Arkema S/Adr

Good morning, this is the conference operator. Welcome and thank you for joining the Arkema first quarter 2026 results and outlook conference call. As a reminder, all participants are in listen-only mode. And after the presentation, there will be an opportunity to ask questions by pressing star and one at any time. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Thierry Le Hannaf, Chairman and Chief Executive Officer. Please go ahead, sir.

Thank you very much. Good morning, everybody. Welcome to Arkema's Q1 26 Results Conference Call. Joining me today are Marie-Josée Doncion, CFO, and the Investor Relations Team. As always, to support this conference call, We have posted a set of slides which are available on our website. I will comment the highlights of the quarter before letting Marie-Josée go through the financials. And at the end of the presentation, we'll be available, as usual, to answer your questions. In the continuity of 2025, market conditions remained soft into January and Feb 2026 before improving in March. Regional trends were contrasted, with demand continuing to be subdued in Europe and in the US, while Asia showed again solid momentum across several of our end markets. In addition, the quarter was once more affected by the depreciation of the US dollar compared to last year, while this impact is expected to be more limited from the second quarter onwards. End of February saw the outbreak as the conflict in the Middle East, which started to impact global supply chains and quickly led to a sharp rise in certain raw materials, as well as in energy and logistic costs beginning in Asia. So, in this complex environment, Arkema delivered stable volumes year on year, a solid performance in the context. This was particularly driven by specialty materials, whose volumes increased by 1.5%, supported by a strong pickup in March. All specialty material segments were up. Coating solutions benefited notably from better dynamics in UV-turing resins. Advanced materials posted solid growth in key extractive markets for high-performance polymers. Adhesives were supported by durable goods and some limited improvements in construction. This volume performance also reflects Arkema's continued momentum in high-growth pockets, with volumes up 15% in attractive end markets such as batteries, sport, 3D printing, and healthcare. Batteries once again deliver strong growth supported by the rapid expansion of energy storage systems, a key additional driver for the group, particularly within high-performance polymers. As a result, Q1 EBITDA came in slightly above expectation, reaching 283 million euros, up 14% versus the fourth quarter of 2025, supported by an improvement in March. EBITDA was nevertheless down year on year, primarily impacted by a significant negative currency effect of around 20 million euros and the absence of rebound in the US and euro so far. Besides, advanced materials experienced a slow start to the year, in line with the trend observed in Q4. However, momentum improved in March, and Q2 should be up sequentially, supported by HPP. I would also like to underline the good performance of cutting solutions, which improved its EBITDA margin by 100 basis points, supported by a more favorable product mix. Additive solutions delivered a significant sequential improvement, despite being down year on year. On the other hand, primary material increase earnings, likely year on year, mainly driven by legacy refrigerants in the U.S. In actually, the improving spread in Asia came late in the quarter and so had only a limited impact, while the business in Europe and the U.S. continued to be challenging, particularly in January and February. However, from today's perspective, it is fair to assume that the actual spread should improve in Q2, with the magnitude still to be confirmed. As you can expect, all teams are fully mobilized to effectively and swiftly manage the current economic and geopolitical challenges. In the first quarter, we have set fixed-cost inflation at constant currencies, and we are well on track to achieve this objective for the full year, supported by a number of cost-cutting initiatives. Turning to the Middle East crisis, the group is reacting swiftly to mitigate supply chain disruption, both in terms of raw material availability and more important, input cost inflation. Pricing adjustments have been initiated to assess the increase in raw materials, energy, and logistic costs, while actions deployed selectively by product, market, and geography. This has required close and continuous coordination with both suppliers and customers. Price increases will become visible in future. Arkema's well-balanced geographical footprint to serve customers predominantly from their region is worth mentioning as a good advantage in the current environment. So far, we have been able to navigate this crisis without any supply disruption. Moreover, Arkema remains focused on executing its major growth project. The group is currently finalizing the completion of its new PVDF capacity in the U.S., scheduled to start mid-year. This will add 15% additional capacity in the region to meet growing demands for locally manufactured PVDF, particularly for energy storage systems, semiconductors or cable applications. In parallel, the group also announced a further 20% capacity expansion at its PVDF plant in China, set up to start in 2028. Also, the new unit of real-time clear downstream of our PA11 in Singapore started up successfully at the beginning of the year and is expected to support HPP earnings momentum from Q2 onwards, driven by capacity growth. I would also like to underline the strong first quarter performance of PIAM. EBITDA was up more than 30% year-on-year in local currency, with a 35% EBITDA margin. As highlighted during our last call, QIAM continues to benefit from good momentum, driven in particular by solutions for foldable and ultra-thin smartphones, as well as its expansion into higher-end applications. We expect this positive trend to continue into the second quarter, with robust share-on-your-self growth. In addition, Arkema's tight discipline in its capital allocation will deliver the solid performance with regard to working capital management This contributed to recurring cash flow coming in better than last year. This performance also reflects lower CapEx, fully in line with our 600 million full-year CapEx target. I will now hand it over to Marie-Josée for a more in-depth look at the financials by segment before we discuss the outlook at the end of the presentation.

Thank you, Thierry, and good morning, everyone. Arkema's Q1 revenues at 2.2 billion euros were down 8.4% year-on-year. They were impacted by a negative 5.1% currency effect, reflecting mainly the weakening of the US dollar against the euro compared to Q1 last year. Volumes came out broadly stable year-on-year, supported by a strong month of March after a relatively soft start of the year. The price effect was a negative 3%, reflecting essentially the lower selling price environment compared to Q1 2025, in line with the progressive decrease in raw material costs observed in 2025. Q1 EBITDA came in at 283 million euros. The currency effect represented a negative of around 20 million euros. Looking at the performance by segments, Adhesive solutions achieved an EBITDA of 89 million euros. It reflected on top of the currency impact the seaweed demand in North America and Europe. Volumes grew significantly overall or slightly less overall, supported mainly by Asia. This performance was driven mainly by adhesives for durable goods with an improvement in aerospace and heavy truck markets in North America. On the other hand, packaging remains soft and construction was better oriented, especially in Europe. In advanced materials, the EBITDA stood at 139 million euros. Apart from the currency effect, the EBITDA was essentially affected by the unfavorable product and geographical mix. Market conditions in much of the quarter were similar to what we observed in Q4 last year. which means that the continuing weak demand in the US and in Europe, while Asia continues to show a positive dynamic. Coating solutions delivered a good performance in the context, with an EBITDA stable compared to last year at €51 million. Volumes were up 3%, driven mainly by strong growth in Asia, in particular in UV curing resins. The EBITDA margin improved by 100 bps at 13%, benefiting from our development in higher value-added applications. Lastly, primary materials. EBITDA was slightly up at 33 million euros, especially supported by a good performance in legacy refrigerants in the US, while acrylic monomers stayed in the low cycle conditions in most of the quarter. Depreciation and amortization stood at 165 million euros, leading to a recurring EBIT of 118 million euros and a rebate margin of 5.4%. Non-recurring items amounted to 45 million euros. They include 34 million euros of PPA depreciation and 11 million euros of one-off charges, notably some restructuring and reorganization costs. Financial expenses. through that minus 29 million euros. The increase versus last year reflecting mainly the cost of carry of a pre-financed green bond issued end of 2025. Consequently, the Q1 adjusted net income amounted to 65 million euros, which corresponds to 0.86 euros per share. Moving on to cash flow and net debt, Q1 recurring cash flow amounted to minus 95 million euros, which included The first quarter, classical working capital seasonality. The working capital ratio on annualized sales stands at 16.3%, which is better than a year ago. Total fiscal expenditure amounted to 75 million euros in the quarter, which is in line, again, with our guidance of annual cap expense of 600 million euros for the full year 2026. Net debt and hybrid bonds. at the end of March 26, amounted to 3.3 billion euros. The net debt-to-last-12-month EBITDA ratio stands at 2.8 times. Thank you for your attention, and I'll hand it over to Thierry for the outlook.

Thank you, Marie-Josée. So, as you could see, despite the geopolitical headwinds, we could deliver positive volume growth across our specialty material segments in the first quarter, with a double-digit increase in our key attractive markets. As we move into the second quarter, the conflict in the Middle East, which began two months ago, remains ongoing, as you know, with continued uncertainty regarding its duration and the magnitude of its consequences on the global economy. At this stage, obviously, the key priority of the group is to remain agile in navigating this volatile environment and to adapt its pricing policy swiftly to offset input cost implications. This is what we are clearly doing. We remain attentive to other potential impacts of this context, notably on global demand, as everyone. At the same time, this crisis could also create some upside, as it could also lead temporarily to tighter supply-demand balance in certain value chains. In parallel, the group continues to focus on self-help measures, maintaining tight costs and operational control, as you could see in the first quarter, alongside the disciplined execution and the ramp-up of its growth projects. So, in this context, the group confirms its target of a slight EBITDA growth at a constant exchange rate for 2026. Before opening the Q&A session, maybe a quick word on Arkema's journey during the past 20 years, and we have a few slides in the deck on this anniversary. As you know, we became listed on May 18, 2006, and we'll be celebrating the group's 20th anniversary in a few days. Over this period, the company has undergone an in-depth and unique transformation from a big bag of commodity businesses. Most of them were unprofitable at that time. They were European-centric for most of them. And we transformed the company into a global and profitable leader in specialty material. Today, Arkema benefits also from a strong financial structure, solid performance, with also high non-financial standards. and offer its customers a superior set of cutting-edge technology. While the chemical industry is currently in low cycle, which is reflected in the share price, leaving space for significant upside, going forward, Arkema has delivered strong long-term value creation over 20 years. One euro invested in Arkema in May 2006 has become 3.6 euros today, including dividends. Besides, Arkema's share price increase over these 20 years is well above the evolution of the CAC 40, and its telecom peers, particularly in Europe. So thank you very much for your attention, and together with Marie-Josée, we are now ready to answer the question you may have.

Thank you. This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on their touchtone telephone. To remove yourself from the question queue, please press star N2. Please pick up the receiver when asking questions. Anyone who has a question may press star N1 at this time. First question is from Tom Bricklesworth, Morgan Stanley.

Hi, Thierry, Maria Jose. Thank you very much for the presentation. Two questions, if I may. So the first quarter has been characterized by better volumes in the more specialty business and less so in the more upstream business. And yet your comment around tightening supply and demand chains would suggest that the reverse will now happen. Is that what we should expect, that now the upstream businesses, and could you comment to how you see that playing out both for QQ and the rest of the year, maybe regionally as well, given we're expecting quite diverse performances between, say, Asia and the U.S.? ? be very keen to hear your views on that. And the second question, related but a follow-up, is, you know, what do you think the medium-term kind of structural or kind of more sustainable impacts will be or that you're seeing in customer behaviors from the conflict that's arisen in the Middle East? Thank you.

Thank you, Tom, for your question. Obviously, we are in an interesting world where none of us know exactly what is going to happen. Visibility remains limited. So the good things, and this is certainly what you could read from the Q1 performance and from our comments around the whole year, is that we remain solid and we have, because we have both balanced portfolio from a geographical standpoint and also from a point of view. Sometimes diversity brings stability and this is the case for Arkema. So back to your question, I think that the dynamics, I would say from a geographical standpoint, I mean, we stay with the same contrast over the Q2 and maybe the remaining part of the world where The engine will be clearly more racial than Europe and U.S., but we'll see. From a product standpoint, it can depend from month to month, you know. What is clear is that, as we mentioned, acrylics, which is what we mentioned by upstream, acrylics will benefit in the Q2 at least from a better supply-demand balance. And I think, so last year we suffered, clearly, in acrylics. Q2, we will see light in the tunnel, which is good, which shows that our strategy is producing benefits and that the diversity of the portfolio is playing its part. Now, as I mentioned a couple of months ago, I say this, and it was at the early stage of the Middle East crisis, I say that I believe that this crisis will have positive and negative impact, but all in all for Arkema it should be around neutral. We are still in this kind of philosophy, and this is why we confirmed the guidance for the full year. So, we mentioned the stream, but in coating, for example, we see some good momentum. So, reverse of last year in the quarter Q1, and it should be confirmed in Q2. With regard to ADG, the sort of overall resilience, solidity, not wonderful, but overall resilience in advanced materials, more contrast, I would say, because we believe that in HPP, after a soft start, as I mentioned, we should start You start to see a sort of sequential momentum benefiting from all these key projects that we have mentioned and the investments, while on the opposite, performance additive should be maybe the loser of the Middle East crisis because this is a business, the product line, which has the most customers in the Middle East and is certainly more impacted by some raw material increase like sulfur where your staff like to pass it to customers. So I would say the portfolio will play its part everywhere. But at the end, the good thing with what we deliver is that there is no surprise in a world of plenty of unknowns with some positives and negatives, but overall with sort of neutral stability, but plenty of work for the team involved. Now, the impact of the medium term from Middle East crisis, which is, I imagine your question is on the global demand. I would say nobody knows exactly. If it lasts a long time, certainly there should be impact because of the inflation and the disruptions. But so far, we don't see too much. The volumes are correct. I would say not worse than they were before. last year, so not an extraordinary level, but I would say not too much impact so far, so wait and see. But we confirm, I think, taking everything into account, we believe that for Arkema, this event in Middle East should be noticeable with some positive elements and some downsides.

Just a follow-up on that, do you think we can expect 2Q26 EBITDA to be above that of 2Q2025? I'm just trying to get some kind of reference point to understand the kind of, you know, how things might progress.

My feeling, and it's factored in the full year guidance, you know, last year we were more, if you remember, H2, Q4, we were more around minus 25 compared to to last year. Then we are minus 14% in Q1. So you see that step by step we catch up with last year, year on year. And I would say we hope to be comparable. I would say Q2 26% compared to to last year, which would be a significant step up, and which is really our roadmap to deliver the full year guidance, so we would be really aligned with the full year guidance by achieving that. Okay, very clear. Thank you, Terry. Thanks for sharing your thoughts.

Next question is from Matthew Yates, Bank of America.

Hey, good morning, everyone. I wanted to ask about the advanced materials division. And from the starting point of the margin you currently have and the trajectory to get towards the midterm guide, and in particular, the point on mix. So I'm not sure I fully understand why mix is a headwind at the moment. Maybe there's some specific products, but you alluded to geographic mix, and I'm struggling to reconcile that with the idea that your capex has been disproportionately in Asia to satisfy where the demand is coming from, yet somehow mix is negative. I wouldn't have intuitively assumed that the Asian demand was going to be margin dilutive or else that wouldn't be consistent with the midterm target. So can you just explain to me what's been going on with mix and how you see that evolving? And then somewhat related to You've announced an incremental investment in PVDF in China. There's been a lot of debate in recent years about the degree of competition and commoditization. I see one of your peers in Japan recently took a large write-down on some investments they're making. Why do you still believe that you can make a reasonably attractive return in that PDF segment and it warrants putting more capital into it? Thank you.

Thank you, Mathieu. Very interesting question, I think, of different nature. In fact, overall, on the midterm, we are comfortable on the fact that the mix, both geographical and product, will improve. So this is not the topic of the short term. The topic of the short term is nearly mechanical, I would say. As you know, the... The unit margin in Europe and the US are, by nature, many of our businesses, higher in Europe and the US than they are in Asia. And it's true for many companies. The reason being that the cost structure itself is heavier in Europe and the US than it is in Asia. But at the end, in terms of profitability, Okay, we have quite good profitability in Asia. As we have in the U.S., we are lower in Europe. Which means that for the same volume, when these volumes are more weighted, which is the case since two years in Asia, because this is where we have the growth, in fact, for the same fixed cost, okay, in each of the regions, you have less margin for a given volume in Asia than you have in Europe and U.S., okay? So this means that in terms of EBITDA, the EBITDA is, let's say, comparable everywhere, but the unit margin is lower in Asia than they are, and the EBITDA margin is comparable, which means that when you have more volume and more development in Asia, it weighs on the average mix for the same fixed cost, it weighs on the EBITDA margin. It's nearly mechanical, in fact. Okay? But now, if you think longer term, Europe and U.S. were confident on that. We recoup volumes, okay, and step by step it will come back and we confirm. In fact, we are very happy to confirm the midterm target for advanced material, which will be well above the 20%. But it's purely, this is what we explained with the mix. With regard to the product mix, I would say no, because... Beyond, if I put aside this geographical discrepancy in terms of products, we developed the product with the highest margin. But again, even with themselves, they make more margin, unique margin in Europe and U.S. than they are doing in Asia. Now, on the PVDF investment in China, which is for Asia, it's not just for China, it's for Asia. as it's really very consistent with our strategy since several years. We have had many questions on this PVDF. We must say that PVDF since many years and still today is an engine of growth and profitability for the company and we want to develop it globally. So we have this investment in the US, we have this investment in China and we are quite comfortable that this investment will have quite a good payback now, Korea, it's, I don't know, this is, I would say, they have to pick their profile, but with regard to us, we are very comfortable on what we are doing, which shows that the quality of our innovation in PVDF, the positioning, the fact that we really focus on the IN of the range, is breeding, is in food, it can be in a semiconductor, it can be in a In batteries, it can be in cables. I think we have a good and differentiated strategy in PVDF.

And, Thierry, if you'll allow me just to follow up. In terms of the Q2 commentary around this business, is it that there are some specific projects I think you mentioned foldable phones in the intro, for example, that are very high margin, or is it just simply an overall improvement in volumes helps to have better fixed cost absorption?

Yeah, we got a few messages, because we made the comment, I agree, on the HPP, and it doesn't matter. In fact, our message was, Q1 was, we joined, to a certain extent, is linked to your first comment and your first question. I would say in the mix of Arkema, advanced material in the Q1, from our standpoint, was maybe the disappointing part. And the message was to say, okay, it's a soft start, but it will ramp up in the second quarter, at least sequentially. We have a good business prospect from the major project, and this major project are for HPP. And also, it was to spot the mix in HPP between, the mix in advanced material in the Q2 between HPP and the performant additives with HPP with, let's say, a positive growth momentum, including PIAM, which is doing pretty well, as you mentioned, but beyond PIAM with PVDF, et cetera, and polyamide and specialty fluorogas and on the other side performance additive being impacted by the Middle East because they sell this is our business line which is selling the most to Middle East and they have this sulfur topic so this is more to give you some granularity inside the dense material which will be with let's say two contrasted business lines for the quarter so that can change so Okay?

Thank you, Thierry.

The good thing is that maybe to complete on that is that our major projects, step-by-step, are ramping up, and this will impact in the short- and long-term HPT, as you know, and as we often mentioned.

Next question is from James Hooper, Bernstein.

Good morning, everyone. First question. Obviously, you've referenced theory, and your answer is geographic mix, where it's more Asian-led, and less strong in Europe than North America. Do you expect that to change, given the kind of US PMI trajectory or what we're seeing since the conflict started on the Gold Coast and other places? And then secondly, can I also ask about Mark? and obviously stronger than expected. Do you think any of this was customer pre-buying? You know, perhaps obviously Asia was very strong and that tends to be the spot market and where, you know, you see where you see perhaps the most current capacity houses. Sorry.

Thank you. So thank you for the question. I would say with regard to the geographic mix, yes, as you know, we believe in the U.S. because we invested a lot there. It's 35% of our sales, and we believe that from a competitive standpoint, even reinforced by what is happening in the Middle East, their competitiveness, especially in terms of energy, is superior, right? So we believe that there are in the U.S. many ingredients for this economy to rebound at a certain point. This is not what we see today. So it depends if your question is short-term or long-term. If it is short-term, we have to be cautious, and we still see these dynamics coming from Asia. Now it will... I don't know. Reverse is not really the right point, because it would mean that Asia would... would get down, which would not be the case, but would rebalance with the U.S. getting stronger. We are at a low point in many of our businesses in the U.S. We start to see a little bit of green shoots. They are minimal here and there, which maybe could get us to feel that in the course of the year we should see some improvement. But now there are so many elements in the geopolitics that we have to be... With regard to March, maybe there is a little bit of pre-buying, maybe in the more extreme of our businesses, maybe. Now, when you look at the volume in March, we are just for the company at par compared to, not for March, but for the quarter. compared to last year. So if you take Jan, plus Feb, plus March, and we have a tendency to look at the whole quarter with different dynamics, slow start and some offset or catch-up in March. So certainly a little bit of pre-buying, but for example, if we look at April, I think we mentioned it in the press release, or I think April is in the continuity of March. which is an element of answer also. This means that we see the good solid march is continuing in April. But you know, we need that to have a Q2 inhibitor comparable to last year.

Thank you.

Next question is from Laurent Favre, BNP Paribas Exxon.

Yes, good morning. My question is on the downstream businesses and I guess focused on net pricing. I was wondering if you could talk about sort of big buckets of policies, codings and the rest. What are you seeing in terms of raw material inflation right now? Are we talking mixing digits, loadable digits, maybe high teams inflation? And are you using surcharges or are you expecting to see, I guess, pricing commensurate with this type of inflation? When you talk about short-term squeezes on downstream, is it a few quarters or just a few weeks and months?

Okay. With regard to the raw material, all along the place, I would say... I would say that it's not only just for downstream businesses, it's for the whole company. You have increased raw material, which can rank from a few percent to 100%. So it's really quite quick and quite steep. This is why our teams, unfortunately, they were already trained with what has happened during COVID, are really moving very fast to pass-press increase. Now it's clear, and you know that very well because you are experienced, is quicker in upstream than it is in downstream to pass to the customers. Our feeling is that the more downstream we go, the more we will have to use the full quarter to pass everything. So our idea is to fully offset to instantly, I would say, for the end of the quarter. But since we have some businesses, as you know, more upstream, that we have some upside effect In the case of Accelix, in the quarter, it will fully offset the time lag we can have on more downstream businesses. This is where the strength of the portfolio is diversity is playing. So overall, we should be good. Now it's clear that you have some different colors starting from a stream to downstream in the quarter. But the idea is to have done the job, full job for the end of the quarter. The reason why it takes some time, I would say the profile of the customer can be very, very, very different, even their own constraints. This is why, as you know, in the real life... It takes a little bit of time. And also, the raw material increase, the wave of the raw material increase are coming one by one. So, this means that you need to come back and to say, okay, it's more, so we have to pass more, etc. So, real life, but... Overall, and this is why we sort of comment on this, comparable to EBITDA, comparable to last year in Q2, because we believe that with our portfolio, there will be some pluses and minuses, but all in all, we can manage. But it's a job which takes a lot of energy from our teams, like I imagine for everybody.

Thank you. And back in 2022, I mean, you had very, very strong pricing, even in downstream areas, at the expense of volumes. And I think at the time you mentioned that there were certain volumes that you were happy to lose because they were lower quality, lower margins. Is there any of this right now, or are you literally now fighting for every molecule as you see them as high quality and you want to retain those volumes?

I would say our... It's clear that when you put a lot of emphasis on price increase, especially in a world where you have a war, we should not forget, in the Middle East, it's not what is going to push volume up very strongly. So let's say that we target more or less flattish volume, okay, and in this flattish volume guideline or context, we push the price. Okay, so it's not exactly like after COVID, where we are still to rationalize our portfolio, especially in the adhesive. This job has been done. Okay, so it's more stable. But let's say, flat-ish volume, and then we work on pricing.

Okay, thanks very much.

Next question is from J.D. Pandaya on field research.

Thank you. I have three questions. Finally, on acrylic acid, when you look at this product in Europe and the U.S., for a long time there hasn't been any capacity added, but margins have continuously sort of, you know, drifted downwards. You know, now in the backdrop of the war and the tightness in NAFTA and properly in Asia, how do you see the sort of mid-term outlook for acrylic acid? And do you think there is a need for capacity utilization in either Europe or the U.S.? Even some of the markets like India, for instance, have, you know, become more and more self-sufficient. That's my first question. The second is around the sulfur topic. How do you see the upstream sort of, you know, methionine market from your point of view, the markup, you know, value chain? Given the shortage of sulfur, have you been able to grab market share or is this an issue right now from your point of view? And the last question is around PA11. Obviously, you made a very big investment in Singapore. When you look at the plant in Singapore today versus your French plant, in terms of operational performance as well as profitability, where do we stand today? Is this more or less at par in terms of product output, but profitability is yet to, you know, join, or how do we stand there?

It's a lot. Okay. So with regard to accuracy, first of all, we're happy to see after, as you mentioned, a couple of years of challenges to see some progress. some improvement, and we appreciate that for the team, it's very important, and it's not in detriment of the downstream, which is good, because you saw the coating solution performance in Q1, which is at par with the previous year, so even in the previous year, we are not great, I think, so this is a chain which is solid right now. Now, as we mentioned, the the tightness, we have no crystal ball. I think we are cautious because we are just out of two years where actually we are really under pressure, but we think that clearly with the conflict and maybe hopefully beyond the conflict, I think we'll stabilize around more normalized conditions. spread but let's do it step by step the first step is to do our job in a market which has changed nobody with middle east crisis and we'll see how long will this crisis last it's a big parameter and nobody knows about it and after that we'll see where we stand and we'll certainly update too I think the good news is that we benefit from this diversity of the portfolio with some more stream business and some re-downstream businesses On the sulfur, I think we, on the methionine, we are not in the methionine. I would say we supplied our customers, so this market share is more their topic than our topic. What we do ourselves is to supply them the best way possible. On the availability of the sulfur, we manage. So this is the good news. Now the sulfur has increased very much. So our topic is to increase. And this is where we have some time lag by contract. Not every market is the same. But I would say we find the sulfur. On Singapore, I would say, first of all, the good news is that the Singapore plant is running very well. It took years, as you know. We started at a low point, and we learned a lot, and now it's really a very, very nice plant, very optimized. Compared to Marseille, it's more modern, so it should be more profitable, but on the other side, the capacity is smaller than Marseille. So I would say only know they are comparable, to answer your question.

Thank you.

There are no more questions registered at this time. The floor is back to the management for any closing remarks.

Okay, so if there is no more questions, I thank you very much for your attention. And as you know, don't hesitate to contact the IR team to complete my answers. And have a nice day to everybody.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.