Titan Cement International SA
XBRU:TITC
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Titan Cement International SA
Earnings Call Analysis
Q1-2024 Analysis
Titan Cement International SA
Titan Cement Group has kicked off 2024 with solid momentum, building on recent successes. The first quarter saw sales reaching EUR 623.7 million, a 6.1% increase compared to the same quarter last year. This growth was fueled by robust demand across all product lines and resilient pricing. Importantly, EBITDA grew for the eighth consecutive quarter, totaling EUR 109.8 million, up 2.5% year-over-year despite increased costs due to annual maintenance shutdowns. Net profit surged to EUR 52.4 million, marking an 18% increase from EUR 44.3 million in the previous year.
In a positive sign for shareholders, the management proposed a substantial dividend increase from EUR 0.60 to EUR 0.85 per share—a 42% rise, reflecting the group's commitment to returning value to its investors amidst growth.
Notably, Titan America reported sales of $401 million, a 3.1% increase from the same quarter in 2023. This performance was largely supported by stable pricing and solid volume deliveries despite temporary weather challenges. EBITDA for Titan America stood at $67.3 million, impacted by $10 million due to planned maintenance. Growth is expected to accelerate in the second half of the year, driven by infrastructure investments and recovery in residential markets.
Titan Cement Group is positioning itself for future growth with plans for an IPO of its U.S. subsidiary, Titan America. This public offering, aimed for early 2025, aims to raise funds to accelerate growth in a healthy U.S. market. The organization anticipates significant investments in logistics and infrastructure to leverage increasing demands for construction materials driven by public works projects, especially under the Infrastructure and Investment Jobs Act.
Looking forward, the expectation for 2024 remains positive despite a projected soft growth in the first half due to adverse weather conditions affecting cement consumption. The growth forecast in specific regions remains robust, with GDP growth of about 2% anticipated in states such as Florida, North Carolina, New York, and New Jersey. The company forecasts a turning point starting in the latter half of the year, supported by increasing infrastructure investments and improving residential permit activity.
Titan is making significant strides in sustainability with investments in low-carbon alternative fuels and carbon capture technologies. This shift is expected to enhance operating efficiencies and reduce environmental impacts, supporting the company's commitment to sustainable construction practices and remaining competitive in a rapidly evolving market.
In Greece, there is a strong upward trend in construction demand, with double-digit volume growth observed. However, increased electricity costs and lower export prices negatively affected profitability. The outlook for Southeast Europe and East Mediterranean regions shows resilience with strong sales growth, but profitability remains challenged by regional economic conditions.
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Ladies and gentlemen, thank you for standing by. I am Geli, your Chorus Call operator. Welcome, and thank you for joining the Titan Cement Group conference call and live webcast to present and discuss the first quarter 20214results. Please note, this call and presentation is intended for analysts and investors only. [Operator Instructions] The conference is being recorded. The presentation will be followed by a question-and-answer session. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Marcel Cobuz, Chairman of the Group Executive Committee; Mr. Michael Colakides, Group CFO; and Mr. Bill Zarkalis, President and CEO of Titan America. Mr. Cobuz, you may now proceed.
Thank you. Hello, everyone. Good morning, good afternoon for all those following us, and welcome to our regular quarterly meeting. I'm joined today by Michael, our Group CFO, and together, we'll go to the results of first quarter 2024. And we have invited today also Bill Zarkalis, our CEO of U.S. business, Titan America. You may remember him from last year Investor Day, last September. And for sure, you remember his contagious excitement on U.S. market. He has been leading our U.S. operations for the last 10 years. Very pleased to share with you 3 announcements we made today, which shows that Titan is more dynamic than ever, performs at a new level of performance while creating long-term value for shareholders. Earlier today, during the shareholders meeting, we have approved the management proposal of a dividend increase for 2024 based on '23 results from EUR 0.6 per share to EUR 0.85 per share, which represents a 42% increase of dividend payout. The second is we are publishing today our quarter 1 results, and Michael and Bill will give more color, more details. But overall, it's a strong start of the year. Despite of a very high comparison, a strong Quarter 1 2023, despite of less invoicing days and some weather issues. We are reporting growth in sales, growth in EBITDA and over proportional growth in net profit. So this is a strong performance delivery, which I can confirm that is continued in April, where we see strong order books as well as strong cost and volume performance. And we will be sharing with you our optimistic views for a good outlook for the year. The third announcement which came this morning is about our intention to list the U.S. business. 1.6 billion sales in Titan America, a strong building and infrastructure material supplier. And our intention also to have an IPO of a minority stake to fund growth and accelerate development in a very healthy U.S. market as well as elsewhere in the group. On this one, Michael and Bill will also provide more color on the future ready U.S. business and the process we are going to follow for a listing and IPO for early 2025. The last comment on my introduction is about our strategy 2026 where results are showing that the execution is in full swing, full acceleration on all our 3 directions: strengthening our U.S. and European footprint by front-loading on CapEx and development. Time to market on green materials and solutions, and we have published in our press release the fact that we have signed or completed 3 new bolt-ons in aggregates, clay, and [ posolomic ] materials. And also embracing flagship technologies as part of our decarbonization renewed efforts with the Kamari plant where we are in a prefeasibility study of our carbon capture and storage, one of the largest in Europe. And more recently, we have entered a negotiation with Department of Energy in the U.S. regarding the first-of-a-kind calcining technology in our plant in West Virginia. Not to forget about our digital efforts. I strongly believe that you can see in Titan, one of the most digital businesses across the sector with very good sprint in technologies -- digital technologies in manufacturing, in logistics and more recently, interfacing with our customers and an excellent acceptance by all our customers in the markets we serve. So many good news to share today. Looking forward to seeing your answers and having an interactive meeting. So I'm passing the floor -- the microphone to you, Michael, for Q1 and outlook.
Thank you, Marcel. Good afternoon, and good morning to all. Welcome to this trading update and short presentation on our first quarter results. I'm very happy to share that we are kicking off 2024 with a positive momentum building on the success of previous quarters. We started 2024 with a strong sales growth with sales reaching EUR 623.7 million, up by 6.1% compared to last year's first quarter in a quarter that has seasonally lower activity. Sales were driven by increased demand across all products and by pricing resilience. EBITDA grew for the eighth consecutive quarter year-on-year and reached EUR 109.8 million, up by 2.5% compared to a record first quarter that was achieved last year. And despite higher annual maintenance shutdown costs recorded in Q1, while last year, these kind of expenses were more incurred in the second quarter. Net profit after taxes and minorities reached EUR 52.4 million compared to EUR 44.3 million last year, an 18% growth, thanks to the higher EBITDA levels, decreased finance costs, and a better foreign exchange results. Our net debt reached EUR 684 million, and the leverage ratio stands at 1.2x, with CapEx at EUR 52 million. On the digitalization front, our projects in the manufacturing, supply chain, and customer service areas continue relentlessly with resulting benefits translating to our financial results. Our outlook overall remains positive, thanks to resilient demand from pricing, improved energy cost performance, as well as further operational efficiencies. On the next slide, we would like to show our third month rolling sales, EBITDA, and net profit performance. One can see that the growth trend is extended and points towards an improved performance for the group for the year with enhanced profitability margins. Now let's take a look at the regional performance, starting with the U.S. What I will try to be brief since Bill Zarkalis will give you further comments and more insight after myself. Again the [indiscernible] Brazilian and U.S. economy, the Group's results in the region during the first quarter remained solid, underpinned by the strong demand fundamentals. Sales reached $401 million, up by 3.1% in dollar terms, thanks to the pricing momentum and the solid volume delivery. To be noted that sales were impacted by heavy rainfalls and tempered weather but were still higher than the very strong first quarter of 2023. The infrastructure bill and the [ chipset ] are increasing the funding directed to infrastructure and conventional investments offset the impact of the temporary slowdown in the residential market. The EBITDA in the first quarter of 2024 reached $67.3 million and would have been higher than the first quarter of 2023 had it not been for the earlier planned annual maintenance shutdowns that burdened the first quarter with higher cost order of magnitude of $10 million. In [indiscernible], the EBITDA for the region would have been 9.2% higher from the first quarter over last year, excluding this impact. Titan America is growing and expanding its footprint and Bill will give you more comments about performance and our outlook for the region. Turning to Greece. We started the year strongly with volumes recording growth in double digits across all main products. Increased volumes were observed in multiple construction fronts with infrastructure projects picking up in volumes and the sectors of housing, hospitality, and real estate development all contributed to increased demand for our products. Domestic pricing levels exhibited a sustained dynamic. However, increased electricity costs in the first half of the year, which is expected to be improved in the second half and lower export prices impacted profitability by a negative EUR 8 million to EUR 9 million. EBITDA in the first quarter of the year reached EUR 11.8 million compared to EUR 17.5 million in the first quarter of last year. Following the inauguration of the precalciner at the Kamari plant, usage of alternative fuels has increased and will improve our fuel cost performance for the rest of the year. The group leverages robust local presence is strengthening its vertical integration through acquisitions and partnerships aimed at addressing the growing local demand. Moving now to Southeast Europe, where sales reached EUR 95 million, up by 13.4% compared starting the year very strong. Volumes recorded growth, benefiting from a mild winter. Profitability increased to EUR 32.9 million, supported by resilient pricing at a much improved underlying cost structure, coupled with efficiencies obtained in terms of operational optimization. Growth across the region is diverse in origin, depending on the country, ranging from land development projects encompassing infrastructure, residential development to roadworks, and industrial investments. The Group increase thermal substitution rates with higher usual alternative fuels, coupled with the attractive efforts to optimize access to diverse alternative fuel sources across different markets. Next, moving to East Med. Increased sales in Turkey, supported by a mild winter and higher exports resulted in a sales growth of 15% for the region of East Med to overall sales of EUR 54.6 million. However, due to the devaluation of the local currencies, margins and profitability were eroded. EBITDA for the quarter was EUR 2.9 million compared to EUR 5.4 million in the same quarter last year. Despite the ongoing economic challenges in Egypt, there are promising signs in the country moving towards normalization, spurred by the March currency devaluation, the [indiscernible] financing from the IMF and European Union and the increasing inflection foreign direct investments. In Turkey, the primary drivers of demand include private sector projects, the construction activities for last year's earthquake, enhancements to existing building infrastructure, and growth in the touring sector. In closing the regional performance, let me comment on Brazil that we consolidate only on an equity method. Our joint venture experienced a 4% sales growth, reaching sales of EUR 32.4 million, while EBITDA served by 22.6% to EUR 4.2 million. Moving now to the volume slide. Volume trends were positive across all main product lines with domestic cement volumes increasing by 3%, coupled with cement exports to third parties to third-party entities, compared to no third-party exports in the first quarter of last year. Furthermore, other key product sales also recorded good volume growth. Aggregate volumes increased by 2% and ready-mix up on up by 7%. Some comments on our cash flow. On the left-hand side of the slide, you can see the operating free cash flow, recording inflows of EUR 14 million, which is quite unusual for the first quarter, which is usually a higher cost quarter compared to net outflows of EUR 20 million in the first quarter of last year when we had experienced higher working capital needs. On the right-hand side of the slide, the group net debt is shown that it is EUR 154 million less than March 2023 and seasonally up by EUR 24 million compared to December, closing at EUR 684 million for the quarter, an average ratio of 1.2x EBITDA. And now before moving to the comments about the U.S. Let me make some comments about our outlook. The trend we have seen in the second half of 2023 continued in the first months of this year with the group enjoying a strong start of the year, exhibiting solid performance across our core markets. We maintained a favorable outlook for 2024, propelled by sales growth for increased volumes as sustained pricing, leading to higher profitability, aided by the successful execution of growth focus initiatives and enhanced costing [indiscernible] efficiencies.The outlook for the U.S. economy is optimistic with expectations of continued growth, albeit at a temporary pace. Pricing levels should remain supportive amidst [ child ]supply in a strong demand environment with volume evolution from increased funding in infrastructure and more residential projects is expected. The outlook on the Greek construction market is also favorable, supported by the launch and continuation of numerous infrastructure, tourists, new residential, and land development projects. However, reduced export prices this year are negatively affecting profitability. Southeastern Europe has demonstrated robustness with growing positivity in sentiment, leading to an increase in construction activity. Maintaining operational efficiencies and continuing the decarbonization investments strengthens our regional presence and future profitability. The outlook in East Med is improving, though the impact of the [ Gas ] award is not predictable. In Turkey, the macroeconomic environment is improving. Private investment continues unabated while the construction works post last year's earthquake should maintain their momentum for the following quarters. Meanwhile, last month's development in Egypt, including the liberalization of the exchange market, the tightening with the Central Bank's monetary stance, significant increase in foreign direct investments, coupled with increased funding from the U.S. and Europe, all both favorably for the country's [indiscernible] temperature. And that completes my comments. I would now like to turn to Bill Zarkalis to ask him to give us his comments about Titan America performance and outlook for 2024 and beyond. Bill, now back to you.
Michael, thank you so much. Appreciate it. Good morning, and good afternoon, everybody. Great to be back, especially as we have exciting news both about our performance, but our future plans as well. Let me start with Mike left it. I mean in relation to the outlook. The U.S. economy is strong, and I guess we all know that for all the fears of the [ card landing ], we see only modest slowdown in 2024 with robust labor markets and strong state balance sheet. Suffice to say that the GDP growth in the areas where we operate in the states where we operate is about 2% for 2024 for Florida, North Carolina, for New York, and New Jersey and only slightly more modest GDP growth expected in Virginia with 1.3%. So overall, robust strong underlying economies in the states where we operate -- coming closer to the cement markets, 2024 seems to evolve the story of countervailing trends. We see that also in the overall economic trends. We expect a weaker first half, which especially in relation to our industry was affected by the bad weather in the first quarter, but we expect it to be followed by a stronger second half. Similarly, the same countervailing trends we see overall in the cement consumption, which, on one hand, is boosted by the accelerated investment in infrastructure, mainly because of the investment in Infrastructure and Jobs Act which is us accelerating and we see more projects coming online as well as the reshoring of the manufacturing plants with the incentives from the inflation reduction and the CHIPS Act. On the other hand, the countervailing trend relates obviously to the reducing -- reduced private investment in the residential sector in the single family, the multifamily, but also the renovation units, they are all softer. But it appears that in 2024, these negative trends are leveling off, and we expect to become -- to see a turning point starting in the second half of 2024. So overall, a good outlook for 2024 with the 2 countervailing trends leading to a relatively soft growth, but still growth. Regarding your question about our specific performance, Michael, let me start with the fact that our pricing power remains strong. Our prices were higher, most across all product lines, both in comparison to the fourth quarter to the previous quarter and, of course, versus the first quarter of last year, especially we see very strong trends in ready-mix concrete aggregates block and still strong trends in price in relation to cement, but not as strong as in last year, but mainly was affected also by the bad weather. Coming to our volumes, they followed mainly the market trends. Boosted by the infrastructure investments and also by the investments in manufacturing across all the states where we operate. But also we were affected by the softness in residential. Let me say in that respect, however, I'm proud of our team because the trends in the residential sector are not really prevalent. It's a checkerboard type of situation. So there are certain areas where we see growth even in the residential markets, and we've taken advantage of that. As a result, we are performing better than what we saw reported by the Portland Cement Association as performance in the first quarter in our states. So a good overall volume performance and a strong pricing performance. Michael mentioned the comparison of our EBITDA versus last quarter and the fact that it was affected by the shutdown in Pennsuco. And of course, in Rono, whereas last year, the shutdown in Pennsuco happened in the second quarter in April. And also, Michael referred to what would have been if we didn't have the expense, the cost for the Pennsuco shutdown.I'm happy to say that if we compare April year-to-date performance with April year-to-date of last year, our performance in EBITDA is going to be much higher than the comparison that Michael said that overall, we see a good healthy trend in our profitability in 2024. And with that, Michael, I'll turn it back to you or Marcel.
Okay. Thank you, Bill. Now as you might realize these developments in the U.S. market, and it's something that we have been planning for a long time. We have invested over EUR 360 million in capital expenditures in the U.S. over the past 3 years. We have been believers of the strong fundamentals and the dynamics of the U.S. economy -- and we're now reaching a stage where we are making a transformational move. The performance of our U.S. operations is expected to improve further over the next few years. Our profitability has increased last year. Just as a reminder, the EBITDA of Titan America was $322 million. So in order to facilitate the funding of our growth, both for Titan America as well as for the group as a whole. The decision has been taken to initiate actions for the listing of Titan America in the U.S. equity markets. Now this is a process which is very strictly regulated by the SEC, the U.S. Capital Markets Committee equivalent. So we are restricted from giving very detailed comments about the process. What we can say is that the intention is to list a minority stake through an IPO of a holding company of Titan America. We have, as I said, the initiative process, we have engaged advisers. The process will take several months. There is a very detailed and diligent accounting process that has to take place. The last 3 years, financials of the company have to be redone in more detail with more -- with lower materiality thresholds and so on. So this is a process which, as I said, will take months. And the plan is that we will file the -- our application with the SEC after summer. And our expectation, what we anticipate is to have the transaction done in the market in early 2025. The -- what I want to make clear because we have some pressures even from our own staff, is that Titan America will remain a Titan subsidiary, a majority owned subsidiary with a significant majority what will be floated will be a minority stake. And the company will continue to be consolidated in group financials and of course, to be majority owned by TCI's shareholders. I think that this completes my commentary on this -- on the announced transaction this morning. And we will now open the floor for Q&A.
Ladies and gentlemen, at this time, we will begin the question-and-answer session. [Operator Instructions] The first question is from the line of Athanasoulias Nikos with Eurobank Equities.
I have 2 questions and both refer to Titan America. The first one is regarding the results of the second quarter of 2024. Should we expect a high single-digit or double-digit growth in profitability given the cost base that will be lower considering the maintenance that were shifted to the first quarter? So this 9% would roll over. That's the first question. And my second question refers to the IPO. And I was wondering what are your plans for the proceeds from this listing? I understand that you say that you will need to fund your CapEx plan, but your leverage is quite low and not -- and as I remember, you have no intention of stepping up your CapEx plan. So should we expect some returns to investors?
Thank you for your question. I'll refer quickly to your question on IPO and the use of proceeds and then refer to Michael and Bill for prospects for Q2, although we have already given an optimistic view on the outlook. Not much different than what we said at the time of the Investor Day. You may remember at that time, we highlighted that we have strong market positions in fast-growing mega regions. We are ahead of a multiyear growth cycle. And we have highlighted a couple of opportunities for growth, particularly in cement capacity, aggregates, ready-mix block, and logistic capabilities. We're also taking the green growth trends that we believe will impact our operations in using more blended cement and more cementitious materials. So I think later in the year, we will have the opportunity to look more in details of which growth opportunities will be funded through the fresh capital raised to the IPO and which other opportunities are there as well as the capital structure of Titan America business. So as Michael said, this is a highly regulated process. We plan to meet all your questions and come with prepared answers as we follow this process, and we will organize an Investor Day later in the year. Now on quarter 2, Michael.
On quarter 2, as Bill has already alluded to it, the outlook is much brighter than, let's say, the first quarter. So the expectation that we will have a better growth compared to what would have been in Q1 is justified. The -- I mean, we're already halfway almost in Q2. And the omens are good. So that's a good signal, not only for Q2, but I would say maybe for the rest of the year as well.
And you mentioned that you will hold another Investor Day. Will this be this year towards the second half of the year?
This will depend -- the intention would be to combine it with the progress of the U.S. transaction. And as I mentioned, it's a very tightly regulated process. So we will have to see when we will be allowed to say more. And of course, how the filing process will go and its approval process. So it will be many months towards the end of the year, I would say.
The next question is from the line of Kourtesis Iakovos with Piraeus Securities.
You've mentioned that you're going to list a minority stake. Do you have something that you could sell with us to be more specific on this? And second thing is what is the level of net debt that is incurred in Titan America at the moment at the end of first Q? Thought you could share with us.
Again, we will say what we're allowed to say. Typical IPOs come in the region of 15% to 25%. So all I can say is that it will be within that region. And we will also depend, of course, on market conditions, pricing expectations and so on. But even at a later stage, it would be very late until we can disclose a specific percentage. Now net debt is a public -- it's public information. It's about $400 million and has been fairly stable over time.
The next question is from the line of [indiscernible] with Alpha Finance.
Congratulations on a great set of results. I have a couple of questions on my end. Regarding energy costs, which weighed on the Greece and Western Europe segment margins, which was said that are expected to improve in the second half? Can you please elaborate more on what we are going to expect regarding electricity costs in Q2? And are we expecting them to improve or more later in the half started in Q3? Could we also have a little bit more color regarding the new 10-year PPA agreement going forward? Has there been any discussions regarding renegotiations in the terms of PPA that we have seen in press reports? Is there anything that you can clarify on this? And then also one last question regarding the U.S. segment. Do we expect any more funding that we saw in March from the DOE for the Roanoke plant? Have there been any other additional opportunities that Titan America can get to utilize funding from the U.S?
Okay. On energy cost, overall energy costs have been improving. However, in Greece, we had in 2023, we had a lower energy cost base based on an older contract, 2-year contract with PPC. So the comparison of the first half of this year to last year is unfavorable because it compares with the achieved contract that existed in the past. So in the second half of the year, the comparison will be more like-for-like. And in fact, it's more probably going to be an improvement because our discussions with the PPC indicates that we may get some better terms. Regarding the PPA agreement, it has been signed and it is valid. It has also been submitted to the ministry in order to get priority rights for connection to the grid. There is no new agreement to be signed at this stage. We are discussing some possible amendments to some of the terms with the PPC. But fundamentally, the agreement is while it is intended to be preserved.
Maybe a couple of comments on my side. Marcel here before Bill will answer on other opportunities to have funding from DOE or other departments in U.S. Look, energy is for us a big item to tackle, and we are acting on many fronts. On the one side on few words. And probably you have seen in our published results for last year but also in this quarter that we are closer to 20% substitution rate of fossil fuels by low-carbon alternative fuels. And for you to know, it's almost EUR 10 per tonne in terms of positive variable contribution of these alternative fuels. And we have just finished this investment in Kamari and another one in our plant in [indiscernible], which allows for more than 60% substitution range. So this will continue at an accelerated pace. While we develop also the waste streams in this market. On the electricity, 130 megawatts. So that's an active thing for us. We have set up our own energy team here in corporate in Greece. We have made all the necessary preparation steps also to be trading in energy for our own needs. So we are becoming a sophisticated.
Circular economy trends. And we do that either alone, capitalize on technology that we have and high-performance products or in conjunction with the universities and other institutions, and we will expect this to mature and have announcements in the months to come.
The next question is from the line of Woerner Tobias with Stifel.
Congrats to your decision to list in the U.S. Two questions from my side on the U.S. Price increases are being put through in the markets, I think, as we speak or have been at the beginning of April again. My question is, if so, how are you seeing those being executed in the market? And to what sort of levels are we talking about in dollar terms? The second question, I've been traveling through the U.S. actually last week and some people I met were sort of referring to Florida as a market where they are more concerned about housing. I just looked at the permits there. It doesn't seem to be a massive issue, but I'd like to get the view from Bill, if possible, on that front. And then apologies if the question has been asked earlier, but I was called off the call. The application of the funds.
Number of the competitors, we see that their own price increases, and we chose also to defer as a waiver first, and we see the momentum now increasing. The more interesting part in relation to the price increases in the U.S. relate really to ready-mix concrete, where we see significant price increases already materializing in the first quarter and also in aggregates where the momentum in aggregate increase of -- price increases is unabated through the first quarter of the year. And in ready-mix, I would say, it continues on the same trends as also we saw in the second half of '23. So we see strong trends continuing ready-mix and aggregate weave to take this into account because it's an important part of the market. And we're seeing cement also strong pricing power, albeit not at the same level of last year, but we see this to change into the Q2 and especially in the second half of the year. Now in relation to concerns about residential in Florida, as I mentioned, it's a checkerboard type of situation. In some areas, we see continuing strong demand in residential. In others, especially in the Southeast, we see some softening. However, let me tell you that we see the housing permits. And clearly, we're going to see a negative trend in housing permits in Florida by about a negative 5% in 2024. This is the expectation. It's going to be slightly positive as far as single-family permits is concerned, about 0.5% -- 0.5% to 1% positive, more negative on the multifamily permits. That's going to be the double-digit rates negative, minus 15% is the expectation. But suffice to say, because I mentioned that the trends are leveling when we see a turnaround. In 2025, we expect a 3% increase in residential permits in single family and about 1.5% to 2% in multifamily, and this growing fast in '26 and '27. So we see really what I mentioned that we -- the soft trends in the residential industry that lasted for 2, 2.5 years are leveling off, and we expect a confluence of events in '25, '26, '27 and '28 with all the trends, all the segments, infrastructure, heavy manufacturing and residential are all going to be pointing north and we're going to have positive trends and a great impact in the consumption of cement in our markets.
Yes. Thank you, Bill. I would just add that, of course, we are seeing these mixed signals in the first quarter. And despite of that, we have delivered positive sales, the combination of volumes, our volume's performance and pricing performance -- and I think, again, at the Investor Day last year when we did dive into the structure and the fundamentals of the markets we are covering, including the underbuilt of circa 1 million houses in our regions and the increased infrastructure. And what I'm pleased to report is that the team has done extremely well in balancing well our exposure between the segments, infrastructure, residential and non-residential.
The next question is from the line of Sharad [ Kumar ] with KBC Securities.
I have some few questions on, let's say, the overall sentiment in the U.S. For example, yes, interest rates have remained pretty high. The U.S. Fed levels of debt have ballooned significantly. So how confident are you that new federal spending towards infrastructure projects will continue because this is a significant driver for the U.S. business? Also, we saw that towards the beginning of the year, Hanson spun off your U.S. business with rather aggressive targets that they set.
With healthy U.S. population and economic prospects. So I cannot comment on the rest of U.S. But in these markets, we just mentioned that they are underbuilt by 1 million homes in our regions. And at the time of the Investor Day, we have presented a quite detailed view on the $122 billion for investments in infrastructure only in these regions. And again, we are happy with the progress that we see. And we prepare ourselves with additional investments in ready-mix, additional investments in portable crushing for aggregates and a very nice coverage in both aggregates as well as 2 new terminals, multiproduct hubs that we just finalized in Norfolk and Tampa. So it's a market-facing organization future ready to tap into this powerful multiyear growth cycle that we expect. For the proceeds, I think we already answered. We will not give at this stage more details than what we gave last year at the investment -- Investors Day. So you can expect us to work on multiple fronts as highlighted this year, not only expanding our investments in logistics but also in the vertical integration, ready-mix and aggregates as well as in bringing to the market additional cement, capitalizing on the long supply chain, which is also related to our positions in Europe, both in cement, clinker as well as in 7 issues. You want to comment, Michael, or Bill?
Let me make a comment here, Marcel. We're not only confident about the U.S. economy, the prospects of our industry. We are bullish about it. We are really at once in a century what they call decade of infrastructure. The balance sheet of the states where we operate, but most of the states in the U.S. are very strong. The funds are there. The federal funds for the infrastructure at the IAG are flowing into the States. The projects have been financed and funded in the certain in earnest, and we see the acceleration happening. On top of that, the structure and the build and the demographic trends that we see, especially in relation to household formation for the millennials but also now starting for Generation Z are really booming. It's very interesting if we see what's happening. So the under build is something that needs to be addressed as becoming a crisis, and we see these changes. So we're very bullish. And on top of that, we have so many trends that is a confluence of events that creates huge opportunities, and that's why our bullish is the carbonization, the circular economy, the infrastructure modernization that I mentioned. But on top of that, the resilient urbanization, the need for seawalls, the smart cities, the trends and refurbishment and innovation, the trends and the needs for high-performance products across really all the segments of construction and new construction technologies that we see participate in 3D printing and other different technologies that we see, including digitalization and the opportunities it brings.We are really ahead of a boom in the growth in the cement industry, aggregates, ready-mix, cementitious material. And we have a very strong position. We have leading positions across the Eastern Seaboard and we're really on the poor position to capitalize on these growth trends and our investments on this is going to help us really extend our leading position. I mentioned at the beginning that it is a contagious excitement and very, very happy to be part of it.Do we have another question?
Mr. Sharad [ Kumar ], are you finished with your questions?
Maybe just one last question from my end, which is, yes, you said you also have said that you might have Investor Day. Could we expect to see some kind of targets that you set maybe, I don't know, for 2030 because I think that helps analysts for us to benchmark how close you are and also maybe the market, which then reward you?
The intention is we're aiming towards the end of the year to combine it with an update and more details for the U.S. IPO. But I think what you will be getting then is still 2026. Updated targets as we will be discussing and reviewing at the board level as well.
The next question is from [indiscernible] with [indiscernible] Securities.
Thank you for the outstanding performance. My question is about the selection of Virginia plant for entry to negotiation by the U.S. Department of Energy for receiving a subsidy up to $60 million. As this investment is a crucial step towards the carbonization, which is the primary goal of the group? And can with Titan's intention to invest additional funds upon selection? Does the group plan to increase its CapEx the following year? And my second question is about the growth in East Med region. The double-digit growth in the top line in easement is going to be continued for the whole year.
Quick answers to both our CapEx plan for this year. We have already stated it's going to be around close to EUR 250 million, which is quite higher than historical levels. We don't have specifics for next year, but I would be surprised if it's much lower. I think it will be around -- up to the same level. Regarding East Med, I think I made the comment before that with the [ Gas ] award still going on, very hard to predict what will happen in Egypt. And Turkey continues to do well. So for Turkey, we are optimistic.
The next question is from the line of Betts Mike with Data Based Analysis.
I had a very quick question, if I could, on the U.S. And the question is, are you seeing more clients or customers demanding that people buy from American companies or the jobs are supplied by American companies? And is that a factor behind the desire to have the IPO as well as the obvious valuation one?
Bill, I think some of the acts stipulate that projects that are funded by public funds, they need really American products. And of course, all our products are American or -- so we don't have any issue with that, and we participate in all these projects.
Ladies and gentlemen, in the interest of time, we will now conclude our Q&A session. And I will turn the conference over to Mr. Colakides for any closing comments. Thank you.
Okay. Well, as you have realized, we are all very excited only with Q1 results, but also with the announcement of the IPO. You will be hearing more from us in July. We have set the Q2 and half year results announcement on July 31. So we would be glad to have you again at the next conference call. And of course, our IR department is always ready and helpful to respond to any more inquires you may have.
Thank you. Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for calling, and have a good afternoon.