Verallia,Courbevoie

Ladies and gentlemen, welcome to the Viralia 2025 Third Quarter Financial Results Analyst Call. The call will be structured in two parts. First, a presentation by the Viralia Group Management Team, represented by Patrice Luca, CEO, and Natalie Delbrove, CFO. Afterwards, there will be a Q&A session. During this session, you may ask questions in two ways, by submitting a written question in the box below the player or by joining the conference call and dial pound key 5 on your telephone keypad to enter the queue. I will now hand over to the management team. Please go ahead.

Good morning, everyone. Thanks for joining us and welcome to our Q3 financial results call. As usual, Nathalie and I will go through our presentation and then we'll have our Q&A session. I will share with you some key highlights of our quarter, and Nathalie will present in detail our numbers, and then I will come back on the outlook for 2025. As an introduction, just to remind that Veralia is a 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 2024 split of our sales by segment. One of our strong assets is our customer base, more than 10,000 customers, and the diversified and balanced end markets in which we operate. We do operate in 12 countries with 35 plants with 64 furnaces. Please note also that we are running 19 QLED recycling centers, allowing us to control about 50% of our needs for external QLEDs. Let's now move to some key highlights of our Q3. First one, the first part of the year was marked by DWGI's voluntary tender offer. This process ended mid-August and was successful. You have on this chart the new shareholding structure at the end of September. BWGIs went up and has now 77% of Veralia's share. BPI went down and has now 3.8%. Employees still have 4.1% of the share capital, and the floating part is now 12.6%. This step being completed, we will continue rolling out our strategic roadmap, focusing on creating value for our customers, employees, and shareholders. Second key highlight is about our decarbonization roadmap. A few weeks ago, we got the certification by SBTI on our net zero 2040 target. We are the first glass packaging manufacturer to commit to such a target by 2040. We have a robust plan to do so. By 2030, we plan to reduce our scope one and scope two by 46.2% compared to 2019, and by 90% in 2040. For scope 3, the plan is to reduce by 27.5% in 2030 compared to 2019, and by 90% by 2050. Some of our customers have committed to achieving net zero by 2040, and they need our contribution. This commitment is paramount and demonstrates how glass packaging is well positioned as a sustainable solution for the future. This strategic lever is paramount and key for future value creation. Last highlight is about the confirmation of the commissioning of our first high-grid furnace in Spain, Saragossa, as a substitution of an old traditional furnace technology. As of today, we do operate with 30% of electricity and will ramp up in the weeks to come with the objective to reach 70%. This furnace will bring a 55% reduction of CO2 emissions compared to a traditional furnace. After our full electric furnace launch in Konya-Klasio, this is clearly an additional step forward in our decarbonation roadmap. We will take some time for lessons learned, and if needed, for optimization, and then we will enter in a step-by-step, in a step-by-step pragmatic deployment phase aligned with our decarbonation roadmap towards 2014. Before giving the floor to Nathalie, a quick overview of our results, Q3 results and the nine-month results. As seen in Q1 and Q2, the positive news is that we are recovering volumes compared to last year. But in a much difficult market, that's what we plan. Q3 revenues is down by 2.8% year-over-year to 846 million euros. with organic growth at minus 0.6% year-over-year, giving a nine-month revenue result down by 2.5% year-over-year to 2,565,000,000 euros, with organic growth at minus 2.4% year-over-year. About EBITDA, Q3 is at 181 million euros, minus 14% versus last year, with a margin at 21.3%, minus 279 bps versus Q3 last year, giving a nine-month adjusted EBITDA of €531 million, minus 17.1% versus last year, with a margin at 20.7%, minus 365 bps compared to last year, 24%. About net debt, our leverage is maintained at 2.6 at the end of September compared to last June. Let's see now the details of our numbers with Natalie.

Thank you, Patrice. So let's look at revenue and EBITDA as usual. So you can see here the third quarter consolidated revenue variance analysis. So we moved from 871 million euro as reported revenue one year ago in Q3 2024, and we are today at 846 million euro. As said by Patrice, the organic growth for the quarter is almost neutral at minus 0.6%, minus 0.7% excluding Argentina. You can see the volume pillar is up by 37.3 million euros year on year, despite still challenging market environment and more challenging than anticipated. We could see, in fact, in the quarter that the activity softened in August and September after a very good start with a good month of July. And looking at segments, sorry, most segments grew year on year and especially led by non-alcoholic beverages and spirits coming back to growth. The price mix impact on the top line is unfavorable with minus 43.4 million euro driven by lower prices than one year ago and still a negative mix. And then we have ethics. that continues to be negative. The perimeter impact is almost zero. Just as a reminder, I will come to the nine months. You will see perimeter impact with Corsico, so our additional entity and plant in Italy. It was acquired on the first of July, so in the Q3, doesn't show as a perimeter anymore. So continued volume growth in Q3. despite difficult market conditions. Looking at the nine-month consolidated revenue variance analysis now, we moved from 2,635,000,000 euros to 2,569,000,000 euros. The organic growth for the full nine months is lower than in the quarter, or to put it different, the quarter is better than the full nine months. Organic growth is minus 2.4%. minus 2.9% excluding Argentina. We have seen continuous organic growth on the nine months supported by commercial initiatives, and all of that despite the softer market environment, especially in the end of the Q3 as I just commented. Volumes are up in Europe and especially in South and West Europe, and LATAM is positive. despite a slower growth in the third quarter. The price mix is negative in the nine months, minus 154.4 million euro. So it's significant, but sequentially we see a decline in this negative impact, and we, step by step, we have to carry over a 24 price reduction softening. We continue to see a negative mix over the nine months, and you have here negative effects impact, but also the positive perimeter impact, so from the sixth first month for 50.5 million euros. So how does this translate into adjusted EBITDA? For the third quarter, you have here the adjusted EBITDA variance analysis, so we moved from 210 million euros in the third quarter 2024 down to 181 million Euro in this third quarter 2025. So we can see from the pillars that the spread impact is the main driver, the main negative driver with minus 40.6 million Euro. We have lower prices and negative mix as we explained since the beginning of the year. But as I was saying, it's gradually easing. It was minus 85 million euros in Q1, minus 60 in Q2, and as we just saw, minus 41 million in Q3. Then we, despite that, we benefit from the volume growth the solid Q3 performance in activity. We have 7.9 million euro positive impact of the activity, despite here startup cost and ramp-up cost from our two new plants, one in , sorry, one in in Brazil, and mainly for wine, and one in Italy, mainly on food. And also, as Patrice explained, the hybrid furnace in Saragossa in Spain. The net productivity continues to deliver 2% cash cost, cash production cost reduction and some negative other mainly due to some one-offs. Exchange rate is negative and as well. So the adjusted BDM margin that you see on the top right, is 21.3% for the quarter. So for the nine months, this leads us to 531 million Euro adjusted APTA. It was 641 million Euro in 2024. And you can see all the pillars, so the activity pillar being positive. We have growth across all regions with volume growth continuing despite a challenging summer, so bringing plus 42.1 million euro. The main negative pillar continues to be the spread for the nine months even if softening in Q3 again. The net productivity continues to deliver a positive number at 35.5 million euro and is 2.2% of cash production cost reduction. The other here is positive and includes the six first months of Corsico, so the perimeter impact. And then you have a six negative. A six negative is mainly coming from the Brazilian Real, and Argentina is presented aside. So we have a continued positive activity on the nine months, but offset by a mainly negative spread. So here you can see the group net debt evolution and the leverage. So the leverage is stable versus end of June at the end of September with 2.6 times. And the net debt is 1,920,004. Here you can see our financial structure and liquidity at the end of September. So several comments here. You can see the first two lines are the sustainability link bond that we issued in 2021. As a reminder, following the change of control There was a possibility for bondholders to ask for reimbursement of these bonds, but you can see that we still hold a nice amount on both of them, $100.7 million for the first one and $70.3 million for the second one. And as you can see, they have a very nice nominal rate, a low one. So this is very good news for the group and for the confidence that our bondholders have in the group. The rest was refinanced by a bridge loan that you can see at the end of this table, and you can see $838.4 million drawn on this bridge. And then, of course, we will prepare a refinancing of this bridge. At the end of September, we have available liquidity of 835 million euros.

Okay, so let's move to the outlook. As we have just commented, so in Q3, we did enjoy again after Q1 and Q2, a volume growth in July, August, and September. But we are expecting more based on the trend on Q2 conception. And in Q3, conception has suffered, impacting as a consequence the glass demand. And I want to share with you some fact-based data. Here on this chart, you have the data from Nissan about the off-thread consumption in Europe of beer, spirits, and carbonated soft drinks. These data are of the last four weeks' period, evolution year over year. To make it clear, if I take on the graph the date September 7, the off-the-head consumption of beer for the last four weeks of September 7 was down by 5%. and minus 2.9% for spirit, and minus 2.1% for carbonated soft drink. What is this graph showing is, one, that offset consumption of beer was quite positive from mid-May to mid-July, and very positive on carbonated soft drink for the same period, with potential positive outcome for the summer to come. Two, reality is totally different since mid-July. All categories turned negative, with a sharp negative turn on evolution, especially in beer and carbonated supplements. No need to say that uncertain environment remains the norm. With a slow global economy, geopolitical and trade tensions are waiting as well on the consumption and creating a very volatile environment. As a summary for the market and activity trends, despite a good month of July, we had a poor summer compared to our expectations. In Brazil, after a strong H1, we see the market softening, and especially the bear market. Mix and spread continued to be negative. a difficult situation in Germany due to the market condition and the overall environment. And finally, about capacity, we continue to see permanent capacity shutdown across Europe with latest announcement in Q3 in Europe, in Germany and Netherlands. It means that since late 2023, up to 18 furnaces are contributing to capacity adjustments. Facing this overall situation, we keep our focus on self-help measures and cash flow generation. For Q4, uncertain and volatile environment will remain the norm, and we see a delay recovery in market conditions compared to our previous expectations. However, as recorded since the beginning of the year, we expect a continued pickup in activity compared to last year, again despite soft demand, but supported by our furnace openings, our additional capacity, well positioned in Italy on the wine business, in Brazil, sorry, in the wine business, and in Italy on the strategic food segment. And as well, a positive effect which will come with the reopening of our second furnace in Ukraine. Priority will be to keep on our focus on strict control, cost control, and capex management to support cash generation, unless we keep on preparing the future with our Saragossa hybrid furnace, which will keep on ramping up, being clearly a new milestone for us. As a conclusion, based on one, the material deterioration in market condition in August and September, the expected pickup in profitability in Q3, which did not materialize. through the fact that we see a delay in market conditions recovery, and despite the continued organic volume growth for us in Q4, we have decided to adjust our outlook for 2025. We plan now to close 2025 with an adjusted EBITDA around 700 million euros and a free cash flow around 150 million euros. On short term, Again, we will keep our focus on profitability improvement actions, plans, and cash generation. And we will be back to you to present our midterm strategy next January during our capital market days. Thanks a lot for your attention, and let's now move to our Q&A session.

If you wish to ask a question, you may do so by submitting a written question in the box below the player or by joining the conference call and dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Francisco Ruiz from BNP Paribas. Please go ahead.

Good morning and thank you for taking my questions. well the first one is if you could help me to understand your your warning uh so on the one hand we have do you think hello can you hear me yes we do yeah yeah yeah i have fun uh i have some noise on there on the phone so so uh yeah i mean In this quarter, you have volume acceleration coming to almost 3.9% despite what is happening in the industry, and you have a price evolution in the top line in line with what was your estimated. So, I mean, in my opinion, this is more a matter of operating leverage and cost structure. So two questions here. Why operating leverage was so low compared to, for example, Q2? And can you give us an idea of the impact of margin by geographies? I know that you are not reporting margin by geographies, but with the low activity in Latin America, we could have much negativeness mixed than initially expected. The second question here is, theoretically Q3 should be a quarter in which you will see some deflation in cost. I mean, at the end of the day, you have no impact of the expensive hedges in 2022, and then, probably better energy and also better solar as prices. Why we haven't seen this in the net pricing of the company? And last but not least, I mean, I have another two or three, but just one more, is why is demand is so weak? You have decided to start three furnaces while the rest of the competitors are closing capacity. Thank you.

Okay.

So, yes, I'll start, Paco, and don't hesitate to complete your questions. So, first, on what happens in the Q3 and the reduction of our, and the gap versus our expectation. In fact, the gap versus our expectation is truly on volumes on price mix, I would say. Even if I will comment on the operating leverage, you're right, it is low in Q3. But don't forget that in Q3, as I commented, we start, we are ramping up, and this is also one of your questions, we are ramping up new furnaces, and we have been working on the hybrid furnace for Saragossa that is not a new capacity. But when we are in, so you have three furnaces where you have starter cost, we are ramping up. They are not fully delivering. They are not producing full capacity at all. So it is quite a strong impact in the third quarter especially. And this was anticipated because it's just the start of work in the plants. But also, yes, even if we have additional volumes versus last year, and you're right, we are very pleased and happy about that. We anticipated a better summer, and this is what Patrice illustrated, with the consumption was low. Our customers did not ask for the volumes that they were supposed to ask in several geographies. The beer segment especially was disappointing. So we expected, frankly, a better summer in that. And the mix also was poorer than expected, lower than expected. So this is mainly that. On the cost side, in the third quarter, there is no specific element that would be to be noticed really, to be noted. On the cost element, I'm not sure I understood well your question here. So we are in the same, we have a very flattish inflation as in the rest of the year. So there's no change here.

About profitability by geography, Francisco, as you mentioned, we did not communicate by quarter the profitability. What I think I can give you some color about it. In LATAM, and especially in Brazil, but as well in Argentina and Chile, we do enjoy very good profitability. So there is no material change compared to what you know, I would say. Still difficult in Northeast Europe, as we mentioned, especially in Germany. So there is no big move or change compared to what we saw roughly in H1. about the capacity, the additional capacity. This is a fair question. I mean, clearly, and I'm going to take some time here. Clearly, while in Campo Bombo in Brazil, this furnace is positioned on segments we do believe have a real potential. And this is what we see really today when we look at the market and the demand. This furnace will be much more focused on will be focused on wine and spirits. And these are the segments which are facing good momentum right now. What is much more difficult in Brazil, as we speak, especially since July, is the beer, the beer market. And it's known that the winter period there was very cold, the last, the coldest of the past 40 years, according to to what we know and obviously it has an impact on the demand. So there is a clear willingness to keep on developing in Brazil with our fifth furnace and with that we are preparing the future. The second furnace in Italy is about the same story. It's a furnace on which we are focusing self-development in jars, food jars, which is a segment where we do see potential And we see, according to the forecast we have, a significant as well increase, at least above the average of the overall industry. So this is why we decided to focus on that . So obviously, it's a balance between the short-term and the medium and long-term. But as you know, we are focused on long-term. And for us, it's taking the appropriate measure of short term to protect profitability, but at the same time doing the job to position well the company for the future. So this is the rationale of it. And the hybrid furnace in Saragossa, it's a different story because here it's not additional capacity. It's to replace a furnace which was at the end of the life. And we've decided to make here our first hybrid furnace, our first pilot. Again, here to prepare the future to get the lessons learned of such a furnace to align with what we want to do as a strategic level for 2040 decarbonization. So this is a rational of our additional capacity. So maybe we have some, obviously, some penalties short-term, especially that in Q3 we're ramping up all of that, but it is an upside for tomorrow, and it is aligned with our long-term strategy here. Hope it's clear, Francisco.

Yeah, yeah, it's clear. Could you give us a data of what's your level of capacity utilization and the level of containment?

Capacity utilization, it's about the same story as what we mentioned in Q2, in July, the end of July. We are running close to normal except some slight adjustment, but marginal adjustment everywhere. but UK and Germany. And in UK, we have one furnace which is stopped. And in Germany, we have two furnace which are stopped. And obviously, we are working to see how we are going to optimize that. And this is part of the industrial strategy we're working on to make it here.

Okay, thank you very much.

The next question comes from Louise Weiser from UBS. Please go ahead.

Three questions for me, please. What are your assumptions now based on your new guidance of around $700 million of adjusted BTA for the top line in terms of volume and in terms of price, and then on the adjusted BTA breach for the price to spread for the full year? The second question is around the new furnaces in Q3. How much did they actually contribute to the volume growth in Q3? And how much would be kind of like underlying volume growth for the rest of the business? And the last question is around the flow through of the volume from the top line to the BPA. It was only 22% in Q3. What explains this? I guess given your comments right now, there's probably some things around like the new furnaces, but it was much better in Q1 and Q3. When do you expect to see that actually, you know, that flow to actually improve again?

Okay. Thanks a lot for this question. So about the top-line assumptions, as we've said, We do expect continued growth in Q4 compared to last year in the order of magnitude of what we have been delivering so far, let's say, despite the market, which is softening. So the gap between compared to what we are expecting is that we are expecting a higher demand. So this is demand and consumption. demand going down, it has impact on, but we do expect us to be in the same order of making on top back. On pricing, moving forward into fall, we do not expect any change, I would say, any change. What is waiting is mixed. due to the market condition, market environment. So mix will be more negative than what we are expecting initially. So this is some color about the top line moving forward in Q4. About Camponbon, the impact in Q3 is quite limited as we are ramping up. So it's really partial. And we are not providing data in detail, furnace by furnace, or plant by plant in a geographic way. But obviously, it will contribute. Next year, we will have some repair in Brazil, especially in One Furnace and Porto Ferreira. And this additional capacity will be able for us to keep on selling at a good level. And obviously, focusing again on the wine segment, wine and spirit segments.

On the flow-through, so yes, you did understand that the Q3 was a bit specific with these ramp-up costs and not full saturation of these capacities. So it will improve going forward based on this, because step-by-step, as we were just saying, Compobon will contribute, Bechia will contribute more, and they won't have these startup costs anymore. And then it's more the country mix that could impact also because the full three is not purely mathematical. It's a bit different from countries. But it should improve in Q4 and moving forward.

Thanks.

Thank you. The next question comes from Francisco Ruiz from BNP Paribas. Please go ahead.

Sorry, it's again me. I mean, more question in the queue, but I have two questions. One clarification, as you mentioned in your press release that, and let me see how you say it, in Latin America, demand momentum weaker in Q3, but also in the presentation, you mentioned that this Q3 performance has been solid driven by Europe and LATAM. Could you give an idea what is the general performance? You mentioned already Argentina and Chile good, Brazil bad, but the overall or the net effect, if it's a plus or a minus. And the second question is on the covenants. I mean, if we are assuming 700 million EBITDA with 115 free cash flow for the year, and with the dividend you have paid, I mean, the net debt should go above or slightly above three times. Is this a risk for you? Is this a risk for the dividend? Thank you.

So I will answer the second one, and we have to come back to the first one because I'm not sure we have understood your question, your first question, Francisco. So I mean, about the net debt ratio as you projected and all of that, I mean, obviously, as we have said, This will be a priority for us to protect that. And to speak about dividend as of today, too early and this will be part of the board decision beginning of next year.

We did generate good free cash flow in the third quarter, strong free cash flow, and this is also what we expect for Q4. So the leverage will not worsen by the end of the year. and then dividend next year is too early as we say, but we are not at all seeing the three times.

So the first question is to have an idea on what has happened in Latin America because in the press release you say that demand weakened in Q3, but on the presentation you talk about the BTA contribution of Latin America which is positive together with Europe in activity.

Yeah. Yeah, so Latin America, I mean, is still making good contribution to Q3, obviously. What we are just saying is that in terms of activity, and especially due to the beer market environment and demand, it was much below what we are expecting and below what we saw in H1. So this is what we wanted to explain here. And we were much more in our plans and expectations in a kind of growth similar to what we had in F1, which did not materialize. But even with this environment, we have positive contributions coming from Latin America, and certainly due to the fact that we are not just beer Okay, now it's clear.

Thank you very much.

The next question comes from Louise Weiser from UBS. Please go ahead.

Hello, Louise?

Oh, sorry, can you hear me now?

Yes, yes.

I apologize, I was on mute, sorry. I know it might be very, very early for you to reply to this, but just trying to get your thoughts on that. Around the pricing, how do you think about this for 2026, given the slow recovery in terms of volumes? Could there be, therefore, an impact on pricing next year and you will have, you know, a bit of pressure from clients to cut prices to get a bit more of the volume recovery?

All right. No real comments about pricing, Louise. First, too early to discuss about 26. Our focus is really to close 2025 with what we have just mentioned. So we are on the way to validate the work, our budget, and business plan. So we'll be back to you. What we can say is that we expect markets condition to continue to normalize with possibly a slight growth in activity. We'll see that in details. And what we expect is continued sequential spread improvement, but we'll see that in details, a net path to contribute. So we are working on that, especially on our mid-term plans, and we will give you more color, obviously, during our CMD next January.

Thanks. And just maybe then... I mean, just checking, but Q3 was supposed to be negatively impacted by the price cuts at the beginning of the year, but no more carryover. Has there been some price cuts in Q3 that would therefore impact 2026? Or have you not done any further price cuts in Q3?

No. Marginally, the main impact is coming from the mix, which, due to the market condition, is really zero.

Okay, thanks.

The next question comes from Fraser Fraser Donlan from Barenburg. Please go ahead.

Morning, everyone. Can you hear me? It's Fraser here from Barenburg. I have two questions. So following on from the pricing question, like on the cost side, do you see any wins, let's say, in the next six or nine months, whether that's like in the hedging book for energy or on soda? And then the second question is just on inventories, like I think you were around €730 million last year, likely. Do you have an idea of where you can land inventory in 2025? At the end of 2025, I should say, given the demand context is, I would say, more difficult than expected. Thank you very much.

Okay, so in the nine months, as I said, our cost inflation is very notable, in fact. We have inflation on... on most of the lines, you know, back to normal inflation, I would say, for example, on labor costs. We commented that we have a significant reduction in . You know that is more than 50% of our raw material. So it accounts for a large part and connects overall prices are having declining in the year. So we have a stop in the year. So that's the main, I would say, deflating driver and that leads overall our cuts to a neutral evolution at the end of September versus previous year.

About inventory, Fraser. So inventory control is a key topic. And since this demand backdrop, let's say, which started at the end of 23, it is really a key topic for us. And we are on that on a monthly basis to adapt and to make sure that we keep all of that under control. So one, it's a key topic. Our expectation for the end of the year is is to be slightly up compared to last year, the end of last year, but in a controlled way and slightly up versus last year due to the additional activity we have compared to last year and what we anticipate for next year. So it's not slightly and marginally up, I would say, compared to last year. This is what we're planning to do.

Maybe one additional point, sorry, on cost that I should have mentioned is on the energy. Just to remind that we are not fully benefiting from the spot energy prices decrease because of our hedging policy. But, you know, this is the last year that we have a portion of hedging from the high years. So it will be an upside for, it should be an upside for next year.

Very clear. Thanks to both of you.

The next question comes from Manuel Laurent from Santander. Please go ahead.

Yes. Hello. Good morning. My first question is on the volume side. I'm trying to address the potential impact on that of the low profitability of the group in Q3. So according to what you have said, Patrice, on the call, it is fair to say that the vast majority of this 4% volume growth it's coming from the new furnaces. And in that light for light growth will be slightly negative, and then filling the gap to that 4% will imply all the new furnaces or not?

Good morning, Manuel. Thanks for the question. No, the contribution of the new furnaces is still very low. So like for light, we do have an organic growth. We do have an organic growth, and it's coming from Europe, but as well from Latin America. It's quite well spread, I would say.

Okay. So since we have a limited contribution from the new furnaces, so to speak, then the narrative of low margins because ramp-up costs in those furnaces, might not significantly explain, let's say, the margin deterioration, right? So then you also mentioned the mix effect on that impact on profitability. So when you are mentioning regarding mix, it's more a country mix, a segment mix, or both?

So when we comment the ramp-up cost and the fact that the new plants are not running fully, so it's just normal. You know, we have usually three to even six months to really run full speed when we start a new capacity. So this is just normal. And at the beginning, you have the cost, but you don't have the full pace against it. So this is impacting the full flow when we look at the ABDA bridge. So it's very specific on Q3. This is also impacting the percentage of ABDA margin when we look at it because, again, you have a portion of cost and you have no revenue in France. So it's one driver. It's not the only driver, you're right, to explain the level of our ABDA margin percentage in Q3 or in the nine months. Absolutely, it's not the only one, but it is a negative impact still on that. And when we commend the mix impact, yes, it's both. Here we were more commenting on the mix of the segments and the products because of the lower level of consumption, you know, people buying more entry products than, again, high-level products. So we have less margin on some cases on these products. but we also have a country mix. When you have Latin America a bit weaker than expected, again, in Q3, but I guess with you, you know that Latin is above 30% adjusted EVTA usually, so it has some impact, but it's a combination.

Okay, great. And just the last one, the next key milestone It will be the capital market day. You mentioned that probably was too early to talk about the 2026, but what we should expect on the capital market day is going to be a quantitative type of capital market day with medium to long-term forecast. It will also address some qualitative issues regarding strategy, a little bit of both.

You said everything. Yeah, it will be, first of all, it will be mid-term, so it will not just be 26, obviously. So it means we will give and provide some orientations, being qualitative and quantitative, especially about the sector, how we do see the evolution, the different segments. how we are positioning ourselves on that. It will be a bulk of all of that with some financial data, I guess. We're still finalizing that, working on that. But this will be a key milestone after this quite, let's say, disturbing period of 22, 23, high inflation, 24, 25, the opposite, all the volatility and the demand. So this will be the opportunity for us to pause and to explain how do we see the next year and as a consequence what you could expect from the company. This will be our intent. Okay, thank you.

All right. Well, so this is David Plessin, the head of IR. I think we're done with the questions on the call, and thanks, guys, for asking all of them. We have, I think, just two questions in writing. The first one relates to basically the flow through between the volume and EBITDA in Q3. I think we've largely touched on that. The second one relates to the spread. The question being, so last year, spread effect was around minus 200 million, should we see in full year 26. That is the last question.

So on this, so both full years, I think I commented quite largely. On the spread, we have a spread of minus 183 million at the end of September. So we are indeed close to already to the minus 200, but as we commented, We have a softening of this negative spread, so an improvement quarter after quarter, and we were minus 14 in Q3. One element where we are prudent and it's difficult, very difficult to forecast, as you know, is the mixed impact in this spread for the end of the year. And sequentially in 2026, again, we'll come back with more data, but yes, we should see an improvement, of course, in the spread. That continues to normalize, but slower than expected, in fact.

Thanks, Nelly. And actually, I think I'll take the last one. Last minute question from Inigo Aguskida with Kepler. Asking actually what has changed in the company since VW took over, so any changes that

Good morning, Inigo. And thanks for this question. I mean, as we said, so BWG is not new in the company. They were already part of a significant shareholder, part of the board. So they decided to go for more. So it is really a continuation of the strategic plan we have as we speak. Obviously, this will be updated with the CMD, but it is a much more rolling and key focus on managing the short-term profitability and preparing the future as well. You know that UWGI has the DNA of the company. It's really long-term oriented. It's going to be a step-by-step evolution if needed, but based really on the key business factor and how would you see the industry. So the key word is continuation, more of the same, and creation value and testing the environment.

Great. Well, thanks, Patrice. Thanks, Nathalie. I think that's it on my end.

There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

Thanks a lot. So thanks a lot to all of you. Let's, for us, focus on delivering and facing the situation and moving forward. And obviously, next milestone is CMD. It will be a pleasure for us to have this opportunity to share our view here and much more midterm orientation. Thanks a lot and have a good day. Take care.