Heidelberg Materials AG (HEI) Earnings Call Transcript & Summary

Distinguished shareholders, ladies and gentlemen, I'd like to welcome you on behalf of the Supervisory Board and the Management Board. I'm Bernd Scheifele. And as the Chairman of the Supervisory Board, I will assume the chairmanship of the meeting, and hereby, I open the 135th Ordinary AGM of Heidelberg Materials AG, to be held as a virtual AGM. I'm very happy about your great interest in our company. You are evidencing this for your participation in our virtual AGM, and we look forward to an exchange of views with you in this video communication. I'd like to welcome also the shareholder representatives, representatives of the media, of former and current employees of the company and all other guests following our AGM. I'd like to welcome also those who are not shareholders and who are following this first time of the AGM via our publicly accessible live stream. Thank you for your interest. The notarization of the minutes of the AGM will be provided by Notary Public Anna Ihrig from Heidelberg. Welcome. Now the formal part, ladies and gentlemen, I'd like to the regulatory matters necessary for this AGM. Today's virtual AGM consists of 4 sections: first, I'll talk about regulatory matters; then I'll talk about today's items on the agenda; then there will be a general debate on all items of the agenda; finally, the last section, we'll vote on items 2 through 9 of the agenda. This AGM will be held as a virtual AGM for those duly registered shareholders and their proxies. The whole AGM will be transmitted in audio and video via our password-protected investor portal on the web page of the company. The Management Board decided after due deliberation to hold this AGM in virtual format, making use of the authorization provided in Section 16, paragraph 5 of the Articles of Association. And thanks to the virtual format, it's not so difficult for shareholders to take part, and we have less environmental pollution because of less travel activities. And the virtual AGM will not give to any higher cost for the company. In the first part of the AGM until the end of the report of Dr. von Achten about the financials to aim for the year, the strategic orientation of the company will be publicly available on the Internet. Please don't make any video or audio recordings of the AGM, which is not all out. Shareholders and their representatives who are not following the virtual AGM via the investor portal. But in the context of the public transmission not automatically linked to the AGM, the electronic connection to the virtual AGM and the execution of shareholder rights in the AGM are only possible via the investor portal. Because of the large number of our foreign shareholders, we're also offering simultaneous translation into English. Now rights to speak and file motions and gain information, as in an ordinary in-person event, shareholders and the proxies have the right to gain information, to file motions and to speak and you have the possibility of a direct dialogue between the administration and shareholders. And as the Chairman, I establish that the information right, it can be carried out in the way of video communication as part of our contribution. And according to Section 131, paragraph 4, sentence 1 of the Stock Corporation law, I stipulate that video communication will be used as part of your contribution, and this allows everybody to follow your contributions. All of the speeches and motions and grants to information will be carried out via the investor portal and the access to the investor portal is available to shareholders and authorized persons. And we can only accept questions in German. Please turn to our hotline or send an e-mail, and the contacts are shown here, these other contacts of the investor portal in order to -- until the 10th of May 2024, shareholders and their proxies were able to hand in written statements and file motions. But this possibility was not used. The core points of the speech of Dominik von Achten was already published on 10th of May, and now to give you the possibility to comment on this in your contributions. Now the right to vote. You were able to execute your right to vote via mail ballots and by authorizing proxies of the company. And this is possible until I close the vote to the items. And you can also provide powers of attorney to third-parties via the investor portal, and I will inform you when this is possible. And I will guide you through the process of the vote. After the questions have been answered by the Board, the management, and also by myself, all members of the Management Board, and I myself as the Chairman of the Supervisory Board, are present and all other members of the Supervisory Board are connected electronically via Section 16, paragraph 6, and they can be called on. And the calling of the AGM was published in the Federal Gazette on the 4th of April 2024. It was called in due time and form, and the print out of the Federal Gazette will be added to the minutes by the officiating notary public. The information to intermediaries and association of shareholders on the calling of the AGM was sent out with the agenda. The documents on today's AGM, the combined statements for the year, financial statements for the year, sustainability report, the management report, the consolidated financial statement and the consolidated management report of Heidelberg Materials AG and of the group, and the report of Supervisory Board on fiscal 2023 and the calling of this event, including the agenda, were made available on the Internet and the documents can be viewed according to Section 289a, paragraph 1 and Section 315a of the commercial law until the AGM was called in due form and time. And within the existing deadline, there were no requests of shareholders to add anything to the agenda. On the 30th of April 2024, 2 counter motions of the umbrella association Dachverband der Kritischen Aktionärinnen und Aktionäre e.V., Cologne, concerning items in the agenda, the counter motions were immediately published on the Internet page of the company, and I will refer to this when I go through the agenda. Nominations, subject to publication under Section 127 Stock Corporation law, have not been received. If you want to file a motion or nominate somebody in the course of the AGM, please do so via the virtual request to speak table in the investor portal. Please do that now because then I can decide whether I should prioritize you when it comes to giving somebody the floor. The list of participants will be run electronically. The participants of the company will be included and the authorized third-parties, shareholders and shareholder representatives who are electronically connected to the investor portal, and I'll tell you the figures of the current attendance. And those participants will be updated regularly via the investor portal. As a shareholder and shareholder representative, you can lodge an objection to the decision of the AGM. This can only be done until this AGM ends and not afterwards. And this objection will be passed on to the notary public. And again, we want to summarize all of the questions and answers on general debate. And if you want to make your contribution, please announce this at the request to speak table in the Investor Portal. Since 9:30, the virtual request to speak table has been available to those shareholders taking part at the AGM electronically or their proxies. [Operator Instructions] Ladies and gentlemen, we'll start with the agenda now. And considering the individual items on the agenda, I assume that you're familiar with the draft resolutions of the Management Board and Supervisory Board that were sent out to you with the calling to the meeting on the 4th of April 2024, and the draft resolutions can also be viewed on the Internet page and in the investor portal. And item 1 of the agenda, this is the presentation of the established financial statements, the approved consolidated financial statements of the group, the combined management report of Heidelberg Materials AG and Heidelberg Materials Group as well as the report of the Supervisory Board for the 2023 financial year. We have the financial statements of Heidelberg Materials AG as per the 31st of December 2023, the group financial statements and the summarized management report for Heidelberg Materials and the group as per the 31st of December, the proposal of the Management Board and the Supervisory Board for the appropriation of balance sheet profit. The Supervisory Board tested or checked the annual accounts and the consolidated management report, and it has been approved in the meeting on the 20th of March 2024, the annual statement has been established and the report of the Supervisory Board. Now I would like to turn to the activities of the Supervisory Board in 2023 financial year. It was a record result. Even though the global, economic and geopolitical situation remains challenging and demand in the construction sector declined, both sales revenue and earnings from ongoing business operations increased significantly. As the first company in the building materials industry, Heidelberg Materials applied uniform and stringent criteria for sustainable products globally, thus setting new standards for sustainability as a pioneer. With the introduction of the first carbon capture and storage cement, the company set new standards in carbon reduction and in the field of decarbonized building materials. The company and the Managing Board were closely supported by the Supervisory Board in the past financial year. In the 2023 financial year, the Supervisory Board once again diligently performed all its duty in accordance with the law, the Articles of Association, the rules of procedure and the German Corporate Governance Code and, in particular, continuously monitored and advised the Managing Board. The Managing Board and Supervisory Board have always worked together in mutual trust for the benefit of the company and maintained an open and intensive dialogue. The Supervisory Board supported by its committees intensely discuss all aspects relevant to the company with the Managing Board, in particular, the intended business policy, strategy and planning, the course of business and the financial situation, the risk association and management compliance as well as innovation and sustainability. The Supervisory Board was directly involved in all decisions of fundamental importance for the company at an early stage. In particular, the Managing Board, requiring approval, that is, investment projects and financing matters, were discussed in detail with the Supervisory Board prior to adoption and in the past financial year, there were a number of topics that we did focus on. The Supervisory Board dealt with the audit and approval of the annual and consolidated financial statements for 2022, including the nonfinancial statement and the dividend proposal to the Annual General Meeting. In the past financial year, the Supervisory Board and Audit Committee satisfied themselves that the Managing Board has installed an appropriate internal control and risk management system as well as a function and monitoring system. They also satisfied themselves of the effectiveness of the compliance management program, which ensures group-wide compliance with the law and internal guidelines. Audit-related topics were discussed with PwC outside of meetings and without the involvement of the Managing Board. And we did that together with the Chairman of the Audit Committee, Mr. Mucic. And I was also in regular and direct contact with Dr. von Achten outside Supervisory Board meetings. The Supervisory Board approved the operational plan for 2023, was closely involved in the preparation for the 2023 Annual General Meeting and supported the renaming of HeidelbergCement AG to Heidelberg Materials AG. In the reporting year, the Supervisory Board also dealt intensively with corporate governance issues such as the annual statement of compliance with the German Corporate Governance Code and the regular self-assessment of the effectiveness of the Supervisory Board's own activities and those office committees. In accordance with the recommendations of the code, and based on the self-assessment of the individual Supervisory Board members, a qualification matrix of the status of implementation of the skills profile for the Supervisory Board was developed. The Supervisory Board revised its rules of procedure at the beginning of 2024 to specify the responsibilities of the committees. As Chairman of the Supervisory Board, I received suggestions from investors on Supervisory Board specific topics and took them into court accordingly. In March this year, I held talks with various investors as part of the governance roadshow, in some cases, together with the Chairman of the Audit Committee, Mr. Luka Mucic. In those physical and virtual meetings with international shareholders from London, Frankfurt and the U.S., various topics, such as the work and composition of the Supervisory Board and its committees, the governance of the company and the remuneration of the Management Board were discussed. Managing Board remuneration was another focus of the Supervisory Board's activities. In addition to determining the variable remuneration factors for the financial year and parameters for the Managing Board's remuneration in '23 and the year 2026, the Supervisory Board prepared the remuneration report and dealt with the adjustment of the remuneration system for the members of the Managing Board. The Supervisory Board has created a new transparent and ambitious remuneration system that is intended to provide even better support for the company's strategic objectives. The adjusted system will reduce complexity and meet the requirements of the capital market and the standard market practices. The long-term bonus now follows a standardized and standard market plan design. It will be 100% share-based and anchors ESG targets in order to support the achievement of ambitious long-term sustainability goals. An individual peer group consisting of the most important competitors from the different regions is now using the term total shareholder return. The annual bonus plan now contains harmonized performance criteria, increasing the transparency and comparability of the Managing Board targets and ensuring an even closer link to the strategic objectives of Heidelberg Materials. Subject to approval by today's AGM under item 7, the adjusted Managing Board remuneration system 2024 plus will enter into force retroactively as of January 1, 2024. The full Supervisory Board was actively supported by the Personnel Committee in the development of the remuneration system components. The Supervisory Board also discussed the continuation of the share buyback program with a third tranche of up to EUR 300 million and the cancellation of treasury shares from tranches 2 and 3. In total, the now completed share buyback program amounted to around EUR 1 billion. As stated in the invitation to today's Annual General Meeting, the company does not hold any treasury shares. The report in accordance with Section 71(3) of the German Stock Corporation Act is waived as no shares have been repurchased in the current financial year to date. The relevant disclosures are included on Pages 241, 242 and 266 of the Annual and Sustainability Report '23. In February this year, the Supervisory Board approved the launch of a new share buyback program with a total volume of up to EUR 1.2 billion and terminating at the end of 2026 at the latest. The share buyback program is in line with the company's financial policy and has a progressive dividend policy and should be seen in the context of the successful reduction in net debt, the good business performance in the past financial year and the participation of shareholders in the company's success. It is again planned to carry out the share buyback in 3 tranches. And the first tranche is to start shortly after today's AGM. In addition, the Supervisory Board held several meetings with the Managing Board in the past financial year to discuss significant investment disposals and portfolio optimization that have an impact on the strategic goals of Heidelberg Materials, and they might lead to an improvement in the balance sheet structure. In 2023, the Supervisory Board was again particularly keen to closely accompany and support the Managing Board in transformation issues, especially in the further development and implementation of the sustainability and digitalization strategy. As part of the strategy discussion, the Supervisory Board and its Sustainability and Innovation Committee dealt intensively with the sustainability commitment 2023 and the topic of recycling as well as the role of alternative fuel in decarbonization. The focus was on the company's plan to reduce specific net carbon emissions. The focus was on strengthening circularity and recycling as well as technology for the capture, use and storage of carbon, CCUS for short. The Sustainability and Innovation Committee also discussed the technical background and potential areas of application as well as the company's project in the field of 3D printing. Overall, the Supervisory Board focused even more strongly on the topic of sustainability in its monitoring and advisory activities. To refinance the bond maturities in financial 2024, the company successfully issued sustainability-related bonds with a total issue volume of EUR 1.5 billion, and that was the first time in 2023 with the support of the Supervisory Board and Audit Committee. With its existing debt instruments, strong cash flow, low debt levels and investment-grade rating, Heidelberg Materials is ideally equipped to secure the financing of its business in the short, mid and long term. In addition, the Supervisory Board dealt intensively with the company's occupational safety program and IT security in the reporting year. The work of the Supervisory Board also focused on Managing Board matters and future-oriented staffing of the Managing Board. In the reporting year, the Supervisory Board extended the appointments of members of the Managing Board ahead of schedule by 5 years: Chris Ward, until August 31, 2028; Hakan Gurdal and Jon Morrish, each until January 31, 2029; René Aldach and Dennis Lentz, each until August 31, 2029. Following the regular expanded office appointment to the Managing Board, Mr. Ernest Jelito stepped down from the Managing Board at the end of the reporting year. He is retired, and the Supervisory Board appointed Mr. Roberto Callieri as the new member of the Executive Board from 1st of January 2024 to 31st December '26. Mr. Callieri has assumed responsibility for Asia. He succeeds Kevin Gluskie, whose contract ended on January 2024. The Supervisory Board has also appointed Mr. Axel Conrads as a member of the Managing Board from the 1st February '24 to 31st of January '27. Mr. Conrads is the new Technical Chief Officer. As Chief Technical Officer, he is responsible for the 3 global technical competence centers for cement, aggregates, asphalt and ready-mix concrete. In March '24, the Supervisory Board extended the contract of our CEO, Dr. Dominik von Achten, ahead of schedule by 3 years until January 31, 2028. The changes in the Managing Board are part of a long-term succession planning with a reorganization of responsibilities for group divisions and an even stronger focus on technical requirements. The Supervisory Board has strengthened the bases for the continued successful development of Heidelberg Materials. With Dr. von Achten, we have an experienced manager at the helm of the company, who has positioned Heidelberg Materials excellently worldwide and has set the course for the future with great commitment. The Supervisory Board is pleased to continue the work with Dr. von Achten in the spirit of trust, and we are convinced that he will drive forward the transformation into a sustainable and digital future that has already begun with enthusiasm and momentum and will continue to lead the company successfully in the coming year. The Supervisory Board would like to thank Mr. Gluskie and Mr. Jelito for their many years of commitment and successful work. They have made a significant contribution to the positive business development and profitable growth of Heidelberg Materials. There were no changes within the Supervisory Board in the reporting year. In the context of today's upcoming elections of shareholder representatives to the Supervisory Board under agenda item 8, the Supervisory Board is focusing on continuity on the Board. The transformation is only proposing one change. Mrs. Marion Weissenberger-Eibl is no longer available for reelection to the Supervisory Board. She is to be succeeded by Gunnar Groebler, Chairman of the Managing Board of Salzgitter AG. The employee representatives were already elected by the company's workforce on March 14, 2024: Barbara Breuninger, Dr. Ines Ploss, Mr. Peter Riedel and Mr. Werner Schraeder were reelected and Katja Karcher and Markus Oleynik will replace Mr. Jochens and Mr. Schmitt as employee representatives on the Supervisory Board. And I congratulate all employee representatives on the election and look forward to working closely with them. The Supervisory Board and I would like to thank Professor Weissenberger-Eibl, Mr. Jochens and Mr. Schmitt for their many years of the dedicated work on the Supervisory Board. As you will have seen from the convocation of today's Annual General Meeting, the Supervisory Board has given an intensive consideration to the future appointment of the Chairman of the Supervisory Board and, after a careful consideration, has come to the conclusion that should I be reelected, I will continue as Chairman of the Supervisory Board but will not head any committees. Overall, the reporting year was another year of intensive activity by the Supervisory Board and its committees. The average attendance rate in the 8 meetings was 96.88%. The average attendance rate at the committee meetings held in the reporting year was 99.06%. The activities of the Supervisory Board and its committees in the past financial years are described in detail in the written report of the Supervisory Board on Pages 12 to 19 of the Annual Sustainability Report 2023. This is why I will not give you any further details here, and I'll refer you to the summarizing remarks. Appointment of new Board members. Before we move on to the Chairman's report, I would like to ask Mr. Callieri and Mr. Axel Conrads to briefly introduce themselves. Mr. Callieri, please.

Thank you very much, Dr. Scheifele. Good morning, dear ladies and gentlemen, dear shareholders. My name is Roberto Callieri, and I joined the Managing Board in January 2024. And for me today, it's an honor and a pleasure, being representing the Managing Board of Heidelberg Materials. I am an Italian. I'm an engineer. I have 2 children. And I started working in 1990 in Italcementi. And my career has basically been all over the world as an expatriate almost full time. I started in North America and Canada, Turkey, Thailand, Egypt, and the last assignment was in Italy as CEO of Italcementi after the acquisition of the Italcementi Group of Heidelberg Materials in 2016. I have worked intensively in the integration with Italcementi Group within Heidelberg Materials, and it has been a very intense and passionate time for me in Italy where, at the end of my assignment, we finally rebranded our subsidiary in here, Heidelberg Materials Italia, and so completing the integration of it within the Heidelberg Materials Group. I'm very passionate about this new assignment. I think there is a lot to do, and I look forward to consolidating and possibly developing our footprint in the Asian countries and definitely contributing to the ambitious target of net zero by 2050 of Heidelberg Materials Group.

My name is Axel Conrads. I'm very happy to join the panel here. Since mid-February, I'm a member of Heidelberg Materials and had taken over the role of Chief Technical Officer. I am married with 2 children. And as the CEO, I'm responsible for 3 global technical competence centers: cement, aggregates and asphalt, as well as ready-mix. Our global competence centers bundle the existing knowledge for the group, and we are the contacts for all operating units. We support our company in efficiency, increasing programs of digitization and the larger projects, especially in the context of decarbonization. As a mining engineer, I have a lot of technical competence, which will help in promoting the technical growth of our company, especially in the field of net zero. Before I was appointed to the Board, I was the President of our Midwest region, North America. I ran the business in one of our core companies. And during this time, I have the chance to contribute to the establishment of a highly modern cement factory in Mitchell, Indiana, which so far was our biggest CapEx project in the group. And I have a lot of industry experience. And this year, I will celebrate my 25th anniversary at Heidelberg Materials. During my career in Heidelberg, I held several management positions in Germany, the United States, Belgium and Bulgaria. I look forward to codesign, to co-shape the transformation of Heidelberg Materials as a Board member. Thank for your trust.

Thank you, Mr. Callieri, Mr. Conrads. I'd like to welcome you again at the Board of Heidelberg Materials. I look forward to a successful cooperation with the Supervisory Board. Now to report the management report, before I ask Dr. von Achten to present the financial statements of 2023 and to give us an outlook for 2024, I would like to show you a short film about Heidelberg Materials. [Presentation]

There's hardly a day where we're not confronted what changes. As far as I'm concerned, I have a feeling that the speed of change is on the increase. For example, AI. I don't think I'm one of those digital natives. But recently, when I discussed AI with my 23-year-old daughter, and when I asked them about what she could tell me, she said that she herself does not really feel like she is the member of the AI natives because that would be the task of the next generation. And even though speed seems to be coming along ever faster, it's something natural. Same goes for us as a company. Change is continuous. We always have to prove that coping with change and crisis is part and parcel of our DNA. And in that film, we saw that in the past fiscal year, we were able to set new milestones and new projects. We are courageous when it comes to addressing projects. And as today, it will be in the future. 2023, our Supervisory Board Chairman said already, was an extraordinary year in many respects. I'm proud of our teams all over the world who faced the challenges of the past year and to focus on the goals and achieve excellent values. Even though there was less demand, we had record results in 2023. We are able to increase sales by 4% to more than EUR 21 billion; and the RCO, the result from current operations, was increased by 29% to EUR 3 billion. The annual profit increase result per share was more than EUR 10, [ EUR 243 million ], plus 23%. For the first time, more than EUR 10. The return on invested capital, ROIC for short, increased in 2023 by more than 10%. For the first time, it was above this semantic threshold. Cash flow was strong at EUR 2.2 billion. Capital efficiency, in spite of investing more, we improved the capital efficiency. What is important is that we did not just make progress with financial figures but also, in terms of sustainability, we made major progress. The specific net CO2 emission was reduced by another 3% in 2023. I visited the company in Devnya in Eastern Bulgaria. There was a highlight in this context because through a higher use of biomass, we were able to replace the use of fossil fuels and the clinker ratio was reduced. The specifics CO2 emissions were reduced by 5% in 2023 there. Axel Conrads already mentioned that in December 2023, we completed the modernization project in Mitchell. It's a highly modern plant with a capacity of 2.4 million tonnes, and our CO2 emissions have so far been reduced by 20%. This is only the beginning. Part of the good group-wide result, in addition to reducing clinker factor to 70% now, it was also the increased share of non-fossil fuels to almost 30%. This progress goes to show that economy and ecology can be part and parcel of a successful business model, and that is the case at Heidelberg Materials. So we drive growth and green transformation in the same way and the demand of our customers is evidence of this. Today, we make 1/3 of our sales for sustainable products. We want to achieve an increase of 50% by 2030. And part of this are products which are characterized by their CO2 reduction and their circularity. Let me tell you further details about this. A key milestone in the past few months with the introduction of the 2 new product brands. evoBuild is one of them. This stands for a globally uniform and stringent criteria for sustainable products, and this creates new standards for decarbonized products. And such a step is unique in our industry. Because of this, let's take a brief look at the methodology of this brand. CO2 reduction, circularity are the framework for evoBuild. evoBuild classification takes its cue from our sustainability strategy and it increases transparency for our customers. evoBuild works with 3 criteria. CO2 is reduced in the case of cement and concrete. It's circular because there's a recycling share in the case of concrete or both. And across products, we have set a 30% threshold. This means that CO2-reduced cement or concrete have at least 30% less CO2 compared to the reference value of 2020. And these are circular. And circular products have at least 30% recycled aggregates or their material need has been reduced by at least 30%, like in the case of our special mortar for 3D printing. And in this way, we are setting new benchmarks for the industry but we are going one step further with our sustainable products. Under the brand evoZero, we offer the, so far, biggest innovation of this centuries-old material, cement, a product with net zero emissions. This is a global first. The order book for evoZero, that's the first CCS-based net zero cement all over the world, are filling up. With the Nobel Center, we have already achieved or received a little bit for this project. And this is a film that shows you the house for science, culture and dialogue in Stockholm. This product is possible because of a historic milestone, which will allow the first delivery of the net zero cement next year. In a few months from now, in Norwegian Brevik, the first CO2 separation plant in a cement factory will be set up in industrial scale. This is the 100-meter-high absorber and we have kilometers' worth of pipes. And to implement this tight space, this is very tight, these modules, which are as big as a handball pitch, are prefabricated and transported very soon. 400,000 tonnes of CO2 can be separated per year, and they can be stored there. This progress and know-how and experience is already drawing the attention of customers, industry politicians and many other stakeholders. And Brevik is just the beginning. I'm very proud of the fact that our specialized teams all over the world are already using the knowledge that we've gained, and they are already driving ahead this decarbonization. At Heidelberg Materials, we are entering a new era. And like no other building materials group, we are pushing towards net zero. And I'd like to give you some specific examples, which are being implemented, built and realized right now because we are all about action and results, of course. [Presentation]

As you can see, we're also active outside Norway, where we try and reduce carbon emissions and we use different ways. One, carbon-reduced products. And we have this example from Ghana, where the co-signer is about to be completed. The complete Board of Management visited, and it was impressive to see how precise, how accurate everybody worked on the decarbonized products. Then secondly, decarbonization of our production processes. For example, waste heat, power, or alternative heat generation in the Helwan plant in Egypt. We visited with the ambassador, and the ambassador said, "Amazing what contribution you can make for emerging countries." Thirdly, decarbonized product. It was recently that we announced the largest CCS project globally, Mitchell, U.S., and we get subsidies of up to $500 million. And we also drove ahead the carbon project in Langford, where we are turning the first sod. Then material-reduced products. There was a 3D-printed building in Heidelberg and, in fact, the project owner wanted to start on the next one already as soon as we have started. So rest assured, we will do whatever we can in order to reduce carbon emissions, which means that we'll try and reuse our value resources as best as we can. We try and keep them in the loop. And well, after a couple of fronts, we already had a first plant for the selective separation of concrete debris in Poland, demolition debris. And we got the license on the 1st of April for reclaimed concrete, and we are now extremely confident that recycling will be a success. We call this the re-concrete approach where we recycle used concrete. And at the end, we'll have clean sand and gravel and cement stone. And this low-carbon cement stone can then replace valuable natural resources. This is the principle of circularity. With the driving force in circularity, and we will continue investing in this field, we'll establish and increase our footprint in core market and will also increase our offering in circular materials. Green Drop rock products in Canada is one company we took over and RMS Gravel in United States. Then there was RWG Holding. And SER in Germany we took over. We also use fly ash, which is a byproduct from energy generation, and that helps to reduce carbon intensity in our products such as in composite cement. With the SEFA Group, we acquired the largest American recycling company in ponded fly ash. With the ACE Group, we took over the largest supply of pulverized fly ash in Malaysia. With investments such as this, we prepare for the future and make sure that sustainability and economic liability go hand in hand. And so that means that we have enough room to sustainably design our success of the future. And that pays off both for the company, for you, our shareholders and for our company. And it's a pleasure that we can share our profitability with you this year and that we can continue our progressive dividend policy. This is why we propose to pay out a dividend of EUR 3 per share, and that's an increase by 15% or EUR 0.40 compared to the dividend that we paid out in 2022. So in the last financial year, we spent EUR 1 billion on dividends and share buyback. And the focus on shareholder return continues in 2024. A couple of weeks ago, we announced that we launched an even bigger share buyback program with a volume of up to EUR 1.2 billion and a term until the end of 2026. The first tranche will start this month. In March, we celebrated our 135th anniversary on the stock exchange. And against this background, I'm exceedingly proud that our share reached a plus of more than 50% growth, and that made us one of the top DACH performers. And while the performance continues, we had an increase by more than 90% since January 2023. Our share performance in the last 16 months is thus higher than the DACH. We outperformed the DACH, which only increased by 34%. And only in brackets, mind you. Let us now turn to the current financial year 2024. Well, we have a robust performance. Despite reducing or falling revenues and compared to a very strong last quarter last year, we increased our margin. And well, a good start in North America and strict cost management help. Poor weather in the major regions and few working days in the first quarter '24 reduced volumes, but we could compensate for that by positive pricing in selected core markets. Sales revenue fell by 8% in the first quarter compared to a very strong quarter the year before. RCO, it fell by EUR 27 million. But because of strict cost management and thanks to reduced energy prices, the operating margin increased to 12.1%. But still, the environment is a challenge. We must and will give good answers. And this is why we keep checking our portfolio and we'll have dedicated action to optimize our cost structure. Our portfolio optimization continues. And since January '23, we've done a number of takeovers and also dispose of a number of companies. And thanks to our growth acquisitions, our proceeds from sales were successful. And we have a better market position, more sustainable growth and financial success. And yet, lower volumes for cement because of low demand for construction work in Europe, plus a cement portfolio that is geared to low-carbon products, means that there is less cement that is produced. However, that also means that less clinker is produced, and that means that several plants will have to be changed. In the cement plant in Hanover, clinker production will be closed down in the course of 2024. In Leimen, just around the corner, we already stopped clinker production and both kiln lines were shut down. The 2 French plants in Bath and Villiers will be closed on October '25. The European plants will continuously be reviewed with regard to their future viability. We'll continue optimizing our plants and will also overhaul plants, well, for instance, make sure that Mitchell is modernized. In that way, we propose to improve our cost efficiency. In 2024, we assume that the demand in the construction sector will stabilize, albeit at a low level. We expect cost development for energy and raw materials to remain volatile. And against this background, we confirmed our outlook for fiscal 2024. We expect an RCO, result from current operations, to be in the corridor of EUR 3 billion to EUR 3.3 billion. The ROIC is expected to reach roughly 10%. In our industry, we plan to make a difference in terms of financial success, sustainability and digitalization. Net zero until 2050, well, that is a tour de force and that is an effort that we can only muster as a team. My big thank you goes to all 51,000 colleagues around the globe. Because without their and your passion and your creativity, all the progress that I've reported on today, on behalf of you, wouldn't have been possible. It is due to you shareholders, dear shareholders, that our transformation is really progressing fast. Thank you for trusting in our company. Thank you for trusting us on the way that we've decided to embark on. We are a strong international company, and we are perfectly positioned to really go for the milestones in 2024 and to muster the challenges that we will have to face this year. I'm optimistic about the future, and I'm absolutely convinced that with the necessary courage, momentum and passion that we have, we will be successful in the next 150 years. So stay posted. [Statements in English on this transcript were spoken by an interpreter present on the live call.]