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Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Cementir Holding First Quarter 2020 Results Conference Call. [Operator Instructions]
At this time, I would like to turn the conference over to Marco Maria Bianconi, Head of M&A and Investor Relations. Please go ahead, sir.
Thank you, and welcome, everybody, to Cementir Holding First Quarter 2020 Results. My name is Marco Bianconi. I will take you through the presentation that you should have received. And I am connected also with the Chairman and Chief Executive, Francesco Caltagirone, who will be happy to take your questions after the short presentation.
Good afternoon.
If you dig the document -- thank you. If you dig the document on Page 2, you can see the highlights. Revenue for the period reached EUR 266.9 million, up 0.9%, mainly due to good performance in Turkey, Denmark and Egypt, with a 50% increase in volumes in Turkey and overall cement volumes up 11.9%. EBITDA reached EUR 32.2 million, down marginally from last year, it would have been higher except for a EUR 2.5 million impact from previous transaction finance settlement. There was a high contribution from Denmark, U.S., Turkey and Egypt. EBIT margin was down marginally from 12.7% to 12.1%. And the first -- there was the first impact of a volume slowdown due to COVID-19, mainly confined to China, Malaysia, Belgium and France.
Loss before taxes was EUR 5 million compared to a EUR 0.3 million loss in the first quarter of 2019. This was up to EUR 9.9 million of financial charges, of which EUR 4.7 million were due to foreign exchange impact. Net financial position reached EUR 322.3 million, an increase of EUR 82 million roughly from December, but down about EUR 94 million compared to March 31, 2019.
Moving to the following slide, we can go through each region, starting with the most important Nordic & Baltic accounting for 51% of last year group EBITDA, where in Denmark, domestic cement volumes were up due to increased market activity and favorable weather conditions. Also domestic prices were moderately up in line with inflation. White cement export was slightly down due to timing differences with the shipments to the U.S., and gray cement exports were in line with last year. Ready-mixed volumes were up, and overall EBITDA was up 24% from last year, driven by the cement business.
Norway, here, volumes fell by around 10% due to lower construction activity, with March volumes down 30%. Prices were ahead of inflation, and there was also a depreciation of the Norwegian krona versus the euro in the period of about 7.5%.
In Sweden, there was favorable weather and robust construction market with the ready-mixed sales volumes flat and prices down due to sales mix. Aggregate sales volumes were up 6%, with prices down due to product and project mix.
Then moving to Page 4, Belgium and France, which accounted for around 25% of last year group EBITDA. Here, gray cement and clinker volumes were down around 2%, with good trading until February and a 25% drop in March due to COVID-19. Prices were in line with inflation in both domestic and export markets. Ready-mixed volumes were down 10% in Belgium and France, with March volumes down around 50% because there was a lockdown and closure of most plants in both countries. Prices were stable. Aggregate volumes were down 8%, with prices outpacing inflation due to product and customer and destination mix. Overall, EBITDA declined by 44.7% compared to last year.
Moving to Page 5. North America, accounting for around 9% of the last year group EBITDA. Here, white cement sales volumes declined slightly because of lower sales in Florida and some delays in relevant projects. Overall, our Lehigh White cement subsidiary EBITDA was up sharply, thanks to higher average sales prices, variable cost savings, particularly raw materials and some efficiencies. Overall, in this region, EBITDA reached EUR 4.8 million, up 32.9% from 2019.
Moving to Page 6 on Asia Pacific, which accounted for 9% of group EBITDA last year. Here, in China, white cement and clinker volumes were down by around 35% during the period because the plant was closed between January 23 and February 21. From the third week of January, lockdown of many cities with Central China the most affected. However, from March onwards, the market has reopened and is recovering with Southern and Eastern China leading the trend. Sales prices in local currency were ahead of inflation, also due to favorable mix, despite tough competition. Overall, EBITDA in China was down 15.8% compared to last year.
In Malaysia, domestic cement volumes declined by around 15% due to activity restrictions from March 17 to April 14. Average prices in local currency were up, thanks to customer and product mix. Export volumes were down, increased by around 10%, with prices moderately up due to country mix. Overall, in Malaysia, EBITDA was down 28.6% from last year.
Moving to Turkey on Page 7, which last year accounted for minus 1% of group EBITDA. Here, there was a sharp increase in gray cement volumes, which were up 60%, and cement revenue was up in Turkish lira by 50%. Average cement prices were down in local currency with different trends at various plants due to severe price competition. Ready-mixed volumes were increased by 13% year-over-year with positive trend in local currency prices. The Turkish lira devaluated around 10% versus the euro in the period. And there was an improvement of EBITDA mainly due to higher sales volumes and some cost savings.
Moving to Page 8 in Egypt, which accounted for 2% of group EBITDA in 2019. Here, white volumes were up around 10%, thanks to higher export volumes with domestic cement down 30% in March due to curfew to limit COVID-19. The Egyptian pound revalued by 13.5% versus the euro in the 3-month period. This contributed to a 48.6% EBITDA increase from last year.
Moving to the last geographical area, Italy, which accounted for 3% of group EBITDA last year. Here, revenue increase is attributable mainly to higher trading volumes. Here, EBITDA was down compared to last year to EUR 3.6 million compared to a positive EUR 1.1 million in Q1 of 2019, mainly due to a EUR 2.5 million one-off impact, which we previously mentioned regarding the settlement of previous transactions.
You also have then a consolidated income statement in the end, and I will then leave the floor to Mr. Caltagirone to take your questions. Thank you.
[Operator Instructions] Our first question is from Emanuele Gallazzi with Equita.
I have 2 questions. The first one is on Europe. I was wondering if you could give us an update on the trends you saw in April and in the first part of May, managing Belgium, France and parts of Europe. The second one is cost control side. If you can share with us a little bit more details on what you're doing on cost control. I saw that you mentioned on the press release this morning.
Okay. In Belgium, France, from April, we -- the second half of April, we are starting to see a mild recovery and also continuing in May. So far, the market for the France -- the French market access from Belgium is still closed. And as you know, we are selling nearly 1/3 of our sales in France. But it seems that by -- I mean, in the second half of May, I mean, starting from next week, we should be -- have the ability to sell and to sell again into France. In Nordic & Baltic, it's continuing, let me say, in the same trend. And it seems that it's not very affected by this COVID-19.
In terms of cost savings, for sure, we are, let me say, trying to postpone part of the new strategic investment. So far, we have postponed close to EUR 30 million. That is nearly 35%, 40% of our yearly expenditure. And this is the only, let me say, things that we are doing and also from the moment that -- for example, in China, we are at 250 kilometers from Wuhan, and our factory has been closed for -- subject to be closed for 3 weeks. And in 2 months, we have recovered nearly 95% of our budget sales. So we think that -- let me say, if there are not other waves of this COVID-19, the market in the second half should, let me say, start to recover at a normal pace for sure, for some countries, depending on the lockdown because France is postponing reopenings.
And also, as you can see also, England, so we really don't know. Now we are in the middle of this crisis. And so for -- we expect that this quarter, the second one is the most impacted, and we should see a recovery in the third quarter and the normalization in the last quarter. This is our expectation. So let's say, it's difficult to forecast. It's more a guess because it's the first time, I think, that the world -- the modern world faced this kind of issue.
Our next question is from Bruno Permutti with Banca IMI.
A few questions. The first one is on the CapEx plan. If you -- I'd like to understand exactly what you mean for nonstrategic investments, in particular, if your EUR 100 million investment plan the next year. And the CapEx plan is confirmed or if it is delayed in some way.
The second point in regards to Turkey. If you can elaborate a little bit on the price scenario in the country, if you see a stabilization. And also, I would like to understand something on recoveries but in the country is, what kind of experience are you having there with COVID?
And the last one was a clarification on Italy. If you can give us more explanation on the reasons for the negative EBITDA margin and what do you expect for the remaining part of the year.
Okay. Now for -- let me say, the CapEx, I mean, for the 3-year plan, we are just postponing there of, let's say, a couple of quarters, the start of some investment, just to be fully aware of the impact of these crisis in our balance sheet, especially on the free cash flow. So for the time being, it's just postponed. And this doesn't mean that at the end, we will not be able to reach, let me say, the EUR 100 million in 3 years. So for the time being, it's just a cautious approach just because we are in the middle of the crisis.
For Turkey, let's say, we had a very good start in January and February, then Turkey has been hit like most of the countries by this COVID and also by the devaluation that is starting again because in the last 3 months that the Turkish lira devaluated nearly 20% against euro and dollars. As you know, Turkey is -- let me say, has a weak award shares to defend the lira. They spent nearly USD 15 billion to defend the currency. And from EUR 40 billion, now they have EUR 25 billion of reserves. So it seems that they have a very little margin to defend further the lira. The issue is that probably the government lowered the interest rate, the internal interest rates too fast to recover.
Now let's say, Turkey, in terms of COVID, is experiencing what the other countries face. There are around 150,000 people infected. The death rate is much lower because, especially in Turkey, like most of the emerging market, the average age of the depreciation is around 25 years. But for sure, it's impacted and there is a lockdown, for example, in the -- our plants are opening everywhere. We have still the main office in Turkey and still in Belgium, that they are closed. We are just reopening the Rome headquarter, but our factories are working all around the world.
And I don't expect, frankly speaking, much of recovery from Turkey. And especially, unfortunately, even if where we might see a good recovery in terms of Turkish lira. If the lira continues to weaken, then in euro, unfortunately, the result will be, let me say, very weaker than what we are expecting.
In terms of Italy, Italy has been affected. In Italy, we just have the trading company. We don't have factories. Also Italy, besides, I mean, the impact of this EUR 2.5 million of legal settlement has been hit in the first quarter, as you can imagine, of the sharp downturn of the energy prices. So we think that during the year, it will recover. And this is just a mismatch of what, let me say, we have bought in the last part of last year and the price that we are experiencing in the market at the early stage of the year and for especially coal and electricity. But let's say, I think it's a very small issue, but we think and we believe that Italy will have a positive result at the end of the year.
[Operator Instructions] Our next question is from Tobias Woerner with MainFirst.
Three questions, if I may, from my side, please. Number one, can you give us your thinking around the share buyback? Obviously, it's good value, you have an offer here, but you have to put that in context of your free float.
Number two, you kindly gave us sort of an update around a number of markets in April and May, but if I could follow that up a little bit more -- or with a little bit more color on Denmark and also the U.S.
And then the last question, you're white cement trading around the world from Denmark, Egypt to Malaysia, Malaysia to Australia, how is that doing at the moment?
So the share buyback, yes, we have called for an extraordinary meeting, general meeting that we'll be calling early in July. And we are going, let me say, to put on the table of EUR 60 million for the next 18 months. So by -- it will last by the end of 2021.
The rationale is that, we believe that in the next month, we should recover a part of normalization in our, let me say, scenario in terms of budget. And if this materialize, we should have, let me say, by the end of 2021, a net financial position that is close to 0. So we also believe that with the issue of COVID that will impact more or less most of our competitors, like us. And it will be difficult for the next 12 to 18 months to, let me say, have an M&A activity because, let me say, on which basis you can, let me say, value the company, the various scenario, the various geography, is very difficult. So we think that we might have the opportunity to buy ourselves.
And today, at the actual price with this some EUR 60 million, we might buy up to 7%. And it's just an option. And first, for sure, so we will see probably during the -- after summer what will happen in our, let me say, budget and if there is a space, we will, let me say, start. Otherwise, we will wait for a better, let me say, period. But anyway, let's say, already now, the company is very low leverage. And let's say, today, the free float is 29%. And for sure, it might be reduced a bit, but, let's say, we have to see if we are going to spend -- this is the maximum available in our balance sheet. So EUR 60 million is a sort of threshold that we have, and we just call the extraordinary meeting with the maximum. Then this doesn't mean that we want to shoot for the maximum.
For the other market, I mean, as I said, April and May for Denmark and Scandinavian country has been, let me say, close to normal. We don't see, except a bit for Norway, a difference from our budget. U.S.A. is affected in terms of 10% to 15%. And so far, it's difficult to disclose that. So we believe that in April and May, we still see this kind of, let me say, downturn in revenues, then it depends because they want to rush to reopen everything, but I don't know if there is a rush or it's just, let me say, some, let me say, willingness, how much is the willingness to reopen.
And sorry, the last question, I don't -- could you repeat it?
Yes. Your white cement trading around the world from Denmark, Egypt and Malaysia. Just if you could give us a similar flavor for April and May, whether there was any decline in seaborne light cement.
We have just -- so, so far, a postponement of, let me say, one ship from Denmark to U.S.A. due to this, let me say, downturn that we have seen in U.S.A. in April and May. To Australia, let's say, we have been forced to close the plant during the -- Malaysia, during the month of March. But the market is still receiving the product as normal. So we don't see any other limitation in terms of export. And also, so far, except for the U.S.A., we don't see -- and the French market, that is closed. So for the gray and also for the white, partly is reduced. But we think that in the second half of May, with the reopen of the border, we should, let me say, start to recover given on the white cement.
And what are you seeing pricing-wise on white cement, if I may ask, please?
Let's say that there is no, let me say, any kind of, let's say, price war around. So we do think that besides some, let me say, delay in the shipment due to the COVID-19, we don't see, so far, any price pressure.
For sure, I can add that the freight rate and also the energy cost, let's say, it seems to be a tailwind in the second half because, let me say, the cost of both coal, electricity and freight should be lower, let me say, but this is for everybody, not just for us.
And so we might have some recovery in the balance sheet from lower cost in freight and the lower cost in coal and electricity.
[Operator Instructions] Mr. Caltagirone, Mr. Bianconi, there are no more questions registered at this time. I'm turning the floor over to you for any closing comments.
Thank you. Thank you very much. Thank you, everybody, for the interest in Cementir Holding, and I wish you a good day. And please feel free to give us a call for any further questions you may have.
Thank you.
Thank you. Have a nice evening. Bye-bye.
Have a nice evening. Bye-bye.
This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.