Sika Ag Adr

Good afternoon everyone and thank you for joining. Our half-year call today will last 60 minutes with an opportunity for Q&A after the presentation. To give as many of you as possible the chance to ask questions, please limit yourself to one question each. With this, I hand over to Thomas.

Thank you, Dominik, and thank you also for the introduction video. It almost says everything. We could go into Q&A straight, but I think we still follow the program. And first of all, also from my side, welcome. Good afternoon. Good morning to all of you. And thank you also for joining us for our presentation of the half year results. It has been a strong half year. and it has been a strong half year despite that we have still muted markets conditions and supply chain disruption on and off over the course of the first six months. I think the strong results that we are capable to present today are the results of SICA's differentiation power. Differentiation that is convincing customers that their business in our hand is providing them more value. And that has driven our outperformance in the industry. And it's the backbone of our results that we are going to present in more details in the next few minutes. But let me start with the highlights of the first half year. And here, as also highlighted in the video, it starts with the top line, 5.59 million reported sales, a slight decline, but looking into local currency growth, 4% local currency growth. That's a tremendous momentum going from Q1 over the course of the half year into Q2. It is also coming with an improved profitability, starting again on the material margin, which has expanded by 60 base points to 55.7 percentage points. And Adrian will go into more details behind those elements. It is also very visible in the results that the fast forward program that we kicked off last year with some costs in last year is delivering excellence to the performance in the first six months and also for the remainder of the year. It's a significant contribution also to the bottom line, to the profitability element. I would also like to outline here that this share gain and this outperformance is across the board. It happens in all geographies. It happens in mature as well as in emerging markets. We are playing on all the elements to drive growth. Also, when we look at the last element, what's the full year expectation? With the momentum that we have seen piling up over the first six months, we have been Confident and we have raised our expectation on the local currency growth from 1 to 4 to 3 to 6 percent for the full year 26. Now, when we look into the regions and clearly outstanding here, when we look in the center, EMEA has contributed 7.7% growth in the first six months. EMEA was also the region that already had positive organic growth in Q1 and has further accelerated on that element. EMEA has also been the region that has been the earliest challenged by the Middle East conflict and de-escalation and therefore also has been early on in modifying the supply chain setup, making sure we have stayed available to our customers, but also have started to adopt surcharges and pricing as the evolution of the input cost took place. Here, especially the Middle East, has been a fantastic journey, starting with a lot of confusion with the breakout of the war. A few days of confusion, but going back to almost a normal procedure, supporting our customers and also delivering to our customers the confidence that They do not need to stop any activities because they are with Seca, with a trusted partner that makes everything possible to bring in materials to the construction site while they continue to build. And based on that, we have also seen a recovery of the growth trend in the Middle East, actually even an acceleration in the Middle East. When we look at the Americas, we have seen a rather soft start in Q1. We still had some issues, weather related, but also the government shutdown had still some limitations. But we see a strong rebound in Q2, which is to a large degree also volume dependent and has contributed very nicely also to the group advancement. When we look into Asia-Pacific, we still have a slight negative growth, but this is mainly related to our rebasing of our China construction business. Over at the end of the middle of this year, so we will expect also that we see in the second half a stronger contribution from Asia-Pacific overall. But besides the China construction in the first six months, we have seen a very solid high single digit growth of the rest of Asia-Pacific here in particular, Southeast Asia, India, our growth engines in particular, Vietnam has been Absolutely blasting the performance in Southeast Asia. So here we have a good momentum and when we look at the group overall, the 4%, this gives us the confidence also for the second half that we can raise our local currency growth expectation. I think at the backbone of these results here we have to clearly say that the trust element being available to the customer not only for Valued performance solutions but also the competencies that we provide the customers and then ultimately also the confidence that Sika will never let you down. Sika is capable to support you in all aspects including making the supply chain available when others are failing and cannot support the needs of the customer. This is also becoming more and more visible in our famous slide, the slide that shows the outperformance of SICA versus its peers. Here we continue to aggregate the numbers as they come in. We have only Q1 figures in here, but very soon we are also going to update this slide. As you can see, the outperformance is more pronounced in Q1 and we are also quite optimistic that this outperformance in Q2 and in the remainder of the year will further expand and contribute in a visual way to underline our market share gains in a still muted environment. While we have, let's say, our challenges from the market, SICK is investing. SICK is investing in the cycle into mature markets, into automation, into efficiencies. Here we have three elements in North America and in Europe, clearly best in class automation in full scale. A large-scale mortar factory in the New England territory, giving us great opportunity to leverage there. But then also our expansion into emerging markets in South America, in Africa, in Asia, clearly investing where the demands are strong or where we also see outperformance possibility by leveraging our competencies in operations and supply chain. It's also worthwhile to mention here, supply chain availability, our footprint, global footprint has enabled us to also benefit from the challenges that recently have been seen globally. And this is also one of the core strengths of SICA to utilize new routes in case needed to best serve our customers. Acquisitions, absolutely a core element of our strategy. The bolt-on acquisitions that enhance our organic growth. Two great examples. The one closed, Finja in Sweden, closed the end of January. It's a fantastic acquisition. We also see in the first few months already a strong contribution and reconfirmation and expansion of our integration targets and synergies. So this clearly also giving us a broader platform in Scandinavia, in the Nordics. And we also see the first wave of implementations in Denmark, in Sweden, in Finland, and in Norway. So fantastic, typical bolt-on acquisition to build on. And then on the right-hand side, you see the Akim acquisition, An acquisition that very much builds on our strengths on the sealant and adhesive side. Akim, a Turkish based manufacturer with a strong footprint in the Middle East, in Central Asia and Africa, and here also enabling to leverage our European as well as our American and Asian business with these skills and with these possibilities that Akim brings to us. We still expect Closing in Q3 as we have announced earlier and we will further update you on AKIM in the near future. I have to come back to Fast Forward, as Fast Forward has been the program that set the tone in the second half of 2025 in two ways. One way in addressing some structural elements, in particular our China business, but also some other larger market opportunities, driving more efficiency. Implementing these initiatives in 2025 with one-time costs that are behind us that we have applied in 2025, giving us already in 2026 a great opportunity to leverage and we are full on track to get the 80 million In savings in 2026 in the first half we have good momentum we have a run rate of around 80 percent by the middle of the year and we are confident that we see the full impact of fast forward in in the second half then It is also clear that Fast Forward is an investment program, an investment program in future efficiencies, here mainly also driven by the investments into digitalization, sales excellence, supply chain excellence, innovation excellence are the three contributors also here. We have shaped our Our understanding and our investments since we last have talked about it and we will also hear in the near future also communicate further on how fast forward is going to provide in the next 18 to 24 months decisive elements of efficiency but not only efficiencies on the cost side but also Again, market shares by having digital solutions for our customer, enabling them for better, shorter supply chain, but also in their project business, helping them to be more successful in their field. We have been all excited about the World Cup in North America. I think that has been a global event. And for us at SICA, for me personally, I like to watch the game, but I must say I also like very much to watch the stadiums. And I think here a remarkable contribution from SICA, all 17 stadiums in North America have been built or have been substantially renovated for the World Cup this year. And this has been a great journey to see how our Mexican, Canadian and American Special thanks to all the people who helped to create these wonderful stadiums, these impressive stadiums for the games. And when you look on the screen, you know, on the screen, you see all the contribution. It's a wide portfolio of Thank you very much. The fire protection, the specialty grouts, it goes across many, many application fields. I would say probably doesn't, if not 50 to 100 different solutions go into such a renovation or new construction. And it is a fantastic landmark contribution that SICA has. And here, this is also relevant in terms of contribution. And when we look from Let's say the World Cup 26 into the near future, the World Cup 2030 is around the corner. And we have a lot of activities in Morocco, in Portugal, in Spain already lining up for making sure those stadiums are also properly up to date. And the latest one we just finished is the Bernabeu Stadium in Madrid that is ready for the World Cup, which is a fantastic stadium as well. and even if you look a little bit further out in 2034 Saudi Arabia will be the host of the World Cup and they have already started also here with big projects making sure they are ready when the games are on. A more internal highlight for us is clearly also the feedback that we got from our organization. As mentioned, markets are challenging, supply chain is challenging, so the organization is on their toes by making sure customers are served. And at the same time, we have asked our organization how they feel, how the engagement level is, and we had a fantastic outcome. 88% participated in the survey and the engagement level went up by two points to 88 points. This is outstanding. It's far above industry standards. It is also higher than two years ago. And it is for me a clear testimonial of the strength of the organization that pulls together, serves the customer, but see also the purpose and the meaning of the individual contribution and highly tied through our strategy and our initiatives on local level, regional level, on group level. Makes me very proud. To have this achieved in times where many things are challenged, but this is a continuous strength of Sika. Building trust inside is also building trust to the outside, to our customer, and that delivers the results that we have seen in the first six months, which leads me over to you, Adrian, to talk a bit more about the results.

Very good. And thank you, Thomas. Thank you for sharing here the highlights of quite a successful business execution in the first half of 26. I would like now to provide further details on the financial performance of the first half year, starting again with the top line and the bridge of our first half year revenue performance. As you can see here, and driven by a very strong Q2, as we have heard, organic growth was 2.9%, adding close to 250 million of organic growth in the first half year. Further, 1.1% of acquisition contribution taking CK to 4% local currency growth in the first half year. Excluding China Construction, which, as we have anticipated, continued to be about a 1.5% headwind to the first half top-line result outside of China, we grew 4.4% organically compared to the 2.9% of the whole group on a reported basis. If we look at Swiss francs, we delivered revenues of 5.59 billion, just slightly below the previous year, driven by still a very strong adverse foreign exchange impact of minus 5.5% or more than 300 million. Foreign exchange impact softened a bit in Q2 and from today's perspective we expect less headwind in the second half from foreign exchange with an approximate three to four percent negative foreign exchange impact for the full year on group level. In the second half, we will also face somewhat easier comparatives in China, given the actions we undertook from mid last year onwards. But so far, we continue to see a subdued market, so no help from a market perspective overall. If we look at growth on a sequential basis, here we show a clear trend reversal with an organic growth of 2.9% in the first half year. This marks a change in trajectory versus the previous three periods. If you look at M&A contribution, fairly stable, one percentage point here across All the periods. Also, that's how you should think about Q3. Whereas in Q4, following the closure of the Ockim transaction, which is planned or expected for late Q3, then a step up in acquisition contribution in the fourth quarter. Now let's look at the full P&L here on a summarized basis and move down from the sales line. In the first half year, we delivered a further expansion of the material margin to 55.7%. This is up 60 basis points from the same period last year which reflects obviously procurement scale efficiencies but also pricing amid increasing input cost but also includes here the higher cost path through of for example transportation cost which do sit on the OPEX line but are If we move down, personnel costs declined by 3% as our fast forward execution is well on track and is compensating underlying wage inflation and also M&A related headcount additions. Adjusting for M&A, our headcount is down by more than 1,000 year on year. On the other hand, other operating expenses increased by 2.7%, largely due to the significantly higher transportation and supply chain costs directly and indirectly related to the situation in the Middle East, but with a corresponding path through, as just alluded to here on the top line, positively impacting material margin. As a result, EBITDA came in at 1 billion and 63 million, pretty flat year on year, given here foreign exchange translation with margin expanding 10 base points on EBITDA level, also here including a further 20 BIP drag on foreign exchange. Also on EBIT level, pretty similar improvement, 10 basis points versus last year. On marginally lower depreciation and amortization charges, net profit of 552 million in line with last year. Here, the foreign exchange impact was partially offset by lower interest expenses being reflective of A good cash generation and correspondingly EPS slightly down 3.43 Swiss francs versus 3.45 in the same period of last year. Operating free cash flow of 139.6 million, which I will cover later. But maybe first looking here at the EBITDA bridge and sort of peeling out a bit better the various profitability buckets here delivering the 30 base points profitability improvement on EBITDA. and many others. The strong material margin was the main contributor but also here with 50 base points improvement our fast forward program both elements were Offsetting here the increase in certain costs largely related to the conflict in the Middle East, notably transportation and supply chain costs alongside some one-off items. We passed through these transportation cost increases to our customers, as mentioned, and this recovery sits in the material margin. The first half, the run rate of our Fast Forward program is about 80%, as Thomas mentioned, so well on track to deliver here the full 80 million in 2026 as anticipated. On the M&A side, we continue to see a good synergy capture Relating to MBCC with an incremental positive margin impact of 20 base points in the first half of 26 bringing trailing 12 months synergies to 195 million up from 182 in the full year of last year also here well on track to deliver the 200 to 220 million then in 20 On the new acquisition, a small initial dilution of 10 base points, largely related to initial purchase price accounting impacts. Excluding the 20 base points FX impact our first half year margin expanded 30 base points year on year which underlies here the solid execution both on the fast forward as well as on M&A related synergies. Now on cash flow, here a very similar cash generation as in the first half of last year, although against quite a different backdrop compared to 2025. Here in the first half year, the only difference here is a one-off tax. and payment which reduced here operating free cash flow below previous year level. If we look at the components here on profit, pretty similar as well while obviously impacted by foreign exchange as well. On working capital, same seasonal increase, although here against a very sort of different backdrop, very strong growth compared to the previous year. And as sales accelerates, receivables rise with them. Also given the Middle East and input cost increases, here also our materials are valued at the higher level. and we're also carrying you know somewhat higher inventories to service our customers at the same time very let's say diligent working capital management overall and then on the tax line here the increase is purely related to a one-time payment that has been accrued and was now paid out which makes the difference. If it was not for that payment, we would have been slightly above the previous year level of 186 million. Now, networking capital typically comes down in the second half, which we also expect in 2026. And we also do not expect any further here one time Tax items of any significance. So for the full year, very confident to deliver an operating free cash flow in line with our strategic target of more than 10% of net sales as cash generation here is heavily skewed towards the second half due to seasonality. And with this, I will pass it back to you, Thomas, for the outlook.

Thank you, Adrian. And on the outlook, we raised our full year guidance for local currency growth from 1 to 4 percent to 3 to 6 percent. This is not based on expected market recovery. This is purely based on our industry outperformance in the given market. We expect the market to remain muted in the second half of 26. We also expect that we will see more inflationary costs coming through throughout the year as well that the pricing element compared to where we started in our assumption in February is going to have more weight in the full year contribution. Our EBITDA margin, we guide for 19 to 19.5%. At the same time, we feel comfortable with the consensus in absolute Swiss francs level as put together yesterday. With that, I would like to hand over to you, Dominik, and open then for the Q&A.

Thank you, Thomas. We start now our Q&A. Please turn on your camera for the Q&A. And first question goes to Ben from Goldman Sachs.

Well, good afternoon, Thomas, Adrian and Dominik. Thank you for the questions today. My question was just on the outlook for top line growth. If I think about some of the sequential drivers into the third and fourth quarter versus your second quarter, you should benefit more from pricing. I guess some of the headwinds from China should become less and should also have some of the scope contribution from Akim in the fourth quarter. These all sound relatively positive. Thank you.

Yeah, thank you, Ben. And yes, I mean, I can follow absolutely your logic on the evolution. And also we have a pretty strong confidence into the Q3 performance, but we have to be realistic. You know, we have seen Q1 very different than Q2. We are confident about Q3, but Q4 is too early really to name. Anything that happens in the Middle East, you know, still may have a ripple effect. We have the midterms in the US. So we have elements that are difficult to calibrate. So I would say yes, it has a bit this unknown included so that we don't just build on the Q3 an extrapolation into Q4. So we don't see anything in particular, but we also don't have the visibility for Q4 like for Q3.

Very clear. Thank you.

Okay, thank you, Matt. Thank you, Ben. And next question goes to Ephraim from Citi.

Thank you. Sorry for the delay, some tech issues. Two very quick questions. Firstly, on your revenue growth, I know you don't particularly split out volume and price as it's quite difficult in your business, but would it be fair to say that almost all the growth that we have seen in first half and what you expect in the second half has largely come from price, given that your competition has been quite, you know, Quite muted in terms of what their revenue growth they have reported. And second one, in terms of the increase in other operating expenses from the chart, roughly half of that is transportation cost, which I suppose is diesel. So in a scenario where kind of oil prices come down, would you expect that kind of cost to reverse sort of around 300 million, you know, if I kind of read the chart correctly? Thank you.

Thanks, Efrem. Happy to answer this. In the first half year, we have also reported in the first quarter that we had in Q1 about a flat price and a slightly negative volume. Here for the full first half year, we have seen both. There is about one and a half slightly higher price for the first half year. and one to one and a half percentage points of volume growth in the first half year. On the transportation cost, yes, this is also a cost that has obviously hit us very quickly. It is largely fuel related. We also have some other topics, for example, in the US in terms of availability of drivers. But largely speaking, yes, this is also something that can or could Thank you. Let's go now to the next question. The next question is from Elodie. JP Morgan, please.

Hi, good afternoon. Thanks for taking my question. So I'll follow up on the previous question on cost. But the question is, if costs actually do come down at some point, what will you do with pricing? I mean, we understand pricing is on the rise as costs have increased. But there is hopefully a scenario where costs will finally ease. And what would we do with pricing and how much of that will be linked to fuel surcharges? And if I can squeeze one on current trading in July, that would be quite helpful to have some color. Thank you.

Okay, I take the first one. I think, Elodie, the proactive pricing measures that we have taken and all input costs, I mean, we talked about transportation and with a certain delay also then the raw material cost increases. We have seen that prior to the restart of the activity that there was some plateauing on the cost side. Since the war has started again, we see the reversal, so it is really difficult to predict in which direction it goes but to answer your question it is also very clear we have been communicating openly to our customers about the the input cost and we applied through surcharges and to price increases the the cost towards the customer and of course if there's a significant cost decline on Thank you very much. Thank you. Price-cost ratio, but we also have to be conscious about not going there too far.

Yeah, and on current trading, I'm really not sort of, you know, big, you know, shifts in pattern. Of course, summer months are always a bit difficult to predict, for example, here in the south, obviously, with holidays, but also the quite extreme heat, but overall, not really a different pattern.

Thank you.

Thank you very much Elodie. And so the next question then goes to Priyal from Jefferies.

Hi, thanks for taking my questions. So, well, sorry, I'll just ask on China. So I appreciate you've obviously said that your rebasing annualises out as we go into the second half. I just wanted to see if there was any comment in terms of current trading with regards to the underlying market being down double digits in H1 but also just the latest in terms of pricing dynamics there as well obviously the market's still challenging you've had scenarios previously where pricing has been used as a mechanism to gain share amongst those competitors just just any sort of update on that would be very helpful thank you

We just recently have been to China, Adrian and myself, to follow up and we came back with great confidence that our measures that we took last year in Q3 and also the structural adjustments bringing on the construction site the element of renovation or refurbishment more pronounced into the play is showing first The market is still not showing any recovery. The market is still down but our internal measures are showing both on the top line as well as on the profitability line that we are progressing in line with our expectations. We have seen on both sides, on the direct business as well as on the indirect business, a momentum that is reconfirming our assumptions. We also have recently seen that the central government is considering a massive investment program on the infrastructure side, meaning infrastructure in a broad sense, including the tech industry, not only roads and roads, Transportation. So I think the central government certainly is not pleased with the evolution and is planning also here to further stimulate. So yes, it's currently still muted. It's still in a declining mode, not as much as last year. But we also have our business, our control, under control. and we also see that the government is here also pushing hard to make here a turning point for the construction industry overall. As you mentioned, China is a very challenging market also when it comes to price expectations. Here, I think we have found our way out of this dilemma as we turn this around. We have made calibration to our offering. The lower ad value products have been taken off. That's part of the reason why we have this rebasing. But the middle and the higher value offerings are going well and we can also defend the price and we can increase our margins in that field.

Thank you.

Perfect, so the next question goes to Vitushan from Baader Bank.

Hi, good afternoon everyone. Thanks for taking my question. And I hope you can hear me. So just a question on America, please. So in Q1, you indicated that the backlog of approvals Following the US government shutdown had largely been processed and should become more visible in project execution during Q2. Given the sequential improvements in the Americas this quarter, could you tell us if you have seen any contribution from these projects into Q, please?

Yes, that's very much to the point. When you look at the sequential change on the organic growth side, it's actually Americas that is leading the pack. It has a swift of 7.4% to the prior quarter. So it's very clear that here not only, let's say, the normalization on the permitting and the implication of the shutdown, but also the strong winter that we have seen in January and February was then catching up. But it is very clear it's North America has seen a good, strong momentum here. And it is especially on the commercial side, on commercial building infrastructure. Of course, data centers are still going super strong. So this is helping. A lot throughout the year. We expect here further acceleration, but also the general part of the commercial construction has seen volume growth, and that's what we expect to continue in Q3.

Okay, well, thank you.

Thank you for that. And now, next on the line is Martin Flöckiger from Kepler Schöre.

Good afternoon, gentlemen. Just one question on my side with regards to a statement I believe to have heard from Adrian earlier on. Adrian was talking about one-time effects in EBITDA margin bridge in H1. I was just wondering whether you could elaborate a little bit on that and also on the main reasons for lowering your EBITDA margin guidance for 2026. Thanks.

I can point out we do a regular review here of the provisioning for bad debt according to the aging brackets and how we collect. We have done this last year in June with Executive Director and Executive Director of the University of Bavaria. also good traction as alluded to on the M&A side and on the other hand we have seen these input costs increasing transportation cost is one of it and whilst if we look back to sort of the beginning of the year Clearly the pricing element is going to be higher compared to the expectation, whereas on the volume side we're doing quite okay, maybe a bit skewed to the downside overall, which in the end also has an impact on the relative margin with the price element. Thank you very much.

The next question then goes to Arnaud from Bank of America, please.

Hello, good afternoon, gentlemen. My question is on the gross margin outlook. I mean, you've done very well in the first half. We have, I think, 60 basis points for gross margin improvement. Is there a timing effect to consider, i.e., you've got maybe inventories of raw materials that you could use in the second quarter, but suddenly, you know, we're heading into H2, there's potential for the raw materials cost to increase a bit more meaningfully, or are you confident that you can maintain a similar level of gross margin for the second half?

Maybe two points here. Firstly, there is always the second half is seasonally in terms of material margins slightly lower than the first half. So that's the first point. I don't see all the things being equal, not different this year. And secondly, again, going back here to the price element being stronger, we will see Here, an impact here on the relative material margin in relative terms. So the expectation is the material margin should in the second half year be a bit lower than the first one. Of course, we continue to manage here all elements of the equation. I think on input cost, yes, they have gone up. We have been quite Active and proactive in price increases. There may be a small timing element, but it's particularly the two factors.

That's clear. And if I may just follow up on one of the previous questions. Do you believe there was any pre-buying effect in the second quarter? Any customers trying to anticipate some of the price increases? I appreciate that's not possible in all the products, but in some product categories.

I think very limited and of course you may have it from one month to the other in a full quarter I think not very realistic of course going into Q2 we also had some catch up from the quite low start so there is different elements but in terms of meaningful pre-buying I think so

And the second but last question goes to Abraham from CIC. Please.

Sorry, thank you for taking my question. So if I may, the first one is about your free cash flow generation. In 2026, you seem confident. Which dynamic in terms of working cap should we expect in H2? And maybe could you please remind us your exposure to the data centers in terms of statistics?

I'll take the first one here on working capital. As I mentioned, quite a different dynamics. Obviously, stronger top line development also, meaning here an increase in receivables, which we're managing. Well, there is also here a seasonality. We will continue to manage that also in the second quarter. So I would expect from, let's say, working capital, obviously, here a clear contribution where there was a build-up in the first instance. On the inventory side, also here, let's say, higher value raw materials, somewhat higher production. In June, compared to last year, the build-up was only about 40 million against a different growth pattern. So I think very much under control here as well. And then also on the payable side, actually managing well, which is a continued effort. This will also be a contributor to basically delivering here a free cash flow, which is here in line with our targeted level, which is above 10% of net sales.

Maybe then on the data center, the data center contribution is still growing. We have a strong momentum, especially in North America. It's contributing in a double-digit way to our overall revenue. But on a group level, it's already at the mid single-digit contribution, also growing. And here, especially, also Southeast Asia has major investments on data centers being kicked off. Also Europe, we have a good penetration into the data centers. Therefore, we see also the next 12 to 18 months with fully loaded projects lining up for execution. With our value-add proposition on data centers, we are also here confident to capture a lion's share of that potential. But I would also like to mention here, you know, data centers are very energy intense, so we also have seen quite a strong increase on the energy provider side, and this on renewable on one hand, but also on the nuclear side, we have strong activities there. We have here also hydropower. I think in Pakistan, one of the largest hydropower dams is under construction with our support. So I think also when you look at cycles, the next probably strong cycle is coming based on the data centers, energy consumption from the energy sector. And here we already see here good pickup and we are ready for the next wave of growth related to the tech sector. Thank you very much.

So, now the last question goes to Olli from RBC. Olli, please.

Hi, Thomas, Adrian and Dominik. Thank you for taking my question. Organic growth in APAC excluding China was very strong in Q2. I'd be interested to hear your thoughts on the progress on the distribution outlets rollout in Southeast Asia, as well as the progress on the distribution and production site consolidation within China. Thanks.

Good. I mean, the two points are very much lining up for the overall Asia-Pacific progression, especially in H2, where we have, let's say, a like-for-like comparison. Talking about the non-China construction business, it is in Southeast Asia and India. and one of the growth engine is our retail journey the adapted retail journey that we exported from China adapted to the Indian needs and the Indian markets here our point of sales expansion and our distribution network expansion is well on track the same happens in Indonesia it's also in Malaysia and in Vietnam a key contributor to our growth so it's In these regards, it's the project on one side, but also then on the other side, I think the retail business, it's a great opportunity in those markets. It's showing good progression and overall almost double-digit growth across the region, especially in those markets, as mentioned, we have double-digit growth. Back to China, we have closed factories in line with our program. We also have adjusted our portfolio to take out the low value ad offering. This took place in Q3 last year. So going into Q3, we will not have that element anymore. and therefore we are confident also to show you in the second half that our China construction business is back on a growth path. Even though the market still is challenging, we are confident that we will see here good progression based on the initiatives and the adjustments that we made in the business.

Thank you. This brings us to the end of our 60-minute call, just in time, actually. We take this opportunity to highlight the date of our next SICA Investor Day. It will be on the 1st of October. We will do a deep dive into our adhesive business, showcasing a top adhesive factory and our new acquisition of Akim. With this we wish you some wonderful summer days. Take care and goodbye.