Buzzi Unicem — Earnings Release 2023

Aug 3, 2023

H1 2023 RESULTS

3 August 2023

Pietro Buzzi – CEO

H1 2023 IN BRIEF

Demand has slowed down, impacting Q2 volumes which contracted both in cement (-7.8%) and rmx (-14%).

Selling prices have strengthened further in Q2, with different degrees of intensity.

Net Sales at 2,149.6 €m (+14.3%, +13.9% lfl), driven by the positive price effect. Slightly favorable fx fluctuations (mainly dollar) contributed €m 8.

Significant improvement in EBITDA (+57.6%; +56.3% lfl) at 575.3 €m and EBITDA margin, which improved by 720 bps (from 19.4% to 26.6%) thanks to the positive price-cost spread.

Net Cash Position increased by 124 €m compared to FY 22, reaching 412 €m.

Upgrading of the outlook for the 2023 financial year. Recurring EBITDA now expected to reach € 1,100-1,200 thousand.

H1 2023 HIGHLIGHTS

* Recurring ** Free Cash Flow: FCFO+Dividends from associates-Ord. Capex

CEMENT AND RMX VOLUMES VARIANCE

Cement volumes (mton)

Ready-mix volumes (mm3 )

NET SALES VARIANCE ANALYSIS

EBITDA VARIANCE ANALYSIS

ENERGY COST

Total energy*

* ex. Russia; only cement

Power & Fuel*

UNITED STATES OF AMERICA

• Cement demand slowed down in the first half, mainly due to weaker residential activity, impacted by higher rates and construction costs
• Negative development of cement volumes (-3.6%) in the first half, penalized by unfavorable weather in some areas, general slowdown of the demand, delays in construction activity.
• Pricing momentum has been able to offset the carryover effect in costs, allowing price over cost trend to remain positive. Margins recoverd 2021 level.
• Moderate FX tailwind on Net Sales and EBITDA

ITALY

• Activity in construction sector has been negative during H1. Higher interest rates and gradual attenuation of tax incentives on renovation driven down resindential. Better prospects in Infra, despite delays in NRRP's implementation.
• Stable cement volumes in H1, thanks to positive trend in Q2.
• No relevant changes to selling prices compared to 2022 exit levels. Carryover effect and generally favorable change in energy costs allowed to widen price over cost dynamic.
• EBITDA includes 12 €m of tax credit (vs 13 €m in H1 22)

CENTRAL EUROPE

Higher interest rates and construction costs, as well as labour shortage, held back the activity in the construction sector.

• Negative developement in the demand has driven down cement volumes (-22.5%).
• Sequential price increases both in Germany and Benelux have been able to compensate the negative volumes effect
• Margins improved thanks to solid price-cost dynamic

EASTERN EUROPE

* recurring

• Demand in Czech and Poland contracted, mainly due to slowdown in residential, impacted by persistent high interest rates
• Ukraine rebounded thanks to easier base of comparison but the operating context remains extremely challenge
• Solid pricing development across the region contributed to margins improvement despite significantly higher production costs
• Limited FX tailwind on Net Sales and EBITDA

MEXICO

^* recurring

• Cement and ready-mix volumes grew in H1 respectively by 12.5% and 8.1%, supported by solid construction activity driven by housing and «nearshoring»
• Progressive price increases allowed to keep price over cost trend stable
• Strong margins despite high production costs, recovering 2021 level
• Relevant FX tailwind thanks to strong MX peso

BRAZIL

• Investments have contracted during H1, held back by higher financiang costs and high level of indebtedness
• Cement volumes have contracted slightly (-2.3%): in the north-east area the trend has been positive, while in the south-east sales have been slowed down by heavy rains

• Higher selling prices thanks mainly to carryover effect

• Margins under pressure due to higher production costs, mainly energy and fixed items (maintenance)

• Small contribution from FX on Net Sales and EBITDA

2023 OUTLOOK

Based on most recent forecasts, activity in the construction sector is expected to remain generally weak also during H2, influenced by uncertain development of private investments and higher financing costs.

Stable trend expected in Italy (Infra to support activity) and USA (good order backlog, infrastructure projects ready to start) Weaker demand expected to persist in Central and Eastern Europe, making a volumes recovery very difficult.

Focus on selling prices and on positive price over cost spread will be key.

Production costs at historical highest level across the regions, still characterized by high volatility, but better than initially assumed.

Group recurring EBITDA expected to reach €1,100 – 1,200 thousand.

VOLUMES

Cement

(mt)

Ready-mix concrete(mm3)

PRICE TREND BY COUNTRY

FY 2016=100

FX CHANGES

	H 1 2 0 2 3	H 1 2 0 2 2	∆	2 0 2 2	C t r r e n u
E U R 1 =	a v g	a v g	%	a v g
U S D	1. 0 8	1. 0 9	1. 2	1. 0 5	1. 1 0
R U B	8 3. 6 0	8 1 5. 4	2. 1	3. 8 2 7	1 0 1. 3 5
U A H	3 9. 5 2	3 1. 7 3	-2 4. 5	3 4. 0 2	4 0. 1 3
C Z K	2 3. 6 9	2 6 4. 5	3. 9	2 4. 5 7	2 3. 9 5
P L N	4. 6 2	4. 6 4	0. 2	4. 6 9	4. 4 3
M X N	1 9. 6 5	2 2. 1 7	1 1. 4	2 1. 1 9	1 8. 4 3
B R L	5. 4 8	5. 5 6	1. 3	5. 4 4	5. 2 1

NET SALES BY COUNTRY

	1 2 0 2 3 H	1 2 0 2 2 H	∆	∆	Fo re x	Sc op e	l- f- l ∆
EU Rm			ab s	%	ab s	ab s	%
ly I ta	4 2 4. 1	3 5 7. 9	6 6. 2	1 8. 5 +	-	-	1 8. 5 +
i d Un S te ta te s	8 4 6. 8	7 2 6. 5	1 2 0. 3	1 6. 6 +	9. 8	-	1 5. 2 +
Ge rm an y	1. 3 4 4	3 9 2. 9	8. 4 5	1 2. 3 +	-	-	1 2. 3 +
he lan ds Lu / Ne t r x	1 1 5. 8	1 1 6. 4	( 0. 6 )	-0 5	-	-	-0 5
Cz h S lov k ia Re / ec p a	1 0 2. 8	9 6. 7	6. 1	6. 4 +	3. 6	-	2. 6 +
lan d Po	7 6. 6	6 8. 4	8. 2	1 1. 9 +	0. 2	-	1 1. 7 +
kr ine U a	3 5. 1	2 8. 3	6. 8	2 3. 9 +	( 8. 6 )	-	5 4. 3 +
Ru ia ss	1 4 2. 8	1 1 4. 3	2 8. 5	2 5. 0 +	3. 0	-	2 2. 3 +
Elim ina tio ns	35 .6) (	21 ( .4)	14. 2) (
l To ta	2, 1 9. 6 4	1, 8 8 0. 0	2 6 9. 7	1 3 4. +	8. 1	-	1 3. 9 +
M ico ( 1 0 0 % ) ex	5 0 0. 2	3 5 3. 1	1 4 7. 2	4 1. 7 +	5 6. 9	-	2 5. 6 +
l Br i ( 1 0 0 % ) az	1 8 9. 7	1 7 9. 6	1 0. 2	5. 7 +	2. 5	-	4. 2 +

EBITDA BY COUNTRY

	H 1 2 0 2 3	H 1 2 0 2 2	∆	∆	Fo re x	Sc op e	f- ∆ l- l
E U Rm			bs a	%	bs a	bs a	%
ly I ta	9 8. 5	3 6 5.	6 2. 9	n.s	-	-	n.s
i d Un S te ta te s	2 5 6. 9	1 8 0. 6	7 6. 3	4 2. 3 +	3. 0	-	4 0. 6 +
Ge rm an y	1 0 0. 1	6 4. 5	3 6 5.	2 5 5. +	-	-	2 5 5. +
he lan ds Lu / Ne t x r	1 2. 6	8 4.	8 7.	n.s	-	-	n.s
h lov k ia Cz Re / S ec p a	3 3. 6	2 9. 4	4. 3	1 4. 6 +	1. 3	-	1 0. 2 +
Po lan d	2 2. 7	1 7. 6	5. 1	2 8. 8 +	0. 1	-	2 8. 5 +
U kr ine a	2. 3	-3 5	5. 8	n.s	( 0. 6 )	-	n.s
ia Ru ss	4 8. 4	3 6. 0	1 2. 4	3 4. 6 +	1. 0	-	3 1. 7 +
Adj	0.0	0.1
l To ta	3 5 7 5.	3 6 1 5.	2 1 0. 2	6 5 7. +	8 4.	-	6. 3 5 +
ico M ( 1 0 0 % ) ex	2 2 7. 3	1 4 9. 5	7 7. 7	5 2. 0 +	2 5. 8	-	3 4. 7 +
Br i l ( 1 0 0 % ) az	3 8. 3	4 6. 6	( 8. 3 )	-1 7. 8	0. 5	-	-1 8. 9

CONSOLIDATED INCOME STATEMENT

	H 1 2 0 2 3	H 1 2 0 2 2	∆	∆
E U Rm			bs a	%
le Ne Sa t s	2, 1 4 9. 6	1, 8 8 0. 0	2 6 9. 7	1 4. 3 +
E B I T D A	5 7 5. 3	3 6 5. 1	2 1 0. 2	5 7. 6 +
f w h ic h, ing o no n r ecu rr	( 3. 6 )	-
f les ing % (re ) o sa cu rr	2 6. 6 %	1 9. 4 %
ia io d iza io De t t t p re c n a n am or n	1 2 8. 1 ( )	2 6. 9 ( 4 )	1 1 8. 8
in f i Op Pr ( E B I T ) t t er a g o	4 4 7. 1	1 1 8. 1	3 2 9. 0	n. s.
f % les o sa	2 0. 8 %	6. 3 %
i ing Eq ty u ea rn s	8 0. 8	5 7. 7	2 3. 1
f Ne ina t ts nc e c os	2 4. 9	( 5 6. 0 )	8 0. 9
f i be fo Pr t ta o re x	5 5 2. 9	1 1 9. 8	4 3 3. 0	n. s.
Inc ta om e x e xp en se	( 1 2 1. 7 )	( 3 1. 2 )	( 9 0. 5 )
f i Ne t p t ro	3 1. 2 4	8 8. 7	3 2. 4 5	n. s.
ino i ies M t r	( 0. 1 )	( 0. 0 )	( 0. 1 )
f Co l i da d i te t p t ns o ne ro	3 1. 1 4	8 8. 6	3 2. 4 4	n. s.

CONSOLIDATED CASH FLOW

E U Rm	H 1 2 0 2 3	H 1 2 0 2 2
Ca h g d fro io te t s en er a m op er a ns	3 8 8. 0	1 6 8. 0
% f les o sa	1 8. 0 %	8. 9 %
i d In te t p res a	( 2 0. 0 )	( 1 5. 7 )
i d Inc tax om e p a	( 6 3. 3 )	( 4 7. 0 )
fro Ne h ing iv i ies t c t t t as m op er a ac	3 0 4. 7	1 0 5. 4
f les % o sa	1 4. 2 %	5. 6 %
Ca i l e d i ta tu p xp en res	1 ( 4 4. 7 )	1 2 6. 3 ( )
i inv Eq ty tm ts es en u	3. ( 7 )	2. 3 ( )
ha f ha Pu tre rc se o as ury s res	-	( 1 2 3. 2 )
D iv i de ds i d n p a	( 8 1. 1 )	( 7 1. 9 )
de ds d fro D iv i ive ia te n re ce m as so c s	4 0. 8	2 7. 9
isp l o f f ixe d a d inv D ts tm ts os a sse an es en	8. 1	6. 0
la ion d i f fe d de iva ive Tr t t an s ren ce s a n r s	1 2 ( 5. )	3. 5 5
d in b le Ac te t p cru e res ay a	9. 8	3. 0
ive d In te t r res ec e	1 7. 6	6. 6
kra h r las f U ine i ica ion t ca s ec s	( 1 0. 7 )	-
ha f c l da d o he C in i ion t t ng e sco p e o on so a n r	( 1. 8 )	( 0. 1 )
C ha in de b t t ng e ne	1 2 3. 8	1 2 1. 3 ( )
f f p Ne ina ia l p i io ( d io d ) t t nc os n en o er	4 1 2. 0	1 1 4. 2

NET FINANCIAL POSITION

	Ju 2 3 n	De 2 2 c	∆	Ju 2 2 n
E U Rm			bs a
h d he f ina ia l a Ca t ts s an o r nc ss e	9 5 1. 4	1, 3 4 9. 7	( 3 9 8. 3 )	1, 0 6 2. 3
ho de b S t- te t r rm	1 ( 6 5. 9 )	1. ( 6 2 9 )	4 5 6. 0	1. ( 6 2 6 )
ho lea S ing t- te r rm s	( 2 0. 7 )	( 2 0. 3 )	( 0. 5 )	( 2 3. 6 )
ho h Ne t s t- te rm ca s r	7 6 4. 7	7 0 7. 5	5 7. 2	4 1 7. 1
f ina ia l a Lo -te ts ng rm nc ss e	2 6 9. 3	2 9. 8 4	1 9. 5	2 6 3 7.
de b Lo -te t ng rm	8. 1 ( 5 5 )	6 1 1. 0 ( )	3. 0 5	1 2. 0 ( 5 )
lea ing Lo -te ng rm s	( 6 4. 0 )	( 5 8. 1 )	( 5. 9 )	( 5 8. 2 )
f Ne in ia l p i io t t an c os n	4 1 2. 0	2 8 8. 2	1 2 3. 8	1 1 4. 2
	de b Gr t os s	br k do ( 8 0 8, 7 €m ) ea wn

H1 2023 RESULTS

3 August 2023

Pietro Buzzi – CEO