SigmaRoc plc (SRC) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the SigmaRoc plc full year results investor presentation. [Operator Instructions] The company may not be in a position to answer every question it received during the meeting itself. However, the company can review all questions submitted today and will publish [ its ] responses where it's appropriate to do so on the Investor Meet Company platform. And before we begin, as usual, we would just like to submit the following poll. And if you'd give that your kind attention, I'm sure the company would be most grateful. [Voting]

And I would now like to hand you over to the executive management team from SigmaRoc plc. Max, good afternoon, sir.

Good afternoon. Hello, everyone. I hope you can all see us on the screen. I've got a series of slides for you, which you can also find on our website. And we start with Slide 4 of the slide deck. We'll run you through a series of highlights of operational review. Jan, to my right, will take you through the finances. Then we'll come back for strategy and outlook. Operationally, the business has done extremely well in 2024. We have taken the business through a transition and integration of the new lime and limestone businesses bought from CRH. This was a transformation for the group. Integration work was done in this year. And we have a big thanks to the integration and IT teams, who have done a fabulous job right across the group. As a result of that, we were able to launch an ambitious synergies program in January 2024 and have already delivered EUR 9 million worth of synergies in calendar year '24. This has allowed us to increase the minimum delivery of that same program from EUR 30 million to EUR 35 million and now to EUR 40 million by 2027. We've also started a divestment program to refocus the group's footprint more into limestone and minerals and have made a first successful divestment in that program at the end of '24 selling the concrete operations in the Benelux. The year '24 was not an obvious year in terms of volumes. The markets had several challenges, but the volumes were managed very efficiently right across [ the pieces ]. As a result of that, on Slide 5, there's a few financial highlights that I can take you through: EBITDA and EPS ahead of consensus and well ahead of our own targets; 240 basis points increase in margins from an EBITDA -- which puts our margins across the group at a very nice level; underlying free cash flow 52.8% conversion, which is very robust and helps us de-gear, with that de-gearing well on track, finishing the year at about 2.08x leverage. It helps also to run an eighth year in a row of EPS growth, which we are extremely happy with. On Slide 6. Some of those statistics have been mentioned again. I'll point you to a few points here. Jan will take you through the finances in more detail. First and foremost, pro forma like-for-like comparator is mentioned for revenue and EBITDA, below the number. So that gives you the comparison between this year and the year prior. Other important figure here is 11.5% ROIC, on our way to 15%, our long-term target; and then the cash flow conversion which was extremely solid. If we go on to Slide 8 now in terms of our operational review. We give you a map on Slide 8, which are the 4 core reporting regions. We also highlighted there our market position of our various lime, limestone and value-added products businesses in those key regions. The 4 regions are the UK & Ireland; West Europe, [ which is ] essentially the Benelux; Central Europe, Germany, Czech Republic, Poland and the Baltic states; and then the Nordics, which is the Nordic countries, the Nordkalk footprint. As we go through, our trading for the year is split up in various, different ways. Slide 9 gives you a first split, by region, on the left; by segment, in the middle; and by product, on the right. The largest region is Central Europe, with Germany and Poland obviously being the biggest markets there; followed by the Nordics; and then UK & Ireland. Western region [ and ] Benelux has obviously been reduced by the sale of the concrete operations there. By segment, construction remains our largest portion, of 45%, but therefore also meaningfully less large than it used to be. Industry is our #2 and environment is #3. By product, high-grade minerals is the largest one. This includes lime and limestone; other minerals, including dolomitic limestone, wollastonite, powders, flours , within that particular segment. Construction aggregates is the standard aggregates we are of -- known for. And value-added products, you should think about, for instance, ready-mix concrete, asphalt, precast and so forth. If we look at the split by region, Slide 10. And UK & Ireland, on the left, flat in revenues, EBITDA slightly down. This is a region which has a large exposure to residential construction. And that obviously had a tough year right across Europe and also in the U.K. -- and as a result, a slight reduction there, but infrastructure supported it still very much. And the EBITDA performance is very satisfactory. Western Europe, Benelux. This platform is totally exposed to construction, both residential -- and infrastructure had a tougher trading year, therefore with 9% reduction in revenues. There was also a translation effect in there from euros to pounds, not to be forgotten. And when the EBITDA is considered, it says 21% reduction, but you should not forget that this includes a one-off reduction in stock, where we reshaped the stocks available. And if you take that effect into account, EBITDA was only down 3%. So a good performance all around. Central Europe. That's Germany and Poland primarily. Revenues is down 3%. Again translation effects for FX determined this primarily, a slight bit volumes there. We look at EBITDA, up year-on-year 8%; fantastic performance on those businesses, in particular the Polish business and the Baltics business, which have done a fantastic job, with the market in Germany at a obviously tougher time but again great performance as well. We continue to see good trending -- good trading there for the years to come. And then the Nordics business, fantastic results in Nordkalk: revenue up; EBITDA up 6%; margins improving; a good year from a perspective of pulp -- paper, pulp and board; good positioning of the business in also mining and chemistry; and a fantastic year there. Looking at the markets differently now, by end segments: the industrial segment, first, 35% of group turnover; a slight weakness in volumes when it comes to steel, as expected. The automotive industry is having a tougher year, but paper, pulp and board and chemistry as well as mining really traded well and helped our industrial segment will -- do well for the year. Environment, second segment. Food, sugar production, for example, and other food inputs, agricultural inputs, had a very strong year '24, as did water treatment, but we have a much larger component of wind energy in our system. And therefore, flue gas treatment for power generation had reduced year '24. Construction, now dominated by the infrastructure segment: tougher year altogether year-on-year in terms of volumes in residential construction, compensated largely by infrastructure construction. The long-term targets here and the long-term trends here are obviously to the up, with various stimulus programs. And then the last way of looking at our sales, by end product. High-grade minerals: As I said, high-grade minerals includes lime, limestone, hydrated lime, powders, flours, additional minerals, wollastonite, dolomitic limestone and so on. Slight increase in volumes year-on-year, which we're very pleased with. The reduction in turnover there is a translation effect in terms of ForEx. This is the largest component of our group, right across various platforms. Construction aggregates. Obviously the weakness here is visible from a volume perspective in residential construction, with a slight reduction in volume of 700,000 tonne or so for the year. Represents a 2% drop in revenue and some translation effects as well in this but, generally speaking, a weaker market when it comes to residential construction. And then value-added products, asphalt, precast, concrete and so on: construction exposed, again slight volume reduction in -- from a year-on-year perspective but, generally speaking, held up well given the economic backdrop. Last slide in this first, introductory section, on ESG. We track several metrics. There's a large component of the annual report on ESG. So a few examples here: emissions intensity, 46% reduced since we became an emissions-intense business in 2021 and with the acquisition of Nordkalk. Energy intensity improved year-on-year 10%. Alternative fuel sourcing and fossil fuel-free electricity, again, both up and improved for the year, which we are very pleased with. And injury frequency, our statistic here for safety, is improved by 18% year-on-year, again very good effort by the teams. We've done 180 audits on our sites. This is a small team of three or so people who have done 180 visits to audit the safety at the various sites. They do fantastic work. Very pleased with their performance. Key point to the right is our net zero road map. The full map is available in the appendix. The key point to highlight here is our net zero target is still the same year, in 2040. And that's now corrected for the expanded footprint with the CRH lime and limestone assets. That concludes a first part of this presentation. I'll hand you over to Jan, on my right, for the finance.

Thanks, Max. If you move to Slide 15. We already saw a couple of highlights, financial highlights, earlier in the presentation. And a few of them were on a pro forma basis. This is a nice overview that shows all the actual results over time. So not on a pro forma basis but on an actual basis. If you then look at the direction, we have EBITDA and revenue growing in -- at transformative rates. Revenue is at 72% year-on-year, and EBITDA even at 92% year-on-year. So those were impressive results because of the lime acquisition, but they also boosted the CAGRs over time at a impressive level, so it's all good there. That was driven by the 2 reverse takeovers that we did over the years and continuous year-on-year improvements. That also affected all the rest of the commercial metrics that are shown on the slide. And that happened in times that were economically challenging. Current times is -- was -- is difficult, but it's -- already started right after the COVID period, when the Ukraine war started, with high energy prices, but the team was -- were, was able to pull off and increase EBITDA margins during that period. So it was well managed from the operations team. And we're in good shape right now, but we continue to strive for better margins for the portfolio boosting it beyond 25%. If you look at the bottom there. It also had an impact on our funding. The current net debt is at over GBP 500 million, GBP 509 million. It tripled from where we were because of the size of this deal, but if you [indiscernible] on the chart next to it, with the bars on the right bottom corner there, our leverage is actually well under control. It was a little higher when the deal was done, a little over 2.5, but with the high generative -- cash generative nature that the business has as well as a divestment at year-end, we were able to bring it down, from a leverage standpoint, from the anticipated 2.3 to 2.1, very much in line with how we have been running it over the last couple of years despite that big deal that was done earlier in the year. So well positioned. And if you then look at Slide 16, a little more in detail around revenue and EBITDA. The lime acquisitions were primarily focused on 2 places in UK & Ireland, where we added Buxton and Clogrennane to the business, boosting revenue and EBITDA there -- as well as in the central bar, where the German business, Czech business and a portion of the Poland business was added there. So boost in revenue and EBITDA, which is impressive for the numbers. There was also an effect of foreign exchange. Max already alluded to that. And the euro weakened versus the pound. So we do see some effect of that on revenue as well as on EBITDA. And going forward, we have foreign exchange hedges in place, if we would need them. So we're mitigating this risk operationally as well as in translations for the balance sheet. If we move to Slide 17. We have a detailed P&L. This -- we also showed the -- shown the slide in the interims period. Numbers have now presented -- numbers are on a full year basis. In the middle of the section there, you see that profits from operations improved with GBP 111 million. It's up 80%, even a little higher than EBITDA, so that's a good position to be in. Finance cost, on the back of the extra funding that we needed to buy these assets, is up GBP 31 million year-on-year because of the debt profile. And then on the tax, the tax line: Tax expenses also went up with the extra businesses and is now reflecting about 80% of profit before tax. A little lower than initially anticipated, but it's a good position to be in. And then on -- at the bottom of the page there. It all adds up to an earnings per share of 8.35p, around that 8.4p, which is up year-on-year but also 10% better than a consensus that was out there in the market. It was a good performance by the -- all the teams together. If you look at the right side of the slide. That's the buildup of our cost base after these big acquisitions from CRH. And we were proud to say that our cost base was 70% variable, allowing us to rightsize and scale up or down the businesses in difficult times. Even with these bigger assets and bigger businesses, that continues to be the case. The composition changes a little bit. You can see there, [ sure ], more kilns added to the portfolio, but the good thing is, if you don't have the volume, you can shut them down if you want and if the business would need it. So the variable nature of the business is remaining and continuing, which is helpful for us managing our risk profile going forward. If we move to Slide 18, you see an overview of the cash position and the cash flow generation that are out there. We do have a healthy cash flow generation internally from our own operations. It runs at a conversion rate of higher than 50%. If you look at the maintained business side: That creates room for investments, either internal from a growth CapEx standpoint or for other purposes. This overview runs from EBITDA, underlying EBITDA, on the left, of GBP 225 million; to underlying free cash flow, in the middle there, of GBP 119 million and 53%. And the building blocks are net working capital. We were actually very tight on collections. And we're running a tight program as well on inventories, so there was a help on cash on the working capital basis. And we closed a couple of financial years, on the tax sides, that we're paying a little more than we currently accrued, GBP 25 million, which is a cash outflow. And then we have our regular maintenance to keep the assets running and keep the base business [indiscernible], a 74 million (sic) [ GBP 47 million ] cash outflow there, which is probably 75% of D&A, for that purpose. The guidance is 85% actually, but we -- this year, we are spending a little more on growth CapEx than historically was the case, so it's a little lower this year than other years. And then last in underlying free cash flow is our cost of debt, which is about 7% over '24. It is coming down this year with the Euribor decreasing and the refinancing of the bridge loan, but in '24, it was about 7%, reflecting a GBP 40 million cash outflow during the year. And then with growth CapEx focused on [ Belgium crusher ] in the -- in construction, focusing on the construction area and be ready when that comes in; and opening also reserves in the -- in a quarry for future years. So that's -- and then a few other items in total is GBP 21 million, ending up with about 44% post-growth CapEx conversion, amounted to around GBP 100 million. If we then move to the next one. This is a slide that shows leverage and our debt structure. We started the year off with GBP 182 million of debt. The acquisitions brought in about GBP 600 million or so early in January. And in the meantime, we've been able to manage debt in terms of EBITDA gearing; as well as through the divestment of the Belgian ready-mix business in December, adding for $30 million (sic) [ GBP 30 million ] to our cash balance that we used to pay down a portion of the bridge loan late in '24. And the other items are -- in there are a couple of nonunderlying costs. They came with the deal and they will not repeat. And they are one-offs related to the CRH deal in '24. And there's an -- finance borrowing costs that we had to pay because of the equity raise and some consultants fees. So all in all, ending the year at GBP 509 million but still at a very comfortable level of -- in terms of gearing of 2.1x, which is a good position to be in at the end of this transformative year in the history. If we look at the next slide. And then you will see that scale matters. And we say that because we have businesses that have a high-cash-generative nature. And that's important going forward with the scale we have because it allows us to do a couple of things. One is to make sure that we can afford investments in CapEx. If it was -- is focused on operational efficiency and improvements, they're in. So we're able to do that. We are currently running at GBP 225 million of EBITDA at 22% of margin. And then the synergy program will allow us to grow further. And that does require some CapEx here and there, and then we'll bring that in. EBITDA is going up in line with the business. And if the synergy program will help, plus the full year effect on these businesses as they did not come in all beginning of the year '24, that will continue to increase further to double-digit levels at a certain time. ROIC is currently running at 11.5%. If we run the synergy program; and if the volumes recover, and the macro economy, we should be able to get to the level of 15%, which is currently set as a target for the overall company in the coming years. And then with the cash-generative nature that the business has, we feel confident now that we can finance a couple of commercial activities, bolt-on acquisitions, et cetera, through our internal cash generation, which will allow us to keep leverage under control and below 2x fairly quickly also if -- as we turn 0.5 points roughly on an annual basis in terms of gearing. So in '25, we'll go below 2x relevantly quickly. That frees up some cash, which we need to find a home for. And we have a couple of items that we've listed as opportunities to do some capital allocations. And we said that we have CapEx, which is, of course, an item to always look at. If we have good plans that we can fund, we will do that internally. And that's the best way of bringing return in. And then there is also room for bolt-on acquisitions that we'll go after. We have a [ long ] portfolio that we can try to bring in if there are preferential terms and if it's complementary to the business. And then last but not least, if we get close to 1.5x in terms of gearing, we can also return cash to shareholders in any preferred form that is out there, either through buybacks or dividends. So all in all, the cash-generative nature of the business allows us to do a lot of things. We're nicely under control financially. And then the business integration is done, so we're basically ready for the next chapter [indiscernible].

Thank you very much. Strategic delivery is the next page -- next section, Page 22, 23, a few slides there on the future. So first and foremost, this is the next chapter of our business. We are now a leading lime and minerals group across Europe. We have 2.7 billion tonnes worth of reserve and resource across the quarries, #1 and #2 ratings in 10 countries. Our products are essential in dozens of industries and then applications. They make modern life possible, and it's not insignificant. This is very helpful for our group. We're in -- attractively positioned across multiple diverse -- and diverse end markets, and that helps weather some of the storms that are out there when it comes to trading. We also consistently deliver in terms of improvement: 33% increase, EBITDA, since acquisition of the various companies that we own. That translates into a 15% return on investment from an EBIT perspective. And that, we're very pleased with. And clearly, as we now move forward, we're moving into bolt-on territory, from roll-up territory, as we self-fund further expansion. If you look at how that 33% improvement has come through and what impact that has on multiples of acquired businesses. Average price paid for companies is 6.9x across our history and -- with some outliers in that mix also. That falls to 5.2x with the addition of the 33% increase in EBITDA. The source of that improvement is primarily cost focused -- cost and optimization focused; running the plants better, faster, harder; some revenue aspects in there too, but the main driver has always been making a lean operation work faster. And we're doing the same effect exactly now with our synergies program. There's 2 graphs that you'll see on Slide 25: on the left-hand side, the evolution of that program and the expected delivery numbers per year and the -- in light blue, the increase to each of those years as we progress through the program. So of -- EUR 9 million delivered already in 2024 and now expecting 10 to -- EUR 15 million to EUR 20 million in '25. On the right-hand side, how that EUR 9 million was derived. GBP 238 million base EBITDA level for 2023, that's the pro forma starting point of the business. Price, volume action, down obviously in the year, with tough -- some tough trading in various segments, GBP 4 million down. Up 8 -- this graph is in pound sterling. Left one is in euros, for clarity. Up GBP 8 million to GBP 242 million, which is the outturn on a pro forma basis for the year. The delivery of those synergies, again the same sort of story as other years: primarily sourced from cost initiatives; network optimization, network overlap; shutting down inefficient kilns, older kilns and kilns in the wrong location so that we optimize the footprint; optimization also in terms of quarry operations, basic quarry and basic efficiency programs as we've always done; and then some commercial initiatives where we have -- look to source -- to sell lime in markets that we haven't operated in before. For instance, the Baltic states is one key example as well. We are also looking very actively at our portfolio of assets -- on the next page, 27. That portfolio includes all sorts of various activities that we have acquired over time. All of those businesses are high-quality businesses. We've really done our utmost to make those businesses leading in their sector and in their region. And when we sell them, we always look for the right sort of purchaser, a purchaser who will take that business on and development it further, who's also happy to pay the right sort of price to us. And therefore, there's no rush whatsoever in selling anything. Only if we find a new home for some of our businesses that will see that business grow and prosper further will we sell. In that program, there's about GBP 20 million in EBITDA left. Not all of them has to be sold. It depends on the attractiveness of the offer that we receive. And if we then look forward into the future. First and foremost, we believe we're clearly at the start of a cyclical and structural recovery, cyclical and structural because interest rates have started to come down, which drives housing and house construction. And that's quite key and quite clear it's still our largest segment -- and therefore, upside in residential construction. There's also the very ambitious German fiscal policy, on the right-hand side. There's a value of EUR 500 billion over 10 years as quoted. Should that get parliamentary approval in Germany and then be implemented, it is clear that, that will drive the German economy and demand for our products. It will benefit the steel sector and benefit the construction sector. It will benefit the energy sector, and all of those use our products. On top of that, we see some positivity, if there's a peace agreement finally in the Ukraine, where the Ukrainian reconstruction might utilize some further materials also from us in the region. And then beyond this, there are these key megatrends that we've alluded to, megatrends of electrification of the economy, greenification of the economy. All of those are there and utilize our products to be implemented. We do remain conscious of -- however, of the existence of the risk of tariffs and the impact of tariffs, tariffs out of the U.S. We do not know exactly what and when. We keep those under review and we'll update the market as and when things change. Shorter term. 2025, the year started well. We are in-line, in terms of trading, up to the first 2 months of the year. And we're looking very actively at how we can develop our synergy program and implement that as fast as we can, with a EUR 40 million revised target. Obviously the regional diversification is key and helpful and provides stability in our revenues. And then clearly, when we look at the potential for the European economies to come out of a slow period where we had significant volume loss in various places, that's obviously something that we look at with quite some expectation. And hopefully, we see that come through already at the end of this year. And so all in all, SigmaRoc is very well positioned for the future, with structural growth drivers, cyclical recoveries and a great base, great asset base and a fantastic set of teams at these various locations which help us drive the performance of this group. That concludes the set of slides. And we'll happily take questions from the floor.

Perfect. Guys, at this point, if I may just jump back in there. And thank you very much indeed for your presentation this afternoon. [Operator Instructions] But just while the team take a few moments to review those questions that have come in already, I'd just like to remind you a recording of this presentation, along with a copy of the slides and the published Q&A, can all be accessed via your investor dashboard. Guys, as you can see there, we have received a number of questions throughout your presentation this afternoon. And thank you, to all of those on the call, for taking the time to submit their questions, but guys, at this point, if I may just hand back to you just to read out those questions and give your responses where it's appropriate to do so; and if I pick up from you at the end, that would be great. Thank you.

All right. So we've got a first question that was pre-submitted. How much stock do the management and Board own? "Are you planning on buying more?"

Yes. So there is a -- in the slide deck that is available on our website, you'll find quite a bit of detail on that, in the appendix also, but in brief: Management own about 3% of the company. That is -- these are shares that were either in EBT or purchased directly from salary. We continue to purchase stock right across the company. Every fund raise we've ever done in our history, we have participated in as well as a management team and invested about GBP 3 million worth of our own money back into the company. So these were not obtained free. And then there's the -- obviously the option program that's there as we perform and deliver results, and that will see our ownership increase even further. So yes, very committed and very much aligned with our shareholders.

All right. [ Nigel H ]: Medium-term strategy is clear. Perhaps you can indicate what the longer-term vision is, further bolt-on deals, dividends.

The group has been -- so we have built this group as a -- really as an acquisition integration and improvement machine. That's been clear from the last 8 years. We've consistently bought good businesses; made them better, integrated them; and increased our EPS as a result. And that was even if we utilized the equity markets to help fund this growth. Now as Jan pointed out, scale is a great thing. Scale allows many things. One of the things it allows us to do is generate cash and utilize this to grow further, buy attractive businesses from our own internally generated resources and add those into the platform. If we can do the same thing with those businesses [ as we've done in the past ], increase their EBITDA, you'll see that straight drop through to the EPS line. We don't use any equity. We buy a business [ then we'll add ] to the EBITDA line. We improve it. That grows the EPS further. So from that perspective, I think that this business is really well placed for the future. It becomes a bolt-on machine that continues to integrate attractive quarry businesses right across Europe, to grow and generate further returns for investors.

Another one, from [ Bill C ]: The German government seems set to initiate a major infrastructure program. What, if any, impact do you expect from this?

Yes. We expect first -- the first impact, as David always says, is sentiment. The German economy has had a number of tough years. We certainly hope and think that this will improve the sentiment in Germany. That already is a win. It means that people start to spend again, buy little houses again and so forth, so that helps us. Secondly, as the actual euro spend comes through post the vote in parliament, hopefully, at the end of this year, we will see volumes of steel produced in Germany used in Germany and volumes of stone used in Germany go up. That will have a material impact for us. We've had in some segments double-digit volume loss in terms of percentage over the last 3, 4 years, in certain segments of the products that we sell. And we hope that we see that return back to historic volumes. And if that happens, that will be extremely beneficial to the group and the German economy.

Question from [ David J ]. Are currency fluctuations acceptable to the company, bearing in mind the current center of gravity? Or should the euro be adopted for reporting?

[indiscernible]

Yes. We are cognizant of this. And about 70%, 75% of our business is in the Eurozone, so this is in the forefront of our thinking. Our current debt structure is also in euro, so we have kind of a natural hedge when it comes to foreign currency treatment on the euro. However, we are listed in pounds on the London Stock Exchange, so there's a translation effect that we need to manage. We have foreign exchange currency plans in place, hedges. If we want to execute them, we can, basically mitigating all impact that any shift in the euro has on our financials and our listing.

All right, another question from [ Bill C ]. "Do you expect an impact from U.S. tariffs?"

I believe that the entire European economy will have some impact of the U.S. tariffs, if they come. What will we see? Well, we sell into the steel sector. And the steel sector will then sell into, for instance, cars and machinery. And some of that goes out to the U.S., so if that has an -- is impacted, then we will see that also. So we need to see how this will be affected. Now the German stimulus program, if that comes through -- and some of the defense spending they've announced will obviously go to end markets which utilize a lot of steel also. So maybe that will mitigate some of this. So we need to sort of wait for the details on both.

Question from [ Chris S ]. "Can you explain in more detail what the GBP 45 million of finance expenses are? They seem very high."

They are mostly correlated to our debt structure. It's interest expense on the loans we have. And then there's a small portion of some effects on leases that we capitalized that are unwinding as -- when the contracts progress over time. And we have a little bit of [ bank covenant ] and other finance costs, but the vast majority is related to our debt structure.

Yes. And I wanted to add to that maybe. If you look at our EBITDA at GBP 225 million or so. As we de-gear and that finance cost comes -- goes down, then obviously the interest charge goes down. And that boosts the EBITDA -- EPS, post that, again. So it's a material proportion, yes. This is a function of the deal we've done. And this benefits the EPS over time also.

The bridge loan refinancing [indiscernible].

Yes. One thing that's already in place is -- that 40 million-plus was based on '24. It was a bridge loan that we -- that came with the deal in '24 which had to be repaid in November of this year. In the meantime, it's been refinanced at preferential terms both in terms of interest rate, bringing it down with more than 2%. It's currently fixed at 4.93% for the 5 years that the term is. And it has a bullet maturity to repay in 2030 after the 5 years, so we now have a blend of a term loan which we can pay down over time and one that provides a 5-year cash position to do all kinds of things with that.

Yes.

Question from [ Ted S ]. "Are you considering, a, start paying dividends at some stage; b, moving from AIM to the main market?"

Yes. Well, we'll look at -- so we'll look at -- so we're looking always at both, right? The first one is a question of, more generally, investor returns. Dividends and share buybacks are clearly in the bucket there. We've signaled that, at debt levels below 1.5x EBITDA, those would certainly be on the table. We don't need to look at, at that point in time, what the valuation is of our business and how attractive the value of our shares is, which one we would utilize. AIM to main is a topic. The AIM market has done a fantastic job for us over the past 8 years. We're not -- we would have not been able to grow a business this rapidly on the main market. The flexibility afforded by AIM was clearly there, so we've much enjoyed our time here, but we also need to look at where the best place is in terms of shareholder value for our company. And so if that's the main market, then we would consider to move. All that is still under consideration.

Question from [ Nicole M ]. What is the target for leverage reduction for FY '25?

Yes. We turn basically 0.5 points per year. So we're currently at 2.1x. The target depends a bit on other activities, but the target, the assumed level, if we don't do anything else, is around 1.6x by the end of '25.

Yes.

[ Augustin G ] asks, "What are your forecasts for your EBITDA margin this year and over the next few years? Is the aim to stay at around 22.5% or to go further?

We -- on the margin point, we try to improve the margins from the 22.5%, upwards. And that improvement is primarily through internal efficiency gains, so we really have a hard look at costs and hard look at efficiency internally to make sure that we basically generate the maximum value for every pound spent internally. So that's clearly what we're doing with that synergy program which -- mostly cost focused. We should see the margins and -- therefore continue to improve. That's the main aim. For what that would look like at the end of this year, hopefully, an improvement to 22.5% as we progress further.

Question from [ Stuart D ]. How big a market is U.S.A. given risks of tariffs?

We do not sell a single gram of any of our products to the U.S. directly, so it's all through what we sell into. So the auto industry, the machinery industry and so on. The car industry in Europe, I think, sells about 10% of its volume, from memory, to the U.S. So it depends on how that is impacted. When it comes to machinery and plants and other things, I would -- I do not have the figures here. We need to first understand what the tariffs would be aimed at, to understand it, and what and how the impact would be, so there's a bit of a waiting game there. And don't forget, again, there's quite a bit of stimulus coming out of Europe, which will have a positive effect, so let's wait and see what comes out.

All right, another question from [ Nigel H ]. As a top 1 or 2 player in 10 countries, will future growth concentrate on geographic or sector diversification?

Both, both. We will do geography. In terms of Europe, we'll do sector. And we'll do -- we can still grow in the 10 countries when it comes to limestone quarries, when it comes to sort of the machinery in terms of grinding mills and other things. So there's clearly things that we could still do with our 10 core countries to date. We can still go further there, but then there's obviously the rest of Europe that is there to look at.

The [ up-listing ] answer -- question has been answered, I believe.

Yes.

Yes.

Yes. Question from [ Thomas F ]. "Could you discuss the possible reconstruction effort in Ukraine? Secondly, do you have minimal reserves in Ukraine? You referenced this in the past. How could this play out, assuming a peace deal occurs?"

Yes. So the reconstruction -- there's various different things that come to play here. So first and foremost, if and when, hopefully, soon, the Ukraine funds a peace deal and reconstruction starts, product and production inside Ukraine, which might now find its way to locations outside Ukraine, will obviously stop and be utilized in the country itself. That's the first effect. That's obviously [ for things like steel ]. Secondly, there's production capacity around Ukraine, next to Ukraine, around the border areas that would sell materials into Ukraine. So generally speaking, in that area, you'll find that material availability could go slightly tighter. That's first thing. Secondly, we do have in the western part of Ukraine a mining license for limestone. That mining license, we have not utilized to date, but we're looking at what to do with it and how to best utilize the limestone that we could produce in that location.

All right. Question from [ Richard F ]. Wastewater treatment. In the U.K., this is becoming a bigger political priority. How are you placed to benefit?

So wastewater treatment is through the various products that we make, lime and limestones. That's just, by default, the best way of -- one of the better ways to deal with this. We are well positioned as a great -- as a lime and limestone producer in those countries. So in the same way as everywhere else, where wastewater treatment is critical, we're well placed.

[ We've skipped ] past a question at least. I think question number 15 was how much the increase in social security costs have affected the business in the U.K. Would you like to take that one? Yes.

Yes, not much. It has an -- it does have an effect, but it's limited to 0.5 million to a little more in -- as cost increase. So we're dealing with that [indiscernible].

That's also because it is only impacting our U.K. operations rather than the [ rest of the group ].

Yes.

There's one more question there.

All right, one more question, yes...

Overall revenue growth expectations, forecast for '25. Price, volume effects, we expect to be roughly flat in the mix, price and volume across and -- Europe, absent any stimulus, absent any revival of growth. So this is just simply, as we are, with nothing happens from the stimulus programs in Germany or from optimism or anything else, nothing happens across Europe, then we would expect flat evolution. Now that is not the base case. The base case is obviously optimism returns, some forward looking returns, construction efforts started, in residential start again. Then we could see quite a good effect on volumes across this year.

There is a full year effect, not growth per se, just by having the businesses for a full year rather a portion of the year, as Buxton came in late March. And Poland came in, in September, so we'll have 8 an -- 8 months more of the Poland business and a quarter of the Buxton business, which is -- which will add to the revenues in '25.

Yes.

Guys, if -- sorry, guys. Go ahead.

No, no. That was all the questions that we've got on the screen here, so I think -- there's one more. [ As soon as you thought there's no more ], that comes in. "Flip side of tariffs. Are any products imported into your markets from the U.S.?" But it's the same, right, and in the other way. So cars and other things that are U.S. made and come here, it's the same effect. So I don't think that it's super easy to understand how European tariffs on those sorts of products would be impacting that flow. So we needed to see what the specifics are of both and then deal with it as we -- as they come in. I think that was all the questions. Thanks a lot.

Absolutely. Guys, thank you very much indeed for being so generous of your time and addressing all of those questions that came in this afternoon. And of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended, but Max, perhaps before really just looking to redirect those on the call to provide you of their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments to wrap up with, that would be great.

Yes, yes. So first and foremost, thank you all very much for your support. I understand you -- all of you -- or a lot of you are shareholders in the business. That is fantastic to see so many of you on this phone call. That's the first point. Secondly, we're very, very happy with the result of the group. It's a fantastic effort, from all the teams on the ground, to absorb such a large additional company, integrate it fast and well without any disruption and then deliver the synergy results as we showed you. And that positions this business, thirdly, for quite a good future, I think. If Europe starts to implement these stimulus packages and get confidence back, we'll see volume recovery. We can see years and years of fantastic growth for this company, as it stands, and then the utilization of cash generated to expand its operations and footprint further, so a very pleasing place to be. Thank you again for all your support. And I'll hand it back to you, Jake.

Perfect, Max. That's great. And thank you all once again for updating investors this afternoon. Could I please ask investors not to close this session? As you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it will be greatly valued by the company. On behalf of the management team with SigmaRoc plc, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.