Good morning, ladies and gentlemen, and a warm welcome to Wienerberger's conference call. Our Board representatives today are Heimo Scheuch, CEO; and Gerhard Hanke, CFO. They will walk you through the presentation and are ready to take questions afterwards. I will now hand over to Mr. Scheuch for his presentation.

A warm welcome. Good morning from Vienna to all of you. Thanks for joining us in this early conference call. Hope you all well and enjoy the summer around Europe. I'm glad, obviously, to go with Gerhard through our half year results. They are solid and very satisfactory performance in the light of I would call it a little sluggish residential housing markets in certain parts of Europe and North America. But let's now move a little bit to the results in detail. When we look at revenue half year, they are more or less in line with expectations with €2.2 billion. And as I said, when you look at Wienerberger and will elaborate shortly a little bit more on that. It's a strong performance, with respect to the end markets that we are operating in. And it shows also how important it was to redirect Wienerberger's strategic focus on renovation, and on infrastructure to markets that are doing much better these days, compared to the new build segment. Operating EBITDA at €400 million. That's in line with our expectations with respect to the first half of this year. EBITDA margin also strong a little bit above 18%. Consider also and we will talk about this that we had extensive standstills capacity cuts in the first half. And therefore, it's impressive that we can reach this sort of EBITDA level even in this depressed market environment. Standstill costs, as I said, were about €50 million for the first half year and the capacity utilization, especially in ceramic Europe was 57% on a very low level, but you see how profitable we still can operate at such levels. Cost management, very strong. We have done a lot of proactive measures. Remember, last year, at the end of the year, we told you that we need to do some measures, because we foresee already that some markets will be down in 2024. We got confirmed. Some are actually down more than we originally expected that, why we intensified the measures, and a little shy of €30 million cost cutting and the measures to improvement were contributing positively to our results. Very happy with the acquisition of Terreal. It's the biggest acquisition of the company in its history. It was the right decision to do at the right moment, even in these markets, Germany and France, because it gives us the positioning the right one in order to improve not only the manufacturing footprint, but also commercially. Not even a couple of months after the closing of the acquisition, we are already with one sales force in the market in Germany and in France, very strong delivery on synergies very performing teams, also on the cost side when it comes to administration and overhead costs. So a very strong contribution from the Terreal side also. If we look then on the market exposure side, as I have told you, that's the first time actually the new residential housing segment for Wienerberger is less than 50% in its turnover. So it's a historic moment that you see that Wienerberger shifting its attention more to renovation and infrastructure, two segments that we will continue to work on in the years to come. And obviously, take advantage of the upswing of new residential housing in North America and Europe with the existing capacity that we have in place, especially in the ceramic segment that means clay blocks and facing bricks and roof tiles. So all in all, I think what is interesting to look at, when you look at the Slide number 5 of our presentation that especially in the single-family housing market, which is a very important market when it comes to Wienerberger's and products with clay blocks and facing bricks and roof tiles, how poorly this market has performed in '24 compared to the last really financial crisis, 2009 and 2011, as we took here the average numbers in 2009 and '11. And even when we take those and compare it with this year, how - sharply this very specific market is down. You see it in France, you see it in Germany, Austria. These are especially markets that are hit hard right now. So this is what we have to digest in the end market. And I think you can appreciate now more how we manage costs and adjust our capacity to this. Also, when you compare 2024 and 2023, very interesting to look at the recovery in Eastern Europe, Poland up with about 15% in this segment. Hungary, obviously up even more and a certain stabilization trend in other Eastern European countries. Here, again, it shows clearly that we have seen the worst in Eastern Europe and moving out of this low numbers, and increasing activity, we can confirm that. And we can also say that, obviously, in these Western European markets, especially Austria, Germany, France and Belgium and the Netherlands. We are right now at the bottom and we will see this bottoming out effect for the rest of the year, and we will see some growth next year. So this is what we see in the end markets. Obviously, people talk a lot about interest rates and the impact on your residential housing. That's true. Absolutely right. And we had no cuts, or no significant cuts in order to stimulate new residential housing construction. However, we see also that the political side has made mistakes. There was instability due to elections, especially in Europe. Some wrong decisions we have taken, people were not confident enough to invest. And so I think momentum is building on the European level, and on national level in the sense that they need to do something about affordable housing, about social housing, about housing in general. So this is going to be confirmed by housing commission on the European level, and this will certainly play in our favor in the years to come, because I see a decade in front of us with quite some substantial growth in new residential housing construction in Europe and in North America, which is based on demographic change, you have a lot of migration, you have a lot of underlying demand in these countries. And step-by-step, I think, will increase the construction rates throughout the economies that we are active in. And you see some measures are already put in place. They are discussed. They are voted in certain parliaments in Europe. So this will play in the - in our favor from 2025 onwards. And we see also obviously, some substantial sort of aid coming from the European Union when the new commission is voted in later this year. So all in all, I would say, from our perspective, to give you a clear message through the worst in Eastern Europe. So it's a positive development in new residential housing. There's a good trend actually, and I'm also very positive with the U.K. and especially with Ireland, when it comes to new residential housing construction, we see good numbers coming through and also growth rates. We are bottoming out in Central Eastern Europe, as I said, especially Austria, Germany, France, Belgium and the Netherlands. These are important markets for us, when it comes to this segment of new residential housing. And we see a temporary slowdown in Canada and in the North American - in the U.S. market. It's a little bit different. Canada is more the political and economical situation. And in Americas, it's the election and interest rates that play an important role here. So all in all, I would say that the rebound of the new residential housing market is only pushed a little bit back. When we gave you our forecast for the whole year in our guidance, we assumed clearly that in the second half of this year, there will be a pickup in activity and there will be some interest rate cuts. Unfortunately, they are not happening. But as I say, this is for me something that is delayed, and we will have a substantial buildup of demand to come with. I didn't talk too much in my introduction about the infrastructure market and the renovation market. And here, a couple of words renovation, very good, very stable, slightly positive in certain countries, very important for our roofing business. 60% of our roofing sales go into renovation, a little bit also other solutions that we have thin brick and other facing solutions that we sell. So these are important markets. Renovation also when it comes to piping and paving, two aspects that we don't talk too much about, but when it comes to piping, a lot of innovation we've done with respect to water and also to energy. So here again, a growing segment and paving also a segment that is important in certain European markets that we are active in. Infrastructure, as such, we see good spending trends from the U.S. to Europe, when it comes to governmental initiatives, water, especially is a big issue, sewage is a big issue and also energy where the governments, and the regions are investing heavily. So it helps us in the respect of our piping business in these respective regions. Let's like have a little look at the quarter two results. And here, you see in Slide 10, very clearly, how affected ceramic business was in Western Europe. These are the economies where we have basically talked about. And you see that when you take out the U.K. and Ireland, which had positive trends that it is more focused on France, Germany and the Benelux. So a negative trend there when it comes to volumes and piping, as I said earlier, a good trend in this segment. Ceramic East, the big hub is confirmed. And here, the 13% plus compared to last year, piping also in a positive terrain. So nearly compensate the upswing in Eastern Europe, our overall activity in Europe, ceramics in the U.S. also a little bit weaker due to the effects that I told you about in the housing part with about 11% down and the piping more stable plus 1%. So again, I think from an overall perspective, group wise in the second quarter, a very strong performance with 2% only decline in volumes as we speak. When we take the revenue bridge, here, you see this 2% also when it comes to volumes, it's minus €17 million. We have here from a mix perspective, a rather stable development price. And let me elaborate here a little bit also on the price side with this negative 3%, €35 million comes mainly, and this is as I say, mainly out of Eastern Europe. And I will explain this how this comes about. Eastern Europe is a different market. It's more do it yourself. It's a more individual market. It's not driven by big project developers, et cetera. So you need to be very careful when such a quick upswing is taking place that none of your competitors take too much market share or get excited about this volume decrease - increase. So that's why we acted proactively Wienerberger in order not only to defend our market share, but also to make sure that there is nobody contemplating capacity increases or putting back additional capacity in the marketplace. So this is a deliberate action, I call it an action that is strategically planned by us. You will appreciate also Gerhard will show you that from a margin perspective, Wienerberger keeps its margin. So it's no pricing pressure that some people might allude to. It's a strategic decision that we take. We can also sort of work in another way in the future. If we see that the market is now stabilizing more. But as I said, it's a very deliberate, and from us planned decision that we put in place, due to the specific market that we find in Eastern Europe. FX is, I think, very clear. And obviously, the scope has an important aspect here that is mainly coming from Terreal, a little bit the smaller acquisitions that we did, but important acquisition on the piping side and in the U.S. So here, all in all, an increase in revenues and a good performance as I said, considering the underlying market. The EBITDA bridge as such, let's focus on this in a minute. When you look at the EBITDA from the side of the sales volumes including the standstill is a little drop here, but not that significant price over cost. I explained this coming out of Eastern Europe, a little bit of Western Europe, but this is not nothing of significance, but I would say this is digestible for us. And then you see the great contribution from the self-help and the cost management that we put in place bringing in €16 million and €12 million, respectively. So obviously, including the scope additionally coming in from the Terreal and the other acquisitions, we have a growth in the EBITDA to €285 million. So I think here, a good underlying trend when it comes to the second quarter and perfectly in line with our expectations. Let me take a deep dive also in restructuring so that you have an idea what we are doing. We are obviously mothballing and closing down operations very quickly, very proactively. So we have done always about 10 plants in different regions, especially in the Western European hemisphere when it comes to facing with clay blocks and roof tiles. So here adjusted the manufacturing base. We have also mothballed certain production lines. That's six. We will monitor this very closely. And over the next half year might be some more that we adjust. Keep in mind that also when we do investments these days, and I will talk a little bit about this in a minute, we also expand our capacity inside. So we regrouped them, but it's an efficiency improvement on the long run between Wienerberger mix we make ourselves even stronger in the marketplace. So again, very well adjusted to the market demand and very quickly and rapidly. You've seen the impact on the personnel side, and the capacity side. So with this, I would hand over to Gerhard, who will walk you through the results of the first half year. Gerhard?

Thank you, Heimo. As Heimo mentioned, we had basically some positive momentum dynamics in the second quarter, especially in Eastern Europe, considering that. And you still remember when we reported on quarter one, which started later this year, we had a rather weak quarter one, which we still feel basically in our first half year volumes. We are in the first half year, as we mentioned before, minus 6% in sales volumes. We see that based on the confirmed recovery in Eastern Europe that we have now in Eastern Europe, more or less a flat development for the first six months. And here, we expect definitely for the second half a more positive development, which was basically which we already have seen in the second quarter. We also spoke about the development in Western Europe, in some selective countries, which are linked to the new residential decline. And we see here minus 13%. And again, here on the infrastructure side, much more stable development for the first half year. When you also look across Europe, just a minus one and in North America, a plus six infrastructure, as we said, developing positively, stable, positively renovation stable and the volume - the missing volumes, let's say, in that way, what we see basically linked to the weaker new residential developments in selective countries in Western Europe. When we look to the revenue bridge, you see that we have slightly higher, let's say, stable, slightly higher revenues, which is driven by the Scope by the additional revenue of Terreal and by the smaller activities, which we bought in the first six months. We also deconsolidated respectively, the Russian business, but we should keep in mind still, which is also impacting basically first half year numbers. You see the 6% in volume. We spoke about the minus three in pricing, and also Heimo mentioned it, it is mainly allocated to the Eastern European Hemisphere. So I will see it - I will show you later on also where you see that basically it is in Eastern Europe, this pricing initiatives, which we consciously have taken more in the range of, let's say, minus 5% and the rest slightly stable - or let's say, stable, some slight lower prices in selective countries in West and a positive price in the ceramic part of North America. But we also have to prepare the slides on that later on. Let us look to the cost inflation because here, I think we are outperforming also, what we have originally have expected. We ended the first half year with a minus 1.5%. We were in the beginning of the year, maybe a little bit more conservative on the performance of our energy, and of our granulates, where we have foreseen or expected that the decline in cost inflation is not that high. So we are having now for the first six months a minus 4% in energy and minus 13% in granulates and here, we was more conservative. You remember, I was assuming during our last call, more cost inflation, between 0% to 1%. This was somehow our target to move more to a zero cost inflation. And thanks to the development in energy and in granulates, we ended up for the first half year with a minus 1.5%. When we look to the overview where we basically, compare the sales prices and we spoke about the sales prices already and the cost inflation, you see that the price cost spread is with 1.8%, this is the €34 million, what Heimo mentioned also before, where we spoke about that's the negative price cost spread basically for the first six months, which you see later also in the EBITDA bridge. You see that the pricing initiatives, which we have taken in the ceramic part in this minus three - mainly allocated to the Eastern perimeter of Europe. And you see also on the piping side, where we have lower prices, you see also that the granulates are going down. You know that granulates – making roundabout from the cost price roundabout 60%, almost to 70% of the cost price. So it is essential part of our cost price and also on the cost inflation of our costing. And therefore, you see that - we have been able to mitigate basically the sales price decline, also by a reduction in the granulate price. You see it in Europe as well as in North America, meaning that the margins, the profitability in this case is stable, so that the pricing itself or the negative price/cost spread, what we were mentioning in the beginning, is mainly to allocate on Eastern Europe. And this is a conscious decision also what we mentioned to pick up some market, and also to position ourselves against the more fragmented market competitors, which we have in Eastern Europe. Utilization, I think also we heard in the beginning that utilization rates are lower. We had as we said, a later start into 2024. We also started up our production capacity a little bit later this year. You remember in the first quarter, we also mentioned this roundabout €50 million on standstill costs. They are still there, for sure. We have seen them also in the beginning. We have basically a lower utilization rates. And still, as Heimo said, we are able to perform and to have an EBITDA margin of above 18%, which is also thanks to the cost management, what we did, because this utilization rates are basically also showing that, we took out quite some capacity very fast, and also showing that there is enough spare capacity, or headroom capacity in markets are picking up. We have done this exercise mainly also basically to bring inventories levels down. And I think also this was mentioned in the first quarter call, when we spoke about the inventory levels in ceramics Europe, where we said, okay, a more normalized inventory level, a finished good stock level for ceramics. Europe is roundabout €400 million, the upper range is €440 million. This excludes please, Terreal, so this is legacy business, what we show here. And you see that against a seasonal upswing, what you normally have in the first half year that we decrease basically our inventories levels in that. So that means also we have done our exercise, when it's about inventory adjustments in that field, so that we feel comfortable to keep going basically into the second half of 2024. Cost management, we had significant contributions in the first six months. What you see here is roundabout €30 million, the big part is still coming out of the cost initiatives, which we implemented in the second half of 2023. You remember, we had last year €60 million then we said, okay, we will have an overspill of €20 million out of the program 2023. We did some extras in the beginning of this year, which adds up to the €29 million for the first six months. And the time have shown, we have implemented now a second program, let's call it, on initiatives to adjust accordingly. And this will also still contribute in the second half, but also mainly will contribute into 2025. This brings me to the EBITDA bridge. A lot of the things I think was already explained. We have an impact of basically the weaker market volumes of roundabout €100 million. We have the price cost spread. And we have significant steps initiated implemented, as we have explained before, when it's about the self-help initiatives when it's about our cost management. So all these things are almost - when you add them up, almost €70 million, and which also supporting basically our €400 million. And we mentioned it also in the second quarter when we spoke about, I think, the €285 million, where we also were able to show a small organic growth basically in our second quarter performance. Let me explain you also some of exceptional items. We have some exceptional items in our P&L. First of all, we have an operating EBITDA, as we just explained, of €400 million. As we do also, usually, we have eliminated or excluded some sale of assets. Here, we have some small assets in which we sold noncore assets, but he has also included the sale of the Russian business, so the deconsolidation of the Russian business in this €10 million, what you see here, minus €9.5 million. And then you have a bigger position, which is roundabout €70 million and this is mainly the restructurings, what we call. So what you see here is mainly severance payments, devaluations, one-off costs, which are linked to the most falling, or the closure of production sites, or also with some other restructuring measures in the overheads. But this is a clear one-off positions, which basically we eliminate from our operating EBITDA. Secondly, it's not only the EBITDA, which is impacted by some one-offs. It's also basically some other positions in the P&L, you remember that the restructuring cases, what I just mentioned led also to some special write-offs in the size of roundabout €49 million, these are basically special write-offs on assets, where we decided to shut down production facilities. And this led to an exceptional depreciation, one-off depreciation of €49 million. The €69 million I just explained before, and then there was the recycling and of the FX reserves due to the deconsolidation of the Russian business, although this was already explained in the first quarter. That means you find back the deconsolidation of the Russian business, basically in two line items of our P&L. First of all, it is the sale of the Russian business or the gain is included in the other operating income and the recycling of the ruble reserve, is included in the other financial results. But if you add them up, basically, you see a significant one-off amount of €150 million roundabout, which is impacting our profit after tax, and what you also have to consider basically in your calculations, when you calculate earnings per share, et cetera, that there is a significant one-off included in the first half year. Let's quickly walk through the regions. We spoke already a lot about it. I think in the Western region. It is - it was already explained the reason while EBITDA is lower than prior year, still a 15% EBITDA margin, considering the new residential housing, what Heimo showed before in these countries, Germany, France, which are suffering heavily at the moment. There's the new build sector. So it is still, I would say, a remarkable performance, a 15% margin. And this definitely supported by our renovation and infrastructure business. So still a satisfactory development considering the market backdrop, or the challenging market backdrop where we are in. Eastern Europe, here you see that all the initiatives as Eastern Europe was basically moving into a decline more or less earlier than, the Western perimeter in the new build sector. And we also initiated last year. So last year, our cost management initiatives, we're mainly focusing on Eastern Europe, and you see that this is already contributing, heavily also to our cost structure, let's say, profitability structure. EBITDA margin is slightly above prior year. So an EBITDA margin in this environment of 20% is also for us, more than satisfactory EBITDA level almost in line with prior years. So strong performance of our Eastern Europe business. The same for North America very happy and satisfied EBITDA margin of 26%, EBITDA almost in line with prior year, keeping in mind that still the new build market, especially in the second quarter was slowing down. And we see and feel that there is some uncertainty in decision-making, due to the upcoming elections in November. So also there, we're expecting a more positive trend basically in the beginning of 2025. That's in a nutshell about the numbers. Heimo, I back to you.

Thank you, Gerhard. Let's have a quick look at the Sustainability Program '26. It's perfectly on track in all its different aspects. So from the CO2 reductions to all sorts of water management and circularity, and biodiversity. We're working on the different issues, implementing our measures in order to reach our ambitious targets there. So all the KPIs are well in line with our expectations. And here, word also on how we run the business and invest in the business. From our perspective, it's very important that the sustainability is the driving force for our business forward. And we obviously put a lot of emphasis, and we speak a lot about innovation, but we do even more on innovation when we talk about our business. If I compare ourselves to the peers in the sector, meaning ours in our industry that still have field plants with all technology, and certain aspects that have been done 10 or 15 years ago, we obviously, at Wienerberger, we are putting down state-of-the-art plants right now in different areas of our business. Just let me mention a few, when we talk about roof tiles. Here, we are currently completing - a completely new site in concrete roof tiles in the U.K. out of Southeast of London. And here, this will be in production at the year-end towards beginning of next year state-of-the-art when it comes to recycling, using sort of sustainable resources. The same goes with its sister company, if I may say so, in the Eastern part of Hungary, also now under construction, a highly modern new facility in state-of-the-art facility that will come on stream beginning of next year. Then obviously, in Austria, clay block facility that is completed and carbon neutral, the first one in our group. So this is already also in good shape, and will be then running as of next year. So here, you see projects where we invest heavily in the future of Wienerberger, and where Wienerberger is well positioned for any sort of future developments when it comes to new residential housing and also renovation. Important also that you see here in England, when it comes to clay roof tiles that we are building the first 100% renewable energy unit for roof tiles that will be next year running in the North of England. And when we move then into the piping operations, the biggest and most efficient and modern site in piping and plastic piping in PVC piping in Sweden. So completely recyclable here and adding all the products, recycled one to production. So again, a state-of-the-art unit that comes on stream late this year. So here you see that Wienerberger is really focusing on innovation, on new products, on new technology, especially we are not just talking about it, but we are putting the action in place, and really focusing on these new technologies in the different parts of our business. That's not enough. We are also tackling the - value chain. Here, you see a picture of a robot that is already active and not only one. There's a few of them already in operation in Czech Republic and people are already working on construction sites. So it's something that's not only tested, but already operational in place and will revolutionize the building, especially when it comes to bigger projects in Central Eastern Europe. So here, again, Wienerberger not only production and technology, but also the value chain that we try to sort of modernize, when it comes to the installing of our products. Saying this and being excited about this future development of Wienerberger and what we do and what we put in place, let me just focus a little bit on the Outlook '24. Here again, I don't need to speak too much about what is still ahead of us, in the sense of politically instabilities that you see around the world, and the other places also the elections that are coming up. So here, interest rates not being cut so quick as we expected. So all in all, what I said at the beginning, we anticipate that the markets, the end markets, especially when it comes to new residential housing remain more or less the same as we have seen them in the beginning of the year. So the recovery that we talked about is certainly shifting into '25. So on top of it, when we look at our Terreal acquisition, and here, I said that also at the beginning that we're very happy on track. So here, again, great job by the teams in integrating - realizing the synergies. We have taken our expectation back from €90 million to €80 million contribution that is due mainly to the weak German market, especially. The French market is also down, but we are still doing here better in the activity rate in the market as such. So - it comes mainly from Germany, it is sort of €10 million less EBITDA contribution. But the good news is when we look at the plan forward, the higher synergies that we can realize, and the better performance will reach our €150 million by '27. When we look at the two most important things that we need to talk about is, obviously how we see the net debt development, and I will do this in - under the close supervision of my colleague, dearest colleague Gerhard. But you see that the debt level is about €2 billion right now at the end of June. We are managing down with gross cash flow from the business. We do some investments as we have shown to you, will work - on the capital working capital, and we will work it down also to come to sustainable level that, this is a little bit more in the range of 20%, a little bit above percent of net sales, when we talk about working capital. So on our net debt level for the year end, and which we can predict more or less at this stage, is about €1.6 billion that we will have. So this is about the two-time when you take €800 million as a target EBITDA. So when we look at the performance, EBITDA for the rest of the year, here again, sales volume more less in line with what we have seen in the second quarter. So price cost spread will be improving, compared to H1, as I said, because these actions are less pronounced than in the first half of the year. So, we will intensify our cost measures, improvement measures. So if I take last year's - last year's half year results with €357 million. We will be up a little bit and then in the range of €400 million, and €420 million the rest of the year this year. So that's what we are working on, and that's what we see as a good sort of performance in this market that we are operating in. So I would say the operating EBITDA guidance for '24 for the whole year is around €800 million to €820 million for the whole of Wienerberger. So this is, I think, when we look at '24 as a year, where we see a bottom building when it comes to new residential housing, a rather stable one in renovation and a rather good one in infrastructure, the performance that Wienerberger delivers. And keep in mind, this is under such circumstances, that we deliver €800 million to €820 million. So with all the potential that we have now the side from capacity, from the investments in new technology, and the increasing sort of presence in renovation and in infrastructure for the years to come. I'm fully whom I'm fully certain that and convinced that we will reach our targets on the mid-term. '25, you will see contribution from state aid programs from programs when it comes to new residential housing full cost effect saving effects will kick in. So when we reach normalized market levels that are far below 2021 levels, by the way in '26. Then we will certainly be in a position to deliver above €1 billion. So in the range of €1.2 billion, as we have said and we confirm this clearly on as a midterm target as Wienerberger. So, I would say it's - from our perspective, we're excited about what has happened this year. It's a difficult year, especially in the new build segment. However, when we look at our performance, how we tackle the pricing issue, the cost issue, how we manage capacity and can bring down working capital, it's a year where we show that we have a high degree of performance, and outperform our colleagues in the markets, where we are active in, and that's important as I think it makes us very optimistic for the future. Thank you very much for your attention. I'm sure that all of you will have one or two questions that we will eagerly answer, Gerhard and myself. Thank you very much.

[Operator Instructions] And the first question comes from Brijesh Siya from HSBC. Please go ahead.

Good morning. I have a couple of questions. To start with the cost management side. So you had in Q2 cost manager of €16 million and cost self-help of €12 million. And Gerhard, you talked about most of the activities or €16 million, most of that came from Eastern Europe from last year, and you have done some action in West in Europe. So what's the kind of run rate we should look for second half in terms of cost management as well as for self-help?

For the self-help, we are striving for roundabout €40 million to €45 million for the full year. And we are now with cost management of roundabout 30%. I think we have 29%. And here, I expect roundabout 20% in addition to the 30% and once more, a bigger share in 2025, mainly when then the initiatives, which we implemented in the second quarter this year, a big share of that will contribute to 2025 results.

Okay. Understood. And now coming to the capacity one, which you have cut down to near about 57% utilization you have right now. Is that utilization calculated after those plants excluded those who have mothballed or closed or including those plants as well.

It is including the mothballed capacity what you see here. The operation and capacity utilization is higher. This is really headroom capacity when you call it is.

And what's the kind of operating or operational capacity inflation we are looking at this point in time?

It's above - it's different, like always from product group to product group, but it is somewhere between €60 to €70.

Okay. And third one is on your pricing side. You talked about pricing down 5%, 2% because of Eastern Europe, and that's a strategic move you have done it. So when we look at the market share of yours in Eastern Europe, has - when we hold this bisection, would you say those markets there would have fallen and you are at this what you were previously or you have gained market share?

Gain market share.

Okay. Okay. So those double-digit volume growth, which you got it in Q2 with how the pricing action would not be more looking like high single-digit increase?

Sorry, you dropped out on me a little bit. Can you just repeat it?

No, no. I was just talking about the Eastern Europe volume growth. In Q2, you had a 15-odd-percent volume growth in Q2, without the pricing action that number would have looked like high single-digit. I'm just trying to understand what, was the market growth in Q2.

Where the market growth was in certain countries and a higher even double-digit yes. So there was a good underlying demand.

Fair enough. I'll jump in the queue.

Thank you.

And the next question comes from Markus Remis from RBI. Please go ahead.

Hi, good morning. I hope you can hear me. I actually have just one question related to the full year non-operating back. If you could provide some more granularity on what to expect in the second half year as regards restructuring and asset disposals. And I'm just reading also through my Q1 notes. And back then, you were guiding for a full year impact from this restructuring of €25 million to €30 million. So I mean that was mid-May, I'm wondering how it was possible kind of to act so quickly? Yes, that would be it?

Maybe to the first one. We have seen them, let's say, for 90%, 95%, we have seen then the restructuring initiatives. We consciously speed it up. We didn't want to come up with salami that we come every quarter with some restructuring. Therefore, we speed it up and adjusted our capacity network, our industrial footprint accordingly to the market assumptions or market environment, which we have seen in the second quarter. Yes, we were more conservative in the beginning of the year. But also there, we had a different market picture, let's call it that way, especially on the new residential side and the restructuring decisions, what we took basically coming out of the weaker new residential markets in Western Europe.

Yes. And I think another thing I would like to add is, obviously, when we discuss these numbers that our colleagues mentioned beginning of May, we were not yet in a position to assess 100%. The market drops in Germany and in France, especially French elections came later. And due to the fact that the exposure of Wienerberger with respect to Terreal, the acquisition is much bigger to these two economies. We were deciding deliberately also to cut quicker and faster yes. And this is obviously one of the aspects so far.

Just to confirm once more, there will be no - there will be no big amount in the second half. So the €150 million, what I explained for the first half year will be more or less the amount for the full year.

Right. And on the positive side, the asset disposals and usually, they're kind of skewed towards year-end?

Depends a little bit. We have a couple of them under negotiations. We can't push it, because it depends on the buyers. But I'm fairly optimistic that the one or other will be realized, and we are talking here more about asset deposals in North America and the U.K. So this should be a good year.

Okay. Thank you.

Thank you.

And the next question comes from Gregor Kuglitsch from UBS. Please go ahead.

Hi. I have a few questions. Could I start with pricing, please? So I think if I look at the slides, we're down kind of 3%, I think, both in Q1 and Q2 I guess, firstly, I want to understand, I think when you spoke on your Q1 call, I don't know, I certainly can't recall down three. So I want to check sort of whether there's a mix effect or whether you were talking about a different number back then. But I guess, more broadly, what I do understand is why do you think pricing is starting to sort of come under pressure? I think you called out some voluntary cuts in Eastern Europe, I guess, I wanted to understand is a market leader, why are you doing that? And I suppose sort of your picture of where you think pricing is directionally heading in the future? That's my first question. Do you want me to ask all of them? Or should I go on that one?

That's fine. Let's take your questions and then we'll go.

Yes, yes. And then the second question is on roofing. So Obviously, I think you trimmed a little bit also in Terreal. My question is, are you confident that there's not sort of a lagged impact on the sort of renovation side so that we're sort of going to be at the trough on the roofing side also this year? And then the final question is, can you just update us what your CapEx guidance is maybe for this year and maybe next year, where do you think CapEx will land? I'm guessing you're cutting it back, but I didn't see a specific guidance. I just wanted to double check?

Let's - from a CapEx perspective...

We can take this first. We expect - I think you see Greg on the one slide where we show the net debt development for the second half, it will be I think, €220 million in the second half. It is mainly, there is some CapEx considered for a share buyback and the rest is basically maintenance CapEx and special CapEx.

Okay. So your full year CapEx guidance is what these days?

Basically, the full year is €340 million on maintenance CapEx and on special CapEx.

We will - and cue spot - you are spot on. We cut back on CapEx, especially on the maintenance side, yes - that's definitely. When you were referring on roofing, you see from our perspective, yes, we have cut capacity also in roofing, especially in Germany, to a lesser extent in France. But we have already adjusted to the lower new build demand in roofing. And on the renovation side, we have seen a rather stable order intake, and renovation is a more longer-term business, not this sort of short-term, so that we have a better view on the intake of orders. So from my perspective, I think here from a capacity and utilization rate and the availability of products we are in good shape. And pricing, you see, as I said, you are absolutely right as a market leader in developed markets like Western Europe, like North America. We don't do any action, so we don't move deliberately on pricing, because we set the price, and we actually show as a leader, the pack were to go, if I may say so. And this is with all you do respect to all of our competitors. But in Eastern Europe, it's a little bit different. First of all, these are very - some of them are smaller markets. Some of them are sort of not so rational competitors there. And we just - we were seeing that the market picks up rather quickly and rather fast. And there, Gregor, you need to be careful not to give them too much room to breathe, if I may say so. If you just lead by example, price and they sort of get all excited that the bricks leave their yard and they want to start a new line. And so, then it becomes a bigger issue for the rest, and then we get - it's difficult to get the capacity again out of the market. So I would say you need to trust us that we are - we don't have here pricing pressure. It's something - and we are not making a price war. It's just to show them that they should basically stay what we have as a business, and not be overreacting in the marketplace, if I may say so.

Okay. And then just coming back, I think back on the Q1 call, you said your price was up slightly. I guess now if you just piece together H1 in Q2, what you put today. Pricing was kind of down 3%, maybe there was a mix effect or what's going on in terms of...?

I think in the first quarter is basically pricing is still, I think, difficult to grab. You have a lot of movements. I think we're not positive that the price is up, but we also had not really - we were assuming more flat pricing. We had some countries where we have seen that pricing is going up. This was at that time, the U.S., which is confirmed. But we also have seen Western Europe, which was stable pricing, and we had - we were not sure honestly about in the first quarter, where Eastern Europe pricing will walk through, therefore, what I have in mind, I think we communicated a stable pricing in the first quarter.

Okay. Thank you.

Thank you, Gregor.

And the next question comes from Tobias Woerner from Stifel. Please go ahead.

Yes. Good morning, gentlemen. Thanks for taking my questions. I have three, if I may. If I look at the Q2 numbers for Eastern Europe, it seems to me as if you've got a good operating leverage there, unless there is some Terreal EBITDA in - or sales and EBITDA in the numbers...?

In Eastern Europe, there's initially nothing just a little bit from Italy, but that's still be neglected. So this is a good operational leverage, as you say.

Okay. So because what I see here is a 5% top line growth in the second half - second quarter and a 44% EBITDA growth, which would be huge. Is that a fair observation?

It is, as I tried to explain before, we - most of the cost initiatives, which we implemented in 2023 where basically focusing on the cost structure of Eastern Europe. And yes, we have seen after all the standstills are basically were done in Eastern Europe in the first quarter. Mainly I would say most of the plants were operational in the second quarter. In Eastern Europe, we also have seen the positive operational leverage based on the, I would say, optimized cost structure what we have in place.

Okay. If I look at my rolling three months production of bricks in Poland, then they were up in June, 11.7%. So Q2 was up 12%. Maybe that's one of the reasons why you're cutting price, you're going to regain volume there. But the key question is really you've hit a low in December 2023 at minus 30% and then the rebound came. So it took less than a quarter to rebound. Is this the sort of pattern you would expect for Western Europe as well?

No, clearly, no, because it's the market dynamics. The Eastern European ones, as I said, more to do it yourself as more, smaller ones. So they are quicker in when it comes back and reacting also on interest rate cuts quicker and faster. The Western European ones are more driven by bigger project developers, and it's a little - it's taking more time to come back. So I would not be so optimistic that we have only a quarter here. That's why I'm saying also it needs to get a little bit more time about six months that we will see here the recovery. In certain areas like the Netherlands, for example, will be first. That's my estimation, because here, the government is making already good inroads with respect to housing. So you will see better activity than the Belgium will follow, hopefully, then the French when they get a new government in place. And I must disappoint you in Germany because I don't see here a governmental change. We have elections in more than a year in Germany, so not a lot of things will happen there. That's at least my estimate. Tobias.

And by definition or by indication, the U.K. is already ahead of the Netherlands?

Oh, yes. Oh, yes. I'm sorry. I didn't include the U.K., it's on a completely different growth path already and has already left this behind. So this U.K. and Ireland is doing better. And actually, honestly, I say it with a little bit of pride, and I'm allowed to do this on this conference call, because I've looked carefully at the numbers of our colleagues of Ibstock. And if I take Wienerberger's performance, it's much better. So honestly, I'm very happy with our performance in the U.K. and Ireland.

Okay. Great. The two last questions to help me or us in terms of modeling. Terreal seems to on a run rate annualized you gave us the €80 million in EBITDA, but the top line seems to be pointing to around €500 million, €520 million. Is that there?

I think that's on the low side. I would more move to the €600 million this is from today's perspective, as good as we know the numbers of Terreal as of today, but this is where we expect that it is more €50 million to €600 million in that range.

That's helpful. Thank you. And then just lastly, a bit masked by the impact the net financial results. You kindly set it out in your €150 million sort of bridge to the net income level. But what would you say is your cost of debt now so that we can model this more accurately for the full year?

Moment, 20 plus compared to prior year. So I have an interest result of €100 million in a small €100 million as an interest result. Keep in mind, the tax rate, we are moving slightly up with the tax rate. We have now Western European exposure due to the Terreal and Creaton editions. So I'm basically expecting a tax rate of roundabout 22%, 23% for the full year.

Great. Very helpful. Thank you. By the way, the CMD, are we going to have a CMD later in the year? So just remind us?

Yes, there will be one.

Yes. Absolutely. You will get invited.

Thanks. Definitely.

Happy summer.

Thank you very much.

And the next question comes from Harry Goad from Berenberg. Please go ahead.

Yes. Hi. Good morning. Thank you for taking my questions. I've got two, please. So firstly, thank you for the information you gave us about your utilization rates in Europe that's very interesting. I appreciate it will vary country-by-country, but can you give us a bit of a high-level feel or what you've seen competitors doing with regard to capacity around Europe? And then just on that, can you remind us about the process of reopening production capacity? And how long does it typically take? What have you seen in the past with regards to sort of catalysts reopening from competitors? And then the second one very different one, the 2026 EBITDA number that you capped, I think it was €1.2 billion. And I appreciate you're not going to give us 20% guidance at this point, but can you just remind us what the sort of general assumptions, in terms of sort of market growth and pricing and other factors that, drove that 2026 number? Thank you.

First of all, when we take the sort of competitive landscape, it's very different between wall roof and façade, because the structure is very different. In roof, we have more or less very - I call it now consolidated situation in Europe. So the capacity utilization is more or less the same, and it's traditionally a little higher than in the other segments, yes. So from this aspect, I think here, we are fine and market-wise most. I'll call it, overcapacities in Germany right now, due to the low market there. But the rest in Europe, it's more or less, I would call it in good shape. And there's no one sort of creating additional capacity, or bringing on additional capacity to the market. Facing bricks is the U.K. and the U.K. market is to be excluded from this, because it's three PLCs that run the market here. So it's a very rational behavior. The Nordic markets are also Belgium and the Netherlands are actually the core here. And here, you have family businesses that are also very reasonable when it comes to this, sometimes a little bit more aggressive, and then sort of in line with expectations. But as I explained to Gregor earlier, here, we are a market leader. Here it's a different structure. Here, it's a more, I would call it, more organized in sense of that you don't break out and do crazy things on capacity and price. So that's under the - as far as I can go, saying this in the, an antitrust perspective. We have never - in contact with people, we don't talk with them. But it's thing that is in place for 20 years. Eastern Europe and Western Europe when it comes to clay blocks is a little bit different, why the competitive structure is different. Here, you have small ones here have one and two site producers, maximum, we have two sites or so. So they can close down a lot. So they reduce capacity, they reduced production output and probably close one line and have it mothball. Mothball means that you need about three to six months, depending how long you have mothballed the line to bring it back and prepare it. It's a delay of three to six months. In our company, we count about three months the decision to take it back and then running. So that was mothball. If you close down something for good and it's - obviously, we decided to move out of the site, so we won't bring it back. So this is a clear decision Gerhard talked about this earlier when he talked about the impact on the P&L of this year. So when we - to come back to what you've said, do we see here activity as I said, to colleagues of you and you also here that while we moved a little bit quicker and proactively in Eastern Europe on volume and prices. In order to keep the stability in the market, not that some are over enthusiastic, and then start additional capacity. That's what this decision was about to go proactively on volumes and prices in Eastern Europe.

Thank you. I was just - sorry, there's a second question around the 20 - the assumptions of the 2026?

Yes. Thank you. Well, I think from - I'm not in a position to give you a guidance and I think it's too early. We'll have time enough to talk you through this. But when you take all the measures that we put in place cost wise, and also from a capacity for new products and innovation, you will see a good organic growth rate. The underlying market assumptions, if you see from a spread now renovation and infrastructure growing at the pace that we have right now. So let's find at our underlying sort of assumption for this development of 1.2%. And then obviously, the new residential housing market coming back, as I said, not to the levels of turnkey one, but below them. So we said about 80%, 85% of these markets that we have seen in '25 is required to hit this 1.2% target.

Thank you very much.

Thank you.

And the next question comes from Axel Stasse from MS. Please go ahead.

Yes. Good morning, everyone. Thanks for taking my questions. I have a couple of ones. The first one is on the U.K. market. So as you mentioned, some of your peers struggled in the U.K. in the first half year, and they even suggested pricing is stable with some competitive pressure on pricing. Can you just explain how Wienerberger has been able to outperform and actually deliver growth in the U.K.? Just trying to understand how your bone in the U.K. differs versus your peers and making sure you're not getting prices here. That's my first question.

We are not cutting prices in the U.K. Not at all. Not at all, no, no. And I think from our perspective, you need to understand that our U.K. operations consist of bricks on the one hand, we have an exposure to the RMI market with roof tiles also. We are very strong end of performance when it comes to RMI and new build both with roof tiles, concrete and clay. And the third exposure is not only to infrastructure, but also RMI new with our piping activity, which is doing very strong, yes. So I think from our aspect here, the performance of the underlying part is very, very important. And there's one thing, obviously, from a pricing aspect, I think must not underestimate that we obviously bring products in from the continent. As we have explained, these products are always priced a lot higher than the products that are produced locally. Here, we are talking huge price differences about 30%, 40%, up to 50% higher prices. And obviously, due to the high-end market that has eroded also a little bit in the U.K. less products are coming. These are the high-end products. So you have more local production with lower pricing and not that high. So I think from this aspect, pricing one, we are perfectly in line with the others in the U.K.

Okay. Perfect. My second question is about the piping business. Can you just provide an update on profitability levels there. Are you on track with the guidance you provided for '2026 in the pipe/infrastructure end market? And actually, can you remind us the profitability guidance you provided in CMB?

The guidance, I think we gave you a little bit of a EBITDA sort of range.

There was no profitability guidance.

In our sales. Your sales, I think you provided, I think, the sales guidance of €2 billion. I just wanted to check if I missed the profitability guidance?

No. I think we talked about the target to come up to about €2 billion sales in this business. So when you take the U.S. and the Continental European and U.K. operations together, I think I speak under your control, we will end up this year about €1.5 billion or so.

We had some smaller acquisitions. What we mentioned also we mentioned GrainPlastics in the Netherlands. We did some [Ireal], which is also located in the Netherlands. So we are doing some small steps, very localized, and also adding the right product ranges or products to complement basically the range. And this is also the way forward, basically, to move in the direction of the €2 billion. There is a part of the organic growth, which is scalable volumes basically out of some small acquisitions, but also further inventory steps in the years to come.

Okay. Okay, very clear. And then the last question. Thank you. Is about the leverage ratio, which has substantially increased in the first half year. And I guess depending on the volume recovery, we will also see CapEx and working capital change accordingly. So how does this change your approach on M&A, particularly? Do you have a leverage ratio that you still feel comfortable to - can you hear me?

Yes, yes.

No. We lost you for a second.

So I was just asking on M&A, given the leverage ratio, which has increased? Has this changed the way you approach M&A? What is the level of in terms of leverage, where you still comfortable to the M&A. And if so, which are the end markets that you are currently looking at to support your top line growth?

First of all, I think we confirm to you that we feel comfortable with a range of €1.5 billion to €2 billion. So we are approaching this €2 billion, obviously, due to the fact that EBITDA has come down a little bit and we will end the year, as you have seen in our presentation about 2x EBITDA to net debt, we feel comfortable with this level. You see also that we do some smaller mid-sized M&A, and we will continue to do so because these are very good bolt-ons. We are talking about 2 to 4x payback. So here, it's a very lucrative and interesting one and we'll keep ourselves active in this field. Obviously, and you're absolutely right on the bigger scale or big transaction we are not sort of moving here actively in some sort of we are monitoring the market. We're understanding what's happening there, and we are looking carefully. And if we see here some possibility to move, then we will sort of consider it. But for the moment, I think we are fine. We are comfortable with our leverage ratio, and we will keep it in this way.

Okay. Thank you very much.

Thank you.

And the next question comes from Nitesh Agarwal from Citi.

Hi. Thanks a lot for the presentation. I have a couple of questions. First one is on gas consumption in 2024, I think last year, you were at about 6.6 terawatt hour, if I'm not wrong. And considering the mothball plants and production lines, what do you think your consumption will be for this year?

Slightly above 6 terawatts. And it will be below. We have basically less operations. We have less plants in operations. So also the consumption will be less. It will be somewhere between 6.3 terawatts, somewhere there I would expect.

Okay. And keeping that in mind, if you look at your total energy consumption going into second half, and of course, you're buying forward strategy. So would that mean that it will be somewhere more or less at the same level as first half? Or you expect slight lower inflation?

You speak about price, basically cost - the cost development on electricity now the price level, what we have seen in the first half is moving plus/minus through the second half.

Okay. Okay. Got it. And finally, on the price/cost spread, I think as a follow-up to this question only, you have said that this will be more or less again similar to that in first half. Does that mean - can we look at it as lower prices, partly offset by lower costs overall cost inflation?

We assumed a slightly better price cost spread in the second half. We will basically drive back our intentional price reductions. What we did in the first half in Eastern Europe. This will basically slow down. And therefore, we - the price cost spread will improve in the second half.

Okay. Perfect. I have one final question. So basically roof as I see it has been your highest margin product, and you have a few projects for roof tiles under development. But overall, do you see any specific opportunities to increase your market share within this product within - in Europe?

Well, I think we have now, after the Terreal acquisition, a very good market position. And certainly, we'll grow it organically and organically means not only with products for the roof, but also with accessories. We are becoming also a big supplier of accessories that are linked to the roof, on the roof, under the roof. We'll give you a better update in our Capital Markets Day a little later this year. But here is obviously some substantial growth for Wienerberger.

Thank you so much.

Thank you.

So it seems there are no further questions at this time. And so I would now like to turn the conference back over to Therese Kränkl for any closing remarks.

And before we do that, I will say as Heimo Scheuch, I thank everybody for participating, and I wish you all from Gerhard and myself lovely summer, enjoy it and great to see you in the fall and some of you in London later when we do our roadshow, yes. Thank you very much, Therese. So you might sort of close the call.

Thank you, operator, and thank you [Heimo]. Ladies and gentlemen, thank you very much for taking your time and dialing you today. Our next conference call will be held on November 12, 2024, and the release of our results for the first three quarters of 2024. For today, I wish you a pleasant day. Goodbye.