currency headwind, mainly because of Türkiye and Egypt. EBITDA reached EUR 296 million, down 9.3% year-over-year and non-GAAP EBITDA at EUR 289.1 million was down 10% year-on-year. Lower EBITDA in all regions with the exception of Egypt. Foreign currency headwind reduced EBITDA by around EUR 27 million. If we exclude nonrecurring charges and income from last year of EUR 15.5 million, non-GAAP EBITDA was down 5.4% versus the first 9 months of last year. Non-GAAP EBITDA margin declined from 24.9% to 23.6%. EBIT was EUR 194.5 million and non-GAAP EBIT was EUR 196 million, down around 16% year-over-year. Profit before taxes reached EUR 210 million and non-GAAP EUR 214 million. Net cash at EUR 79.9 million was an improvement of EUR 34.4 million in the last 12 months, which include EUR 43.5 million dividends by the parent plus extraordinary EUR 14 million dividends by subsidiaries to third parties and extraordinary investment for EUR 54 million. If we turn Page #4, Nordic and Baltic. You can see that in Denmark, domestic cement volumes declined moderately due to harsh weather conditions in the first quarter and still stagnant market. There was a volume improvement, though, in the third quarter, thanks to cement supply for the Fehmarn Belt project. Ready-mix volumes were up 3%, while aggregate volumes declined by 12%. If we exclude EUR 6.8 million of nonrecurring income in 2023, EBITDA declined by 8.4%, mainly due to lower volumes despite a number of cost efficiencies. In Norway, ready-mix sales volumes were down by around 21% due to widespread weak demand, adverse weather conditions and delays in some infrastructure projects. The EBITDA contraction was due to lower volumes and higher transport costs. Also, the Norwegian kroner depreciated by around 2%, 2.1% versus the euro average. In Sweden, ready-mix sales volumes increased by 30%, thanks to the contribution of major projects, whilst aggregate volumes were down around 15%. EBITDA was up versus last year and the Swedish krona revalued by around 0.6% versus the euro. Turning to Page 5 on Belgium and France, which accounted for around 24% of group EBITDA. Here, domestic volumes decreased moderately in the first 9 months of the year, whereas the construction market contracted by 6% to 7%. Exports to especially France and the Netherlands declined more sharply due to the slowdown in construction activity, also influenced by the Paris Olympics and strong competition. Ready-mix volumes were down 11% due to the general weakness of residential and commercial sector, whereas aggregate volumes were slightly up in the 9 months 2024. EBITDA was stable, impacted by lower sales volumes, offset by higher sales prices, lower fuel costs, lower clinker purchase and production efficiencies. Turning to Page #6, Türkiye, which accounts for around 17% of EBITDA. From April 2022, Türkiye is considered hyperinflationary, therefore, all reported figures are non-GAAP. Domestic cement volumes increased by 9%, thanks to significantly higher sales in the regions of Elazig and Kars, supported by post-earthquake reconstruction. Cement exports were up 8%, although penalized by the lack of export to Israel because of the embargo. Ready-mix volumes were up 20%, thanks also to new plant openings. Aggregates volumes were up 41% due to opening of a new quarry in Eastern Anatolia and higher underlying demand. Revenue decreased by 4.3% because of the Turkish lira devaluation versus the euro. If we exclude EUR 4.5 million of nonrecurring capital gain income in 2023, EBITDA declined by 9% year-over-year due to higher operating costs and negative FX, partially offset by higher volumes and prices. The Turkish lira devalued by around 45.5% versus the euro average in the period. Moving to Page 7, North America. In United States, white cement volumes were slightly up. Especially in Texas, they moderately improved, aided by better weather conditions and effective commercial actions, even if rainfall in the first quarter and fewer working days and intense competition affected prices. Florida, New York and California deliveries increased versus last year. EBITDA was down by 4% because of lower selling prices due to strong competition and higher fixed costs. The U.S. dollar was broadly in line with the euro average. Turning to Page 8, Egypt. Domestic white cement volumes declined by 6% due to weak residential market and the postponement of major public projects. Revenue in local currency was up 28%, while in euro declined by 8.8% because of an Egyptian pound 44.3% devaluation versus the euro average. EBITDA increased by 25.1% due to higher sales prices, partly offset by higher cost and EGP devaluation. Lastly, we have Asia-Pacific, where in China, revenue declined by 19%, with volumes down by around 14% and modest price reduction, and the renminbi devaluation versus the euro. Volumes were affected by real estate prices, early-year low temperatures, heavy June rains, summer floods and longer national holidays. EBITDA was impacted by lower sales volumes and prices, higher transport and fixed costs. If we exclude EUR 2.1 million of nonrecurring capital gains we made last year, EBITDA decline was 19.4%. On top, there was around 2.6% devaluation of the renminbi versus the euro average. In Malaysia, domestic cement volumes were slightly down due to stagnant residential and commercial sector. Exports were up by 9%, driven by higher shipment to Australia, the Philippines and South Korea. EBITDA declined due to lower average prices also influenced by export mix and exchange rate, partially offset by higher volumes and savings on variable costs. Here, the Malaysian ringgit devalued by 2.9% versus the euro average. On Page 10, a few highlights on sustainability. Our decarbonization commitment continues with EUR 35.3 million of investment in sustainability for mainly for kiln upgrade in Belgium, which will allow alternative fuels to reach over 70%. The Science-Based Target initiative validated our near- and long-term climate targets aligned with the 1.5 degrees scenario and approved the overall net zero emission target by 2050. We have been included Europe's Climate Leaders 2024 ranking by the Financial Times and Statist, and we've been confirmed as a leader in the ESG Identity Corporate Index for the second year in a row. We also launched a new range of low carbon white cement brand named D-Carb in Europe with 15% lower CO2 emissions versus Aalborg White Portland cement. And last but not least, on the 22nd of October 2024, the consortium formed by Aalborg Portland and Air Liquide was selected by the European Union to receive a EUR 220 million nonrefundable grant under the European Innovation Fund. This project is one, of the first fully onshore carbon capture storage systems in Europe with the aim of reducing CO2 emissions by approximately 1.5 million tons per year. The last slide, Page 11, is the guidance, which we confirm with revenues of around EUR 1.7 billion for 2024. EBITDA of around EUR 385 million, and net cash position at constant perimeter of EUR 300 million and a CapEx of EUR 135 million. With this, I end my presentation, and I leave the floor to Mr. Caltagirone to take any of your questions. Thank you very much.

[Operator Instructions] The first question is from Emanuele Gallazzi, Equita.

I have a couple of questions on the Nordics. Let's start with Denmark because basically, we have seen a sort of recovery in the third quarter. So, I was wondering if you can just discuss a little bit more about the outlook for Denmark entering in 2025. Are you seeing some improvement on the residential market? And even on export, do you expect this softness to continue in the coming quarters? And the second one still on Nordics is related to pricing. Can you just help us understanding a little bit better the current pricing environment in Nordics? And basically, what do you expect for 2025?

Denmark is stabilizing, and we expect for 2025 a better result, especially because the Fehmarn project that is the tunnel between Denmark and Germany is picking up. And so, we expect that compared to 2024, we should have, let's say, around EUR 5 million more of EBITDA in 2025 compared to this year. The price, I think for the old perimeter is more or less stable, and even if we have seen so far a decline of quantity in some markets, especially China and Belgium, and France because of the end of the Olympic infrastructure. So, we continue to see some softness for these 2 geographies even in 2025. The other geographies, we expect that they should improve compared to 2024. For example, in Belgium, despite lower volume, we expect that the new kiln -- the ramp of the new kiln will allow us to increase the alternative fuel from 25% to up to 75%. This means that at the actual price that we can expect the savings next year of EUR 5 million to EUR 6 million in terms of fuel cost.

The next question is from Matteo Bonizzoni, Kepler Cheuvreux.

I have 2 questions. The first question relates to the carbon capture and storage project in Denmark. We have read that you received a grant, so a public funding worth EUR 220 million. And as you said before, this project, if it's going ahead, it should allow you to save 1.5 million tons of CO2 emission. I just want to have some data maybe on the return for this project and the CapEx which would be left on top of you and maybe some details on the time line and how many years this CapEx could be spread? And if you have already taken a final decision, go ahead or not go ahead, it would seem that it's a no-brainer in the sense that including the public grant is something which needs to be done, but I was just checking if it's true or not. And the second question is on the trading condition in the fourth quarter of the year. The question is the following one. Last year, the fourth quarter was, let's say, in relation to the typical seasonality pretty weak because it was EUR 10 million below the EBITDA adjusted Q3. If I go back normally, Q4 compared to Q3 adjusted EBITDA was from in line to slightly below. So, it could make, think, let's say, that Q4 this year could be maybe not down compared to Q4 last year, but it's just I mean, something which I would like to check.

Thank you for the question. So, regarding the carbon capture project, what we can say at this point is that we received EUR 220 million over a total cost estimated of around EUR 530 million. The remaining roughly EUR 300 million will be burred by our partner, Air Liquide, nearly 80%. So, our estimated CapEx will be in the range of EUR 90 million in total for the last 3 years. So, EUR 30 million of CapEx for the '27, EUR 30 million for the '28 and EUR 30 million for the '29. These are estimation because we are talking about a few years ahead, and the raw material cost might change up or down. Then the contract that we have signed with Air Liquide is a sort of fee that we will pay on the tons that we will produce. And so, we will have, let me say, just a cost on the balance sheet and not a CapEx. So, for us, let's say, it's a minimal, let me say, investment. We have nearly 6 months to say yes or no, but this mostly depends on, let me say, our possibility to interact with the Danish government about the infrastructure that they have to build, because as you can imagine, each plant has to build it's own, let me say, carbon capture. And then this CO2 has to be conveyed to the storage place. But the infrastructure in every country has to be built by the local administration. So, from the moment that we cannot store like everybody, the CO2 at the plant, we must be sure that our time frame is aligned with the time frame of, let me say, the public administration. So, we have several talks. We think that Denmark is the first one that already authorized this big inland storage place of nearly 0.5 billion tons that is 60 kilometers away from Aalborg. And so we think, let's say, that we should go ahead because the solution is already in place. So, we have to receive the confirmation that by 2029, when we will complete the investment in the plant, the infrastructure will be completed because otherwise, it will be difficult, let me say, to store this CO2. And so, there is, let me say, about the CapEx, this is the maximum expense that we expect 3 years from now that is, as I said, a total of EUR 90 million. The Q4, I expect that let's say, more or less, we should be in line with the same quarter of last year. So, this means that, let's say, we expect to have a slightly better result than our, let me say, guidance and that might fall between EUR 390 million and EUR 400 million of EBITDA. Also, the net financial position that so far is affected by, let me say, extraordinary investment of around EUR 55 million, we expect that should be better than what we forecasted, let's say. So, without this investment above EUR 300 million -- or including this investment, let's say, above EUR 250 million. So that is the EUR 300 million minus the EUR 54 million that we have spent. So, we are seeing some rebound in some markets where we continue to see some weakness even in 2025 is Belgium, France and China. The other market will be better, and also in Egypt because of the restart of the second line, we expect next year nearly EUR 5 million to EUR 6 million better result because we will sell and export more cement because we have another 500,000 tons of availability for the market.

The next question is from Emanuele Negri, Mediobanca.

I have one question on the Danish market. You mentioned that Denmark benefited from a positive contribution from the Fehmarn Belt project. Could you please quantify this positive contribution for both the third quarter and maybe for the quarter side in terms of expectation?

I'd say that this year, we were, let me say, short in terms of delivery to this project. So nearly 70% below the expected schedule. So, if next year we will go at, let me say, 100% of the schedule, we expect EUR 5 million, EUR 6 million more. This means that the total project should benefit each year of around EUR 8 million and EUR 9 million because this year, the benefit is limited to EUR 2 million, EUR 3 million because of this, let me say, low station.

The next question is from Tobias Woerner with Stifel Europe.

Two questions from me around the CCS project. Just remind us, I've just got your sort of CO2 emissions in front of me, Scope 1, Scope 2, which add up for the group at, if I'm not mistaken, 7.7 million tonnes. You talk about a reduction of 1.1 million tonnes. But just remind us what is your European emissions of that, of the EUR 7.7 million because it's the European emissions, which carry the CO2 cost.? And then secondly, just to understand, you talk about the total project, EUR 500 million to EUR 530 million, the grant of EUR 220 million, that should get you with the EUR 300 million covered by Air Liquide to roughly the total cost. So, the EUR 90 million is for what? Is that the fee you pay to Air Liquide later on or how should we see this from '27 to '29?

Let's say, just to complete the framework. So, of this EUR 500 million, EUR 530 million, EUR 90 million of this EUR 530 million will be directly invested by us. The other will be invested by Air Liquide and the other part is the grant financing. So, our EUR 90 million will be in the 3 years, '27, '28 and '29. I must add that we will apply for the Danish carbon fund. And also, we expect to receive, but this will be awarded end of 2025, early 2026. The Danish fund is just for, will cover the OpEx cost for 20 years. So, we don't know how much we will receive. But while the European fund will cover part, I mean, 40% of the total CapEx cost, we expect also to receive a fair amount. I don't know today, I cannot estimate, to cover the OpEx cost. Also, I want to add, just to be fully transparent that the contract with Air Liquide will last 15 years. So, they will charge us a certain fee depending on the cost of electricity, the cost of raw material, the tons produced, and will last 15 years. The Danish fund will last for 20 years when we will start the plant. So, we expect from 2030 to 2050. And also, the Danish fund will be also revaluated year-by-year by inflation. This is important because after 20 years, otherwise, the value of this, let me say, fund will be in real terms much lower. So, let's say that we might also see positive outcome. You have to consider that today -- I mean, today, there are no, let me say, green cement or zero-carbon cement production around the world. Heidelberg will start next year with this small plant in Norway of around 400,000 tons. But what we expect that among the already authorized project, and this last project that has been authorized now, by 2030 there will be roughly nearly 10 plants that will produce zero-carbon or nearly zero-carbon cement. That will cover, let's say, 10%, 15% of the production. So what we expect is that there will be a certain scarcity of this cement for the further 5 to 10 years, because we think that just to reach a 50%, let's say, of zero-carbon cement covering the market, let's say, we might see by 2040 or above after 2040. So, Heidelberg is already marketing the cement at EUR 500 per ton because now it's the only cement available. So, I don't forecast the price of cement from now to 5 years because this is a new technology. For sure, we have some certainly, the technology is well-proven. I mean Cryocap is something that is already used to extract oxygen and also the other novel gas from here for medical purposes. The issue, I mean, that today we have on this project is how to deduct correctly the smoke at the same because the smoke has a certain percentage of dust. So, this is the issue, but also, let's say, that our project using this technology will be the third one. And so, we have another couple of projects already authorized and start for Holcim by Air Liquide that will start 1 year earlier. So, I hope and we hope that the learning curve on deducting this, let me say, smoke will be well ahead after 1 year of training. So, the CO2 produced by us in Europe is roughly today around 3 million, half in the Nordics and half in Belgium, France. The other, I mean, it is produced in the other part of the perimeter, but the 3 million tons of CO2 is involved in the ETS scheme.

Well, looking at Belgium, are you applying for any further grants from the EU as we speak? Or what's the situation there?

We are likely just because we have only 2 plants compared to others. So, we have only Belgium, we will apply, but also you have to consider that Europe will finance, and also, we saw in this, let me say, last outcome, the innovation of the project. So, you don't just -- you cannot ask money or funds just because you want to decarbonize your product. You have to be innovative and your project has to be different from all the other projects already approved. So, the forward we move, the more complicated will be to have this fund. And in fact, this round, only 3 projects over, I think, 20 or 25 from the cement sector have been awarded. So, we will apply for Belgium, but also, we need to understand which innovation we can bring to the process because otherwise, we will not receive the funds. Anyway, if you consider that the target of the market is to be minus 50% by 2030 in terms of emission. So, if we will be at 0 and in Belgium, we will reach with alternative fuels around between 50% and 60% of emission, we will have an average that is around 30% that is well below. And so we will be, for sure, along of, let me say, certificate even if one will be not decarbonized. So, this might be a competitive advantage that day.

And in Belgium, the storage, I take it will be offshore, right, or onshore? What you're considering.

I think that will be offshore. I mean, Air Liquide is also building a terminal to receive the CO2 from the Benelux in Antwerp. And probably this terminal will feed the, let me say, the storage in Denmark. So, we will see because I think in Denmark, the availability is EUR 0.5 billion. And in Denmark, there are only 2 big emitters, ourselves and Utility, yes, that is producing. So, the production of CO2 from industrial sector in Denmark is around 2.5 million tons. So, they will authorize another 2 sites in land, and the total capacity of Denmark, we think that in a couple of years will be above 1 billion tons of storage. So, for the Danish country and government will be an inflow, a huge inflow of money like oil, let me say, just because they have the availability of this site, and they will receive for sure, from Nordics and Northern Europe, and also, I think Germany, the CO2 and they will stock below the ground.

Okay. And one last question. Thank you for your patience. 0.5 billion tonnes of storage sounds huge -- excuse my ignorance, but what was that? Was that a former gas extraction site or what is it?

It's like, let me say, I don't know exactly. It's a salt cave cavern. I mean, that depleted mine. But let's say, it's not at sites that are at least 2,000 meters below the surface because this is also the standards. And they can be, let me say, stored for, I mean, hundreds here, this CO2 without rock salt.

The next question is from Bruno Permutti, Intesa Sanpaolo.

The first one concerns the cost outlook that you see. It seems to me that you should have some recovery in volumes next year in some important markets. You should have, what we have seen until now, it's a certain price resiliency. Correct me if I am wrong on this. And so, I was wondering what is the cost outlook you see? And because I would imagine that from the 9 months results, we should see perhaps an improvement of the operating profitability of the EBIT in terms of margins next year. So, I was wondering if this is a scenario that is consistent with your cost outlook. The second point concerns the U.S. market. I know it's not so big for you, but something has changed perhaps there, and it would be great to have your opinion on eventual changes with the new elected President, if you see something different going on or if it will be business as usual. And the last point concern M&A. We have seen some bolt-on acquisition this year. It's something that we will continue to see in the coming years, waiting for something a more clear long-term outlook. So, what are your ideas for the net cash?

Okay. I mean, what we see and I have already start, let me say, to outline is that we today see a mix of, let me say, recovery and also, cost savings due to the investment that we have done that should increase the result that we will have this year of EUR 20 million, EUR 30 million next year. I mean, so what we expect is that the revamp of the Belgium kiln, the start of the second line in Egypt, the pickup of consumption of the big project in Denmark and other small adjustment, this what we have already started our budgeting season, and we will, as usual, release to the market by, let me say, early February, the new, the rolling 3 years plan. But what we see from now is that we should have an increase between cost savings and more revenues that should impact -- I mean, from EUR 20 million to EUR 30 million because also, let's say, we have to consider that the foreign exchange market even for the result of the election, the USA can change abruptly for the emerging market or for the dollars. So, the range of EUR 10 million is because we have to see depending on which exchange rate we will put in our budget. Then your second question, the U.S. market, let's say, for sure, Trump is, let me say, a pro-spending pro-infrastructure, but also we have to consider that we are in white cement. And let's say, we are already seeing some pickup in the market. But frankly speaking, even in the past, from the moment that white cement is not used for infrastructure, we don't think that will affect our perimeter in a, let me say, sensible way. The last question is that we have made some, let me say, tactical M&A, more repositioning. So, there are other fine-tuning that we might, let me say, do in our perimeter. But the bold acquisition, I think we have to wait, as I already said, how this transition will start, let me say, to affect the market positively and negatively because, as I said, some players, some plants will not be eligible, say, for being revamped. And so, what we will see in the next 2 or 3 years is that especially in Europe, the market, especially more than the market, the production layout of Europe might change in a significant way. So, we are building cash. And also, if you consider that, let's say, this EBITDA next year, we will -- let's say, we will come back to our normal CapEx that is around EUR 80 million. So, this year, we spent EUR 130 million because of the kiln in Belgium. We should have an industrial free cash flow of around EUR 200 million before dividends. So, it's something that, let's say, allow us to look at a certain, let me say, opportunity, even big opportunity. But let's say, I think that now is not the right time. It's still not the right time, let me say, to invest because you have every time to think about how much will cost to decarbonize the asset, and especially if in that country, the infrastructure will be available and ready and when, because otherwise, let's say, even if you want to decarbonize, and it seems that, for example, in Italy, so far, no one has been awarded of any facts. And especially, because the country per se has a delay in designing the infrastructure to ship the CO2 from the plant to the site, natural site for the sequestration or to the harbor if you need to ship away. So I expect that probably in Italy, most of the plants will continue to pay the CO2, probably an increase of CO2, let me say, price because they will not be, for sure, ready by 2030 with the investments, because even if some of the players, I'm aware, because we have in Italy, Buzzi, or Heidelberg that have the money and the willingness. But if the country is not ready, they cannot revamp the plant because otherwise, as I said before, if you don't have the infrastructure, then you waste just the money. So, what I expect is that in some country, some plants will not benefit of these funds. And so, as you can imagine, the price of these plants is completely different.

[Operator Instructions] The next question is a follow-up from Tobias Woerner with Stifel.

Directed to you, Mr. Caltagirone, if I may. Just to get this clear in my mind. Belgium, did you say that your carbon footprint will fall by 50% to 60% because of the use and investment into alternative fuels, i.e., the 1.5 million will fall to, let's say, 0.75 million tons of CO2 emissions, just to clarify.

No. What I said, yes, more or less this is that from the moment that, as you know, part of the CO2 is produced by the chemical reaction of the cement is roughly 50%. So, without, let me say, decarbonizing system, you cannot get rid of this 50%. So, what we expect is that of this, let me say, actual 1.5 million of CO2 emitted by -- in Belgium, we should lower this to 50%, 60%. This means 750, 900 tons of CO2 because below you cannot go if you don't have a CCS system. So in Europe, what we expect once the Danish plant is finished that our total emission on 2 plants should be around 800, 900 tons of CO2. That is roughly below one third of what we are emitting today and much below the European target.

Okay. And the time line of that, is that by the end of 2030 or beginning of 2030s?

We expect in 2029 to finish the investment. So, let's say that in 2029, I mean; to build the plant and also to redesign part of the plant for the CCS, it takes 2 years. I mean, the other 3 years is mainly for authorization and for the design, and also to understand if we are going in parallel line with the investment of the infrastructure of the country. But otherwise, let me say that we will take 6 months to review all the projects and understand everything. So, we might be even ready in 2.5 years. So, the 2029 might be even anticipated a bit because of, let me say, positive environment, I mean, solution. But otherwise, let's say, during 2029, we should, let me say, start the operation. And if in Belgium, because we will apply for the fund of the next round, but we don't know if and how much because this time, you probably have seen that we have been awarded of the maximum amount compared to the other cement player, and one of the highest between all the 10, let me say, already awarded because, let's say, as I said, it's very innovative for various reasons, even because it will be applied both for gray and white. It will have ensure, let me say, storage and also because we will increase with this system, the heating availability to the city of Aalborg of another 30%, 40% because this, let me say, decarbonizing will use energy, with this energy, we can produce heat that can be -- so all this gave us the possibility to have a very high score. So, I don't know, let's say, frankly speaking, if Belgium, but even the other project or the other competitor will receive this kind of rating because I'm aware that the innovation today in the CCS is limited to Cryocap, or I mean, that is a sort of filtration that is the technology chosen by Heidelberg. But from our point of view, there aren't, let me say, other new technology in the pipeline for the next 1, 2 or 3 years. So, we see a limited opportunity to receive the funds or we might receive funds, but with a lower percentage compared to what we have received now.

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

Okay. So, thank you very much for your interest in Cementir Holding, and we wish you a pleasant rest of your day and evening. Thank you. Bye-bye.

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