Aperam S.A. (APAM) Earnings Call Transcript & Summary

Yes. Good morning Paris. My name is Thorsten Zimmermann. I'm the Head of Investor Relations at Aperam. And I welcome you to our 2024 Capital Markets Day. Please take note of the disclaimer regarding forward-looking statements. And then we pause a second on the plan for the day. Now we have a great mix of Brazil, forest and environment. And you might ask, where is the 2025 strategy? Now Tim, our CEO, will say a word about that. And Frederico will present the Brazil strategy, which is then the last segment covered, and that completes the cycle. Now you see we have 3 episodes of our activities in Brazil, produced a film. It's our low-carbon upgrade of an energy strip. And Bernard will later then talk about our decarbonization road map, Scope 1, 2 and 3, where we actually lead the pack. And Sud will close with the economics of the year because, for us, it means a lot of business opportunity. Your questions, we'll answer at the end of this presentation. And now without much ado, I hand over to our CEO, Tim di Maulo.

Hello, everybody. Welcome. You see -- you hear something which gives you a little bit of taste to what is our forest, in particular in Oikos. We will discuss later what Oikos is and what does it mean for this company. So let's start. I would like to start with 3 words. The first is cycle, the second is cycle, and third one is cycle. And if for my 36 years of experience in stainless steel, I should repeat cycle. For every time I've lived it, it will be much longer, as you can understand. So if we are here is because there is a need to better understand this industry, what is behind the cycle, what is the sustainability -- the sustainable profitability of a company which is in the sector. But also when we look at sustainability, we cannot say sustainability only profitable -- in terms of profitability. We also have a challenge, not only as an industry but as the entire world, of sustainability as such. And this is the aim of this presentation, to go through all these aspects of the sustainability. Now let's start from what is Aperam, where we are, what are our challenges, et cetera, something that is very known to you. I will go to the first slide which summarize a little bit what you already know because you know the company. You know that we have confirmed that this company has done a lot to improve the profitability by EUR 300 million. How we are -- you know our portfolio. You have seen in 2022 EUR 1.1 billion, then you have seen EUR 300 million. And what is the right number? Maybe in the average, I don't know. But the right number is certainly something which is not the one or the other. You see the cycle, okay? This, the chart in the middle with some numbers show you what the cycle have been, the numbers, you know them very well. And you know that 2023 has been a very difficult year, for many aspects. We will discuss this later. And then you know this company, on the aspect of the Leadership Journey. What is the Leadership Journey? Is our engagement to go and to do better and better, not waiting from the external condition, from the external market the right moment to make profit. But continuing asking ourselves how we can do -- with a self-help measure, how we can do better. And you know we have done this review of all the different phase of the Leadership Journey, and we have always realized what we have promised. Now the question is, when you are in a cycle like this one, how can you show me that this is in the number? Okay? This is a fair question because you see numbers that are going up and down so fast that this can be a challenge. So we have taken -- we give you a simple exercise that you can do alone, and maybe better you should do alone, with the number which are available in the market. Numbers that are typically the best price, which represents the link with the EBITDA. Volumes -- and you see that if we look at -- we compare 2 low cycles like 2020 and 2023, 2 low cycles. You see that the price in 2023 were even lower slightly, but even lower than 2020. Then you see the volumes were much lower than 2020, which, keep in mind, 2020 was penalized also because of COVID, okay? 2023 is an exceptionally low level of volume. So you have a contribution margin. Then you have the contribution margin, the inventory effect. You know that we always disclose to you the magnitude of the inventory effect. Here, we are talking exclusively of Europe. And you see that the bridge between the 2 years should have been around EUR 200 million. Reality has been in the range of EUR 140 million, EUR 145 million, which means that the gain, the real gain, the real improvement from 2020 to 2023 has been EUR 50 million. This is what the Leadership Journey means. Means that we improve the company always to do better for similar level of market. Now on top, can we say that Europe has realized 100% of the Leadership Journey? It has done the big part. This is only Europe, it's not the full Aperam. Remember, it's not the full Aperam. Yes, with the inflation that we have also to be mitigated with the booster that we have launched inside the next phase of 2025. So in synthesis, Leadership Journey is and has always been a reality that you can yourself check in the numbers. Then, cycle. So somebody can love cycle because it's also a lot of opportunity in the financial world, cycle. If you are here, probably is because this industry fits with your way of knowing that. But it's also something that we have to take care, especially when cycle are becoming faster and faster and with amplitude which is bigger and bigger. And so the way we are doing is the following. The company is, and you will see much more in one second, in fact, 2 pillars. One pillar is the activity, the typical activity of stainless steel that you know. We are -- let's say, we have been defined as European stainless steel producer. We are much more, I will show you. So this is the part of European and Brazilian stainless steel producer. A lot of the cycles. And a growth which is, in Europe, relatively modest, okay? There will not be a strong growth. But then we have other activity, of which we have sometimes explained -- no, we have explained to you, which are becoming the growth area of Aperam. And this activity are all what is recycling renewables is a division that you find in our reports, the alloys, and the distribution, which is service and solutions. These 3 activities have a much lower cycle and are growing faster. And when you see in reality what they count for Aperam, you see that, in the average of '16 to '18, Europe was indeed dominant in term of part of the contribution to EBITDA, okay? This is why we have defined a European stainless steel producer while this is not anymore the case -- has not been the case in 2023, and will not be the case in a normal level in 2025. On the contrary, the activity that we are developing are growing faster. Activity like recycling, the forest, and all what we will explain to you today, including Brazil. And you see also another important thing. This is real. These are people. These are people which are producing EBITDA. They are producing in a sustainable way. Because sometimes we have the temptation to have a lot of speeches about, okay, how green we are, how much we are doing here and there, et cetera, et cetera. But fundamentally, company, in my opinion, is what people are doing. And what you see here is that more than half of our people will not be producing only stainless steel. They will do something else. We have nearly 2,000 people in the forest. You will see them. Okay? We have people in recycling. You see what Aperam is and what is the DNA of this company and the transformation that we are doing. This is why we present always this slide, which gives you what is the structure of this company and what is the link also. Because, of course, you can say, okay, you diversify, but in reality, you don't diversify. You have a strong link, a strong synergy between all the divisions that are part of Aperam. It's not, let's say, interesting to discuss more because we have already presented you what is service and solution. So all the service, with the modern tools that we are putting there, we have presented the alloys. We have presented the investment done in stainless electrical steel. Partially, we will discuss also today with Frederico in the presentation of Timoteo. And then recycling and renewables. We will have a very in-depth look at what is this part in the part of the forest, in part of the environment. So I will let my colleague and the movies to show you. Now fundamentally, steel and stainless steel and alloys, do they have a future? And the definitive answer is yes. You cannot do anything which is linked to environment, to energy transition, without solutions in alloys, stainless steel and steel. You cannot do the mobility revolution without this product. There is no way. And there is no way to not to do it. Okay? So our industry is an industry that is there to support all megatrends: in energy, in mobility, in health, in anything which is linked to a better future that we are building now and we are dreaming of. So this should give you the trust and the confidence in this industry. I repeat, looking beyond the cycle is important. And looking also beyond the fact that sustainable profitability is absolutely important and fundamental for industry, but sustainability is key. One day, nobody will have the right to operate without being sure that the sustainability is at the core and is a reality. When I say a reality, I would like that we start this with watching the movies. And here, we will see something which is interesting because the next movie will be Brazil. Unfortunately, it would have been a nice experience for all of you to be there and making this meeting in Brazil. But okay, apart of the CO2, it's a logistic complexity, et cetera. So what we wanted with this movie is to show you an incredible plant. I named this incredible plant because, from the first time I was in Brazil many, many years ago, I saw the difference. This difference, you will see trees in the middle of the plant. So this is not the only different. But you see what people -- how much people are important, how they take care of themselves, how it is important to work in a company and in the plant, which is really outstanding at the global level. So we can go for the movie. [Presentation]

So hello, everyone. Good morning. So I'm Frederico Ayres Lima, so I'm the CEO of Aperam South America. And my -- I have 2 targets here today. The first one is to, together with the video we have seen, plus the next 2 videos you will see, give you a bit of the flavor of what Aperam South America is. So this is my first target. The second one is that as you could not go to Brazil, as Tim said, because of the CO2, because of the logistics, I want with this presentation to leave you with the willingness to go one day. Because actually, I would say that there is only one thing it can do that is as good as our steel, and it's the Caipirinha we can drink in the guest house there. So I hope you will be there one day. When I was thinking on how to present to you Aperam South America, I decided to focus on 3 pillars. People, so it's a very engaged and diverse team we have there in Brazil. Market, so it's a market of growth, it's a market of opportunities that we have. And the last one, the footprint of this unit, the unit that compiles, as you saw in the video, BioEnergia and the Timoteo plant, both located in the state of Minas Gerais in Brazil. So a deep dive in all those 3 pillars so that you can then understand the business from this perspective. Starting with people. So Tim spoke a few words about it. And I think that when you look at that smiley friend that Tiago is speaking about -- speaking that his father works there and he worked there for 20 years, you can get a bit of the feeling of how proud, how engaged we are as a team there in Brazil. One thing that Tiago has not mentioned, and it's important to state, is that he started in the company 20 years ago as an operator and today is a manager in the steel mill. So I think this also complements the way we treat people, the way our people are important for us in the company. And other 2 aspects I would like to raise today for you, we can see in those charts. If you look at the chart on the -- chart on the left-hand side here, we have, as we saw in the video, our frequency rate of the unit, Aperam plus Aperam BioEnergia plus Timoteo plant. For those that are not familiar with those figures, what you have in the bars -- in the gray bars, are the number of lost time injuries we had at the company. And in the red line there, you have what we call the frequency rate. For the frequency rate, we divided the number of events by the number of hours worked during that period. And I have 2 messages in this slide. The first one is that, when you look at the 3 in 2023, that we were very sad because we were coming from 0 in 2022. But when you look at these 3, it means that out of those almost 5,000 people working on a steel mill 8 hours per day, but a mill that works 24 hours per day, 7 days per week, we had in the last 2 years only 3 people that could not work the day after the event that -- the safety event they had. So this is -- I mean, when you look at that, all the hours worked, it's a figure that is outstanding. Actually, when -- as also said in the video, the average of the stainless industry in the world is 3.46 for this frequency rate. So while we are at, in 2023, 0.2, the average of the industry is 3.45, so -- 46 to be precise. When I was building this chart, my idea was to put a line on where the sector is so that we could compare. But this line would be above the ceiling here, if I would put it there. So this is the first point I would like to have in mind. And the second still based on people and on engagement, is this the second figure here. In Brazil, we have a business school that is Sao Paulo University that has a context in which every year, they evaluate through questionnaires, through audits at the site and interviews, they evaluate the companies in Brazil, and they classify them as what they call, poetically, Incredible Companies To Work For. In Brazil, we have always been recognized as a good company to work. And in the last 4 years, Aperam BioEnergia was elected the best company to work in the agriculture business in Brazil. And Timoteo plant was elected the second best to work in the steel -- sorry, not steel -- metal and mining industry in Brazil. No need to tell you that when you speak about agriculture in Brazil, we have many big companies known by all of you. The same could apply for mining and metal industry. So it's a very -- I mean, good result to be recognized in that way. So this when we speak about people. The second asset I would like to discuss, the second of those 3 pillars, is the market. And to start, I will explain what our products are. On the left-hand side, here, you have the stainless steel. So that's easy for you to recognize as a product of Aperam, for sure. So used in architecture and construction, as you saw in the stadium we saw in the video. But also on the day-to-day, like the handrail you used on the stairs here, the lift of your house, the cutlery you used today, all these are made of stainless and well known as an Aperam product. But in Brazil, we have a second line of product that are the electrical steels. And inside the electrical steels, we have 2 main products: the GO, grain-oriented steels, that are used for transformers and for all stationary machines. So transformers, our charger for electrical vehicles, and many other stationary electric machines use GO. And the GNO. The GNO are grain non-oriented, so rotatory machines -- so rotating machines. And there, we have the generators of electricity [indiscernible] hydropower plants, and also the motors. So we could say that all the energy -- not all, but most of the electrical energy use is generated by using GNO, because you have rotary machines that produce electricity. And then to transform that energy and make it arrive to our homes, to make it arrive here, you have the GO. And then when you use it again, we have the GNO. So the electrical vehicles, they have GNO in the motors. The motor you have in your air-conditioning, your fridge, all this has GNO steels inside. And the special carbon grades that are, I mean in -- let's say, in revenue, not as important, but also is sort of a filler, a product we have in Brazil that helps us keep the competitiveness and the scale. I will deep dive in each of those products. But first, I would like to show because I spoke in the video about the volumes, but then how you see that in revenue. So in revenue, as you can see in the chart on the left-hand side, stainless is responsible for 70% of our revenue. And then we have the other products around 30%. So as I said in the video, 50% in volumes and, in revenues, 70%. And on the chart on the right-hand side, we see where stainless is applied. And the reason I put this chart -- these 2 charts in this presentation is to show you the importance of having this diversified product range. Because we have different products, as you see on the left-hand side. And even in the main one that is stainless, you see that it's spread all over the economy and particularly in Brazil. So this multiproduct business in which you have many segments consuming is sort of a natural hedging for this operation. It's a hedging because, when a product is not performing well, we have alternatives and we have flexibility, as we will discuss in the coming slides. So going product line by product line, I would like to start with stainless steel, that, as you saw, is the main source of our revenue. On the chart on the left-hand side, we have in the bars, the upper end consumption of the market. And what I would like you to notice here is that, one, it's a market that has always showed reasonable growth and that is expected to grow further. It's expected to grow because of the chart in the middle. In this chart in the middle, what I show is the Aperam consumption per capita of stainless in Brazil. So how many kilos per inhabitant we consume every year in Brazil. And the message I would like you to have in mind here is that, even comparing to developing countries like Mexico, we have a much lower Aperam consumption per capita. So this shows the potential that Brazil has to grow the consumption of stainless. So this supports what I said when I spoke about the Aperam consumption. So the growth of the Aperam consumption that we saw in the past will continue for the future. And then I also have this dotted line in this chart on the left-hand side. This is the market share -- sorry, no, not the dotted line, the gray -- the orange part in the middle of the chart here, where we show the market share. So it's a market that grows in which we have a market share that has always been between 70% to 80%, and for which we have plans to grow. So we have a road map in which we are growing the market share. We could grow it in the last years and we are planning to continue this leadership in the market. So summarizing what I presented about stainless, I would put in those 4 main points here. The first is the market that has a growth because of the GDP, and also because of the products we have -- projects we have to boost this consumption by finding new applications and by developing new grades as we saw in the speech from our colleague from the research center there. The second is the market leadership we have. So as I showed in the market share, so between 70% to 80% market share. It's a very solid leadership we have in this market. It's a level competitive playing field. So we in Brazil have always been able to have trade defense measures that would avoid any unfair competition in the market. So at this very moment, we have antidumping against China, we have countervailing duties against Indonesia. And we have always had this eye on a fair trading market in Brazil. And the last point of the 4 I'm mentioning is the position we have in the cost curve that I will come back to this in the coming slides. But what I would like to say is that -- it's -- we have a sound -- very good position in the cost curve that enables us to have this market leadership in Brazil. Electrical steels are also important for Aperam. And the 3 blocks here show why. The first one is the energy transition that Tim already explained. So it's unavoidable. So to move into the electrical vehicles, to move into less use of fossil fuels, the use of electrical steels is a must. So that's one point that supports the importance of electrical steels for Aperam. The second is particularly for Brazil. In Brazil, there are a lot of investments and a lot of plans for the years to come to increase the availability of electricity. So to make electricity available for industry and for homes in all the country. And this will boost a lot of the consumption, particularly of grain-oriented electrical steels. And the last point I would like to remember in this slide is the mobility electrification. So it's a reality. So Brazil, we'll take a bit more time to move into the electrical vehicles for 2 main reasons. The first is that in Brazil, today, 90% of the cars produced can run with ethanol, so it's already a sustainable solution. And the second reason is the purchasing power. So those 2 reasons make the move in Brazil a bit lower than in Europe or United States. But nevertheless, by the middle of the next decade, more than 50% of the cars produced in Brazil will be electrical hybrid. So this will also boost and is a strategic point we have in our road map for the future of the electrical steels in Brazil. So I spoke about the people, about the market, and then a bit about our footprint. So a few points on the footprint. The first one is the integration. It's a fully integrated footprint in which we start from the charcoal and we go down to the finishing lines as we could see in the video. So this integration makes some important points -- give us some important points that I would like to remember. The first is the use of all the waste and all the scrap internally. So the blast furnace gas is used downstream. The scrap that is generated in the cutting process is -- comes back to the [ metal shop ]. So this integration is an important point for us. The second is the flexibility. This -- the mill is fully flexible. So as we saw in the video, we can produce electrical steels, we can produce stainless steels. We can use the blast furnace route, but we can also use the scrap route. So this flexibility, with the flexibility we showed in the product range, is really important for the resilience of this company. And then, again, as I already said, and I will detail a bit more, the position in the cost curve, that is somehow connected to this integration, because we can dilute our fixed cost. We have a very, let's say, efficient supply chain internally. So this is helping us on this competitiveness. So another feature of this footprint that I would like to mention is the sustainability. I would talk about sustainability here from the point of view of CO2, but I could speak about the foundation that we will see afterwards or governance, but let's focus on the CO2. This chart here, the yellow part shows our emissions of CO2 per ton of [ crude ] steel Scopes 1 and 2. For those not very familiar, Bernard will help us in the coming presentation, but let's -- I will speak about the numbers and then Bernard will explain the definitions. But again, when you look at the yellow, shows the emissions. Here, I have 2 points to say. The first is that we are very well positioned in the CO2 per ton of steel if we compare with our other competitors. And this is the first point. And the second is that when we look ahead, even in a very conservative approach in which we don't improve and we don't invest and we don't change any process, we would still stay at this low level of emissions. And then we have the green part down there. The green part in the chart are the removals we have in our forest in BioEnergia. So what we can see in this chart is that we have a low level of emissions, and even this low level is fully neutralized by our forest. The bars here shows the balance. And you can see that it was slightly negative in '23, then it's negative in '24, zero, and then negative again for the future. So it's interesting to see that this is a company that's CO2-neutral if we speak about scopes 1 and 2 considering removals. And why is that? I would say, 3 main reasons. The first one is the use of charcoal. So to make a long story short, the trees are the best equipment we could imagine to remove CO2 from the atmosphere. So what a tree does in the photosynthesis is that it takes CO2 from the air, releases O2, oxygen, and incorporate the carbon in the wood, in the trunk of the trees. So with this -- then when we produce our steel, what we make -- what we do is that we take this carbon and we burn it again to CO2. But then the trees will take it again, we'll use it again. So it's a fully renewable process in terms of the charcoal use, completely different from using coke in which I take a carbon that is on the earth and I burn it to CO2. So in this case, this is the first of the 3 reasons we are so low in CO2. The second is the electricity in Brazil. It was already -- also said in the video, but I will give the numbers. In Brazil, in 2022, that is the last public figure we have, 92% of the electric energy in Brazil was renewable: hydro power plants, solar [indiscernible] so 92%. And in Aperam South America, 50% of the energy we use comes from the grid. So 50%, 92%. The other 50% we take from a dedicated hydro power plant, so 100% renewable. So the balance for Aperam South America is that more than 98% of the electric energy we use is renewable. So, close to 100%. And then the last reason for this good result is the green part there, is the 100,000 hectares we have of planted forest that are at this very moment removing CO2 from the air, and a part of it being accumulated there in the forest. So just as a statement, all this is made based on the methodology of ISO 14064. So this is the standard that we use for this certification of Scopes 1 and 2 and it was certified by external bodies, okay? So with this, I conclude the 3 pillars I would like you to have in mind to explain the business there in Brazil. People, market, footprint. And then I will show where we are with all those -- the assets and what we plan for the years to come. One important point, as I spoke a bit about flexibility, the position on the cost curve and how the flexibility, resilience we can bring from this flexibility. And the chart on the left-hand side shows this. So what we can see here is that this company, even in the difficult years of car wash scandal in Brazil, the recession we had in 2016, actually, the recession as '14, '15 and even the COVID, this company has always delivered 3 digit -- close to 3-digit EBITDA. Even in the difficult year of 2023, it was a positive result. So what we see with this EBITDA of the company is that it's a resilient company that resists very well in the low cycles and take a lot of benefit from the high cycles. And this is due to -- how I try to explain in those 3 main pillars there. And as I said, the position in the cost curve. This is schematic cost curve, we have in your right-hand slide -- chart here, shows the cost of my competitors, plus the import duties and logistics to bring material to Brazil comparing to Aperam. So we can see that even the very competitive units that are supplying to Brazil cannot be as competitive as we are in our own market. So no one can beat us in our markets in terms of costs. And how do you look at our strategy for the future? I would put it in 4 pillars. The fourth one -- first one is competitiveness increase. So okay, we are well positioned in the cost curve but we cannot sleep with that. We know we are in a business with a lot of overcapacity, with a lot of ups and downs as Tim showed. And we know that one of the main assets to survive is the competitiveness. So here, we have a lot of actions. We have initiatives to increase the use of scrap. In Brazil, as I said, we can produce using electric arc furnaces. We have 2 electric arc furnaces. We have limitations of availability of scrap. But we are ready to increase the use and take opportunities from the market. We have a lot of actions on productivity, Industry 4.0, all the initiatives that we can use to bring more productivity and more competitiveness to the business. This company has a culture of continuous improvement. Everything we do 1 year, we try to do better than we made the year before. And this is forever. So this is what brings part of the gains and part of the competitiveness you could see in the cost curve. A second big block on our strategy is mix improvement. When I say that the market in Brazil is growing and we are growing our market share, this is a mix improvement because instead of selling carbon steels, I sell stainless steel. Instead of exporting stainless in an oversupplied market, I sell in the domestic market where I have advantages, I have trade defense measures. Also, electrical steels. We are improving the mix day by day. The grades we produce today, most of them were not in our portfolio 10 years ago, not most, half of them were not in our portfolio 10 years ago. And I'm sure that the products that we'll have next year are better than the ones I have this year. So this is a mix improvement through which we improve our margins. NGO is a similar issue. The development of applications like electric vehicles are bringing grades that have a better profitability than the ones we have as commodity grades in NGO. Still talking about mix improvement, at this very moment, actually, at the end of today, Brazilian time, we'll be starting up the new hot rolling mill in [indiscernible] plant. So an investment that started 2 years ago and we are concluding really right now, today is the day. And with these investments, we are able to produce grades at a wider width that we would not be able to produce before. Again, mix improvements that are bringing better results for us. We have a capacity increase road map. So as I said, we have a focus in Brazil. We have a leadership in Brazil and is a market that is growing. So we do have a road map in which we can increase our capacity and I don't need to tell you that it's much easier for us that we already have a footprint in Brazil that we have a hot [ phase ] that has some spare capacity and we produce carbon. It's much, much easier for us to invest and follow the market growth than for anyone else in this business. And my last pillar of this strategy is the sustainability. But sustainability, I will not speak about reducing CO2 or about less use of water. Here, the point I would like you to have in mind is the business that comes with these sustainability ESG issues. We want to promote low CO2 grades, to have a premium that we want to take profit of markets connected to the low CO2, for example, the picture in the middle that I think Sud will speak a bit, is the bio oil. This was a byproduct that didn't have any use in the recent past and that today we sell. We sell as a fuel with 0 CO2. So a lot of new opportunities we believe will come out of the business of low CO2. So this is the fourth pillar I would like you to have in mind when I speak about my strategy for the years to come. So to wrap up, well, what have I said in those 20 minutes I'm here. First point are the differentiators this company have. The first one is the engaged and performing team we have there. We have a unique market position. So we are leaders in a market that is growing, in a market that -- in which we have competitive advantages. It's a flexible multiproduct business. So we can, as I said, produce stainless steel, I can produce a lot of steel and I can change the amount of each of those. It's a competitive unit. Our position in the cost curve is good. And this is due to the cost in Brazil. So the Brazil and the cost we have in Brazilian Reals but also due to the fact that most of my suppliers are in Brazil. So all my ferronickel comes from Brazil. My ferrochrome comes from Brazil. My scrap comes from Brazil. My iron ore comes from Brazil. So this gives us a good competitive base. And also future-proof environmental setup. When we see companies trying to use hydrogen to the -- in the blast furnaces, trying to change from the blast furnace to [ DII ], so all those moves, Brazilian footprint is already prepared for the needs because we are already producing via 100% forest charcoal that, as I explained, these are renewable fuel. And this -- and then in the middle here, we can see the resilience and the future of this company. So a company that has always shown a good level of EBITDA and that we expect to increase. I like the chart Tim showed in which we see the cycles but we see the cycles and we are, in each low cycle, less low than in the previous one and each high cycle, higher than in the previous one. This is the idea want this chart in the middle to give you. And then when we look ahead, so we have the competitiveness initiatives that we are adopting that should maintain or even improve our cost position. I repeat what I said. So debottlenecking and upgrade investments. So these more -- these investments, if we compare with a newcomer that can make us ready for the growth of the market and for the opportunities of the market. Volume and mix improvement, what I said of a market that is growing, a mix that is improving and that we are ready to take profit out of it. And the CO2 economy that I mentioned. And then I come to my very last slide. Aperam South America, we will celebrate in the 31st of October of this year, its 80th anniversary. And the best image I can have of this company now is that it is a 80-year-old child. It's a child because it has a bright future ahead. I see much more opportunities than threats. But it has 80 years. So it has a reputation. It has a history. It has solidity to offer for a company of 80 years. So with that, I close my speech here. Thank you all for the attention and I invite you for the coffee break that will be downstairs where you entered. Thank you. [Break]

Can we restart? Good. So we are starting the second step. I grant you, at least in my taste, this second and third part will be even more astonishing and give you a sense of what Brazil is. But on top, what Aperam is, what we want to do and how this company is really engaged in the future. We always hear about ESG. ESG is a kind of -- sometimes it's a kind of small star in a slide presentation with the certification somewhere, et cetera, et cetera. But I really defy you to find other companies in which the S has the sense of what you are going to see. S, I repeat for you is social. You've seen a part of it, being the best company, the incredible company in which you're working is one thing, being by far the safest company in the steel industry is another thing. Now you will see something which is more act on social and look at the numbers and look at the activity, you will be astonished. Thank you. [Presentation]

So good morning still to you all. I am Bernard Hallemans. I'm heading the Renewables and Recycling division in Aperam and I'm also in charge of CTO and sustainability. And before we are going to look at BioEnergia, which is really a marvelous story. I would like to get into our CO2 road map together with you. And I could start like Tim said 3 words, cycle, cycle, cycle. In this presentation, it will be about CO2, CO2 and CO2. And I think CO2 is the word that you have already heard the most in the current day. So let's first maybe and it might be a recap for some of you, get into some definitions because CO2 is a word but behind there are some very important concepts. And when we talk about CO2, we should be reminded that CO2 is defined into 3 different Scopes. You have already heard Frederico talk about Scope 1 and Scope 2 in Brazil. We have 3 scopes to look at and we need a road map on the 3 Scopes. Scope 1 is what you emit as a company in your direct activity. So everything we do inside our plants, if there is CO2 emitted, it is counted in Scope 1. Scope 2 is what you buy as CO2 inside the electricity that you use in your production. So we consume a lot of electricity, which we buy on the market. This electricity has been produced in a power plant. This power plant emits CO2. We have to account for this CO2 in our Scope 2. And then Scope 3 is everything else, which is needed to get your product on the market. And you will see and you already know, I think, that Scope 3 for us is really a very important subject. I illustrate by this chart the importance of Scope 3 in our business. Don't look at the numbers because they are not really relevant. I will talk about numbers later. But look at the skills you see for stainless steel industry, the importance of Scope 1, Scope 2 and Scope 3 and this is for typical EU-based producer. And you directly see that, in our case, the most important is Scope 3. We are, in fact, an industry where Scope 1 and Scope 2 are already very low. If you compare stainless steels or also the electrical steels in Brazil with, for instance, carbon steel, we will be already 4 to 5x lower due to the way or thanks to the way that we are producing. If you compare it to other metals like aluminum, we will even be 10x lower or more. As far as Scope 1 and Scope 2 in our industry, it's already something we can start from as being very low. Additionally, when we then say that Scope 3 is really the essential differentiator, Scope 3 is very, very different amongst the players in our sector. When you buy a fork, a knife, a spoon in the store, you don't see the difference but this spoon can be produced with a carbon footprint Scope 1, 2 and 3, below 2, can also be produced with more than 10 and it's the same product and you pay a similar price today. Sud will later go into the value creation which such a differentiation can make in the future. We are a producer, which is on the top of this graph. We are and you will see numbers later, we are emitting 5x less CO2 than some of the competitors which are coming from Asia. They are based on nickel pig iron and nickel pig iron is a source of a very strong CO2 Scope 3. So once we have the concepts, let's look at Aperam and let's look at the road map we have already ongoing and that we have for the future. And I will start with Scope 1 and Scope 2. We are already today a leading player in Scope 1 and Scope 2. You see in the middle of this graph, as I already told you, in comparison with average steel production, we are already 4x, 5x less. You have seen in the Brazil presentation that the Scope 1 and Scope 2 in Brazil is fully compensated by the absorption in our BioEnergia premises. So there, we have a total, which is close to 0 or even negative. And so we start already with a very low carbon footprint in Scope 1 and Scope 2. On the left side, you see where it comes from. We'll not go into the details but the different parts are rather obvious. The second message, apart from the fact that we already have a very low footprint, is that our plan to go even lower is a plan that needs only relatively very little investment. We have a plan towards 2030 and I will show the numbers later, which needs us to invest over the next, let's say, 7 years, we are in 2024, less than an average of EUR 20 million per year. And these are investments in known technology, which are stable and which are not going to fundamentally change the production cost that we have. So we are very different from, let's say, carbon steel, which has a very big challenge of reconverting this industry to a much lower CO2 footprint in Scope 1 and Scope 2, which we don't have. We have a plan. We will strongly reduce further but it is CapEx light and it will not fundamentally change our cost position. This plan is also well balanced between different levers that we have, different actions that we take. And you see this pie chart in the middle. And you see that we have 3 pillars, which are in investment almost equal. Which are these pillars? First one is to work on energy efficiency. I think that's a sensible thing to do. We all do that at home. We do that in our plants and we use the most modern ways to come down in our energy consumption. And we have quite very nice results at this moment in doing so. So we consume less and less energy to produce our products. The second one is that we are substituting all fossil sources into green sources, into potentially green sources. So this means electrifying your processes. We still use gas in several furnaces in our mills. This gas is gradually being taken to electric energy. So we transform this energy process into an electrified process. You have already heard about coal and charcoal and you will see the video later also on BioEnergia. The second -- the third big pillar is that we are generating our green energy ourselves for as much as we can. Some of you were in the Genk plant a few years ago. You have seen the solar power plants that we have built there, which we are doubling at this moment. We have already a lot of wind energy in our premises. And so everywhere where we can, we are installing the same kind of technology to produce the green energy ourselves. And where we have heat available from our processes, we will also look into converting this heat into energy again. So you can, from heat, produce electricity again and then you have again a CO2-neutral source of energy that you can use. And then the fourth pillar, which is not a CapEx one, is that we are also active in getting green energy from the electricity market on which we are also active through the schemes that you know of. The total of -- the total impact of all these actions come into this curve. This is our plan going forward until 2030, which we have also submitted to SBTi. And on which we are, or against which we are ahead for the moment. So our results on 2023 are not fully final yet but they will probably -- they will surely be better than the curve that we had embarked upon. And so we are very confident that for the next years, we will reach our target, which is close to 370, 380 kilograms in CO2 in Scope 1 and Scope 2. Now Scope 1 and Scope 2, I already told you is important but it is not the essential part or the differentiating part. I think a lot of companies are doing the same as what we do. Scope 3 is really the point on which we focus and we should focus in our sector. You've seen that Scope 3 is the most important emitter of CO2 to get to our products. And there, I think really that Aperam is differentiating from peers and from other companies. Of course, we have already integrated in recycling. We have bought ELG. This integration has been done, still continue in terms of generating synergies. And so, of course, we will base our production for the biggest part possible on scrap. Many companies can do that. We have chosen to be -- to do it in an integrated way, which gives us advantages. But we go beyond this. You can go to a certain percentage of scrap, let's say, 95%, 96%, 97%. 100% technologically will be very difficult. So you still need some raw materials to add to the scrap to come to your final product. And there, I think we are really a differentiator. We have plans. We have already actions. We have assets which enable us for this last part to go the extra mile with a very low and in the future, close to 0 CO2 footprint. And then we talk about our waste valorization units in Recyco. Then we talk about Botanickel, which I will explain to you. And then we talk about partnerships to get to alloys, ferroalloys with very low CO2 footprint. All that on top of what Frederico already indicated on the Brazil perimeter and our forest there. So I will go a bit more into detail on each of these very important points. And here, you see what the effect is of what we do there. So of course, we will use recycling scrap as the base material for our production for -- as far as we can. The other bearing here, it's nickel-bearing units. There, we can make the difference, as I said. We can use ferronickel or nickel pig iron, NPI, where you see on this graph, which carbon footprint, CO2 footprint Scope 3, they represent. Our way is to choose to go to the red bars that you see with Recyco, with Botanickel with these initiatives, you see what difference we can make in Scope 3 versus other techniques. I already told you, in recycling we are integrated, as you know. It enables us to recycle in local supply chain through the 3 different circles that you see on this graph. First small circle is what directly comes back into your production as scrap that is generating during the production stages of our product. The green cycle -- the green circle is coming from the industry where we deliver materials. When a dishwasher is made, there is scrap generated and this scrap is circling back into the production process. And then the purple circle is what we call the end-of-life scrap. It's what you generate as scrap when you change the old dishwasher, for instance, it goes through the recycling chain and it comes back as scrap in our plants and we produce new steel out of it. For these 3 circles, having an integrated entity, ex ELG, which is active on the world market and which has access to all these sources is, of course, a prime asset. And we have been, thanks to this integration, pushing forward the use of scrap and the value we can get out of the scrap to the maximum extent. We're still doing that. You see at the right side, a small graph or one of our typical grades and you see the progress that has been made in one of the parameters, which is scrap ratio, especially since 2022, when we did the integration. But we can do that not only for this typical grade, we can do it for all the grades that we produce since we have a very good visibility on this scrap generation market, where sources are and how we have to activate them. As I told you, we go beyond scrap because the last mile will also be important in the future. And there, I want to talk with you about Botanickel and about Recyco. This slide is about Botanickel. Botanickel is the joint venture by which we will retrieve in the future and we are already doing the first move out of plants and it might be very exotic as an idea but it works and we are proving that it works. How does it work? You have to start at the top of this slide, there are in the world, soils which naturally contain nickel. And the nickel content, you see it on the slide, is somewhere between 0.3% and 1%, let's say. There are plants which are local species, which have the ability to extract preferentially this nickel out of the soil when they grow. And so they are naturally accumulating this nickel inside the plant, if we plant them on this soil. And so you get a plant with inside, you see the number, typically 2% to 4% of nickel. This is a nickel source that you can get in a CO2-free way. You don't have to do any big metallurgy or any big investment. You will not emit CO2 when the plant is growing, on the contrary. So we will harvest these plants and we will turn them into biomass. When you turn them into biomass, you can produce energy. So we can produce electricity with this biomass, which we can also give and use to the local community or to the local entity where we are harvesting. The biomass that comes out and so the ashes that come out are a very rich nickel-bearing source of material. You see the percentages. So we come into percentages, which are comparable to what usually is used as ferronickel, for instance, to add the last nickel to our products. And so these ashes will then be used in our recycling or in our Recyco unit or valorization unit, which I will explain in the next slide, as a green source of nickel, replacing the raw materials that we used to use in the past. And the beauty of the thing is that what remains out of this process can even be used as a fertilizer, again, to use on these soils, which we are growing the nickel from. Of course, this is a process that ends at a certain point because then the nickel will get out of the soil. And the last beauty is that this soil is then -- has the ability to be used by the agriculture, which is locally active. So it is, in my view, a fantastic circular story that has many components. And that is, when you talk about ESG that ticks all the boxes that we should look at when we talk about ESG. Now coming back to this Recyco unit, which I understand is sometimes maybe complex to grasp, I've tried in this slide and there's a lot on the slide to explain what we do there. Recyco is a former steel mill. It was the former steel plant of Isbergues in North of France. And we use this Recyco entity to turn waste into nickel, chrome and molybdenum units. Why and how are we doing that? You see below in the scheme, our melt shops. The melt shops of Chatelet and Genk in Belgium, where we have a furnace and a refining unit. And what usually is done, as I told you, you use scrap. And then you go the last mile with some expensive and CO2 rich raw materials, which are in the red box at the right side. So we use ferronickel typically to feed into this process. With Recyco, we can do it in another way. With Recyco, we start from the left side. And there are in the market, wastes, byproducts of processes, which contain these valuable metals and which are for other or for colleagues of these products used already by companies which you know well, which valorize these waste streams. With Recyco, we have a process, which is based on heating, so pyrometallurgical process, which can take these wastes. We put them together with other wastes coming from other sectors. We use, for instance, molasses. We compress these and then they go into a complex metallurgical process, which gives us the metals out of these wastes. And so there, in this green box called Recyco, we will generate, again, nickel, chromium, molybdenum units with a very low footprint out of the wastes that we have taken in. Also, these Botanickel ashes will be part of the feeding of this physical plant. And you see in the graph that we are at this moment ramping up and we have a target of more than doubling in the next years. We are ramping up the generation of these nickel, chromium and molybdenum units in the Recyco plant. And so we will replace the red arrow by this green arrow at the left side. This is my last slide because it's -- I would say, it summarizes what we are doing and what we have committed now to and what we are committing to. We are in the last days of finalization of getting approval from the SBTi targets that we have put. And you see the targets in the slides. So we are engaging on a CO2 intensity reduction by 34% by 2030, in Scope 1, 2 and 3. You see the absolute value on which we are committing. And this is the next step into then the carbon neutrality road map that we have towards 2050. I told you we are ahead of the plan that we had put in 2023 and our plan is to keep on being ahead in the next years with the actions that I've tried to explain to you. So that summarizes my explanation on CO2 Scope 1, 2 and 3. And the way we see as Aperam to make the difference in the next years, in a world which will meet this CO2 to reduce fast and heavily, I would say. Next point is the lunch break, so I invite everyone to go to the lunch and then we will be back at 2:00 to look at the third part of our Brazil story. Thank you.

Okay. Thank you for coming back. I hope that the lunch was interesting, at least I had some discussion in few group and it was very nice and you have a nice feedback for the moment. Now I would say that you have seen Timoteo. You've seen the foundation and our engagement in the social. Now you will see something which is different. Different because, okay, you have heard us so many times talking about BioEnergia, our forest, how big they are, et cetera. It is a pity not to have been there because how big it is, it is an experience that you can have only being there, okay? When you take a Jeep and you cross during hours and hours, and this is always forest, always forests, this is something interesting. But what you have to look at also is that these are not simple farmers. These people have the most innovative people we have in Aperam. During the last 15 years, we have a challenging [ NOx ] which have all groups from the company, workers, typically workers, presenting their innovation. I tell you the division who has owned the maximum number of prime was BioEnergia. These people are extremely innovative. They are doing things which are really nice. You will see them. I don't disclose so much, but you will see also that there will be a small gift for you of products coming from BioEnergia that you can use to be part of the carbon capture, okay? You will see this and let's start with the movie, please. [Presentation]

Hi, everyone. I don't know how I'm going to top that. It's impossible. So my job here is actually quite simple, right? Which is that you guys read a lot of things, listen to a lot of people talk about these fantastic buzzwords about sustainability, environment, billions of euros, dollars, energy, hydrogen and all those things, right? In the context of this, Tim spoke about a uniquely Aperam story. And my job is to come back and explain to all of you what this uniqueness means in terms of value. So one of the things I'm going to do today, I'll try to do is demystify this word sustainability in terms of value, okay? Because there's 3 things I want you guys to keep in mind as we go through these slides. First is the exciting opportunities my colleagues have spoken about and the value from these streams. The second one is how these are not dreams of the future but are happening today in practical and clear means and third, we are Aperam and efficiency is in our DNA and how we are doing it in the most Aperam way possible, which is looking at how we invest shareholder capital in all these existing projects, right? So please keep these 3 things in your mind as we go through all these exciting opportunities and look at the value. So to start with, this is something which is a typical CFO chart. I would like to walk you through what we are doing in terms of E. In terms of environment, it is very easy to think that, okay, there's our past traditional businesses, and there are these exciting new opportunities. But it's important to remember, sustainability, if it is going to happen, metals are going to be at the core of it. And recycling is going to be at the core of it. And if you remember, metals and recycling are at the core of Aperam. So on 3 stages, we are going to do this. The first stage is our existing businesses. We are using the E revolution to transform and decommoditize our existing businesses. The second phase, which is all these fantastic new value streams you've heard about today, we can clearly see the gains in our books and these are production-ready. Some of these like recycling, are in production. And the last part, which is what most companies like to talk to you about, which is selling the dream is the upside of carbon which is truly the way we view it at Aperam, something which we are working towards and if it happens for an investor, a fantastic upside and we are confident that this will happen. And I will walk you through with some really worst-case scenarios and even in these scenarios, how much money we are going to make. Just for the record, on a value basis, we expect from the first 2 phases a minimum of EUR 100 million of returns in EBITDA, out of which EUR 40 million has been planned in already in our next leadership journey 5. And I've given you a legend on how CapEx heavy or light these businesses are. First step, de-commoditizing traditional businesses. So I always, when I talk to my commercial guys, one thing they like to say, and I give them full credit is stainless is moving out of your kitchen into industry. So we are really living the second phase of stainless. So the first part of our stainless business, if you look at it, we are going into mobility and energy and our investments we have made and last leadership journey, we've announced the investments in our AOD in Genk or the cold rolling mill in Gueugnon will help us and are already starting to deliver solutions, for example, for the EV. In alloys, we have basically reduced 3 cold rolling mills to 1 in Gueugno and expanded our capacity in Gueugno, this CapEx has been announced in the past. And because of this growth in capacity today, we can fulfill the growth in LNG demand which is coming. Brazil, Frederico has talked about electrical steel growth. There, we are moving up in mix. We have announced HGO, which is a high-quality grain-oriented steel announcement as Brazil goes, Frederico has explained, 32% growth in transmission and distribution of electricity over the next 10 years. So there, we have seen value and we will see value. And last but not the least, in recycling, you remember our investment in recycling when we purchased ELG. And we clearly said that the aerospace size of the business is something for us new and it is a space where we will actually see value come along. And this is a business, if you don't know, we are the world's largest recycler of aerospace alloys. If you are west of the Danube River and have flown in a plane in the last 10 years, your engine has been recycled by an Aperam company. So clearly, the current businesses are changing due to the investments we are making and will deliver already in leadership journey 5 and that's how E is helping us in the current business. Next, we move to the new value streams. We have discussed enough about recycling in the past slides. There's 2 points I'd like to add to this. First one is that we have increased our synergy target from raw material valorization from EUR 24 million to EUR 40 million. We're confident of doing that because we see the value in the recycling business. The second thing is that we are confident also because of our own expansion in the recycling business that by the end of the decade, which is not a long time, right? Tim committed and promised that we are continuing to perform along the 2025 targets. So if you take a next milestone to 2030, we believe that our recycling business target should be higher than EUR 100 million. The next part is about Recyco. Bernard has explained the process to you, take everything which is in this case a waste from 2 businesses and actually deliver value out of it. Now important to keep in mind, it's an old stainless mill with very little CapEx requirements. I promised you in the beginning, the way we, as Aperam do it is with capital efficiency, we keep shareholder capital in mind. So this is not a brand facility with -- spent with billions of euros of expense. This is a retrofit of the existing steel plant from the '50s. And we continue to improve the processes there to use pyrometallurgy to actually convert waste in the north of France into valuable material. So the point in Recyco is also that this material is not just in terms of CO2 footprint, but also cost effective compared to primary nickel which it replaces. Recyco, we said will add a double-digit million EBITDA until 2030. The next one is BioEnergia. You've seen this fascinating presentation. Let me give you a couple of numbers behind it. Number one, forest area expansion, we are expanding 24% target until 2030. Annual planting area is 18% increase. Wood density growth is 25% until 2020 and another 30% we expect to 2050. Now these can look like typical graphs for you, and they don't mean anything. So let me decode it for you. First thing, you take money and buy forest or forest companies, mergers and acquisitions. Second, you do continuous improvement and keep increasing your planting area in the existing area. Third, you invest in innovation, and you actually increase the amount of carbon captured by a single tree over a period of time. So it clearly shows, this is not just you put in a seedling, pour some water and trees grow. There is a lot of human effort, resources, ingenuity, innovation, which goes, and it also clearly says the choices we make on capital efficiency. What does that mean? I can increase 18% by buying, 18% surface area by acquiring a company, but then I have to pay a premium to the shareholder. I can choose to actually optimize and increase the plant area. I can increase the forest area by buying 25% increased land, but I choose to actually work on innovation and amount of carbon captured by a tree, increase it by 25%. So basically, these are not either our options. However, I want to make it clear to you that these are options which we consider carefully where we actually plan this growth and nothing is left out. And before I move from the BioEnergia slide, because this was a topic of conversation during lunch, the planting machine you saw there, just to give you an example, was actually the prototype was used somewhere in Scandinavia and wood pulp machines. We've bought it, adapted it to the Brazilian climate, to the rains, made it a multi-operation, which means it can be used for fertilizers and seeding. And for the analysts among you who are cracking numbers, we used to have more than 100 people actually used for more than 2 months to plant forest every year. Today, we use 10% of that, overnight operation during 14 to 20 days in the rainy season, so there's no wastage of water, there's a reduction of cost because the people are not working there for 2 months. And actually, we use these people basically in other areas where we are growing. So that it is a cliche, but it's a win-win situation. And then I come to the last part, which is the upside of carbon. First, if someone comes and tells you we have a brand which is low carbon, zero carbon, everything. In our industry, most of our peers, if not all of our peers have only one way to reduce their carbon footprint, which is to actually go and buy scrap from somebody else and as a result, increase the scrap ratio. Because of our differentiated value chain here, Aperam has unique ways of reducing its carbon footprint. And today, already, we have pilots, and that's the reason we put it on the upside part, pilots where customers pay a premium to actually get reduced carbon products. The volume growth on this plus the price premium, we expect -- and this is why we call it the upside of carbon, a low double-digit EBITDA contribution. The next part, Bernard spoke about this is carbon border adjustment mechanism, which is a uniquely European concept to price rightfully the carbon emitted by the different processes. Just the math on that, it's 8 tonnes of carbon dioxide between us and imports. Today, a spot price of CO2 is at a high -- sorry, at the very low level because of activity, let's take that EUR 50. So it's a simple math, you can multiply and even if you take 10% of that, it's EUR 40 per tonne more than today as a price premium. Now there are 2 things to keep in mind. First, stainless is the only process in which we consider Scope 3, but -- so it is true emissions by the process, which means, as Bernard explained, it goes back till the sourced alloys as well. The second thing is that in all other industries, carbon, steel aluminum, a carbon border adjustment mechanism, the price premium and the added benefits which will come to the company is used for transforming the footprint, the billions of euros necessary to transform the footprint into a CO2-free operation. Bernard has showed you the CapEx. In case of stainless, this 8 times 50 or whatever that number is going to be is purely a premium to the investors in a stainless business. That's a difference if you are covering metals and the difference between the different metals companies. Then we come to even more new business models. We've heard about Bio Oil. So basically, the process is here, you can read it directly. What used to go up as smoke and actually damage our carbon footprint, today it's captured and converted into by Bio Oil. And we made -- because this was such a landmark process, we made actually a sale of this oil and published a press release about it. I like actually the Portuguese word, which differentiate between carbon mineral and carbon vegetal, which basically clearly explains the added advantage of this oil. If you take it from the ground, you have it with a lot of sulfur and this one, because you take the carbon from the air, there is no sulfur because the trees filter it already. So you get a value and a premium for that, and it's very CapEx-light process. The advantage we have in Brazil in our operations as we are the world's largest charcoal producer, which means that we have the scale and the technology to actually capture this. Let us look at the value, and we're looking at another low double-digit EBITDA contribution until 2030. The next one, Botanickel. Bernard in detail explained you to the process. Let me just touch upon 2 points. One is the fact that as we have looked at, we still buy -- will continue to buy even with our scrap footprint, a limited amount of primary nickel. And our goal is that Botanickel will cover a large part of this primary nickel need with low CO2 footprint until 2030. The second thing is that -- but this output of Botanickel in terms of nickel cash costs and please ignore the negative column that is because some people subsidize nickel costs with cheap byproducts like platinum. But end of the day, if you look at it, it is at the low second quartile. So it's very competitive. It makes business sense. Again, growing forests or plants is a low CapEx business in terms of M&A. And it has the added benefit of, as Bernard has explained, remediate the land and then give it back to agriculture. So any asset you invest in technically goes back. Again, low double-digit EBITDA by 2030. And then we come to the discussion where the professor in the video explained in detail about Biochar and we have to be clear. Biochar is something which we used to sell as fines and it was used as a low-margin product, which was sold externally. Today, we use a pyrolytic process and convert it into Biochar. And this Biochar acts as a fertilizer and a clear carbon capture for hundreds of years, right? Now it is something which you probably noticed downstairs, right? You have small packets. So if you want your personal contribution to carbon capture and you want to help enrich your own personal garden or your parent's garden, if you don't have one and live with parents, please take a packet, it's your personal contribution to carbon capture. The point is, end of the day in this business model, today, we have a partnership with a traded exchange where you can buy CO2 credits generated at Aperam. It's a pilot, but you can buy that. Again, a low double-digit EBITDA contribution by end of 2030. So through the cycle, recycling renewables, we believe will double its EBITDA until the end of 2030. You remember, I spoke about 5 ideas in this upside of carbon. Let's take the worst case of low double digit, which is EUR 10 million. That's 5 times 10, it's EUR 50 million, just to do the math. The added benefit is growing in this segment, softens our earnings volatility as well. So that's the economics of the E. And I have a couple of charts which I brought to show you how do we practice this. The first one is this, which is we do not want to use sustainability as a word to actually, we say in German, throw money out of the window. The use of capital efficiency is absolutely important, 2 pilots. The alloys team came to us when, unfortunately, the Ukraine crisis happened. And we foresaw that a 7-year plan to expand into LNG is now become a 3-year plan. You could buy another player and expand there and pay a premium to the current owners or you could invest EUR 50 million CapEx, the net working capital build is EUR 200 million just because the nickel and all the raw material prices went up, if they normalize, it's going to come to EUR 150. And the additional EBITDA is EUR 50 million. So you're looking at a 4 time -- 4-year simple return. The capital efficiency focus is that we are not investing in new facilities. We are using the upstream and downstream in our European stainless facilities to actually re-equip the equipment at lower cost and lower CapEx to use them to expand the capacity of alloys. The other focus, BioEnergia. Capital efficiency also means not just reducing the CapEx and reducing it. It also means investing in the right places, even if we believe that this scenario is critical. Last year, one of the most difficult years in metals in the past cycle, we still spent EUR 51 million for M&A for our BioEnergia business. Full run rate, EUR 15 million for 3.5 years for simple return. So importantly, capital efficiency focus, it is designed as a JV with our largest supplier in Brazil. As a result, ferrochrome we get back from them will also have a Scope 3 reduction. So efficiency of shareholder capital employed for us, I would say, is even more important in the sustainability space. And then I come to the last slide, where I'd like to use a chart which Tim told you. This is a chart which shows a nice story of the new growth businesses in specialty and sustainability and supply chain, which is our S&S business, for example, they drive base dividend growth. We have a progressive dividend policy. They drive base dividend growth and they contribute to a solid balance sheet and reduce earnings volatility. And then the cyclical business, which will have up cycles and low cycles. They boost shareholder returns and they will fund the reinvestment in new earnings streams as they happen. Our financial policy has been split a little artificially into these 2 parts, but that's the principle. Now that's a story that every CFO shows you, right? Now let me use Tim's numbers. He showed you a case in 2020, we made in Europe, EUR 100 million EBITDA out of a total Aperam EBITDA of EUR 300 million, EUR 293 million to be exact. In 2023, Europe made minus EUR 43 million out of a total Aperam EBITDA of EUR 304 million, which means this is an action already in the past where EUR 200 million EBITDA missing from the European business, thanks to energy crisis inflation and a slowdown market at the low bottom of the cycle has been compensated or there is a contribution from these businesses we are talking about. So it's nice to tell you a story and make you wait for 3 years to see it in action. This time, we have brought actually that. Just the difference between 2020 and 2023 shows clearly in numbers how the story is in action. So that brings me to the end of this presentation. The one thing I do want you guys to all remember is that we use these new earnings streams to actually complement existing businesses. We believe existing businesses clearly have value. And like Tim said, cycle, cycle, cycle, it will help us to deliver value across the cycle. Thank you. So we just need a couple of minutes to set up chairs here before we start taking your questions.

Okay. So I hope you have enjoyed the movies and the presentation. Now there is the most difficult part for us, to answer your question. I hope a lot of, let's say, ideas or -- of things have been clarified. We are always on the market. I think we see all the same thing. But sometimes it's not so easy to understand and visiting, even if virtually should help a little bit to clarify things. Patrick the floor is yours. So please.

It's Patrick Mann from Bank of America. This is probably a very basic question to start with. But how should we think about South America and Brazil from sort of a cash flow perspective? So you gave us the EBITDA history. Just maybe -- how much CapEx is going in? And then are you very much focused on growth within Brazil? Or do you send money up to the center? Or how does that cash return to shareholders?

I will let our CFO to answer.

So Patrick, first of all, Brazil is very [indiscernible] operation, as you can understand. Because of 2 things. One is -- because it's a low CapEx operation. And second thing is because it's an integrated site. One site in terms of our stainless operation. So typically, we -- I would look at it as less than 50% gets put back in the company in terms of cash, okay, in terms of both organic and inorganic investment. And the rest actually flows into the cash flow statement of Aperam. That's the high low number.

It's Bastian Synagowitz from Deutsche Bank. My first question is just also on the strategy, I guess you've been talking about your strategy here. It seems to be like a lot of single and small projects. And I think you referred to most of them as being pretty capital light. Can you give us maybe some color on the CapEx needs overall and how we, in particular, should be expecting your CapEx cycle to phase over the next couple of years. I think we've been going through this phase where we've seen CapEx at very high levels at EUR 300 million, EUR 250 million over the last 2 years. There you're coming off to like EUR 150 million. Is this sort of a level where we should be expecting you for the next couple of years? Or is there actually a chance where the CapEx could actually bump up again to a much higher level than that? That's my first question.

So I think that you have to take as first answer the fact that we have a typical level of maintenance CapEx, which is in the range of EUR 110 million, EUR 120 million, depends on the activity, plus we need some money for the CO2 story. So it is very small at the global scale, but still in a range of between EUR 15 million to EUR 25 million depending on the year. Then you see our policy. Our policy is to be a reasonable actor and investor. First, we need to find the good story and the good investment. And part of what Sud has explained is that we very much care about return on capital invested, okay? So this is the first point. And second, we want to maintain a level of company with nearly zero debt. You know that our debt is on lease some working capital. And keeping that, we mean that we adapt the level of investment at the level of the cycle, okay? The last cycle we will be, the easier will be to answer to your question. Now we are a very cyclical industry. And so you have seen high level of CapEx and even share buyback in the past years when the cycle was very high. You have seen in 2023, a more reasonable level of investment, and it will be a reasonable from what we see today in 2024, then cycle of cycle that I'm confident that we will come back. In the meantime, we are studying so many other opportunities that will grow Aperam and make Aperam even bigger.

Thanks, Tim. Maybe one more question for Fred on the Brazilian market. So can you maybe give us a bit of an update on what's really going on there? What are the demand dynamics near term? I guess the Brazilian market has always been a very exciting one when we looked at the, I think, consumption per capita, but that's obviously been for a very long time. I guess there were certainly some underlying structural growth, but what are you seeing near term. And then also maybe just on the anti-dumping side, there's this ongoing anti-dumping case there, any color or update you got for us at this front?

Yes. Let me start from the market growth. If we look at Brazil in the long run in the past, the consumption of stainless has always grew more than twice the GDP -- not more, around twice GDP. But you're right that we didn't see the growth we expected because Brazil has not grown for a few years like 13%, 15%, 16%. So we had low growth. So even if stainless grew twice the GDP was not a spectacular growth. Then this -- but it's growing. It has always grown, and it's growing for the years to come in our analysis. There is a very good connection between the fixed capital formation and the upper end consumption of stainless, for example. And this has a positive trend for the future. So as you say, it's a market we have always shown some growth, but sometimes less than we expected because of the GDP that was not growing. For the future, our expectation is that this growth continues and then it will depend on the economy. That today, we had last year growth of around 2% of GDP. So you could say that apparent consumption of stainless was 4% or something a bit more than that. And then we will depend on the economy for the years to come. But again, the growth is there. And then you asked about the anti-dumping. In Brazil, the trade defense measures have always been in our agenda. We have always been very agile on implementing. We have, let's say, an advantage is that as we are the only player. We know all the figures because the domestic supply is ourselves. So we have the precise number, the imports are public. So we have all the tools we could have to implement trade defense measures. So in Brazil, the first trade defense measure was applied in 2012. There it is still existing. And that was an anti-dumping against many countries on stainless and on GNO as well. So for both products, we have the anti-dumpings implemented in 2012, 2013 is still in place. Last year, we approved the CVD against Indonesia. And at this very moment, we are at the final stage of convention for these labs and hot rolled coils coming from Indonesian cold-rolled in other markets to Brazil. So this is what we see as trade defense. We also have import duties, as you all know. So they are today at the level of 12.6% for the stainless and electrical steel. And in the recent past, there was a pressure to reduce this, but what we see today is the other way around. So no one talks about reduction as now we have United States with the session [ 232 ], and we have in Europe also trade defense measures. So no one speaks about reduction import duties. So answering your questions, we have measures that are there in place, some of them to be renewed because as I said, they are from the beginning of the last decade. Some new ones should be increased with the convention and the import duties that shouldn't change. So that's what we see or if they would change for me, they would change to the upside. So they wouldn't be reduced.

Do you have any expectations on the timing for the certain [indiscernible]?

Short term, still -- for sure to this year.

Ioannis Masvoulas from Morgan Stanley. First question for me, understood you announced some very interesting targets on some of the new initiatives coming from the Botanickel and some of the other projects. But going back to the previous EBITDA uplift target of EUR 300 million on a like-for-like basis. Can you perhaps provide an update in which areas you are ahead or maybe a bit behind your targets? And what shall we expect by next year in terms of today's market environment, how much of that progress shall we expect to see through the P&L?

So Ioannis, Tim spoke about in his first slide, and I confirm that, first of all, we are on target to, on a like-for-like basis to reach the EUR 300 million. And Tim also actually showed the delta coming from the volumes and the prices. right? So that's the market -- that's a number, any given day, you can look at CRU numbers and utilization assumptions, and you can model what that effect is going to be. But in terms of leadership journey is defined as self-help, what we can go out and do ourselves without any help from the market. And based on that self-help measures, all divisions we set targets, we said we'll do disintermediation. We said we'll go into higher mixes in our alloys business and our stainless businesses. We said our recycling will contribute more, right? Because of the acquisition. Those were the main targets to reach to EUR 300 million. Everybody is performing on or better than targets, right? The headwinds have been, of course, energy costs, demand and last year was the valuation effect of the windfall, right? But those are the things. So yes, in terms of the EUR 300 million, I see no deviation from any businesses. Recycling has overperformed because remember, we said our contribution has been over the cycle, EUR 55 million. right? So that's something you have to keep in mind when you discuss over the cycle because the EUR 300 million is over the cycle target.

That's very clear. And the second question is going back to CBAM, there is clearly the opportunity assuming Scope 3 is included properly. There is the upside opportunity for the European mills. But how confident are you around some of the risks that could result from CBAM, for example, Europe becoming an even higher cost region. And how could that impact competitiveness, both in terms of exporting stainless, but also producing downstream products and exporting those into the world?

So I think I will take this. Europe has a challenging front, which is the green deal that has no sense without an industrial deal okay? I think United States are more advanced than Europe in understanding that there is no green deal without an industrial deal. Now it is not something which is reserved that to the application of stainless steel, that is for everything. You have seen the big debate on the electrical car. It is good to, let's say, state that from a certain time, all the cars sold in Europe should be electrical, but you need also to be sure that there is no dumping and subsidies that are coming from other countries with this cars. And the European Commission is aware of this and has already started to work on that. And this applies to every kind of product, of which the cars, the electrical cars will be one of our main segments. So we are interested in this because it will be important for the development of our stainless steel electrical car. So I think it's a general problem of Europe. I'm confident that Europe, even if it's low, will take care of it and will not allow our industry to go away because in any case, if the industry -- the European industry will be transferred to, I don't know, Asia, nothing will change with the planet on the contrary. You have seen that if this happens, the planet will be worse, okay? And so there is no green deal without an industrial deal, maybe Europe is low, but I'm confident that this will come.

This is Tristan Gresser from BNP Paribas Exane. One question on Brazil. I think you mentioned you want to grow capacity there. What is the time line? What are the plans. You also said you want to grow your market share there. So at what point will you consider new melt capacity in the region?

Yes, sure. Now actually, as I said, our priority is the Brazilian market. So we were not investor export. And today, we still have capacity. So we still export a reasonable part of our production, as I said, in the video 20%, around 20%. So we still have a buffer and the total capacity to supply the -- properly the Brazilian market, and even Americas, I could say. But then when we say grow, the point is that one day, it will be necessary because as I showed and answering the question before, I think it was from there. So we do believe it will grow in one day, it will be necessary. Our point is that the road map is clear. We know what to do, and we don't need a new melt shop because as you know, we produce carbon steel that are more affiliate than a product, a strategic product at the end. So my answer would be that we are ready to invest whenever necessary and that the CapEx is much lighter than any other competitor could do to supply the Brazilian market. So this is the point. But so far, with the capacity we have, we are comfortable of properly supplying the market with our 70% to 80% market share for the coming years.

All right. That's very clear. And my second question. Sorry, if it's a bit provocative, but we talked about Brazil, the new streams of EBITDA, but we haven't talked really about Europe. And that's a question we ask some of your peers for an underperforming asset, at what point do you look at the business and say, maybe Europe is no longer core, I would like to have your view there.

So the answer is very clear. Europe is and remain core of Aperam. Even if today, it's a smaller part of our people, for example, only 25%, which are growing other activity, but Europe has a very competitive assets in Europe, our Aperam Europe. It is in a market which will be more and more protected by the CBAM. And despite the cycles, over a long term, over a long period over the cycles, the return on capital employed, the ROCE of Europe is very good, okay? So yes, there are years in which we are very happy of Europe. Years in which we are not happy of Europe. But all in all, we are happy with Europe and especially because we have built in Europe a very competitive assets, including the fact that Europe is supported by Service & Solutions. So we have a very large penetration in the market and this is stability of flow and the knowledge of the market. And we have Aperam recycling which is the unique -- we have the unique one, integrated and that can leverage on synergy in the market. So having the best competitive position in one market, it's something that will last and there is nobody who can challenge this position in the future because these assets are not available for others. So it's a question of endorsing the cycle, unfortunately, we have started the discussion with cycle and cycle will remain.

It's Tom Zhang from Barclays. Two questions for me. The first one just on Brazil again, touching on the sort of stainless consumption per capita it's a divergence we've seen for a while. But on your presentation, Brazil is not too far away from some developed markets like U.K., Australia, what gives you confidence that Brazil is meant to be at the top of that chart with a much higher level of stainless per capita consumption? Maybe we do one by one.

No. I think being at the top is very, very long term. We are coming from less than 2 kilos per person, while we have Japan, Italy at 18. So this will take decades. But what we believe is that it should grow faster in a developing country as Brazil. We cannot compare the Brazilian economy with U.K. or some others you may mention, economies that are based in services, while Brazil is the industry, the economy is based on segments that do consume steel and stainless in particular. So the [ agriculture ] business in Brazil is a big consumer of stainless and growing consumer of stainless. So I think when you look at the developed country in which services are growing faster than anything else, it's -- I don't see that the stainless growing as far as it would grow in Brazil. And we do have -- because it's important also to say that we haven't an organic growth of the [ Aperam ] consumption per capita that will happen because in Brazil. If you look at today, the number of feeds per inhabitant, the number of houses per person. This is much less than in a developed country. So when this catch-up will happen. So this will be a natural increase in [ Aperam ] consumption. But we also have another part that is boosted from us by ourselves. So we develop applications like the ones you saw within the use of stainless in concrete mixers, the use of stainless in applications that before were carbon were plastic, this is growing very fast. So I would say we have a part in Brazil that whenever you look at the economy of the segments that will grow, we see that it will grow, the stainless. And we have our efforts in which we measure and we put targets of growth that would be above this level.

Got it. And then just another one on sort of the cycle in your presentation, Tim, you sort of showed the recycling and renewable cycle overlaid against the stainless cycle and you were saying the peaks and troughs are the same, not the same magnitude. I mean they come -- they're pretty cyclical. But obviously, with how earnings have developed with recycling renewables, as you were saying so, they've offset, to a large extent, stainless Europe in the last year. So how do you sort of see that developing in the future? Is this just a one-off really good year for recycling renewables. It goes back towards a mid-cycle number? Or do you think they're actually more sort of acyclical or countercyclical. The earnings between recycling and stainless?

So it will not be fundamentally countercyclical because you understand that we are in the same area when you are recycling scrap, so you are collecting and if the volumes are lower, you have an effect on volumes, which is lower. So 2023 has been a low, let's say, year of event for recycling, which leads to the consideration that if it's been profitable at this extent means that the resilience is much higher to cycle than in the rest. And for the other components of Aperam recycling and renewables, but [ forest ] will always be, let's say, stable. We have a cost base which is [ Real ]. We have a productivity which is unbeatable, nobody can have the same productivity we have done extensive benchmark. We have, let's say, the best second competitor is using eucalyptus, which we have sold them as seeding. So there is no doubt that the performance of BioEnergia will continue to grow. And on top, they are producing new products, which were not existing before. So these are typically noncycle industries. Then you have alloys. Alloys heavy cycle. But first of all it is counter cycle or at least it is depending on things which are completely different from the commodity business as stainless steel, okay? Can be different. And second, the history of alloys explains that alloys is a unit based on innovation, okay? Our cycle are mostly linked to the fact that every 10 years, 30% of the products we have are not existing anymore. So we have a continued renew of products, and we continue to have products growing, reaching a maturity, so decreasing them, and so there can be a cycle going down. And again, okay? Now we are developing so much. We have seen our new plant in India. So for the moment, we are not putting any virtual, let's say, visit. But in the future, we will do because it is an amazing application.

Maxime Kogge from ODDO. So 2 questions on my side on Brazil because it's a topic of the day. So the first one is actually on the S&S business, I think you're quite underrepresented in that area in Brazil. And that's in contrast to Europe, where it's a strong competitive advantage. So how come is it -- I mean, this business is not that developed in Brazil? Or is there any plans to change that? That would be my first question.

So sometimes is historical, and you have a certain level of, let's say, link with your historical customers. And so you keep your historical customers. Service & Solutions was an activity which was developed in the year 2000, but was really, really poor in the sense that the facilities of the service center, when I arrived there was the worst in the world. And today, we have the best -- probably the best and the nicest service center in the world in Campinas. You see stainless -- all stainless steel and so -- and internally, is the perfect layout and competitiveness of the machinery. So we have developed, but not the extent of Europe, also because the problems is different. In Europe, the problem is that the market has been highly penetrated by imports and being with S&S was a way to not to compete in our segments with the import, okay, which are typically entering by the independent distributors. In Brazil, the independent distributors are buying very -- in very large majority by us. So there is not the same sense of urgency and sense of the economics.

Okay. And second one is on -- I think you highlighted that around 20%, 25% of Brazilian production was going overseas was exported. Can you talk us more about the export market? Is it the U.S.? Is it the rest of Latin America? And don't you see this segment as a bit at risk, given that you have so much overcapacity in Asia, and that could obviously wipe you out in the long term of these markets?

But we do have a mixed strategy for exports for obvious reasons, what you exactly said. So I wouldn't supply [ 3 or 4-millimeter ] to Indonesia doesn't make any sense. So what we export today is more in Americas. The majority is exported to Americas. And then answering your question, isn't it the risk because of the agents? Of course, I don't have in Latin America advantage -- or in United States, the advantages I showed you my cost curve here. No, I don't have the same, but it's not zero either. So I have logistic advantages. I have traditional customers for which I supply for decades already that prefer to buying from us in -- let's say, in Latin America and in the United States, we have the Session 232. So what we are exporting there is normally what is within our quota. That, again, we see no chance that is reduced. And if you ask me what would happen eventually an upside, an increase in our quota. Because we have never been a treat to the American industry in terms of security. That was the reason for the Session 232. So -- and then I said Americas is a majority. So no risk in the United States [ via the block of the Session 232 ]. And in the South America, we have the logistic advantage I said. So a big part of it is shipped by truck. So it cannot be compared lead time, risks and 4x weeks with my Asian competitors. And then I do export a bit for other markets, but then it would be very niche. So in which I don't see my Asian competitors play in there. So it's less commodity grades or something to complement Europe whenever necessary.

Moses Ola from JPMorgan. Thank you very much for taking our questions today. First question I just had was just on the very near-term outlook versus your Q4 guidance, if I may. So what we've seen over the past couple of weeks is a lot of nickel supply come out of the market, and we've seen nickel prices obviously move higher recently. In terms of just expectations to sort of raw material prices, obviously, scrap pricing has moved higher as well. What are your expectations here for raw material prices on the nickel side with all the supply that's going out, do you think that these -- the supply that's come off is temporary? Or do you view it could be more permanent?

Cyclical, always there even in the supply and demand of scrap. So it's a temporary, let's say, up and down and balance between supply and demand. We compensate with the ferronickel if there is a lesser scrap and we have more scrap, and we reduce ferronickel. This is the typical. Then for guidance on price, we are not here to guide you on price. So I will not give this. It's -- you know that in our, let's say, on our release, we have already guided on the fact that we have [ exited ] Q4 with a market which was difficult, and the market what we were expecting is -- market is still difficult in Q1 in Europe.

And then on the recycling business, when could we expect that full run rate of over EUR 100 million EBITDA through the cycle?

I gave it as 2030.

Stijn Demeester, ING. Two questions. The first one is on your M&A preferences. Can you talk a bit about which areas do you see the more potential, I'm assuming alloys and recycling and what type of transaction bolt-ons like ELG. Or would you consider some larger scale M&A? The second one is on Botanickel, maybe a footnote, but have you secured land agreement with owners to back those EBITDA growth targets? Or how do the economics work? Do you buy the land? Do you lease the land? Can you just talk a bit about that?

Okay. For M&A, I will say that our preference is always on 3 aspects. The first aspect is there should be synergy or a very and solid good reason to do an M&A. We have done only on M&A last year was on the forest. We have done 2 years ago was ELG. And we will always proceed with the logic that is linked to our business model and what you have seen and our business as a producer of stainless steel, electrical steel and a very much integrated producer in the circular economy and the sustainability. The second is that I should have also economic sense. We are very much attached on the return on capital employed, as I said. And so we will always look at that with a very wise attachment and on the fact that when we compare external growth to internal growth, our internal growth is a typical area that should be higher than 15%. And the large majority is much higher than 15%. So if we want to grow externally, we need to have this as logic. And the third one is also that we want to keep, let's say, a solid balance sheet that is one of the things that we have always shown to you because part of the duty of the company is to be solid to have a clear dividend policy and to be shareholder friendly. It's part of our duty. For Botanickel, I ask Bernard to...

Well, I would say that for Botanickel, there is not a predefined model that we are running through. Botanickel is a business that we will perform in many different places in the world. And so we look at the local situation and we will adopt the best model or the best approach vis-a-vis the local situation that we encounter.

Andrew Jones from UBS. Just one quick one on the -- with the Brazilian forest, if you compare it to the cost of net coal, like in terms of your cost of charcoal like cash cost, which is clearly pretty consistent. How does it compare? And is the consumption ratio in the blast furnace similar? And how do those economics concern?

Yes, sure. Well, yes. So we can make a TCO, total cost of ownership calculation of the cost. The Coke has an advantage of the density. So the productivity of the blast furnace can be slightly better because of this density. But then it has some disadvantages and the main one is cost. And the difference in cost is huge. So it's really -- well, let me make up easy calculation is more than double. So the charcoal is much, much more competitive. Then you may be asking yourself, so why don't everyone produces with charcoal for a few reasons. The first one is that you have Aperam South America has the biggest, best furnace operating with charcoal in the world. And I can tell you that it's not easy to be operated. I mean I think some of these white hairs of Tim here came from the blast furnace when we [Technical Difficulty] they changed it to Coke, from Coke to charcoal because it was really difficult to make it work because it's too big for charcoal. As I said, it's the biggest one by far. The second biggest one is -- the second biggest one in the world is as big as our small one. So then that's the reason. So it's much cheaper. So it's much more competitive.

And also, sorry, and just in general, we don't rebound. Also, you need 156,000 hectares of the forest. Don't forget. You know what is this? It is -- if you take some kind -- if you take land of the wheat of 1 kilometer. You go from Belgium to Sicily Island. Just have in mind.

Frank Claassen of Degroof Petercam. I've got a question on the use of scrap in Brazil. How much of your sourcing of raw materials is already scrapped. And how quickly can that evolve in the future? How important can a scrap market become in Brazil in the future?

Simple. All the developing markets have not enough scrap to go to the -- to go in the way of circular economy as, for example, Europe and United States. In Europe, we can run all the plants in Europe with around 90% of scrap, because the life cycle of stainless steel is 20 years. In 20 years in a market which is growing with 1% or 2%, so in a certain stability of the consumption. At the end, you collect what is, let's say, the end of life, plus the consumption of the industry, and so you have an equilibrium. In developing market. And typically, there are many statistics about China, et cetera, [Technical Difficulty] have normally a ratio depending on the level of growth and depending on where the industry has started between 25% to maximum 50%. In Brazil, we are close to the 40%, 50%.

[indiscernible] from Citi here. I just have a quick question on the Botanickel. You mentioned that you guys are expecting a double -- low double-digit EBITDA improvement from Botanickel. Do you guys have any guidance on what's the amount of land or the amount of -- given like the X amount of yield, you can get of nickel per hectare of planted. And to achieve that EBITDA target that you're saying, what's the expected amount of hectares or expect the amount of raw material you need to be able to achieve that? And will you be adding that in? Or is there already a capacity for that in what you own right now?

So like I explained that came in my third part, which is the upside of carbon right? So we were talking about that low double-digit EBITDA came from what we expect as nickel value from what Ben has shown as the ramp-up calculated compared to today what we buy as primary raw material, right? So as he has explained before, it's in a pilot phase. It's a working pilot I mean -- and the discussions and that's why I put in my chart, the CapEx depends on the growth ramp up.

So that's if you were to generate the same amount of nickel that you're using at the current moment, price comparison if you were to use Botanickel instead of primary. Okay. And then in order to achieve the current nickel, do you know how much?

Yes. So basically, in Europe, for example, let's say, we have an average of 90% scrap and other parts. Then Bernard has shown 5 different sources -- or 4 different sources, right? Recycling, primary scrap, Recyco, and Botanickel. So -- and then we make an allocation currently where the nickel will come from, and one of that is Botanickel and from that.

It's Tristan from BNP Paribas Exane again. Just a quick follow-up on the sustainability and the CO2 cuts presentation you made. By 2030 in Europe, are you able to really -- I know you're going to be able to cut your Scope 2 emissions with renewables, et cetera. But the Scope 1, is it kind of linger? Or do you have an option there to cut it? Because you get the CBAM kind of benefit, but if by 2034, there are no free allocation and you still need to buy to cover Scope 1, that's kind of a bit of an offset. Is there a way to cut this scope 1? Or there is going to be a remind of it and you'll have to pay for the credits for it?

No, there's clearly a way also to go down on Scope 1. We don't have separate targets also towards SBTi between Scope 1 and Scope 2. But I told you at the basis of what we do, we go to a maximum usage of scrap, the carbon content of scrap is not existing. So the scrap is already stainless steel. And so the carbon that comes from your Scope 1 is mainly coming through the raw materials that you use. When we use Botanickel, when we use scrap, when we use what comes out of Recyco. This will also have a beneficial effect on Scope 1.

Sorry, it's very dark in here. Did we overlook anybody, any questions left?

Ioannis Masvoulas again from Morgan Stanley. Just one more question. You showed a very interesting chart with the cost curve. I think that was just for upper in Brazil on landed basis, where would Europe sit on that cost curve?

Similar in the sense that landed business, without circumvention will be exactly the same. So in Europe, we have a very competitive asset, as I said and repeat including the fact that we have a strong support from Aperam Recycling with the synergy and Service & Solutions. Then against all the countries like Indonesia, China, et cetera, we have a strong protection anti-dumping anti-subsidies. So the large majority of the producer country which have the user to dump this is covered. The only thing that still is in construction with the commission is the circumvention. So there are countries which are circumventing. What is circumvention is you buy, for example, [ auto banned ] which are -- which have anti-dumping subsidy coming from Indonesia. And then you do a light transformation in, I don't know, in Thailand or in Turkey. And with this, you go to Europe, this is typically circumvention because you are not paying the duty which are generated by the protection of raw material by the subsidy, et cetera, on raw material trying to, let's say, sell something which is different from the region. Okay. This has been already treated by the commission with the anti-circumvention against Turkey for hot rolled, and now we have other 3 files for the cold roll.

Maxime from ODDO. Last one on my side. So the word Tesla has not yet been pronounced. And yet I'm quite tempted to ask a question given how -- I mean it could be a really game changer for you and the rest of the industry. So as far as I know, the first Cybertrucks have been delivered in November, unless I'm wrong, they were made of stainless steel. And unless I'm wrong, they were made of your stainless steel. So is there anything more you can say at this stage on this contract? And how we should think about it for your earnings power?

So unfortunately, we are linked to an NDA. And so we cannot disclose any more information about this. You have a lot of information if you look at the site of Department of Commerce because they have published everything, so you know the site, you know everything. What I can say is that stainless steel is a fantastic product. Since many years, it could have been used for the Body-in-White of the cars. Why don't use in the cars because this industry is dominated by 2 big players, which are carbon steel and aluminum. They are much bigger than us. The way of managing, for example, stamping, carbon or aluminum is much easier than stainless steel, okay? And this has been the fact that the automotive industry, which is very conservative, has always looked at the solution as they were the only solution for carbon steel and aluminum. But now with the electrical car, there is hope that people are changing a little bit mindset. And this is happening, in particular, for example, in the battery case, okay? In battery case, stainless steel has a solution, which are, by far, efficient, lighter with higher volumes and cheaper. And this is something that the electrical vehicle producers are really looking at, and it will be a game changer for stainless steel. But also in Body-in-White, there could be, let's say, the experiment of Cybertruck and when it will be larger in the market, maybe somebody else. But you know there are a lot of applications that you cannot imagine, even you have seen on the SpaceX is now in stainless steel, okay? It's fantastic. Who has ever imagine that in the past, that instead of using carbon fiber or titanium, you can do a rocket going in the future to Mars with stainless steel. And indeed, Stainless Steel is the product which has the highest potential for this kind of sector.

Just one final -- sorry, me again. Just on the targets, just to clarify, the EUR 90 million, or let's say, the doubling of EBITDA for recycling renewables. Is that just upside from carbon? Or is that everything? Because I guess you've specified that some of Scrap Recycling, Recyco, BioEnergia growth that's within new value streams and then there's upside of carbon. That EUR 90 million target, that's for everything together. And then if you could give just a bit of color on the timing of when that flows through because you said EUR 40 million improvement will come within Leadership Journey 5. So I guess that's 2025 and then the rest comes later, just sort of phase it.

So the EUR 40 million, you see this 1 of the 4 use cases, which drive that EUR 40 million has come from aerospace recycling, right? So that's your answer, and that's the delta. So we've said over the cycle average of [ EUR 55 million ] for recycling to start with, right? Then for 2025, I've given EUR 40 million out of which recycling -- aerospace recycling is one of the parts. And the growth. So in terms of numbers, 100 minus 45 is 45, right, until the end of 2030. And part of that will come in leadership 25. So that's the math. So I think it's -- we have enough color to work that.

Okay. I think we have no more questions.

Okay. So if there are no more questions, we have a reception now, down. I would like to, let's say, to conclude this Capital Market Day saying few words. First of all, thanking you very much because it has been a long day, but I hope, interesting in the format. You will never replace a visit in Brazil, that's for sure. And I really suggest if any day you are -- transit that way, et cetera, ask us to visit the plant or the forest, and we will certainly be possible to organize that. Now as we have said many times, a company, which is in transformation has to show the reality of this transformation sometimes it's difficult to assess it. Sometimes it's difficult to understand also what are -- what is the sense of this ESG commitment, okay, when you see environment, social, governance. The governance is easier. But when you do social I think that Brazil is showing something different. Social means the people who are there, how they live, the population and you have seen big numbers. When you see environment, you have seen all the initiatives we are taking, which are solid ones and then will be part of the economics of Aperam. The company is prepared for the future. My team is very solid and very competent and really enthusiast of what is the transformation of the company and our journey to the sustainability. I hope you feel the same. I hope that you, whenever your investor, will hope -- I hope you will feel the same. And I thank you for the participation. You will have time for further questions later during our reception. And of course, Thorsten, Sud and myself, we are all always in the road show and meetings with you, and we'll be happy in the future to update about the situation of the markets, et cetera. but at least, I hope that from today, you have clearly in mind what is our engagement in terms of Brazil and sustainability. Thank you very much.