• Revenue Growth: 7.6% year-on-year, reaching EUR1.3 billion.
• EBITDA: EUR281 million, up 16.7% year-on-year; 20% growth excluding non-recurring items.
• EBITDA Margin: Improved to 22% over the last 12 months.
• Net Profit: Increased by 34% to EUR149 million.
• Earnings Per Share: EUR2, up from EUR1.48 last year.
• Net Debt: Reduced by EUR20 million to EUR640 million; leverage ratio at 1.1 times.
• CapEx: EUR109 million, focusing on energy mix, digitalization, and logistics.
• Alternative Fuel Usage: Reached 23% in June.
• US Sales: $836 million, a 5.2% increase year-on-year.
• US EBITDA: $177 million, a 21% increase.
• Dividend: EUR0.85 per share for 2023, paid on July 3.
• Share Buyback Program: New EUR20 million program approved.

• Warning! GuruFocus has detected 6 Warning Signs with ILPT.

Release Date: July 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Titan Cement International SA (TTCIF) reported a strong performance for the first half of 2024, with sales growth of 7.6% and EBITDA growth of 16.7%.
• The company achieved a significant improvement in EBITDA margins, reaching 22% over the last 12 months.
• Titan Cement International SA (TTCIF) is on track with its Green Growth Strategy, achieving a record level of alternative fuel usage at 23% and launching new sustainable product lines.
• The company has made significant investments in the US, including the completion of new import terminals in Tampa and Norfolk, enhancing its logistics capabilities.
• Titan Cement International SA (TTCIF) plans to list its US operations on a New York exchange by early 2025, indicating a strategic focus on expanding its market presence.

Negative Points

• Despite strong sales, Titan Cement International SA (TTCIF) faced challenges in Greece with lower export prices and high electricity costs impacting profitability.
• The Eastern Mediterranean region continues to be affected by challenging macroeconomic conditions, with currency devaluation impacting reported figures.
• High costs remain a concern, particularly in raw materials, labor, and distribution, which are above pre-pandemic levels.
• The company is facing increased competition in the US market from new independent import facilities, which could impact pricing strategies.
• Titan Cement International SA (TTCIF) experienced an increase in CO2 emissions due to a higher sales mix of clinker, although it remains committed to its decarbonization goals.

Q & A Highlights

Q: Could you provide details on the amount of cement imported into the US and the impact of new import facilities in Florida on your pricing strategy? A: Marcel-Constantin Cobuz, Chairman of Group Executive Committee, explained that Titan Cement's strategy involves maximizing local production while complementing it with imports through their mega import terminals. Vassilios Zarkalis, CEO of Titan America, added that the US market remains a deficit market requiring imports, and Titan's import capabilities are robust. They do not foresee significant impact from new facilities on their pricing strategy, which focuses on growth and price increases.

Q: What is the rationale behind investing in Calcined Clay, and how does it relate to your import strategy? A: Vassilios Zarkalis explained that Calcined Clay is not a replacement for cement but opens new product capabilities. It supports growth through new product development, aligning with market demands for decarbonization and circular economy solutions. Titan has secured local reserves of clay for future development of blended cements.

Q: When is the planned Investor Day, and what are your plans for the shares acquired through the buyback program? A: Marcel-Constantin Cobuz stated that the Investor Day will be scheduled post-IPO due to regulatory advice. Regarding the buyback program, there are no current plans to cancel or reissue the shares into the market.

Q: How do you plan to manage capacity utilization in Southeast Europe given the strong performance and potential growth? A: Marcel-Constantin Cobuz noted that Titan Cement is running at high utilization rates but benefits from network effects, allowing for volume transfers between plants. Michael Colakides, CFO, added that digital applications and lower clinker-to-cement ratios are increasing effective production capacity.

Q: Can you quantify the cost benefits from digitalization and decarbonization investments, and what are your CapEx plans for the coming years? A: Michael Colakides mentioned that while exact figures are difficult to project, digitalization has shown over 10% improvement in the first year in the US. CapEx for 2024 is expected to be around EUR240 million, with a focus on digitalization and decarbonization projects, particularly in the US.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.