Bernard Fontana - CEO: Ladies and gentlemen, welcome to the presentation of Annual Results 2012. After my remarks, highlighting the most important development throughout the Group, Thomas Aebischer, our CFO will explain the Group financial results and before the discussion, I will comment on the outlook.
First, Holcim at a glance, in 2012 the better demand for building materials in the fast-growing markets of Asia and Latin America as well as North America was in contrast to low demand in debt and rescission hit Europe. With 148 million tonne, Holcim delivered more cement. However, the shipments of aggregate and ready-mix concrete declined due to a lower demand in several mature markets, primarily in Europe and in the Pacific Rim.
Despite the limited volume growth and important restructuring costs Holcim succeeded in increasing net sales, operating EBITDA and net income. Excluding the restructuring cost of CHF736 million. Operating profit also increased significantly. Thanks to the combined effects of an organic growth and the Holcim Leadership Journey. The Group achieved like-for-like growth of both the operating EBITDA and operating profit of 6.4% and 11.4% respectively on an adjusted basis.
These results are driven by a high degree of cost awareness and by the successes achieved in passing on various higher costs to prices. The various streams of the Holcim Leadership Journey, which gained momentum from mid-year on contributed CHF158 million on a net basis to the improvements at consolidated operating profit level.
The restructuring costs also impacted net income. Nevertheless, it substantially increased by more than 50% compared to the previous year. This rise was supported by the sale of stakes in Guatemala and Thailand. More details on our financial performance will follow on from Thomas Aebischer.
As the payout potential before write-offs remains intact. The Board of Directors proposes an increased cash payout per registered share of CHF1.15 from capital contribution reserves compared to CHF1 in 2012.
And now to the Holcim Leadership Journey, which was launched in May last year and which will generate an additional CHF1.5 billion in operating profit by year end 2014, a safe and healthy working environment is part of this initiative.
Our goal for 2012 was to reduce the lost-time injury frequency rate, a goal that was reached as went from 1.5 to 1.2. Despite many improvements, we still faced severe accidents. Therefore, our efforts are ongoing and we aspire to be among the best companies worldwide with regard to the lost-time injury frequency rates.
The core elements of the Holcim Leadership Journey are the customer excellence and the cost leadership. They quickly gained momentum following the Group-wide announcements. So today I can already report on the first successes.
As you know, we set the goal for 2012 to increase the operating profit by at least CHF150 million and with a result of CHF158 million on the net basis we’ve reached that goal, a fact which considering the challenging market environment holds premise for the future.
In terms of cost leadership part, the main contributions on the net basis came from procurement with CHF48 million and from energy and alternative fuel with CHF40 million.
In addition, I can mention that 2013 composition scheme of the top 1,000 managers of the Group has been adjusted to be aligned with the delivery of the Holcim Leadership Journey.
In connection with the Holcim Leadership Journey, Holcim has and will continue to streamline its production capacity in several markets according to long-term demand. Primarily, in Europe further capacity adaptations have been developed. For example, in the cement segment, Holcim aims to reduce its capacity in this Group region by around 10% to improve capacity utilization.
Substantial capacity adjustment took place in Spain and Hungary. Holcim Germany reorganized its ready-mix concrete business. In Belgium, the intended closure of the Haccourt grinding station, in France – after the closure of the Ebange plant – the intended transformation of the Dannes plant and in Italy the intended transformation of the Merone plant into grinding stations were officially announced. These announcements always occurred within the framework of relevant consultations with the authorities and employee representatives.
Holcim also optimized capacities outside of Europe. In the Yocsina plant in Argentina clinker production was stopped, and in Australia, in Brazil, in Mexico the aggregates and ready-mix concrete businesses were optimized.
In the documents provided and in particular in the Annual Report, Page 26 to 31, you will find a detailed summary of all restructuring measures, including their impact on the annual results 2012. The restructuring initiatives have been accelerated in the fourth quarter, and in 2012, we posted cash expenses of CHF239 million, largely in the fourth quarter of 2012. As of 2013, most of these restructurings will support earnings.
While the non-cash charges during the first nine months of 2012 amounted to CHF40 million, the fourth quarter also noted a considerable acceleration with an increase of these charges amounting to CHF457 million. Therefore, full year 2012 noted total non-cash costs of CHF497 million, of which the majority, as already elaborated on, was recorded in Group region Europe.
The total impact on operating profit amounted to CHF736 million for 2012, of which cement accounted for some 64%, aggregates 19% and ready-mix concrete for the remaining 17%. In the table shown here, you can see for example that we're right-sized our ready-mix activity by closing 159 profitable ready-mix units.
Now let me comment on the development in the group regions. We start with Asia Pacific, our largest group region. Here the favorable economic trend continued. Mainly in Southeast Asia, the construction industry benefitted from increasing government expenditure for the improvement and expansion of infrastructure and additional housing space. The development on the Pacific Rim on the other hand was less dynamic.
Nevertheless, there were certain impulses; in Australia, in regions with strong mining activities and in New Zealand in connection with reconstruction after the earthquake in Christchurch. Overall, Holcim increased cement deliveries, mainly due to Australia, aggregates and less pronounced ready-mix concrete deliveries decreased.
The Indian Group companies recorded below expectation volume growth as the market faced a temporary slowed restart after the monsoon. Holcim Philippines and Holcim Indonesia were working at full capacity level. In Vietnam, deliveries decreased due to the fight against inflation and shortages in liquidity. Also, both Australian Group companies sold slightly less products.
The operating EBITDA of the Group region improved considerably, primarily the Group companies in the Philippines, Indonesia and India contributed substantially to the success of this group region. Excluding the one-off restructuring costs in Australia the like-for-like operating EBITDA rose by 14%.
To cope with the rising demand in Indonesia we’re currently building a new plant in Java and we decided following the dynamic development of demand to build the second identical kiln line at the same location.
Substantial capacity expansions are also in progress in India. Shortly before year-end, we sold 9% Siam City Cement Company in Thailand. However, we remain their strategic partner.
Now to Latin America. This Group region remained on a solid growth path and benefitted from large infrastructure projects. Residential, commercial and industrial construction also contributed to these developments.
The overall solid demand for construction materials led to higher cement sales. The decrease in sales of aggregate can be explained by the closure of queries in Colombia, the weak demand in Argentina, and delays in the start of construction of a big mining project in Chile.
With regard to ready-mix concretes, the reduction can directly be attributed to the strategic repositioning of our ready-mix concrete business in Brazil. The operating EBITDA increased excluding the one-off restructuring costs, the like-for-like operating EBITDA rose by 10.7% primarily the Group companies in Ecuador, Colombia and El Salvador contributed to this positive result.
However, the weak construction activity in Argentina impacted the financial results of our local group company. Shortly before yearend, Holcim solve its participation of 20% in cement was progressive in Guatemala to the local majority shareholder. In two important markets we're expanding our presence in the Cement segment. In the Brazilian plant of Barroso a substantial expansion will be realized by 2014 and a new kiln line to increase clinker capacity will be built at the Guayaquil plant in Ecuador by end of 2015.
Now Europe, the recession that has continued in EU. After the difficult start to the year of course by bad weather conditions, the European construction industry never really gained momentum. The austerity policies of governance and a cautious private sector led to a decline in demand for construction materials. Only in Russia, and Azerbaijan, as well as in Switzerland, construction activity remained high.
Overall, Holcim sold less volumes in all segments. The Aggregates segments was hit hardest. The recession primarily impacted our group companies in Italy, in Spain and also in U.K. However, France, Belgium and the Netherlands also experienced a decrease in sales volumes. In Switzerland, where the construction activity remains high, the weak Euro led to increased imports and thus to a reduced performance of Holcim Switzerland.
In Eastern Europe, several infrastructure projects were cancelled, resulting in a difficult market conditions for the group companies present in these markets. The reduction in sales volumes, the associated price pressure and the significant restructuring costs had this negative impact on the opportunity EBITDA, which declined by approximately one-third.
The cement restructuring initiative will reduce the cement capacity by 10% and will allow a significant and sustainable improvement of fixed cost as well as a much better capacity utilization rate. When excluding the one-off restructuring costs, the like-for-like operating EBITDA declined by 13.4%. Finally, clearly better operating results were achieved in Russia and Azerbaijan.
Now North America, the U.S. economy gained momentum in the second half of the year, which favorably influence the construction industry. Canada mastered the economic challenge remarkably well and the economic turn continued.
Holcim U.S. sold considerably more cement and was able to benefit from the increased construction of buildings, which however developed differently per regions. Aggregate Industries U.S. also profited from the growth trend and increased its deliveries of ready-mix concrete. The reason for the success was also the full integration of Ennstone, Inc. and Lattimore Materials with activities in Texas which consolidated for the first time for the full year.
With regard to Aggregate sales, the previous year's level was not reached due to the completion of a large infrastructure project. The operating EBITDA of the Group region North America improved substantially and strong organic growth was achieved. Both Group companies in the U.S. improved their performance. The reasons for which were the largest sales volume and the stable cost development. In the U.S. price increases also supported the results.
Now Africa-Middle East; political uncertainty in North Africa and primarily the civil war in Syria weighted on the economic development in the Group region. Largely stable was the economic trend in the Indian Ocean and the Arabian Gulf and in most countries in West Africa, the economy improved.
We experienced a reduction in sales volumes of cement and ready-mix concrete, but sold more aggregates. The operating EBITDA of this Group region decreased considerably by 11%, primarily the financial results of Holcim Lebanon reduced the overall performance of this Group regions.
I will now handover to Thomas for the key financial results.
Thomas Aebischer - CFO: Okay. Thank you very much, Bernard, and good afternoon to all of you. It’s a pleasure for me to present the 2012 results, and before we focus to the full year, I would like to give you some remarks on the fourth quarter 2012.
Cement volumes in the fourth quarter increased by 1.1%, driven by Group regions Asia Pacific, Latin America and North America. Aggregates volumes on the other hand decreased by 7.6% across all Group regions. Sales volumes of ready-mix concrete recorded a decrease of 7.2%, or 4.6% on a like-for-like basis, despite Group regions Asia Pacific and North America posting higher volumes.
Group sales increased by 1.2%, or 1.7% on a like-for-like basis to CHF5.3 billion, the operating EBITDA grew by 1.6% to above CHF1 billion adjusting for one-off restructuring costs of CHF181 million. As a result, the operating EBITDA margin in the quarter increased to 19.1% from the 19% recorded a year ago.
CO2 sales in the fourth quarter were CHF12 million lower compared to last year. The operating profit increased by 3.6% to CHF575 million adjusting for one-off restructuring costs. As a result, the adjusted operating profit margin reached 10.8%, up from 10.5% in the fourth quarter 2011.
Now, focusing on the full year 2012, net sales amounted to CHF21.5 billion, up 3.9% compared to 2011. Cement sales volumes increased by around 2.5% supported by positive developments in all Group regions except Europe and Africa Middle East.
Aggregates sales volumes declined by 7.7% across all Group region with the exception of Africa Middle East. Ready-mix concrete decreased by 3.1%, mainly reflecting the restructuring measures impacting the 159 ready-mix plants, which Bernard has mentioned before in his outline.
All product segments recorded favorable price developments throughout the year. Continued efforts on the cost side resulted in fixed costs increasing under proportionally while variable costs related to an increase mainly in raw material and energy remained challenging. The aforementioned price increases, however, strongly contributed to the development of the operating EBITDA that increased by 6.2% to CHF4.2 billion adjusting for one-off restructuring costs of CHF239 million.
As a result, the adjusted operating EBITDA margin expanded by 0.4% to 19.6% year-on-year. CO2 sales were lower by CHR1 million and therefore did not really impact the comparison to 2011.
The operating profit grew by 10.6% to above CHF2.5 billion adjusting for one-off costs amounting to amounting to CHF736 million. As a result, the adjusted margin recorded an increase from 11.1% in 2011 to 11.8% in the year under review.
Cash flow from operating activities reached CHF2.7 billion, representing a slight decrease of 2.6% or 1.8% on a like-for-like basis.
Moving on to net sales; net sales amounted, as mentioned before, CHF21.5 billion, representing an overall increase of 3.9%. Excluding changes in the scope of consolidation contributing a negative 0.1% and foreign exchange movements contributing a negative 0.2%, the like-for-like change amounted to an increase of 4.1%.
On a like-for-like basis, Group sales benefited from solid cement volume growth in Group regions Asia Pacific, Latin America, and last but not least, North America. While most Group regions recorded either flat or lower volume growth in aggregates, Group region Africa Middle East was the only region to report a positive sales contribution from higher aggregates volumes.
Cement prices increased in all regions albeit to varying degree, while aggregates pricing was mainly driven by Group regions Asia Pacific, North America and Europe. With the exception of Group region Africa Middle East, all regions recorded positive sales impacts from ready-mix concrete pricing.
Operating EBITDA increased, as mentioned, 6.2% to CHF4.2 billion adjusting for the aforementioned one-off restructuring costs. This was mainly driven by better pricing and the positive impact of the Holcim Leadership Journey that helped to mitigate the impact from the overall slight volume decline in aggregates and ready-mix concrete and the continued high variable costs related to distribution and energy. Compared to 2011, foreign exchange movements hardly had an impact on the operating EBITDA.
Moving to the overview by region, Asia Pacific improved its operating EBITDA by 10.3% or roughly CHF1.9 billion. On the like-for-like basis, the growth even reached 12.6%. The result was driven by a combination of better pricing in all segments and higher volumes in cement that more than offset increased fixed and variable costs. Key contributors are Ambuja Cement and ACC in India, Holcim Indonesia and Holcim Philippines. Lower volumes impacted the performance of Holcim Australia, that's mainly in the aggregates and ready-mix sector, Cement Australia and Holcim Vietnam.
Operating EBITDA in Latin America increased by a good 7.9% to CHF958 million despite inflationary cost pressures in Argentina and Brazil, in addition to higher energy costs in some countries. On the like-for-like basis, the increase amounted to a solid 7.2%. This result was achieved from a combination of volume growth in cement, partially improved market prices, and last but not lease a continued efforts and focus on cost that more than offset the increase in fixed and variable costs in addition to restructuring charges amounting to CHF31 million.
While the Group companies in Ecuador, Colombia and El Salvador posted substantially better operating results compared to last year, the sluggish demand hampered the results of the Group Company in Argentina.
The Group region Europe witness the 32.6% decline of its operating EBITDA to CHF627 million. On a like-for-like basis, this decline amounted to minus 32.8%. The main drivers of this decline were a combination of lower volumes and higher costs that could not be offset by an overall price increase.
Restructuring costs of CHF180 million in Spain, Italy, France, Belgium, Hungary and the U.K. negatively impacted the operating EBITDA development. While the Group companies in Russia, and Azerbaijan posted significantly better operating results, Holcim Switzerland, Aggregates Industry U.K., Belgium, and Holcim France recorded lower results compared to last year due to weaker demand.
North America posted the highest operating EBITDA growth at 38.8% and 32.4% on a like-for-like basis to CHF480 million. The performance was mainly driven by better pricing in all segments, higher volumes in cement and ready-mix concrete and strict cost controls that more than compensated the slight increase in fixed costs.
Operating EBITDA in Group region Africa, Middle East declined by 11% to CHF278 million. The decline was largely driven by lower volumes and higher costs in Group companies in Morocco, in the Indian Ocean and Lebanon, which was impacted by the political turbulences in that region.
Below operating profit, other income amounted to CHF207 million, up CHF138 million, mainly driven by the gain on disposal of the 9.3% stake in Siam City in Thailand and the 20% stake in Cementos Progreso in Guatemala amounting to CHF175 million in total. The contribution from associate companies declined to CHF150 million, down from CHF159 million in 2011, which the main driver being the lower profit from the stake in China and in Egypt.
Financial income increased by CHF42 million to CHF233 million, mainly driven by higher interests on cash and marketable security. Financial expenses decreased from CHF1.2 billion to CHF786 million, mainly driven as a result of the impairment of the investment in Afrisam which was recorded in December of 2011.
After-tax charge for CHF558 million, Group net income increased from CHF682 million to CHF1.26 billion in 2012. Adjusting from non-controlling interests, the net income improved by 126.5% to CHF622 million.
The financing surplus for 2012 amounted to CHF903 million, a slightly increased operating EBITDA and lower income taxes paid were not able to offset the higher negative working capital needs, those resulting in a minor reduction of the cash flow from operating activities to CHF2.7 billion, down 2.6%.
Investments to sustain the asset base increased by 7.1% to CHF805 million on a net base with roughly 75% on this being allocated to cement, 14% to aggregates and the remaining 11% to ready-mix concrete.
Expansion investments of CHF814 million was down 8.1%, while around 79% of this was invested in cement, aggregates and ready-mix concrete amount accounted for 9% and 12%, respectively. These slightly lower investments combined with the dividend paid in 2012 and the sale of the stake in Siam City in Thailand and Cementos Progreso as mentioned in Guatemala supported the overall increase of the cash flow generation capacity in 2012.
The shareholders' equity increased to CHF19.8 billion in 2012, up 0.9% compared to 2011. Net financial debt recorded a considerable decrease of CHF1.2 billion to CHF10.4 billion. As a result, key credit metrics continued to strengthen throughout the year and recorded an improvement compared to the levels recorded a year ago. This development together with the high level of cash and marketable securities of CHF3.1 billion supports the Group’s overall credit profile.
With this thank you very much for your attention. I would like to handover to Bernard.
Bernard Fontana - CEO: Thank you, Thomas. Now for the outlook for 2013; Holcim anticipates an increase in sales of cement in 2013, but it will be challenging to reach the previous year's level in the aggregates and ready-mix concrete businesses. While Group regions, Asia Pacific, North America and Latin America are expected to witness higher sales volume, Holcim is somewhat less optimistic with regard to Europe and Africa and Middle East.
Turning to operating EBITDA and operating profit, the Board of Directors and the Executive Committee expect a further improvement of margins. The Holcim Leadership Journey, which will gain further momentum in all streams as planned, will contribute to this development. Under similar market conditions, significant organic growth in operating EBITDA and operating profit should be achieved in 2013.
I propose that we now turn to the questions.
Remo Rosenau - Neue Helvetische: Hi, it’s Remo Rosenau, Neue Helvetische Bank. Just to be sure, the significant increase in the organic growth of the operating EBITDA is based on the adjusted figures, right?
Thomas Aebischer - CFO: That's correct.
Bernard Fontana - CEO: Absolutely, yeah.
Remo Rosenau - Neue Helvetische: So what I would want, I mean where those significantly start for you personally? Because I know it's a subject to personal judgment so. Your judgment is interesting here.
Bernard Fontana - CEO: It’s significant. It means it’s a confirmation of the guidance initially given, if you remember we started with the base line of 2011. We (indiscernible) organic growth and on top of that we make efforts of the Holcim Leadership Journey to improve by CHF1.5 billion. You could see that we reported an organic growth and on top of it a net contribution of the Holcim Leadership Journey to the operating profit in 2012. This message that means, yes, we are on track. So I come to this net, because some companies report gross figures, yield and so on. Here we report net which is what you find in the operating profit. I take an example; out of the CHF158 million, we report, for example, CHF39 million on cost saving, fixed cost. Our fixed cost base is roughly CHF7 billion plus. The inflation was 4% adjusted from restructuring cost 1.5% that we report will come on top that we have identified, that was on top of the actions that were contributing to the organic growth and of course CHF39 million may look modest, but they just come on top of those efforts. Of course, with all the measures that have been taken as restructuring initiative, you may expect significantly higher figures on the fixed costs front in 2015 and 2014.
Remo Rosenau - Neue Helvetische: The second one on pricing. Do you think that pricing momentum, which was quite positive last year is likely to continue in most regions and specifically in North America? I mean other players have said that they have price increases announced for April. Some even said that they plan all this for August, August is that – would you confirm that?
Bernard Fontana - CEO: Yes. If I take cement, so we announced last year that we will (curve) the trend after 17 quarter of price decrease, there was a skepticism in issuing the (path), then this has happened and indeed we report now for cement, at the end of the year, a price increase in U.S.A. of a bit less than 4%. But what is important is that, for example, in October, in Texas, we increased the price by $5 per ton. Since January 1 we have increased our cement price by between $5 and $7 per ton, according to the different region in the U.S. so price increase have been best. What will happen later on now on the – further we'll see depends on the momentum of the industry, but clearly this momentum on price increase sticks. First, it was needed because it came after all those quarter of decrease, but second I see a fundamental reason of why they should stick is that the NESHAP regulation that obliged the industry to upgrade its standards as for pollution. The good news is that Holcim is more or less at start. We'll apply from September 2015, so if you have an industry that is not at standard and you want to be ready, for 2015 you must take action already in 2013.
Remo Rosenau - Neue Helvetische: And in the other world regions about the pricing momentum?
Bernard Fontana - CEO: So price momentum, Asia continue, LatAm we have this momentum. In Europe we took a bit more cautious stance. Now if we take Europe in 2012, in average our priced increased by 1.3% in cement. Here the caution comes more from the volume aspect because roughly in 2012, we lost close to 4% of our volumes in cement in Europe and the other area where we are more cautious on outlook which is Africa Middle East, we had a positive price momentum of 2.5% last year and our caution comes more from the volume side where we lost 4% volume last year. The main point of concern we had was Morocco where a new actor invested a new capacity that is roughly 20% of the market and indeed, we report in average the loss of price of 2.5% in Morocco, but the important news is that in Q4, sequentially to Q3, the price increased by 5.5%. So our caution comes from the volume aspect, how will the people who leave, the Moroccan people who live in Spain and France and who traditionally invest in various debt in Morocco will be having small caution how will the tourism activity developed, it's more cautious stand on volume rather than price.
Christian Korth - MainFirst: Christian Korth from MainFirst. I have three questions please. The first one is about your expansion CapEx that you mentioned in the presentation with CHF1.5 billion in 2013. Could you elaborate a little more detail which projects are incorporated in this guidance? Secondly, you are guiding for average interest rate to go slightly up, maybe you could explain why you see that? Lastly, in terms of aggregates you have said that it will be difficult to reach the volumes of 2012 and I would like to know if you could shed some light why you see that especially in the regions, I know as you start to explain that maybe you can give us a little more detail on this?
Bernard Fontana - CEO: So, I’ll just start with the CapEx then you can go on the interest rate and we’ll come back after on the aggregate. So if we take our expansion pipeline, we have a pipeline of project to grow by 14.2 million tonnes of cement more or less CHF2.5 billion and here the main project are India with the expansion around Jamul, which is the associated grinding station of 5.2 million tonne. We are also growing in Indonesia, where we finish 2.1 with the cash out and it comes at the end of the project and we accelerate for 2.2 to be able to take advantage of the growth of the market so between 3.2 million ton, 3.5 million tonne of expansion and then we have a major project in Brazil in Barroso where we plan to strengthen our presence to take advantage of the growth of the country. We show 2.3 million tonnes. So they are major investment project ongoing. Any comment on this one and then on the interest rates?
Thomas Aebischer - CFO: These are the major project we have on the construction as Bernard has mentioned. With respect to the interest rates, average interest rates or average cost of debt in 2011 was 4.5%. We have given guidance already then that we expect a slight increase for 2012, so we ended the year at 4.8%. When you look how we have changed the financing, that's really the explanation of interest rates. We have reduced bank financing pretty significantly further and have now increased the capital markets financing to 81%. So when you break down interest rates a little bit further, then when you look at the financing costs in our operating companies, the decrease actually in 2012 from 5.6% to 5.2%. At the same time, the financing cost at corporate level went up from 4.2% to 4.6%, mainly as a result, we have also extended our average maturity now to 4.2 years. So as we went longer, as we did more capital market transactions and then repaid short-term bank debt, bank loans, that of course had that slight negative impact on the interest rate. We expect that trend to actually – when we look at our financing strategies now for 2013; we expect that trend to continue the trend of going as much as we possibly can into capital markets. We went into Mexico with several transactions, last year we went into Australia with a more than one transaction. We had a transaction in Canada and so on and forth and that will continue this year as well.
Bernard Fontana - CEO: As for the aggregates, that was the last part of the question. If we see where we lost volume this year first is Spain. With the decline of Spain we lost in 2012 2.3 million tonnes of volume of aggregates. In U.K. where also the austerity measures are in place and it directly impacted volume, we lost 2.2 million tonnes, in Central Europe 1.5 million tonnes and in Australia, although there where we have a favorable effect with the pricing by a shift of the activity, but in the South East Queensland we lost some volume and globally the volume loss was 2 million. So adding this evolution, where will Europe go? Where I want to a bit cautious, in particular in France, how will the start of the year begin, that's why we take a bit cautious stance on aggregate. On the other – on the contrary, in the cement activity, we are in the emerging countries and here we are driven by the growth of those countries. I will take the opportunity to introduce some question by some of the analyst who listen to us on the webcast. Question by Miek Betts, Jefferies.
Miek Betts - Jefferies International: On the Slide 4 you listed a number of countries where cash cost were incurred as part of the Leadership Journey. Three big countries for Holcim are missing, India, Mexico and the U.S. Is there not much scope in these three countries? Similarity the Middle East, Africa is not mentioned.
Bernard Fontana - CEO: So if I take India, of course, they work on their cost and their cash, but they are also growing. So if you need to adjust also the work for (indiscernible), you don't have significant effects, so we don't record them in the Holcim Leadership Journey; just normal work. In the U.S., all the job, all the work to adapt the industrial footprint has been done already in the past year. Now, the footprint – if you take the cement footprint is really in place. We have a very good cash cost at Ste. Genevieve, for example, where we run at less than $28 per tonne and we're in good position to take advantage of the price increase, but also of any positive development on the volume. As for Mexico, we had an adjustment of our ready-mix footprint to really continue, also they were part of this exercise, but here the cash cost, which is the severance cost is small and was not material to be put in the Holcim Leadership Journey. Finally, Africa Middle East, yes, they contribute to the Holcim Leadership Journey. One major point of their contribution will be the cost in Lebanon, but here the cost is we want to improve is mostly the energy cost. We have not so favorable cost structure in energy and it goes more through access to petcoke and technical activities that's why you really not see a significant impact on the cash cost.
Miek Betts - Jefferies International: Thank you for the additional disclosure by products on Page 158 and 159 of your Annual Report. The figure that stands out through is the CHF41 million operating EBITDA loss in other construction materials in Europe, down from a profit of CHF25 million in 2011, is this mainly due to restructuring cost?
Bernard Fontana - CEO: Yes, it’s mainly due to the restructuring cost. We didn’t give all those detail, but if we adjust, we already see the first positive effect, adjusted the operating profit increases by 25% and even by 28% in the last quarter, because when you stop a unit that makes losses. Then you have an impact on your results.
Thomas Aebischer - CFO: So I think I also appreciate that Miek Betts has seen the additional disclosures and I hope that will satisfy a lot of you as well. With respect to adjusted numbers, we really try to stay away as much as we possibly could and we really have only adjusted the numbers where we believe they have to be able to reconcile in order to understand that you understand how we are on track with our efforts with respect to the Holcim Leadership Journey. So when you look at segment results, of course, they are significantly not only OCMS, not only ready-mix but also other segments as we have disclosed it are pretty significantly impacted with restructuring costs. If you want to trust them, you actually find the information in the Annual Report.
Bernard Fontana - CEO: Now, I can come back to a question by Jean-Christophe Lefevre-Moulenq.
Jean-Christophe Lefevre-Moulenq - CM-CIC Securities: Two questions on India. Full year 2012 cement price effect was 5.4%. Could you elaborate on cement price effect over 2012 versus Q4 2011? Are price hikes planned in India and what is the order of magnitude?
Bernard Fontana - CEO: In fact, what happened in India is that after a delayed monsoon and the very good first part of the year, the restart of the volume was a bit slower in Q4 and the phenomenon we saw in Q4 was more volume driven than price driven because we've managed to maintain a high level of price during the monsoons. So we started the monsoon with a high level of prices. The volume impact in Q4 2012 compared with Q4 2011 was a reduction of minus 1.4% in ACC and minus 4.4% in on Ambuja. But roughly the price per bag was kept in the area of INR210 per bag. Now what we see starting from there is not the spark in price that we had in Q4, 2011 coming from a low level, but more on the weekly basis, price is getting higher and higher in India, because ultimately it's a back price and we adjust the price on a weekly basis. So currently the (teams in) India there to push the price. It's not a hike, because it comes from the high level, but pushing weekly – week after week and I think they do their job and they do it well. We’ll take one question here and then I will switch to other questions from our (indiscernible). Yes?
Jean-Christophe Lefevre-Moulenq - CM-CIC Securities: I also have a question about guidance especially on Leadership Journey program. Now you have booked CHF240 million of cash cost over this year, do you expect still to have cash cost in 2013? Secondly, is the guidance of a positive impact from the program (converted) of CHF550 million still valid or do you see any changes there, so that you have to increase your EBIT by CHF400 million from the program in 2013? Then a second question would be, you talked about price in the U.S., could you give us once an indication what price level you really have in the U.S.? Do we have $100 or lower or higher? Secondly, on that what do you expect really to increase the prices in the U.S. dollar?
Bernard Fontana - CEO: I will take (indiscernible) and you will take the price in U.S., Thomas. So indeed we said that we were planning CHF200 million cash cost for the Holcim Leadership Journey, (80/120). In fact, we decided to do more and faster and that's why we put all those CHF239 million in Q4, so this is there, this is done, launched and some have been done, some are ongoing and we don't tend to come back on the cash restructuring cost and I think it's much better because it's faster, it's behind than we need what we need to do, it impacts some of our employees, so that our teams can focus on delivering now their production with the lower cost base and focusing on their customers. The guidance we give confirms the guidance we gave initially with the impact of the Leadership Journey, so with some organic growth and a net contribution of the Holcim Leadership Journey and with (especially) globally with significant growth, but it’s a confirmation of the guidance we gave, so yes this minimum CHF550 million impact is confirmed.
Jean-Christophe Lefevre-Moulenq - CM-CIC Securities: So the Journey program should add at least CHF400 million to their EBITDA in 2013.
Bernard Fontana - CEO: In operating profit of CHF550 if we compare with the base line of…
Jean-Christophe Lefevre-Moulenq - CM-CIC Securities: But CHF150 that you already released from CHF550 so…
Bernard Fontana - CEO: Yes.
Thomas Aebischer - CFO: I think I still owed you another answer, no. So with respect to the Leadership Journey unchanged, the only thing which has changed, the CHF200 million have been spent, we actually spent more CHF240 million in 2012, no additional cash costs for Holcim Leadership Journey expected in 2013 which we have given the guidance as 120 because we accelerated the program and we are on track really now to reap the benefit in 2013. With respect to the pricing in the United States, I mean, I can give you an average and then average is I think you mentioned it is about $100 as average sales price. So you have three price levels, you have the average sales price in the market. You have the revenue at station, which is the price at a cement terminal and then you have the (mill net) as we call it other companies call it differently, which has expand the price. So if you’re going to have a market price $100 is a good price. Now you’ve asked about project and building of course, we have in the United States it's not a bad market, we are contributing and participating in very large, where there are large infrastructure projects you paid for these projects and you come in the price and of course that price is in the competitive bidding process normally and will not – is somehow independent from the generic price increase announcements we do. So what can you expect in 2013? I think that's the question is it 5%, is it 10% or maybe it's significant. Coming back to your question now, I think everything we’re above somehow 6%, 7%. Everything above 6% or 7%, would be considered significant. Now for 2013, because when you look what's in the marketplace a 6% price change in the United States for 2013 should be expected.
Jean-Christophe Lefevre-Moulenq - CM-CIC Securities: I just want to come back to the question of how much higher EBITDA. I mean, you say you have speed up the process and accelerated in higher cash cost and you spent – a quick – one quick – now I also interpret that this should basically lead to rather to be on the upper end of the range you gave for of (550 to 700), at least not on the lower end, is that a right assumption or not when you say you speed up or accelerate the process?
Bernard Fontana - CEO: So if I take the fixed cost contribution to the Holcim Leadership Journey, we said we should contribute by at least CHF200 million and we reported CHF39 million in 2012. It is sure that with the (arterial) measures that have been deployed, you will have a strong contribution of the Holcim Leadership Journey on the fixed cost. There are a lot of component in the Holcim Leadership Journey. There is the component of energy and AFR where we report a gain in 2012 of CHF40 million, here we are confident to be on track because we have launched the investment that were necessary to achieve our commitment, we have launched them in September and in July last year. By the way, that's why guidance of maintenance CapEx you see a higher figure than last year, because we anticipate some of the cash outs that are linked to those programs. On the procurement front, we have referred to gains of CHF39 million – sorry, CHF48 million, here our organization is in place to deliver more and faster in 2013 and 2014. In the logistics area, where we have ambitious target also, we reported zero. It doesn't mean we did nothing. Several companies have already initiated, but some companions reported negative gain. I give you an example. In the U.S. the level of the water in the Mississippi was low. So we had to low the barges with just half of the quantity. So here we registered the negative gain and that's why we're here. I can tell you that we have strong initiative in place. For example, in Asia and in Europe, where we expect significant traction. Finally, there is the top line program, where all the initiative are in place. So some go faster, some go but clearly on the fixed cost it goes and – while and it will go much faster.
Jean-Christophe Lefevre-Moulenq - CM-CIC Securities: So, I would interpret that’s somewhere in the middle. But beside this, I mean is there any – you say organic growth and you mean with that including the benefits. So everything apart from currency and acquisition or whatever divestment, but can we expect apart from the Holcim Leadership Journey also grows? I mean the U.S., if it's really recovers, it can make a real big jump in the earnings and then the question is how much you will relate to the Holcim Leadership Journey and how much not? What from the pricing especially, how much is the prices? That's a bit tricky to foresee. I know that you will have lot of this price increases related to the Holcim Leadership Journey. So how can we differentiate in the future what is Leadership Journey and what is on top of that?
Bernard Fontana - CEO: You can have an explanation in the way we reported 2012. We reported organic growth and a net effect of the Holcim Leadership Journey. In the top line we reported CHF31 million, you can measure that with all the price increase. We came from the U.S. for example. So what we report is very specific actions, specific programs where we register net gains on top of the market trend.
Thomas Aebischer - CFO: Maybe to add here. I mean you're of course on the right track and the guidance last year for 2012, which hopefully we believe we were – we landed it the way we have given guidance. We said organic growth and then in 14th of May, when we came out with the initiative of the Holcim Leadership Journey. We talked about the Leadership Journey contributing 150 to 300 on top of the organic growth. This was a little bit difficult now to – got back into the numbers and now attribute how much is now organic and how much is now the contribution, especially when you start an initiative. So we said to ourselves in 2013, we're not going to split this. We have given guidance on the impact of the Leadership Journey and as Bernard had said, this guidance is unchanged. Then we will see what remains. In the guidance we have given for the Leadership Journey was under similar market conditions. On operating profit level, we lost in Spain and in the U.K. roughly CHF120 million in 2012. So this is not similar market conditions. I mean, I don't know how you see it, but in our definition this is not similar market condition. So despite the significant downturn, further downturn in Spain and the U.K., we were able to produce a positive result, organic growth and that of course includes the negative development, so for 2013 – now for us internally the ultimate test is, are we able to impact the margin, and so we impacted the margin by 0.4% on operating EBITDA and 0.7 percentage points on operating profit, mainly with the initiatives of the Leadership Journey and we expect that margin expansion now to continue into 2013 with these initiatives.
Yuri Serov - Morgan Stanley: Yuri Serov, Morgan Stanley. Just coming back to the question of cash costs. So you have spent everything that you have allocated to the program, but on the other hand, in terms of the delivery of the benefits so far you have reported that you have only delivered just over 10% of the total target. So how does that work? How are you going to deliver the remaining benefits?
Bernard Fontana - CEO: Because we've accrued at year end, and a part of the cash cost, for example, if you close a factory, you must have a cash cost to clean it up or whatever and that will be spent over time. The massive initiatives were in Q4. So then you get the effect. You reduce the number of people, then there is a time for them to go according to the legislation in different countries. That's why it's – (it is to come) but all those costs have been accrued, yeah.
Thomas Aebischer - CFO: So the program as we have maybe you go back to the slides we have presented on the – or we have produced on May 14 and made them available to you, the program is clearly back-loaded. I don't think you can expect an initiative to start in a size of Holcim and then to see the impact the next day. You need to mobilize people, you need to mobilize the organization, you need to set up the organization and then you start having the benefits. So when you look at the way we have given guidance on the impact, the smallest impact is 2012 little bit a larger impact in '13 and then hopefully we get traction especially on the customer excellence in 2014. So it's a staggered approach back loaded into 2014, main initiatives on restructuring took place as Bernard just have said, in December of 2012. There was no impact yet other than the negative impact in 2012, which we try to eliminate with the adjustments of the results.
Yuri Serov - Morgan Stanley: That's fair enough, but I will probably on that a bit more though. In your press release and at the -- to around Christmas time you said that you would be doing this restructuring in Europe and that's why you will spend most of your cash costs. Now, the total number of the benefit that you put on that restructuring in Europe was CHF120 million, which is much smaller than at least the total number even for the fixed costs, let alone for the whole program. So, I take it that you only achieved a portion of that in 2012, and much more of that CHF120 million will come later, but still to me it still sounds like your cash cost was spent on effectively restructuring in Europe, which is only supposed to deliver CHF120 million, what about the rest?
Bernard Fontana - CEO: So we have initiative, we have for example in Australia, a lot of you need have been optimized in South East Queensland and we expect A$35 million and A$40 million, fixed cost reduction there, we have the impact of Yocsina in Argentina, Yocsina is next to Cordoba and we have two neighboring plants at 10 kilometer distance more or less and we put two-in-one. Here again we have some impact. So there are lot of initiative here and there, and this is true that the part of the cash cost that we report for Europe is proportionally higher, because when you close an aggregate plant or cement kiln, you must anticipate one day or the other some cleaning cost and we have accrued them and there will be a spend when it's needed and there may be some yes or no but we have covered all the cost. So, basically the way that I understand to summarize is that you have effectively have done all the actions and you have accrued for all the costs and all the benefits will basically just keep on ballooning from here.
Bernard Fontana - CEO: We have taken all the bad news in 2012 and particular in Q4.
Yuri Serov - Morgan Stanley: The second thing that I wanted to touch upon is your plant closures in Europe, can you just explain how you make the decisions, obviously you closed a facility, you reduced your fixed cost, your cost structure gets optimized, but inevitably in certain countries at least you will lose some market share, how do you make that trade off, surely in Spain where everybody is closing capacity, that's not an issue but in countries like Belgium, countries like France, for example some market share loss would be expected, so how do you make that trade-off, or how do you counter than market share loss with any actions that you can explain to us?
Bernard Fontana - CEO: You have two levels; you have kilns and the grinding capacity and the ready-mix. For the ready-mix it's a network then do you need sometime reorganized if we take the example of Germany where we have some GV, we have combined with the GV, so we keep the market share in a more efficient network. In some others, you should have two neighboring facility running at 30%, doesn't make sense to give the two and we've restructured. Second you have the grinding capacity. There are now so much fixed cost there, so we kept the grinding capacity to be able to protect our market share. Take the example of facility next to Madrid, most of the kiln, but we kept the grinding capacity to continue to cover the market. Finally, you have the kiln and here is really an optimization within the network. If you take the example of France, you have (indiscernible) that are similar factors, it's very close. Then we’ll optimize in the favor of (land). If you take Merone in Italy, the same proximity of Switzerland or other Italian assets and there we optimize within our network. So, clearly, this is driven by a fixed cost approach unit by unit, checking which are the most efficient, which are the best position, which are the best reserve also of raw material for the future and making sure that we keep our market share. That's basically the process.
Thomas Aebischer - CFO: So we are not losing market share. There are so much over-capacity and now in Europe I don't know what a European number is for the industry. We would have to look country by country. When you look at our Europe, we are somewhere around 65%, 68% capacity utilization. There is plenty of capacity around to supply these markets. We’ve closed roughly 10% now of our capacity. So this was the same in the United States. You may remember, a few years ago, we closed actually a total of five plants or one mothball foreclosed in the United States. We could do this because we had a network where we are not going to lose the market. We had terminal networks, we had to Ste. Genevieve plant built at the time where we are able to supply the market and the exact same strategy is in Europe. So we are not going to give up and we are not walking out of market, we are just optimizing our cost structure.
Bernard Fontana - CEO: So yes I would come to you, maybe I just did a few questions, because there are lot of questions that come also from those who listen to us, so there were question by Paul Roger from Exane BNP Paribas, on our guidance of organic growth and EBITDA, I think we have addressed it.
Paul Roger - Exane BNP Paribas: On the restructuring cost, higher end guidance 2012 does it mean we have more?
Bernard Fontana - CEO: I think we have said that we have taken everything in 2012 and we don’t plan to have more cash cost and restructuring cost.
Paul Roger - Exane BNP Paribas: Another question was, can you comment from – more on the outlook for volumes in Mexico? What explains the softer volume experience by the industry and have trends at the start of 2013 been more reassuring?
Bernard Fontana - CEO: So in Mexico, we registered a volume increase last year by a bit more than 3% and we think that in 2013 the Mexican economies forecasted to perform similarly to 2012 and this supported by a moderate growth in the U.S. Demand for cement would remain robust, supported by improved consumer confidence, better conditions in the labor market and increased credit availability and we think that the cement volumes should reflect the positive economic growth in this market.
Thomas Aebischer - CFO: If I can add, in Mexico, clearly was – when you look at volumes, a disappointing year in 2012 and clearly not as – was not growing as much as we would have expected. One of the other reason is the new government which is in place and which was clearly unable to develop the necessary project and put the money on the ground within a necessary timeframe, so our expectation also together with what Bernard said, with improved situation in the U.S. and the remittances which are flowing into Mexico to see to expect a better year now in 2013.
Bernard Fontana - CEO: Yeah, another question by Rob Muir of Berenberg.
Robert Muir - Berenberg: Can you split the 2012 cost savings in the Leadership Journey by quarter, so that we can see the underlying operating gearing? Can you also give some guidance as to their timing in 2013?
Bernard Fontana - CEO: So you could see we gave them for 2012 and now we'll give them on a quarterly basis from this year.
Robert Muir - Berenberg: Are you gaining market share in cement in the U.S.? Your Q4 performance was extremely strong. Are you gaining market share which is behind this? The (connotation) here being in relation to the cost advantage posed by Ste. Genevieve or perhaps customer excellence which is also linked to one of your question.
Bernard Fontana - CEO: So here on such that Q4 performance was in North America including Canada, we have largely performed in line with the market developments and the government improvement stems from the efficiencies and the operating leverage from the volume and pricing improvement. Then you can see some the differentiated report quarter by quarter according to the development by the regions here for example we gained the positive impact of the price increase in Texas that was placed in October.
Thomas Aebischer - CFO: In the U.S., we've said that many times in the last two years now we have a really good position now with very cost-efficient position, very cost-efficient plants and operational leverage now starts to play. As soon as volumes are improving, absorption of fixed costs and that's clearly what you see now in 2012 and we expect that to continue in 2013. Canada, we always talk about the U.S., Canada has posted – we are in Canada since 1954. This was the best result in the history of the Company was in 2012. So very high level performance. Luckily enough, we bought out the minorities in 2007, so hopefully that will continue for many more years to come and the setup of infrastructure projects in the footprint we are in Canada is clearly there to contribute also in the future at the fairly high level.
Bernard Fontana - CEO: Third question by Rob Muir.
Robert Muir - Berenberg: You talk about reducing your open capacity by 10%. How much of this is a clinker capacity versus grinding and how much clinker capacity will you have remaining? If we apply the guidelines that 64% of the total restructuring cost relate to cement. Are we right to think that you are writing these asset off at NAV of CHF70 per tonne, or is it then less than that?
Bernard Fontana - CEO: So, we have given the information of the cement capacity that we close which is 4.7 million tonnes. So you can make the calculation of the (entrepreneurs the EV), compared to capacity of roughly 50 million tonnes. If I am back to the clinker since the beginning of the crisis, Holcim will have closed 6.5 million tonne capacity in Europe. That give you the figures we have, which represent two-third of the capacity. We have closed (indiscernible) since the beginning of the crisis. We have – maybe I will go to questions in the room and then we’ll be back to questions by those who are connected.
Martin Huesler - Zurcher Kantonalbank: Martin Huesler, Zurcher Kantonalbank. I have three questions. Can you say what were the energy cost per tonne in the fourth quarter and full year 2012? Then you said, you mentioned several times that you don’t foresee any cash costs, restructuring costs for this year. Do you foresee from today's perspective non-cash cost arising for further plant closures or capacity adjustments and the third question is regarding India. What is your outlook from today's perspective for India volume wise? What are the most recent trends? Did volume pick up in the last couple of weeks? What do you expect with the input costs to happen?
Bernard Fontana - CEO: So first question on energy. We finished the nine-month of Q last year with an average energy cost of CHF16.4 per tonne. More specifically, in Q3 last year, the energy cost was CHF16.7. In Q4, we had energy cost of CHF15.7 per ton. So we finished the year at CHF16.3. If you remember, we gave a guidance for last year of CHF17. We give more or less the same guidance; we gave the same guidance CHF17, more or less flat for next year. If you want to analyze what is the gap of CHF1 reduction between Q3 and Q4 last year, 40% of it comes from ForEx effect outside India and 60% come from India. So a favorable impact this time. The major effect is the better utilization of petcoke in favorable pricing conditions in some of our units in India. The next question was…
Thomas Aebischer - CFO: The next question was on guidance on write-offs. There is no guidance on write-offs because we don't expect any additional charges in 2013, but you'll know how it works depending on how economies are going, impairment have to be done and I cannot speculate -- now we do not expect anything based on our budgets. I guess that's the best comment I can give you.
Bernard Fontana - CEO: There was a question on India. Where are we today? There was this temporary slow start in Q4 after the monsoon, but now day after day, the activity is getting momentum. It's not there is spark of a price that we experienced mostly in Q4, as we come from higher price, it's weekly improvement of volume and prices that we find in India. As for other cost drivers, so you could see where we are in energy which is developing well. The most important thing we worked is the increase of the distribution cost as a consequence of the increase of the railway cost between 15%, close to 15% and the increase of diesel that might go between 15% and 25% according to the different regions. As for the fixed cost and the general discipline that also applies to India where some productivity program also in place. So this is the trend we see in India but it's after a slow start the activity is going back to normal. The outlook for India, we are confident in India, the fundamentals are good. We expect for the coming years a growth of roughly 8% in volume for the next three, four years, an average of 8% in volume, and of course we have some differentiated trend in the different areas. There is an overcapacity in India that remains roughly 70 million tonnes, 70% of this overcapacity is in the south where we are not present. The remaining is mostly in the north where we are present, but the north, you go also mountainous region so it must be taken with care because the logistics conditions doesn't allow such an easy move of the product, so we are more or less in similar overcapacity situation as we were in the last 12 month. We see less project coming on-stream, but fundamentally we are more or less at the same level.
Aynsley Lammin - Citi: Aynsley Lammin of Citi. My question is about the outlook in India. I have two other questions. Should we expect net debt to benefit from any further asset or investment disposal in 2013?
Bernard Fontana - CEO: It is true that as part of the Holcim Leadership Journey, we have said that we would be – we look for selective divestments where it makes sense in area and (indiscernible). There is no major contribution, but we remain open on a case by case to some selective divestments.
Aynsley Lammin - Citi: What are your expectation for volume and price increase in the U.S. for cement and aggregate in 2013?
Bernard Fontana - CEO: Maybe we can come back to this one, Thomas.
Thomas Aebischer - CFO: So the volume I think we talked about pricing in the U.S. when you take PCI in the latest forecast, they talked somewhere around 7% to 8% on volumes in cement and that's more or less in line where we expect it as well in 2013 with respect to aggregate volumes, we expect the positive development I would like to refrain here from giving you a percentage number, because aggregates volumes, the downturn, which Bernard has talked about in the U.S. on aggregate is mainly related to a very large infrastructure project we were participating in and if we get such projects again, then we will not talk about 1% or 2% and we clearly talk about more significant numbers, but it's very depending since we don't have a network of aggregates across the United States like we have a network of cement. It's very much depending what happens in micro-markets in the ones we are present with our aggregates, but we would expect the positive development overall in the volumes in 2012 and 2013 as well.
Bernard Fontana - CEO: I will now come back to question asked by Arnaud Lehmann of (BofA). So was question of the soft Q4 and the outlook I think you have addressed it and the strength of North America margin in Q4 I think we have addressed them.
Arnaud Lehmann - Bank of America Merrill Lynch: Another question is, do you have any plans regarding reducing minority shown within the Group, India, Indonesia, Philippines?
Bernard Fontana - CEO: I think answer is that we have enjoyed having minorities and that's part of our local strategy to have local management and local shareholders, and as long as there is no conflict of interest, we keep this situation. We’re happy with this situation as was the case for many years. There was a question on the CO2 sales. I think we could report CHF62 million of CO2 sales last year compared with CHF63 million in 2011. So it's more stable and the fact that the CO2 price is lower roughly EUR5 currently is something that doesn't prevent from the necessary restructurings in Europe, because with the highest CO2 price, (Shuruvo) capacity captures to (crushing) the CO2 and I think it's favorable for companies like us who do the job to optimize their footprint in Europe. Last question by Arnaud Lehmann.
Arnaud Lehmann - Bank of America Merrill Lynch: What should be the impact of change in accounting for proportionately consolidated company, and the impact of IAS 19 on financing cost, maybe this is one for you Thomas.
Thomas Aebischer - CFO: I think it refers mainly to the deconsolidation of our participation in Thailand. With the new accounting standard which came into effect 1st of January 2013, we will no longer proportionately consolidate the Siam City Cement. Siam City Cement is a public quoted company in Thailand and you will find all the details about – the net sales impact is close to CHF400 million 40%, 50% for Holcim which will be deconsolidated. However, the impact of course on net income will be – there will no impact, we will continue doing equity accounting for the investment. With respect to IAS or IFRS 19, we've disclosed the impact in our annual accounts and I do not expect any other impacts out of that change in accounting guidance.
Gregor Kuglitsch - UBS: Why do you think adjusted like-for-like EBITDA growth was 2% in Q4, so the adjusted EBITDA growth amounted to 1.6% goes to – so we had positive development in North America, LatAm and on adjusted basis Asia Pacific. African, Middle East and Europe could not reach the level of pervious and also the growth was a bit lower in India in Q4 as was mentioned with a slow restart of the monsoon. We have to another question by Gregor.
Gregor Kuglitsch - UBS: What happened in India when margin came under pressure?
Bernard Fontana - CEO: So I've commented the volume effect, now when (indiscernible) we saw all the reasons why the volume were a bit lower, the lack of sand availability in Punjab, the weather in some areas (indiscernible) where the people were going. So you can find many specific reasons that are temporary reasons. But basically there was a bit less volume growth compared with Q4 in 2011 and that's why temporary and the activity is going back.
Thomas Aebischer - CFO: May be another comment about India, very important to – yes, the fourth quarter compared to the fourth quarter '11 was challenging, mainly on price. We had very steep price adjustments in the fourth quarter of 2011 which didn't take place again in 2012. So if you compare quarter '11 with four of quarter '12 then of course it's roughly a flat development on price. However, when you look at the year, EBITDA margin, operating EBITDA margin for 2012 increased roughly 1 percentage point from '11 to '12, so clearly a positive margin development in India from '11 to '12 overall.
Gregor Kuglitsch - UBS: What do you think total cost inflation will be in 2013? Do you think pricing can offset these?
Bernard Fontana - CEO: So clearly, we target to do much less than the evolution of cost than the inflation, already in 2012 before the impact, full impact of the restructuring measures adjusted from restructuring cost, our fixed cost increased by 1.5% in an environment of 4% and clearly, the job of the Holcim Leadership Journey on top of what is done everywhere is to ensure we pass on our cost to the market and also create additional value for the Company and for the customers. We gave also the guidance in term of energy cost, a flat guidance and clearly -- our programs to improve our performance in energy.
Giuseppe Mapelli - Equita: Giuseppe Mapelli, Equita. In which countries do you expect an increase in competition due to the effect of new capacity entering in the market in 2013?
Bernard Fontana - CEO: I think the main place where we report capacity is India with the CHF70 million and I said that we see it a quite a stable situation as for the market and the main concern we had was Morocco that I have commented at the beginning, where 20% of the market comes on stream it's impact especially in current environment and my perception is that on the price and volume this has been digested now by the market, which allowed a sequential price increase in Q4, 2012 compared with Q3 2012 of plus 5.5% allowing to finish the year in the range of minus 2.5%. So that’s for me the main area. I think now with all these questions, I think we reached the end of this session. Thank you very much for your presence and your numerous questions and for your interest in Holcim. Wish you a nice day. Thank you. Thank you, Thomas.
Thomas Aebischer - CFO: Thank you.