Titan S.A. ($TITC)

Ladies and gentlemen, thank you for standing by. I am Maria, your Chorus Call operator. Welcome, and thank you for joining the Titan Group conference call and live webcast to present and discuss the full year 2025 results. Please note, this call and presentation is intended for analysts and investors only. [Operator Instructions] And the conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Marcel Cobuz, Chair of the Group Executive Committee; and Mr. John Ioannou, Group CFO. Mr. Cobuz, you may now proceed.

Good afternoon. Hello, everyone, and welcome. I'm Marcel Cobuz, I'm joined here by John Ioannou, our Group Chief Financial Officer; and by Spyros Kamizoulis, our Investor Relations Head. John will take you through the financials after my opening remarks, and then the 3 of us look forward to your questions. Let me start with Titan Forward 2029, the strategic framework for everything we are reporting today. November last year, at our Investor Day in Athens, we discussed, we unveiled Titan Forward 2029, fully endorsed by our Board and our long-term core shareholding family. Building on our Growth 2026 strategy delivered 1 year ahead of schedule, Titan Forward 2029 has 3 clear priorities: one, above market growth in core cement and aggregates, particularly in the U.S.; second, scaling an integrated global alternative cementitious materials platform; and third, innovating on low-carbon and digital technologies, scaling precast in both Europe and U.S. and advancing our zero-carbon clinker through projects in Greece and U.S., all this underpinned by a decentralized, agile operating model built for execution. The financial ambitions we have presented at the time, sales to EUR 4 billion by 2029, EBITDA to EUR 1 billion, margin improvement of 250 to 300 basis points over the period. Earnings per share of EUR 5 to EUR 6, return on capital of 15% to 17% through the cycle and approximately EUR 500 million of cumulative returns to shareholders. Since November, 5 material moves in 4 months, showing that our Titan Forward 2029 strategy is in full execution suite. Tracim Cement growth in Greater Istanbul already trading positively, and I will come back when we discuss the outlook. Vracs de l' Estuaire in Northwestern France, close to Le Havre already performing well. Keystone Cement signed in Pennsylvania, serving a greater than 6-million-ton addressable market on the East Coast with compelling Mid-Atlantic synergies with our existing footprint, a transaction, which is subject to customary approvals by the antitrust authorities. And a 10-year fly ash agreement signed with Electric Power of Serbia, which is adding to the 5 other geographies where we operate currently with our cementitious footprint. And on top of that, we have announced also a strategic partnership, launching advanced mortars in Greece and in Europe. That is the tempo of Titan Forward 2029. Now to the 2025 results, they are strong, 5 consecutive years of growth, record earnings in 2025, record return on capital, record operating cash flow. We delivered our previous strategic plan 1 full year ahead of schedule, entering, therefore, the year with strong cash flow, a solid balance sheet as of January this year. What makes this result particularly satisfying is the combination, driving its leading positions in high markets -- high-growth markets, a truly integrated business model and a culture of disciplined long-term execution and, of course, a growing engine of innovation and digitalization for Titan and all 4 are working together. Group sales in 2025 and John will go more into details, EUR 2.67 billion, up 6.4% like-for-like growth in every region. Earnings at EUR 606 million, a new group record, 60 basis points of margin expansion to 22.7%, the best margin since 2010. Return on average capital employed at 18.2%, a new record and top tier in the global building materials sector, a standard we are committed to sustaining. Operating free cash flow at more than EUR 500 million, up from EUR 414 million in 2024. The margin expansion came from a positive price over cost dynamics across every region, pricing outpacing input cost inflation throughout the portfolio. And volume growth was also broad-based. On shareholder returns, last year, in July, we paid a total dividend of EUR 3 per share, including the EUR 2 special component linked to Titan America IPO. Today, we have proposed to the General Meeting of Shareholders, EUR 1.1 per share for 2025, up 10% with a new buyback launching end of March in a total amount of EUR 10 million. Since 2021, the combination of growing earnings, dividends and buybacks has delivered substantial value for our shareholders, a track record that we are committed to expand through Titan Forward 2029 with approximately EUR 500 million of committed cumulative returns over the period. Very quickly on the regions and more specifically on the United States, our biggest market and largest contributor, Titan America delivered an all-time high revenue, earnings, net income and operating cash flow. Earnings margin expanded to 22.6%, up 80 basis points and approximately 50% of Infrastructure Investment and Jobs Act funding still to deploy over the next 3 years, which would serve our supply positions. We supply approximately 40% of data centers built in our served market, including the Amazon Web Services delivering high-performance solutions under our Titan Edge range. Florida is also a standout with earnings margin at 27.2%, up 220 basis points. Just to mention some of the iconic projects there, the Kennedy Space Center expansion, PowerHouse 95 Data Center campus also in Virginia, the largest foundation pour in Florida history at the Bentley Residences in Miami. All this defines our market position and technical credentials in the markets we operate. In Greece, we are also the sole supplier on the Thessaloniki Flyover, supplying also the Ellinikon, one of the largest urban regeneration project, the new Crete Airport project, every major project in the country and Greece's like-for-like sales were up double digits. In Egypt, our earnings more than quadrupled. Egypt's exports, as you are following, more than 11 million tonnes of cement in 2025 from near zero 4 years ago. Our Alexandria plant is at the center of this multiyear growth story, and we are investing there to extend that advantage. On alternative cementitious material, our supply platform is now operational across 5 countries, pozzolan in Greece and Turkiye, reclaimed cementitious materials project in its way in U.K., fly ash in India and Serbia, slag from Indonesia and other countries to be added early this year. Capital expenditure is on our fourth consecutive year of accelerated growth investments, EUR 285 million. We've mentioned only a few of the key projects where we see already positive impact. First of all, is the Roanoke, quarry mine life extended, but also investments in trucks across the U.S., the new ready-mix plant in Florida, Virginia and North Carolina, including then quarry capacities in Crete and cement storage, particularly for Egypt export market in Alexandria. So they are already generating real returns this year. We have included in the deck also update on our technology, artificial intelligence that we can go more into details at the Q&A. And on sustainability, where our CO2 emissions are now recorded at less by 12% compared to 2020 baseline, alternative fuels at a record for the group at 22.3%, while we continue advancing on development of critical projects as well as new technologies, including zero-carbon clinker project here in Greece. And we made it to the list of CDP A, as well as recognition by Financial Times and Times as a Climate Leader for the second year in Roanoke. Once again, a big thank you to all our partners and to more than 6,000 women and men across our '25 markets, who built these results. Safety first every day before any other conversation, but also their commitment of this company, which is nearing 125-year of entrepreneurial culture that makes Titan work at its best. I will come back for the outlook. And now I hand over to John Ioannou to walk us through the financials of the year.

Thank you, Marcel, and good morning, good afternoon, everyone. Now before we dive into the financial results and building on the tempo that Marcel referred to earlier, I wanted to share with you a time line that summarizes our key portfolio developments across the group in 2025 and early 2026. We began the year with the formation of a JV in India, focused on low carbon building materials and the expansion of our ACMs platform with a particular emphasis on fly ash utilization. In February, this was followed by the successful IPO of Titan America on the New York Stock Exchange, raising close to $400 million and significantly strengthening the group's financial flexibility. In March, we expanded our footprint in Greece through the acquisition of LATEKAT, a family-owned quarry business in Thessaly, securing high-quality reserves for more than 100 million tonnes. Later in the Spring, we committed to a strategic investment in the U.K., where we will build and operate a fly ash processing and beneficiation facility following an agreement with Peel further scaling a low-carbon materials platform. In May, we completed the divestment of Adocim in Turkey, in line with our portfolio optimization strategy. During the summer, we made our first move into precast partnering with Molins and through a JV acquiring Baupartner in Bosnia, a leading precast concrete and steel structure specialists with a strong regional presence across Bosnia, Croatia and Serbia. In July, our North American operations received Miami-Dade Counties notice of acceptance for more than 40 lintel product SKUs, expanding on precast offering and reinforcing our vertical integration model. In August, we further strengthened our Greece business with the acquisition of standard pozzolan in Crete, a ready-mix and aggregates company, enhancing downstream integration. In September, we signed an agreement to acquire VD in France, a grinding unit located in Le Havre, supporting our presence in key European markets, and advancing the use of low-clinker cement. In October, we agreed to acquire Tracim in the wider Istanbul region, cement plant with 2.3 million tonnes of annual cement capacity and strong export capabilities, strengthening our position in Turkey. Before year-end, we also launched a new strategic partnership in Greece in the field of advanced mortars, expanding our value-added solutions portfolio. Moving into early 2026, we continue this momentum with an agreement in the United States to acquire Keystone in Pennsylvania, a cement plant with close to 1 million short tons of annual capacity and significant synergies. In January 2026, we further accelerated the expansion of our ACM platform through a 10-year agreement with Electric Power of Serbia, securing access to approximately 5 million tonnes of fresh fly ash. In parallel, there has been strong acceleration in Titan ventures, our venture capital platform. We partner with Carbon Upcycling to pilot carbon utilization technology at industrial scale. We expanded our collaboration with Ecocem to advance next-generation low-clinker cement solutions. We committed capital to Zacua Ventures second fund, reinforcing access to early-stage innovation across the sustainable built environment ecosystem, and we scale the deployment of Concrete.ai and its AI capabilities on concrete optimization across ready-mix plants and new geographies. This has been a busy year indeed, but as you can see, our initiatives are fully aligned with our Titan Forward 2029 strategic priorities around growth, decarbonization and vertical integration. Moving now to our financial highlights for 2025. A good finish to the year with quarter 4 posting an 8.1% sales growth, which pushes full year sales to a new record of EUR 2.67 million, which is a 6.4% like-for-like growth versus prior year. EBITDA in Q4 was impacted by cost pressures and was held at prior year levels. However, for the full year, we achieved record EBITDA of EUR 606 million growing by 9.3% on a like-for-like basis. EPS stood at EUR 3.2 per share. And on a like-for-like basis, the growth is 7.4%. And finally, our return on capital employed reached a record high of 18.2%. Liquidity, supported by healthy cash generation, proceeds from the U.S. IPO and Adocim disposal is strong with net debt at EUR 214 million at year-end and a leverage ratio of just 0.4x. On the back of this robust financial position, and an improved credit rating of BB+ with positive outlook. We had a very successful bond issuance in the first week of February '26. We continued our investments. CapEx reached EUR 285 million, the majority of which was invested in growth projects. And as discussed in the previous slide, we extended 3 offers for acquisitions, and we also completed 3 bolt-on acquisitions in Greece and 1 JV in Southeast Europe. The 2026 outlook is masked by the ongoing conflict in the Middle East, which creates geopolitical uncertainties with macroeconomic implications. We're monitoring the impact on our cost structure to mitigate all risks and we remain cautiously optimistic. Our guidance for the year, excluding inorganic growth from M&A, sales is low single-digit growth like-for-like, EBITDA mid-single-digit growth like-for-like, and CapEx, EUR 350 million to EUR 400 million, but to be confirmed later in the year. Moving to the next slide. Our reported sales growth is 0.9%. However, after adjusting 2024 sales for scope, the Adocim sale and for translation ForEx our like-for-like sales growth stands at 6.4%. Growth is driven by improved volumes in the core materials and firm pricing across regions. We achieved a record EBITDA of EUR 606 million in 2025, and this is a growth of 9.3% on a like-for-like basis. This came from volume growth and a positive price over cost management, and we also increased our EBITDA margins by 60 basis points. When we look at volume performance, overall, we had growth across all product lines, with cement growing at 1%, ACMs by 20% updated from a low base. Ready-mix by 6% and aggregates by 9%, while block volumes, although rebounded in Q4, for the full year were soft due to weaker residential demand in the U.S. Moving to our operating free cash flow. Our operating free cash flow is strong. We generated over EUR 500 million and this was further supported with inflows from the U.S. IPO and the Adocim disposal. While outflows included our capital investments and the returns to shareholders in the form of dividends and share buybacks, this resulted in a decrease of net debt by EUR 409 million. Our cash flow generation led us to a robust and healthy balance sheet position at year-end. Our net debt stood at EUR 214 million and leverage ratio at 0.4x. With a very comfortable maturity profile as at year-end, we were more than 80% of our debt was long term. The strong debt and liquidity profile provided ample funding capacity, and we tapped into the debt market early in 2026 with the successful Eurobond issuance of EUR 350 million at a very attractive investment-grade coupon rate of 3.5%, and the maturity of that is February 2031. In 2025, we continued our CapEx investment across all our regions and deployed EUR 285 million, with U.S. in Greece absorbing the lion's share of that. Our CapEx investments are aligned with our long-term growth strategic priorities and include projects such as expansion of quarries and cement storage, acquisition of new pumps and mix trucks, new fixed and portable ready-mix plants as well as new block plants. Our CapEx purchase also include logistics improvements to enhance operational efficiency and throughput, investments for increased alternative fuel usage and investments to develop Type 1T cement with the use of ACMs. Last but not least, we are progressing with our IFESTOS carbon capture storage project. In addition to our CapEx and our bolt-on acquisitions, 3 strategic acquisitions are worth highlighting in this page. I've already mentioned them quite a few times, so I will go a bit faster. Tracim Cement, a plant close to the port serving the Istanbul area with cement production capacity of 2.5 million tonnes per annum a grinding plant in the Port of Le Havre with clinker capacity of 600,000 tonnes per annum and a cement plant in Pennsylvania with clinker production capacity of 1 million short tonnes per annum. Moving now to the overview of the markets. I wanted to start with this slide to show you some photos. This slide illustrates Titan's positioning as a supplier of choice of iconic and strategic projects across our footprint, spanning infrastructure, real estate, industrial, logistics and energy. The point is to show the diversity of demand drivers in the quality of project exposure across our regions. I will not go into the details of this because you are quite familiar and Marcel mentioned most of them before. Regional performance at a glance. Sales and profitability grew pretty much across all regions, while Southeast Europe faced significant cost headwinds and intense pressure from Turkish imports. That put pressure on volumes and margins and recorded a drop in EBITDA against record comparables in 2024. Despite this, Southeast Europe maintains the highest margins in the group. Moving to the U.S. In 2025, Titan America operations, as Marcel stated in the beginning of our call, delivered record levels of revenue, profitability and operating cash flow despite the market backdrop marked by softer demand and economic uncertainty. Infrastructure and large projects drove sales, while residential continues to be soft due to affordability challenges. We increased sales in aggregates and fly ash while ready-mix kept at the high levels of '24. Cement and block volumes slightly softened due to the residential market downturn. Prices in cement broadly at last year's levels, while prices increased in aggregates, ready-mix and fly ash. Finally, operational efficiencies from investments unlocked further value. Sales were up 2%, while EBITDA was up 6%. In 2025, Titan operations in Greece sustained their upward trajectory, delivering robust double-digit revenue growth underpinned by favorable market conditions and enhanced operational performance. Bolt-on acquisitions and strategic alliances in Greece and France, aimed at broadening geographic reach and securing a leadership position in a rapidly expanding market. During the year, alternative fuels usage increased, thanks to a plant in Kamari reaching record levels, approximately 60%. In addition, higher alternative cementitious materials usage and process automation improvements unlocked further value. Sales increased by 13% and EBITDA reached EUR 61 million, growing by 10%. Titan's operations in Southeast Europe maintained stable revenues year-on-year as broadly unchanged volumes and pricing offset competitive pressures, particularly from import activity. Residential construction remained the primary demand driver across most markets, while infrastructure investment played a more prominent role in cement consumption in Bulgaria and Serbia. Sales were flat year-on-year, while EBITDA impacted year-on-year due to higher raw materials, energy and labor costs and heightened import pressures primarily in Albania. EBITDA reached EUR 149 million versus the record EUR 166 million in 2024. In Egypt, improving demand conditions, regulatory oversight, along with a gradual rebalancing of supply and pricing dynamics drove growth. Egypt domestic cement market grew by 13%, supported by ongoing mega projects. Also rising cement exports have positioned Egypt as a major regional export hub. In Turkey, the group divested Adocim in 2025 and completed the Tracim acquisition in Q1 2026. Overall, East Med sales reached EUR 251 million, up by 44%, while EBITDA quadrupled reaching EUR 62 million, driven by Egypt's performance. Finally, in Brazil, domestic cement consumption in Brazil grew by 3.7% in '25. However, in the Northeast region, where we operate, consumption rose by 7.2%. This performance was supported by strong housing activity and infrastructure projects. In 2025, Apodi prioritized margin expansion by optimizing its product mix, geographic allocation and sales strategy. Our sales reached EUR 109 million, an increase of 7% like-for-like, while EBITDA reached EUR 32.8 million, an increase of 17% like-for-like. Let's now take a look at the progress we have made in our digitalization transformation journey. In 2025, the financial impact of our digital deployments was around EUR 28 million. Some key milestones included digitization of more than 80% of our cement manufacturing assets, the rollout of ready-mix cement logistics solutions, Cyprus in all Titan America, the launch of new pilots for quality prediction and mix design optimization, the successful proof of concept for robotic solutions at our cement plants and the gain of our first external customers for real-time optimizers by our digital business, CemAI. On the customer experience front, by the end of 2025, we have digital customer portals live in all our business units with more than 90% adoption in BUs with mature solutions. Looking at the 5-year plan, the investments to digitalize our business end to end are estimated to be more than EUR 60 million cumulatively by 2029, driving a margin uplift of 50 to 100 basis points. Turning to ESG and looking at some of our sustainability metrics in 2025, the group further advances its decarbonization, SBTi validated targets by reducing its specific CO2 emissions to 594 kg per tonne of cementitious material, which is 12% down versus 2020 levels. This was driven by a record high alternative fuel thermal substitution rate of 22.3%. It's worth noting that a couple of key plants achieved thermal substitution rates levels above 50%. Clinker to cement ratio closed at 76.9%, a slight increase versus prior year mainly due to a much higher cement exports from Egypt in 2025 versus '24. CO2 emissions per unit of revenue also fell to 3.51 kg and absolute net CO2 emissions decreased by approximately 500,000 tonnes. Notably, during the year, Titan received strong external recognition from leading ESG rating agencies. Let's now look at some of our recent investments in innovation, in new product platforms and next-generation technologies. Starting with our entry into precast, as already discussed, in Western Europe, we acquired a leading precast concrete solutions provider based in Bosnia through a JV, while in the U.S., Titan America started its expansion into precast and prestressed lintel after securing key approvals for more than 40 lintel products SKUs. All targeting to expand our portfolio of value-added concrete-based structural solutions. During the year, in Greece, we have also created a new product platform for the building renovation segment with our expansion in the field of advanced mortars and thermal insulation systems. Our IFESTOS flagship carbon capture project progressed into advanced development in 2025 with FEED studies underway and environmental permit secured. In Patras, Greece, Titan is preparing to implement the meca clay technology for the first time, where the Titan Center of Advanced Technologies is being established for the design of high-performance next-gen materials following a partnership with Thyssenkrupp Polysius. On the digital innovation front, we have partnered with CITRIS at the University of California, Berkeley to advance the development of digital twins for cement plants, an AI powered technology that creates virtual models for processes, systems and entire plants helping us stimulate and optimize our operations. At the same time, we're exploring new frontiers in robotics for plant monitoring and GenAI-enabled smart maintenance. At this point, I'll pass it over to Marcel to share with us the outlook of 2026.

Thank you, John. So I think if we go market by market before looking into the geopolitical elements of the context and then the guidance, U.S. remains a strong market for us. Construction market remains broadly stable in 2026 with elevated financing cost and persistent input inflation. The growth drivers remain federal and infrastructure spending as well as manufacturing onshoring. And as I mentioned earlier, good exposure we have, particularly in Virginia, on data centers as well as Virginia is also the state where we have the majority of our sales in infrastructure projects, the demand drivers remain strong. Of course, mixed residential markets expected to start growing in 2027. I think the supply shortage we have announced at the time of the Investor Day that is somewhere between 4 million and 5 million of housing shortage in a country with very strong demographics. When we move to Greece and Western Europe, the absorption of recovery funds, investments in construction and renewable energy that should continue driving sustained growth in construction market. We also see an increasingly strong private consumption and in the context of rising real wages, declining unemployment and fiscal discipline support growth. And of course, the hospitality segment is a growing segment, expected to continue driving. Southeastern Europe, high comparables in the past, broadly positive resilience outlook in this region. Again, construction sector has momentum. Growth is driven by domestic consumption, increased public and private investments, fueled by the foreign remittances. Inflation should stabilize, supporting purchasing power and business confidence. Finally, Eastern Mediterranean, Egypt economy is expected to grow, driven by the reforms with moderate inflation. Our investments in silos and export capacity will boost the competitiveness of our exports. Turkiye economy is also expected to grow with structural reforms are on the way and of course, with post-Earthquake construction, multiplier effect, including in the region, we have recently made the acquisition in Greater Istanbul. Let me also point to 2 things before the guidance. First, the geopolitical context. The ongoing conflict in the Middle East creates uncertainties with macroeconomic implications. Titan has no exposure to the affected regions. However, this conflict-driven implications including higher energy prices may impact market trends and increase inflationary risk, which we are constantly monitoring and we are focused on both mitigating the risks through hedging actions to mitigate any potential impact, but also focused on cost, cash flow discipline, procurement as ramifications may appear. Second is how to read our guidance precisely. Our like-for-like growth guidance is stated on constant scope and currency. It excludes the contribution of our recent acquisitions. As mentioned at the beginning of our call, we have already closed the transactions on Tracim and Vracs de l' Estuaire, which are already contributing positively to the results of the -- contribution is real, funded and incremental to the like-for-like guidance, which is considered in sales at low single-digit EBITDA growth at mid-single digits, while we continue our CapEx program as per Titan Forward 2029, all this to be reconfirmed mid-year. Maybe to finish also on the notes taking into account the first 2 months of 2026 are ahead of the prior year on a like-for-like basis, with February showing particular momentum. Greece and Egypt are leading and again, Tracim and our operations in France are already contributing a positive early integration -- early integration signal. With this, we can move Spyros to the questions. Yes, maybe you want to take this one, differentiated investment proposition, which you have shared with more than 74.

Sorry, the face. Yes, exactly. So basically, this is a chart that we would like to share with you where basically it shows how Titan is a differentiated investor proposition, where strong cash flow, generally strong cash generation with a robust balance sheet. We are investing in our acquisitions, and we're focusing on our growth CapEx. We have a very good return to our shareholders with -- in the form of dividends and share buybacks. All in all, it's a very balanced approach to our business, and we've been very confident with that.

Let's move to the questions.

[Operator Instructions] The first question comes from the line of Kaparis Stathis with AXIA Ventures.

I'm trying to -- can I clarify something before I ask the questions. Did you say that the organic -- expected organic like-for-like growth includes the closed acquisitions. It's a bit unclear whether Turkiye, Tracim and France are considered like they're contributing to that low single-digit growth?

So yes, I repeat, they do not include the non-organic growth. So as of end of February, we are consolidating our acquisition in France. And as of March, we are consolidating the Tracim acquisition. So their contribution is to be considered on top of the guidance, which is like-for-like. That means that constant ForEx and constant scope. And it's in line with our Forward 2029 strategy estimate.

So on the guidance, I've got a couple of questions. So on the organic part, the question is, can you help us understand exactly what are you blending in terms of even in conflict, how does it affect post FY 2026? That's number one. Then on the inorganic part, it's quite clear that, of course, we are consolidating those 2 acquisitions, Particularly on Tracim, you have expectations of EUR 50 million EBITDA in 2027. The question is, is 2026 going to be pro rata 2027 pretty much? Or there is some ramping up of production to be done in 2026? And it's not going to be pro rata 10 out of 12x we've seen. And then if you could give us an indication of the timing -- expected timing for closing Keystone acquisition in U.S.? And also last one because I understand it's too many questions. And pretty operational question. Is the plan to move away from or partially move away from the agreement with the third-party distributor in Youngstown and optimize volumes? Are you locked in some part of agreement regarding that?

Could you repeat the last question, please?

And last question regarding Keystone, I understand you have a third-party agreement for distribution to Youngstown. Is that locking you in? Can you break out -- I mean is your intention to divert volumes and where you expect to optimize operations? Is there any lock-in contracts with them?

Thank you. Quite a number of questions. So again, the first 2 months of the year are ahead of the prior year when it comes to the -- like-for-like basis, February is showing particular momentum. Again, we had good volumes in both in Greece and Egypt. U.S., the February volumes were a bit softer due to wet weather, but that's a timing effect. However, we see in aggregate fly-ash blocks already good growth year-on-year and a strong backlog, very good pricing in Greece and some of the markets, and we have also announced price increases in U.S., which we will monitor the dematerialization more in the next month. So in this context, we are guiding sales growth for the year now and EBITDA growth we say mid-single digits. Of course, that takes into account some headwinds from the current crisis. We have estimated them particularly in terms of freight, which may impact our seaborne trading, the ramifications, which would be on the energy cost. But given the fact that we are not exposed to the affected regions that we have for our electricity, I just give an example of Greece. We are hedged at 50% of our consumption. The fact that we have a large number of our vessels already contracted. We expect very limited impact based on the current estimates. Depending on what will happen on energy prices as well as the duration of the conflict, this crisis could also result in other pricing actions, which we would be evaluating later in the year. So very limited impact for now in the EBITDA of the quarter of the first half. To your question, if it's pro rata. I have already mentioned. So the 2 operations in Istanbul and in France, they are working. They are firing from all the engines. So we already see a positive trading result from both operations as of month of March, and we'll give you more details in the quarter 1 results. So they will be consolidated for 9 months, respectively, 10 months of the year with a positive impact in the group, which will be in excess of EUR 40 million EBITDA for the year. In terms of closing of Keystone, we have communicated previously, this is subject to customary approvals of antitrust authorities. We are in the middle of that process. We could expect more to say in the second half of this year. And we will not comment on any specific decisions on the commercial policy or industrial policy of Keystone. Just remind you that this acquisition presents multiple synergies with our positions in -- on the East Coast. So once we will have the antitrust approvals, we will provide the full account of the synergies but we have already indicated that this will be EPS accretive of year 2.

The next question is from the line of Bourazanis Marios with Eurobank Equities.

Hello. Thank you for your presentation. I hope you can hear me. So I just wanted to get a sense of what your view was on the outlook for pricing in the U.S. in 2026? And more specifically, if you believe that a lower CO2 price here in Europe could significantly improve margins for cement exports from Greece to the U.S.? That's my first question. And also a second question, if I may. If you can please comment on your view around potential changes in the ETS ruling. If you expect any -- a potentially lower CO2 price environment to have any meaningful impact on margins and cement either in Greece or Bulgaria?

So look, let me separate the things. In U.S., the headlines, cement price numbers in 2025 was flat, but that marks meaningful mix effect across our geographies and product channels. So on a like-for-like basis, the pricing has not -- going into 2026, we have announced price increases across every product line, [ $12 on cement ] then on ready-mix, on aggregates, markets where we operate, we have an integrated business model, so particularly Florida and Virginia. So that gives us significantly more pricing latitude. So taking into account these elements of geography, packaging, delivery needs, we estimate that the like-for-like price increase in U.S. will be low single digit. These are pushed to April, and we will report more on the quarter 1 results. On the impact of CO2 prices, as a reminder that we are long on CO2, right? And we do not -- we are not guided by the CO2 prices in the pricing of our products, particularly in markets which are under U.S. or in European Union. We have already operated price increases in both markets. You mentioned in Greece and Bulgaria. More details, we'll give you at quarter 1, but we are confident and happy with the pricing resilience in this market. When it comes to ETS, indeed, this year, there will be a wide consultation on the new phase of ETS. This is a very laborious process, which will take several months. For sure, there will be changes, but we do not expect radical changes. The predictability will offer again, the opportunity to be specific about the profitable decarbonization projects that we will continue. Again, we are running a number of projects with high decarbonization at stake, including a project, which is an engineering phase here in Athens. In Kamari, this project, the go-no-go decision and the financial closure is estimated to take place next year. So by then, we will have even more viability on the product mix, depending also on the ETS changes.

The next question is from the line of Arthus PIOT from On Field Investment Research.

Thank you for the presentation, first. I just want to come back to the price increase in the U.S., like how confident are you to pass the low single-digit price increase in April. Then what price increase did you announce in January in Greece and Bulgaria and how much are sticking? And then just on the outlook, what energy cost inflation is assumed in the 2026 guidance? And what is the volume and price split for 2026 in target for sales, please?

Yes. If you could repeat the last question, please?

It's just about the split between volume and prices for the 2026 to single-digit growth target for sales.

In which markets you are -- in general?

Yes, in general, just about the outlook.

Yes. So again, the environment in U.S. is positive after 2 months in the year with a strong backlog. And we'll comment more on the price increases and the way they materialize in the market at the publication of the first quarter results. We see positive price increase already in the market when it comes to aggregates and ready-mix. And in April, we will communicate more on how we see that in cement. Again, pricing is a function of mix of deliveries of products and geographies and we'll provide the full account on this, in line with what we have already announced in the past. On the price increases in Greece and Bulgaria, they had high single digits, and they have been successfully implemented already sticking in both markets. On the volume and price split for the low single digits, again, this is the like-for-like excludes the acquisitions, and it goes almost at 50%-50% for each of them on a low single digits. So you could expect pricing in line with inflation and volumes, again, slightly higher.

Okay. And just last question about the energy cost inflation. Like what energy cost inflation is assumed in your 2026 guidance?

2026 guidance, given the fact that we keep improving our use of alternative fuels, we have -- we are on a full swing after investments over the past few years in particularly our plants in Greece and Bulgaria where we have reached an average of more than 60% with, I would say, crude speed of 80% at the end of the year. So we will have a very nice total substitution rate there at very attractive prices. So that brings flat fuel cost. And as I mentioned for the other energy component, particularly the electricity part, we are already hedged at 50% and we have considered in line with inflation increases, which again will result in a price over cost being positive.

The next question is from the line of Katsios Nestoras with Optima bank.

My question, already answered.

The next question is from the line of Rolfe John with Crescent Capital.

I appreciate all the detail. Just a few more questions on energy. What does energy represent as a percentage of your total cost of goods? And then secondly, you mentioned that in Greece, you were hedged about 50% of your energy consumption. Is that hedge ratio similar across other markets where you guys are active and typically how far out are you hedging? Is it sort of for the current fiscal year?

Thanks, John, for your question. So look, we operate in a very diversified portfolio of geographies where our fuels are -- or our energy costs in total costs are varying. Just to give you an example for fuel for our kiln, if at the group level is 8%, that represents only 4% in North America and 18% in Southeastern Europe. If you take electricity, that represents 9% at the group level in total cost, which is 19% in Europe, and it's only 2% in North America. So because you are calling from U.S., our total energy cost is only 9% of our cost in North America. So that explains also partly the -- what I'm going to say on your second question. So we have hedging agreements in a very limited number of markets. Greece is rather the exception on the other markets, we are attuned to what's happening on the spot market, which gives us also the flexibility of applying a very agile pricing strategy.

Great. And then just one other follow-up with respect to the 2029 targets. I don't know if you guys have talked about this before, but the sales growth target of 6% to 8% per annum, have you talked about how much of that you would expect to be organic and how much of that would be driven by M&A?

Yes. So at the time of the Investor Day, we have published the numbers. We have announced that 2/3 will come from volume, price and mix effects on the existing scope and 1/3 will come from the new businesses, including M&A. Can we have the last question for today?

Yes. The last question is from Hoste Wim with KBC Securities.

I have 2, please. Can you maybe first comment on the Turkish growth plan, given that there is potential for building a second line? Can you put some or give some comments on potential timing, potential contribution you expect from both first line when fully optimized and then the second line? And then the second question I have is on -- and partly related to that maybe is the CapEx envelope for the group is EUR 350 million to EUR 400 million for this year. Can you elaborate what are the biggest projects in that CapEx envelope?

Yes, I will take the first and then John, please on CapEx. We are very excited about the investment in Turkiye and in Istanbul. Istanbul is a thriving market with more than 10 million inhabitants and a very vibrant housing and infrastructure market with large infrastructure projects, which are currently being financed by public investments, mainly on transport infrastructure, but also on energy infrastructure, including nearby large power plants, including new nuclear -- civil nuclear power plants. So that will create a multiplying effect with high cement intensity in a market, which is currently running at a slight deficit in terms of supply. It's a plant, which is running at 100% of its capacity utilization rate. So a lot of synergies are expected in the short term. We are already working with an integration team on site, on projects on alternative fuels, on product mix in using lower cost cementitious, improving the thermal and electricity consumption. So all this will yield in good synergies for the year. And at the same time, we are looking into developing the engineering of the second line as we discussed, as we are permitted. We expect more to say on this towards the end of the year. So value accretive from year 1 and a priority investment for us is to finalize by September in a joint venture solar power plant, which would provide almost 40% of the needs of the plant, which will already have an impact of plus 10% on the current EBITDA of Tracim. So that is an expected EBITDA in the range of EUR 40 million, EUR 45 million. On CapEx?

Yes, on CapEx, our guideline is EUR 350 million to EUR 400 million. Approximately about EUR 100 million and EUR 125 million normally per year goes to our maintenance CapEx just to maintain a world-class and safe asset base. And the remaining EUR 200 million and EUR 250 million will focus again on growth initiatives. And as I've mentioned earlier, this will be behind expansion of quarries and storage and acquisition of new trucks, new pumps and new plants as well as some of the funds will go towards cost efficiencies, either logistics improvements, digitization to basically drive efficiency, throughput and more cost savings.

Thank you, everyone. Thank you for your questions and for your interest, and thank you for acknowledging our great start of the year and a very strong finish of the past year. We will see, again on the 7th of May when we will be discussing the first quarter 2026 results. And yes, Spyros is also telling me that on the 27th of March, we will have the integrated annual report published, which will provide more color to the results of 2025. Thank you again. Have a good day ahead.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for calling, and have a good afternoon.