Nexam Chemical Holding AB (publ)

Welcome to this live broadcast with Nexum Chemical that reported for the second quarter this very morning. We will be given a presentation by CEO Ronny Törnqvist and CFO Marcus Nyberg. A Q&A session will follow where you as viewers can ask your questions in the live chat. By that, let me welcome CEO Ronny Törnqvist. Hello.

Hello, Mattias. Thank you for introducing.

How are you this summer morning?

Very good, thank you. It's a bright day here in Kåne.

Great. How would you describe the second quarter in brief?

Well, it's been a quarter characterized by a lot of work. It's been quite successful in some of the initiatives that we've been taking, but it's also been a disappointment in some of the running business that have lost some momentum so in the some slightly positive in the quarter but a lot of positive activities in the quarter for the future okay thank you and by that i let you present and i'll be back for the q a session please go ahead thank you all right so let's go uh make some chemicals second quarter presentation i will start off marcus my colleague will come in in the middle and then i will take the end of the presentation Nexam Chemical works on the future of plastics. We provide additives to improve plastic materials and make them more sustainable. We have a lot of innovation and a lot of patent coverage in the technologies that we develop. Next slide, please. In summary, the highlight of this quarter was really that it was for the second time in a row a very strong growth quarter on quarter in the sales of reactive recycling. And the recycling segment that we've been working on for a few years, is now starting to bloom out. And we see a rapid increase here, both this quarter and last quarter. And I will get back to that later on in the presentation. Next slide, please. To summarise what Nexam Chemical is about, it is then to make additives that are added to plastic materials to make them better. and often more sustainable. We have decided to split our business segments and activities into four areas based on the properties that we can affect in the plastic materials and therefore the added value we bring to our customers in the respective fields. And these are divided into these four segments. Lightweighting, where we make additives to enable production of structural foam from PET and other thermoplastic materials. It is high temperature, which is pushing the boundaries of high temperature, the highest most temperature resistant plastics can take, so to say. It's applied in very advanced applications such as jet engines and NMLs for high temperature microprocessors and so on. And then we have the area of aesthetics where we work with the looks of plastics, colors, surface properties and also durability of the plastic materials. And then the area recycling, where we make additives that rise the value of recycled plastics, either that poor materials become good enough or that fairly good recycled materials become quite advanced design material. So those are the four segments. If we continue, please. Because we have such momentum right now in recycling. I would like to focus on that area in particular during this presentation to explain a little bit what it's about. So we have a portfolio of additives that suit quite a wide range of applications and quite a wide range of plastic materials. In common for all is that it gives an improved business case for our customers. Either they can do more advanced applications at a lower cost, or more, let's say, daily applications also at a lower cost. It is quite vital, and it's one of the biggest challenges in the plastic recycling business is to be competitive against virgin materials, and it is one of the main drivers in that market. On the global scale, the plastic production is about 400 million tons per year. And it's predicted by OECD to increase rapidly also in the future, especially in the third world. But at the same time, there are loads of initiatives and investments going on around here in Europe, of course, but also in many other parts of the world, where there is an increased activity around the recycling of plastic. So it's a strongly growing market on a global scale. Next slide, please. If you look at how plastic recycling works, various forms of collection of used materials that come into centers where they are then sorted, cleaned and shredded down to small plastic chips that are then more or less well sorted into fractions and more or less well cleaned. So that's the first step. The second step is a compounder that produces a raw material from this that can be used in the industry. And in this step, additives are sometimes added. We here provide additives to those compounders. And these compounds go into component manufacturing, wide world for production by injection molding, extrusion and other plastic processes to make a long tube or a component such as a car component or a packaging like a shampoo bottle or something like that. And then the next step is then the end product assembly or a brand owner that are using these materials. And our customers are in the area of either compounders or component manufacturers. We're starting to see that the added value that we bring is higher further up in the value chain here, and that the component manufacturers often are more ready to pay for extra performance of the material and therefore for additives. But we work with both of those. And in those processes, our materials are added to a small percentage, usually 1 or 2%. Next slide, please. How it works? It's a question that I've received from many investors and customers, of course. So I thought we'd make a short description of it. The material that is added from Exxon is reactive chemistry embedded in a master batch. So it's in a plastic carrier, you can say. half a percent to five percent, let's say one or two percent, into the ordinary processing equipment where the compounder make their granules or where the component manufacturer make their parts. And it reacts with the polymers inside the recycled material and thereby improving the properties. There's some pictures here of a very poor recycled material. It's a low density polyethylene from packaging. And it's a picture of a film blowing process. And you can see that it's full of holes and quite a nasty character. And by just adding two and a half percent of our additive, we repair the molecules in such an extent that you can actually blow a film and it becomes usable material. And this is applicable in trade to trade recycling in PET, like the grape containers, for example. Blown film, like plastic bag or protection film in the construction industry. Bottles from HGPE, which is canisters or shampoo bottles, for example. Piping for building industry. Recycling of polyester-based clothing into new textiles. And for example, PT strap bands, the ones that are used to run packages in transportation. A few examples of what it can be used to. Next slide, please. We have a customer case that we think is significant. They are first out, it's the company Kullaplast in the south of Sweden, that have started to use our additive to improve recycled low density polyethylene to produce high quality packaging material. By using our additive, they can use more recycled materials and it can also make more advanced products. So it is significant because this is a huge global business. And the problem that Kulaplast had when they started to work with us was that when they were getting varying quality of post-consumer recycled materials, it sometimes worked in the process and sometimes not. And it was very difficult to control. By adding a little bit of our additive, they can use all of that material. So they get a wider spec when they purchase material and they are more sure that they can make a high performing end product without disturbances in their production. And exactly this problem is the same for thousands of blow molders out there that are struggling to meet the customer requirements on lower cost and more recycled content, but difficulties to actually achieve that. And here we provide with a unique and really, really good solution. We've actually turned the film together with Kula Plus that we are releasing today. It will be on our homepage and you can look at it to get a deeper understanding of this type of business case. So there is a significant interest of this and the volume potential in the blown film business is quite huge. If the recycling rates remain at around 10% as they are today, The opportunity you can say worldwide is somewhere in the range of. 30 million US dollars for us, but recycling rates are increasing and this could be an even higher number. So it's one of the examples and then there are many, many other application areas where we can also work like this. So we see huge potential in the market in the sun. Next slide, please. Uh, Okay, that didn't work. All right, like this. If you produce... The business case for our customers is about that. If they use, for example, a grape carton material, these kind of plastic containers that you see everywhere in the food industry, uh they are produced based on quite expensive recycled plastic which comes from recycled bottles combined with a little bit of new material and it's difficult to reuse all the tray material into this application so maybe 10 percent of it is consisting of that by adding our additive they can use much more of lower cost recycled materials adding a little bit of cost for the additive of course but in the end saving quite a lot of money And in this particular case, it was possible with a saving of about 25% on the cost of the product by increasing cost of our additives with 6%. Next slide, please. So the plastic market is approximately 400 million tons in the world. Recycling and bioplastics are approaching 10% of that. It's bioplastic, chemical recycling and mechanical recycling. But from a practical perspective, mechanical recycling, that means grinding and remelting of the plastics, is the absolute predominant form. It is predicted to increase. Next slide, please. If you look at the volumes that are out there, the big material classes are polypropylene, polyethylenes, PETs. And we have unique patented solutions exactly in those material classes that are the big ones. So more than 50% of the plastic out there, we have some kind of solutions. And to... But now as recycling is increasing, we have to become more performant, be able to make more difficult products with them. We really provide solutions here. So it's a great opportunity. Next slide, please. This is how it looks for us. We've been struggling for quite a while with quite low volumes in this segment. We had a few early adopters starting a couple of years back. But it has taken some time because we have a product process that do require time together with our customers. But these two last quarters, we've been seeing that it has really kicked off. It's been a couple of really big customers that have come in and started to use it in the running production. So just as our other business, this is recurring serial business, so they will continue. And we also have several customers that have been purchasing our additives and use it in certain product lines and are now increasing the use into other product lines. So we see multiple happenings on the same time and this is the reason why we see this fairly strong growth right now in this segment. I can already now say that it is not to be expected that every quarter will be 50% growth in one segment, but we're happy to see it right now, and we do believe that we see a continuation of quite rapid growth in this area, for sure. Next slide, please. Another positive point during this quarter, in addition to the rapid development on the commercial side in recycling and the technical side, is that we see that our subsidiaries in Eastern Europe are doing quite well. We had a full-time high both in Hungary and Poland in this quarter. There's no huge numbers, but we see a strong movement. Hungary is up 11%, Poland is up 10% compared to a year ago. And there is good momentum there. And we have a lot of untapped potential in the vicinity around our plants. I have the circles here for one day transport from the plant, you could say by truck. And it covers quite a good market, all of Poland, Czechia, Slovakia, of course, Hungary, Romania, parts of Ukraine and a lot of Germany. So we see that we have a lot of anti-potential here and we see a huge interest in all of those markets for the concept ReColor Plus, where we combine our aesthetics area with colors with the reactive recycling technology. And it's very synergistic and quite compelling to a lot of customers. You need really compelling, unique selling points when you enter markets where you're not so known. It will take some time, but we will really push in Central and Eastern Europe going forward. We're starting by adding a business development person in Poland who will start in the autumn. Next slide, please. I think I will let Marcus take over here and provide you with a business update, some more details on the figures, and then I will come back and talk a little bit about the forward movement in the company.

Thank you Ronny. I will give you some details about the financial outcome for the quarter. We ended the quarter with 54.3 million SEK in sales, a little bit higher than last year. We also increased our margins compared to last year. We ended up with 47% compared to 46% last year. We also had an EBITDA of 1.3, a little bit lower than last year. As Ronny just mentioned, we really are investing in business development in Central Europe. So that is actually the main reason for this increased cost, but also that we also have upgraded our operations and we're more training for the staff and also to make some additional maintenance to improve our output. So that has been the reason for additional costs. Looking at the cash balance, we have 9 million on our bank accounts and we also have the possibility to borrow another 30 million SEK. This is a little bit different way that we are now presenting our cash balance. And the reason for this is that we have some accounts that is in our cash pool and some are outside of it. So our available cash in total is 22 million SEK. Let me see. We can also see that we are... As Ronny mentioned, we have some headwind in our light weight. But we also see this big increase actually that is coming in recycling. That gives us confidence that the investments that we've been doing for the last five years, both in product development, in business development, it finally starts to pay off. And as it's showing, you know, total figures. That gives us confidence that we are on track here. And also that we have mentioned that Central Europe, that has been a bit behind maybe in the recycling and this recolor, starts to take off as well. Can you please go to the next slide? This is actually just showing some more details of what I already mentioned. You can see that we actually are, even that we ended up with 54, but it's a little bit higher. What has happened compared to the 53 last year, that we actually have in transforming our business from lightweight to recycling so even if that it might look a little bit boring maybe very stable on on top line things are are really happening uh this is this transformation uh to recycle okay can you please go to the next slide And something that we have mentioned before and will continue to mention, because we really see this, the scalability of our industry. We are still a quite small industrial company. And what we see is that all the volumes that we add on, that actually gives us one third of it, will actually go to uh go to the end so and we also see that we have uh for you for instance we had a sales of like 26 27 million and we can handle that with our current we are with our current organization so that gives us that we actually are approving that our business model that our business model really is scalable and we also see that our um our margins uh we can say that uh for performance master batch the overall margin is roughly 45 percent for performance chemicals we are around 50 percent and we can see that we really have stable margins and we expect that it will continue to be so in the future and we also one other thing that i think that we should mention is that we're that once we are in and start to work with our customer and they start to buy they will come back so uh and so with that i think i will uh go back to you ronnie give you some more details about the future the markets all right uh so

we work on projects and it follows the generic description of a sales funnel where we start by creating interest and and early stage discussions with customer going through evaluation development stages proof of concept scaling up launch into production and then commercial reoccurring sales and we have presented this slide before in last quarter the biggest difference is maybe that the recycling customers have increased from eight to i think it says 13 or 14 or 15 down there in in the commercial phase so we're increasing the number of customers there and we are filling the funnel on the top extremely much right now we have been out on fairs We had planned a fair also in India, but it has been due to some problems, political problems in India we moved to later and we go there instead in the fourth quarter. And there are a lot of customer interest and we also believe that this to the new video will also trigger even more interest in in that business and so on so we're we're feeling the funnel all the way from the top and it's we're pressing down the projects according to our ordinary product and customer development procedure that was established already when we developed a lightweighting business some five six seven years ago and that has been refined next slide please I want to just give some examples and more meat on the bone for this description of the sales funnel. In order to drive customer interest, what are we doing? We're building awareness. It goes all the way from direct customer contacts, also indirect customers, such as recycling machine manufacturers and so on, that we collaborate with in order to find the right customers. We do expose ourselves on trade fairs and conferences and have presentations and are quite active in order to build awareness around what we do in the market. But we're also now gaining, as Marcus said, we've been at this for four or five years and we're starting to understand the markets more and more and becoming much more targeted and are able to find the customers with the highest probable potential and start to understand how long the lead times will be and so on in the various cases in order to prioritize on the right things. But there is a lot, it is a technical business. So we do, our R&D people do a fantastic job supporting the customer development projects and so on. And then there is always opportunity out there. We see when we speak to the industry, really, what expectations and hopes would be. And we are continuously developing new additives to meet new challenges. And regarding the ongoing projects that are in the phase of valuation to industrialization, you can say that in flexible packaging, we have seven to eight very highly active customer collaborations, and they're mainly in Europe. Rigid packaging, we have 20 to 30 ongoing highly active projects, and they are more spread around the world, not only in Europe, but also in other parts of the world. Polyester fibre applications, this is quite a hot discussion topic in the industry but it's difficult to do. There we do have an ongoing market introduction of our quite special solutions and we collaborate with about 10 early adopters and they are also spread around the world. And then the ReColor Plus type of applications where we combine our advanced recycling technology with color and other more ordinary additives. They are usually characterized by being smaller and article number specific businesses. But there we have both in the Nordics, Central Europe and Eastern Europe, a lot of customer interest. And we have typically now the last quarter and since a bit less than one year, approximately 50 such cases every quarter that we work on. And they usually convert into business with a quite high hit rate, maybe 50%. So that's just to give a little bit more meat around the bone for the sales funnel, what we are working on right now. And we have another slide like that. So the next one, please. It's an example of a recycling development project, also to make this more concrete. How does it work? There is a global food packaging producer that they like to be They don't want us to tell who they are, but we started to speak to them late in 2020 and early 2021 and have had recurring discussions, maybe one, two, three per year with their R&D until early 2024 when it was decided together that let's do something together and see if we can solve these problems together. and they wanted to have higher amount of recycled material and maintain the mechanical performance in their packaging materials. So we did first lab trials in quarter two in 2024, like 50, 25 kilogram, and those were quite successful. We did scale up and pilot evaluation already in quarter three, then purchasing 250 kilograms of material. And then in the end of 24, we got the first commercial order, but four tons. And the current run rate as they are producing and using this in various packaging applications is approximately 30 tons per year. But we don't give up there, of course. We are collaborating with them to run a really prioritized and accelerated R&D project to offer a next generation version that they can can allow them to increase certain mechanical performances in their material, despite using very high amounts of lower cost recycled plastics. This is both driving, let's say, our product offering, and it's a huge potential for savings for this customer. And we believe that it will be much more than 30 tons for these particular customers when we go into next year. So I hope that gives you some better ideas about this. project pipeline, why does it take so long and so on. Next slide, please. To summarize the business that we're in, we have the four segments that I talked about, aesthetics, lightweight, high temperature and recycling. The second quarter now we had 58%, I believe it says, on aesthetics. It's going quite well. It looks also stable on the top line, but actually underneath, it has been a really positive development in Eastern Europe and also a strong performance in the Nordics that has compensated for the loss of one of our biggest customers, a Finnish customer that unfortunately closed their operations and sold all their machines to another country. So they don't buy anything anymore, but we managed to compensate for that during the same time. The lightweighting segment is where we see global difficulties, really much headwind right now on the end customer side and it's driven by weak sales of wind power and the lead times of getting that type of PET foam material into other applications. minus 20 in the quarter right but on the long term it's an excellent construction material it can be used in many different applications it's light it's strong and it's cost efficient so we really believe in that lightweighting segment on a longer term scale but right now it's in trouble high temperature It's a long-term speciality. We continuously work on it, but the business logic in that field is quite long lead times before something happens. And recycling is then our dynamic scale-up. You can say that the aesthetics is a base business. It's quite commodity. A lot of competitors, but we're one of the strong competitors, you can say. High temperature, lightweight. I think we are really specialized... very narrow markets, very specialized, and we have a very close collaboration with not so many customers. And we have really strong long-term growth potential also there. And recycling is extremely dynamic and unending number of potential customers and very unique solutions from us. So our company consists of, you can say, three different types of companies. Next slide, please. It's the same. So we think that how we should be looked at from the market is that we are three different businesses that are in three different logics and that approximately half of the business is, you could say, strong and stable industry manufacturing. proportion of, what is it now, 35% approximately high temperature and lightweight together. It's specialized to be compared to very special chemistry and a really unique market position. And then the recycling 11% should be compared to an extremely dynamic startup slash scale up company. Next slide, please. So how does the second half of the year look like? It's of course always difficult to say about the future, but we see continued growth in recycle. Absolutely. We see stability in the base business and we see that we get the broader customer base. So we believe in growth in the second half of the year. Our commercial strategy and the innovations in recycling is driving to support our other businesses. So let's say that the advances in our recycling segment is also supporting the aesthetic segment and it's also supporting the lightweighting segment, for example. We see several customers now transforming into industrial scale on the recycling, so that will of course underpin any such growth. Eastern and Central Europe, as I mentioned before, we see a really strong trend there. and we still believe in the structural phone business on the long term and we continue to collaborate really good with those type of customers and support their initiatives and also both lowering cost and increasing value of their products and helping our customers to adapt to let's say new application areas. And on the high temperature segment, we still continue to work on several long-term opportunities there too. And it's coming up more and more interest from the European defence industry to work on advanced composite applications, and they will become a partner in those kind of collaborations. And there is also a drive in the electronics industry to go towards higher temperatures. But I do not think that the high temperature segment will see significant positive changes in terms of volume this year. But it's important for the future. So why should you invest in Nexan Chemical? First of all, because we have a strong growth potential. We have a focused commercial strategy and it's in line with global trends in the world. We have a huge untapped potential in recycling and we also see a huge potential in Central Europe. We have a really strong development and R&D team and quite a diverse portfolio of solutions. And we are improving profitability and have a solid financial position. We have a scalable organisation, like Marcus described. You could imagine several potential acquisition opportunities in the future, in order to broaden our presence in our markets. That is why you should invest in Excel Chemical. Next slide, please. That was it. I hope you got a glimpse of what we're up to in the summary. on the quarter. It was a tough one because we lost a lot of business because one segment is going slow in the end markets. But I think it's a major achievement to compensate for that in terms of sales volume from the team. I'm very thankful for my colleagues who have contributed to that. And yes, that is more or less where we are right now. So thanks a lot. We're open for questions and answers.

Thank you, Ronny and Marcus, for that presentation. I just want to remind the viewers that you can ask your questions in the live chat. It's time for me to present equity analyst Lara Mohtadi from ABG Sundal Collier. Please go ahead with your questions, Lara.

Thank you. My first one is on your recycling segment. Very promising to see that it's growing nicely. Can you just help us understand a little more what has been contributing this growth and why should we expect it to grow in H2? Is it primarily volume ramp up from existing customers or is it new customer onboarding?

The increase in quarter one and two, let's say first half year compared to the end of last year, has been both of those. So oncoming customers that we have collaborated with for sometimes years that are actually turning into production volumes. So you could say additional customers and especially three, four customers that have been small to medium are increasingly used. So introducing our additives into more of their products, not necessarily selling more of their products in total, but putting us into the recipe into more products. And that's a trend we see with many of the recyclers that they start on one product line and then learning from that, they duplicate that kind of success and puts it into more products.

Great thing.

Short answer.

Thank you. Very clear. And during the quarter, you press released a new customer, your largest customer that's now entered full scale production. When can we expect this customer to generate meaningful revenue?

They are already in the second quarter here.

Great.

They are already moving quite well.

Okay, very clear. And well, despite your stable revenues and your improved gross margins, EBITDA was down nearly half year on year. And obviously you mentioned that this is mainly attributed to the increased investments in Central and Eastern Europe. But how long do you expect these elevated costs to persist? And when can we start to see a return on these investments?

The return on the investments, we hope that we can, we really see that we are starting to get lots of interest from Central Europe and for Germany. But as Ronny has mentioned, unfortunately, this takes time. But we can see that we are starting to get small orders and then they will pick up. Exactly when? We don't know, to be honest. but we really are investing in this and we see a really big interest. We hope soon, but we can't really put on a timeline. The upgrading, as you said, for operations, that's part of some maintenance work, some training and those kinds of things. That's actually like a one-off, like a timing of when you're doing certain things. So that you can see more, that was something that we did during spring.

And that will be, it's already operational, you can say. That will go, yeah. So half of the delta is, let's say, improving operations and such things. and they will abate immediately. The other half is long-term investment in market development. They will take longer time. In half of this year, next year and so on, we will bear the fruit from that.

Very clear. Thank you. If we talk a little bit about lightweight, Well, sales have been soft for some time, particularly due to markets like wind power. But when do you foresee a recovery in market demand in this segment? How are you working to offset these weaknesses? Are the focus mainly on other segments like recycling or are you actually targeting initiatives within the lightweight segment itself as well?

We do both. And as always with Nexam, we do everything we can to expand and grow our business in the areas that we can affect. The running production and the demands, they go up and down and we cannot affect it. We are working to set ourselves in a really strong position in the phone market. So when it recovers, we will profit from that. When this recovery happens, it is very difficult to say. And the view forward is becoming less and less clear, obviously because they are in an overcapacity situation and their customers feel that they don't need to give so long projections and so on. So it's becoming more and more difficult to predict how it will move. So we cannot say anything about that, but we can say that we do put ourselves in a strong position when the market recovers, we will be there and we will support our customers to make really good and cost efficient products. But we do see that we do get driving both the aesthetic segment and the recycling segment on shorter term, and that's where we'll put the majority of our efforts in terms of trying to increase sales.

Great, thank you. And a little bit of a more or a broader question. You mentioned potential M&A opportunities. Could you maybe elaborate on the types of companies or technologies you're looking into? How could they complement your existing portfolio?

Well, we don't have any ongoing acquisition project right now, but it would fit to our logic when we are in a position to do that. Obviously, Marcus mentioned about our financially stable position. It is stable and we can fund our own development initiatives with it and so on, but it does not allow for major acquisitions, of course. You could say that there are alternative logics uh geographical uh potentials into markets that were not reached by those rings that i showed on the on the central european map and and then there is technology logics in let's say recycling technologies for other big polymer streams for example in the world that are also of interest for us so so both technology technology and geography right markets

Great, thank you. That was all from my end.

Thank you Lara. Thank you Lara Mohtadi of ABG Sundahl Collier. I also have a few questions in the live chat and I will start off with one from Jonas Kornhall. What's the status and outlook regarding pipes that was talked a lot about some years ago?

We do have a few customers that produce pipe materials for pipes or pipes, but it has not taken off to the extent that Nixon was thinking about maybe five or ten years ago. The main reason is that the technology that we have worked on is peroxide free, so it's less risk of contamination of water pipes by this technology than the currently used production technology. But it also means a more complex process, you could say, and the existing industry infrastructure in pipe production does not support the conversion right now. And today it is allowed to use peroxide inside water piping and plastic all around the world. So there is not enough motivation for the pipe producers to convert into this alternative technology. That's my view of it. So it's a little bit subjective from how I see why we don't sell so much into pipe. If there should be such legislation change or worries of peroxide coming into the drinking water, then we're ready. But we do not see movement, active movement in that industry to go in that direction.

Okay, thank you. And another viewer, Johnny Lindahl asks, can you elaborate a bit more about your fiber segment?

Fibers, recycling probably fibers, yes. You can say like this, we talk mainly about polyester fibers, which is predominant in textile materials. There are a lot of starting initiatives around the world to try to use recycled materials into fibers. And it is not so easy because if you just take your ski jackets and whatever textiles that are made from polyester and you remelt them and rework them, the degradation of the material is such that the material is not good enough to make fibers. You can use it maybe for other applications, lower-end applications, but you cannot use it for fibers. So, and it's also even difficult, you can take recycled PET bottles. They are very high quality recycled material that is possible to use in fiber manufacturing. But most other streams that are lower cost and would make more sense from a circular perspective and so on, they require improvement. And we have developed some additives and technologies and done testing at research institutes and together with very advanced customers. And we have a few solutions there that are extremely promising, but not really industrially validated. They're validated on smaller scale. And so we work with a few early adopters in that field, trying to really solve the big thing in that industry. And then hopefully this can become our next big thing.

Okay. And if we talk a bit more about Central and Eastern Europe, what is the key drivers there? Would you say it's changes in the markets or is it a result of your own increased efforts?

I think both. There is The plastic industry in Central and Eastern Europe, just like in the Nordics, is maturing with regards to the use of recycled plastic as a valid raw material next to the virgin plastics, so to say. Our customers' job is to put the right material into the right application and use it in the best way to find economically and technically sound solutions. And the recycling option is being more and more pushed also from, you can say, end consumer and brand owners. And in this dynamics, the market is changing. And that's, I believe, more and more customers like to work with Nexam also for, let's say, coloring virgin plastics. Just because we also have the recycling and can help them in their next steps in that area. So we feel that that is changing on the market, but we are also ourselves becoming much more active. And we have had quite a beautiful development of the Hungarian business, and now we'll try to apply the same logic that we used there, but from an internal perspective, to do the same thing also in Poland, and also to build the markets around both of those countries.

Okay, and let's talk about volumes. How large volumes can you handle before you need to have more plants, for instance?

Yeah, we believe that we can produce, if you talk about value, probably 375 to 400 million per year value of additives in the kind of product mix that we have today. But it is also a question of product mix. If there is a certain machine technology that is very popular among customers, we might need to do something there also a little bit earlier than that, or if we can have it in a specific place. can expand the current plants utilization rate without becoming overloaded because we need to have flexibility to always be able to take in short-term orders and so on but yeah approximately double okay thank you that was all the questions for you today is there any final remark you would like to give us Yes, we want to wish everybody a happy summer.

Thank you. And I want to thank everyone that has been watching this. And thank you, Ronny and Markus. And we wish you a nice vacation, too. Thank you.

Thank you. Bye bye.