Arkema S/Adr

Thank you. Good morning, everybody. Welcome to Arkema's Q2 2023 results conference call. Joining me today are Marie-Josée Doncian, our CFO, and the investor relations team. As always, supporting this conference call, we have posted a set of slides on our website. I will now comment the quarter highlights before letting Marie-Josée go through the financials in more detail. And at the end of the presentation, as usual, we'll be available to answer your questions. So in the context of numerous profit warnings, the chemical sector over the past couple of months amidst a very challenging economic environment, our Q2 2023 financial performance did not show any particular surprise and was relatively robust. While our EBITDA was, of course, lower year-on-year given the well-flagged exceptional profits, in atrium atrix and PVDF. It was comparable, in fact, to pre-COVID levels in a significantly lower volume environment, which, if needed, is a good indicator of the increased resilience of the group over time. Here are some key points of the quarter I'd like to highlight. We delivered an EBITDA of 470 million euros a little bit better than our expectations and consistent with our full year EBITDA guidance. This performance was achieved in difficult macroeconomic conditions marked by low visibility and weak demand, including continued destocking. This weakness was nearly all over the place, with nevertheless a few exceptions, like automotive, energy, and batteries. In particular, destocking the battery chain in China continued in the early part of the quarter, but seems to have come to an end, and volumes finally turned positive on the quarter. All in all, while group volumes were lower year on year, our pricing remained firm, for the most part in the context of general inflation, even if raw materials declined. Excluding the expected normalization of PVDF and extreme acrylics I've mentioned before, we already had the opportunity to comment in the past quarters. The price effect was positive at group level, reflecting the execution of our dynamic pricing policy and also the positive impact of innovation and new business development on the product mix. A highlight of the quarter from our point of view was our EBITDA margin. which stood at 17.1%, testament to the quality of our business portfolio, and again, supported by positive mix and pricing discipline. Looking briefly at the performance of our specialty materials segments, adhesives had a decent quarter with a stable EBITDA margin compared to last year, which was appreciated given the continued pressure on volumes. This performance of BOSTIC was supported by our mix toward more value-added solutions and benefits from lower raw material prices. In advanced materials, we had the reversal of the PVDF overhorning, but we benefited from high value-added new business developments, as well as resilience in high-performance polymers in the U.S., and to a certain extent, also in Europe. Performance additives again delivered a solid performance despite lower volumes with EBITDA, broadly flat year-on-year and high margins. Our EBITDA margin was above 20% for the segment, which was a satisfactory performance in this context. In coatings, we were impacted by broad destocking and more challenging conditions in atrium acrylics, following last year's very high comparison base. Our downstream business, despite again lower volumes, was clearly more resilient, with a rising share of more eco-friendly solutions and some benefits of lower input costs. Beyond the financials, we had, as you know, some exciting M&A news in the quarter, which will increase our exposure to high-growth markets like electronics and electric vehicles, finalizing Polytech in high-end engineering and of course announcing the acquisition of a majority stake in PI Advanced Materials, which is really a unique opportunity to broaden and strengthen our high-performance polymer range with an amazing technology. Regarding our major CAPEX, we were delayed by a couple of months, both on the plant at Nutrients Facility in the U.S. and on the bio-based polyimide-11 plant in Singapore. No important issues at all, but as you know, there are both proprietary and cutting-edge processes, many equipment, so we have to experience more minor corrections than expected. For this reason, we now estimate the EBITDA contribution from new project to be closer to 30 million, than the initial forecast of above $50 million. But you will see that in our conclusion, this delay will not impact our full year guidance for the group since our first health performance was ahead of our forecast. We expected more benefit from lower raw materials as we anticipated a couple of months ago. And recently, we launched a company-wide initiative which will bring on the fixed costs around $30 million So we are quite comfortable on our guidance, and we'll come back to that after over to Marie-Josée for a more detailed look at the financials. Thank you, Thierry.

To start with, quarterly sales were down 23% year-on-year at €2.4 billion. So this is mostly organic, since the scope and currency effects were rather limited. On the one hand, volumes were down 15% in the face of the continued destocking and low demand across a number of important markets, notably construction, coating applications, and packaging. On the other hand, the global price effect came in at a negative 6.6%, impacted mainly by the expected normalization of PVDF and upstream acrylics, while most of our other businesses were in positive territory. Code 2 EBDA came in at €417 million. Thierry already commented the details by segment. On a half-year basis, EBDA came to €784 million, with the 40% year-on-year decline linked mainly to the reversal of the windfall profits generated last year in PVDF and upstream acrylics. Depreciation and amortizations stood at 132 million euros. This is a stable versus last year, as the polyamide 11 Singapore plant and nutrient project have not yet started being amortized, leading to a recurring EBIT of 285 million euros and a rebate margin of 11.7%. Non-recurring items amount to 64 million euros. Around half is attributable to the CPA, depreciation, and the other half to one-off charges, restructuring and legal expenses, as well as startup costs for our polyamide 11 plant in Singapore. Financial expenses stand at 16 million euros, and tax charges come to 51 million euros. Consequently, the quoted to adjusted net income stands at 207 million euros, which corresponds to 2.77 euros to share. Moving on to cash flow and net debt, Q2 free cash flow amounts to €115 million. It reflects our solid operating performance and includes the €42 million increase in working capital. So our working capital ratio on annualized sales stands at close to 17% versus nearly 15% last year. The higher level being linked to some restocking following the low point of year end 2022. as well as the weaker sales environment. Total capital expenditure amounted to 135 million euros in the quarter, which is quite comparable to last year's level. In quarter two, we had 69 million euro M&A outflow linked to the acquisition of Polytech in Germany. Net debt at the end of June 23, therefore, amounts to 2.6 billion euros, including 700 million euros of hybrid bonds, a little higher versus end of Q1 level, given the dividend payment. Our balance sheet remains solid with the net debt to last 12 months EBDA ratio standing at 1.7 times. I thank you for your attention, and we'll now hand it over to Thierry for the outlook.

Thank you, Marie-José, for this highlighting of the financial details. So it's no surprise to you, you had the opportunity to hear it from other players in various industries the overall macroeconomic environment remains marked by low volumes and limited visibility nothing new there this is the case both in europe and in the us while asia is the most resilient region currently even though they yet have to show signs of a tangible rebound In this context, you know us, we are maintaining a strict operational discipline. Marie-Josée had the opportunity to mention our efforts still on working capital to make sure we generate significant cash flow. We are focused really on managing fixed costs, particularly as a result of this weaker than expected macros in the start of the year. We have recently implemented a new 30 million saving plan on fixed costs versus what we had in the first half and we initially budgeted. So we continue to remain attentive to the macro. We think we are now at a low point. We don't see yet when the pickup will come, but as we said earlier, We expect the benefit of the saving plan. We expect benefits also from a stronger relief in raw materials and energy costs. We'll be a bit below, as I mentioned, on the contribution of new projects, but on the other side, we have the benefit from the saving plan. Certainly, destocking, which has come to the high point still in Q2, is getting a bit weaker on the construction part, a bit higher on the industrial market, but all in all, we believe that it will get a little bit lower in the second part of the year. So this means that all in all, we are confident to confirm our annual guidance, aimed to achieve in 2023 an EBITDA of around 1.5 to 1.6 billion euros. Beyond the current financial year, we continue to work on two time horizons and we remain much focused on the longer term. With our portfolio of cutting edge technologies across three segments, sustainability driven innovation, we believe we are really ideally positioned to capture the numerous growth opportunities in areas like batteries, electronics, 3D printing, home efficiency of the circular economy. We still strongly believe that this strategy towards specialty material is really the right one. It was really for us quite satisfactory to have a 17% EBITDA margin in the second quarter despite lower volumes, so really the strategy is really reinforcing the profile of the company. So we'll be discussing some of those areas in greater detail at our upcoming Capital Market Day on September 27th in Paris, where you'll also be able to meet and talk to various members of our senior management team. I really look forward to seeing you all there. So I thank you very much for your attention, and together with Marie-José, we are now ready to answer the question you may have.

Thank you. If you wish to ask a question over the phone, please press star 1 on your telephone keypad. If you wish to withdraw your question, please press star 2. Again, please press star 1 on your telephone to answer the question queue and wait for your name to be announced. Our first question comes from the line of Martin Rudiger of Kepler-Chevreux. Please go ahead.

Yes, good morning, and thanks for taking my two questions. The first question is on the guidance. In the past, Thierry, you specified your four-year guidance at Q2 reporting, but today you did not narrow the guidance range, although H1 is already in your pockets and just six months are left. The high end of your guidance implies a 4% EBITDA growth, while the low end implies a 9% EBITDA growth for the second half year over year. What are the parameters for the high end as well as for the low end of your guidance? And in that connection, are you happy with the right now with the consensus? That is my first question. The second question is on PFAS. In the last couple of days and weeks, we hear... quite some noise about her fluoride pollution to the environment at your Pierre Benit plant in France. What is your view about the risks on this? Thanks.

Okay, with regard to the first question, I'm a bit surprised by your question because really we are talking about 100 million and 1.5 billion, which is really... quite narrow, and as narrow as we do every year. So maybe your comment could be that our guidance at the beginning of the year was not large enough, but with regard to the second trimester, I think it's typical of what we do, and looking at some deviation from our peers in the second quarter, I think the deviation has been far beyond this kind of range. So I think we are comfortable about this range. I think from our side, it shows a good level of confidence, but I would not qualify that the guidance is not narrow enough, frankly speaking. It's not my feeling. But as I mentioned, maybe Maybe we could have started with a larger guidance at the beginning of the year, but we try to be as precise as we can. So this is our culture, as you know. With regard to pervenities, there are some local noise on this point. There are questions from... authorities with regard some pollution, which some concern past products, some concern products which have nothing to see with the site of Père-Bénit. So we are working, as you know, in full transparency with the administration. We have already respected on the site of Père-Bénit all regulations, and we have the answer that we share with the authorities. After that, as any topic, you have some press coverage and some of the elements which are said in the press are right, some are wrong, as often. But we don't see, I mean, we continue to monitor this topic, but we don't see risk which would not be disclosed today in our communication, including the reference document. Thank you.

The next question is from Aaron Ciuccarelli of Berenberg. Please go ahead.

Hello. Hi. Good morning. So the first one is on advanced materials. It's nice to see volumes down 8% after being down 20% in Q1 despite, it's fair to say, slightly easier comps. So maybe can you comment a little bit on what are the moving parts here and what should we expect going into the second half of the year? And the other one is, again, on advanced material. It's nice to see margins holding up well. Maybe, you know, it would be good to understand how much you should progress going forward here, especially considering that you're now talking about higher raw materials decline compared to original expectations. The second one is on working capital. I still see that actually inventory is still quite high and receivable higher year-over-year. Should we expect working capital to remain at a similar level into H2? And the final one is on your costs, excluding ROMATs. CSG&A has a percentage of, say, 9.1%. You're talking now about further cost initiatives with be interested to understand really what are the levels you have here for further cost-cutting. Thank you.

Okay. So, maybe, Marie-Josée, you can start with working capital. Okay.

So, as I mentioned, in fact, we clearly are at a kind of higher point than, let's say, usual in working capital ratio on sales. We worked Clearly counting on a better volume market starting the year, coming out of a low point volume situation at the end of 2022. So there has been some restocking happening inside the organization across various businesses. So this is a point of attention that we are paying attention to. I would not agree with you that the receivables are at a high point. We are actually pretty good at collections and the number of days of receivables in sales compared to my last two months turnover is actually at a low point. compared to my historical trend. So I would say the main point of focus for us is the quantities in stock. We continue to enjoy some price decrease in the valuation, but definitely quantities would be something we would expect to come back down a bit in the second half of the year.

Thank you, Marie-Josée. So now on the advanced materials, thank you for mentioning that the margin is quite good, given the context, and 20% on the You're right also to say that if you compare to the average of the H1, we are 1.5 points above, which means three points more quarter to quarter. Now it's already difficult to extrapolate one quarter. What is clear is that in terms of seasonality, the second quarter normally is better than the first one. It's one element. is that we got a little bit of release on the raw material with, I would say, a good pricing policy. I would mention, I think we did it, that the battery segment was really destocking in the first quarter, and now the demand is better, even if the pricing continues to to decrease a little bit. I would say in terms of volume, it was far better in the second quarter, especially the end of the second quarter than the first one. Overall, the performance additives that maybe you know a little bit less than the HPP has been quite stable. This is important. I would like to raise again the importance to have Even while being focused on specialty material, it's important to have some diversification because it brings more stability, and the performance additive has been quite impressive in its stability year on year. So these are the, I would say, the moving parts to answer your question. comment we give you a guidance which is rather precise for the whole group as we do every year not commenting again on the question of Martin I will not guide for every segment for the second part of the year clearly if you look at the whole group you have a certain stability between the two segments the two semesters, and it could apply more or less to advanced material with some plus, and you mentioned one with lower raw material, some minus with lower seasonality, and normally in H2 compared to H1, so you have a combination, but nothing significant, I would say, between the two semesters. Now, with regard to the cost initiative, I imagine you mentioned the fixed cost initiative. I think we are... And we are quite agile on that, as you know. We never launch really, as some companies do, big major plans suddenly. We are more ongoingly working on our costs, both variable costs and fixed costs. And with regard to fixed costs, the levers are normally quite traditional, right? strict management of replacement when people take retirement and when you have some people leaving. We hire every year 2,500 employees, which is more than 10% of the employees, just with a natural turnover, retirement in the company. So because of that, it gives some opportunity to streamline, so we do that. Also, there are some discretionary expenses, as you know, including travel, to give you something that everybody will understand, but it's far beyond that, where we would be rather aggressive on the second part of the year. And now, when you have lower volume, especially for not the continuous process, but the process in batches, for example, I believe even if we don't communicate externally more in a way on that, clearly we adjust our footprint in order to cope with lower volume. So these are some examples of initiatives we are taking and we'll take and accelerate on the second semester to deliver this semester on semester 30 million savings on fixed cost.

Thank you very much. Good luck.

The next question is from Chetan Udeshi of JP Morgan. Please go ahead.

Thanks, Moni. The first question I just wanted to follow up was on the, maybe not follow up, but just the first question on the topic on fluorogases. I know we've not talked about it for a while, but Just looking at some of the anecdotal data, etc., it seems the prices are very high this year or going up strongly this year on the back of the planned reduction in quotas, both in the U.S. and Europe. I think it's in 2024. I mean, in the past, we've seen this dynamic where the prices go up into the cuts to quotas and then they fall down. post the initial buying wave. Is this something similar we should be expecting this cycle or is there a different pattern you think because of maybe changes in the market structure, et cetera, et cetera. And is this something a material driver to Arkema's earnings in intermediates this year? That would be first question. And the second question was just around You mentioned certain seasonality, and that seasonality typically, even for second quarter, you tend to see a softer third quarter versus Q2 just because of seasonality. Is that something you expect, or because of the project contribution and fixed cost savings, we should be not expecting that seasonal decline in Q3 versus Q2? Thank you.

Okay, so the first one, the answer is rather easy. In the old time, our profitability was very shared between Asia, Europe, and the U.S. U.S. has always been very stable. Europe was, I would say, rather stable at with a low performance but with no quota implemented except with one year where we are disturbance because the regulation was not applied but it's not the case anymore because it took it took some time for the european commissionery to make sure that his regulation was implemented but now it's done and asia was a big contributor today different the i would say the Most of the large, very large majority of the contribution is between U.S. first, then Europe. In Europe now, the quota scheme is respected, and we don't have the disturbance we had in the past. And in the U.S., it's stable like it was. Now, when you say that we seem to have a sort of elevation of prices and profitability for EuroGas this year versus last year, it's not the case, huh? we have a rather stability in fluorogas, while maybe a little bit better than last year, while we decrease intermediate on the Chinese acrylic as we mentioned. So our feeling, and it's a strong feeling, we believe that fluorogas in the coming years will be rather stable. and the mechanisms are different now than they were in the past, and the Asian part, which was really the volatile one, is quite small now, so we have a far more stable positioning. With regard to seasonality, I will not comment really quarter by quarter, but what I say on the semester, and I think I said that last time, is that the second semester normally is a little bit softer in seasonality than the first one, if you make the math and if you look at several years of past for Arkema. This year, a little bit different because we have still momentum, even if they are a little bit below in a new project contribution, this contribution will be there. Secondly, as I mentioned, we have this... fixed cost savings. So it makes a difference of about 30 million and because between the two quarters is not insignificant. Then you have the raw material dynamics. Don't forget also in raw materials that we have about six months delay between the impact of raw material decrease. So this means that a big part of the decrease of the raw material index of the first semester will be seen as the second semester. uh these are good elements and i would say even if today we have no visibility even if we have not if we remain quite cautious maybe end of the year a little bit incremental less of this talking it can make a difference also so if you take these four elements it's not a pure rational there are still uncertainties but uh all in all it makes uh i would say a seasonality

not exactly the one we had in the past okay that's clear thank you the next question is from matthew yates of bank of america please go ahead hi everyone um i wanted to take the opportunity to come back and ask a little bit more about the pei am deal from a couple of weeks ago um And really just to understand the longer-term potential here and therefore why you're so excited about this business. It looks very dependent on smartphones today, but perhaps that changes in time. I see they make reference to Line 9 expansion possibly being dedicated to electric vehicles. When you did your due diligence on the deal, were you able to understand how much visibility they have on orders or design wins into that market? And then secondly, they seem to have quite a new strategy around varnish, where capacity today is de minimis. But they're talking about huge numbers potentially in five years' time. Can you help me better understand what the sort of applications are for Vaish and what's changed as to why they're entering that business now that they haven't been in historically? Thank you.

Okay, is your only question or you have another one, Mathieu?

I can ask another one. On the material basket... Okay, on term...

Antoine, I will give you the general answer. I think we have organized specifically for you because we thought it would take too much time in this call, a specific answer to some specific questions. So you will get the answer you want on the varnishes and smartphone, et cetera. Overall, we are very confident on this technology because it really fits Two of the major areas of growth for Arkema in the long run, one is electronics, and electrical vehicle is also influencing a lot of electronics, as you know. And also the second one is battery, which is really emerging very strongly. The technology of polyamide is absolutely important for this to business. And what we have seen even in this year, which this is why we wanted to buy it this year because it was a lower point. We see a good momentum month after month of this new business which is coming in battery and in advanced electronics. So on this, the rationale which I explained last time is very clear from the standard point. We give you, we take advantage of the capital market to come back on this acquisition. And even if we have not closed, so we are limited in what we can show you by definition because the company is not with us yet. We try to continue to explain what is BI and then all this application and they will be done by your expert. And as I mentioned, since you had a few specific question, we have organized for you a little bit of answer with our experts. So you will get all these answers.

I appreciate the help. Maybe a question on the adhesives business in terms of the raw material basket, which I would imagine has a lot of moving parts. We're now hearing from the coatings companies that they're seeing their basket down high single digit, maybe even double digit percentages year on year. When you look at the inputs for adhesives, can you give us a sense what sort of cost deflation you're seeing. I would imagine there's probably a lot more additives in that business, so maybe the numbers aren't exactly the same, but just curious how you're seeing raw material deflation on the adhesive side.

We don't disclose, actually, our strategic information, our raw material index. I would say for ADG, they are very close to the whole group, so we don't see any specific difference. The raw material both are not the same, but overall the index are comparable. with the rest of the group. Maybe with our cutting customer, for example, if you take the paint and if you compare paint and adhesive, which is basically the ground of your question, if you look over a long period, you have more volatility in margin for paint companies than you have with adhesive company. This means that the margin goes up higher with paint companies in peak years, and it goes down when raw materials are decreasing, and it goes down more significantly when the raw materials are increasing. You could see that in the past couple of years. You cannot directly compare adhesive and paint in terms of raw material influence, pricing versus raw material, etc. This is also one of the beauty of the adhesive, which is more stable from this standpoint.

Thank you so much.

You're welcome.

The next question is from Jaideep Pandya of Onfield Research. Please go ahead.

Thanks. A few questions. Firstly, on PVDF theory, could you give us some indication of what sort of volumes growth do you see in the second half versus first half and then into 24 based on sort of your customer feedback? It seems like volumes have stabilized. So and then, you know, Chinese prices have on a reference level also stabilized. So do you expect price stability in your portfolio as well? for H2 and into 2024? That's my first question. The second question is on coatings. We've seen now a few quarters where your volumes have been down in the 20s, where your customer volumes are stabilizing and customers are also upgrading raw material guidances. So do you think that in the second half this year into 2024, we'll see some restock in coatings from your coatings customers? And then the third question really is on the portfolio. I mean, you know, well done on the PI acquisition, but do you see any meaningful opportunities in either coatings or adhesives, which are sort of in the league of Ashland, which could come your way in the next sort of 12 months or so? These are my questions. Thank you.

Okay, thank you, Jadip. On the first one, we already have good volume growth between Q1 and Q2 significantly. So it depends if you compare H2 to H1 or H2 to the trend of Q2. I would say in terms of volume, we plan to have the H2 more in the order of magnitude of the Q2, which is more comparable, while, as I mentioned, the Q1 in volume was more difficult. Then in 24 versus 23, just because we had the weakness at the start of the year, we'll continue to grow. And as you know, we have invested also both in France and in China for, let's say, to make the story short, mid-year, one is a bit before mid-year, the other part is more a bit after mid-year. So which means all in all, we'll get more capacity overall in 24 than in 23. So because of that, because the market, we have a lot of business, as you know, in battery, but not only in battery, normally 24 should be above in volume compared to 23 and even compared to the second part of 23. In terms of pricing, we see for the Chinese pricing is clear that we got a big hit in the first part of of the year, even we continue to see decrease in Q2. I agree with you. Normally, we should be more or less stable, but again, wait and see. But everything is factored in organelles anyway. Putting volumes, yes, it's a good remark. I did it to my team. And I told them, I don't understand. We have some gap between what our customer are publishing and what we say. So yes, normally if you are rational, we should get some restock at some point, but this means they have still some stock. But the good news is that it seems that the market is stabilizing and that we come to a point where the stock are well optimized at our customers and they should start to restock a little bit. So we'll wait and see. Again, I don't want to I have no crystal ball, but in terms of logics, what you say should be true at a certain point. But I don't want to over-emphasize that. Let's wait to confirm stabilization and then to see if there are some pickup before the end of the year. But clearly, you know, when I mentioned the four factors that could influence GH2 compared to a normal seasonality, this was the last one, if you remember what I just said a few minutes ago. With regard to portfolio, we had the acquisition of Pyam, which is quite attractive. We had the acquisition of Ashton, which was also attractive and I would say significant. You understand that now we are re-chasing technology for this new world. For us, so different profile of acquisition compared to what we we did in the old years. And also I would mention Polytech, which is smaller, but exactly the same kind of thing, technology for new megatrons that we are acquiring. So now I think that to make the story short with Ashland and with PIAM, we have already in our plate a good set of acquisitions to manage, develop, integrate. So there is no urgency for us to make any meaningful opportunity. We'll continue to make small bolt-on as we have been doing in the past, particularly in adhesives. We did one in Mexico in coatings recently. So this kind of acquisition, yes, we'll continue to do. But for the meaningful one, let's pause a little bit and let's focus on the delivering the PM acquisition and the echelon acquisition.

Thanks a lot and well done for being the only company not to warn in the sector.

Thank you, Jenny. Thank you very much. I appreciate it. We appreciate it, the whole team.

The next question is from Laurent Favre of BNP. Please go ahead.

Yes, good morning. Terry, the first question is on the $30 million savings program. Just to be sure, are we talking about a $60 million annualized program and therefore we have the carryover into next year of $30 million, or is it more about phasing of fixed-cost investments? That's the first question. And the second question, I guess trying my luck, could you talk a bit about how you're thinking about about the trajectory for volume growth over the next 18 months, following 15% to 20% volume declines over the last 18 months. And I know that you don't have a crystal ball, but you do have an investor day in 60 days, and I'm assuming you will give us a three-year view. So you probably have to have a bit of a view on what's going to happen in the next 18 months. Thank you.

So the next 18 months is three semesters, right? So I will start with the saving program. So what you did, if I understand well, you took the 30 on one semester multiplied by two to get to 60. In fact, it's not the calculation you should make. It's really short-term adjustment, not necessarily structural, working on the discretionary expenses, on the hiring, on the adjusting the site for lower volumes. So they are really corresponding on the conjunctural current macroeconomics. It's clear it's a macroeconomic back. They will disappear. So it's not like the good thing. And this is why I wanted to mention it because, as you know, we are completely transparent. We say we are a little bit late on some of our projects. Okay. But don't worry because we are the offset. with this extra savings. This was the message. But I would say all in all, it's a wash. But next year, come back to your second question, if you can think that after volume decrease, we should have some pickup to which level, you don't know, I don't know, for 24. uh i think that these savings will disappear but don't worry the ramp up of the project will be quite significant in 24 versus 23 other projects that we have accomplished In the recent three years, they will be really all having started before the end of the year, including the start of May, which should be at the end of the year. And we communicate to you during the capital market day how much it will bring between 24 and 23 to consume the guidance, you know, for 24 and to project ourselves in a longer period. So I would say... This savings is more something which is more temporary to cope with the current environment. So on the volumes, yes, I would say it's qualitative, I recognize, but nobody, I think, do better in terms of precision today. I would expect the start of the second semester to be in continuity really with the first semester. Maybe during somewhere, the Q4, to have a little bit of a pickup. Judith mentioned, for example, coatings with destocking, stopping, and some restock a little bit could come. And 24 to be better, but at which level in terms of macro? It's more a macro question for experts than for yourself or myself, but I think given the length of of the stock is something you could expect even in a reasonable manner.

Thank you. But when you look at the 15% to 20% volume decline, what you're telling us, I guess, is that you don't think you've lost market share or you haven't voluntarily reduced volume.

Sorry, if it was your question, sorry, I missed it. No, no. We check market share all the time. We can accept to give up a little bit of market share when we consider that the products are too much commoditized and we want to maintain our pricing power. But really, it's incremental. And really, the value-added business, we don't do any.

Thank you, Thierry.

You're welcome.

Mr. Le Hanaf, this was the last question. There are no more questions registered at this time. Back to you.

Okay, so thank you very much, all. Thank you for, I know that the end of the month is quite busy and that some of you will take a summer break, so I take the opportunity to thank you for your question all along the semester and the support, and I wish you good luck. Don't hesitate if, like Mathieu, on a specific point you want to have some deep dive, we are, as you know, always at your disposal. And we'll do it with pleasure to finish to convince you on our very attractive project. So thank you very much. I'm looking forward with the whole team to talking to you, especially at the Capital Market Day where we – I expect all of you to be present. It will be quite a nice Capital Market Day. Thank you very much.