Cementir N : CH_Press release_First quarter results_31 03 2023

PRESS RELEASE

Cementir Holding: Board of Directors approves consolidated results as of 31 March 2023

• Revenue: EUR 414.8 million, up 14.5% on EUR 362.3 million in the first quarter of 2022; Non-GAAP Revenue were EUR 413.8 million (+14.2% on 2022)
• EBITDA: EUR 81.2 million, up 33.8% on EUR 60.7 million in the first quarter 2022. Non- GAAP EBITDA was EUR 85.6 million (+41.1% on 2022)
• Profit before taxes: EUR 63.9 million, +50.7% on EUR 42.4 million in the first quarter 2022. Non-GAAP profit before taxes was EUR 68.3 million (+61.1% on 2022)
• Net financial debt: EUR 32.1 million (net cash of EUR 95.5 million at 31 December 2022)
• Targets for the year are confirmed

Rome, 9 May 2023 - The Board of Directors of Cementir Holding N.V. today examined and approved the consolidated unaudited results for the first quarter of 2023.

Please note that as of April 2022, the Turkish economy is considered hyperinflationary according to the criteria set out in "IAS 29-Financial Reporting in Hyperinflationary Economies".

Financial highlights

	1st Quarter	1st Quarter	Change	1st Quarter	Change
(Euro millions)	2023
2023	2022	%	%
	Non-GAAP*
Revenue from sales and services	414.8	362.3	14.5%	413.8	14.2%
EBITDA	81.2	60.7	33.8%	85.6	41.1%
EBITDA Margin %	19.6%	16.7%		20.7%
EBIT	49.2	32.9	49.5%	56.2	70.7%
Net financial income (expense) and share of	14.7	9.5	54.9%	12.2	28.1%
net profits of equity-accounted investees
Profit before taxes	63.9	42.4	50.7%	68.3	61.1%

* These figures do not include the impact of the application of IAS 29.

Sales volumes

(thousands)	1st Quarter	1st Quarter	Change
2023	2022	%
Grey, White cement and Clinker (metric tonnes)	2,336	2,435	-4.0%
Ready-mixed concrete (m3)	1,018	1,128	-9.7%
Aggregates (metric tonnes)	2,195	2,679	-18.1%

Cementir Holding N.V.	Share capital: € 159,120,000
Registered office: 36, Zuidplein, 1077 XV, Amsterdam, Netherlands	VAT number: 02158501003
T: [phone]	Tax number: 00725950638
Secondary and operational office: 200, Corso di Francia, 00191 Rome, Italy	Netherlands Chamber of Commerce number 76026728
T: [phone]
www.cementirholding.com

Net financial debt1

(millions of euros)	31-03-2023	31-12-2022	31-03-2022
Net financial debt / (Net cash)	32.1	-95.5	88.6

Group employees

	31-03-2023	31-12-2022	31-03-2022
Number of employees	3,103	3,085	3,142

"The first quarter of 2023 ended with results in line with our expectations, with a growth in revenue and EBITDA, thanks to careful management of energy costs, which increased further as well as the costs of raw materials and personnel and despite the weakness of some markets" commented Francesco Caltagirone Jr, Chairman and Chief Executive Officer.

The following comments refer to the consolidated income statement of the first quarter of 2023 excluding IAS 29 impactsin Türkiye. This representation allows a better comparison of Group's performance with respect to the same period of the previous year.

In the first three months of 2023, cement and clinker volumes sold, equal to 2.3 million tonnes, decreased by 4% compared to the same period of 2022. The decline is attributable to the slowdown in the market, mainly in Denmark, Belgium and the United States, despite the increase recorded in Türkiye.

Sales volumes of ready-mixed concrete, equal to about 1 million cubic metres, have fallen by 9.7% due to the negative trend in all areas with the exception of Türkiye.

In the aggregates sector, sales volumes reached 2.1 million tonnes, down 18.1% due to the decline in Belgium, Sweden, Denmark and Türkiye.

Group revenue from sales and services reached EUR 413.8 million, up 14.2% compared to EUR 362.3 million in the first quarter of 2022. The increase in revenue is mainly due to price increases, offsetting higher costs for fuel, electricity, raw materials, transport and services. It should be noted that at constant 2022 exchange rates, revenues would have reached EUR 445.5 million, 23.0% up on the same period last year.

At EUR 342.5 million, operating costs increased by 2.8% compared to EUR 333.1 million in the first quarter of 2022.

The cost of raw materials, equal to EUR 192.9 million, increased by 5.5% compared to EUR 182.8 million in the first quarter of 2022, as a result of the generalized increase in the price of energy sources on international markets.

At EUR 51.6 million, personnel costs increased by 5.8% compared to EUR 48.8 million for the same period in 2022.

Other operating costs, equal to EUR 98.0 million, fell by 3.4% compared to EUR 101.5 million in the first quarter of 2022.

1 IAS 29 has no impact on net financial position as at 31 December 2022.

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EBITDA reached EUR 85.6 million, an increase of 41.1% compared to EUR 60.7 million in the first quarter of 2022, due to better results achieved in the Nordic & Baltic area, Türkiye, Belgium and Egypt, whereas the United States and Asia Pacific saw a contraction in results.

The EBITDA margin was 20.7%, compared to 16.7% in the first quarter of 2022.

At constant 2022 exchange rates, EBITDA would have amounted to EUR 90.9 million, up 49.8% year-on- year.

EBIT, taking into account depreciation, amortization, write-downs and provisions of EUR 29.5 million (EUR

27.8 million in the first quarter of 2022), amounted to EUR 56.2 million compared to EUR 32.9 million in the same period of the previous year. Amortization, depreciation, impairment losses and provisions include amortization and depreciation due to the application of IFRS 16 of EUR 7.9 million (EUR 7.1 million in the same period of 2022).

At constant 2022 exchange rates, the EBIT would have amounted to EUR 60.4 million.

The share of net profits of equity-accounted investees is negative by EUR 0.2 million (marginally negative in the first quarter of 2022).

Net financial income of EUR 12.4 million (income of EUR 9.5 million in the same period of the previous year), comprises net financial expenses of EUR 2.1 million (EUR 1.3 million in the same period of 2022), net foreign exchange income of EUR 13.6 million (net foreign exchange income of EUR 10.9 million in the same period of 2022) and the effect of the valuation of derivatives.

Profit before taxes was EUR 68.3 million, an increase of 61.1% on EUR 42.4 million in the first quarter of 2022.

During the first quarter of 2023, the Group made total investments of approximately EUR 41.7 million (EUR 24.9 million in the first quarter of 2022), of which approximately EUR 18.8 million (EUR 7.0 million in the first quarter of 2022) in connection with the application of IFRS 16.

Net financial debt at 31 March 2023 was EUR 32.1 million, a reduction of EUR 56.6 million compared to EUR 88.6 million on 31 March 2022, and includes the distribution of dividends of EUR 28.0 million in May 2022. These amounts include EUR 82.5 million due to the application of IFRS 16 (EUR 75.3 million at 31 March 2022).

The negative change compared to net cash of EUR 95.5 million as at 31 December 2022 is due to the seasonality of the business in the first quarter, the annual maintenance cycle and the working capital dynamics.

Total equity as at 31 March 2023 amounted to EUR 1,551.1 million (EUR 1,522.8 million as at 31 December 2022).

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Performance by geographical segment

The figures reported in the section Türkiye do not include the impact of the application of IAS 29 - Financial Reporting for Hyperinflationary Economies.

Nordic and Baltic

(EUR'000)		1st Quarter		1st Quarter	Change
	2023		2022	%
Revenue from sales		164,129		162,000	1.3%
Denmark				109,048	13.2%
	123,472
Norway / Sweden				50,683	-19.9%
	40,573
Other (1)				15,503	10.8%
	17,178
Eliminations		(17,094)		(13,234)
EBITDA			28,840	43.4%
	41,368
Denmark			24,561	61.8%
	39,729
Norway / Sweden				4,163	-84.0%
	667
Other (1)				116	n.m.
	972
EBITDA Margin %		25.2%		17.8%
Investments				10,809
	22,281

1. Iceland, Poland and white cement operating activities in Belgium and France

Denmark

In the first quarter of 2023, sales revenues reached EUR 123.5 million, an increase of 13.2% compared to EUR 109 million in the first quarter of 2022.

The volumes of cement on the domestic market, both grey and white, were lower than in 2022, influenced by a generalized slowdown in demand and by unfavorable weather conditions. High inflation and the increase in interest rates adversely affected the residential sector and investments in public works.

Exports also declined due to lower deliveries to Germany, Poland and France, partially offset by higher deliveries to Norway and the Faroe Islands.

In Denmark, both ready-mixed concrete and aggregate volumes decreased compared to the corresponding quarter of 2022 due to weak demand, a colder winter and the temporary closure of a quarry, which only reopened in March 2023.

Thanks to careful management of energy costs and sales prices, EBITDA in the first quarter of 2022 amounted to EUR 39.7 million (EUR 24.6 million in 2022), up 61.8%, with profitability returning to average pre-Covid levels.

Norway and Sweden

In Norway, ready-mixed concrete sales volumes decreased compared to the same period last year due to the slowdown in residential and commercial demand, adverse weather conditions and the delayed startup of some major infrastructure projects.

It should be noted that the Norwegian krone depreciated by 10.7% against the average euro exchange rate in the same quarter of 2022.

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In Sweden, the volumes of ready-mixed concrete and aggregates decreased significantly compared to the previous year, due to the general decline in demand mainly caused by the impact of higher interest rates on the residential market.

The Swedish krona depreciated by 6.9% against the average euro exchange rate in the first quarter of 2022.

In the first quarter of 2023, sales revenue in Norway and Sweden decreased by 19.9% to EUR 40.6 million compared to EUR 50.7 million in the first quarter of 2022, while EBITDA decreased by 84% to EUR 0.7 million (EUR 4.2 million in the same period of 2022). The decrease in EBITDA in both Norway and Sweden was mainly due to lower sales volumes and higher production costs.

Belgium

(EUR'000)		1st Quarter		1st Quarter	Change
	2023		2022	%
Revenue from sales		90,582		76,076	19.1%
EBITDA		21,208		15,967	32.8%
EBITDA Margin %		23.4%		21.0%
Investments		8,364		2,476

In the first quarter of 2023, cement sales volumes in Belgium and the Netherlands declined compared to 2022, while they remained stable in France. The contraction in demand was due to both adverse weather conditions and a slowdown in construction activity linked to a more restrictive monetary policy, resulting in reduced demand for mortgages and real estate financing.

For the same reasons, both ready-mixed concrete and aggregate sales volumes in Belgium and France decreased year-on-year, with a more significant drop in France due to the completion of some major projects at the end of 2022.

Overall, in the first quarter of 2023, sales revenue grew by 19.1% to EUR 90.6 million compared to EUR

76.1 million in the same period of 2022, and EBITDA increased by 32.8% to EUR 21.2 million, compared to EUR 16 million in the previous year.

EBITDA benefited from careful management of energy costs and sales prices.

North America

(EUR'000)		1st Quarter		1st Quarter	Change
	2023		2022	%
Revenue from sales		45,833		44,620	2.7%
EBITDA				6,894	-17.9%
	5,657
EBITDA Margin %		12.3%		15.4%
Investments				3,444
	910

In the US, white cement sales volumes contracted in line with the trend in the residential sector, which is the main market, with sales in Texas and California contracting more sharply due to competitive pressures from imports.

The dollar appreciated by 4.4% against the average euro exchange rate in the first quarter of 2022.

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