• Revenue Growth: Increased by 4.9% year-to-date, reaching just under EUR2 billion.
• EBITDA: Grew by 14.6% year-on-year to EUR455 million on a like-for-like basis.
• Net Profit After Tax: Increased by 20% to EUR238 million.
• Earnings Per Share: Reached EUR3.19 for the nine months.
• Leverage Ratio: Closed at 1.1 times EBITDA.
• CapEx: EUR181 million deployed, focusing on energy mix improvements and logistics.
• US Sales: Grew by 4.5%, reaching $1.25 billion.
• US EBITDA: Increased by 20% to $293 million on a like-for-like basis.
• Greece Sales: Increased by 8.4% to EUR324 million.
• Southeast Europe EBITDA: Grew by 19% to EUR128 million.
• Eastern Mediterranean Sales: Reached EUR182 million, up by 4.8% year-on-year.
• Brazil EBITDA: Increased by 18% to EUR18.1 million.
• Net Debt: Closed at EUR670 million, down by EUR95 million compared to September 2023.

• Warning! GuruFocus has detected 7 Warning Sign with BRDG.

Release Date: November 07, 2024

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

Positive Points

• Titan Cement International SA (XBRU:TITC) reported a robust nine-month performance with a 5% growth in sales.
• EBITDA increased by 14.6%, driven by improved pricing and operational cost performance.
• The company is making significant progress in its Strategy 2026, focusing on supplementary cementitious materials and low carbon fuels technologies.
• Titan America achieved a strong performance with a 20% increase in EBITDA, despite adverse weather conditions.
• The company is on track with its US IPO plans, aiming for a market entry in the first quarter of 2025.

Negative Points

• Adverse weather conditions, including hurricanes, significantly impacted operations in the US, leading to lost sales.
• The Eastern Mediterranean region faced challenges due to macroeconomic conditions, with a 21% decline in EBITDA.
• Currency devaluations in Egypt negatively affected financial performance in the region.
• Increased capital expenditure investments have led to higher debt levels, although they are lower than the previous year.
• The company faces ongoing challenges with inflation affecting logistics, labor, and raw material costs.

Q & A Highlights

Q: Given the weather-affected quarter in the US, do you expect revenue and volume growth in 2025 to increase as projects get delayed? Also, is there potential for similar actions like Heidelberg's focus on business in the center network in Europe? A: The impact of weather was significant in Q3, but not a regular event. The outlook for 2025, especially the second half, is optimistic, with expectations of record performance in sales and profitability. Regarding operational efficiencies, Titan is focusing on cost leadership and operational efficiencies, particularly in fuel and power costs, and digital initiatives to improve performance.

Q: With CapEx at EUR181 million for the nine months, should we expect around EUR60-70 million in Q4? Also, how might US election results impact infrastructure spending and regulatory requirements? A: CapEx for the year is expected to be around EUR240 million, similar for 2025, focusing on growth and efficiency. The infrastructure bills in the US are bipartisan, so spending is expected to continue. Environmental regulations are unlikely to become more restrictive, and Titan remains committed to reducing its carbon footprint.

Q: Can you provide more details on the recent acquisition in Virginia and its impact on the Mid-Atlantic presence? A: The acquisition in Virginia of an aggregate and clay quarry supports Titan's strategy to introduce new cementitious materials, particularly in infrastructure projects. This acquisition will accelerate the market introduction of new products and demonstrates Titan America's capability to bring innovations to market quickly.

Q: With the IPO of US activities, what are your priorities for capital allocation with the expected leverage level? A: Capital allocation priorities remain focused on organic growth, capacity expansion, and technology investments. M&A activities will continue, particularly in aggregates and supplementary cementitious materials. Dividend payouts will also be maintained as previously guided.

Q: What was the EBITDA impact from Hurricane Milton during Q3 2024, and what does it mean for cement demand long-term? A: Hurricane Milton resulted in lost sales, with an EBITDA impact of over EUR10 million for the quarter. However, this does not change the annual outlook, as projects are delayed rather than lost. Titan's operations were well-prepared, minimizing the impact compared to other market players.

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