Heidelberg Materials AG (HEI) Earnings Call Transcript & Summary

Good afternoon, everyone. Good morning for our Q1 conference call. As always, in the room, we have Dominik von Achten, our CEO; René Aldach, CFO; and Robert and Ozan from the IR team. Look forward to discussing the Q1 results with you. We have prepared a couple of slides that Dominik will go through, and then we look forward to your questions. Over to you, Dominik.

Chris, thanks a lot. Hello, everybody. A very warm welcome from us here in Heidelberg. Thanks for joining. I'll turn to the presentation that has been shared and just go through it and draw a little bit the red line in the sand as always, and then we are looking forward to your questions. If you go to summary, I think it was a very encouraging start for us in 2025, strong results despite, as you well know, difficult weather conditions. Revenue up more than 5%, RCO almost 1.5% up. So a year-over-year improvement, both on the revenue side and on the RCO line. That was not so much help across the world everywhere by the markets when it comes to volume, especially, but we helped ourselves with the Transformation Accelerator program, which contributed a strong EUR 50 million already year-to-date in the program, and we are well on track to get to our EUR 500 million target. With that tailwind, we obviously continue as promised, our EUR 1.2 billion share buyback and open the second tranche within May as we have announced and promised earlier. We stick to what we have said. The growth path, and that's important, continues. The larger transactions in the U.S., Giant is closing on time. And that means closing was on April 1 and since then is ticking along already. And the other point that is important from our side to stress is the M&A pipeline around the world is very well filled. On Brevik, very good news. We have started actually now capturing CO2. We've liquefied it, and we've already temporarily stored it. And the ship is also out there testing the connection. So everything is set for the opening of the plant middle of June. We are fully on track. And with all of that, we confirm our outlook to deliver an RCO between EUR 3.25 billion and EUR 3.55 billion, the ROIC will be around 10% and the CO2 emission will be slightly reduced. If you go to Page 3, you see the numbers up on revenues, basically flat on operating EBITDA, basically flat on the margin and slightly up on RCO. So I think a good quarter also in the historical content and then especially given the weather conditions. If you go to Page 4, you see the bridge as I said earlier, this was not really helped by the markets because the volume is still negative. So there are a couple of markets where volumes are not our friends. But price over cost is working well in a combination of good pricing and even better cost discipline, and that altogether then leads to a positive price over cost chart. Talking about cost, Page 5 shows you, we have announced the EUR 500 million, and we are already at 10% of that year-to-date, only a couple of months into the program. It's fully set up organizationally. It's fully set up process-wise. We're following up in every quarterly management meeting per country. And I can tell you personally from our recent discussions with all of the countries, we are fully on track to deliver what we have promised. When you then turn to the different regions, you see Europe stabilizing on a higher level with revenues being slightly up, EBITDA margin basically flat. RCO slightly down, okay, early days, that's always a winter quarter for us. You see also the absolute amount of result is compared to what they need to deliver for the full year, basically 0. So I think in that respect, important to get out of the gate quite well and that worked okay from our perspective for Europe. North America, to be honest, a little bit of rocky road in the first quarter, also weather-driven, as you have heard from other locations, result dropped, okay? Also there, the magnitude of the drop looks steep in the graphs, but EUR 16 million in the scheme of the total year is fairly a very small number. I think overall revenues are stabilizing, just below the EUR 1 billion. And also from a business line EBITDA margin, I think we are more or less close to the 30% or above. So I think in that respect, that's okay. Asia Pacific, ready to get going again. This is actually, from our perspective, very positive. You know that in the last 2 or 3 years, we were always hoping for a rebound in Asia, also working hard there. Now Roberto Callieri and his team have really worked hard on the costs and productivity. And now the markets are also coming back one by one. So in that respect, we are quite optimistic for Asia for the remainder of the year. And the first quarter was actually quite good, stabilized on last year's level. So overall, fine despite the fact that Australia, for example, as a market is still down as a market, but also there, the team has done a good job on cost discipline. I would say the star of the quarter is our African Mediterranean and Western Asian performance that has really, for the first time ever, surpassed the revenue level of EUR 500 million in the first quarter, and they've surpassed for the first time EUR 100 million result in just one quarter. And look at the margin development, I think there is nothing to add in that respect. The figures, I think, talk for themselves, and we remain very optimistic also for that area. On Page 10, you see then the highlights on sustainability. As I said earlier, capturing of CO2 is working with a massive unit there. The storage temporarily is also working and the ship is there and the connection is being done. All of that will be presented to you in our nice Capital Market Day at the end of the month, you should expect not only nice discussions with us, but also a beautiful landscape in -- around Brevik. So in that respect, welcome to all of you that join us. And then almost a little bit unnoticed, we already opened the largest calcined clay plant in the world in Ghana outside of Accra and is now fully in production. It's working, and we are selling and marketing the products that are completely new to the market in West Africa. And then wrapping it up on Slide 11. I don't need to repeat the numbers. But just to add, we also stick to our CapEx guidance of EUR 1.2 billion. And also on the leverage, we stay comfortably between 1.5 and 2, (right now, we are clearly below). So let's wait and see what the year brings. I don't need to wrap up again with the executive summary. I would argue let's go directly into your questions, and we are looking forward to them. Thanks.

Yes. Short and sweet, it's a small quarter for us. So please, operator, would you start the M&A -- Q&A, sorry.

He's already in M&A mode, our communication team. That's good. This is how you get the story rolling. Good.

[Operator Instructions]

The first question comes from Elodie Rall from JPMorgan.

Thanks for taking my questions. So I'll limit them to two, but I was wondering if you could give us a bit of color about the exit rate at the end of Q1, in particular, in the regions which were impacted by bad weather. And if you've seen -- so the exit rate and if you've seen basically current trends, so basically April and year-to-date in May, if you've seen some acceleration in performance and if you've seen volumes turning positive. So that's my first question. And the second question would be on pricing. If you could give us a bit of color about the pricing element in Q1, how much was that? And if you have pushed more price increases in April?

Elodie, sorry, maybe there was a technical issue at the very beginning. Can you just repeat the first part of your question? When you say exit rate, what do you -- what is exit rate? Just to be sure that we -- that everybody on the call also understands exactly what you are talking about?

Yes. I was just asking for some color about the sequential improvement between the beginning of the quarter, so January, February being quite bad and March and the current trend since then?

Yes. Okay. Fair enough. So let me start and then maybe René can add. I think let me start with your volume question. I guess that's the exit rate. And you are right, January, February was fairly slow. Weather was harsh in some parts of the year. So it was sluggish, then March was strong and basically made up in many cases for the weak start. But there is no breakoff in April from our perspective from what the exit of March was. I think that's what you asked. So for us, we sit here fairly relaxed. Hello, hello.

Yes, hello.

Elodie, can you hear us again?

Yes.

Okay, sorry, somehow the line got so excited about what I was telling you. So let's get back to your exit rate question around volumes. As I said, January, February was weak in volumes. March was good. And we do not see a negative exit rate out of March going into April. In fact, the trend goes from our perspective in the right direction. And you have to even keep in mind that there is a working day shift to that hits April, at least in Europe to some extent because last year, Easter was in March. And this year, Easter is in April, okay? Then you have Ramadan around the world. So more or less, from our perspective, the exit is absolutely fine. No concerns from our perspective. Pricing holding up well. Of course, there's a mixed picture around the world, but we are going constantly for price increases. You know that there is not this normal rhythm once a year and then you are done, and we always try to go in January, then it's weather, you go back and forth with things. But there are still price increases coming in many markets of the world. There are second price increases coming in some parts of the world. But from our perspective, the pricing is fine. So no concerns on the pricing from our perspective.

Thanks, Elodie. The next question comes from Ravi Ephrem from Citigroup.

Two quick questions. Firstly, can you give us a sense of the scope impact from the Giant Cement acquisition for the rest of the year and also the sale of the Congolese assets? And secondly, on your big new calcined clay plant in Ghana, congratulations on that. Can you talk about a bit of marketing strategy in terms of the pricing dynamics, especially are you having to do something with pricing to kind of enable penetration of that product to the market? Or is it virtually indistinguishable and hence, you can kind of just sell it in your existing channels without any pricing changes?

Yes. Thanks a lot. Let me answer the second one, and then Rene will take the first one on the scope impact. On the calcined clay, I think -- thank you for your question. It's important to understand from our mindset we are not subsidizing the market with products that we have invented. If we invent decarbonized products for the Western African continent, we are not selling them cheaper than the traditional product. It's rather the opposite. There is no pressure from us to push any volumes into the market. We do this very carefully and make sure that the market understands that there is a higher value than what they traditionally got, especially because nobody else can offer this right now in Western Africa. So in that respect, the message is rather the opposite of what you indicated. We will carefully make the market for this product with a very convincing business case. That's our mantra for all what we do in decarbonization, and that is also true for this setup.

Okay. Let's go to your swap question. Let's do the easy one first, sale of DRC. I guess it's not yet closed. We want to have this done hopefully by end of June, that's not a super big operation for us. So there's not a material impact on our numbers, probably it's low single-digit million. So not material. And then the Giant acquisition, obviously, I cannot tell you for one operation, what result we expect. But read our press release what we have done, make an estimation that we have that probably then 9 months in our numbers. And that's how you need to look at this.

Yes. And I think it's important to also, if I may add, just as a general remark, we've done a lot of acquisitions in the U.S., but the meaningful ones, especially are contributing spot on or even above what we have assumed in our business cases. So the North American team is very focused and now also very experienced in pulling the synergies that we need. And we always said that we acquired at an attractive multiple even before synergies. But to make this a super attractive case, we need to get the synergies, and that's what the team is working -- is already working on since more than 1 month.

Next in line is Tom Zhang from Barclays.

Two from me as well, please. So first, maybe just a clarification. In the press release, you wrote deliveries are up in all regions -- or sorry, you wrote deliveries are up in all business lines. Am I meant to read that as every region, volumes are up even in North America and APAC, where you are posting relatively small year-on-year increases in revenue? And then the second question, if you could just talk a bit about the price/cost contribution to EBIT. I guess that's continued to decline a little bit, plus EUR 24 million year-on-year. It's the lowest since Q3 '22. Is that just because price hikes have been delayed a little bit more into April? Or is there something on the cost side that's relevant for you to flag?

Yes. Let me do the first one. I think we are just checking what you are referring to because, obviously, the volumes are not up everywhere. That's also hopefully not what we have communicated. I think we've given you in the presentation the volume split up. So I think it's clear that there are regions where the volumes are up, but there are also regions where the volume is down. Notably, U.S. was down in volumes. So I think in that respect and also Europe, we have a mixed bag up and down. Africa was clearly up. And in APAC, you have more increases than decreases. But -- and then Australia was a little bit down to some extent, also cycling driven because there was a big weather event in Australia. So this is -- these are the facts, and we check the communication, but it was not our intent to assume that deliveries are up in all regions or business lines.

Yes. Tom, just to confirm what Dominik said, the biggest thing was obviously in North America with the sh**y weather in Q1. Volumes were down. I guess it's not a surprise. Everybody had the same and all the other regions, especially in cement, were okay. And then let's go to the price over cost thing. You say it looks low. The number, there's -- it's Q1 negative inventory effect, double-digit millions, maintenance timing, you name it. And as Dominik said it, pricing for Q1 was okay. And then you had in Europe, you had some higher energy cost -- electricity costs in the first 3 months. But just to tell you, our fixed cost base is down in an inflationary environment. Let's say, if you look at the whole world, there is 3% to 4% inflation if you took the emerging markets also into this. So our fixed costs are even down, and that is the transformation accelerator. So we are not at all saying that the price of our cost number is too low because it's Q1 and there are a lot of one-offs back and forth inventory. So that's -- we are very confident with that number.

Okay. That's clear. Yes, the line I meant was just on the quarterly statement in the first paragraph, it says deliveries in all business lines recorded a slight increase. So maybe that was business lines rather than...

Yes, the recorded numbers were up. The like-for-like numbers were slightly down in aggregates and in ready-mix, but the recorded numbers were up.

Got it, okay, that's clear, thank you.

So the next question comes from Brijesh Siya from HSBC.

Two for me as well. The first one is on the calcined clay. If you could -- I know it's early days, but what do you think in terms of the IRR of those projects? And if you could give a little bit about margin, what kind of margin you aspire to be? Is it similar in that case? Yes, I mean, what kind of pricing approach you will have? And the second one is on the European market and a little broader one. In the statement, you talked about some increase in fixed cost as well as raw material and transportation in Q1. So if you could just elaborate what kind of inflation you have seen in Q1? And how do you see that in the context of your earlier guidance that energy cost to be flattish for the full year and given that the energy costs are now trending down. So if you can just [indiscernible], please?

Okay, Brijesh, let's do the calcined clay first. Obviously, what is -- there are 2 things we have to say here. Obviously, the calcined clay can or will replace clinker, which we would need to import. So because we have no clinker production in Ghana. So that replaces the clinker. That is an effect. So you save cost over there, plus you will bring new products to the market with a lower CO2, let's say, footprint. And this is a little bit the business case because we save a lot of money of clinker imports and as well the supply chain, you need to truck it from the calcined clay plant to our plant and not wait for ships and demurrage and whatever. The business case is here purely based on cost savings plus selling then, let's say, lower carbon products. So -- and remember, that is a joint venture between us and another company. So we get half of the volume allocated to us. So that's a little bit regarding calcined clay. In our European market, when you are asking cost inflation, as I said, energy cost for Q1, if we talk electricity, were a little bit up, especially January, February, March was okay. Fuel costs were slightly down, so that nearly offsets each other. So Europe nearly flat on electricity or energy. And then our self-help regarding fixed cost reduction and third-party services, let's say, neutralized cost or coming even off. The outlook, as we said it, we assume energy cost at worst flat versus prior year. And you said it rightly, some costs are coming even down. Oil price is very cheap. So overall, where we have the fuel benefits, electricity now the summer should be okay. So the worst case is flat, but probably there's a little bit upside to our energy.

Yes. And I think what's unclear, you know that we have now a new government here in Germany. They are changing the rules on the energy costs, and there may be coming some relief also in that respect. So there are a little bit -- a couple of points that could help us down the road. But obviously, with energy, it remains volatile. We don't -- it's hard to predict.

Next question comes from Cedar Ekblom from Morgan Stanley.

Two questions. Can you just talk a little bit more about Asia? It is a bit of a drag, and it is a region that you allocated capital to with increasing your footprint in Indonesia quite meaningfully. So I'd just like to understand how we should be thinking about the potential for that business going forward and how we might fix some of the profitability issues in the region from here? And then secondly, can you just talk a little bit about the backdrop for -- and the capacity for M&A from here? Because clearly, scope was a nice helpful tailwind in the first quarter and hopefully, more of that can continue. So I'd like to just get a sense of how you're thinking about the balance sheet, what types of assets and regions are in focus? If the sort of backdrop from a tariff perspective has changed the landscape for M&A at all, what you're hearing from potential sellers, et cetera, that would be helpful.

Cedar, you are a very experienced analyst. You put 10 questions into 2 headlines. So well done. Let us try to answer, and I'll start and then maybe Rene has to add a little bit. On Asia, you're right, it's been a drag for 2 or 3 years. And I think it's too big to be a drag for a long time. That's why we've changed the management on Board level. Rene has taken over himself in Australia. And Roberto Callieri, after a very, very successful job in Italy has taken over in Asia, and he obviously gets going with the team working on many fronts, but also, first of all, the cost position that there is still room for maneuver, and that's what you see already now in the numbers. And then we are working on the market positions that especially Thailand, the market he knows very well because historically, he's been working for Italcementi in Thailand. So obviously, Thailand is the market then Indonesia for us, a very important market, where we have seen prices stabilizing and coming back a little bit. Volumes are still a little bit subdued, but important to see that pricing seems to have turned the corner a little bit there. And then the other meaningful market is obviously India where we made no secrets about the fact that the Indian market has been sluggish for a while, not so much in terms of volumes, but in terms of pricing and overall market dynamics. That also seems to turn. So that's good news. So we are quite hopeful that India will also be fixed down the road. And then you have the smaller markets for us, Hong Kong, Bangladesh, China, nothing exciting to say. In fact, China is still very bad on volumes, but has stabilized in terms of results. And the Chinese team is doing an excellent job delivering okay results in a very difficult market environment. Do you want to say something on Australia?

Okay. Cedar, Australia, you have seen as everybody has read, there was in March, the big cyclone where Queensland was out of business for a week, and then we needed 2, 3 weeks to pump out the quarries. Overall market is, I would say, it's maximum flat versus prior year. Inflation is pretty high. Pricing is good. Costs have massively reduced. Australia is up for us in the quarter, even with the cyclone and with flat market. And now with the acquisitions coming in Australia, I think Australia can have a good year this year.

Yes. And then on M&A capacity, Cedar, I'm not sure what you are assuming. But I would say we are becoming rather an M&A machine down the road. So it's clearly our target to even ramp up the M&A activities. You refer to the balance sheet. There is room to do so in a very disciplined way as we have proven over the past years. And the pipeline in all areas is very full, but we are very selective of what we execute. So that's now a very comfortable position from our perspective, but it's very clear that M&A activity is here to stay or rather increase. So -- and that is true for all regions. And then we may put not all eggs in one region basket, but split it between different regions depending on the local market conditions and perspectives.

Okay. So I should just take it that M&A in all regions, in all asset types is on the table. Is there any preference for bolt-on or more platform size deals? Or is it literally we'd look at anything, we've got lots of capacity and we want to grow through M&A?

I think we've got -- we stay focused on our business lines that you know. We have a preference towards aggregates and partially -- and cement and materials deals, less so on ready-mix, very selective there. We also do deals that includes also asphalt. But in general, that's a little bit the focus. I think to be fair, maybe the focus is not so much in Europe in terms of massive M&A activity also because we can't do massive deals in Europe in most of our markets, but all the other areas are clearly in focus. And even in Europe, there are tuck-ins here and there that we are looking at, but we are very selective because we have a very good asset base and a heavy asset base in Europe. And the homework in Europe is not necessarily to work only on M&A, but also on other things.

Next one comes from Arnaud Lehmann from Bank of America.

2.5 questions from me, if that's okay. Firstly, on Africa had a good quarter. I appreciate the base effect was relatively easy for the region. But can you give us a bit of color on the performance there? And do you think that the good Q1 in Africa is sustainable into the rest of the year? The second question is on Brevik. So you mentioned in the statement that the plant is now starting to operate. Is there any accounting impact that we need to consider from opening the plant in terms of depreciation, higher OpEx or anything meaningful that we need to account in the numbers for the Europe region? And lastly, if you could give us any negative currency effect on your EBITDA or operating income at the spot rate with the weak dollar in particular?

Thank you. The last 1.5 questions, Rene, will take. I'll take the Africa one. Africa is, as we always said, it's not one market. It's a portfolio of countries, and that's also what you see in our results. This is not one market only that's sticking out. It's really broadly across Africa that the business comes back. And I think that's also -- I think the African countries have gone through dire trades for quite a while, especially also after Corona, but also before. And you know that the emerging markets now for almost 10, 12 years were not the name of the street. But the sentiment has turned also on the back of the oil price impact because you know that they are still a lot of oil-dependent countries there. If the oil price in general comes down, that's one thing. And then also if the dollar weakens, that also helps them to some extent. So in that respect, there are some hard facts that help the countries to get going again. And the activity level we see there is good and looks very sustainable for the time being. So not at all a reverse change going into Q2, if that was what you were also asking. Rene?

Yes. So Arnaud, for Brevik accounting impact, I would say, nothing to consider right now. The CapEx, as you know, a big part of this was funded, and we need to -- it's not fully operating yet, so it needs to be capitalized first. And then we only have on our balance sheet the part of the CapEx we pay. So it's not a material impact for the group. And then OpEx, as you also know, it's to a certain extent, to a high extent, funded, so there's no accounting impact you would need to consider. Then currency effect, obviously, you all see, you are referring to spot. If you just look at the U.S. dollar and the Aussie dollar, there's obviously a headwind compared to a few months ago. But you have seen we keep our guidance where it is. That tells you that our remaining operations will make this up. So I think, yes, we have -- currency is not our friend right now, as you know, the U.S. dollar, but the operations business is running nicely.

Then next question comes from Yassine Touahri from On Field Research.

So two questions as well on my side. First question, a bit more color on North America. It looks like the aggregates margin were a little bit under pressure in Q1. I understand it's a very small quarter. So my question is that, are you expecting aggregate margin to improve? Have they improved in March? Are you expecting an improvement in the coming quarter? And maybe coming back on the question of Elodie on the exit rate. In the U.S., are you seeing volume up in March and April? And then second question, which is on M&A. When I look at the scope impact based on the acquisition that you've already done at the EBITDA level for the year, is there a number that you would consider something like -- is something like EUR 100 million or EUR 150 million of additional EBITDA reasonable as an assumption for M&A impact for the year?

Okay. Maybe, Yassine, let me take the exit rate question, and then Rene will talk to you about the aggregates margins in the U.S. and about the M&A scope impact for the full year. Now on the exit rates, I said it earlier in my remarks. Short term, I think there are rocks in the road in the U.S., and we do not -- unless there is a sentiment change versus the own administration, we don't see a massive volume trend to the right side. So volumes are sluggish from our perspective. Yes, now big picture. I can't go into any details in that respect. But I think overall, the volumes remain sluggish for the first 4 months, and we've not seen a significant trend change in that respect, neither to that they are falling off the cliff but also not to the positive. And again, if there is no significant sentiment change, you know the figures. GDP has been disappointing in the development. You saw the interest rate decision. So there is no movement on that end. So I think there is no trigger point at this point to drive that sentiment. Now let's see what the administration comes up with in the next weeks or months. But I think it needs some sort of a trigger point in order to turn the sentiment around.

Yassine, aggregates margins, you said it by yourself, EUR 5 million would make a difference already. We would have higher margins in Q1. And -- but going forward, pricing in aggregates for the U.S. was good. And now it comes, as Dominik alluded to, how do volumes behave in the U.S. that we have a margin impact because of fixed cost absorption or not. But overall, price over cost due to good pricing in the U.S. and our transformation accelerator will be good, and then it depends on volume. I'm not here raising red flags, is a good -- super business. You've seen the development. It's good, and we think it can move forward. Then M&A scope, I think when we did the guidance, I said 3-digit millions EBITDA for the current ones we have, let's say, announced, signed, we confirm that. You see Q1 was not too bad, I would have said. And let's see what we can do -- what we do further in the year. We want to do further M&A, probably that number can go even up. So 3-digit million at least EBITDA.

And the last question today comes from Harry Goad, Berenberg.

I've got two, please. So firstly, in Europe, I appreciate, obviously, Q1 is always impacted by weather, but can you just remind us what you think for the outlook for Europe underlying volumes as we progress through the year and maybe a little bit of detail by key country. And then secondly, with regard to the EUR 500 million cost saving program, can you just remind us how much of that we think or we should assume will actually drop through to profit as in -- I guess there's a headwind from cost headwinds that's being offset as well.

Okay, Harry. Again, for competitive reasons, I need to be a little bit careful about talking about specific countries in Europe. But you know that many European markets, especially Western, Southern -- especially Western and Northern Europe have been sluggish for a couple of years now when it comes to volumes. We indicated to you that in some markets, we do see stabilization and an upward trend. And that continues market after market, but it's also fair to say there is no massive quick turnaround at this point in some of those markets. The volumes in Eastern Europe, okay, first quarter, we have to be careful because it's a winter quarter in most of those markets. But overall, the volume is intact in most of those markets, and the same is true for the Southern European markets. That's a little bit the split picture that I was talking about earlier, and that's also now the assumption for us. So we don't assume that volumes further decline from here. We assume stable to slightly increasing volumes for the remainder of the year, but also not a positive explosion. The one remark I need to make is, again, Germany, you know that they have indicated this huge program of EUR 500 billion infrastructure. The government is now in place. They get going. The indications we hear that they want to get going quickly. And I assume that they also will go quickly starting the EUR 500 billion getting them into action. But we have not yet got any formal decisions yet, any legislation that has come. So I think we should be rather conservative not to assume that in 2025, you see much of that going to the -- to be actually placed with one caveat. Harry...

Yes, we can hear you.

Yes. Sorry. I'm not sure what we -- we checked the technology. I'm not sure what happened. So I'm not sure what you heard, Harry, but I think big picture, Eastern Europe clocking along well, but the winter quarter, same is true for Southern Europe, okay. Northern and Western Europe, still subdued from -- far away from the peak, but stabilizing market after market. And outlook for us is no further decline, but rather stabilization, further stabilization and slight increase, but also no explosion to the positive in the short term. And then the German program of EUR 500 billion coming hopefully into legislation, impact to the market short term, probably not so quick, but sentiment change could drive a quicker acceleration of volume uptick. That's a little bit the message.

So Harry, to your EUR 500 million question, we always said you can't just add EUR 500 million to the result. And obviously, that's there to offset as well inflation for the group. And we always said it's probably roughly a run rate EUR 200 million result improvement after it's fully implemented in '26.

Thank you, Harry. This concludes our call today. Let me remind you that we indeed do have our Capital Market Day ahead of us on the 27th and 28th of May. So for those who still want to come, there's some last remaining seats. So please register. The link should be on the website and also on the presentation that you saw today. For everybody that's registered, we look forward to seeing you in Brevik. Thanks a lot for dialing in. Goodbye.

Thanks, everybody. Bye.

Thank you. Bye-bye.