Vallourec S.A.

Good day and welcome to Valorec Q2 2025 results conference call hosted by Philippe Guillemot, Chairman of the Board and Chief Executive Officer, and Sacha Biber, Chief Financial Officer. Throughout today's recorded presentation, all participants will be in a listen-only mode. Later, we will conduct a question and answer session. You may register for questions at any time by pressing star one on your telephone keypad. And now, I'd like to hand the call over to Conor Laina, Vice President of Investor Relations. Please go ahead, sir.

Thank you. Good morning, ladies and gentlemen, and thank you for joining us for Valorac's second quarter 2025 results presentation. I'm Conor Laina, Vice President of Investor Relations at Valorac. I'm joined today by Valorac's Chairman and Chief Executive Officer, Philip Guillemot, and Valorac's Chief Financial Officer, Sasha Bieberg. Before we begin our presentation, I would like to note that this conference call will be recorded. A replay will be available following the call. You can find the audio webcast on our investor relations website. Presentation slides referred to during this call are also available for download here. Today's call will contain forward-looking statements. Future results may differ materially from statements or projections made on today's call. The forward-looking statements and risk factors that could affect those statements are referenced on slide two of today's presentation. These are also included in our universal registration document filed with the French financial markets regulator, the AMF. This presentation will be followed by a Q&A session. I'll now turn the call over to Philippe Guillemot.

Thank you, Conor. Welcome, ladies and gentlemen, and thank you for joining us to discuss VALUEX second quarter 2025 results. In the second quarter, we delivered another quarter of disciplined execution and resilient performance. We extended our streak of positive cash generation and returned 370 million euros to shareholders. Despite microeconomic volatility, our core markets remain active and our strategic initiatives, particularly in Brazil, are ahead of schedule. You can see today's agenda on slide three. I will move directly to slide five, where I will start by discussing the highlights of the second quarter. Our second quarter results were in line with our expectations. The BDA of 187 million euros came in slightly above our guidance midpoint. declined versus the first quarter as anticipated. However, tubes and group APD margins increased sequentially. Total cash generation was positive for the 11th straight quarter. We generated 57 million euros of total cash generation and returned 270 million euros of cash to shareholders. Looking ahead, we expect third quarter EBITDA to round between 195 and 225 million euros. We also confirm our full year outlook. We expect group EBITDA to improve in the second half of 2025 versus the first half of 2025. Looking at our operations and end markets, we have seen some positive trends in the business despite recent volatility. We announced several significant OCTG orders, particularly in the Middle East, across multiple key countries and customers. This will support our results in the second half of 2025 and early 2026. In the U.S., market prices have increased in response to higher tariff rates, but the upside has been limited by lower drilling activity. Operationally, we have completed our cost reduction plan in Brazil ahead of schedule, with savings above target. In the quarter, we closed the acquisition of Thermotide Ovasil, which now gives us an integrated coating offering for deep water line pipe. As I mentioned, we commence shoulder returns in the second quarter. We paid a euro and 50 cents per share dividend, and we purchased 1.2 million shares in the quarter. Let's move to slide six to discuss an update on our Brazil performance program. Recall that we announced this program in July 2024. This was intended to meaningfully improve our tubes operation in the country. Since then, we have made significant headway on this project. Consistent with our overall strategic playbook, the elimination of complexity was a key enabling factor in this plan. We closed our aging 150 kiloton plug mill at the end of 2024 as planned. We further simplified our product offering and have enforced strict minimum order quantities to ensure optimal mill loading. At this point, we have completed the major cost reduction actions. We have reduced headcount, renegotiated raw materials and logistics contracts, and improved our production quality. We have targeted at least €150 per ton of residual cost reduction by year-end 2025. We are tracking significantly ahead of target in terms of cost savings and are several months ahead of schedule. I thank the South American team for their great performance in delivering this objective. The second key target was to deliver higher production capability in the region. We have progressed well on debottlenecking high-value equipment and are further integrating upstream production in Brazil with downstream capacity in our other regions. We have also made significant changes in our sales and operational planning. We are investing further in our systems and processes to enable better performance and information sharing across the organization. With better integration, we can offer we can offer more products with better lead times while generating higher returns for value add. We continue to see opportunity to deliver at least 100 kilotons of incremental annual pollution from the region. Globally, we see potential to drive better returns across the organization as we push the group towards true operational excellence. Let's turn to the current market environment on slide We start here with the U.S. OCTG market. Volatile crude prices have led to reduced drilling activity in oil plays over the past few months. However, there has been a partial offset due to the increase in gas drilling. Strong spot prices and a positive multiyear outlook for gas demand are driving higher levels of investment. Our domestic order intake has remained healthy, and our meals are well utilized at current staffing levels. Excluding one-off effect in January, imports increased sequentially in the second quarter following the change in U.S. trade policy. Recall that this change removed still import quotas in favor of a 25% tariff. The U.S. administration increased tariff rates to 50% The effect of this change has yet to influence the import data you see here. Market prices increased once again in the second quarter, driven by strong order books across the U.S. OCD industry and steel tariffs. The latest Pipelogix survey indicated an expectation of falling imports and price increases ahead. Let's move to slide 9 to discuss the U.S. trade situation in more detail. There is some detailed U.S. data to help you understand the impact of evolving trade policies. On the left, you see supply to the U.S. market over the past three years. While industry demand dropped in two sequential years, Domestic seamless shipments from Valourec and our piece were stable. Domestic manufacturers are the baseload of U.S. OCTG supply. Imports act as swing supply. On the right, we show the sources of imports. Wender spikes are more commoditized and, as such, come from low-cost countries. Seamless, right? tend to come from higher-cost producers offering higher-value products. Below, you can see the average import values of this product in 2024, which are now subject to a 50% price. You can also see last year's market prices compared to the latest market price from five projects. Clearly, prices have not yet risen enough to offset the cost increase related to this tariff. We do not compete directly with welded pipes in most of our work product applications. The effect of welded supply on our pricing are indirect and inconsistent. Meanwhile, the implication of this tariff on seamless imports should be clear. Every import will decrease Our prices will increase to support import economies. Let's move to the international OCTG market on slide 10. Demand, as measured by the recount, remains stable at a high level outside of the U.S. Onshore drilling activity increased in the latest month, driven by gains in some of our core markets in the Middle East and Africa. As we noted last quarter, there has been selective softness in global activity. Overall, though, our customers are forging ahead with multi-year plans to increase capacity. We have received several meaningful orders from an area of customers so far this year. This supports the expected improvement in our cubes volumes in the second half of 2025. Market prices, according to Hystat Energy, have been resilient in offshore markets like the North Sea, while drifting lower in the Middle East over the past few months. I again emphasize that our product mix is biased toward higher steel grade and more premium products than these index tracks. Therefore, our pricing remains robust. As we look ahead, we continue to see a wide range of opportunities across our market, including the structural shift towards increased gas and unconventional draining, and the resilient development of deep-water basins. I will now turn the call over to Sacha to discuss the second quarter financial results.

Thank you, Philipp, and good morning, everyone. Starting with page 12. In Q2, we have delivered an EBITDA of 187 million, well within the guidance range that we have provided you with during the Q1 call. The corresponding EBITDA margin of 22% is one of the highest in our recent history and is evidence of our value over volume approach. I also would like to highlight that those results came in a period of unfavorable FX rates. To illustrate the impact of this for the group, If the Q1 FX rates had stayed stable, then our revenues would have been about 55 million higher, and our EBITDA would have been higher by about 10 million. I will give you the like for like figures, i.e., at stable Q1 FX rates also for the tube segment in a minute. You can note that for our outlook statements, we assume a Euro dollar rate of around 115. We also made good on our aspiration going back to the capital market day in September 23 to be one of the most shareholder-friendly companies within our peer group by paying our first dividend in 10 years' time and executing a smaller share buyback to avoid dilution related to our employee share program. Following the significant shareholder return, we turned back into net debt in spite of a once again very healthy cash generation in the quarter. the 11th quarter in a row with positive cash generation. Turning to page 13. Tube's volumes sold were slightly lower sequentially, though in line with expectations and guidance. While the average selling price also decreased in this quarter, we are confident to see increases in the periods to come. Please keep in mind that also for KPIs like the average selling price, FX plays a role. The ASP for Q2 at Q1 rates would have been closer to 2,800 euro per ton instead of the 2,610 you actually see for Q2. Over to page 14. Similar to the group overall, also on the tube side, we reported solid profitability with a 19% margin, quite consistent over the last quarters. The EBITDA per ton was also impacted by FX. If I apply the Q1 rate, this would have led to a roughly stable EBITDA per ton instead of the 494 actually reported. In line with our reaffirmed expectation of a stronger second half, we also expect the EBITDA per ton to pick up once again going forward. On page 15, we detail our mine and forest results. As expected, results came down from the very high Q1 level, though still above a more normal run rate. All levers contributed to the strong results, from healthy iron ore prices to a favorable customer and product mix, as well as low costs. The non-cash IIS 41 effect was roughly stable sequentially at plus 6 million. Our outlook for the second half assumes slightly lower ore prices and higher cost per ton. On page 16, we look at the net income components. Depreciation and amortization of $48 million in the quarter does not include any surprising elements. Financial expense of $5 million was supported by the extraordinary release of accrued interest and by a favorable FX results. I indicated last quarter that a run rate financial expense of 15 to 20 million per quarter is more normal. Other expenses of 42 million on the other side are more negative than expected. It generally includes non-controlling interest to get us to the group share of net income, and as such, will always be slightly negative. However, in this quarter, we have also reassessed the derivative reflecting expected future losses of our HKM supply agreement. In the balance sheet, this derivative now stands at 135 million, roughly stable compared to year-end 24. However, together with related loss within the quarter led to P&L charge of close to 40 million. Those losses in Germany also impacted the tax rate in the quarter. Additionally, we had tax expenses in France, which together with the German losses, pushed up the tax rate as he cannot offset those losses with sufficient taxable income. In H2, the tax rate should normalize once again. Moving to cash flow on page 17. We continued our track record of generating cash flow with total cash generation of 57 million in Q2, fueling future shareholder returns. We also released working capital mainly through lower receivables. We then recorded restructuring charges predominantly for Germany, which includes the in-period cash out for HKM. While some restructuring will also be recorded in Q3 and Q4, we are in the progress of closing the CERIMAC sale, which will lead to a disposal proceed most likely in Q3. Looking at the right-hand side of the slide, you see that over many quarters, we have now demonstrated a focus on managing working capital tightly which helped to turn a high proportion of our earnings into cash. Over to page 18. Following the shareholder payouts, net debt stands at 201 million, with liquidity remaining very comfortable at more than 1.5 billion, well above our minimum requirements. Gross debt declined slightly sequentially, mainly driven by FX and the payment of accrued interest. With that, Philip back to you.

Thank you, Sacha. Let's go to slide 20 to discuss our outlook. Starting with our tubes business, in the third quarter, we expect volumes to be similar to the second quarter level, while EBITDA patterns should increase sequentially. For the full year, the first half booking performance in our international tubes business will translate into an increase in international shipment in the second half of the year. Two BDA patterns should improve in the second half due to improvements in pricing. For mine and forest, we expect our production soil to be approximately 1.5 million tonnes in the second quarter. We still expect total production of around 6 million tonnes for the full year. EBDA in the mine and forest segment will be contingent on market prices for iron ore. At the group level, we expect our third quarter EBITDA to run between 195 and 225 million euros. Looking at the full year, we also confirm that the second half improvement in the cubes business will drive higher EBITDA at the group level. To conclude on slide 21, We remain focused on improving our profitability and return on invested capital as we drive forward towards operational excellence. We are pleased with the progress in Brazil I shared with you earlier, but we see many more opportunities both in that region and beyond. Our overall market remains strong. While US draining activity has increased, recent trade actions continue to support pricing. Meanwhile, International OCTG markets continue to be driven by robust multi-year drilling programs across our core customer base. Thank you again for your attention. Sacha and I are now ready to take your questions.

Thank you, sir. Ladies and gentlemen, as a reminder, to ask a question, please signal by pressing star 1. If you wish to cancel your request, please press star 2. And please make sure the mute function on your phone is switched off to allow your signal to reach our equipment. Again, it is star one to ask a question. And our first question is from Guillermo Levy from Morgan Stanley. Please go ahead.

Hi, good morning, everyone, and thank you for taking my questions. I have two, please. The first one, could you comment perhaps in the U.S., what's your order intake mix at the moment in terms of how much is going to oil wells or gas wells, and also how that mix has changed over time? And then the second one, I understand that you are renegotiating some long-term agreements at the moment. Could you perhaps share your thoughts in terms of mood from clients to renegotiate this contract at the moment. If I'm not wrong, you have one with Petrobras that is currently ongoing and also mood overall in terms of order intake base in the next couple months. Thank you.

Yeah, on the US, obviously, the vast majority is oil, but roughly the split for the group is 80-20, to make it simple. And as you understand, gas for us, obviously, is good because it requires a more premium product, which is our, obviously, sweet spot. As far as others in the rest of the world, well, yes, you're right. We've won a significant long-term agreement We are very pleased with the development of our activity in South America, knowing that obviously with the current industrial base we have in Brazil, which has improved its performance in the last three years, we are more and more well positioned to deliver to these markets. And this will continue to be the case. And as far as the rest of the world is concerned, you've seen many press releases about major oil intakes in the Middle East region, which just indicates that, again, we are viewed as a key partner to these natural oil companies who are, I insist, executing multi-year capacity increase programs and they have not deviated from their plan so far.

Thank you. Our next question from Kevin Roger from Kepler Chevron. Please go ahead.

Yes, thanks. Good morning. Thanks for taking the question. I will have two, if I may. The first one is on the restructuring plan in Brazil and the comments that you made saying that, you would expect at the end to be well above the target that you had, the 150 euro per ton APDA improvements. Can you give us a bit of color on basically where you think you can land in terms of total achievement and what could be at the end the positive impact on your expectation for the 2026 plus APDA just to understand maybe the potential positive impact from this restructuring plan and the net plus from the better than expected performance? And the second one, I know it's a bit early, sorry for that, but when you think about, you know, the sequential movement Q4 versus Q3, would you expect the DDA to improve again slightly, sequentially, or would you more expect a Q4 to be flattish with Q3, please?

Well, you've seen that we post a 22% margin, 19% on Q in Q2. I think this is clear evidence that the work we are doing to continue to improve our cost base is paying out. And clearly, 26 will fully benefit from what we have initiated mid-2024. We are beyond our expectation, ahead of schedule. This means that 26 will, as you said, fully benefit from this cost reduction. The purpose is obviously not to stop there and to continue to look at any opportunity to further improve our cost base, to better integrate our Brazilian operation in the overall processes of the group. Today, 50% of what we produce in Brazil is exported out of South America, mostly to the Middle East. So it's very key to have a very integrated way to operate the group which obviously we are implementing since I've gone. As far as Q4 versus Q3 is concerned, again, we reiterate the fact that H2 will be stronger than H1. Volume are flat in Q3 versus Q2, but as we still expect to be around 1.3 million ton, you can easily guess that Q4 volume are likely to be higher. And as a consequence, we'll support a strong EBITDA.

Okay. Understood. Thanks for that.

Thank you. We'll now take our next question from Mick Pickup from Barclays. Please go ahead.

Good morning. Just following up on that volume conversation, I think last quarter you were expecting volumes across the second half to pick up, and now it's clearly looking into 4Q. Is that just the U.S.? Have there been any other moving parts? That's the first question.

We never said Q2 volume would be higher than Q1.

We always said it would be lower. Sorry, Q3 improving. I think on the last call you said the second half volumes would be improving.

Q3 volumes are flat, but there is a drift from Q3 to Q4 on some orders. We are in a make-to-order business, and obviously we only produce once we have the PO in hand. and sometimes a bit later, two weeks later than expected, which explains, obviously, the profile of our volumes.

As Philip said, there is no change in expectations regarding H2 volumes. A certain shift between Q3 and Q4 might be a fair comment. Keep in mind, and I'm going back to the U.S., during Q2, we had quite some Uncertainty in the market regarding demand also exacerbated by volatile oil prices, and as such, our Q2 intake in the U.S. was rather on the low side, and that means invoicing in Q3 will likely be lower than in Q2 for the U.S. However, recently, the environment has really turned more positive. Our recent cycle bookings came in quite strong, and I think that gives us good confidence also for Q4.

Perfect. And a follow-up, and it's just admin. During the quarter, you saw the Nippon-US Steel deal finalized. I assume that means that US Steel can now use VAM connectors in the US. Does that make any change on the business?

No, they are not supposed to thread the U.S. steel pipe with LAM connections. That's not what it's going to be.

Okay, thank you. Thank you. And we'll now take our next question from Jean-Luc Romain from CIC Market Solutions. Please go ahead.

Good morning. Given your guidance for the third quarter and the full year, we should expect strong increase in volumes in the fourth quarter, and my understanding is pricing would be higher due to mixed effect of deliveries to the Middle East. Does this imply material improvement of EPDA? In the fourth quarter compared to third. I know you won't give a numerous answer, but just to qualify.

No, I won't guarantee you four, so I'll let you, with the input you have, estimate the two.

From the early on, I just made the comment on tubes, volumes, based on the full year assumption that is roughly unchanged relative to our prior discussions of around 1.3 million tons. If you then deduct H1 and you deduct Q3, you are left with higher volumes in Q4 sequentially. You couple that with our commentary around EBITDA per ton increasing. I think that leads you to a certain Sequential development Q4 versus Q3 for the tube segment for the mine and forest. However, I think we have been pretty clear that H1 will be stronger than H2. Nevertheless, tubes is higher than mine and forest, so I think that leaves you with a net EBITDA expectation for Q4, at least sequentially.

Thank you.

Thank you. And our next question is from Baptiste Levac from ORDOBHS. Please go ahead.

Yes, good morning, gentlemen. Two questions from my side. The first one is regarding disposals. You mentioned Cerimax, where you are negotiating. Is there another, let's say, assets that you may sell? In the future, I was thinking about Scotland units. And the second one is regarding working cap movements. You should have, let's say, acceleration of deliveries during, let's say, second half and beginning of next year. Should we see a temporary increase of working cap in Q3 ahead of these deliveries? Thank you.

Yeah, we are currently closing the transaction on Serimax. This obviously was an asset which was obviously not core to our business and as a consequence for sell. I don't know what you refer to in Scotland because we have already restructured our operations over there. And I don't see any asset for sale in Scotland. But maybe you know something I don't know. And as far as working cap is concerned, as you understood, since I joined, cash is king. Working cap obviously is a key lever for cash. And you have noticed that we have made significant improvement on our management of working cap inventory to start with, payable, and this will not stop. And we still have room for further improvement. Obviously, volumes increase significantly. It will be reflected in the working cap, but for the time being, we still have room for good management of our working caps.

Thank you very much.

And our next question is from Guillaume Delaby from Bernstein. Please go ahead.

Yes. Good morning, Philippe and Sacha. Two questions, if I may. So given the Brazilian restructuring, which is going to increase EBITDA per ton in Brazil by 150 euro per ton, can we, maybe it's too simplistic, but can we roughly knowing that Brazil is between half to 75% of your production, Can we assume that starting in 2026 and the following years, and all of the things being equal, the 150 EBITDA button improvement in Brazil could translate maybe at the entire group level at an improved EBITDA button between, I don't know, 75 euro to 100 euro button? In other words... Could we assume starting, I don't know, maybe H2 2026, EBITDA per ton, all of the things being equal, at 700 euros? This is my first question, or is it too simplistic?

First, I don't know for you. We went with... The ratio you have, 50% to 70% of what we sell, the tonnage we sell, is being produced in Brazil. I don't know where this is coming from. It's not at all a percentage. We are much more balanced between geographies. I remind you that we are domestic with 100% of what we sell in the U.S. Our market is produced in the U.S. It's already a significant portion of our world volume. And on top, we have... industrial base in China, Indonesia, and Saudi to deliver to Middle East. So Brazil is key, the significant industrial base with two oil and milk, one steel plant, but not at the level you explained. In general, let's be clear, we are focused on cost, on operational excellence, and we look at any opportunity to improve our performance and cost base There are many levels we can act upon, and we will continue to do so. So we will definitely get the full benefit of what we have already achieved in Brazil since mid-2024, ahead of next year. But we are doing it everywhere throughout the world. So we are looking for margin expansion. I remind you that when I joined, I said, very few key objectives, some already been delivered, some still to be delivered. One of them is to close the margin gap with steroids. And I remain very focused on closing that gap.

Okay. Second question, if I may, in terms of improvement in average selling price over the coming quarters, globally at the group level, what could be, I would say, the magnitude? Is it going to take two, three quarters? What is your view as of today?

Average selling price depends on mix to start with. So, obviously, it depends... obviously on how premium our products are. I already for since a few quarters have been pointed that the indices used by Reichstatt is not a good proxy for the mix we sell as an example in Middle East. So hopefully we enjoy a higher average selling price in the region. And we continue to focus the use of our scarce capacity, e-treatment and premium selling to sell the high value-added product we have in our portfolio. So we obviously continue to pay careful attention to the mix, and the consequence is sustained, obviously, with average selling prices, which are nevertheless impacted by the Euro to Dollar, when you look at the impact of the exchange rate.

So . simply looking at the U.S. as an example, also for the U.S. onshore business, Q3 is now in backlog. And as such, we do know that the average selling price also for the U.S. onshore will be higher in Q3 versus Q2. So that's one thing, and I think actually that's also true for our other businesses. By the way, Thanks for re-initiating coverage. Much appreciated.

Thank you very much.

Thank you. Thank you. Now our next question. As a reminder, if you wish to ask a question, please signal by pressing star 1. And our next question is from Christopher Couplon from Bank of America.

Thank you for taking my questions. Good morning. I've got two. Once again, on your 150 questions, per ton cost savings program. I'm excited to see the results. And I just wanted to ask whether you can already report, if you're saying you're tracking ahead, how much, where you're standing today, where it's visible. Can you ascribe a certain amount of EBITDA margin or indeed give us an indication how much of that 150 is already in the numbers that you reported either in the first half or in the last 12 months? because I just wanted to say, Sasha, I appreciate your comment on the FX impact, and that's a quick follow-up for your Q3 guidance. Can you confirm you mentioned, I think, 1.15 as the underlying assumption? Maybe you can give us a little bit more color around the range that you've given us for Q3 and what defines that range. And then one last question, Philippe, on your slide that I think is super helpful, slide 9, where you show the U.S. impact. Would I be right in assuming that with the 50% tariffs not yet reflected, you would expect PipeLogix to continue to show a significant increase in pricing into Q3?

Well, first, I can only reiterate what I said. You see the two margin Q2, 19%, so very strong margin, and obviously we will continue to They're very much focused on the margin. And on top, I told you that you can expect a higher EBITDA pattern in Q3. So I think, again, I'm not going to give you the formula to translate the very specific cost reduction plan we have in Brazil and how we translate on our margin at group level. I think this comment on the Brazilian plan is just to illustrate the way we manage value-added today. And the fact that beyond talking about plans, we execute them, and we see them in the numbers. We see it. And there is more to come. Proportional excellence is the agenda of the group for the next few years. As far as the U.S. is concerned, yes, just with the data we shared with you, you can easily guess that when you apply a 50% tariff on the price we have observed, again, talking from custom, on the U.S. imports, there are only two way out, or prices in the U.S. increase or imports decrease. There is only two way out. And in any case, it's positive for local producer as we are. We have still some available capacity. And going back to what Sacha said, we start to see it in the latest cycle on the order booking we have in the U.S., and we will see about prices in the next few months.

And then, Chris, finally, on your FX question, you heard me right in saying that one of the currency pairs that is impacting Our exposure, and I was referring to translation exposures only, is $0, and our planning Q3 and full year assumes 115. Now, let's suppose it is not 115, but it is, I think, current spot is around 117. Then, for the full year, this would mean all is equal a single-digit million negative, so I think, As of today, that gets lost in the overall noise in other risks and opportunities, and as such, as of today would not be a meaningful factor also in the discussion of the Q3 results. Hope that's clear.

Yeah, thank you very much. And Philipp, I appreciate you. You're going to show us when you've achieved the savings rather than talk about them before. If I may, if I share quickly, that range that you've given us, can you remind us what the main uncertainty factors are that you're prepared to talk about in terms of the low and the upper end for Q3?

Yeah, sure. I mean, our policy last quarter and also going forward will indeed be to always guide for the next quarter because there we do have fundamentally a decent visibility because pretty much all of the businesses, even U.S. onshore, is in backlog. Nevertheless, there will always be some moving parts. We just touched upon FX. We could talk about iron ore prices. We could talk about specific product or customer mix in our mine and forest business. But I think the highest uncertainty generally It's simply the actual tubes invoicing up until the last days of the quarter. Even if we have the business in backlog, it is somewhat difficult to say whether it will ultimately, from our terms and conditions, ship on a Wednesday or ship on a Friday. That is the main uncertainty, I would say.

Very good. Fair enough. Thank you very much.

Thank you. And as there are currently no further questions in the queue, I'd like to hand the call back over to Philippe Guillumont for closing remarks. Over to you, sir.

Thank you again for joining us for today's call. I'm very pleased with the Board's recommendation to renew my term as Chairman of the Board and Chief Executive Officer for four more years after the end of my mandate in 2026. VeloWake has been a fundamental change in my first three years with the company. Looking ahead, we will maintain our value over volume strategy and our premium positioning through our culture of technological innovation. In our strategic planning for 2030 and beyond, we are setting ambitious goals in industrial excellence, business development, and value creation for our clients, our employees, and our shareholders who place their trust in us. Thank you again. Operator, you may close the call.

Thank you. This concludes today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.