Verallia,Courbevoie

Hello and welcome to Viralia First Half 2025 Financial Results Analyst Call. My name is Laura and I will be your coordinator for today's event. Please note this call is being recorded and for the duration of the call, your lines will be on listener limit. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star 1 on your telephone keypad to register your questions. If you require assistance at any point, please press star zero and you will be connected to an operator. I will now hand you over to your host, Patrice Luca, CEO, to begin today's conference. Thank you.

Good morning, everyone. Thanks for joining us and welcome to our H1 Financial Results Call-in. So as usual, Nathalie and I will go through our presentation and we'll have the Q&A session. I will share with you some key highlights and Nathalie will present in detail our numbers. And then I will come back on our guidance. As an introduction, just to remind you that Zeralia is the global leader in glass packaging. We are number one in Europe. number two in Latin America, and number three worldwide. On this chart, you have our ID card. You have on the left, the 24 split of our sales by segment. And as you may already know, one of our strong assets is our customer base, more than 10,000 customers, and the diversified end balance and market in which we operate. We do operate in 12 countries, with 35 plants, with 64 furnaces. Please note also that we are running 19 toilet recycling centers, allowing us to control about 50% of our needs for external toilets. Let's now move to some key highlights. First, I would like to share will view the completion of two key investments in two new furnaces, two brownfields, one in Brazil and the other one in Italy. Both projects have been completed and production has started. In Brazil, in Campobon, the furnace was commissioned in May and is bringing an additional capacity of 330 tons per day. The objective here is clearly to develop ourselves in a sustained Brazilian market growth. In Italy, in Pescea, the second furnace was commissioned at the beginning of the month, providing an additional capacity of 300 tons per day. This additional market capacity will be dedicated to the growing segment for food. Both furnaces are using an ETOX plus OxyCombustion technology, which is providing a reduction of CO2 emissions by 18% compared to a traditional furnace. So these two furnaces are ticking two boxes. They will support our objectives of both organic growth and decarbonisation. Next key highlight is about our confirmation of the launch of our first hybrid furnace in Spain, Saragossa. In this case, it is not an additional capacity, but the replacement of an existing furnace. We do expect to operate up to 70% electricity and using oxygen instead of air for combustion. This furnace will bring a 55% reduction of CO2 emission compared to a traditional furnace. The plan is to heat it up in a few weeks from now at Salim Choufri. And clearly, after our full electric furnace launch in Komiak last year, this is clearly an additional step forward of decarbonization on that. We will take some time for this on the ground, and if we need optimization, and then we will enter in the step-by-step deployment phase align with our decarbonisation roadmap to reduce our Scope 1 and Scope 2 by 46% in 2030 compared to 2019. The third key highlight is about product innovation. You know that we have launched our AirRange product offer. We started with our 300g Bordelaise bottle and then with a new jar offer Objective of this range is to offer best-in-class lightweighting products. And lately, we have completed the range with MyAir. MyAir is a new standard for single-serve solution for 20-centiliter beverage with a disruptive weight of 105 grams. This product is aiming to address the ready-to-drink, non-alcoholic beverage or steel wine segment. With this new proposal, we are leveraging the full capability of Glass as a packaging solution and demonstrating our ability to innovate and support our customer needs. Last key highlight is about BWGI tender offer for the AliaShare. So, as announced last Monday, the offer is successful, passing the 50% threshold. And BWGI is owning now 70.31% of Veradia shares and 62.81% of its voting rights. The threshold of 50% being passed, as planned, the offer will be reopened at the same price of 28.30 euros. IMF issued yesterday a notice formally announcing the reopening from July 31 to August 13, and final results will be known just after the closing of this second window. The settlement delivery offer, or the initial offer, or the initial window, the first window, will take place on August 1, so at the end of this week. This step being completed will continue rolling out our strategic roadmap, focusing on creating new value, for our customers, employees, and shareholders. Before moving to, before giving the floor to Nathalie, a quick overview on Q2 and H1 results. The positive news are one, as seen in Q1 of volume recovery. Two, a stronger cash generation compared to Latio, which is one of the key objectives for 2025. And last, a rebound in profitability in Q2 of 457 bps compared to Q1. So in detail, Q2 revenue is down by 2.5% year-over-year, with an organic growth of minus 3%. with organic growth at minus 3.3% here over here. Q2 adjusted EBITDA is 204 million euros, minus 10.4% versus last year, with a margin at 22.5%, giving an H1 adjusted EBITDA of 351 million euros. with the margin at 20.4%. About debt, net debt, our leverage is at 2.6% at the end of June, compared to 2.1% at the end of last December. And finally, our net income is at 68 million euros, minus 45.6% compared to H1, giving an EPS of 0.76 euros excluding PPE. So let's now see in details with Nathalie the details of these results.

Thank you, Patrice, and good morning everyone. Let me leave you as usual throughout our second quarter and half year results. So let's start with the Q2 consolidated revenue variance analysis. So you can see here the bridge between our Q2 2024 sales that were €928 million and our Q2 2025 sales that are €905 million. So as said by Patrice, our organic growth is minus 3% in the second quarter and minus 3.6% excluding Argentina. You can see on this bridge that the volumes are contributing positively, plus 19.5 million euros, broadly in line with the first quarter, and knowing that in the first quarter we had a low-con base, which has led the gate in Q2. So, again, this is one of the positive highlights of the quarter, this positive volume growth. We have a strong performance in food and beer, and oil segments are showing positive organic volume growth. The price and mix is negative, minus 52 million euros. This is primarily reflecting the carryover from 2024 price reduction, still in this second quarter, and we have some negative mix impact. is negative mainly to Brazil, as Argentina is shown as a separate. And we have in this first half a perimeter impact that you will see because of the acquisition of the Italian business that took place in July 2025. So this leads for the full half year to this bridge. So an organic growth of minus 3.3% for the first half half-year and minus 3.9% excluding Argentina. Again, you can see continued organic growth in volume. We had a targeted commercial policy and nearly all segments contribute positively here with a specific outperformance in Latin America. I will come back to that. The price and mix is still strongly negative, so we see a bit the same shape as what we saw for Q2. So same comments with the camover effect from 2024 price reduction and the negative mixed impact. And again here, the very letter is about Corsico, so the business in Italy. So looking per region, so as the usual South and Western Europe, and Latin America. So here you have the revenue. So the reported revenue in South and Western Europe declined by minus 0.3 percent, but with a scope impact. So at the constant scope, we have a decline of minus 4.5 percent. We have higher even excluding the contribution of Corsico. So organic, higher volumes. And again, here, most segments report positive volume growth, with a little exception with sparkling wine that are slightly down. If we move to North and Eastern Europe, we can see here, so we have some forex impact. That is why you see two charts. That is quite limited. We have reported revenues declining by 6.4%. We have lower selling price in the market that is showing still some moderate signs of recovery. But again, recovery, we have slightly in H1 in the most segments, and in this region, and two specific mentions about premium syrup spirits in the UK that continue to be quite soft and so far still, and still wine in Germany in a difficult market environment. When we move to Latin America, so we have reported revenue declining in million euro, but still really linked to forex, so you can see a nice growth if you exclude the 4X impact. We have a strong moving growth in H1, especially in Brazil, with a good momentum in all segments and a strong performance in food jars and non-alcoholic beverage and beer. So how does this translate into adjusted APDA? So let's start with the second quarter. You can see on the top right the adjusted APDA margin. So for Q2, it's 22.5%. Let's remind that we were at 18.18% in Q1. So we have a nice improvement sequentially in the adjusted EPDM margin Q2 versus Q1. Even if, as you can see also, we are still behind 2024. That was at 24.5%. But again, a nice sequential evolution. We have here, you can see the pillars, the usual pillars, bringing us from 227 million euros one year ago to 204 million euros in the second quarter of 25. So the activity is contributing positively by 15.7 million euros. We have the effect of the volumes that we just commented. We have a negative spread price-mix cost in the quarter by 56.4 million euros. But even if we're negative and unexpected, we have a less negative spread in the second quarter compared to Q1. And this includes unfavorable impact You can see that the net productivity continues to contribute nicely, above the target of 2% cash production cost reduction. We are at 2.3% in this quarter, and that leads to 11.9 million euros. In the other pillar, 11 million, you have perimeter effect, so contribution of Corsico in Italy. plus a nice contribution of NGNA reduction in this quarter. And you have negative 4x for minus 2.6 and some decline, a slight decline in Argentina by 3.3 million. So again, as a takeaway, still a nice rebound in the margin versus Q1. So looking now at the full semester, We have an adjusted EDD margin on the top right at 20.4%. And again, a compound of the 18 and the 22.4%. So in the pillars, you have the activity contributing positively, 34.2. The spread is negative by minus 142.6 million euros. So you can see that Q1 was more negative than Q2. The net productivity contributing on target, 2.3% decrease in cash-cash production, so greening 24.4% million euros, sorry. And the other pillar that is also contributing positively, and then that leads us to the, with the forex in Argentina being slightly negative. So a positive impact from volume recovery. even if we are still, of course, suffering from the negative spread values. So by region, let's look at the adjusted EBDA and the margin. So in South and West Europe, we are at 20.6% adjusted EBDA margin. That is 243 million euro adjusted EBDA, so decreasing versus last year by 15.7%. So the same peel-out in the South and West Europe, so positive active EGC contribution, negative spread and positive PNP. And in addition, we have the perimetal effect of Corsico acquisition here. North and Eastern Euro grew rough adjusted EVA evolution. We are at 49 million Euro adjusted EVA in this half year. That is a decrease, a significant decrease by 36.6% in versus last year. And you can see that the adjusted DPTA margin is at 13.6% to be compared to 20% last year. So in terms of PILAR, then we have a positive activity contribution, especially in Germany, that is slightly and slowly recovering. But we have a strong negative spread. Again, lower selling prices and negative mix. That is quite significant in the region. In H1 in Latin America, so we had, we posted 59 million euro and the decrease versus previous year is linked to foreign exchange. And you can see on the top right that the agency DPD margin is a nice 32.2%, so a strong performance, even slightly behind last year. So, again, especially with activities up and the spread is negative, but much less negative, so we have a very nice performance in this region. If we move to cash elements, CapEx, we keep CapEx new under control at 6% of total sales. So it's quite new compared to previous year. It's a mix of different planning in furnace repairs. So we have a less busy planning, especially in H1 compared to previous years. And we're also at the end of our new capacity, new furnaces, so comparable in Brazil and Asia in the country that Patrick mentioned to you. These CAPEX, they include, of course, the rollout of Saragossa hybrid furnace that we just presented to you as well. Cash flow generation, as any positive news and positive amount in the performance in the first half, we have generated a free cash flow of 66.2 million euro. That is a significant improvement compared to previous year. where we started the year with a negative cash flow of minus 49.2 million. So we have a 115 million euro improvement here. And you can see the cash conversion is high at 70.5%. We have lower operating working capital outflows, and not only coming from CapEx VCR that you see here. And we also enjoy lower interest paid and financing costs and lower cash tax. So all of this converts again to a positive free cash flow generation. The leverage as a result of what we saw previously is at 2.6 times at the end of June. Let's remember that it's after a dividend payment that occurs every year in May, and that was €202 million, so explaining partly and mainly the re-leveraging versus 31st of December. Now, here the structure, our financial structure and liquidity. So, specifically to the tender offer from VWTI, we have here, you can see one line of 1.6 billion euro certain forms bridge loan. So, as already published and communicated, we have entered into a bridge to cover potential put exercise The first two bonds that you see on this page, so the bonds, the 500 million euro one from May 21, and the second one from November 21, 500 million euro. These two bonds are, I mean, the change of control that just occurred, that will occur on August 1, will trigger a possibility for the bondholders to exercise their So it's fully covered, as you can see, by the bridge of 1.6. And even more, let's remind that the third bond, the one of November 2024, is not under the change of control or closed. So it doesn't need to be covered by the bridge. And just sorry, the available liquidity of the group is at a nice level of 810 million euros.

Thanks Nathalie. So about our guidance, let's start with some market insights, what we see today. We still see a sub-consumption in Europe, still an uncertain global economy with geopolitical and trade tensions. And obviously, these geopolitical and trade tensions are creating a very volatile environment. Nothing really new compared to what we can see in Cuba. And in fact, which is leading to cautious and kind of wait and see position of many consumers and customers. Nevertheless, we believe in some support to glass demand from the end of day stocking in most segments. We still see a market environment in Natav being supportive. And finally, about capacity, we continue to see permanent capacity shutdowns across Europe with regular announcements from the NUC. So facing this situation, what is key for us is to keep our focus on self-help measures and cash flow generation. And to be more specific, what I can say for our work group for H2 is one, we expect a continued pickup in activity supported by our fairness openings for our two new additional capacity in Brazil and Italy. and as well the reopening of our second furnace in Ukraine. Two, except in UK and Germany, in H2, as expected, we are back to normal use of our installed capacity, but to be clear, ready to adapt again with agility if necessary. Three, we do expect in H2, as it has been commented already for Q2 by Nathalie, a lower negative carryover and spread impact compared to H1. Four, you may have seen that for any of the profitability of H1, it is not at the rendezvous, and we are suffering in Northeastern Europe, and to be much more specific in Germany, and this is why we are expecting a profitability improvement, thanks especially to the restructuring actions already taken. And five, we continue preparing the kuture, rolling out our decarbonation roadmap with Saragossa and BreedFurnace, launched in Qt. It's all about focus on short-term priorities, delivering what has to be delivered to secure the kuture, but at the same time to prepare for the kuture and the growth to come. That being said, so about our guidance, We maintain our full year 25 guidance assuming geopolitical and macroeconomics environment does not deteriorate further. So we want to deliver an adjusted EBITDA around 800 million euros per year and a free cash flow of more than 200 million euros. Thanks a lot for your attention and now we can move to the Q&A

Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. We will pause for a brief moment. Thank you. We will now take our first question from Louis Reuser of UBS. Your line is open. Please go ahead.

Good morning, thanks for taking my questions. So the first one is with regards to your price cost per year Q2. It seems that you still face some cost inflation in Q2, given the price mixed effect on the top line is lower than the price mixed effect on the Although I agree it was an improvement versus Q1. Could you give us more color on this in Q2? You said last time that you expected cost inflation for the full year to be close to neutral or a slight inflation for the full year, given you will benefit from collect deflation. So how do you think about this now? And could you tell us about how you think about the price-cost price for the full year? Are you able to quantify the impact? Do you feel expected to be significantly less than in 2024? The second one is with regards to volumes. The flow through of volumes from the top line to BDA was actually very strong in Q2. Is that how you think about it for the rest of the year? And the last question is with regards to the change in capacity in the market. You last mentioned I mean, last time you mentioned that there were 13 furnaces that closed in Europe since late 2023. Have you seen further changes, and how do you – how much does that represent as percentage of the total capacity in Europe on a net basis, i.e., including those who are actually adding capacity on the market? Thank you.

Okay.

Thanks a lot. So I will take maybe the last one. Let me tell you for the two – So about capacity, the main bulk of the adjustment, I believe, has been already announced, and this is what we commented at the end of March. Since that, we have seen a few adjustments, especially additional ones in France, and that's about it. And then we'll see if more is coming. And this is about, if I'm not wrong, an equivalent of 15 furnaces representing, what we can say, an adjustment of 7% of total capacity in Europe, to be specific.

About the spread, Nathalie, if you want to comment. Yes. We expected the spread to be a bit less negative in Q2 and continue to have this trend moving into H2, mainly because of the carryover effects from 2024. You should remember, in 2024, we decreased prices throughout mainly the first half, but it was more spread in time that, again, what we see in 2025. So it means that when you compare yourself to 24, to last year, you have your comparative prices in 24 moving down, so the comparison becomes a bit easier in the second quarter. And again, in H2, most of this carryover effect is in H1 this year. On the cost elements, we commented to you in the first quarter that we have a specific, especially in the energy, quite a strong inflation in the non-hatch elements, if you remember. spot prices in energy were quite high in the first quarter. We don't have that in the second quarter, so we are back to a cost inflation that is pretty neutral, in fact, and we don't have these negative elements on the cost side that we had in the first quarter of 2025. And moving into the H2, I won't give you the exact number, but again, just as we said previously, we see the spread being less negative step by step throughout the year. In terms of volumes, so I think your question was on our view for the rest of the year, if I understood properly. So we have received positive organic growth in volume. This is what we project for the second half of the year. Don't forget that we have also additional capacity. We have that we just started to produce in where I know that is good. We have, so we have a supportive environment in Latin America, and we have also and step by step as we we see the rest of the group we run at a higher capacity percentage. The exception being, as we said, the UK and Germany.

Thanks. Just if I may add on the volumes, also the flow through of your volumes from the top line to BDA was very strong. Is that how you think about for the rest of the year? Should we think about a similar flow through for H2?

Okay, so I'm sorry, I was not sure. Very, very. That's all right. So you're more on the focus. So in the activity pillar, you have the full concentration of volume, but you also have, you know, inventory variation and some compromix. So that explains that you don't have the direct, you have some different elements moving here. You have some other moving parts.

And the pure organic protein volume. Thank you.

We will now take our next question from James Terry of Citigroup. Your line is open. Please go ahead.

Good morning. Thanks for the presentation. Just a couple of – let's just start specifically on Northern and Eastern Europe. This seems to be underperforming in other regions quite significantly with the all-time low margin in H1. Does that mostly relate to the Q1 difficulties or has there been much improvement in Q2 and even early Q3? And would you be able to talk a bit more about the Germany restructuring and what you think is needed for meaningful recovery here? Secondly, just on global consumption trends and trade flows, would you be able to comment a bit more on any changes in customer behavior and order patterns and how it's developing in early Q3? For example, what are you hearing about export trends and have you seen any customers shifting supply chains at all that could lead to market share gains for you? Thanks.

Thanks. Thanks a lot. So for any situation you write, the margin at which we are today is not a clear satisfaction for us. This is the result of a market difficulty. And yes, Q2 is better than Q1. In Q1 we are impacted by lower market, lower volumes, as I said, but Q2 is improving. And in Germany, so as you And in 2025, based on the current situation we are facing, we have decided as a non-CQ1, the launch of an additional post-structuring plan, which is about to be finished, and which will impact positively, starting in H2, with expected full impact in 2026. And on top of that, we have decided to optimize for a period of time, it's not definitive, but we have decided to cold-stop an additional furnace in Essen. So it means that in our Essen plant, as we speak today, there is one furnace running instead of three. All of that we need to size and to adapt to market reality and to get the best occupability we can get from this market. Plus additional, traditional, I would say, cost cutting measures and especially focusing on the PAP. Hope it does answer to your question. About the global conception and export trends and all of that, quite difficult to give a, we do not see any single pattern I would say. What we can see, what we can say, maybe some of our customers before the famous August 1st deadline for the tariff to be implemented between Europe and the US. We have that, but we have others which have been waiting for to better understand what would be the situation. And as we speak, so in the last hour or so, there is this agreement, I'm not sure if we say agreement, potential agreement with this 15% tariff and it's not clear at all as we speak if wine and spirits are in or out with a kind of clause of exclusion and we do understand that it still has to be negotiated so we are still cautious about that obviously focusing and ready to adapt if necessary, but let's say less concerned to what was potentially announced beginning of the year for one and spirit for the US. On the other side, we see some positive signal from China, because especially on the CONAC side, where an agreement has been found duty free cells are restarting, so this is much more positive news flow from China than compared to before.

This is very helpful. Thank you.

Thank you. Once again, as a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. Thank you. And we will now take our next question from Francisco Ruiz of BNP Clariba. The line is open. Please go ahead.

Hello, good morning. I have a couple of questions as well, if I may. The first one is let me understand why you are still or why you are now increasing capacity when you already highlighted the current situation in terms of uncertainty, especially in Europe, where I You are increasing volumes, but your main competitors are not in this Q2. So what is the urgency to put a new furnace in Italy? And a follow-up on this as well is if you could give us the current situation of capacity utilization. And you commented a new furnace stopping in Essen, also not full capacity in UK. So if you could give us a figure that we could play with. The second question is in regarding capex. So, well, I understand that the expansion capex is lower, but also the maintenance capex is well below. Should we see an improvement of that figure? Because it's really low compared to the historical average on what is the average of the sector, or we should say something like around 6% this year. And if you could give us an idea of what is the for the second half and next year. Thank you.

Okay. Thanks a lot. So for capacity, additional capacity, as I had commented during the presentation, these additional capacity are really specific. The first one in Brazil, so it's clearly because we see a supportive market in Brazil. This was already part of our plans, and we are going to run full capacity in Brazil. So in Brazil, for us, it's a no-brainer. It's a way to keep on going along the market group and get our share there. So Brazil is amazing. I would say it's a no-brainer. Italy in Pescia is much more specific because in Europe we do see potential growth of food segment. Globally, this is a segment which is going to grow in the years to come. This is a segment where we believe that we have some opportunities, and this is why we decided to maintain this additional capacity in Pescia for food. You may know that when you want to do efficient business in food, you need a specific setup of your process. And really in Italy, this is what we wanted to do, moving in our patient side, one to two finesses, where two finesses in the plant is a way to be efficient and with a good setup. So we do not see any issue with that. We see that as a potential upcycling. About installed capacity globally in Europe, as we speak, and the plan for H2, and this is what we commented already, we plan to run, let's say, normal capacity usage in France in Spain, in Portugal, and in Italy. Where we are still facing some difficulties is in Germany, and I have just commented that before. And here, just for us, the question to wayside and adapt to reality and market. One, this is what we are doing with some benefits to come in H2. And in UK it's much more a temporary situation, where in UK we are much more dedicated to spirits, 75% of what we are doing is spirit, and in spirit we are still quite low and below what we were used to do in the past. So here, I mean, it's just a question as well of to adapt and to be prepared to restart of some capacity when we see volumes picking up much more than what we see today. About CAPEX, though you're right, the 6% is a little bit low. It's quite low, let's say. So there is a calendar effect, and it has been said Let's keep in mind as well that we are starting to get the benefit on the capex deflation after this high period of inflation. We had in 22 and 23, so we start to see some benefit out of that. And last, yes, you're right, in H2, we will have much more capex. And if I have to give you a number for the full year, we should be around 8% full year.

Just to add, we have only one cornet repair in the . You know that we have planning, different plannings from semester to semester and from year to year.

Hope it does answer your questions, Francisco. Thank you.

We will now take our next question from Philip Lorraine of Brain Spain. Your line is open. Please go ahead.

Yes, good morning. Just wanted to follow up a little bit on volumes because I know that there's a weaker contribution from the volumes to the sales bridge in the second quarter versus the first quarter and we see the same effect on the activity contribution in the adjusted bda bridge so i just wanted to to get like a bit of more detailed comment on like gradual development and so on thank you

Okay, so in the HCA bridge, in the activity pillar, we have the impact of the additional volumes. We have also some inventory variation impact. And we also have the impact of fixed costs that can be not absorbed when we are not running full capacity. So, in fact, that explains that you don't have a direct, full direct, I mean, from your volume, when I comment, the volume evolution. So, in the first quarter, as we commented, we were running, or let's take the second quarter, we are step by step coming back to full capacity. as Patrice mentioned, except in Germany and in the UK. So we think in the first quarter we still have some, we have more fixed costs not absorbed. In the second quarter, on the contrary, we have a few, we have a part of cost for the startup, for example, of our two new furnaces, Concobo and Sechia, that are not yet fully absorbed and that would be they will be fully covered in the second half.

Okay, no, I wanted more to comment maybe like on the one that you see in the top line, because for Q2, the volumes contribution was 19.5 million, but it was 24 million also like in Q1. So why is this that it's getting like a little bit tougher, especially if I compare to the starting point of sales, which is like actually higher in Q2 2024 than it was in Q1?

Yeah, it's You have a slightly lower Q2 volume impact indeed in the bridge versus Q1. It's not related to countries here, depending on which country more or less, but that's a minor impact here.

Okay, so not just related to volumes, but also to the across the countries.

It's volume impact, but you do country by country. Yes. Okay. Yeah, the unit value for country, you also have some country mix impact in each of the lines. Yes.

Yeah. Okay. That's it.

Thanks. Okay. Thanks.

Thank you. We have no further questions in the audio. Handing it back to the management for webcast questions. Thank you.

All right. Okay. Good morning. This is David Platt speaking. I'm the head of IR. I think we got questions from two participants for the webcast. So the first one is a set of questions from Inigo Aguskida with Kepler. First question, there's like four questions there. First question is what can we expect from the new shareholder? in terms of impact on strategy or any other change, anything you might tell us around your midterm strategy ahead of the upcoming capital markets day? So this is the first question. Second question is, can you please commence on the trends by region when it comes to Q2 volume? Third one is, how do you see pricing for 2026? And the last one is, why did you decide not to sell your Argentinian subsidiary? Okay.

Thanks, David, and thanks, Inigo, for this question. So about the WDI impact on strategy, as we've said, for us it's much more, they are all your company, they are sitting on the board, so they are supporting already all the strategy and plans which were ongoing, implemented, ongoing and to go. So for us it's much more business continuity, this is a way to secure and to be again a little bit much more long-term oriented to support our strategy and the value creation of long-term run. With CND to come in January, this would be an opportunity for us, after this quite interesting period of inflation, destocking and all of that, to come back to some fundamentals of our business, and especially this would be the opportunity to come back to some capital allocation topic and all of that. But no big change or downturn in strategy to be expected. The key word is continuity, and continuity for value creation for the company or employees and shareholders. About Q2 volume trend by region, I mean, it's quite similar to what we had in Q1, I would say. In Europe, what we had is a low single-digit organic growth, obviously boosted with our Corsico acquisition in H2O ratio, so all in much more mid-single-digit growth, I would say. And in LATAM, so we have high single-digit increase, again, as we commented during Q1, which is why we see a positive momentum For 2026 pricing, a little bit early to comment on that. This is obviously what we are going to begin after the summer break preparing 26, and we are going to see what are the market trends, the businesses to come and all of that, with obviously a first objective on our cost situation. About Argentina, as we said as well, nothing new here. We were solicited to do all this business. We said day one that could be, we could sell if it was a value creation again and if it was for a good financial deal. After weeks of discussions, finally we concluded that the proposal or the offer was not at the level we expected. And for us, Argentina is a good business. for a nice price with a nice business. So this is why we decided to keep it. And this is clearly something we are going to enjoy. This is really cheap for the business, more profitability. So this is why we decided to keep it.

I think I've answered the questions. Absolutely. Well, thanks, Patrice. And we have one last question from Sophie Bowman. which is can you please elaborate on current capacity utilization levels in Europe?

I mean, in Europe, so again, to make it simple, France, Iberia, this is what we said in French, except UK and Germany, we are running as standard, meaning that we are running full speed except the planned maintenance that we have to do, which is the standard of this business. So we are running full speed compared to last year where we were much more around 90%. So in H2 we are going to... In UK and in Germany, we are below that, much below that. As I explained, we have put some temporary measures We are not back to normal, to make it simple. So we are still in the phase where we're not. But the good news, and what I do see positive, is we are back to normal, a big part of our business, and waiting for better days, adapting, taking with responsibility the measures we have to take where it is necessary.

Great. Well, thanks, Patrice. Thanks, Nathalie. I think this is it from my end.

So thanks to you all. Okay, thanks a lot to all of you. I hope that most of you, us as well, will take the benefit of a summer break to be fully energized to face the second semester and prepare for 2026. So, if the case, I wish you a good summer break. Please.

Thank you.

Bye-bye. Thank you. This concludes today's call. Thank you for your participation.