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Titan Cement International SA (TITC) reported its fourth-quarter 2024 earnings on March 27, 2025, revealing a mixed financial performance. The company’s earnings per share (EPS) came in at $0.92, missing analyst expectations. Revenue also fell short of forecasts, coming in at $659.5 million against the anticipated $677 million. Despite the miss, Titan Cement’s stock rose 4.4%, closing at $43.85, reflecting investor optimism following strategic initiatives and positive future guidance. According to InvestingPro analysis, the company appears undervalued based on its Fair Value calculations, with a "GREAT" overall financial health score of 3.66 out of 5.
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Key Takeaways
- Titan Cement’s EPS and revenue missed analyst expectations for Q4 2024.
- The company’s stock rose 4.4% post-earnings, signaling positive investor sentiment.
- Strategic initiatives include a focus on low-carbon products and digital transformation.
- Titan Cement maintains a strong competitive position in key markets.
- Positive outlook for 2025 with expected sales volume growth and margin expansion.
Company Performance
Titan Cement reported a 3.8% increase in group sales to €2.64 billion, while achieving a record EBITDA of €592 million, up 9.6% on a like-for-like basis. The net profit after taxes saw a significant increase of 17.3%. The company’s EBITDA margin expanded by 120 basis points to 22.4%, indicating improved operational efficiency. Titan Cement also reduced its net debt to €622 million, lowering its leverage ratio to 1.021 times EBITDA. The company trades at an attractive P/E ratio of 8.28 and has demonstrated strong dividend growth of 41.67% over the last twelve months.
Financial Highlights
- Revenue: €2.64 billion, up 3.8% year-over-year
- EBITDA: €592 million, up 9.6% like-for-like
- Net profit after taxes: increased 17.3%
- EBITDA margin: expanded to 22.4%
- Net debt: reduced to €622 million
Earnings vs. Forecast
Titan Cement’s Q4 2024 EPS of $0.92 fell short of analyst forecasts, while revenue of $659.5 million also missed the expected $677 million. This represents a revenue miss of approximately 2.6%. Despite these misses, the company’s positive strategic initiatives and future outlook contributed to a favorable market reaction.
Market Reaction
Following the earnings release, Titan Cement’s stock experienced a 4.4% increase, closing at $43.85. This price movement reflects investor confidence in the company’s strategic direction and future growth prospects, despite the earnings miss. The stock’s performance has been exceptional, delivering a remarkable 63.06% return over the past year and trading near its 52-week high of $49.98. InvestingPro subscribers gain access to real-time valuations and comprehensive financial metrics that help identify such market opportunities.
Outlook & Guidance
Titan Cement has a positive outlook for 2025, anticipating sales volume growth and top-line expansion. The company plans to exceed $300 million in capital expenditures for the year, focusing on strategic projects, including digital transformation and low-carbon product development. Titan Cement also expects continued margin improvements. The company’s strong financial position is further validated by its impressive Piotroski Score of 8, indicating robust financial strength and operational efficiency.
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Executive Commentary
Marcel Cobus, Chairman, stated, "Record results for Titan in 2024 marked by top line growth, over proportional EBITDA." He further emphasized the company’s commitment to margin expansion and continued investment. CFO Michael Colacuelis added, "Our performance stands out consistently above most or all of our peers."
Risks and Challenges
- Economic slowdown in key markets could impact demand.
- Fluctuations in raw material prices may affect profitability.
- Regulatory changes, particularly in environmental standards, could pose challenges.
- Increased competition in the cement industry may pressure margins.
- Supply chain disruptions could hinder operational efficiency.
Q&A
During the earnings call, analysts inquired about the U.S. market’s growth prospects, the implementation of the Carbon Border Adjustment Mechanism, and export strategies following the divestment of Turkish assets. Additionally, the progress of the carbon capture project was discussed, highlighting Titan Cement’s commitment to sustainability initiatives.
Full transcript - Titan Cement International SA (TITC) Q4 2024:
Gaili, Conference Call Operator, Chorus Call: Ladies and gentlemen, thank you for standing by.
I am Gaili, your Chorus Call operator. Welcome and thank you for joining the Titan Cement Group Conference Call and Live Webcast to Present and Discuss the Full Year 2024 Results. Please note, this call and presentation is intended for analysts and investors only. All participants will be in listen only mode and the conference is being recorded. The presentation will be followed by a question and answer At this time, I would like to turn the conference over to Mr.
Marcel Cobus, Chairman of the Group Executive Committee and Mr. Michael Colacuelis Group CFO. Mr. Cobus, you may now proceed.
Marcel Cobus, Chairman of Group Executive Committee, Titan Cement Group: Thank you. Thank you and hello everyone. We have a large number of participants today both in the conference call as well on the webcast. Thank you for your interest. Very happy to be here and speak about results on a very good 2024 performance as well as share some highlights on our strategy 2026 execution.
So maybe three introductory remarks before I pass the floor to Michael. The first one is that we are announcing today record results for Titan in 2024 marked by top line growth, over proportional EBITDA plus 9.6% in a year where we outperformed the markets despite some adverse weather impact in the last quarter. We also have achieved margin expansion. At the same time, it’s a year where we continued investing at a high pace. And Michael will give you more details on supply chain capacity investments and logistics optimization, use of alternative fuels, which proved to be highly accretive in terms of value creation, but also our progress in digitalization and innovation preparing the future.
The second introductory message is on our strategy execution, which picked up an accelerated pace in 2024 and we are on track to reach targets of 2026 in advance. And on this one, at least two points to retain. One is active portfolio management as well as strengthening our assets and positions. We have conducted, completed four bolt ons acquisitions, particularly in the aggregates. We have added 100,000,000 tons to the results in aggregates.
We have entered joint ventures in India and Europe on supplementary cementitious materials. And we have announced at the beginning of the year also the divestment of our Eastern Turkey assets and concentrating on the Western part. But of course, a milestone for us, strategic milestone was the completion of the IPO and New York Stock Exchange listing of our U. S. Subsidiary, which is meant to unlock even more value.
The second is on the progress on time to market of new products as well as profitable decarbonization moves. Here, you will see that we have achieved a record level in alternative fuels. We have progress on cement issues strategy. We have achieved again continuous improvement in the CO2 footprint. And as per our press release, we have also announced that our carbon capture and storage project, which is there to mitigate a large part of our scope one, is well on track as we move to the next phase of pre feasibility.
The third message is creating value for shareholders. Michael will go into details, but we have the Board in its meeting yesterday is proposing to the shareholders approval in May a special ad hoc increase in dividends by per share in addition to the regular one, which moves to per share compared to in the past year. So strong momentum at Titan across all operations and markets while we are pursuing initiatives to grow, expand margin and commercial excellence. So pass the floor now to Michael for more granular views on the financials and key highlights before speaking about the
Michael Colacuelis, Group CFO, Titan Cement Group: outlook and then taking your questions. Michael? Thank you, Marcel. Good morning, good afternoon to everybody from me as well. Following on what has been covered by Marcel, I’m very happy to walk you through the financial results of 2024, which present another year, the fourth year sequence of record financial performance.
Group sales were up 3.8%, closing at EUR2.64 billion, recorded again the fourth consecutive year of top line growth, driven by increased volumes across all product lines and sustained pricing. All our regions posted sales growth with The U. S. And Europe at the forefront contributing more than 90% of group sales. Group EBITDA reached a record $592,000,000 like for like, up by 9.6% with gains from operational efficiencies in energy cost management and digitalization coupled with lower solid fuel costs and higher use of alternative fuels, leading to the expansion of the EBITDA margin by 120 basis points to 22.4% like for like.
Net profit after taxes in minorities increased by 17.3% at million, and earnings per share reached per share compared to per share last year, both on a like for like basis. At this point, let me clarify that the commentary in this presentation, which is done on like for like adjusted basis, it refers to EBITDA, which is adjusted for million of non recurring one off costs related to the preparation of The U. S. IPO and the small early retirement program in Greece and that the commentary on net profit and earnings per share is additionally adjusted for the million adjustment for goodwill impairment charge in Turkey. I would be referring to the adjusted figures in my commentary as it depicts better the evolution of the core business and compare apples to apples versus last year.
Both adjusted and reported figures can be found on the slides and in the press release issued earlier today. Thanks to solid cash generation and the reduction of net debt by million to million, the group’s leverage ratio dropped further to 1.021 tannins EBITDA. Within the year, the transcript rating was upgraded to double B plus with stable outlook by S and P, reaching the same rating that has been given to us since last year by Fitch. In terms of CapEx, in 2024, we have invested million, marking a fifteen year high with prioritization given to growth projects across the supply chain, digitalization, decarbonization and innovation. Committed to our large scale carbon capture project Iphistos at the plant near Athens, we have signed a front end engineering design contract in the second half of twenty twenty four.
And an important point to repeat. Thanks to the high profitability achieved by the group and coupled with the liquidity raised through the successful IPO of Titan America and our low leverage, the Board of Directors is proposing to the Annual General Assembly of Shareholders that will take place on May 8, a special ad hoc increase of the annual dividend by per share to a total dividend of per share. Both will be paid on the July 3 this year. Now turning to the next slide. With regards to our operational achievements in 2024, we developed new digital solutions and further accelerated the existing real time optimizers, leading to increased production and energy consumption savings, while we remain on track to digitalize 100% of our plants by 2026.
The decarbonization front, we recorded a significant reduction of CO2 emissions, an 11% decrease since 2020, while for the fourth consecutive quarter year, Titan was awarded leadership status by CDP on climate change as well as more recognitions by Financial Times and the Time magazine. The execution of our strategy in 2026 has been accelerated, and we remain on track to reach the target set in advance with bolt on investments in The U. S. And Greece and expansion of our supplementary cementitious material sources by forming new joint ventures. In addition to these, our corporate venture capital fund proceeded with investments in four new material startups within 2024.
Two significant post balance sheet events occurred within February with the group completing the major strategic move with Titan Americas IPO and listing on new ex Topic Change, raising gross proceeds of $393,000,000 Furthermore, within the same month, Itan Group entered an agreement to divest its 75% share in Adoce in East Turkey. For 2025, we hold a positive outlook. You will hear the closing remarks by Maceo, thanks to our attractive positions in both The U. S. And Europe, anticipating growth in sales and profitability through volume growth and resilient pricing, while controlling cost increases in production and distribution.
Now turning to the next slide. On top, you can see the graph for the full year figures, which I just commented on, exhibiting that 2024 marked a record year for the group, exceeding the results achieved in 2023 across sales, EBITDA and net profit. And EBITDA also grew EBITDA margin also grew by 120 basis points on a like for like basis. Looking at the charts at the bottom of the slide with regards to the fourth quarter, which is a seasonally lower quarter for the industry, sales did grow by 1% year over year, reaching EUR $660,000,000 despite the poor weather in The U. S, but supported by firm pricing and robust volumes at group level with significant volume increases deriving from downstream products.
EBITDA recorded a small drop of 4% to EUR138 million as persistently adverse weather temporarily delayed projects in The U. S. Just a couple of words on the following slide, taking a look at it to see the continuous growth since 2020 across our main financial KPIs and the much higher levels of profitability that we’re now operating on. Moving to the P and L slide where there is more detail, we show how sales growth outpaced the increase of cost of goods sold, increasing margins. Lower fuel costs contributed to this improvement, benefiting from energy savings, higher use of alternative fuels as well as lower fuel nominal costs.
The increase in SG and A includes the million one off, while in the fourth quarter we capitalized some of the costs related to The U. S. IPO. Finance costs declined while taxes increased due to higher profitability. Net profit after tax increased by 17% resulting to the adjusted earnings per share of In the next slide, we invite you to compare the our performance to peers in both Europe and The U.
S. In terms of annual growth in sales as well as in EBITDA. As you will very likely notice, and this happens now for the third year in a row, our performance stands out consistently above most or all of our peers. Itan continues to demonstrate top tier performance within the industry. This consistent success highlights our ability to not only navigate volatile market conditions, but also to deliver robust results.
Taking a look at our volumes. Significant growth was achieved at group level in 2024 across all product categories on the back of solid demand and despite the adverse weather in The U. S. And the decline of the construction activity in Western Europe. The group’s domestic cement sales increased by 2% to 17,800,000 tonnes.
All group’s exports were directed to the trans terminals, mainly to Titan America in The U. S. With lower exports directed to European terminals in France, U. K. And Italy, reflecting the slowdown in construction activity in Western Europe.
Export to third parties from Egypt picked up significantly. Ready mix volumes exhibited good momentum for another year with increased demand from both The U. S. And Greece growing by six percent and reaching 6,300,000 cubic meters. Lastly, public goods grew by a significant 10% to 21,900,000 tonnes, driven by substantial demand for its infrastructure increase.
Now moving to our cash flow. As you can see from the blue arrow at the center of the slide, the robust EBITDA performance of million and the focus on tight operating working capital resulted in a strong operating free cash flow of €299,000,000 despite being a year of record CapEx. Notwithstanding increased taxes and higher returns to shareholders, net debt was reduced by million. Moving on to CapEx. Twenty twenty five was a record year of investments, just over million in pursuit of the group’s ambitious growth and transformation strategy.
Most of the funds were diverted to The U. S, with in total more than $500,000,000 invested in The U. S. Over the last four years. Extensive capital allocation aiming at the optimization of our supply chain continued in 2024, including the establishment of new ready mix units and the modernization and expansion of our ready mix fleet in The U.
S. And in Greece and The installation of ready mix units in strategic locations in Greece. We have accelerated the execution of the 2026 strategy, targeting improved logistics capabilities and completing bolt ons in The U. S. And Greece, including four new aggregates quarries and one new clay quarry, securing supplementary cementitious materials reserves, while a new joint venture has recently been formed in India.
The bolt ons complement our 2023 investments in supplementary cementitious materials of Aegean Pearlites on the Creek Island Of Yalit and the Vezirhan Pozolana quarry in East Marmara in Turkey. Turning the page and looking at our debt and liquidity picture. The group’s leverage declined as of last December with net debt standing at EUR $622,000,000, a reduction of the leverage to marginally over 1x EBITDA. Taking into account the funds raised from the IPO of Titan America and the announced payout of the EUR 3 per share dividend in the summer of twenty twenty five, we expect the group’s net debt to drop below 500,000,000 and subsequently the leverage ratio to drop well below one, hence further strengthening our balance sheet and allowing ample firepower for further growth opportunities. At the end of twenty twenty four, ’50 percent of group debt was in bonds, 35% in bank loans and 11% in lease liabilities, while no significant maturities are expected are scheduled for the next couple of years.
Now turning to Slide with a regional performance and before moving to each region individually, it is worth noting that sales growth was recorded across all the regions as you can see on the left pie chart. While in terms of EBITDA, which is the pie on the right, U. S. And Europe drove EBITDA growth and contribute 96% of the total, while EastMed contributes only a small percentage at this point. Starting with The U.
S, a review of our biggest market where Titan America, a by now listed company on New York Stock Exchange as of February 7, has delivered another year of record sales and EBITDA profitability. Titan America sales increased by 3%, reaching $1,640,000,000 while EBITDA reached $368,000,000 up by 15% compared to $319,000,000 in ’twenty three, adjusting for $9,000,000.01, of course, related to The U. S. IPO preparations. The fourth quarter was more challenging due to adverse weather conditions that hit the Eastern Seaboard, including severe hurricanes, heavy rainfall and even snow.
Despite the negative impact of weather induced work disruptions and project delays, our sales manager too outperform the market. Our vertically integrated business model allowed us to reliably supply our customers with high quality products with the use of our extensive high capacity logistics network. As a result, the year saw increased sales in the downstream market with an expansion in ready mix, blocks and flyer sales. Pricing momentum remains strong with the pricing contribution and the lower fuel energy costs more than offsetting increased maintenance and labor costs, eventually improving EBITDA margins. EBITDA margins also benefited from operational efficiencies, investments in digitalization and automation and hence lower production costs.
Water effects notwithstanding, underlying market trends remain solid with materials consumption being driven by projects continuing to roll out under the Infrastructure Investment and Jobs Act and nonresidential private projects. The industrial sector continued to benefit from large investments in our states as manufacturing and onshoring investments and more data warehouses progressed at an accelerated pace. Residential demand weakened in the second half of the year, especially in Q4, as the interest rates reduction expectation remained unfulfilled. In 2024, we forged ahead on further strengthening our U. S.
Operations by progressing on several projects. We finalized acquisition of aggregates and supplementary cementitious material quarries in Virginia, which expanded our reserves and increased our capacity and strengthened our ready mix business by growing our distribution fleet and by adding new production units. The group completed the IPO of Titan America in February, raised a total amount of $393,000,000 As of today, Titan Group, Didachemen International, owns 86.7 percent of the total outstanding common shares of Titan America. Moving now to Greece, where sales for Greece and Western Europe in 2024 increased by 9% to million. Performance in Greece was reflected in another very strong year with cement sales volume growing in double digits.
Great domestic growth dynamics have also flowed downstream, translating into a multiplier effect in the consumption of aggregates, ready mix and motors, which also increased double digit and contributed positively to margins. Domestic cement pricing held firm during the year with price increases realized in the downstream segments. Growth was balanced across all main construction segments and maintained strong momentum throughout the year. The residential segment continued to drive demand together with the private nonresidential segment with investments across various types of commercial and industrial projects. After another record year for Greek tourists, preparations are in full swing for the upcoming season and construction activities are ongoing across the Greek islands.
Within Q4, major infrastructure projects picked up picked up pace across Mainland Greece such as the Thessaloniki flyover, the established Niarchos Foundation Hospital in Thessaloniki and the Panthers Pirros Highway in the Peloponnese. EBITDA is EUR 58,200,000.0 compared to million last year, the reduction coming primarily due to the lower export prices in line with international cement export prices dropping to the heights of 2023. Investments in Greece continue with an agreement to acquire an aggregate quarry already finalized and other opportunities in this area being in process and a couple of projects very close to completion. Thermal substitution rates increased to 39% from 32% in 2023, thanks to the operation of the precut sider at the Kamari plant. Continuing its efforts, our subsidiary Interpeton introduced a new range of ready mix concrete products, Veltel, which offers superior durability while reducing carbon emissions by up to 30% compared to the standard products currently available in Greece.
The group has been installing more silos across the plants to support the growing use of wider range, including lower clinker products and enhance the efficiency of its logistics network. On top, we have installed additional ready mix units in strategic commercial locations in Greece and increased the use of alternative fuels and cementitious materials. Now I turn to Southeast Europe, where sales increased by 2.3% to EUR $432,000,000, while EBITDA grew by 15%, closing the year at million compared to million the year before. Following a slowdown in the third quarter of twenty twenty four, the Southeast Europe region regained a momentum in the last quarter of the year and closed with improved sales and profitability, while full year volumes remained stable at high levels amidst mix performance across countries and different market segments. Given diverse market trends, the combination of overall price resilience, the drop in energy costs as well as the efficiency gains obtained by the group’s recent investments in renewable energy sources and alternative fuels improved the group’s cost structure and led to increased margins.
New lower carbon cements have also been launched, while key initiative is on course to further expand the green products authority, eventually leading to further drop in the clinker to cement ratio. The region of Istmet, next, recorded full year sales of €250,000,000 up by 4.4%, thanks to increased domestic volumes in both Egypt and Turkey, coupled with much higher exports from Egypt. EBITDA reached EUR 25,700,000.0 with profitability having been hit by the devaluation in both currencies, while the price increases in local currencies were not sufficient to offset this effect. In Egypt, domestic cement consumption remained stable as the production quarter regime remained in place. Our operations in Egypt recorded a good performance, while our exports have increased significantly the year, exceeding the 1,000,000 tonnes mark.
In Turkey, where domestic cement consumption grew for another year and group sales followed the market growth. In the absence of public works, the largest portion of cement consumption in the country continued to be drawn by the earthquake rebuilding activities. Our exports from Turkey to The U. S. Have decreased, accounting for the decline in the region’s profitability.
The group continued to develop sales out of its recently acquired Posolana Quarry in addition to the quantities consumed internally while introducing blended cements with lower carbon footprints. And as we announced as we commented before, in February, we announced a sale of 75% stated hydrogen against cash proceeds of $87,500,000 Finally, a couple of words on Brazil, where as a reminder, the consolidated figures are on an equity basis. Domestic cement consumption increased by 4.2%, thanks to the expansion of the real estate market from the second quarter onwards and to the resumption of construction work among others under the extensive affordable housing program. In the Northeast, the region where our joint venture operates, a 7.5% volume increase was recorded. ARPUD’s sale reached EUR115 million, mainly due to pricing pressures owing to intense market competition.
It’s well mentioning that with sales volumes bolstering in the second half of the year, Aperdio recorded in October the highest monthly sales volumes in its history. EBITDA is EUR29.5 million compared to EUR24.4 million, so 20% up year on year, driven by cost efficiencies, including energy and decarbonization cost reduction initiatives. Now some words on our digital transformation and decarbonization. In 2024, Itan accelerated the pace of rolling out AI based real time optimizer solutions for its cement manufacturing lines as per the group’s target to digitize 100% of its cement manufacturing by the end of next year. Currently, RTOs are installed across plants in our regions, while new ones are also being developed.
These RTOs sourced from both external partners and developed in house allow for increased output and reduced energy consumption. Since 2023, Itan has also completed the installation of its machine learning based failure prediction system in all cement plants of the group, increasing reliability and reducing the cost of unplanned maintenance. Additionally, within 2024, Titan operated the new AI based digital solution for cement quality prediction that had been piloted in The U. S. In 2023, generating a fast payback with a solution expected to be rolled out to more clients in 2025.
Semine, the spin off digital company established by Gitan in 2022, offering machine learning based failure prediction as a service to other cement manufacturers, continuing to grow its customer base in 2024, while also expanding its portfolio of AI and machine learning offerings by providing a new process optimization solution, semi process optimizer. In the integrated supply chain domain, building on its expertise in forecasting sales demand, distribution network optimization and cement spare parts inventory optimization, Itan continued the development of its AI enabled dynamic logistics solution for its concrete operations while completing the rollout of the solution to all its ready mix operations in The United States, improving the efficiency of the supply chain and of the customer experience. As part of Titan’s target to digitize its concrete logistics by 2026, Titan invests in telematics solutions for its truck fleet in The U. S. And Europe.
And in the customer experience domain, Titan is working on improving customer experience. And by the end of twenty twenty four, Titan had developed digital customer applications in more than 60% of its business units, mainly in The U. S. And Europe, with a target to reach 100% to be covered by the end of twenty twenty six. Addressing climate change remains a top priority for the group, and we are on track to meet our 2026 and 02/1930 targets.
In 2024, we reduced our specific SPOC1 net emissions to below 600 kilos per tonne of cementitious product, breaking this threshold for the first time in the group’s history, achieving an 11% reduction since 2020. In more detail, in 2024, the group progressed with its decarbonization pathway across multiple areas. We have reached a record high use of alternative fuels of 21.3% and a historically low clinker content in our cement products of 76.6%. We have also launched a partnership with EcoCEM to further develop our technology in low carbon cement products. Currently, the lower carbon products and solutions offered to customers represent 29.8% of our total cement production.
Following a $62,000,000 grant from the U. S. Department of Energy, Gitan is developing a calcite clay production line in the Roanoke plant in Virginia, while continuing to mature its carbon capture project, Ithasplos, at the flagship Kamari plant, benefiting from a grant of two thirty four million euros from the Innovation Fund, among others, by signing a front end engineering design contract. Itar was awarded the leadership status of climate change by CDP for the fourth consecutive year. While we were recognized among Europe’s climate leaders by the Financial Times for our leadership on climate related risk and decarbonization efforts and by Time Magazine named us as one of the world’s most sustainable companies.
And finally, a comment on our innovation efforts. In 2024, we advanced our venture capital initiative launched in 2023 with a strategic plan to invest EUR 40,000,000 over a three year period. We intensified our efforts, broadened our portfolio and made three additional investments in innovative funds: C2CA, Concrete AI and Optimative. Additionally, we participated in fifth wall’s React Fund, a prominent U. S.-based venture capital firm specializing in real estate technology.
These partnerships underscore our commitment to supporting pioneering technologies and start ups that enhance industry competitiveness. Our collaborations are designed to expose us to disruptive technologies that support our growth strategy. Aligning with our objective to integrate Evinobate products, services and materials while accelerating our sustainability and utilization initiatives. This covers my broad description of the highlights of our activities in 2024. And I will now turn you to Marcel for some words on the outlook we have for the year.
Marcel Cobus, Chairman of Group Executive Committee, Titan Cement Group: Yes. Thank you, Michael. And I think
Michael Colacuelis, Group CFO, Titan Cement Group: it was
Marcel Cobus, Chairman of Group Executive Committee, Titan Cement Group: important, in addition to the financials to spend a little bit of time on our other fronts of digitalization, decarbonization and overall improvement on commercial excellence. The you have seen what we have published in the press release. Of course, the year started with increased volatility on the geopolitical and geoeconomical context. More specifically on the markets, the year started with some extreme weather as we are well into quarter one. However, looking at the backlogs and our commercial performance, we maintained positive outlook for the year with sales volumes growth, top line expansion and increased margin.
And this is supported by our efforts of commercial performance as well as cost performance. More specifically, in The U. S. And for those who listened yesterday to our results of Titan America, we consider that the key growth drivers for the year will continue to be federal and infrastructure spending and manufacturing on shoring as well as non residential, while affordability of housing is increasing. We’re expecting moderating in flight inflation and adjustments to monetary policy at a later time in the year.
Our exposure to high growth regions in U. S. Is a proxy for further growth in the year. The Greece economy, same pace of transformation as Michael mentioned, starting from all the engines, both on infrastructure, private consumption, real estate and hotels industry, so high volumes growth expected and strong pricing. And that’s somehow similar for as we hold a positive outlook for Southeast Region where we see increased public and private investments, which articulates in solid infrastructure, nonresidential as well as residential based on foreign remittances.
Egypt, we invest in silo capacity to boost the competitiveness of our exports while we also witness increased public spending this year. So we’ll continue on holding this positive outlook. At the same time, this is an year where we enter the year with a strong balance sheet that allows for moves to create short and long term value, but also allocating capital to growth CapEx, which as we have proven in the past, it was well invested and produced results. As we speak, we are also working on our strategy going forward. And I have already announced that we are well on track to deliver in advance our strategy 2026.
So we are working on our strategic directions for 2029, both in terms of capital allocation, but also strengthening the profile of Titan as a regionally vertically integrated materials supplier. So at a later stage in the year, we may share these strategic directions with you as part of an Investor Day. Thank you for listening to us. So I think Spiroz, we are opening for question and answers.
Gaili, Conference Call Operator, Chorus Call: You. The first question is from the line of Ravi Efrem with Citibank. Please go ahead.
Ravi Efrem, Analyst, Citibank: Hi, thank you. I have three questions. Firstly, can you talk about how you will service U. S. Imports after the sale of the Eastern Turkish plant?
I assume the Samsung terminal also goes with the asset. My understanding was that the supply from Greece was less attractive as you have to take on the carbon costs there. So are there any alternatives for that? That’s my first question.
Marcel Cobus, Chairman of Group Executive Committee, Titan Cement Group: Yes. Ravi, maybe you give us all three questions, please.
Ravi Efrem, Analyst, Citibank: Okay. The second question, I first told I understand that again the front end engineering and design has started. Can you give us a guidance to when the actual construction will start? And then how would the disbursement of the $230,000,000 from the EU work? Will you get a cash in advance or would you have to spend first and get reimbursed from the EU?
That’s the second question. And thirdly, on your supplementary cementitious materials JV with GC in India, what does Titan get as a result of the JV? Would it would all the sourcing and sale of fly ash and blast furnace lag of J. C. Internationally happen through the JV or is it more of a purchase agreement?
Those are the three questions.
Marcel Cobus, Chairman of Group Executive Committee, Titan Cement Group: Thank you, Ravi. I’ll start, Michael. These are spot on questions. Yes. So the Eastern Turkish plant is being divested.
We are still in the process of obtaining the regulatory and customary approvals as we keep increasing our focus on the Western Part of Turkey. We continue supplying on arm’s length the Titan America needs and generally The U. S. Market, which is a short market in terms of cement from the Greek plants, which are today competitive in the market. As we look at the introduction of the Carbon Border Adjustment Mechanism, this year is a trial year.
The next as of next year, we will continue using this export outlet, but at the same time, we maintain the flexibility. Being a trading house since 1960s, we are well in the market to build optionality.
Michael Colacuelis, Group CFO, Titan Cement Group: We also have an option with the new buyers of the other treatment plant. We have an option for purchase of course for the next two years.
Marcel Cobus, Chairman of Group Executive Committee, Titan Cement Group: On the carbon capture and storage, we are in this pre feasibility stage. We have a go no go or final investment decision planned for early twenty twenty six. By then, all starts need to be aligned, both in terms of technical readiness of technology, normative and regulatory environment including contracts for difference as well as the value chain build up with liquefaction, transportation of CO2 and storage. This is a project which practically is pre financed, revi, half of it’s close to 60% from a subsidy, a grant which is given by European Commission in Brussels part of Innovation Fund. And practically, we are holding an element which is off balance sheet which is the unsold CO2 rights accumulated over the past years which can be activated at any time.
To your specific question where the payments will be under disbursements, I think this will be roughly 2026, ’20 ’20 ’7 with the large part of disbursements at the end of the period. On the supplementary cementitious material, we are very excited about this. Not only the 130,000,000 tons of Pozoland that through joint ventures and outsourcing we have secured in a joint venture here in Greece as well as in Turkey, but also the increased exposure to calcined clay. And we have a project in U. S.
We have announced last year in Roanoke. We have long term supply agreements with Indonesia and now this joint venture in India, which will start with volumes around 500,000 tons of fly ash and investments which are ongoing boosting that capacity to 2,000,000 tons, which again is strengthening our capacity light asset capacity of being a trader and sourcing fly ash where it is produced.
Ravi Efrem, Analyst, Citibank: Thank you.
Marcel Cobus, Chairman of Group Executive Committee, Titan Cement Group: Thank you, Ravi.
Gaili, Conference Call Operator, Chorus Call: The next question comes from the line of Hassan Asuelias Nikos with Eurobank Equities. Please go ahead.
Hassan Asuelias Nikos, Analyst, Eurobank Equities: Hello. Thank you very much for the presentation. I have three questions on my end, although the first one I think has already been answered. The first one was regarding a potential Investor Day to update the financial targets given that twenty twenty six ones are already obsolete. The second one is the reason behind the margin, the EBITDA margin expansion.
Was this mostly based on the optimizations and cost controlling on your end? Or was this something market based as well? How would you split the impact between the two? And the third one is regarding your dividend policy, where you have voiced before that your swap is that you want to increase it step by step. But if you continue having positive free cash flow of over SEK 100,000,000 over the next years, will we be able to see such subhoc payments to start becoming more frequent?
Thank you.
Michael Colacuelis, Group CFO, Titan Cement Group: Okay. Let me take the three questions. On Investor Day, Marcelo already gave you a notice. We expect to have one in the autumn. No specific date set yet, but it’s probably going to be around October.
Regarding the market the margin expansion, it’s not the same everywhere. You’ve seen margin expansion in most of our geographies. And it comes as a result there have been relatively few price increases in 2024, not as much as prior years. But there has been significant improvement in efficiencies. Digitalization, as you said, is actually a key contributor as it is being introduced in plants.
The real time optimizers, once they go in, they produce a step down of costs, but then a relatively flat from their own performance. The maintenance predictive artificial intelligence, again, brings cost savings, real cost savings, lower stoppages, cheaper repairs, on time repairs And of course, the investments that you see in our CapEx, in alternative fuels, in logistics, again, bundled together, they are also financially beneficial. So the increase in margin is remains a constant target, and we expect to see a further improvement in 2025 as well. And finally, on the dividend policy, we have already given the signal that a normal dividend in 2025 would have been per share. The step up in profitability as well as the liquidity raised through the IPO drove the Board to recommend this special dividend.
Our target is to primarily grow the business and not start distributing it out. So focus is for new organic, but also inorganic expansion of the business.
Marcel Cobus, Chairman of Group Executive Committee, Titan Cement Group: Yes. Maybe on the margins, just two other comments. Is related to evolution of our product portfolio and the other one the effort of commercial excellence. As our strategy is to source and use more supplementary cementitious materials, they are a proxy for using more blended cements. And usually that comes with a lower cost of cementitious replacing higher carbon, higher cost clinker.
So overall a better margin at like for like price, which brings me to the second question, which is second topic, which is commercial excellence. Over the past two years, we have actively invested in upgrading our sales capabilities, marketing by end use segments, training on value selling our salespeople, recruiting additional technical salespeople as well as introducing new products to the market. And we already see the results in 2024 where with very few exceptions, very local, we we have maintained firm pricing or we have achieved a nice price increases. So that is an important driver for margins expansions going forward.
Hassan Asuelias Nikos, Analyst, Eurobank Equities: That is very clear. Thank you.
Marcel Cobus, Chairman of Group Executive Committee, Titan Cement Group: Thank you.
Gaili, Conference Call Operator, Chorus Call: The next question is from the line of Cunningham Ethan with On Field Investments. Please go ahead.
Hassan Asuelias Nikos, Analyst, Eurobank Equities: Hello. Good afternoon. Thank you for taking my question. So I have three questions on my end. The one is that you mentioned that in the fourth quarter in The U.
S, you had adverse weather effects. Is it fair to assume that these will follow into the next quarter? And if so,
Ravi Efrem, Analyst, Citibank: could you
Hassan Asuelias Nikos, Analyst, Eurobank Equities: quantify first quarter next year this year? And then my second question is, how do you see the potential impacts on Middle Eastern reconstruction? And how would this impact your operations in Turkey and Egypt? And the third question is, do you have any updates on the implementation on the carbon border adjustment mechanism and the free allowance? Will this come in this year or next year?
And when it does come in effect, how will these affect your operations in Greece and Europe?
Marcel Cobus, Chairman of Group Executive Committee, Titan Cement Group: Thank you. Thank you for the questions. So, yes, we have already commented on the impact of the three hurricanes on the fourth quarter in Latin America and the impact on volume. As you may have seen from the weather reports, this continued in the first quarter, so it impacted particularly the Mid Atlantic areas, but we hold a positive outlook for a rebound in volumes throughout the rest of the year. Regarding the participation to Middle East reconstruction, it’s a slow process.
There is a lot of expectation there. Again, we maintain our presence with assets in Western Turkey and we will seize opportunities from there to these export markets or rebuilding part of them or from Egypt where, thanks to the investments over the past twelve months, we have shifted from clinker exports to cement exports, which again finds a nice destination in these markets. Regarding CPAM, at the beginning of this week, I was in Brussels with our Head of Europe meeting officials. The CPAM is in an examination state, but it will become applicable as of 01/01/2026. And that’s good news for the wave of investments that generally the industry of cement is planning to have in Europe acting both as a protective buffer, but also as a level playing field with assets in Northern Africa or Eastern Mediterranean, which are not at the same level of CO2 footprint.
I call the positive view on the impact of CBAM again on the investments and also on the pricing environment in Europe.
Hassan Asuelias Nikos, Analyst, Eurobank Equities: Okay. Thank you very much. The
Gaili, Conference Call Operator, Chorus Call: next question is from the line of Werner Tobias with Stifel. Please go ahead.
Werner Tobias, Analyst, Stifel: Yes. Good afternoon, gentlemen. A couple of questions from my side. Number one, when we look at The U. S, I’m with you on the housing optimism.
I’m slightly more cautious on infrastructure. Generally, the argument is that the IIJA is only spent 30% or somewhere around that level and it will continue that way. But at the same time, we’ve got a new administration which wants to move from a fiscally driven economy to a privately driven economy, I. E. Wants to get the bond yield down, which would be positive for housing, but not so positive for infrastructure if it wants to address deficits and indebtedness.
So my question to you is, where do you take that optimism from around the infrastructure side? When you talk about weather in Q4 in The U. S, where do you see that weakness in volumes coming from? Is it purely weather or is it also by subsector driven? And then secondly, on U.
S. Pricing been pushed out into Q2, just remind us of the sequence when these pricing increases are going to go through from your perspective. And then just lastly, Greece, obviously benefiting greatly at this point in time, a very positive outlook there from my perspective with the EU Next Generation Recovery Plan. But actually one angle which is not yet priced in and I’d like to get your view on is the defense spending coming out of Europe, the EU. Will Greece participate in that?
I know you spend more than the average NATO member at the roughly 3% of GDP or slightly above. What’s your view on that? Thank you.
Marcel Cobus, Chairman of Group Executive Committee, Titan Cement Group: Thank you, Tobias. So yes, indeed, we confirm our housing optimist. On the infrastructure, I think the backlog makes us optimistic. Our overall exposure and I think these are data that we published as part of our IPO and also equity story, we hold an exposure of 15% on infrastructure segment in the Florida market, which has a nice growth pattern and 45% on Middle Atlantic. So if that 45% of Middle Atlantic is too high, I wouldn’t say so.
25 data centers are in different stages of launch and preparation in Mid Atlantic and Virginia is becoming the capital of data center investment. So on top of that, I think we published again and again and and we see projects in different stage of initiation that over 50,000,000 short tons over the next five years with, I would say, equally distributed percentages between roads and bridges as well as water infrastructure and airports. So as long as we see this project in the market, we have a good exposure like we published last year, how we are working with Amazon in Virginia, we maintain a healthy optimism on U. S. Infrastructure as a
Michael Colacuelis, Group CFO, Titan Cement Group: growth driver. And also on the same subject, state of the state finances, both Virginia and mostly Florida, very strong financial estates. And Florida has a state budget for infrastructure, which is very large and very much committed, and it is a republican government, by
Marcel Cobus, Chairman of Group Executive Committee, Titan Cement Group: the way. And three weeks ago, Florida has announced another boost plan on infrastructure. U. S. Prices, you said it, yes, we have announced price increases in the market, some realize faster than others.
We maintain our opinion that this will be resilient this year. Now on Greece, again, looking at the backlog of infrastructure projects as well as non residential and and tourism industry from the four large construction companies, more than billion in backlog over the next three years. And the key challenge here is rather labor scarcity than financing or capabilities of cement suppliers to participate in this project. Personally, I do not believe that the defense programs announced will impact the infrastructure boost across Europe. We have seen it in Germany, in France and the overall direction there is that there will be a relaxed position on the deficits allowed by the European Commission.
So that will allow for both pursuing the infrastructure projects and boosting them as well as the military spending, digital and education spendings, which are now under discussion.
Werner Tobias, Analyst, Stifel: Thank you very much.
Marcel Cobus, Chairman of Group Executive Committee, Titan Cement Group: Thank you, Tobias.
Gaili, Conference Call Operator, Chorus Call: The next question is from the line of Gatsios Nestoroz with Optima Bank. Please go ahead.
Michael Colacuelis, Group CFO, Titan Cement Group: Yes, hello. Just two questions from my side. The first one is about CapEx. What is your guidance for a group CapEx this year? And the second one is about your sales purchase program.
This one, if I’m correct, ends this June. Do you plan to launch a new one? Thank you. Okay. Group CapEx, we did mention that 2024 was a high spending a year.
Plenty opportunities showing up will obviously beneficial with financial benefit behind them. So we expect that the group CapEx will exceed the $300,000,000 mark in 2025. And regarding share buybacks, it’s still early days. We have maintained this pace for a couple of years now, so we’ll most probably continue at similar levels. Okay.
Thank you. We’ll take one more question.
Gaili, Conference Call Operator, Chorus Call: Yes. We will now move on to our written question from one of our webcast participants from Mr. Stathis Kapares with Axia. And I quote, on Egypt exports, can you please give us some color on export destination needs to bottleneck potential size of export from the current 1,000,000 tonnes? Also post Turkey exit, what are areas of interest to expand business?
Thank you.
Marcel Cobus, Chairman of Group Executive Committee, Titan Cement Group: Yes. So I thought that we partly answered this question. We are not speaking of a Turkey exit. We still have assets in the Western Part of Turkey in Marmara grinding stations and we are an active buyer of clinker and cement producer while we maintain a strong partnership with the operations divested in Eastern Turkey. As I mentioned, we will seize opportunities to further strengthen that position as well as improve our export capabilities taking into account the potential growth in Middle East market.
Regarding Egypt, we have identified a number of destination markets which are not inside the group and the largest market is around Israel, but we do have also healthy positions in other markets. And we actively invest in silo capacity, debottlenecking, but also lowering the cost through investments in alternative fuels. We have both plants operating at record high level of alternative fuels usage and that brings the overall delivered cost at the competitive levels with international markets. Thank you.
Michael Colacuelis, Group CFO, Titan Cement Group: Thank you. I think we have to close now. Yes.
Marcel Cobus, Chairman of Group Executive Committee, Titan Cement Group: We are well over the hour. Yes. Thank you again for your interest, for your questions. As usual at your disposal Spiro Camizulis is here to answer any other questions you may have. And I think in the next couple of weeks, we will organize the usual roadshows.
And of course, with the strategic directions 2029, the Investors Day will be a nice opportunity to exchange more. But please remember, it’s a strong momentum of Titan across all operations, record performance in 2024 to be continued in 2025 with a strong outperforming of market, while we pursue initiatives again to grow, expand margins and improve our commercial excellence. Thank you. And we’ll
Michael Colacuelis, Group CFO, Titan Cement Group: be back with you on May 8 with the general assembly of the company as well as the first quarter results. Yes. Thank you. Thank you.
Gaili, Conference Call Operator, Chorus Call: Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for calling and have a good afternoon.
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