Imerys (NK.PA), a global leader in mineral-based specialty solutions for industry, reported an encouraging start to 2024 with its first-quarter results, signaling a turnaround in business growth despite a slight year-over-year revenue dip.
The company announced revenues of €930 million, bolstered by stronger volumes and a solid adjusted EBITDA of $188 million, up 9% with a margin above 20%. Notably, Imerys is reorganizing to focus on the energy transition and is in the process of divesting assets in the paper market and acquiring perlite and diatomite businesses in Europe.
With resilience in diverse economic conditions, the company anticipates volume growth across all sectors and geographies, with a positive impact on profitability expected.
Key Takeaways
- Imerys reported Q1 2024 revenues of €930 million and an adjusted EBITDA of $188 million.
- The company is undergoing reorganization, including divesting paper market assets and acquiring businesses in perlite and diatomite.
- Imerys demonstrated resilience in various sectors, with mixed performance in construction, a decline in the European automotive sector, but stability in the US and strong performance in China.
- Cost-saving measures from 2023 continue to benefit the company, with €120 million in savings.
- A positive outlook for volume growth in all sectors and geographies is expected, with a focus on the electric vehicles value chain.
Company Outlook
- Imerys expects progressive volume growth in all sectors and geographies.
- A rapid rebound in the US and acceleration in Europe are anticipated in the second half of the year.
- Divestment of paper market assets and acquisitions to impact revenue and EBITDA positively.
Bearish Highlights
- Revenues saw a 3% decrease compared to the previous year due to the end of surcharges.
- The construction sector is showing a mixed performance, with residential construction remaining weak in Europe and the US.
- The European automotive sector is declining, and industrial markets in Europe are weaker.
Bullish Highlights
- The adjusted EBITDA increased by 9% to $188 million.
- Strong performance in the energy and electronics sectors in Asia, stable automotive sector in the US, and resilience in industrial markets in the US and Asia.
- Cost-saving measures delivered significant savings, with €120 million in 2023 and continued benefits in Q1 2024.
Misses
- Specific figures for the contribution of the disposal of paper market assets to revenue and EBITDA were not provided.
Q&A Highlights
- TQC JV income reached over €50 million per quarter, indicating solid market conditions.
- Net financial expenses were €16 million for the quarter, with no significant increase expected for the full year.
- Management remains optimistic about the business and the outlook for 2024.
Imerys' first-quarter performance in 2024 reflects a company in the midst of strategic transformation, with a clear focus on the energy transition and a commitment to cost control and innovation.
The company's agility in navigating mixed market conditions across various sectors and regions positions it favorably for the expected growth and profitability improvements in the coming months.
The ongoing reorganization and strategic acquisitions and divestments are set to further refine the company's focus and financial health. As Imerys continues to adapt and evolve, the market will be watching closely for the impact of these changes on its overall performance.
Full transcript - None (IMYSF) Q1 2024:
Operator: Good day, and thank you for standing by. Welcome to the Imerys First Quarter 2024 Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be the question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Alessandro Dazza, Chief Executive Officer. Please go ahead.
Alessandro Dazza: Thank you, and good evening to all of you. Thank you for joining us today to review Imerys Q1 2024 Results. Next to me, as usual, Sebastien Rouge, our CFO. And as usual, let me start by giving you some highlights of the quarter we have just closed. I'd say first very important topic, I believe we have turned the corner and overall business is growing again. Revenues close to €930 million higher than Q4, but also higher than Q3 of last year, on the back fundamentally of stronger higher volumes. Some end markets still remain weak and we will go in detail, typically or notably, I would say industrial in Europe and residential construction both in Europe and the U.S., but all geographies, all markets pointing in the right direction. Slight decrease versus last year 3%. Last year, high comparable March was the best month of the year. Also prices slightly down about 1.9% again against high comparables. Last year Q1, we raised prices by 11% versus the previous year. So, this is partly the effect of the end of surcharges compared to last year. On the profitability side, I would say excellent work, good commercial actions, strong saving measures, and I will come back on this, strong performance of our JVs, all of these contributed to a good profitability and an increase compared to last year. We posted adjusted EBITDA of $188 million up 9% versus last year, representing a solid margin of above 20%. We continue to execute on our strategic roadmap with three important actions in the quarter. We reorganized to create a new business area around energy transition, and I will come back on this one specifically on the next slide. Second, we entered into an agreement to potentially divest our assets serving the paper market, a deal with the American Group, Flex (NASDAQ:FLEX). Third, we moved again on the M&A side. We entered exclusive negotiation with Chemviron, a subsidiary of Calgon Carbon, to buy their perlite and diatomite businesses in Europe, specifically in France and in Italy, representing approximately €50 million in yearly revenue. Typical bolt-on acquisition for Imerys, it will deliver important synergies, it will broaden our portfolio in growing markets like natural solution for consumer goods. So all-in-all, I think we demonstrated to be agile in this economic environment, our resilience and fundamentally, the validity of our business model. If we look at this new business area, we announced early on in April, it's called Solutions for Energy Transition. Why? Because these businesses, the critical minerals represent more and more an important pillar in our business, and they have -- they deliver a fast growing contribution to the group performance. It includes two businesses, Imerys Graphite & Carbon and our 50% share in the joint venture, The Quartz Corporation, producing high purity silica for solar and semiconductor industries. Both these activities do represent a key driver of our future growth, and they highlight the major role that Imerys will play or maybe is playing in the energy transition. On these slides, I wanted to point out again the rebound finally that we see in markets, as I mentioned at the very beginning, growing again compared to Q4, 4%, but also Q3, 1%. As I said before, all geographies, all businesses are posting an increase and is really a volume growth. I remind you, prices are slightly down, FX or foreign exchange rates did not help and there are slightly negative perimeter effects. So, the growth is entirely volume based. If we look now where it's coming from or the specifically on the end markets. Let's start with construction. I'd say a mixed picture. Infrastructure, non-residential remain solid on back on the back of different governmental investment plans. Residential remains largely subdued and Imerys is mostly exposed to this part or this sector of the industry. Europe weak, residential is down 2.5%. North America flattish and especially we see finally a rebound. New housing permits have grown in Q1. So, business typically, you get a permit and then you build, so business should improve as we move on and we count on this. China, Asia benefiting from infrastructure and I would say overall recovery. Consumption, all-in-all remains healthy, good in the U.S. On the back of robust job market, a bit more flattish in Europe, persistent inflation, Asia and China, in particular, coming back and solid. On the next slide, automotive, I would say, to-date probably the most worrying sector. You see Europe, 7% decline, difficult markets, U.S. more stable, Asia, China going well, maybe partly offset by a weak Japan, but China doing very well fueled by exports and that is partly the reason why Europe is suffering as we read every day in the newspapers. Energy, again depending on the region, Europe down on the back of slow economic activity, better in the U.S., strong in Asia. Electronics coming back strongly after a poor 2023. And if we do look specifically at electro vehicles, overall, the trend remains positive worldwide, 20% growth. It will continue, although we do see different geographies with China really running fast on the back of exports 40% growth, Europe, the U.S., slower in the adoption and in the production of electro vehicles. A last slide on the markets, industrial. Again, is a consequence of what just said, weaker in Europe, the U.S., more resilient, more dynamic and probably coming out more rapidly from the recent slow quarters, and Asia finally picking up, which China especially ramping up in general. Paper, strong beginning of the year. I remind you last year on the back of very heavy destocking was a bad year for this industry, and it's good to see that everywhere is showing stabilization or even a good recovery. Iron and steel, again, depends largely on construction and equipment, and therefore, weak in Austria, or Asia and the U.S. and preparing for a rebound and remain strong or solid in the rest of Asia. And last slide to show the work we've been doing, especially on costs when volumes were down. You might remember last year, we announced a 3.3% cost savings program that delivered over €120 million. Well, it is continuing to deliver, which shows that it is a structural improvement. We had 3.9% savings in Q1 on costs, really all area, it's overheads, it's fixed costs, it's discretionary spending, it's capacity adjustments, it's efficiencies, it's around energy. Yes, we have been helped by, let's say, improvement in freight, in logistics and in energy, but a lot of it is self made and it does deliver. Sebastien, I hand over to you to go in more details on figures.
Sebastien Rouge: Thank you, Alessandro. Good afternoon, everyone. Let's go through some of the key aspects of our financial performance, and we'll start with revenue. Sales reached €926 million in the first quarter of '24 with soft volumes that represents a 7% decrease year-on-year. It includes a negative currency effect of €15 million mainly due to the level of USD and Japanese yen versus the euro. Prices impact is negative 2%. You remember that in Q1 of '23, prices were still high, at high levels, and they were just recovering from the 2022 inflation spike. If volumes are lower than those of Q1 '21, it was mentioned earlier both sales and volume are above Q3 and Q4 of last year, which is a good sign of the beginning of our end market recovery. If we look now into more details at our three business segments. Performance Minerals generates 63% of the group's turnover, with sales at €579 million in Q1 of this year. Revenue generated by Performance Minerals was down 5.6% like-for-like in the first quarter of '24. Sales in the Americas were impacted by a slowdown in demand of the construction industry and of filtration markets. Revenue in EMEA and Asia Pacific decreased by 7.5% as compared to a still strong first quarter in 2023. Dynamic sales of plastics have partly compensated for weak ceramics demand. Compared to Q3 and Q4 of '23, both Performance Minerals segments have increased their activity. If we look now at our solutions for Refractory, Abrasive and Construction business. The segment recorded sales of $300 million in the first quarter, representing 32% of Imerys consolidated revenue. The volumes in construction and industrial end markets in Europe were soft, but the Refractory business, particularly in the U.S., showed some signs of volume recovery. The business as a whole posted growth as compared to Q3 and Q4 of 2023. Now let's talk about our new business area solutions for energy transition. Please remember, it includes graphite and carbon activity and the contribution of our joint venture, the Quartz Corporation. We will deep dive on this one in July when H1 figures are disclosed. In Q1 of 2024, Graphite & Carbon recorded sales of $49 million representing 5% of Imerys consolidated revenue. This business posted a 10% decrease in revenue as compared to Q1 '23, reflecting persistent destocking in the entire electric vehicle value chain, while conductive polymer applications have started to rebuild. If we look now at the group profitability, adjusted EBITDA for the first quarter of '24 reached €188 million up 9.2% versus last year in spite of soft volume and a decrease of volume contribution of €17 million. This evolution reflects a base business, which took advantage of positive price cost balance, fueled by a decrease in costs of €31 million. This includes fixed cost and overhead well contained below 2023 levels. It also reflects an increased contribution from our joint ventures and associates. As a result, profitability levels increased versus last year. If we look now at the other elements of our income statement, current operating income landed at €123 million that represents 13.3% of sales. Income tax expenses of $24 million correspond to an effective current tax rate of 22%, the bigger contribution of net profit from joint ventures, not taxed at our level, supported this rate decrease. Net operating expenses represented €14 million impacted by non-recurring costs related to restructuring and asset disposal. As far as the paper asset disposal is concerned, I invite you to refer to the press release for the planned recycling of translation reserves that will occur at the closing of this transaction in the P&L. This entry will be non-cash and will not impact shareholder equity but as the amount is material, it's better to have this in mind. All-in-all, net income from continuing operation landed at €69 million up 10% versus last year, and that's in line with the adjusted EBITDA increase. We have this year no contribution from discontinued operation as they were linked to the divestiture of HTS that happened in January '23. Now back to Alessandro for the outlook.
Alessandro Dazza: Thank you, Sebastien. And to close, what do we see ahead of us? First behind, we lived some serious destocking at the end of '23 and several months of low activity. As I said at the beginning, I think we have turned the corner and we expect volumes to grow progressively in all sectors and in all geographies. The electric vehicles value chain is the last one that needs some stock adjustments. That's why we will see our Graphite & Carbon business pick up as we move on. But overall, very confident on the trajectory and therefore on the positive impact on volumes going forward. The U.S. more dynamic, so we expect a rapid rebound or good development. Europe as usual a bit behind, a bit slower, but will accelerate in the second half. To be observed is the residential construction market and automotive still partly impacted by high interest rates, but also in this case moving in the right direction. What is important is for us to keep focus on our costs and cost ceilings. When volumes come back, we will see this leveraging significantly in our profitability. We have new capacities ready to fulfill demand and a number of products in the pipeline, new products that will also foster our growth. Thank you for your attention, and I open to questions.
Operator: [Operator Instructions] And now, we're going to take our first question, and it comes from the line of Sven Edelfelt from ODDO. Your line is open. Please ask your question.
Sven Edelfelt: Thank you very much for this presentation and congratulations for the nice improvement, especially at the Quartz Corp. I will have a couple of questions from my side. You mentioned an improvement in volume. And if I look at volume, they are still down in Q1. Can you perhaps share with us what was the volume in March? And if possible, April would be good? If I look at the Quartz Corp, the contribution the net income contribution should be around €50 million in Q1, if I'm not mistaken, because there are other JVs that are contributing as well. Can you maybe clarify this element? And as well, on this contribution, to what extent we can extrapolate and multiply this contribution by at least for on a full year basis? Third question will be a bit of a clarification. I think there has been some bad noise about Pacific Quartz, which revenue were down 67% in Q1. And can you basically tell us that maybe the rate across compared to Pacific Quartz limited when compared to your quarter? And then, the final question would be on paper. Can you give us an idea of what the amount that we could deconsolidate this year in case you're successful on the disposal? When I say amount, I mean, revenue on EBITDA would be good? Thank you.
Alessandro Dazza: Okay, Sven, Sebastien will then join me in answering some of your questions. First of all, on volumes, quarter-on-quarter, Q1, Q1, yes, volumes are down 3% and fundamentally is a bit of construction and a bit of industrial activity in Europe. Volumes are up compared to Q4 and Q3. That's the message we were giving. March of last year was the best month of the year, so we start from a higher comparison. But what we see in Q1 is clearly a rebound compared to the last six months. If I look at April, as you know, we don't specifically mention numbers and by the way, April is not even closed since it is the third yet, but the direction is absolutely confirmed. So, we do expect a good April and that's why we are confident then that progressively it's going up. What is also positive is, it's not a single business or a single geography. Every single business unit or business area in the group in every geography has a better Q1 than a better Q4 and even a better than Q3, which is typically a stronger quarter, except profit and carbon because Q3 was the beginning of the destocking, so it was still and you have the numbers in the appendix, it was still before the destocking. It's the only one that is late basically in the value chain. On TQC, I don't know if we, so again, we have the numbers specifically on each of the JVs. It's largely TQC, it is by far, far, far the biggest. Yes. The others are really minor contributions. Can we multiply by 4? No, because every quarter is a fight. We have competition. We have markets. We have unpredicted events. What I said, if you recall, in February when sorry, in April, when we presented this business. There are no special effects. There are no one offs. It's a business that is solid on good markets with its own competition, with its own market drivers. Probably today there is a bit of overproduction in China of solar, which is partly the reason you mentioned on a drop in activity at one of the competitors. But the underlying demand in semiconductor, in fibers and in solar is up and is up for many years to come. Then like every market, it will have up and down, it will have slowdown, overcapacity, a bit of competition. So, to say it's multiplying by four is the right thing, I think it would be wrong. Every quarter, we will monitor, we would report, we remain confident that we have a great business, but every quarter is a fight. Don't compare entirely to Pacific Quartz because this company is very minor in raw materials. For the industry, they are much stronger in the downstream business. So, it's more on finished products and downstream. So, it's not really entirely comparable to us, just for your information. They have a very small part of minerals for the industry. And last in terms of paper, our business into the paper market, Sebastien, Q1?
Sebastien Rouge: Q1 around €90 million of sales. And I would say when we normalize the margin, it's the traditional margin, 14%, 15%, 16% of EBITDA margin depending on the period that you can use to normalize that. So, we'll obviously know a little bit more precisely in the next week when the closing can take place, but I think that you can use that to do pro rata.
Sven Edelfelt: So, if I sum up, April is up to some extent. And the Quartz, we cannot multiply by four, but close to four because there is no one-off. So slightly below four, right?
Alessandro Dazza: You take your assumption then, it's a market like every market. We wish we could do simple math. Its, at least, we have to try to. It's difficult to predict the future.
Operator: Thank you. Now, we're going to take our first question, and the next question comes from the line of Ebrahim Homani from CIC. Your line is open. Please ask your question.
Ebrahim Homani: I have three if I may. The first one, if you can maybe give you more flavor on your cost structure? Are there more cost saving actions that will be led in the next quarters? We can consider that the actual cost structure is it, will remain the same over the next month? My second question is about the M&A. Now, you plan the consolidation of the paper assets in the current year, should we consider H1 or H2? I've understood that we have to consider a 15% margin on these assets. And maybe my last question is about the hearing in the U.S., which was planned yesterday, if I'm not wrong. It has been reported. Is there any explanation on that?
Alessandro Dazza: Thank you, Ebrahim. I'll start with the last one and then let Sebastien comment on the costs. On [indiscernible], there is of course an explanation. The hearing has been delayed as far as we know today by one month to May 29th. The main reason is simply there are a lot of new cases that have been added and our, the mediator the committee basically the representative of the plaintiffs just want to be sure that everybody has properly interpreted and understood the agreement and are willing to sustain it. They want to be sure that once we launch this voting, there is proper knowledge and support for this plan to avoid exactly what happened last time. So, we remain very confident that is we are on the right track. I think a month of delay if it helps build the support is well invested. So, we remain confident we have started the downhill process. On cost, but we will be updated as of course as soon as the hearing is confirmed before the end of May.
Sebastien Rouge: On cost, what we can say, on the variable cost, we have now a good visibility of the lower cost level of energy and freight, which, as you know, are our biggest input costs and that we'll be able to hedge or to contract for most of 2024. And I would say that, that comforts the cost reduction that we have seen and we'll carry on. On fixed costs and overhead, we continue our homework as well. We continue to do small footprint adaptation here and there and in particular in our European footprint. It will not be tens of tens of millions of euro that we take out of the cost base, which we continue to make sure we put that under pressure. So, there is no very big movements that we can expect, but at least not upwards that's for sure.
Ebrahim Homani: And maybe the last question maybe on the schedule the divestment of the paper assets.
Alessandro Dazza: Yes, we hope we could give a date. Yes, difficult to give a date, but in terms of divestiture of the paper assets, I think realistically, it should be by the summer. And I exposed myself in an optimistic way, but we are very well advanced in our in the finalization. Documents are signed. We are waiting for a last approval from a competent authority. Normally, there is a deadline, so I remain optimistic that will be done by summer. And on the acquisition side, it's probably a bit longer because we just launched the consultation with the unions that is compulsory. And after that, there will be some carve outs of these companies from a larger asset base of the Carbon Group in Europe. So it might be rather, I would say, towards probably rather a Q4 closing.
Operator: Now, we're going to take our next question, and the question comes from the line of Aron Ceccarelli from Berenberg. Your line is open. Please ask your question.
Aron Ceccarelli: I have one on price mix. It was quite a strong price mix down only 1.9% against very tough comps. Just wondering, if you can provide a little bit more color around what was price versus mix. And since comps are getting easier here for the remainder of the year, should we be thinking about possibility of positive pricing going into the second half? The second question is around cash flow. I understand you don't provide cash flow now, but it would be useful to have an idea of how cash flow performance was in terms of also working capital management? And the final one, if I exclude the contribution from the joint ventures, the EBITDA was down 12% year-over-year. It would be possible to have a little bit of color around what was the key segments that drove this equipment?
Alessandro Dazza: On the price, 1.9%, as you say, I think it's a quite a good performance because last year we were still going up or still having some surcharges. So, I think it is good news. Some businesses are even slightly positive. As you say, comparison will ease as we come towards, let's say, second half. So all-in-all, in the year, I do not exclude we might be positive, too early to say. But let's say all surcharges have been removed. There is nothing left in the group because of obvious cost comparisons or price comparison towards last year. And here and there, we have to compensate to offset some fixed cost increases, which we have passed through. So it could turn positive when we look forward and even for the full year. Cash flow, we don't publish three months. I think we publish a lot more information than many other companies on a quarterly basis. So allow us not to talk about it. If you remind what we said on a full year basis, not only we delivered a great cash at the end of '23, lot of it was structural coming from a project we have launched internally to better plan our production forecasting, inventory management. So fundamentally, the job has been done. We will see it in June, we will see it in December. Then if activity picks up as we believe strongly, as you always know, it needs cash flow it needs working capital to grow. But structurally, I think we are doing what needs to be done. Your last comment, I'm not sure it's suitable, meaning it's our business. If you want to remove some bits and pieces of the business, then pick whatever you want. I think our joint venture belong to us. Largely, we co-manage them. They are doing well and we are very happy and proud. Some cost reduction is slightly down and others are slightly up. So, I don't see much to be discussed. If you start separating a single business, go ahead and I think it's not the way to see it. This is Imerys and I think it's growing and it's going in the right direction after a few economic driven digital quarters.
Aron Ceccarelli: Thank you. May I ask just a couple of follow ups? One would be on the synthetic graphite and carbon black. It would be great if you can give us a little bit of color around the visibility you have in the destocking, what you guys have seen at this moment? And the other one would be you mentioned automotive, if I recall correctly, in your presentation to be one of the weak end-markets in Europe. If it's just related to EVs or ex-EV?
Alessandro Dazza: Graphite and carbon, I think it's a good point. It is the one with the biggest drop compared to last year, which is clearly destocking effect. The entire industry is going through a destocking and I think you have seen it in you have read it when you read Umicore, when you read automotive, when you read metals, nickel, lithium, manganese, cobalt, every product relating to the EV value chain has seen from H2 last year a significant decline. Overcapacity overproduction, slower adoption of electric vehicles have led to these high stocks, high inventories. We slowly see the end. March was a reasonable month and Q1 was better than Q4. So, even in graphite and carbon, I think we have turned the corner. It's the only business that Q1 is not better than Q3, but is better than Q4 and I'm convinced Q2 will be better than Q1. It has turned the corner. It is very customer specific. You have some customers that are booming. We have customers up 20%. We have others down, which is partly is really which models are winning the EV race and which one are losing or which company is losing. So, but fundamentally, I think again it has turned and is going up, especially carbon black. Synthetic graphite is a more specific product, is a bit slower. You might remember we have built a third line and commissioned last year, and we are building the fourth. We are running at 2.5%, 2.75%, so we are filling slowly the third line. And we are happy because the fourth one will be coming on stream this year. So, we want this market to continue growing or restart growing and growing fast. No doubt. More generally on automotive, EVs worldwide are growing, so that's not the issue. It is rather Europe and it's rather, I would say, normal cars. If you look at European production of vehicles, is the one that is down. EVs are still pointing up. So, it's more an automotive issue, interest rates, uncertainties of laws. So, it is more the traditional car market in Europe that is that needs.
Operator: [Operator Instructions] And now, we're going to take our next question, and the question comes from the line of Matthias Kubli from Tiger Asset Management. Your line is open. Please ask your question.
Matthias Kubli: Congratulations on the great JV income result. I mean, it's astonishing to see that you do more than €50 million JV income now per quarter. Last year, TQC did €80 million in one year. So, my question would be on TQC following up from Sven's question. When I look at the contribution from the JV income last year, it was pretty much stable around €20 million per quarter for TQC. So, why should this year be very different and where we have much more volatility in net income? And then, I have a follow-up on some financials.
Alessandro Dazza: Not sure, I completely understand the question, but I will try to answer as best as I can. When we presented this business, we said that the business is enjoying solid growth because of the underlying markets, plus the Company has been investing the last two years and is continuing and is completing its investments. So, growing business last year, good performance this year is partly is volume and price, is both factors. What I was saying is, it is difficult to promise that nothing is going to change for the next three quarters. That was more my message. At the moment, we believe the underlying markets are solid. But if you had posed the same question a year ago on graphite and carbon, I would have told you there is only one direction, which is up, and then suddenly realized there was a bit too much optimism, a slowdown and a couple of quarters of less demand on a curve that in the long-term, I think nobody challenges. That's simply why we fear not to commit on the remaining quarters of a single activity.
Matthias Kubli: On the net financials expenses, they were at €16 million in the quarter. Do we have to think about this that they could be meaningfully higher for the full year or was there, yes, could this also come down again in the next few quarters?
Sebastien Rouge: No. There was a bit of exchange expenses during the quarter. So fully, we'll not have 4x what we have. On the other end, you know that structurally, we'll consume a little bit of cash down the road with dividends that will come with a little bit of CapEx that will come as well. So, all-in-all, that will balance it out a little bit, but it is difficult to predict the ForEx evolution, obviously. But on the base interest, I think we structurally have a little bit more gross debt than we had last year, but nothing particular.
Operator: Dear speakers, there are no further questions. I would now like to hand the conference over to the management team for any closing remarks.
Alessandro Dazza: Okay. Then thank you very much for listening to us and with a positive message that finally the business is going in the right direction, and with the expected announcement on interest rates should give a further boost, especially to the construction sector. Therefore, we do look much more positively to 2024 than we did three months ago. Thank you, very much and good evening.
Sebastien Rouge: Good evening. Bye, bye.
Operator: That does conclude the conference for today. Thank you for participating. You may now all disconnect. Have a nice day.
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