Sigmaroc (LSE:SRC) — Annual Results

0:01 Good afternoon, ladies and gentlemen, and welcome to the SIGMAROC PLC full year results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the Q and A tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today, and we'll publish those responses where it's appropriate to do so on the Investor Meet company platform. And before we begin, as usual, we would just like to submit the following poll. And if you'd give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to the executive management team from SIGMAROC PLC. Max, good afternoon, sir. Good afternoon. Hello, everyone. I hope you can all see us on the screen. I've got a series of slides for you, which you can also find on our website, and we start with slide four

0:54 of the slide deck. We'll run you through a series of highlights, operational review. Jan to my right will take you through the finances, we'll come back to strategy and outlook. Operationally, the business has done extremely well in 2024. We have taken the business through a transition and integration of the new Lyme and Limestone businesses both from CRH. This was a transformation for the group. Integration work was done in this year, and we have a big thanks to the integration and IT teams who've done a fabulous job right across the group. As a result of that, we were able to launch an ambitious synergies program in January 2024 and have already delivered €9,000,000 worth of synergies in calendar year 2024. This has allowed us to increase the minimum delivery of that same program from EUR 30,000,000 to EUR 35,000,000 and now to EUR 40,000,000 by 2027.

1:51 We've also started a divestment program to refocus the group's footprint more into limestone and minerals and have made a first successful divestment in that program at the end of twenty twenty four, selling the concrete operations in the Benelux. The year 2024 was not an obvious year in terms of volumes. The markets had several challenges and the volumes were managed very efficiently right across the pieces. As a result of that, on Slide five, there's a few financial highlights that I can take you through. EBITDA and EPS ahead of consensus and well ahead of our own targets, two forty basis points increase in margins for an EBITDA, which puts our margins across the group at a very nice level. Underlying free cash flow, 52.8% conversion, which is very robust and helps us de gear. With that de gearing well on track, finishing the year at about 2.08x leverage.

2:52 It helps us also to run a eighth year in a row of EPS growth, which we are extremely happy with. On Slide six, some of those statistics have been mentioned again. I'll point you to a few points here. Jan will take you through the finances in more detail. First and foremost, pro form a like for like comparator is mentioned for revenue and EBITDA below the number. So that gives you the comparison between this year and the year prior. Other important figure here is 11.5% ROIC on our way to 15% our long term targets and indeed, the cash flow conversion, which was extremely solid. If we go on to Slide eight now in terms of our operational review. We give you a map on Slide eight, which are the four core reporting regions with also highlighted there our market position of our various lime, limestone and value added products businesses in those key regions. The four regions are The UK and Ireland, West Europe, essentially the Benelux, Central Europe, Germany, Czech Republic, Poland, The Baltic States, and then the Nordics, which is the Nordic countries, the North Calc footprint.

4:05 As we go through our trading for the year, it splits up in various different ways. Slide nine gives you a first split by region on the left, by segment in the middle and by product on the right. The largest region is Central Europe, Germany and Poland obviously being the biggest markets there, followed by The Nordics and then UK and Ireland. Western region, Belgium and Benelux, has obviously been reduced by the sale of the corporate operations there. By segment, construction remains our largest portion of 45%, but therefore also meaningfully less large than it used to be. Industry is now number two and environment is number three. Byproduct, high grade minerals is the largest one. This includes lime and limestone, other minerals, including dolomitic, limestone, elastinites, powders, flowers within that particular segment.

5:00 Construction aggregates is the standard aggregates we are known for and value added products you should think about, for instance, ready mixed concrete, asphalt, precast and so forth. If we look at the split by region, Slide 10, UK and Ireland on the left, flat in revenues, EBITDA slightly down. This is a region which has a large exposure to residential construction, and that obviously had a tough year right across Europe and also in The UK, and as a result, a slight reduction there. But infrastructure supported it still very much, and the EBITDA performance is very satisfactory. Western Europe, Benelux, this platform is totally exposed to construction, both residential and infrastructure, had a tougher trading year, therefore, with 9% reduction in revenues. There's also a translation effect in there from euros to pounds, not to be forgotten.

5:59 When the EBITDA is considered, it says 21 reduction, but you should not forget that this includes a one off reduction in stock where we reshape the stocks available. And if you take that effect into account, EBITDA was only down 3%. So good performance all around. Central Europe, that's Germany, Poland primarily. Revenue is down 3%. Again, translation effects for FX determined this primarily. A slight bit of volumes there. We look at EBITDA up year on year 8%. Fantastic performance on those businesses, in particular the Polish business, the politics business, which have done a fantastic job with their market in Germany at a, obviously, tougher time, but again, great performance as well.

6:50 We continue to see good trending, good trading there for the years to come. And then the Nordics business, fantastic, fantastic results. In the North, flat revenue up, EBITDA up 6%, margins improving, a good year from a perspective of pulp paper pulp and board, good positioning of the business and also mining and chemistry and a fantastic year there. Looking at the markets differently now by end segment. The industrial segment first, 35% of group turnover, slight weakness in volumes when it comes to steel, That's expected. The automotive industry is having a tougher year, but paper pulp and board and chemistry as well as mining really traded well and helped our industrial segments do well for the year. Environment, second segment.

7:45 Food, sugar production, for example, and other food inputs, agricultural inputs had a very strong year '24 as did water treatment, but we have a much larger component of wind energy in our system, and therefore, flue gas treatment for power generation had a reduced year '24. Construction, construction now dominated by the infrastructure segment, tougher year altogether year on year in terms of volumes in residential construction compensated largely by infrastructure construction. The long term targets here and long term trends here are obviously to the up with various stimulus programs. And then the last way of looking at our sales by end products, high grade minerals. As I said, high grade minerals includes lime, limestone, hydrated lime powders, flowers, additional minerals, valsartan, dolomitic limestone and so on.

8:41 Slight increase in volumes year on year, which we're very pleased with. The production in turnover there is a translation effect in terms of forex. This is the largest component of our group right across various platforms. Construction aggregates, obviously, the weakness here is visible from a volume perspective in residential construction with a slight reduction in volume, 700,000 tonnes or so for the year, represents a 2% drop in revenue, again, some translation effects as well in this, but generally speaking, a weaker market when it comes to residential construction. And then value added products, asphalt, precast concrete, so on, construction exposed, again, slight volume reduction in from a year on year perspective.

9:32 But generally speaking, held up well given the economic backdrop. The last slide in this first introductory section on ESG. We track several metrics. There's a large component of the annual report on ESG. So a few examples here. Emissions intensity, 46% reduced since we became an emissions intense business in 2021 with the acquisition of North Calc. Energy intensity improved year on year 10%. Alternative fuel sourcing and fossil fuel free electricity, again, both up and improved for the year, which we are very pleased with. Injuries frequency, our statistic here for safety is improved by 18% year on year. Again, very good very good effort by the teams.

10:24 We've done a 180 audits on our sites. This is a small team of three or so people who've done a 180 visits to all of the safety at the various sites they do with fantastic work. Very pleased with their performance. Key point to the right is our net zero roadmap. The full map is available in the appendix. The key point to highlight here is our net zero target is still the same year 2040 and that's now corrected for the expanded footprint with the CRH Limestone assets. That concludes the first part of this presentation. I'll hand you over to Jan on my right for the finance. Thanks, Max. If we move to Slide 15, we already saw a couple of highlights financial highlights earlier in the presentation and a few of them were on a pro form a basis.

11:15 This is a nice overview that shows all the actual results over time. So not on a pro form a basis, but on an actual basis. If you then look at the direction, we have EBITDA and revenue growing at transformative rates. Revenues at 72% year on year and EBITDA even at 92% year on year. So those were impressive results because of the Lime acquisition, but they also boosted the CAGRs over time at impressive levels. So it's all good there. That was driven by the two reverse takeovers that we did over the years and continuous year on year improvements.

12:03 That also affected all the rest of the commercial metrics that are shown on the slide. And that happened in the times that were economically challenging. Current times is difficult, but it's already started right after the COVID period when the Ukraine war started with high energy prices. But the team was able to pull off and increase EBITDA margins during that period. So it was well managed from the operations team, and we're in good shape right now, but we continue to strive for better margins for the portfolio, boosting it beyond 25%. If you look at the bottom there, it also had an impact on our funding.

12:55 The current net debt is at over £500,000,000 $5.00 £9,000,000 It tripled from where we were because of the size of this deal. But if you lack on the chart next to it with the bars in the right bottom corner there, our leverage is actually well under control. It was a little higher when the deal was done, a little over 2.5, but with the high generative cash generative nature that the business has as well as a divestment at year end, we were able to bring it down from a leverage standpoint from the anticipated 2.3 to 2.1, very much in line with how we have been running at over the last couple of years despite that big deal that was done early in the year.

13:43 So well positioned. And if you then look at Slide 16, a little more in detail around revenue and EBITDA. The Lime acquisitions were primarily focused on two places, in UK and Ireland, where we added Buxin and Cockburnen to the business, boosting revenue and EBITDA there as well as in the central bar where the German business, Czech business, and a portion of the Poland business was was added there. So a boost in revenue EBITDA, which is impressive for the numbers. There was also an effect on foreign exchange. Max already alluded to that. The euro weakened versus the pound. So we do see some effect of that on revenue as well as on EBITDA.

14:32 And going forward, we have foreign exchange hedges in place if we would need them. So we're mitigating this risk operationally as well as the translation to the balance sheet. If we move to Slide 17, we have a detailed P and L. We also show shown the slide in the interims period. Numbers have now presented are now presented on a full year basis. In the middle of the section there, you see that profits from operations improved with EUR 111,000,000. It's up 80%, even a little higher than EBITDA. So that's a good position to be in. Finance costs on the back of the extra funding that we needed to buy these assets is up 31,000,000 year on year because of the debt profile.

15:23 And then on the tax line, tax expenses also went up with the extra businesses and is now reflecting about 80% of profit before tax, a little lower than initially anticipated, but it's a good position to be in. And then the at the bottom of the page there, it all adds up to an earnings per share of 8.35, around 8.4, which is up year on year, but also 10% better than a consensus that was out there in the market. It was a good performance by all the teams together. If you look at the right side of the slide, that's the buildup of our cost base after these big acquisitions from CRH.

16:13 And we were proud to say that our cost base was 70% variable, allow us to to right size and scale up or down the businesses in difficult times. Even with these bigger assets and bigger businesses, that continues to be the case. The composition changes a little bit that you can see there. So more kilts added to the portfolio. But the good thing is if you don't have the volume, you can shut them down if you want and and if the business would need it. So the the variable nature of the business is is remaining and continuing, which is helpful for us managing our risk profile going forward. If we move to Slide 18, you see an overview of the cash position and the cash flow generation that are out there.

17:00 We do have a healthy cash flow generation internally from our own operations. It it it runs at a conversion rate of higher than 50% if you if you look at the the the maintained business side that creates room for for investments either internal from a growth CapEx standpoint or for other purposes. This overview runs from EBITDA, underlying EBITDA on the left of €225,000,000 to underlying free cash flow in the middle there of 119,000,000 the 53%. And the building blocks are net working capital. We were actually very tight on collections and we're running a tight program as well on inventory.

17:48 So there was a help on cash on the working capital basis. We closed a couple of financial years on the tech side, so we're paying a little more than we currently accrued, euros 25,000,000, which is a cash outflow. And then we have our regular maintenance to keep the assets running and keep the base business at bay, euros 74,000,000 cash outflow there, which is roughly 75% of D and A for that purpose. The guidance is 85,000,000 actually. But this year, we're spending a little more on growth CapEx than historically was the case. So it's a little lower this year than other years. And then last, in the non underlying free cash flow is our cost of debt, which is about 7% over '24. It is coming down this year, but the euro would be increasing and the refinancing of the bridge loan.

18:45 But in 2024, it was about 7%, reflecting a GBP 40,000,000 cash outflow during the year. And then with growth CapEx focused on Belgium crusher in the construction, focusing on the construction area and be ready when that comes in and opening also reserves in the quarry for future years. And then a few other items in total is EUR 21,000,000, ending up with about 44% post growth CapEx conversion amounted to around GBP 100,000,000. If you then move to the next one, there's a slide that shows leverage and our debt structure.

19:31 We started the year off with GBP £182,000,000 of debt. The acquisitions brought in about 600,000,000 or so early in January. And in the meantime, we've been able to manage that in terms of EBITDA gearing as well as through the divestment of the Belgian Redeemer business in December, adding 30,000,000 to our cash balance that we used to pay down a portion of the bridge loan late twenty twenty four. The other items are in there are a couple of non underlying costs that came with the deal. They will not repeat, and they are one offs related to the Sea Race deal in 2024.

20:19 And there is a finance borrowing cost that we had to pay because of the equity raise and some consultants fee. So all in all,

20:28 ending the year at $5.00 £9,000,000 but still at a very comfortable level of in terms of gearing of GBP 2.1, which is a good position to be in at the end of this transformative year in history. If you look at the next slide, and then you will see that scale matters. And we say that because we have businesses that have a high cash generative nature and that's important going forward with the scale we have because it allows us to do a couple of things. One is to make sure that we can afford investments in CapEx if it was is focused on operational efficiency and improvements therein. So we're able to do that. We are currently running at £225,000,000 of EBITDA, 22% of margin.

21:22 And then the synergy program will allow us to grow further in that. And that does require some CapEx here and there, and then we'll bring that in. EBITDA is going up in line with the business. And if the synergy program will help, plus the full year effect on these businesses as they did not come in at all at the beginning of the year 2024, that will continue to increase further to double digit levels at a certain time.

21:54 ROIC is currently running at 11.5%. If we run the synergy program and if the volumes recover in the macro economy, we should be able to get to the level of 15%, which is currently set as a target for the overall company in the coming years.

22:17 And then with the cash generative nature that the business has, we feel confident that we can finance a couple of commercial activities, bolt on acquisitions, etcetera, through our internal

22:32 cash generation, which would allow us to keep leverage under control and below two fairly quickly also if as we turn half a point roughly on an annual basis in terms of gearing. So in 2025, we'll go below two relatively quickly. That frees up some cash, which we need to find a home for. And we have a couple of items that we've listed as opportunities to do some capital allocations. We said that we have CapEx, which is, of course, a nice to always look at. If you have good plans that we can fund, we'll do that internally. And that's the best way of bringing return in. And then there's also room for bolt on acquisitions

23:24 that over after we have a long portfolio that we can we can try to bring in if there are preferential terms and and and if it's complementary to the business. And then last but not least, if we get close to one and a half in terms of of gearing, We can also return cash to shareholders in any preferred form that

23:52 is out there either through buybacks or dividends. So all in all, the cash generative nature of the business allows us to do a lot of things. We're nicely under control financially and then the business integration is done. So we're basically ready for the next chapter very much. Thank you very much.

24:12 Strategic deliveries, the next page, next section, Page 22, Page 23. A few slides there on the future. So first and foremost, this is the next chapter of our business. We are now a leading lime and minerals group across Europe. We have 2,700,000,000 tons worth of reserve and resource across the quarries, number one and number two ratings in 10 countries. Our products are essential in dozens of industries and applications. They make modern life possible and it's not insignificant. This is very helpful for our group. We're at attractive attractively positioned across multiple diverse and diverse end markets that helps weather some of the storms that are out there when it comes to trading.

25:00 We also consistently deliver in terms of improvements, 33% increase EBITDA since acquisition of the various companies that we own. That translates into a 15% return on investment from an EBIT perspective, and that we're very pleased with. And clearly, as we now move forward, we're moving into bolt on territory from roll up territory as we self fund further expansion. If you look at how that 33% improvement has come through and what impact that has on multiples of acquired businesses, average price paid for companies is 6.9x across our history with some outliers in that mix also.

25:46 That falls to 5.2% with the addition of the 33% increase in EBITDA. The source of that improvement is primarily cost focused, cost and optimization focused, running the plants better, faster, harder, some revenue aspects in there too, but the main drive has always been making a lean operation work faster. And we're doing the same effect exactly now with our synergies program. There's two graphs that you'll see on Slide 25. On the left hand side, the evolution of that program and the expected delivery numbers per year. And in light blue, the increase to each of those years as we progress through the programs of EUR 9,000,000 delivered already in 2024 and now expecting EUR 15,000,000 to EUR 20,000,000 in 2025.

26:35 On the right hand side, how that EUR 9,000,000 was derived, two thirty eight million base EBITDA level for 2023. That's the pro form a starting point of the business. Price volume action down, obviously, in the year with some tough trading in various segments, four down, up eight. This graph is in pound sterling, left one is in euros for clarity, up eight to $2.42, which is the outturn on a pro form a basis for the year. The delivery of those synergies, again, the same sort of story as other years, primarily sourced from cost initiatives, network optimization, network overlap, shutting down inefficient kilns, older kilns, kilns in the wrong location, so that we optimize the footprint optimization also in terms of quarry operations, basic quarrying, basic efficiency programs as we've always done.

27:35 And then some commercial initiatives where we have looked to source, to sell lime in markets that we haven't operated in before, for instance, The Baltic States is one key example

27:47 as well. We are also looking very actively at our portfolio of assets. On the next page, 27, that portfolio includes all sorts of various activities that we have acquired over time. All of those businesses are high quality businesses. We've really done utmost to make those businesses leading in their sector and in their region. And when we sell them, we always look for the right sorts of purchaser, a purchaser who will take that business on and develop it develop it further, who's also happy to pay the right sort of price to us and therefore there's no rush whatsoever in selling anything, only if we find a new home for some of our businesses that will see that business grow and prosper further will we sell. In that program, there's about EUR 20,000,000 in EBITDA left.

28:39 Not all of that has to be sold. It depends on the attractiveness of the offer that we received.

28:47 If we then look forward into the future, first and foremost, we believe we're clearly at the start of a cyclical and structural recovery, cyclical and structural because interest rates have started to come down, This bridge drives housing and house construction, and that's quite key and quite clear. It's still our largest segment. There's therefore upside in residential construction. There's also the very ambitious German fiscal policy on the right hand side. There's a value of 500,000,000,000 over ten years as quoted. Should that get parliamentary approval in Germany and then be implemented, it is clear that that will drive the German economy and demand for our products.

29:32 It will benefit the steel sector, will benefit the construction sector, it will benefit the energy sector, and all of those use our products. On top of that, we see some positivity if there's a peace agreement finally in The Ukraine where the Ukrainian reconstruction might utilize some further materials also from us in the region. And then beyond this, there are these key megatrends that we've alluded to. Megatrends of electrification of the economy, greenification of the economy, all of those are there and utilize our products to be implemented. We do remain conscious, however, of the existence of the risk of tariffs and the impact of tariffs, tariffs out of The U. S. We do not know exactly what and when.

30:17 We keep those under review and we'll update the market as and when things change. Shorter term, 2025, the year started well. We are in line in terms of trading up to the first two months of the year. And we're looking very actively at how we could develop our synergy program and implement that as fast as we can with a EUR 40,000,000 revised target. Obviously, the regional diversification is key and helpful and provides stability in revenues. And then clearly, when we look at the potential for the European economies to come out of a slow period where we had significant volume loss in various places. That's obviously something that we look at with quite some expectation and hopefully we see that come through already at the end of this year. And so all in all, SIGMAROC is very well positioned for the future with structural growth drivers, cyclical recoveries and a great base, great asset base, and a fantastic set of teams at these various locations, which help us drive the performance of this group.

31:23 That concludes the set of slides. We'll hopefully take questions from the floor. Perfect. Guys, at this point, if I may just jump back in there. And thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that's situated on the right hand corner of your screen. But just while the team take a few moments to review those questions that have come in already, I'd I just like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can all be accessed via your investor dashboard. Guys, as you can see there, we have received a number of questions, throughout your presentation this afternoon, and thank you to all of those on the call for taking the time to submit their questions. But, guys, at this point, if I may just hand back to you just to read out those questions and give your responses where it's appropriate to do so. And if I pick up from you at the end, that would be great. Thank you.

32:15 Alright. So we've got a first question that was pre submitted. How much stock do the management and board own? Are you planning on buying more? Yes. So there is a in the slide deck that is available on our website, you'll find quite a bit of detail on that in the appendix also. But in brief, management owns about 3% of the company that is that these are shares that were either in EBT or purchased directly from salary. We continue to purchase stock right across the company. Every fundraise we've ever done in our history, we've participated in as well as a management team and invested about £3,000,000 worth of our own money back into the company. So these were not obtained for free.

33:00 Then there's the obviously, the option program that's there as we perform and deliver results, and that will see our ownership increase even further. So, yes, very committed and very much aligned with our shareholders. All right. Nigel H, medium term strategy is clear. Perhaps you can indicate what the longer term vision is, further bolt on Neil's dividends. The group has been so we have built this group as a really as an acquisition, integration and improvement machine. That's been clear from the last year, eight years. We've consistently bought good businesses, made them better, integrated them and increased our EPS as a result. And that was even if we utilized the equity markets to help fund this growth. Now as Jan pointed out, scale is a great thing. Scale allows many things. One of the things it allows us to do is generate cash and utilize this to grow further by attractive businesses from our own internally generated resources and add those into the platform. If we can do the same thing with those businesses that we've done in the past, increase their EBITDA, you'll see that straight drop through to the EPS line. We don't use any equity. We buy a business that adds to the EBITDA line. We improve it, that grows the EPS further.

34:25 So from that perspective, I think that this business is really well placed for the future. It becomes a bolt on machine that continues to integrate attractive quarry businesses right across Europe to grow and generate further further returns for investors. Another one from Bill C. The German government sent seems set to initiate a major infrastructure program. What, if any, impact do you expect from this? Yes. We expect first impact, as David always says, is sentiment. The German economy has had a number of tough years. We certainly hope and think that this will improve the sentiment in Germany. That already is a win.

35:12 It means that people start to spend again, buy little houses again, and so forth. That helps us. Secondly, as the actual euro spent comes through post the voting parliament, hopefully at the end of this year, we will see volumes of steel produced in Germany, used in Germany and volumes of stone used in Germany go up. That will have a material impact for us. We've had, in some segments, double digit volume loss in terms of percentage over the last three, four years, certain segments of the products that we sell. And we hope that we see that return back to historic volumes. And if that happens, that will be extremely beneficial to the group and the German economy. Question from David Jay. Are currency fluctuations acceptable to the company bearing in mind the current center of gravity?

36:05 Or should the euro be adopted for reporting? Yes. We are are cognizant of this. About 70%, 75 of our business is in the Eurozone. So this is in the forefront of our thinking. Our current debt structure is also in euro. So we have a kind of a natural hedge when it comes to foreign currency treatment on the euro. However, we are listed in pounds on stock exchange. So there's a translation effect that we need to manage. We have foreign exchange currency plans in place, hedges.

36:54 If we want to execute them, we can, basically mitigating all impact that any shift in the euro has on our financials and our listing. All right. Another question from Bill C. Do you expect any impact from U. S. Tariffs? I believe that the entire European economy will have some impact of The U. S. Tariffs as they come. What will we see? Will we sell into the steel sector? And the steel sector will then sell into, for instance, cars and machinery, and some of that goes out to The US. So if that has an impact, then we will see that also. So we need to see how this will be affected. Now the German stimulus program, if that comes through, and some of the defense spending they've announced will obviously go to end markets which utilize a lot of steel also. So maybe that will mitigate some of this. So we need to we need to sort of wait for the details on both.

37:57 Question from Chris S. Can you explain in more detail what the GBP 45,000,000 of finance expenses are? They seem very high. They are mostly correlated to our debt structure. It's just interest expense on the loans we have. And then there's a small portion of some effects on leases that we capitalize that are unwinding as when the contracts progress over time. And we have a little bit of bank cost and other finance cost, the vast majority is related to our debt structure. And I wanted to add to that maybe, if you look at our EBITDA at 200, let's take 02/25 or so, as we de gear and that finance cost comes goes down, obviously, the interest charge goes down and that boosts the EBITDA as the EPS post that. Again, so it's a material proportion, yes. This is a function of the deal we've done and this benefits the EPS over time also.

39:02 The bridge loan refinancing is worth it. One of the things that's already in place is that that 40 plus million was based on '24. There was a bridge loan that came with the deal in '24, had to be repaid in November of this year. In the meantime, it's been refinanced at preferential terms, in terms of interest rate, bringing it down with more than 2%. It's currently fixed at 4.93% for the five years that the term is. And it has a bullet maturity to repay in 2030 after the five years. So we now have a blend of a term loan, which you can pay down over time, and one that provides a five year cash position to do all kinds of things with that.

39:55 Yep. Question from 10 s. Are you considering, a, start paying dividends at some stage b, moving from AIM to the main market? Yes. Well, we'll look at so we'll look at so we're looking always at both, right? The first one is the question of, more generally, investor returns. Dividends and share buybacks are clearly the bucket there. We've signaled that at debt levels below 1.5x EBITDA, those would certainly be on the table. We then need to look at, at that point in time, what the valuation is of our business and how attractive the value of our shares is, which one we would utilize. Aim to main is a topic. The A market has done a fantastic job for us over the past eight years. We would have not been able to grow our business as rapidly on the main market. The flexibility afforded by AIM was clearly there. So we've much enjoyed our time here, but we also need to look at where the best place is in terms of shareholder value for our company. And so if that's the main market, then we would consider the move.

41:01 All of that is still under consideration. Question from Nicole M. What is the target for leverage reduction for FY 2025? Yes. We turn basically zero five points per year. So we're currently at 2.1. The target depends a bit on other activities, but the target the assumed level, if we don't do anything else, is around 1.6 by the end of twenty five. Yeah. Augustin g asks, what are your forecast for your EBITDA margin this year? And over the next few years, is the aim to stay at around 22.5% or to go further? We on the margin point, we try to improve the margins from the 22.5% upwards.

41:57 And that improvement is primarily through internal efficiency gains. So we really have a hard look at costs and hard look at efficiency internally to make sure that we basically generate the maximum value for every pound spent internally. So that's clearly what we're doing with that synergy program, which is mostly cost focused. We should see the margins and therefore continue to improve. That's the main aim. For what that would look like at the end of this year, hopefully, an improvement of 22.5 as we progress further. Question from Stuart D. How big a market is USA given risks of tariffs? We do not sell a single gram of any of our products to The US directly.

42:45 So it's all through what we sell into. So the auto industry, the machinery industry, and so on. The car industry in Europe, I think, sells about 10% of its volume from memory to The US. So it depends on how that is impacted. When it comes to machinery and plant and other things, would I don't know if have the figures here. We need to first understand what the tariffs would be aimed at to understand it and what and how the impact would be. So there's a bit of a waiting game there. And don't forget again, there's quite a bit of stimulus coming out of Europe, will have a positive effect. So let's wait and see what comes out. All right. Another question from Nigel H.

43:31 As a top one or two player in 10 countries, will future growth concentrate on geographic or sector diversification? Both. We will do geography in terms of in terms of Europe. We'll do sector. We'll do we can still we we can still grow in in the 10 countries when it comes to limestone quarries, when it comes to certain machinery, in terms of grinding mills and other things. So there's clearly things that we can still do with our 10 core countries to date. We can still go further there, but then there's obviously the rest of Europe that is there to look at. Uplisting answer question has been answered, I believe. Yeah. Yeah. Next one. Question from Thomas f. Could you discuss the possible reconstruction effort in Ukraine?

44:23 Secondly, do you have minimal reserves in Ukraine? You referenced this in the past. How could this play out assuming a piece of a peace deal occurs? Yeah. So the reconstruction effort there's there's various different things that come to play here. So first and foremost, if and when hopefully soon the Ukraine funds a peace deal and reconstruction starts, product and production inside Ukraine, which might now find its way to locations outside Ukraine will obviously stop and be utilized in the country itself. So that's the first effect. That's obviously for instance, things like things like steel. Secondly, there's production capacity around Ukraine next to Ukraine or on the border areas that would sell materials into Ukraine. So generally speaking, in that area, you'll find that material availability will go slightly tighter. That's first thing.

45:17 Secondly, we do have in the western parts of Ukraine a mining license for limestone. That mining license, have not utilized to date, but we're looking at what to do with it and how to best utilize the limestone that we could produce in that location. Alright. Question from Richard f. Wastewater treatment in The UK, this is becoming a bigger political priority. How are you placed to benefit? So wastewater treatment is through the various products that we make, lime and limestones. That's just by default the best way of one of the better ways to deal with this. We are well positioned as a great as a lime and limestone producer in those countries. So in the same way as everywhere else where wastewater treatment is critical, we're well placed.

46:11 We've skipped past the question, Elyse. So I think question number 15 was how much the increase in social security costs have affected the business in The UK. Would you like to take that one? Not much. It has an it does have an effect, but it's limited to $500,000 to a little more in as cost increase. So we're dealing with that as we go. That's also because this is only impacting our UK operations rather than the rest of the group. And there's one more question there. All right. One more question, yes. Overall revenue growth expectations forecast for '25. Pricevolume effects, we expect to be roughly flat in the mix, flat price and volume across Europe, absent any stimulus, absent any revival of growth.

47:02 So this is just simply as we are, nothing happens from the stimulus programs in Germany or from optimism or anything else, nothing happens across Europe, then we would expect flat evolution. Now that is not the base case. The base case is obviously optimism returns, some forward looking returns, reconstruction efforts started and residential starts again, and we could see quite a good effect on volumes across this year. There is the full year effect, not growth per se. It's just by having the businesses for a full year rather, a portion of the year as Buxton came in late March and Poland came in September. So we'll have you know, eight months more of Poland business and and a quarter of the Buxton business, which is which will add to the revenues in '25.

47:55 Yeah. Guys, if I sorry, guys. Go ahead. No. No. That was all the questions that we've got on the screen here. So I think, oh, there's not one more. As soon as you no. There's no more that that that comes in. Flip side of tariffs, are any products imported into your markets from The US? But it's it's the same, right, in the other way. So cars and other things that are US made and come here, it's the same effect. So I don't think that it's super easy to understand how European tariffs on those sorts of products would be impacting that flow. So we need to just see what the specifics are of both and then deal with deal with it as we as they come in. I think that was all the questions.

48:41 Thanks a lot. Absolutely. Yeah, guys. Thank you very much indeed for being so generous of your time then addressing all of those questions that that came in this afternoon. And of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended. But, Max, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments to wrap up with, that would be great. Yes. So first and foremost, thank you all very much for your support. I understand you all all of you a lot of you are shareholders in the business. That is fantastic to see so many of you on this phone call. That's the first point. Secondly, we're very, very happy with the result of the group. It's a a fantastic effort for all the teams on the ground to absorb such a large additional company, integrate it fast and well without any disruption, and then deliver the synergy results as we as we showed you. And that positions this business thirdly for quite a good future, I think. If Europe starts to implement these stimulus packages and get confidence back, we'll see volume recovery.

49:46 We can see years and years of fantastic growth for this company as it stands. And then the utilization of cash generated to expand its operations and footprint further. So very pleasing place to be. Thank you again for all your support, and I'll hand it back to you, Jake. Perfect, Max. That's great. And thank you all once again for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'd be greatly valued by the company. On behalf of management team of SIGMAROC PLC, we would like to thank you for attending today's presentation.

50:32 That now concludes today's session. So good afternoon to you all.