...January 26, 2024 LSF10 XL Investments S.a.r.l.(Xella) reported weaker-than-expected results in 2023. The expected recovery in the second half of 2023 did not occur. Instead, high inflation and rising mortgage rates continue to impair residential property demand. This affects Xella, since the residential new-build end-market represents more than 65% of Xella's total sales. In the first nine months of 2023, sales were down by 19%, driven by Eastern Europe (negative 28%). Sales in Western Europe decreased by 13.8%, primarily due to the weakening German and Nordic markets. We expect continued subdued end-markets in the coming quarters, and limited recovery into 2024. Xella is adjusting its cost base. Since the Eastern Europe segment has better profitability than Western Europe, the sharp reduction in activity in Eastern Europe has a dilutive effect on the group's overall profitability. Normalized EBITDA for the first nine months of 2023 decreased by 32.5%, and the EBITDA margin contracted by...
