Befesa S.A.

Good morning and welcome to the first half of 2026 results conference call of BEFESA. I am Rafael Perez, CFO of BEFESA and this morning I am joined by a group CEO, Asier Zarraonandia. Asier will start with an executive summary of the period and then he will cover the business highlights of the steel dust as well as aluminum salt slag recycling businesses. I will then review the first half financials by business and cover the evolution of commodity prices, hedging program, and finally Cash Flow, Net Debt, Leverage and Capital Allocation. Asier will close the presentation providing an update of the outlook for the rest of 2026 and an update of our growth plan. Finally, we will open the line for the Q&A session. Before getting started, let me remind you that this conference call is being webcast live. You can find the link to the webcast on our website. Now, let me turn this call over to our CEO, Asier, please.

Thank you, Rafa. Good morning, all. Moving to page five of the financial and business highlights. The FESA has delivered strong second quarter results, resulting in a remarkable first half results with solid volume growth, especially from our operations in the U.S. Total adjusted BDA in this half has been Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs The deleveraging trend continued with financial leverage reduced to 2.18 in June 26 compared to 2.7 in June 2025. The increase in net income and EPS of 13 per share year on year reflects our improving profitability. In the steel dust business, we delivered a strong EVDA in the first half, driven mainly by higher sink spot prices and volume growth. Our secondary aluminum business remains operating in a challenging business environment. The continuous high scrap leakage in Europe with desperate volumes of alu scrap results being currently at a record height in a challenge for the interior sector and the supply side. Regarding the group outlook for the full year 2026, we confirmed our media guidance in the range of 250 million euros to 270 million euros. This outlook is mainly based on higher steel dust throughput, especially in the U.S. After a solid performance in the first half of the year, we remain optimistic for the second half of the year. Same prices at an elevated level, which is favorable for us. However, the macroeconomic and geopolitical framework remain volatile. We will continue to execute our selective growth projects with high returns. These results in a limited growth capacity requirement while at the same time laying on foundation for future growing growth and continuing reduction of our financial leverage. We continue strengthening our balance sheet further with a targeted leverage ratio below 2.0 by the end of the year. Moving now to page six with the business highlights for the steel dust business. European steel production continued at a five-year low level in H1, with a flat development year on year caused by weak end market demand. Despite this, the low factor increased by 6% to 91%, driven by strong bus deliveries, especially in the second quarter. Steel production grew DIP by 6% in the U.S. Consequently, our business in the U.S. benefited from this development through the higher-dust deliveries. The low-out factor increased by 11% to an average utilization of 75% in Q2. In Asia, volumes in Turkey were weak, and Korean operations remained at a similar level than last year, and we expect both markets, Turkey and Korea, to improve in the second half of the year. China. Utilization reminded to do it. Earnings, however, were still at break-even levels. Moving on to page seven, business guidelines for the aluminum salt slag recycling and secondary aluminum recycling business. On salt slags, volume were flat this year over year. In the second quarter, as volume have normalized. We expect normalized production for the rest of the year. In secondary aluminum recycling, volumes are still under pressure caused by challenging market environment, which is characterized by lack of scrap, as discussed earlier, and a continued weak demand for automotive customers. However, the metal margin improvement seen in the Q2 is a good sign that is expected to continue during the second part of the year. Now, I hand over to Rafa, who will explain the financials in more detail.

Thank you, Asier. Moving on to page 9, the financial results for the steel dust segment. The adjusted EBITDA increased in the first half of the year by 8% to €104 million, and the according margin improvement by 260 basis points to 27%. The €8 million improvement adjusted EBITDA was driven by higher limit price, volume growth, as well as lower cork prices, and was partially offset by unfavorable effects and general inflation. Our global low factor improved by close to 4% year-over-year, providing better operational leverage. On price, SING LME increased strongly year-over-year and was the main contributor to profitability growth. Hedging was a slight headwind on Euro terms. The combination of LME price hedging and FX resulted in an increase in the blended SING price in Euro terms by more than 3% year-on-year. The increase in sin treatment charge from 80 to 85 US dollars per ton was a very minor headwind, which was almost negligible in the reporting period. The impact from FX movement, namely Euro to US dollar, was negative in the first half of the year, whereas the headwind was significantly less pronounced in the second quarter compared to the first quarter of the year. General inflation in contracts accelerated in the second quarter sequentially driven by fuel cost. Moving on to page 10, financial results of our aluminum segment. Aluminum solar slag grew revenues by to 61 million euros and EBITDA to 18 million euros. Both revenues and EBITDA improved year over year by 10%. While volumes declined by 4% and were a headwind to revenues, Price increased and compensated for the volume-related headwind in both top and bottom line. In secondary ALU, revenues and EBITDA were at the prior year's level. The decline in volume was compensated by higher aluminum prices. EBITDA was furthermore supported by better metal margins. Moving on to page 11, same price and treatment charges. The average LME SIM price during the first half of the year was $3,353 per ton, which is 22% above the same period of last year's average. The average of the second quarter of 2026 was $3,463 per ton, compared to $3,243 per ton in the first quarter. The euro-to-dollar exchange rate increased from 1.09 to 1.17, representing a headwind in the period. On the right-hand side of the slide, on treatment charges, nothing new. In 2025, treatment charges for zinc were at $80 per ton for the full year. This year, treatment charge was settled at $85 per ton, with the impact on profitability can almost be neglected. Turning to page 12, hedging. We have continued to take opportunities in the market to extend our SING hedging book until January 2029. Our hedging book today covers close to 30 months of hedges and does the entire fiscal year of 2027 and 2028. We have done this at record high levels of $3,100 for 2027 and 2028. We continue to monitor the market to close volumes for 2029. Now turning to page 13, BEFESA's energy prices. The page shows the evolution of the three energy sources that we have at BEFESA, coke, natural gas, and electricity. Regarding coke prices, which today represent around 50% of the total energy bill in the company, the normalization trend continued, and the war in the Middle East had, so far, no impact on prices of supply. Average coke price in the second quarter was around 144 euros per ton. which is roughly 10% lower than the same period in last year. Regarding electricity, which today accounts for around 40% of the total energy expense, prices were approximately on last year's level. Natural gas prices, however, were slightly upward slopping and were driven by the arising uncertainty resulting from the war damages on natural gas infrastructure in the Middle East. Turning to page 14, cash flow results. Operating cash flow in the first half reached 71 million, which represents an increase of 10% compared to last year. On the EBITDA to cash flow bridge, starting with 124 million euros of adjusted EBITDA and to the left, working capital related cash out amounted to 44 million euros in the first half of the year, about 12 million euros higher than in the first half of last year. The main reason for the increase in working capital in the first half was predominantly due to inventory buildup of works which I have addressed earlier. In the second half of the year, we expect a normalization of the working capital following a similar trend that in the previous years. Taxes paid in the first half of the year came in at 5 million euros compared to 12 million euros in the first half of last year. Operating cash flow was 71 million euros compared to 64 million euros the previous period. On CAPEX, in the first half of the year, we have invested 31 million euros in regular maintenance. Growth CAPEX this year is relatively front-end loaded and was 15 million euros. This is related to the expansion of our bamboo plant in Germany. In summary, total CAPEX was 46 million euros in the first half compared to 37 million euros in the same period of the last year. For the full year, we continue to expect total capex to be around 70 million euros. Total interest paid amounted to 15 million euros, and total bank borrowing amounted to 18 million euros in the first half of the year. For 2025, the EGM approved in June 2026 to pay a dividend of 40 million euros in July, equivalent to one euro per share, or 50% of 2025 net income. In summary, final cash flow amounted to minus 8 million euros in the first half. Cash on hand stood at 134 million euros, which, together with the 100 million euros fully undrawn revolving credit line, provides BEFESA with almost 240 million euros of liquidity. Gross debt at the end of June 2026 stood at 690 million euros, and net debt stood at 555 million euros, Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs Ayo B.Com. As a reminder, two years ago in June 2024, leverage stood at 3.4. This development underlines the strong cash generation capabilities of our business and the capital allocation discipline in the period. Following the refinancing back in July 2024 and the repricing in March of last year, BEFESA today has a strong long-term capital structure with optimized financial costs. We will continue reducing the leverage to a level or below two times by the end of the year. To do so, we limit the growth capex on these projects that will deliver immediate cash flow upon completion. Also, we will keep the annual regular maintenance capex around 45 million euros in the coming years. On dividend, we are committed to maintaining our dividend policy to pay between 40% to 50% of the net income to shareholders. Moving on to page 16, BEFESA has entered into a new cycle of low CAPEX and growing earnings, which results in a strong frequent flow generation growth and shareholder value creation. During the last years, we have improved our international exposure of the company to a truly global player, which did not come without the required investment. This step is now concluded, and we are now entering into a cycle of structurally lower CAPEX requirement, below 80 million euros per year. Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs As I already mentioned, we aim to keep leverage below two times for the coming years, enabling greater optionality in future capital allocation decisions. Now, back to Asier on outlook and growth.

Thank you, Rafa. Moving on to page 18, 2026 guidance. The first half of the financial year 2026 was in line with our expectations. We expect 2026 to be another year of earnings growth and confirm our guidance for the full year. On EBITDA level, we continue to expect to the end of the year between 250 million and 270 million euros, which translates into a growth between 3% and 11%. We expect total capital in the year to be around 70 million euros. On the back of unexpected growth in operation cash flow between 1% and 9%, This will enable us to further reduce leverage to around 2 from last year's level of 2.3 to around 2 times by the end of the year. Moving on to page 19, going through the main elements of our outlook for fiscal year 2026. We expect the steel dust volume in Europe to remain at solid levels and the U.S. to grow, as we are already seeing in H1, given by new contracts with the steel producers. In the rest of the world, steel dust volumes are expected to develop broadly in line with last year. Salt slag is expected to mainly broadly stable volumes compared with the second part of 2025, enjoying some tight wind from higher collection fields. The metric margin for secondary aluminum is expected to improve gradually over the course of the year, particularly in the H2. We are already seeing an improvement in the business environment in the second quarter, which makes us confident about a further recovery in the second part of the year. For energy costs, we expect a mixed development in 2026, with coal price and electricity growth stable and natural gas prices increasing in Europe. General inflation is expected to be a headwind due to ongoing high energy and fuel prices. These impacts maintain auxiliary material and personal costs across all regions, creating a negative pressure point in the cost structure. We should be aware of the developments in the Middle East that are still ongoing and have already impacted on energy and fuel prices, and as such, overall inflation. We anticipate that this inflationary environment will remain for the rest of the year. As explained by Rafa, Due to ongoing tightness in the zinc concentrate market, the benchmark treatment charge settled at $85 in 2026, was slightly up compared to last year, $80. Hedging activity for zinc remains stable, with the average 2026-2036 hedge price set at approximately 2,990 per metric ton, consistent with 2025 levels, suggesting a neutral hedging contribution. Fx is expected to continue to be a headwind for the remaining of the year. Total capex for the year will be around 70 million euros with around 45 million euros for regular maintenance and remaining for growth in the expansion of Bairbul. We continue following our discipline capital allocation strategy and ongoing focus on free cash flow generation. We therefore anticipate further the leverage with net leverage declining to around two times by year end. Moving on to page 20, our expansion project in Bourbon. Execution of the project is on track to start production at the end of August. Bourbon will add 60,000 tons of capacity to our existing recycling capacity of 200,000 tons. We diversify our customer base towards end market with lower demand volatility. Given the planned production starting late August, the contribution of Berber will mostly be feasible in the fourth quarter of 2026. Moving on to page 21 about the expansion of the European electrical furnace steel industry. Europe is accelerating its transition toward electrical furnace steelmaking, largely driven by the decarbonization targets and supportive policy frameworks. Between 2026 and 2030, in total, 13 new electric air furnace projects were announced to come online. This represents more than 22 million tons of new electric air furnace capacity, which equates to a 24% increase comparing to the existing 90 million tons of electric air furnace capacity in Europe. As a result, EAF penetration is expected to rise from the current 45% over the next 5 to 10 years, supported both by these new projects and the progressive replacement of blast furnaces. Given our strong market position, established customer relationships, and ongoing business development efforts, BEFESA is strategically well-positioned to capture the significant volume growth expected from this structural shift. We are already engaged in advanced negotiation with key customers to support this expansion phase in the coming years. Moving on to page 22, the development of the U.S. steel industry. In the U.S., electrical furnace steel capacity is projected to increase by more than 25% by 2028, equivalent to around 21 million tons of new steel making capacity. This expansion translates into over 300,000 tons of additional steel dust, creating a substantial opportunity for our steel dust recycling operations in the U.S. With a total installed capacity of 650,000 tons, we are well positioned to leverage this growth. Our goal is to progressively ramp up utilization from below 70% last year to around 90% by 2028 as new electrical furnace capacity comes online. The combination of our modernized palmerton facility, long-term customer relations, and strategic geographical footprint Near Key Steel Producers, ensures that Befesa is ready to capture Disney's phase of growth in the U.S. market. In summary, we are pleased with our first-half performance, which keeps us firmly on track to deliver another year of earnings growth. Our outlook remains unchanged, and we are reaffirming our guidance of $250 million to $270 million of EBITDA for 2026, equivalent to growth of 3 to 11%. We remain focused on discipline and execution and are confident in our ability to deliver on our commitments for the year. Thank you very much.

Thank you, Asier. We will open the line for the Q&A session.

The first question comes from Adana Ekoku from Morgan Stanley. Please go ahead.

Hi, good morning. Thank you very much for taking my question. I've got one on secondary aluminium. Thank you, Arama.

Well, the fact is that the secondary aluminum, what we have is sometimes some delay to apply the increase of pricing in our sales, comparing with the pricing to the scrap purchases. So normally what we are watching is that the margins are going to increase, but basically we think that the Q3 is going to be more and more strong than the Q2, and especially the Q4 by the contract that we have in a quarterly basis. So, yes, the volumes are still under pressure, but the margins clearly are going to be recovered. That's why we are very confident that in the second part, the difference with last year is going to be very remarkable.

That's very clear. Thank you.

The next question comes from from Berenberg. Please go ahead.

Hi, good morning. You mentioned the build up in the inventory on the wax or the production of wax. Can you just mention kind of what drove that in the quarter? And this is something we should expect to reverse in Q3. And then I guess a follow up on the aluminium salt slags. Just trying to understand the dynamic between the F&B price and your kind of revenue generation. Thank you, Asier.

The inventory built up in works, in a regular situation, everything that we will treat as steel dust and produced works will be sold to customers. Very often, it happens that we have processed all the steel dust. and we are filling a ship and a vessel and it doesn't arrive to the customer so we don't accrue the sale. So it's just a timing effect and as you say very well, in Q3 we will see the reversal. It's just a pure timing thing.

Yeah, and with regard with the aluminium salt slag and the evolution in comparison with the FMB, Well, basically we have to consider that the aluminum is just one of the parts of the income that we have in the business, together with the fees and the sale of the salt. So depending on the weight, it's not a direct correlation for the increases of the income. Having said that, we have part of that as well in a tooling basis that we develop an income fee. So we are always very clear benefiting for the rally in the FMB. which now is more normalized. But I think that the work that we have done increasing the fees for the year together with these, you know, peaks and moreover with the normalized production will make that the salt slag business is going to be probably in the highest results that it ever has. And with regard to the U.S. smelting, nothing to add that we are telling in the last calls. The plant is running very stable. The cost started, you know, finally as we announced a couple of calls ago. Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs The next question comes from Juan Rodriguez from Kepler Chevro. Please go ahead.

Good morning. Thank you for taking the questions. I have two on my side, if I may. The first one is on guidance. After the first half of your performance, you already almost reached 11% for the first half, and you already signaled that you expect an even stronger second half. So what are you bending in? We know there's a lot of macro uncertainty, but I would like to better understand how you're keeping this conservative stance on the guidance. And then the second one is on the development of EAF expansion in Europe that you signaled on slide 21. How are you viewing this from a plan point of view? On the short term, are you expecting to further increase utilization rates and then increase capacity maybe from the 2029-30s? What will be needed on your side for discussions to move forward, that is to increase capacity? and how we expect to do it on a leverage level. Should we keep the leverage target of around two times once the new volumes or new capacity is engaged? Thank you.

Thank you, Juan. Well, the guidance, yes, we have in the first half 11% and everything comes to think that we are going to be in the You know, from the midpoint to the, you know, high part of the guidance. This is basically what we consider now. Of course, it depends on the evolution on all the items which affect, which is in prices and general inflations and so on. But we do think that we are really on track to go to the high part of the guidance. This is how we see this today, right? Regarding the Europe, well, Europe, basically, we are in full capacity with the maintenance. The difference between, among the quarters, it depends sometimes when you do the maintenance stoppages. So increased capacity in a medium term, you know, comes from the, on hand of the Resitec or the French plant, increased capacity through the construction of a second kiln there. Timing, well, I think there's something in the 28, 29 probably could fix with the delivery of the steel makers project. But again, we are monitoring this in order to have the plant very close to entering into production, very close with the steel production plants, new plants coming into the line.

And the leverage, Juan, basically, as we have said many times, we are fully committed to keep the leverage Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs The next question comes from Olivier Calvé from UBS. Please go ahead.

Yes, hi. Good morning, Asier and Rafa. Thanks for taking my questions. I have maybe a follow-up on second aluminum, maybe DAF, for this year. I think you previously said something about €10 million as an expectation. Do you think this is still realistic? And can you maybe talk about the exit margins you had in secondary aluminum, perhaps, in June? Second question would be for you, Rafa, just on the hedges, if you could remind us what you've done incrementally in the second quarter. I mean, obviously, you're extending the hedges to early 29, but just if you could refresh us on where you were before. And thirdly, just on steel dust utilization, it'd be helpful if you could talk again about the utilization levels you saw, but specific to the second quarter by geographies. Your comments were mostly on H1, if I'm not mistaken. Thanks.

Well, thank you very much, Olivier, for the question. In terms of the secondary aluminum and the idea of a video, I think that 10 million was named with thinking in a good part of the guidance helping us to get to that part. We still think that it's possible, perhaps even a little bit more, but in that range probably something manageable at the levels of the margins and production expected for the last part of the year.

Regarding the hedging, Rafa, on hedging, Olivier, basically what we have done in the last quarter is to extend the hedging until January 2029. Before that, we had the hedging until July 2028. So basically we have taken the opportunity to hedge and to cover the second half of 2028, okay, taking the opportunity of the rally in the same price. Asier Zarraonandia Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs

Asier Zarraonandia Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs

Okay, so sorry, just the 76, 77% you're talking about the U.S. or?

No, I'm both. U.S. Q2 and by casualty we are thinking in the total utilization rate for the forecast of the year for the total business in that level too.

Okay, if I can just follow up on that, maybe just the Asia part of the business, you know, do you expect this to be sort of flattish in terms of utilization? And I mean by that Turkey and South Korea, do you think it's going to be, you know, at similar utilization levels as last year or, you know, you were flagging sort of weak volumes in Turkey?

No, I think it's quite similar, yeah. Yeah, it's quite similar. I think it's more or less the same level. And even including China, because there are not improvement there. And China, well, is not a big contribution, but in terms of production, it will be similar. And Turkey and Korea, I think it will be finally in the year, the same level of last year, slightly, you know, up and down, but it's basically the same level. Yeah, flat dish. Okay, thanks. Thank you, Olivia.

The next question comes from Fabian Piazza from Jefferies. Please go ahead.

Good morning, gentlemen. Thanks for taking my questions. I've got three. The first question is on maintenance shutdowns. I think these were fewer in the second quarter. Do you have any visibility for the remainder of the year, potentially the phasing throughout Q3 or Q4, and how much these maintenance shutdowns would be as a percentage in the full year as compared to the ones that we've already seen? The second one is on capex, so new capex cycle of just below 80 million. So for 2026, we can expect maintenance plus ban book, and then for 2027, 2028, just below 80 in total for the Recitec brownfield. Is this then going to decline towards 45 million maintenance in 2029, or is there anything else? on the plate that you already see. And the third one would be the Bernburg expansion you referred to a 6 to 7 million EBITDA run rate. Is that only for the incremental piece with the beverages cans or is that as a total to be understood? Thank you very much.

Thank you, Fabian. Interesting question. Maintenance shutdown. Well, traditionally and this year is no different. The Q1 is the lower level production. because we try to accommodate to the stoppage of winter in Christmas and January of the steelmakers across all the geographies. So Q2 is a good reference. We have still some stoppages in Europe and some in U.S. as well. And it's a good reference for the Q3 that we do hold the same level of maintenance as Q2. Ayo B.Com, Rafael Perez Gomez, Birke Fuchs Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs

Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs Ayo B.Com. BECON, Rafael Perez Gomez, Birke Fuchs And with your third question, Fabian,

Yes, six, seven million is that we expect the contribution for the increased capacity and the higher rate utilization. And this is basically what we still wait, and it's the whole capacity in the terms that the main capacity utilization is going to come for The next question comes from Anis Daya from OtoBHF. Please go ahead.

Yes, thank you very much for taking my question. Good morning, gentlemen. I have only one question. It's on the U.S. steel dust volumes, which increased strongly by 33% in Q2. I'm wondering how much of this growth came from new contracts, And what utilization rate do you expect for the U.S. operation now at year-end 26? And more broadly, could you provide the expected utilization rate speed by geography for the total group? Thank you.

Well, thank you for the question. Basically, the U.S. market is coming from the new contract as expected. We are now seeing a very high increase in the normal production rates for the rest of the customers itself. I mean, I do think that the economy in the U.S. and Europe and other countries is not booming, so basically the production is in the level now. One thing is different, that the Q1 came, you know, lower than expected because the standstill for the steelmakers, they took more time to not only the new contract, but the rest coming, you know, some delays in the reopening of the year. For the rest of the year, in U.S. in particular, we see the Q3 and Q4 very similar to the levels that we have seen in the Q2. This is the idea. And for the rest, as I say, I mean, Europe is in maximums, Asia probably is flatting, and the U.S. is coming to 75. So in total, we do hope that the capacity utilization at the end of the year for the steel dust business will be around 76, 77 percent.

Thank you very much.

The next question comes from Lars von Kleff from Deutsche Bank. Please go ahead.

Yes, thank you very much. Good morning. Two questions left, and I will ask them one by one, if I may. I heard you saying you rather expect to end the year in the upper end of your guidance range. What would be the biggest risks to achieve that?

Well, it's the key question here. Thank you, Lars. Yes, I said that. If the conditions are like we see now, with the same prices in a good level, with the rest of the cost and so on, nothing really crazy from now on, with the margin expecting in the recovery aluminum, yes, we see that we are comfortable in that part of the range. This is the idea. Of course, everything has to fix it, but we don't see now a very, you know, big tide wind that can, you know, do that we are going to be below the midpoint. This is the idea that we have now. Hopefully, I have not to tell other thing in the Q3 results, but at the end of the day, it's how we see now, and we are really optimistic that we can get this part of the guidance.

Okay, perfect. And then you just mentioned secondary aluminum again. I mean, impressive. The secondary aluminum utilization rate rose by 290 basis points in Q2 to 75.3. Could this partly also reflect the geopolitical tensions in the Middle East currently constraining primary aluminum production? And if so, is there a risk that utilization rates normalize lower if Iran and the U.S. reach a resolution and more primary aluminum comes to the market again?

Well, I think that the relation between primary aluminum and secondary aluminum sometimes is not so obvious, right? I mean, the secondary aluminum is more in geographical zone. In our case, it's for what happens in Europe, and the volumes clearly depends or lie on the automotive productions in use. It's true that whatever happens in Mideast affects basically to the aluminum primary prices. That was happening months ago or two months ago. And this is a reflection on the prices of the free market bulletin and the market value. But it's not a big correlation or a very clear correlation at the end of the day. So for us, the aluminum is more in connection with the volumes that we do hope because the contract in place. And again, the margins which are coming very more strongly the second part of the year.

Understood. Many thanks. I'll go back to the land. Thank you Lars.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Rafael Perez for any closing remarks.

Thank you all for your questions. You can also contact the investor relations team of FESA for any further clarification. We will now conclude the conference and the Q&A session. Let me remind you that you can find the webcast and the dial-in details to access the recording of this conference call in our website. Thank you very much to all of you and have a good day.