Heidelberg Materials AG ($HEI)

Ladies and gentlemen, welcome to the Heidelberg Materials First Quarter Results 2026 Conference Call. I am Sandra, the Chorus Call operator. [Operator Instructions] The conference may not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Christoph Beumelburg. Please go ahead, sir.

Thank you, Sandra, and welcome from Heidelberg here with, as usual, Dominik Von Achten, CEO; Rene Aldach, our CFO; and the IR team. And after going through some prepared remarks, we get ample time for your questions. So with that, very short intro over to you, Dominik.

Christoph, thanks. Hello, everybody. Great to have you on the call. Thanks for joining. Look, we had an interesting quarter in the start for 2026. Robust performance from our perspective, but quite significantly impacted by weather in U.S., Europe and partially in Africa. So the revenue side, EUR 4.5 billion, RCO, EUR 0.2 billion, down from prior year quarter, but important for us, positive price over cost. And that, to a large extent, mitigates the volume impact that has been driven by the weather. I don't have to tell you Northeast, you saw the pictures from New York. You saw how Northern Europe and Western and Eastern Europe were under snow for a long time. So that's our footprint in that respect. So for us, I would say, normal course of business. Transformation Accelerator, I think, has taken off. But from my seat and our seat, I think there is still ample room for maneuver on the cost side. as we go through the year, especially given the volume developments in the first quarter. So we should expect further good traction on the transformation accelerator. More than EUR 400 million are already on the clock, and we are very confident that we'll surpass the EUR 500 million by year-end, and that's important for us, especially in the current environment. Share buyback, we stepped up our last year's buyback of about EUR 400 million now to EUR 450 million with the next tranche that will start after next week's AGM. Important for us, as we always said, we want to grow organically with our sustainable product focus, but we also want to grow externally and great acquisition down under in Australia with MAAS that's going through the antitrust process right now, everything on track. And then we have AKCANSA, I think a very interesting step-up into the majority position of a company we know very well of a market position in Turkey, we know very well. And from an expert platform, we know super well, and we can leverage for growth, not only in Africa, but also in other parts of the world, including. A little bit behind the scenes, we need our French Airvault plant through a massive rebuild significant investment well beyond EUR 300 million. step change in efficiency and decarbonization. The plant is now running. The kiln is running, [ kiln ] produced, alternative fuel are running. So I think in that respect, we are really -- we will see a big change in the performance of France, not only on the financial side, but also in terms of carbon footprint. Keep in mind, the carbon footprint of this new setup is 30%, 3-0 percent better than the old plant. So a massive change. That's why we said step change. And with that, we confirm our outlook between EUR 3.4 billion and EUR 3.75 billion. ROIC will be above 10% and the CO2 emissions will be slightly reduced. If you go to the details on Page 3, I don't think I have to go through that. EBITDA at EUR 484 million, 13% down. Operating margin slightly down to 10.7%. And then on the RCO down to EUR 163 million. If you see on Page 4, this is mainly driven by volumes. That's the impact that I was describing. From my seat, that is mainly and predominantly weather-related. There are some markets that are a little bit slugg. We'll come to that, I guess, through the discussion. But in general, this is weather impacted in Q1. Important that the price over cost remain positive. If you then go to the margin, you see that LTM, so last 12 months, the margin is actually moving in the right direction in all business lines. So cement is moving in the right direction up to 27.5%. Aggregates is up to 25.7%. And for the group then that means an increase to 21.6%. So from our perspective, the green light, the train is moving in the right direction despite all the headwinds. Transformation Accelerator, as I said, EUR 380 million of last year, so more than on track. Of course, normally, if you have the EUR 500 million, you would have expected EUR 250 million to EUR 300 million. So EUR 380 million, a fantastic job, and we just need to do it again, and that's what we are fighting for this year. So as I said earlier, you should expect to surpass the EUR 500 million by year-end. If you then go through the different areas, Europe is the one that has had harsh weather and where the results really came down. I think Europe is large, a large footprint and the markets are quite different. From our perspective, the sluggishness of the market sits a little bit in a line between the U.K. and Germany and Benelux in between. The rest of Europe is actually okay. And then in the East, it's maybe Poland and Romania that is a little bit slower. The rest is actually going quite well, if not very well. So in that respect, the big countries for us are a little bit hit by the weather and some sluggishness in their performance. I'm sure we'll come back to that during the discussion. Then if you go to North America, the result is below last year. And I would say that's all about the Northeast. And that's why from our seat, it's for us the biggest region by far. And it is the one that has been hit the hardest by the weather. That's why I think we are on it. April looks good. So I think from my seat and our seat, this will -- this is going in the right direction. There are also large projects that are now kicking in and really seeing the material pull. So I'm actually quite optimistic that North America in general, but also the Northeast will turn the corner. Asia Pacific, I would say, stable with some ups and downs in the different countries. Then you can maybe later on say something to Australia, but also there, we see movement in the right direction. So overall, I think we've seen the worst in Asia and Australia. But the question is how much uptick we'll see throughout the year. Let's wait and see. Volume development also in April was actually good. Africa, despite the fact that volumes were a little bit under pressure, especially in the northern parts of Africa, but also in some parts of sub-Sahara driven by the weather. In the end, the result was quite stable. And also there, April looks significantly better. So I'm pretty confident that also Africa or [indiscernible] for us will continue to deliver well during 2026. And then on the guidance, as I said earlier on, we absolutely stick to our guidance. at 3.4 to 3.75 RCO, above 10% ROIC, a slight reduction in CO2 emissions. And then on the CapEx, 1.2 to 1.3 and the leverage around 1.5x. So that's it from our side. Rene, do you have anything to add?

Okay. Just a short info about the next tranche of the share buyback. We started this after the AGM in May. You remember the last one was around -- the last few months were around EUR 400 million. This one will be EUR 450 million. So that's a significant -- or it's a nice uptick. And together with the dividend, I think we stick to our commitment that we want to increase the shareholder return, which we are de facto doing. And that's just what I wanted to add to Dominik's explanations.

Thank you, Dominik. Thanks, Rene. So operator, we can start the Q&A process, please.

[Operator Instructions]

Thank you, operator. So as the line is pretty full, as usual, please stick to 2 questions at a time. And we start with Ben Rada Martin from Golden Sachs.

My first was on energy inflation. I know in the press release, you spoke about expectations of cost inflation and a partial offset from pricing and surcharges. I guess it would be helpful, could you quantify what the kind of base case of inflation is on your EUR 2 billion energy bill and I guess your EUR 2 billion or so transport bill as we sit today? And then the second one would just be on pricing. It'd be helpful to touch on how you saw pricing realization in the first few months of the year in Europe and North America, please?

Yes. Let me take the first and then the -- let me take the second and really take the first. So it's Dominik. Then on the pricing, I think pricing in Europe is intact for us, that's okay. The only -- to be honest, the only sluggish market a little bit is maybe the U.K. The rest is absolutely intact from our perspective. The one more, the other a little bit less, but no change from what we have indicated earlier on pricing in Europe. We continue to do value before volume. For us, it's important to move the price also because you look, the carbon certificate is still at EUR 75. So from our seats, the cost position is pushing, especially for those who are short. So in that respect, no change from our pricing approach. And for North America, pricing, you saw this pricing in aggregates is very strong. I think also in comparison, I think our pricing in aggregates go to the details. I think top performance of the team in North America, which is important for us. In cement, you can always dream more. But also there, if you take the benchmark, I think, top job of the team. Pricing is moving for us in positive territory. North America pricing is up also in cement. Remember, last year, we were down. So we said we're going to target a single -- low single-digit increase in cement in North America. So we are actually on track with pricing also in North America then.

And regarding the energy inflation, first of all, I want to clarify something we read a partial offset, but the clear target is to fully offset the cost. And as you know, I'm managing the Australian business, and I can assure you and I have the numbers in April, we fully offset the additional fuel costs we got direct and indirectly from suppliers. So that's number one. Number two, how much is this affecting us? It's interesting. The oil price is now 10% down today. So this moves every hour. And now to give you a precise number is difficult, but I'll give you a little bit of preview here how you think about -- you need to think about this. First of all, fuel and diesel and oil is only 15% of our energy bill. So it's -- if you take EUR 2.2 billion, it's EUR 300-something million. And you can imagine that we learned from the Russia-Ukraine conflict and our hedge levels were never as high as they have been in 2026. So only a certain part is affected by the Iran, let's say, conflict. And I would have said we want to recover the full impact. And it's probably from a direct fuel and energy cost impact is probably low low single-digit cost increase on our energy bill, which we want to offset and now with the 10% oil price decrease that will be even lower. So it's clear we want to offset. But mathematically, it's clear. If you just offset 1:1, that's margin dilutive. It's very clear that's the mathematics of this, but that should not impact us big time. So we seem here very comfortable.

Next one is from Luis Prieto from Kepler.

Just a couple of them very briefly. The first one, coming back to pricing. Is there a scenario in which we see further initiatives implemented in the second half of the year? I think are changing a lot, but is that something that is likely? And the second one, if I recall correctly, you mentioned in Q4 results that you were optimistic for the year with a conservative initial guidance. Has your stance at all changed due to geopolitical risks? In other words, can we still categorize the confirmed outlook as a conservative initial guidance?

Luis, let's go one after the other. Pricing, we never give up on pricing to be very clear. So there is no rule that we can't move in the second half. We try every day to advance our pricing. But we need to react to the volatilities, and that depends what Rene said earlier. It depends also on the geopolitical wiggle room that we have that we can't manage and we'll navigate well through the for as we did in the past. But the clear message to you is there is -- we never give up until the 31st of December and then the work starts on January 1. So pricing is a continuous movement in the right direction ideally. So no question around this. Look, early days on the guidance, let's not get ahead of ourselves. We stick to what we have said end of last year, and let's not now speculate about too many potential upsides or deviations from that. Let us deliver. And as we go through the year, we keep you updated. But given also the geopolitical volatility, I ask for your understanding that it's still a way to go until the year-end, and we need to manage all the ups and downs. We are confident we can get there, absolutely confident we can get there. Otherwise, we would not tell you, but let's not get ahead of ourselves.

Next question comes from Paul Roger from BNP Paribas.

So I have one short term, one long term. So on the short term, pleasing to see there was a significant recovery in April or in Q2. I wonder if you could be a bit more specific and maybe even quantify the volume growth and also talk a bit about some of the recent trends and if they differ by market? And then secondly, on the longer term, you referenced a bit the deal in Turkey. Can you say a bit more about the rationale for that? And also whether there will be any strategic changes following that deal?

So just because the line was not super clear, Paul, just to repeat your question. The first one was recovery in April. And what was the second half of that first question?

Can you quantify a bit and talk about the hot spots and maybe some of the weaker spots as well.

Yes. And then the other one was China Perfect. So Paul, on the recovery in April, we are clearly above prior year and also our plan in April in terms of volume. Let me not get into too many specifics, but it's not just a small tick up. It's from our seat is a significant pickup. So I think that goes in the right direction. But I think there are also, to your second half of the point, there are markets are still sluggish. And I indicated them to you earlier. So if I look at Europe, it's this access between all the way between U.K. and Romania. You can always draw a line. And that is the one that I think we are waiting for a significant recovery. I think I have some good indications here in Germany on housing here and there a little bit. There is movement below the hood, but we don't see it yet in our numbers. So the sluggishness, Paul, sits predominantly there. And then I think that is probably the weakest spot, which I can take a smile now and say, hey, that gives us the biggest upside, but let's fix that problem first. So those are probably the weakest links. The rest nothing to mind bother about. It's ups and downs, but it's nothing to be either too happy or worried about. And then on AKCANSA, let me start and then Rene adds because he knows the business also quite well. He is also involved in that. So for us, why did we do this? You know that we know the business for 30 years. We had a joint venture with. And we have now the opportunity to take over their shares. That's what we are doing, which then puts us into almost 80% share, so predominantly ownership. From our seats, the business has been underperforming. That's also why we were forcing a little bit a solution here. And we do believe we are the best owner for this. You know that we have also a Turkish Board member who knows the business and the surroundings in Turkey very well. So as a team setup is also good. The assets we know very well. We know the upsides of the assets. We know the market position in Turkey very well. We know the surrounding markets of Turkey, and that's important. The plant in [indiscernible] sits at the water and is a powerhouse when it comes to exports, both in terms of serving Africa, Asia and even North America. And I think that's important for us to get a grip on that because with all the volatilities, taxes here, imports absolutely, blah, blah, blah. There is a lot of wiggle room that you get and flexibility you gain in your network. And you know that we have a very powerful trading arm that is leading globally under HM trading. But Rene, maybe you have something to add also financially, to this.

As Dominik said, the business was in '25 are not performing. But if you look at the prior years, it was okay and there's significant synergy potential if we manage this on our own. And I guess this is strategically very, very good deal. And if they come to normal EBITDA levels as well financially, it's good. So we buy an own known business. The risk downside is very low. And we have [indiscernible], who is working for [indiscernible], he knows everything and now we can manage by ourselves. So it's a very good strategic acquisition, helping as well our growth story within our financial metrics.

Next question comes from Elodie Rall from JPMorgan.

So just a follow-up first on both questions. April volume, does that mean that April volumes are up in Europe as well? If you could just clarify because I'm not sure I understand that you also said that overall European volumes are up in April. And then second question is on your overall margin performance in Q1 and maybe going forward, because you're saying that you're delivering on your cost initiatives, but your EBITDA on a like-for-like basis is down in all regions, even in regions where you generated positive like-for-like sales. So for example, in North America, like-for-like sales were up 3%, but like-for-like EBITDA is down 27%. What's going on there? And where are the cost savings basically going? Because it's a bit disappointing not to see that translating in EBITDA performance. So maybe Q1 is exceptional. And from here, it's okay. But if you could give us a bit of color there, that would be quite useful.

Okay. Very good. And, let me give you the first answer. The volumes are clearly up for the group. Europe is flat. And then to be clear, which is much better than the first quarter.

And Elodie, second quarter regarding margins, let's go through this. You say North America revenue is okay and margins are down. This is correct. But you know what, we have only one region in Q1 in North America, which is down. All the others are nicely up. And which one is the region which is down heavily, it's the Northeast, Dominik alluded to this, New York, what have you, snow, heavy snow. And this is by far our biggest region. And that is also -- it's a cement region with high margins. And if this is heavily down, then it weighs on the average margin. It's very clear. And then we have as well, obviously, this maintenance timing inventory, you don't need to go into the details. So Q1 was impacted by the Northeast. All other regions were clearly up. So from our point of view, that is not a concern because in April, that region as well volume-wise went nicely up. So that's a tick. And then you know what, in Europe, we have 20 countries now to Q1 for the weather report to go through margins from my perspective, doesn't make any sense. The cost reduction focus is there, and we will push further. And as Dominik also said it, the EUR 500 million is probably not the end number, but probably it will not be the end number, it will be nicely higher. So the savings will show up. And what we have also done in Q1, you have seen this, we further optimize the European footprint. We have announced to close another cement plant in Germany. We have announced to, let's say, restructure, optimize our cement network in Sweden. So that will all come through, don't worry. And if you look at the European cement margins, I think they are even -- they are improving. So I'm not worried about this. Even if in Q1, look at the Slide 14 of the deck, the cement margins are up in Europe with she volumes and weather. So that gives me confidence. And there, you see the savings.

Next one comes from Arnaud Lehmann from Bank of America.

Firstly, just a clarification on your full year guidance. Do you include any contribution from MAAS Group in Australia or AAA in Turkey in the guide for EBIT? Secondly, and if you can clarify maybe the timing of consolidation for these 2 assets, please? And secondly, just to finish the world too, in Africa, you mentioned bad weather for declining sales. And I thought it was always sunny in Morocco and Egypt, but maybe you can give us a bit of color.

Okay. On the guidance, I think no, it's not included. MAAS, Rene, you want to say something about?

Okay. MAAS, we have signed this after we have, let's say, decided on the guidance. And there's a -- they authority reviewing this. earliest, I would have said, late Q3, beginning of Q4. So that's it from us.

And AKCANSA, also there is an antitrust process running with the agencies in Turkey. So very hard to predict. Again, let's not get ahead of ourselves. It's not in the guidance, but it's very hard to predict when this will close. This can go fast, but this can also take longer. So I'm being cautious on this. We are not trying to overpromise here. So that would be an uptick if it comes earlier, but let's not speculate on too high hopes. On Africa, as I said, I think the North Africa was actually good in April. Volume performance across the board was very positive. There was also Ramadan effects that's clear. And Sub-Sahara Africa comes and goes a little bit. But overall, also in Sub-Sahara, there are parts of sub-Sahara that were stronger than others. But overall, Amba is clearly up in volumes for April.

Next question comes from Pujarini Ghosh from Bernstein.

So if we discuss the RCO margin, so Q1 RCO obviously dipped quite a bit. And going back to your full year guidance, it implies almost like at the upper end, more than 10% increase. So my question is what kind of volume price, price cost expectations are you baking in to take you to either the bottom end or the upper end of the guidance? So basically, how should we expect the remainder of the year to progress? And the second question is back on AMWA. So basically, you've discussed the Africa region, but the other markets in that segment, how are they doing? Is there any impact from the conflict? So yes, any color around that would be very helpful.

Let me take the second one, and Rene takes the first on the margins. Look, we are not in the direct conflict zone. The biggest impact we see for years now in Israel. Obviously, Israel is under a war scenario for quite some time now. So that's where we see the biggest impact. But Egypt is not impacted, at least not negative, I think even positively because the market in Egypt is strong. Malco, same thing. And we are not in the Middle East, Turkey, no impact other than the indirect impact that Rene was describing earlier. But other than that, Pi, we are not in the Middle East with any presence. So no impact to us.

And then to your first question regarding our guidance, as Dominik said it, we have one small quarter now. Yes, we are a little bit behind prior year, but we could explain this. And April looks good. We will catch something up what we have missed in Q1. And the overall North America, as we said it, pricing is very, very good in aggregates. Our volumes except Northeast were good across all the regions. So no change to our assumptions in North America. AMWA also April very strong, catching up what we missed in Q1. Again, in Q1, our highest margin, biggest country that Morocco and they had floodings in the first 2.5 months. So -- and we see this catching up. So as well here, no change to guidance. And then Europe, as Dominik also said, there are a few bigger countries not performing like we want to. But we will make this up with cost and our pricing is okay. So also here, Overall, no change to what we said when we have given out the guidance. And probably there's maybe upside a little bit in Asia and Australia. So let's see. But overall, I think we will hit what we wanted to hit.

on the line is Yassine Touahri from On Field Research.

I think my first question would be on the cement margin in North America. I think the cement margin have been coming down for, I think, fourth quarter in a row now. And the compression that we see in the first quarter, it's like nearly 700 basis points. I understand it's like partly weather related. But again, it's very surprising. Is there any one-off in this or the timing of maintenance or anything that explains this collapse in margin in Q1 -- and when we look at the rest of the year, do you feel that you're in a position where you could see a return to margin expansion in cement or at least margin stability? And then my second question would be on -- there is a press report suggesting that you might be looking at an acquisition in South Africa. Is it something that you can comment on? And if you cannot comment on the specific press report, could you explain a little bit your strategy in emerging markets? Could we see more acquisition in emerging markets in cement? Or are you going to focus mostly on developed markets?

Let me take the second one and then Rene takes the first one. As always, Yassin, no comments on any press speculations. That is also true for this one. And when it comes to M&A, we've always said we are going to grow both in developed and in emerging markets. We have a global portfolio. There are ups and downs in each of those markets. We want to balance also things out. We focus on delivering our financial metrics and our growth ambition. And in that combination, we look at every opportunity in our core business. So we will not leave our focus on heavy building materials. That's what we always said, and that's our clear focus because we believe that's what we know best. That's where we'll have our global advantage. That's where enough growth sits -- and with that, we stick to what we have said all along. So both developed and emerging markets are absolutely there. You see now MAAS was a developed market acquisition. I would say Turkey is probably counting somewhat to emerging markets, maybe stuck in the middle. But in that respect, the full range is up for grab, but it needs to deliver a contribution to the financial metrics. As Rene was explaining earlier, it's true both for MAAS and it's true for AKCANSA, and it's true for every acquisition that will come. So the pipeline is full, and you should expect more acquisitions as we go through the year.

Yes, regarding the cement margin, and I think I thought I have somehow alluded to this, that delta is coming again only from our biggest region, cement region we have in North America. And you are saying on a number level, it's what 650 or whatever basis points. In that region, we are talking 200 basis points, 2,000 basis points delta because there was not much going on there. So again, margin expansion, that's obviously with increasing costs and you put fuel surcharges in everything that's margin dilutive is clear. So we need to get back to the margin path for North America. It -- it should not go down clear. And cement pricing needs to move better than it is last year, but that's not the problem in the whole industry, cement pricing last year was not great. But it's clear, Yassine, that we need to get better here and we will. And again, Q1, don't use Q1 because there is the biggest region under heavy pressure with no de facto much sales. So I'm not so concerned. again. So let's see.

The idea -- when we look at the second quarter, the idea is the volume should be better, at least in April. As a result, the margin pressure should be much less substantial and it could even be potentially stable depending on the pricing execution. Is that the way to look at it?

No, that's -- you have summarized it better than I did. That's correct.

But there are 2 more questions on the line. We are doing okay on time. So if you have any more questions, feel free to step back in line. The next question comes from Julian Radlinger from UBS.

So 3 from me, please. I think they should be relatively quick. The first one is a really easy one. So we've talked a lot about the cement margin decline in North America. The aggregates margin decline in Europe, is there anything other behind that than just volume declines that you saw in Europe? Second question, if I'm looking at your segments, taking a step back from the Q1 now, APAC continues to be the one that sticks out as the one where earnings have been moving sideways for a long time now. I know you get this question a lot, but how happy are you with this region in general? Is the performance there meeting your expectations? And if the answer is no, what can you or are you doing about that? And are you -- and how far are you considering portfolio actions there as well? And then my last question, and this is sort of similar to what Yassine asked about emerging market acquisitions. If you can kind of come back to that and elaborate a little bit, I'd love to understand a bit what makes certain emerging market assets look more attractive right now than, for instance, doing more aggregates bolt-ons or cement bolt-ons in the U.S. or contributing to European cement market consolidation in a region which is highly underutilized, things like that. If you can kind of help us understand a little bit the trade-offs there.

Yes. Okay, Julian, that's almost a textbook for the next half hour. So only a small 3 questions. Let me take a step and then Rene will jump in when it comes to your second question. Aggregates margin decline in Europe, it's very simple. I indicated to you, U.K. is sluggish, and that is one of our biggest aggregates. The aggregates volumes, if you look a little bit where they sit, they sit predominantly in the markets that I described as being sluggish. So I think that's the main reason. So if you take that in the flip side of your argument, that's the volume pressure there. So I think overall, from my seat, we should also see a recovery in aggregates in Europe and predominantly in the U.K. It depends also on the specific market development. So I think overall, I think that's mainly the answer there. On APAC, let me give you the answer for total APAC and then Rene can again comment on Australia because I would argue we do take portfolio measures quite substantially in APAC. You know that we've done an acquisition recently in Malaysia. You know that we have done moves in Indonesia, and Rene will come to the moves in Australia. So we are growing that region quite substantially, and it has the beauty that it has a fairly stable market of Australia in there and then the more emerging markets, Indonesia, India, Malaysia, Thailand, Hong Kong. So I think that's the case. And maybe before we get to Australia, it's clear that we continue to work on our portfolio. That's also clear for APAC. The question was whether we are satisfied. No. Does it meet your expectations? No. But can we change or should we things change overnight hastingly? No, because that's destroying shareholder value. That's not what we are paid for. So we are keeping an eye on what we can do from a portfolio perspective. But clearly, portfolio management will continue also in APAC. And you should expect that not only in Australia, but also in Asia. But Rene, maybe you describe a little bit the situation in Australia.

Okay. For Australia, we have done the BGC acquisition via our joint venture Smit Australia. That is a big, big, big success. And then following our strategy, we want to increase our, let's say, presence in markets where we are and where we can further improve, and that is the mass acquisition on the East Coast. I think that fits perfectly to our portfolio. And you have seen as well our other competitors in the building materials growing in Australia, and I guess we are doing the right thing. And we follow these result contributions of these acquisitions very, very closely, and they are all performing like we wanted to have it in Australia. So I think that fits perfectly to the strategy.

And then Julian, on your last question, emerging market acquisitions versus aggregate bolt-ons and European consolidation moves, I think it's pretty straightforward. Again, going back to what we said, we want to grow, we want to meet the financial framework. The beauty about the emerging market acquisitions that we do, they are very quickly value accretive, both in terms of margin and in terms of ROIC because in most cases, these are asset-light steps, not everywhere, but in most cases. So that means that typically on a ROIC performance, you get a good return. That's especially true for the AMWA setup. And then aggregates and cement bolt-ons, obviously, we are looking at everything that moves, but we do say no to a lot of things because we don't see the value and the value accretion for our financial framework. It's a matter of availability of the acquisitions, but it's also a matter of price and the matter of synergies or missing synergies. So that's the way we look at that. And that's basically also true for European cement consolidation. Rest assured, we look at everything, but I haven't seen 10 deals in the last 3 months in that respect. So there is not a lot of this movement moving yet. But absolutely, we are looking at this same principle. If we are the best owner for the asset, if we can drive the biggest synergies, if we can get value accretion to our financial framework, then we absolutely move also in cement consolidation in Europe.

Next one comes from Harry Goad from Berenberg.

I've got one question, please, on U.S. federal funding of infrastructure. So specifically on the IIJA bill where although I appreciate there's quite considerable capital still to be spent, as I understand that the bill needs to be reauthorized this year. Is there any -- I guess, first of all, can you give us any insights on what you're hearing on negotiations around reauthorization? And is there any risk on funding for not say 2026, but 2027 if negotiations sort of don't go as well as you would hope?

Harry, I think it's hard to predict -- it's never been harder to predict how these negotiations go in general, and that's not a detail for any negotiation. In general, I'm quite optimistic that they will bridge it somehow, whether they do it through a reauthorization in September or October or whether they do it in January. I don't think that's going to -- they have muddled through this in the past. You can go back to history. This has never led to a cutoff in investments. They somehow them do interim solutions or something. If I look at the general political setup and the desire of the current administration to at least not lower the chances for the ballot in November, I'm quite confident that there will not be a dramatic swing to the one or the other points. I don't see that at all. So I think I would rather assume for now, don't quote me, but I would rather assume a fairly stable maneuvering. I wouldn't see a massive uptick and I wouldn't also see a massive decline at this point. And from our main scenario, we would assume that the funding continues well through 2026.

Next one comes from Glynis Johnson from Jefferies.

Two, if I may. The first one in terms of Transformation Accelerator. There have been some more recent plant closures that you've announced. And I just wanted to understand, are they part of the original transformation Accelerator program? Are they supplementary to that? And if so, can you give us any additional quantification of what the potential savings could be? And then second of all, similar thematic actually is your friendly peer in Switzerland put an EBIT number on AI upside. You've obviously talked about digitalization very enthusiastically since the Capital Markets Day at the very least. Do you feel confident enough to put a number on it yourselves on what the upside could be in terms of digitalization and AI?

Rene, do you want to take the first one and then I'll take the AI one.

It is for the transformation accelerator. These plant closures we have announced in the Q1 will be additional savings to the original EUR 500 million. And that's why Dominik and I say the EUR 500 million will not be EUR 500 million will be more. And we always said there's fixed and variable cost part components. And don't assume this is for the full year. There's a process. We have unions. We have a lot of things to manage. There will be an impact in 2026, but the full run rate then will come in

And on the second topic is, you know that we've been on the topic of AI for quite some time now. We've given you very specific examples. And I'm always happy to see that others in the industry are also following that. I think that's fine. I think it will also increase the suppliers moving on this. the whole network will move down the road of AI, which I think is great. It's also great for us when we talk about our digital investments in terms of command AKCANSA and other things. So I think in that respect, we are moving in the right direction. We are not -- we have not put a number on this at this point. Partially, it also drives the transformation accelerator, but we have bigger hopes and dreams on AI and let us continue to work on this in a diligent way along our processes and together with our customers and then eventually we will come up with something nice, but we should -- at this point, that's the status from our side.

We go back to a second round this time from Elodie again, JPMorgan.

Let me ask another question. So we haven't discussed benchmark ETS. It's something that we all seem to have forgotten now. But do you have any latest views that you can share with us on, first of all, when you think we'll get the benchmark, which has been longer waited for and what level you expect? And then the ETS reform to come, what kind of changes you have assumed the timing, the news flow, we should expect basically?

Yes, we manage our business, but it's hard to manage the politicians. And I'm being careful with making assumptions on what will come out of Europe in this respect. You know the discussions. I can only pick up what I'm sure you also picked up the rumor that the new benchmark will anyway sit around, what is it, 650, 660 or something. Let's wait and see. So that would be a little bit relief versus what the speculation was maybe a couple of months ago. But I can't tell you. My understanding is that they will try to come up with a decision here in the next couple of weeks. But it's -- again, it's hard to predict. There is no formal date to the best of my knowledge. And then on EU ETS, again, a lot of speculations back and forth. The market at least is not speculating at this point about a fundamental change because the CO2 certificate price has been pretty stubborn around EUR 75. And normally, the market is pretty clever. I'm not trying to beat the market in that respect. So this for me gives an indication, maybe it's only one indication that there is a revision coming. But clearly, the market at least is not speculating on the revolution nor do we. I think they probably will try to put some sort of relief in there, and you've discussed market stability reserve, linear reduction factor. You know all the ups and downs and limits around this. But it really would be not professional for me to speculate on where they exactly land because there are so many discussions going on also behind stores. We are -- wherever we can be, we are giving our inputs, absolutely, but it's hard to predict and I for your understanding, I don't think this would be professional for me to say anything more than I've said now.

Then we go full circle and end with the one that asked the first question, Ben from Goldman Sachs.

Excellent. My first was on evoZero. I know we haven't really spent much time on it today, but be interested, we're a few months into production with the product, how have the volume and I guess, the green premium realizations been versus your expectations set at the CMD? And then second one is we've seen some press articles about admixture shortages in APAC and diesel shortages. Are there any geographies that you think are at risk from physical supply shortages of input materials that's worth flagging?

Ben, thanks a lot. Let me answer the first one and then Rene, as he heads procurement, he will come to the second one. On evoZero, I think interesting dynamics continue. First part of your question, production goes very well. So technically, it's a clear green tick in the box. Also the integration with the cement plant, the team has done a fantastic job. We are producing -- we are capturing the CO2. We are storing the CO2. So the carbon bank is filling. That's fantastic. Big innovation, nobody has done this before, but it's really working. So I think in that respect, very, very encouraging, and we are working diligently on the sales side of things. We have very engaging customer discussions all across Europe and with some global tickets that are also centered around their European footprint. So I think that's really -- the pipeline there is very full. And now to the price point discussion, it's clear, and we've always said that we are demanding for this product a completely different price point. And we are very focused to get to that price point. And for now, that works very well. So let's wait and see. The good advantage that we have that we don't have a pressure to act. And that's much different from if you start a cement plant and you have a silo of 20,000 tonnes. If the silo is full, you have 2 options, either you sell the product or you stop your production. So that pressure is not there with evoZero to be very clear because we can breathe over 5 years in terms of storage with the tokens. So that gives us also ample opportunity to pull every lever we can or want on finding the right projects, the right customers for the right price point.

Okay. And then regarding your question about additives and diesel supply security here, I have nothing to report with no shortages, supply right now is okay. So nothing to report from that perspective right now.

Okay. This concludes our conference call. Thanks for your good questions. Just a reminder that, as always, we will be on the road following our AGM next week on -- when is it, Wednesday next week. We will be at a couple of conferences in Frankfurt, also in the U.S. So stay tuned. If you're interested, please let the IR team know. And with that, have a good day.

Thanks.

Thanks, everybody. Thanks.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.