Heidelberg Materials AG (HEI) Earnings Call Transcript & Summary

Ladies and gentlemen, I'd like to welcome you, on behalf of the Supervisory Board and the Executive Board, to our second virtual Annual General Meeting. Now ladies and gentlemen, due to an audio problem, I will repeat myself. I'd like to welcome you very warmly to our 132nd ordinary annual general meeting. It's the second virtual annual general meeting at 10:06. My name is Fritz-Jürgen Heckmann, the Chairman of the Supervisory Board. I'll take over the chairmanship of this meeting. I'd like to welcome the shareholders of our company and I'm very happy and appreciate that many business partners and former and current employees are accompanying us. I'd like to welcome the guests and the media and those who are listening and watching the publicly available live stream. Ladies and gentlemen, today's meeting consists of 4 parts. The first part will deal with the description of the formalities. Afterwards, I'll present the items on the agenda. And then we'll start with dealing those questions that we received until May 4, midnight. And the fourth part will deal with the voting on items 2 to 12 on the agenda. Because of the continuing corona situation, we cannot have an in-person AGM. Because of this, this will be a virtual AGM. The background of this is that we want to take the necessary decisions in due time. And because of this, we're using the legal provisions available. The executive -- the Managing Board, with the agreement of Supervisory Board, decided according to Section 1, Paragraph 1 and Paragraph 2 of the COVID-19 law to hold this meeting without the physical presence of the shareholders with the exception of the proxies of the company and to convene this meeting in a virtual way. And we decided to ask the shareholders to send in their questions until the 4th of May at the latest. Now not all of the Managing Board members or Supervisory Board members are here in person. Because of the restrictions due to the pandemic, we have reduced the attendance to minimum to avoid any health risks. Present in this room are Dr. Dominik von Achten as the CEO and Chairman of the Managing Board; Dr. Lorenz -- Mr. Lorenz Näger as the Vice CEO and CFO; and the notary public from Heidelberg, [ Ms. Ana Girik ], who will take the minutes; and myself as the Chairman of the Supervisory Board. [ Ms. Girik ] will notarize the minutes of today's general assembly, and I'd like to welcome you very warmly as well as the 2 colleagues from the Managing Board. And we have the 2 proxies of the company. We are meeting in the dome hall of the headquarters at Berliner Strasse 6 in Heidelberg. All members of the Managing Board and the Supervisory Board not present are linked virtually, and they are in contact with us. Now for you, our shareholders, we are live streaming this event on the Internet. My introductory words and the speech of the CEO can be followed by everybody interested on the Internet, and there is simultaneous translation into English too. As I said before, questions were submitted via the InvestorPortal. We were able to process these questions. And pursuant to the law and at our dutiful discretion, we will answer these questions. Voting rights can only be exercised through absentee ballots or through giving a power of attorney to the company's proxies. Your absentee ballots or your instructions to the proxies of the company may be submitted via our InvestorPortal until the beginning of the voting. You can also change your earlier votes shortly before the start of the voting. I will point this out to you again. Nevertheless, I'd like to ask you to vote quickly because in the live stream, there can always be delays. If you want to exercise your right to vote, our InvestorPortal gives you the chance to launch objections against decisions. If you want to file an objection, and this only possible until the end of the AGM. It cannot be done after the AGM. In the InvestorPortal, you have a button that says lodging an objection. And if you click on that, you can refer to an item on the agenda and lodge your objection. That will then be presented to the notary public. And I'd like to ask you, in the interest of an orderly proceeding, not to wait until the very last minute if you want to declare your objection because there may be delays in the live stream due to a technical glitch. As usual, we will provide the list of participants right here in the meeting. And later, I'll give you the figures for the attendance. You must not record the meeting. But a recording of the official -- of the publicly available part of the AGM will be available on the Internet. Now I'd like to ask you to hold a minute of silence. We mourn those active and former employees who died last year. All of them made a contribution to the existence and success of our company. We remember them in gratitude. Thank you for holding a minute of silence. Ladies and gentlemen, in 2020, there were no changes in the composition of the Supervisory Board. Now the changes to the composition of the Managing Board, effective February 1, 2020, especially the takeover of the chairmanship by Dr. von Achten have been explained last year or were explained last year -- during last year's AGM. Now the invitation to today's AGM happened with a complete agenda in the Federal Gazette on March 23, 2021. And a printout of the Federal Gazette is -- lies before the officiating notary public so that this can be added as document to the minutes. So this event has been called according to the law and in due time, we have not received any motions for an addition to the agenda. And the information to banks and other intermediaries and shareholder associations, shareholders on the convening of the AGM happened in due time. All of the reports and documents for today's AGM were available on the Internet since the 23rd of March, and they were sent out to people on request. The report of the Supervisory Board and the corporate governance report can be found in the Annual Report on Pages 8 through 13 and following Page 80. And the documents can also be found on the web page of our company under the section Investor Relations and Dates and Publications, Annual General Meeting. Since this is an AGM without the physical presence of the shareholders, communication cannot happen through requests to take the floor or motions in the context of a general debate. Rather, we will answer the questions submitted to us earlier. Countermotions and nominations and procedural motions are not possible during the AGM today. On the basis of the legal provisions, the company has given the shareholders the possibility to submit counterproposals and nominations. And to the extent that these happened within the deadline, they were published on the web page. Those making the proposal or those who have made the proposal or submitted the nomination, all of these proposal nominations will be treated during the AGM as if they have been voiced during the AGM. This -- the right of the Chairman of the meeting to have a vote first on the proposal of the Managing Board remains unaffected. Now the company, on the 21st of April of this year, we received 3 countermotions of the Umbrella Association of Critical Shareholders, e.V., Cologne (sic) [ Dachverband der Kritischen Aktionärinnen und Aktionäre e.V., Cologne ], items of the agenda, 2, 3 and 4 under Section 1 and 26, Stock Corporation Law and the counterproposal of West Path Institutional Investors USA (sic) [ Wespath Institutional Investments LLC ] on Item 3 of the agenda. All of the counterproposals were published on the Internet page immediately. The counterproposal of the Dachverband, the umbrella organization, rejects Item 2, the proposal of the administration on the appropriation of profits. They reject this appropriation because in 2021, the company received the funds for short-time working and this money of the Federal Employment Agency should be repaid before paying a dividend. The counterproposal against Item 3 rejects the proposal of the Board to give discharge to the members of the Managing Board, pointing out a disregard for the duty of care in terms of human rights due diligence in Indonesia, to the Western Sahara and West Bank. And the counterproposal against Item 4 moves to reject -- discharge of the Supervisory Board. The justification is the less-than-adequate supervision of the Managing Board and since the company emits too many greenhouse gases and the sustainability goals of the company are not sufficient. The counterproposal of West Path Institutional Investments refers to Item 3 and rejects the proposal of the Managing Board -- of the administration to give discharge to the Managing Board because of insufficient information of the shareholders on complying with human rights due diligence and violation of this duty in Western Sahara, the Westbank and Indonesia. So the Managing Board and Supervisory Board will later comment on these counterproposals. The voting procedure is such. We'll first vote on the proposals, resolution proposals on Item 2, the dividend; on Item 3, that is the approval of the act of members of the Managing Board and we'll vote separately on everybody; and then there's also Item 4 where we will vote individually on the approval of the acts of the Supervisory Board. And should these resolutions on Items 1 to 3 be passed and should all the members of the Managing Board and Supervisory Board be discharged that will automatically mean that the countermotions are rejected. The countermotions will only be voted on, should the draft resolutions fail to find a sufficient majority. We'll now get down to business, Item 1. That is the submission of the adopted financial statements, the approved consolidated financial statements of the group, the combined management's report of HeidelbergCement AG and the HeidelbergCement Group as well as the report on the Supervisory Board for the 2020 financial year. As I said, those documents have been available on the website of our company. And here, you will also have the chance to look into the remuneration report, also the explanatory notes on Section 289 and 315 of the commercial code, and the corporate governance statement as well as the corporate governance report for financial year 2020. Under Item 1, as before, we will not have a resolution since the Supervisory Board has already adopted the annual financial statement as well as the consolidated financial statements, and they are thus official. Now the details of the supervisory report, you will find all the details on Pages 8 to 13 of the annual report. And there's also the report from -- of the CEO, who will give you more details in a moment. Let me give you a summary and tell you, on behalf of the Supervisory Board, that the year 2020 was dominated by the coronavirus pandemic. HeidelbergCement's focus has been and remains on protecting the health of all our employees and business partners as effectively as possible. However, the corona pandemic also presented us with numerous challenges from a business perspective. There was a significant drop in sales volumes as a result of lockdowns in many countries in the second quarter of 2020. And this is why, in the AGM last year, we had proposed a major reduction in the dividends. Fortunately, in the third and fourth quarters of the last year, there were considerable catch-up effects. So the company has shown first-rate adaptability and has used the changing circumstances and was thus able to reduce costs within a very short period of time and to satisfy demand. And this led to a situation where despite a decline in revenue of about EUR 18.9 billion to EUR 17.6 billion, well, that's a considerable sum, despite of that, the result from current operations resulted in an increase in -- from EUR 2.2 billion to EUR 2.4 billion. Also, at the same time, we were able to reduce net debt by EUR 1.5 billion to EUR 6.9 billion. All of this was only possible because the Managing Board acted swiftly and resolutely and because all of our employees were outstandingly committed. So the Supervisory Board thanks the Managing Board and all employees for this achievement, which should by no means be taken for granted. And this robust development allows us to look into the future with confidence. And that is reflected in this year's dividend proposal. In 2020, there was a generation change in our Managing Board. The previous Deputy Chairman of the Managing Board, Dr. Dominik von Achten, took over as Chairman of the Managing Board from Dr. Bernd Scheifele on the 1st of February 2020. Despite the challenges by the corona pandemic, Dr. von Achten and his colleagues on the Managing Board managed to make the company successful. And as planned in September 2020, the Managing Board presented a very convincing new group strategy beyond 2020. Needless to say that the strategy was reviewed by the Supervisory Board and was approved. The company is ready to face the challenges that lie ahead, and we'll invest even more into the future-oriented fields of digitization and sustainability. We will thus make a contribution to the global responsibility to limit the rise of worldwide temperature to below 2 degrees. And we are also accelerating our already ambitious goals to achieve a carbon-neutral concrete. At the same time, we retain a focus on the company's professionality and financial profitability. Ladies and gentlemen, we at HeidelbergCement define success not only in terms of financial targets but also in terms of how we get there. Sustainability plays a central role in our thinking and in our action. Our high scores in leading sustainability ratings are both a distinction and an incentive. The Supervisory Board explicitly supports the Managing Board's new strategy and is convinced that the company will be able to overcome the challenges of the future. Ladies and gentlemen, in implementing the strategy, last year, the Supervisory Board paid close attention to the actions of the Managing Board. We did not only monitor the business policy but also the strategic orientation and major business transactions. The Board of Managing agreed the company's new strategy with the Supervisory Board. Any deviations of actual business development from the plans were explained and detailed by the Managing Board. Such deviations, of course, were in no small part due to the coronavirus pandemic and its effects. In view of the dynamic nature of developments and in order to ensure that the Supervisory Board was kept informed in a timely manner, extraordinary meetings were held between the regular meetings of the Supervisory Board and its committees. The Supervisory Board did not only meet, as I said, in plenary, but there were also meetings of the committees and there were also meetings outside direct -- outside the meetings directly with the Managing Board, and the Supervisory Board was directly involved in all decisions of fundamental importance for the group. The Supervisory Board is satisfied that the Managing Board has installed an effective risk management system, and that was certified by the auditor after they had convinced themselves of that fact. Furthermore, the Supervisory Board is satisfied as to the effectiveness of the compliance program. And once more, the Audit Committee had reviewed the situation effectively beforehand. Outside the scheduled meetings and without the participation of the Managing Board, the Chairman of the Supervisory Board as well as the Chairman and the Deputy Chairman of the Audit Committee also discussed topics relating to the audit in detail with the auditor. And outside the meetings, I, as the Chairman of the Supervisory Board, was in regular contact with the Chairman of the Managing Board. The average attendance of Supervisory Board members was 99%. Participation rates at the committee meetings was 100%. There were no conflicts of interest of any Supervisory Board member when dealing with topics within the Supervisory Board, and there were also no consulting or other contracts or services or work between any member of the Supervisory Board and the group in the 2020 reporting year. The employee representatives, of course, have regular employment contracts with your company. Now after the onset of the pandemic last year, the Supervisory Board and the Audit Committee dealt regularly and in detail with its impact on the company. This -- the major impact on volumes and revenues affected the business situation and the development, but there were also changes in working practices, and there are certainly longer-term consequences for the markets of HeidelbergCement. The Supervisory Board placed particular emphasis on closely accompanying and supporting, beyond 2020, the new group strategy. This was not only subject of the Supervisory Board's annual strategy meeting in September but was also dealt with in an extraordinary meeting in August. And that was necessary when the strategy was only incipient. There were other meetings too in which we dealt with the new strategy. There were several meetings when the Supervisory Board discussed with the Managing Board the major investments, divestments and portfolio optimizations affecting the strategic goals of profitable growth of HeidelbergCement and further improvement of the balance sheet structure. Sustainability was always on our minds, and there was also the subject of digitization. I mentioned the Audit Committee before. And in the reporting year, the Audit Committee dealt extensively with the further development of the company's corporate governance and the risk management as well as with the effectiveness of the compliance management system. In addition, the Managing Board regularly reported to the Supervisory Board and the Audit Committee on the company's measure or measures to achieve an even more sustainable business model. One focus here was on other ways of reducing carbon emissions or, where this was not economically feasible, on the capture and subsequent use and storage of the carbon dioxide produced. In addition, the Supervisory Board and the Audit Committee addressed other funding matters, and the Supervisory Board approved the issuance of a bond under the EMTN program. It was created in the 1990s and allows the company to issue bonds to the capital market. The bond amount of EUR 650 million with a term that runs until October 2024. The terms are good, but that also helps to smooth our maturity profile. The prospectus underlying EMTN program was updated in April 2020. And of course, we've updated it once more this year. And we can report that the funding of the company in the short, mid and long term is definitely secure. The Supervisory Board welcomes and encourages the concern of the Managing Board to refinance expiring financial instruments at current favorable interest conditions, thereby continuing to improve the financial results. We looked closely to the maturity profile and have noted that it is, as usual, balanced and the company is earning a premium on its capital costs. Supervisory Board has encouraged the Managing Board in its efforts to keep the leverage ratio in the investment-grade range, and of course, to continuously reduce it further. The Audit Committee in its meetings also dealt with the 2019 financial statements and consolidated financial statements as well as the points of focus for the audit, the reports regarding internal risk, risk management and compliance, the half year financial report and quarterly statements for the 2020 financial year, the preparation of the Supervisory Board's proposal for the 2020 annual meeting, for the appointment of our new auditors, PwC. And after they were appointed, the -- then the Audit Committee also monitored the awarding of the audit contract to PricewaterhouseCoopers. And in this context, it's also -- you find the points of focus for the 2020 audit. And if Mr. Ulrich Störk and [ Mr. Thomas Turner ], who are our new auditors, who were always present for the Audit Committee meetings and also reported to the full Supervisory Board. The Audit Committee also monitored the nonaudit services offered by the company's auditor and has received reports from the Managing Board on the nature and scope of the nonaudit services performed by PwC. The chairman of the Audit Committee is Mr. Luka Mucic. Mr. Mucic is the Chief Financial Officer of SAP, and he is thus a financial expert pursuant to Section 100 of the German Stock Corporation Act. He has the expertise in the areas of accounting and auditing. The Personnel Committee also met in order to discuss and recommend to the Supervisory Board the variable Managing Board remuneration for 2019 as well as the definition of parameters for the variable remuneration for the year 2020 to 2022. Also the Personnel Committee assured itself that all members of the Managing Board have carried out the required individual investment in HeidelbergCement shares as part of their remuneration system. On corporate governance, we have the current declaration of compliance, and you can find it on Page 81 of the corporate governance of the annual report. Also, we follow the diversity goal to pursue them. And as well as to -- for the Supervisory Board, while we take into account the specific requirements of the construction industry, health and safety, in particular, the goals defined for the Management Board and the terms and conditions are of great importance as is sustainability and the use of sparing use of any resources. Now the compensation system for the members of the Managing Board was adapted. In the future, the CO2 efficiency of the company will move into the foreground of the variable remuneration of the Managing Board, will have a greater role to play. You can read up on the details under Item 7 of the AGM, where this is described. The remuneration structure for the Board can be found in Pages 86 to 99 of the annual report that describes the remunerations of the Managing Board with -- effective 1st of January 2019 and the changes as of 1st of January 2021. The different bodies dealt with the annual financial statement. Also to -- and the annual statement report also in the presence of the auditors, the Supervisory Board to account the results of the auditors and the results of pre-order of the Audit Committee and the results of our own order and keeping with result of the final audit. Supervisory Board, therefore, agreed with the annual statement of accounts and the group accounts. And there was also an audit of the nonfinancial declaration for fiscal 2020 by Supervisory Board and the Audit Committee. There were no objections and you'll find the nonfinancial declaration on Pages 47 of our annual report. As I said before, we also dealt with the dividend. And with the underlying parameters, the Supervisory Board takes into account all parameters, followed the proposal of the Managing Board to appropriate the balance sheet profit, including the payment of a dividend of EUR 2.20 after EUR 0.60 in previous year due to the special conditions that I described. Ladies and gentlemen, now I'd like to give the floor to Dr. Dominik von Achten, who will now talk about the annual financial statement and the annual results and to give you some explanations on the outlook on the current fiscal 2021. He will describe other items on the agenda, and he will report according to Section 289a, Paragraph 1, Section 315a, Paragraph 1 of Commercial Code. Thank you very much for your attention so far. Now I'll give the floor to Dr. von Achten.

Well, thank you very much, Mr. Heckmann. Ladies and gentlemen, welcome also from my side also on behalf of my 6 colleagues on the Managing Board. One of them is present here, Dr. Näger, you will hear from later. The others will follow our deliberations on their screens and I'd like to greet all of those colleagues following our deliberations on screen. What a year 2021. This has been a rollercoaster for all of us, and this is a great opportunity for us on the occasion of this Annual General Meeting to look back on what happened. I'd like to start out, as last year, with a thank you. Thank you to 4 of those stakeholders, as we say today, who are very important to the company. Dear shareholders, first of all, I'd like to thank you. Thank you for your loyalty even during a period of time where you were not so happy about some decisions last year that Mr. Heckmann pointed out to you. And we are happy that in the last few months, we've been able to offer you a contribution in terms of a better share price. And I hope that you will stay loyal to us in the future, that you will remain interested in what is happening to HeidelbergCement. My second thanks go out to our customers. For our customers, 2020 was a crazy year. And without their hard work to keep the job sites running and to maintain operations, without that commitment, we wouldn't have been able to sell our products. And during these times, the innovation comes from us, but in many cases, also from you, our customers. And because of this, we are very happy to continue working with you. Our third thanks go to our suppliers and service providers. We hope that we have made progress in designing interaction with you even better and more efficient. And we would like to thank you for your support during the many winter repairs, which are very important for the company's success. And during these times, due to COVID-19, these repairs were a particular challenge. And last but not least, I'd like to thank our employees all over the world. First of all, we should like to think of our colleagues in India. Many of you will have seen on television, how dramatic the COVID-19 situation is in India, and our employees are also impacted by that. And we hope that the situation will quickly improve. All of our 50,000 employees did a sterling job last year, as Dr. Heckmann said, and our thanks go out to all of our employees all over the world for their great commitment and the great work that they did. Before I refer to the results of 2020 and the further development and the 2020 strategy, the Beyond 2020 strategy, I would like to take you on a visit of some of our construction sites that we are working on right now. Some of them have been finished or they were finished in 2020. I'll start with the biggest one, the biggest construction site. This is Terminal 3 of Frankfurt Airport. You may be wondering, oh my God, are they building a new terminal in Frankfurt? Yes, because Fraport thinks in the long term. We help people and companies with our products in order to come together. And Terminal 3 in Frankfurt is a great example of this, almost 250,000 cubic meters of concrete made by HeidelbergCement are paved there, installed there and up to 4,000 people worked on that job site and Fraport is making a major effort to improve -- to clearly improve the energy efficiency compared to Terminal 1 and 2. The energy footprint will be reduced by 50% on Terminal 3. So this is a construction site where we like to make our contribution, and we are bringing people together by, for example, having some people with Indian roots that can fly home to India, which is also important and possible in these days, during these days. And there's another construction site that I will address later. This has to do with our innovative power. Now we put an exclamation mark behind this. This is the development of the first 3D-printed house in Beckum in North Rhine-Westphalia, and later, I'll address this innovation. And number three, those of you who have been following us for a longer period of time as shareholders, for instance, you know that even before, and in particular, now we are trying to bridge the gap between tradition and modernity. And the art museum, Bourse de Commerce, in Paris is a great example. Originally, this was a stock market. And now this is an art collection. The Pinault Collection uses this building at this great architecture as we think was built by Japanese architect Tadao Ando, and he is well-known for working a lot with concrete and wood. And he built great buildings before. And in recent years, he has been very committed to the environmental topic in Japan, so we find a great connection between tradition and new innovative ideas on the other hand. So with these 3 impressions of our job sites, I'd like to take you to the key messages on the past year. Mr. Heckmann mentioned some of the key items, so I can keep my summary short. We really managed in spite of this rollercoaster ride to achieve record results with our team for our shareholders. And we are very happy about this, and this gave us the chance to return to a progressive dividend payout earlier than expected. So after we had to reduce the dividend to EUR 0.60 last year, we have been able to increase the dividend to EUR 2.20, a little higher compared to 2019. So an increase of 5%, and we hope that this is a clear contribution to our shareholders. Now 2021 started off very nicely, very strongly. Normally, it's a small quarter as far as the total results concerned, but the beginning of the year was characterized by a very difficult 2 months. Winter returned during those 2 months. And in March, we got off to a great start. And everything worked well, and we took that momentum into April, and we had a good start into the year. Mr. Heckmann pointed out that our first goal of the Beyond 2020 strategy is that we wanted to build upon a solid concrete foundation as far as our financial power is concerned, and we managed to do so last year. We were able to significantly reduce net debt, and I'll come back to that point later. What is very important for our future is the topic of sustainability and CO2, and I will also address these subject matters in detail. We have made major strides in implementing our CO2 road map. Now personally, I do not just want to set ambitious goals in this area, but we want -- but I want to achieve these goals and even exceed these goals in the best of cases. So generally, our outlook for 2021 is fairly optimistic. And we published a guidance on this. So this year, our -- we want to make sure that our results before and after depreciation will be increased slightly. And it looks like it. This looks very likely after this good start into the year. Now I'll take you on a journey in terms of what we promised and what result was. And as a member of the Managing Board, we want to create trust and reliability. Through our reliability, we want to convince you and ask for your trust in us. Last year, we announced a result before depreciation of over EUR 3.5 billion, and we achieved EUR 3.7 billion, so that's plus 6.1% like-for-like. We wanted to push net debt below EUR 7 billion, and we reached EUR 6.9 billion. We announced to bring the leverage ratio below a multiple of 2x EBITDA and what we achieved was leverage ratio of 1.86x. And after the pandemic, we announced a savings program of EUR 1 billion, and we achieved savings of EUR 1.3 billion. So announcing something is one thing, reaching the goal is another, and we are very ambitious. And now you can see from our point of view, the most important key figures, which we set for our 2020 -- Beyond 2020 strategy. We're not happy with the sales development. I'm quite honest about this. Revenues declined by 7%, but 5% were due to a strategic decision to reduce the HC Trading business to an area, yes, from -- we took this away from an area where we didn't like the risk profile. So this was a strategic decision. The organic decline was minus 2%, and the result for the depreciation of current operation was EUR 3.7 billion. And the revenue from current operation was a EUR 2.4 billion, plus 8%; adjusted earnings per share of EUR 6.90 plus 8%. And very important, of course, is the return on invested capital. This increased to 7.9%, plus 1.4 percentage points. So I believe it's fair to say that together, we did a very good job. We will not keep from you that there were a couple of things that one or the other shareholder might like to have more information on. And in fact, after long discussions, in the second quarter of the last year, that is after we had seen earnings and volume drop by some 90%, well, at that point, we decided to change our midterm forecast. And we think this is what you need to do. It's absolutely the duty of a Managing Board with a business mind. And this is why we needed to reevaluate our portfolio, and this is how we came up with an impairment of EUR 3.4 billion. And it's the goodwill impairment and a write-down on assets. And now here, you see the distribution of the impairment. It's mainly in the U.K., it's Western and Southern Europe. And at the end of the day, this did not have an influence on the operating performance of the company, and it did not have an influence on the cash flow. And well, I like to do that. Personally, I like to see that it has a positive effect on the return on the invested capital. Let me now turn to net debt, and I mentioned that initially. And here, we have reached a record high with EUR 2.2 billion, almost EUR 0.5 billion up or almost 30%. And so we've reduced net debt to EUR 6.9 billion. That is a reduction by EUR 1.5 billion, which is quite a step-down. And that's brought to the leverage ratio to 1.86x. What's important for us is to have a solid investment-grade rating. That is an important factor, of course, for our institutional investors and all others. Both rating agencies, that is Standard & Poor's and Moody's, have upgraded us. And so we have already reached one of the milestones in our Beyond 2020 strategy. Let me now turn to the dividend. You can see here the development since 2009. And yes, this is where the chart starts. And as I said last year, with a EUR 0.60, I know that we were quite tough on you. It was quite a sacrifice for you. So -- but since you gave -- made a major contribution last year, we want to pay you back. And this is why this year, we decided to increase the dividend to EUR 2.20 again and would ask the AGM for its approval. And that means that we will continue our progressive dividend policy. Well, for you, the dividend is important for you since you are our shareholders, but the share price will also matter to you. And for a while, I must say that we were not really fully satisfied. And we'll have to measure ourselves against what the market generally does. In the last couple of months, we have become more confident again. But I'm telling you quite clearly that we're not satisfied with what we've reached. We could do better. And that's what we will keep working on. All right. Then briefly on outlook. The first quarter of 2021, you may have been wondering, the figures, since they were much better than market expectations, we published them as soon as we could. And so our revenue had reached EUR 4 billion, a minor increase, but as revenues have picked up once more in 2020, as I said, we were still negative. And so that means that the RCOBD and the current RCOBD is much better. And almost 440 -- 540 RCOBD or EUR 220 million RCO that is the profits from current operations. The percentages, don't pay too much attention to them. It's just a harmless first quarter, the quarter that's never very good. And so let's enjoy it while we can. And let's just hope that the business will continue as well in the next quarters. But we'll certainly do our very best. So the underlying trend is certainly okay. The construction industry is still in flow. There is still the population growth in emerging markets, and there's also a trend towards globalization. And in the more developed markets, in the mature markets, there's a trend away from urbanization. People seem to love green, seem to love gardening evermore than in the past. And so in many metropolitan areas, in the more mature markets, we see a trend for the rural life. And that is a market dynamic that we'll certainly keep an eye on and where our products can be made use of. An important driver for 2021 and beyond is infrastructure. You know that gigantic sums are being spent in the EU and United States. A lot of money is being paid out to drive the infrastructure development. And as an industry and as a company, we do benefit. Social trends, society trends, Mr. Heckmann has made mention of them, they are pretty straightforward and everybody is aware of them, and we are leaders of the pack here. We need solutions for a sustainable construction. We need to focus on the circular economy principles, and we need to address the carbon challenge and well, regulations, the taxes and whatever comes up in that context. New technologies, however, will be necessary if we want to be successful, and we need to review and adapt our business model. This is why digitization and sustainability, including innovation, have come into our focus. And I'll give you more details in a moment. Now Mr. Heckmann mentioned our strategy, and we had detailed discussion in the company with the Supervisory Board, and we presented our strategy last year. In simple terms, we have 2 big blocks. We do not want to throw out what we used to have, because it's not bad. So we'll keep a lot of it, but we will improve it where we can. So our first goal is to simplify what we have and to improve it. And the second very important block is innovation. And within those 2 blocks or parts of the strategy, we have a couple of subitems that I explained. So under simplify and improve our portfolio at the existing, we want to improve things in sales, logistics and production. We really want to have business excellence. And we are there already in some respects. But if we look very closely through the magnifying glass, there may be one or the other thing that could be very much improved. And this is something that we do in our countries and in the central functions. Mr. Heckmann already mentioned portfolio management. In absolute terms, portfolio management is something that drives us in 60 countries. And after a detailed analysis, we felt we'd better streamline that and focus on core countries. We need to have a better focus, and this is why it's so important. And last but not least, we wanted to help develop our people and simplify our business processes. The second block or part of the strategy contains the subjects of sustainability and digital transformation. You saw that in our purpose film. It's very important for us to be champions in the field of carbon neutrality. We want to be net zero. And this is what we are fully focused on. At the same time, and apart from sustainability, this is one of my personal hobby horses, I'll be open about that, is digital transformation. This industry may not have had a forte in this field. Well, we may -- I wouldn't talk about revolutionizing it. But what we want is to drive things forward here, push things here and to work closely with our customers and our suppliers to make things more efficient. And well, we can hope to make business much more attractive that way. But all of that can only work if we do a decent reasonable capital allocation, because at the end of the day, ladies and gentlemen, why we're here is to create value by being sustainable, deliver sustainable shareholder value is the modern wording for that. Now we have set ourselves business targets, which you can see here, and we want to be there by 2025. This is about structural profitability of the company, the RCOBD margin, the margin of earnings before depreciation, and we want to bring that up by 3 percentage points or 300 basis points. Then there is return on invested capital, ROIC, and we want to raise it to much more than 8%. Leverage ratio is to be in the corridor between 1.5 and 2x. RCOBD or net debt divided by RCOBD, that is, and sustainability. Well, we really pulled our ambitious goal forward. And so by 2025, the 30% reduction is what we want to have achieved compared to 1990. And digital, last but not least, 75%. 75% of our sales volume is to be done with digital products. So what have we achieved so far? And well, this is a great day to show you. We are working on our portfolio, tweaking it in many respects. Three things have already been done. Egypt, a majority participation in Egypt was delisted in order to streamline the structure in Egypt and give us more clout. Then a minority participation in Hilal Cement in Kuwait was sold. Just yesterday, you may have learned about that in press, so the aggregates business and our ready-mix business in Greece was sold off and we'll focus on cement only in Greece. We work on other portfolio adjustments. And the press has speculated about that. Yes, it's true. We are working on a couple of points. And in the course of the year, you will probably hear from us again. We made headway with regard to carbon reductions, carbon dioxide emission reduction. We could always say, yes, you could do better, and we wouldn't contradict you. But we've accelerated our goals, and we did not only focus more on those goals. And even though we needed to readjust our activities, we are right on track. Until 2019, we had a reduction of some 21%. And then last year, 2.3% reduction is what we achieved. That's the 13 kilograms of difference that you see between the 589 and 576. You can calculate that for yourselves. Compared to the last 29 years, that is quite a bit increase, so we had a reduction of 8, 8.5 kilograms per year, and now we increased that to 13. Clearly, we are on track here, and we need to take the next steps now in order to reach our ambitious goals. And we all need to be on the same page there. And that's why we decided, and we think we really have become some kind of champion here, if I look left and right. Now our original purely financial goals complemented by a carbon dioxide multiplier, you might wonder what that means. Well, the financial goal before the variable remuneration is paid is multiplied with a carbon multiplier which can be between 0.7 and 1.3. And below that line, that means if we miss our carbon targets, our people, and that includes the Managing Board, may lose up to 30% of their variable compensation. If we exceed our targets, the variable compensation will not necessarily grow by much, but it might compensate a lower financial performance, might offset a loss there. So if we don't make our climate goals, the full bonus cannot be paid. Personally, that's very important, and the Managing Board finds that as really very important. I can assure you in the company, that caused some kind of shock, yes. And we are now really on the same page and are on track. We feel this was quite a bold thing to do, but in the first weeks and months, it has shown that was the right thing to do. Now talking about innovation. It's not possible without new technologies. And because of this, we are looking intensively at CO2 capture in several projects all over the world and we're -- we want to use and we are using different technologies for this. Amine washing has been developed further and oxyfuel and LEILAC. These are all unfamiliar terms for most of you, and I don't have the time to address them in detail, but we're working on 5 or 6 different processes with microalgae and sunlight in our sites in Morocco. So we're using different processes that we want to use in order to see which possibility or which path allows us to make the greatest headway. But processes are only as good as they can be scaled in their industrial use. And when it comes to scaling these processes, we must be ahead. So we're proud that together with the Norwegian government, our partner in Northern Europe, we are -- we will reequip our Brevik works. And by 2020, we will save -- or we'll capture 400,000 tonnes of CO2 emissions. And we will store these in the oil and gas fields on the coast of Norway. CO2 storage, of course, can only be a temporary solution. It's a valid solution, mind you, but it's not just about storage, CO2 storage. It's also about usage of the CO2, and this usage will ideally lead to a circular economy. And when you look at the product development that we are planning for, then you can see that in 4 areas, we have made major strides. On the one hand, in the field of low-carbon concrete products, we have achieved progress in England and in Norway to bring down our CO2 footprint. And our Italian colleagues are also doing well, our colleagues at Italcementi with RIGENERA and 3D printing, which was codeveloped in Italy. And they have a very innovative solutions for low-carbon building. Then when it comes to the circular economy, there is the Ecocrete product in Holland. In the Netherlands, will -- we use 100% recycled aggregates. And on the right-hand side, in our administration, we have the topics of TioCem and Powercrete. This is about a better energy balance of the products and a contribution to even-cleaner air. So these are just a few small examples. And in every country, we are intensively working on further developing these products together with our customers. [Presentation]

Well, my special thanks go out to Jennifer Scheydt. You saw her in the video, including her team, and they were very committed to this project. They made it possible in the first place. And now there is a follow-up project in Bavaria and what may be interesting to you is that Jennifer Scheydt mentioned that this reduces the material needed. This means that the footprint will be much less, and you saw the footprint where the building owner can really do what he likes. The developer can do what he likes. And between the first and second project, the first project took 4 months to build the building and the second project, now the square meter -- there were more square meters involved but it only took 2 months. So the speed inherent in these innovations is enormous, and we expect to move ahead with this kind of speed, not just with regards to this innovation, but with other innovations, too. And when it comes to digital transformation, we're also making great progress. It is our claim to be the first industrial digital company in the building materials industry. This is a very high claim, but we are doing well. And this is based on 3 foundations: HConnect, this is about the efficient interaction with our customers. We are in contact with more than 7,000 active customers per month all over the world. We have a very loyal user base. More than 70% of customers use our products every month. And you may remember the order of magnitude. I mentioned greater 70% is the goal for 2025. Today, we are above 30% of group sales, which are covered by these products in the different countries. The second foundation is HProduce. This regards the digitization of our production. And here, we are focusing on 4 digital tools in the field of cement production. One important tool is the optimization of production planning also with regards to an optimized mill operation especially with regards to the use of energy. And after a first pilot 2 years ago, we have started rolling out. And it's being used in 12 plants already, and we will accelerate this rollout. And last but not least, a topic called HService. Well, we are trying hard to use artificial intelligence and robotics in order to improve accounting processes and to digitize our supply chain, too. So where are we right now? What is the status quo? You may remember, this is the same slide, but now with a few markers as to what we achieved in 2020 as far as the RCOBD margin, we improved it by 26 basis points. When it comes to return on invested capital, we achieved an increase of 1.4 percentage points to 7.9% in 2020. And with the leverage ratio, we have reached the corridor with the range of 1.5 to 2x. CO2 emissions have been reduced, as I showed you, by 2.3% in only 1 year. And in terms of the digital transformation, 30% have been achieved, and we will continue making quick progress. And now on to my forecast for 2021. As I said before, there will be a slight increase in revenue, RCOBD and RCO on a like-for-like basis. Our net investments in property, plant and equipment will be kept at EUR 1.2 billion. Last year, we were below EUR 1 billion. This cannot be done in a sustainable way if we want to further develop the company. So the net investment in intangible asset will be used before acquisitions, and ROIC should rise above 8%, if we want to keep the leverage ratio within the corridor between 1.2 -- or 1.5 and 2.0x rather. And I'll finalize with a summary of my core messages that you can see on the left, and there's one more comment that I would like to make on political developments. You have seen and heard that the Federal Constitutional Court decided in recent days to give the next generation a right to climate protection. And politics has responded very quickly. They -- you may have noticed that yesterday, the climate goals of the federal government have been tightened drastically, 65% reduction by 2030, 88% reduction until 2040 and climate neutrality by 2045. We, as a company, we as HeidelbergCement, accept this challenge with joy, and we will work hard on achieving this and on making a contribution to achieving this political goal. We owe this to society and to our future generations. For this, we need the legal framework conditions. So there is no question about this. But for us, one thing is important. We work for ambitious goals. But most of all, we work for achieving these goals and for implementing these goals. And along these lines, I look forward to the next year. We will be there, and we hope that 2021 will also turn out to be a successful year for HeidelbergCement. Thank you very much.

Well, thank you very much, Dr. von Achten, for the report of the previous year, and thank you for this positive outlook in spite of all challenges, both with regards to this year and the future. Ladies and gentlemen, with this, we have reached the public part -- the publicly available part of our live streaming of this year's Annual General Meeting. The further course of the meeting can only be observed by the shareholders and their proxies. Because of this, if you were in the live stream and if you are shareholders, please register for the internal livestream with your password and as to the external listeners who cannot take part now because they're not shareholders, now I'd like to invite you to become shareholders. Then next year, we will look forward to seeing you in an in-person meeting and hopefully not in another virtual meeting. [Statements in English on this transcript were spoken by an interpreter present on the live call.]