L'Air Liquide S.A. (AI) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Air Liquide First Half 2026 Results Conference Call. [Operator Instructions]. I will now hand over to the Air Liquide team. Please begin your meeting, and I will be standing by.

Good morning, everyone. This is Aude Rodriguez, Head of Investor Relations. Thank you very much for attending the call today. François Jackow and Jérôme Pelletan will present the first half 2026 performance, for the Q&A session, we will be joined by Emilie Mouren-Renouard; and Adam Peters, both VP, overseeing respectively, EMEA and North America. Adam is [indiscernible] from the U.S. For our next events, we look forward to welcoming you to our digital Capital Markets Day on October 5. Let me now hand you over to Francois.

Thank you, Aude, and good morning, everyone. It is my pleasure to share Air Liquide's operational highlights for the first half of 2026. Against [indiscernible] demonstrate its resilience, delivering sustained growth and strong financial performance. [indiscernible], while driving robust execution today, we continue to secure our long-term growth trajectory through a record volume of new project signings. Let's start with Slide 3. Our first half results clearly be affirmed the structural strengths of our business model. Comparable sales growth increased to 3.5% in the second quarter, landing above expectations and representing a pickup compared to the 1.9% in the first quarter. This positive momentum was primarily driven by strong underlying performance across both booming electronics and improving industrial merchants. Overall, sales growth in the second quarter reached plus 5.2% excluding FX and energy, bolstered by the successful and speedy integration of DIG Airgas in January. The strong top line performance validates our proven ability to drive growth both organically and through highly disciplined acquisitions in core geographies. At plus 110 basis points, margin progression is well on track with all levers of our transformation program contributing. Recurring net profit reached double-digit growth, up 10%. Cash flow remained strong, up plus 8%, both excluding currency impact. Our recurring ROCE stands at plus 11% in spite of increased investments, which demonstrates our disciplined capital allocation and improved performance. Our strong cash flow and balance sheet give us the firepower to continue to invest in the long term. Indeed, the first half of 2026 is marked by record-high signings, driven by an exceptional momentum in electronics and several major projects in large industries. This drives our backlog of signed projects under execution to another record of EUR 6 billion, up versus EUR 5.5 billion in Q1 '26. Combined with our active M&A strategy, this directly secures our future growth. Our ESG KPIs remain firmly on track with a few noticeable progresses this semester. One is the start-up of 2 renewable electricity sourcing contracts in [ Secunda ] in South Africa. As of now, close to 50% of these contracted sourcing has already started up, aligned with the objective to reduce the group CO2 emissions by more than 30% in one of the largest industrial gases production site in the world by 2031. So in summary, in the first half of 2026, despite the macroeconomic conditions, we have not only successfully delivered simultaneously on growth and profitability, but also prepare the next phase of growth. This is truly the interim strength of Air Liquide. Now on Slide 4. Air Liquide remains intensely focused driving strong margin expansion across our 3 main levers. We reached accelerated industrial merchant pricing of plus 5.2% in Q2, successfully addressing inflation through smart pricing management. We delivered also almost EUR 300 million of operational efficiencies in H1, through continuous improvement and executing, and that's very important, our structural transformation program. We pursued accretive portfolio management to optimize our footprint and increase our local density. We are successfully executing our rigorous margin expansion plan, delivering, as you see clear and measurable results. Moving now to Slide 5. We are driving an exceptional momentum in electronics, signing new projects and strengthening our #1 leadership position. In fact, in just the first 6 months of 2026, our electronics project decisions reached over EUR 1 billion. If you think about it, that's 1.5x of our total for all 2025. The momentum is supported by a diverse mix of projects and geographies, almost all driven by artificial intelligence needs. Looking at the various projects on the slide. Following our acquisition of DIG Airgas in Korea, we further leveraged our global relationship with key players like SK hynix, with project wins both in the U.S. and in South Korea. In the U.S., we secured 3 large-scale projects during the first half, representing a total investment of over $480 million, all dedicated to advanced chips with leading semiconductor manufacturers. Meanwhile, in Asia, our project signings achieved outstanding momentum, totaling more than EUR 550 million. These wins reinforce our global market leadership and give us strong visibility on long-term profitable growth. On Slide 6, we are capturing the growth in large industries with the signing of 3 major projects in the first half. They expand our presence in the U.S. and directly support U.S. industrial reshoring. In large industries in the U.S., we are investing $350 million under a new long-term agreement to supply air gases to Hyundai-Posco in Louisiana for the landmark low carbon steel plant. This new infrastructure directly supports the development of critical domestic and low carbon materials. It also enables our customer international expansion while actively contributing to the reshoring of American industry. In Texas also, we strengthened our long-term partnership with Oxea Chemicals by expanding our production capabilities at their base City site. This strategic $200 million investment involves the construction of a new, highly efficient plant to produce low carbon in gas and hydrogen. This project will reduce the group CO2 emissions by 64,000 tons while providing also additional capacity. This project, and that's important, underscores our technological leadership to capture profitable growth in a key U.S. industrial basin while supporting climate objectives. Finally, in Kazakhstan, we have entered into a new long-term agreement with Silleno to supply nitrogen to their upcoming polyethylene facility. Through this EUR 70 million investment, we will own and operate to state-of-the-art energy-efficient nitrogen production units. This project consolidate our presence in this strategic industrial basis, allowing us to capture strong operational synergies and also support a key regional petrochemical hub. You have to keep in mind that these major large industries wins demonstrate our relevance and differentiation across a broad number of strategic and structural growth areas. To conclude, on Slide 7, Air Liquide's performance in H1 demonstrate operational and strategic execution on all counts. First, our results show strong growth despite the challenging context along with great progress on our margin expansion road map. Also, our active M&A strategy continues. We were able to close our landmark DIG Airgas transaction ahead of schedule. We look forward now to the growth. This will continue to provide to the group. Finally, backed by a record level of project signings, securing future growth, we are very well positioned to sustain our long-term growth profile. In a nutshell, I'd like to say that we are executing today and preparing for tomorrow. I thank you for your attention. I will now turn over to Jerome to detail the financials. Jérôme, please?

Thanks, Francois, and good morning, everyone. Turning to Page 9. I will now go through our financial performance in more detail. So for the second quarter of 2026, group sales delivered strong comparable growth at plus 5.2%, excluding nary pass-through and currency effects and including the scope effect from the DIG Airgas acquisition net of the biogas [indiscernible]. On a comparable basis, growth stood at plus 3.5%, landing above expectations and representing a strong pick up over our first quarter performance at plus 1.9%. I will briefly call out Engineering & Technologies, reaching EUR 420 million in H1, up plus 4.6% on a comp basis and plus 8.8% in Q2. This increase is explained by the finalization of several unit construction for third-party customers in engineering and construction. So looking at the first half, overall, group established sales increased by plus 0.8%. Our reported top line was impacted by currency headwinds at minus 3.6%, which were only partially offset by the plus 0.1% positive energy impact. Additionally, the strategic acquisition of DIG Airgas, net of our biogas divestiture contributing a positive scope effect at plus 1.7% during this period. Consequently, total comparable growth for the first half of the year ended a solid plus 2.6%. So now moving to Page 10, showing all our regions are growing. In Americas growth remain at the same high level, same in Q1. And in Asia, we delivered sequential growth led by material pickup in activity. EMEA has also seen a modest increase in growth versus last quarter. From a business line standpoint, the growth increase in Q2 was driven by strong electronic sales and an improved industrial merchant performance. Healthcare continued its steady contribution and line remained mixed. We have created, as you see a balanced portfolio across business lines and geographies that provide inherent operational resilience, proving again its value throughout every stage of market cycles. Let us now provide you with more granularity on the activity in our main geographies in Q2 2026. I am on Page 11. Indeed, we sustained high growth in the Americas, plus 5% on a comp basis. Large industry sales in the Americas were again led by strong activity in the U.S. This increase was driven by contribution from new project start-ups and ramp-ups alongside high demand across our Gulf Coast pipeline network, especially from both chemical and refining customers in reaction to the development in the Middle East. In merchants, sales were driven by an increased pricing effect at plus 6.7%. Volume were slightly -- were up slightly excluding impacts of the global [ helium ] shortage. Solid bulk gas activity was supported by a pickup in [indiscernible], notable for the space industry, while construction benefited from ongoing momentum in data center buildouts. Scale growth in the Americas continued at high level. And finally, electronics saw strong progression of advanced materials and specialty materials, offset by lower equipment and installation sales. Sales in EMEA [indiscernible] supported by continued positive health care activity and an improved IM. In large industry, customer demand remained low, driven by weak content sales and low activity in the Middle East, partially offset by growing hydrogen to support robust activity in refining. Within merchant, our pricing action increased to plus 3.1%, demonstrating our ability to proactively counter growing inflationary pressures. Volumes were slightly up, excluding the impact of the global helium shortage. Finally, Healthcare delivered sustained growth at plus 4%, supported by solid medical gas pricing and [ homes ] care activities. Activity in Asia now was boosted by a surge in electronics, further amplified by our DIG Airgas acquisition. In large industry, the activity remained mixed with hydrogen sales growth in Korea, not fully offsetting low activity in the regions. Q2 merchant sales grew at plus 2.1% up plus 3.4% when you exclude [indiscernible]. Pricing demonstrated a positive sequential trend improving from negative 0.4% in the first quarter to positive plus 1.4% in Q2. Notably, sales growth in China increased and in Q2, propelled by strong demand across on-site packaged gas and bulk gases by performance across the rest of Asia remain more mixed. In Electronics, we delivered strong momentum and this performance was driven by the very strong demand for carrier gases and advanced materials alongside the rolloff of prior year equipment and installations copies. Turning now to Page 12. I would like to give a quick update on our [indiscernible] operation in the Middle East. As you know, the region, of course, remained volatile. However, our local team is safe and doing an outstanding job to supply our customers and our assets remain fully intact and operational. The global [ EDM ] supply chain remains a point of attention. Production in Qatar has restarted a limited capacity, and we are utilizing -- sorry, road transport for our helium [indiscernible] container, which helps this global supply pressure. Of course, we are continuing to keep adapting to a fast-changing environment. Future results have demonstrated, again, the resilience of the supply chain. We're effectively managing the situation to minimize the impact on both our customers and our financials. As for the potential outcomes, the last few months have proven us right and we expect the coming months to confirm this trend even more strongly. I will now comment on our Q2 activity by business line. I am on Page 13. We are seeing an acceleration in merchant at plus 4%, with pricing strengthening to plus 5%. The negative delta is volume, which were attributed to the helium shortage. Excluding this impact, merchant volume increase, notably in construction and utility sector in the Americas fostered by digital infrastructure and data center development, technology in Asia and pharmaceutical in Europe. In large industry, a record high volume in the U.S. are offsetting low [indiscernible] in Europe and soft demand in the Middle East, while activity in Asia remained mixed. Turning to Page 14. Following the rolloff of challenging prior year equipment and installation comp year-over-year, growth in our electronics business has accelerated to plus 10% in Q2. The key drivers of this performance include, of course, [ carrier ] gas startup and ramp up, mainly in China and Taiwan alongside broad-based momentum in Advanced Materials. Top line results were boosted by one-off South Korean customer pulling Q3 order forward following the successful [indiscernible] IT merger of the company, DIG Airgas and Air Liquide Korea but even normalized for this, the underlying electronics cost is very robust, plus 8%, a truly excellent operational performance. Finally, this year remained a consistent contributor to our growth this quarter. Performance in medical gases was anchored by our premium value-based commercial model, innovatice care -- in home care, sorry sustained growth in our patient base successfully offset the impact of strategic divestiture completed in Europe impacted the period. Now moving on margin discussion, Page 15, as Francois highlighted earlier, our transformation initiatives are yielding structural benefits on our margin improvement levers of delivery. In the first half of the year at the group level, we delivered a plus 110 basis point expansion, excluding energy pass-through as well as the PPA impact of the DIG Airgas acquisition. Keeping the PPI impact, the improvement remained very strong at plus 100 bps. [indiscernible] by our results will remain intensely focused on cost discipline with personnel costs down minus 1.6%, purchased minus 1.5% and other expense up plus 3% on a published basis, depreciation was up plus 3%, reflecting the start-up of our new production unit. Let us now review our ongoing margin improvement plan execution in more detail. First turning to pricing in merchant, persistent inflationary pressure continue to do our pricing action with Q2 pricing reaching plus 5%. Our primary focus is on cost discipline and actively managing the price to cost spread to drive further margin expansion. Second, efficiency reached a record high EUR 299 million, representing a plus 4% increase over the elevated baseline of last year. Those substantial gains were driven by the seamless execution of group transformation initiatives globally. Third, we continue to pursue active portfolio management. As a reminder, closing the Airgas early in Q1 give us the full year of benefits. Integration is moving sites, fast, creating even more value than we expect. Beyond this, we are pursuing disciplined bolt-on acquisition to drive local density while actively pruning our portfolio to ensure capital growth where it yields the highest return. Moving on to review our P&L in more detail, I am on Page 17. Nonrecurring operating income and expense accounting for minus EUR 123 million in the first half of 2026 mainly due to costs related to the acquisition of DIG Airgas in South Korea and restructuring costs linked to our transformation plan. Net financial costs stood at EUR 210 million for the first half of 2026. This includes a net debt cost of EUR 149 million, up 27% compared to the first half of 2025. This increase is very much primarily driven by the financing structure put in place for our DIG acquisition in South Korea this impact was partially offset by a reduction of the factoring cost with almost the end of factoring program in H1. Our effective tax rates stand at 26.4%, higher than the 25% in H1 2025, mainly because of nondedicated costs linked to the DIG acquisition. Net profit is up plus 1.2% as published and plus 6.5% when you exclude the currency impact, the recurring net profit group share stood at EUR 1.9 billion, up plus 4.4% [indiscernible] and a very strong 10% on a constant currency basis. On Page 18, now, our robust cash flow generation and strong balance sheet allowed us to finance dividend CapEx and also the DIG acquisition. Our net debt is at EUR 13.9 billion end of June 2026, marking a plus EUR 5.5 million increase from December 2025, following the financing of the DIG acquisition, the payment of EUR 2.2 billion in dividends is made, [ 1.8 billion ] of industry investment and the halting of the factoring programs, our gearing has thus increased to 45% adjusted for the dividend payment seasonality effect. It is indeed worth mentioning that our working capital requirement increased by EUR 1.4 billion in the first half of 2026 compared to year-end 2025, but it is key to note that excluding factoring, the underlying operational increase was just EUR 0.4 billion. Indeed, our decision to help factoring program in H1 for cost effectiveness naturally added more than EUR 1 billion to trade receivables. Next, let us now turn to Page 19, return on capital on to [indiscernible] stood at 11%, which is quite stable compared to the first half of 2025 despite the dilutive impact of the acceleration in investment. Moving to Page 20, we'll now review our main investment KPI. We're at an all-time high industrial -- investment decision in H1 2026 at EUR 2.9 billion, up plus 26% year-over-year. These decisions include above EUR 1 billion of electronic carrier [indiscernible] that Francois discussed earlier as well as major large industry projects in U.S. Steel and Chemicals. Our investment backlog reached an unprecedented EUR 6 billion, an increase of plus 30% year-over-year, very much and well balanced across electronics and large industry with strong regional and project diversity. While upcoming Q4 start-up will naturally draw down our backlog, a strong pipeline of new dealers will help to replenish it, giving us a strong and high visibility in our midterm growth. Our 12 months portfolio investment opportunity reached EUR 4.8 billion, plus 17% higher year-over-year at the end of June 2026, despite a record EUR 2.9 billion of investment decision during the first half, that are, of course, moving into the backlog. That demonstrates the strong momentum we are seeing in new project development. The pipeline remains highly diversified, comprising nearly 80 distinct projects. Electronic has now emerged as the primary driver, accounting for approximately 50% of the portfolio. The total portfolio of opportunities also including opportunities this time. Beyond 12 months, is stable and exceeds EUR 10 billion. So on Page 21, concluding the financial review, we confirm again our guidance for 2026 and 2027 accumulating has a plus 550 bps margin improvement over a 6-year period. Thank you very much for your attention. And I guess, we'll now begin the Q&A session.

[Operator Instructions]. We will now take our first question, and this is from Alex Sloane from Barclays.

Two from me, please. Firstly, around Helium. So Industrial Merchant delivered improved Q2 growth really helped by pricing and China recovery you've called out. I mean that looks like it's despite kind of a low single-digit helium related volume headwind in Europe and the Americas. In your expectation for the H2 group growth to be similar or slightly better than H1, are you assuming a similar drag from helium availability? And should we be concerned this becomes a limiting factor on electronics growth? Are we still some ways off that given storage? And I guess more broadly, just thinking about your similar or slightly better comment on that second half outlook, would Q2 delivery adjusted for the order phasing in electronics be a broadly sustainable run rate for H2 expectations?

Thank you very much, Alex. So the first question on helium. As you know very well, I mean, the Qatar source was quite a significant source of helium globally for all the industry. On top of that, what we have seen in Q2 is some restriction coming from Russia for -- I mean, the products which was going to China, especially and some restrictions also coming out of China. So the market is -- was getting more tense, I would say. On the positive news is that the production from Qatar has restarted at a reduced rate, but we have been able to secure some volume from this source. So that's, again, a very positive news. Our expectation is that this will continue and will limit basically the impact of helium on our sales for the second part of the year. We have, of course, to be extremely cautious about the outlook for this part because we see that the situation is quite fluid even if what we see and what we hear is quite positive. As we speak, I mean, the helium production is still working and again, should contribute. That's, of course, on top of our existing infrastructure with the cavern that we are using very successfully and also the multiple other sources that we have today and that we have activated, again to limit overall the tedium impact for the second part of the year. Speaking of the impact on Electronics customer, I think that was part of your question. Overall, we managed the supply of our electronics customers for helium. As you know, we have a long-term contract, and we have the capabilities to supply their requirement. So we have committed and we have been able to deliver the volume. So it's in no means a limitation to the business we are doing with the electronics for helium but also for the rest of the portfolio. So again, strong resilience of the group in spite of the adverse condition that we do expect to improve. For the electronics itself, you have seen that clearly, there was an acceleration in the some quarter. This is a result of 2 things. The first one is we see less and less the impact of the very high E&I, equipment and installation sales that we had in the previous quarters which was, to some extent, masking the organic growth of electronic. That's one. The second part is the fact that electronics is picking up and it's picking up because of the contribution of the investment that we have done previously for carrier gases and it's clearly, I mean, delivering. And also, that's a very positive news. The very strong sales that we have been enjoying for the advanced material, the proprietary molecules of [indiscernible] which is clearly picking up in the second quarter. So we see that some customers are catching up a little bit with advanced purchase, so there may be a little bit of this effect on the advanced material. But all in all, we do expect electronics to remain in the range of 8%, maybe 9% for the rest of the year. Again, very strong electronics. It's a good news, and I think it's a good sign also that the investment and the position of the group is delivering.

We'll now take the next question. This is from Alejandro Vigil from Santander.

The first one is about your OpEx plan, the efficiencies. You have achieved EUR 300 million in the first half. If you can elaborate about the outlook for the coming quarters, particularly in EMEA, that probably the growth profile of this business -- this division is lower than the other divisions. And the second question is about the net debt. And you explained this factor in the first half, which are your expectations for the full year in terms of net debt? The evolution of net debt in the -- in the second half of the year, please?

Hello, thank you very much for your 2 questions. Jérôme?

Of course. Thank you very much. And so we'll go through your 2 questions. So as related to the efficiencies, you're right, the efficiency has been very strong in H1 to nearly EUR 300 million. It's plus 4% versus last year. Basically, this good transformation is multiple. We are continuing our transformation of the company as we have been doing in the last years. And when you look at the different buckets. There is basically 3 different buckets that explain the acceleration of those efficiencies. First, there is an operational efficiencies. We are accelerating on the transformation of the industrial operation, the creation of the group industrial operation direction is happening, accelerating into the process and to the global utilization. We have multiple projects ongoing using more and more artificial intelligence to make our assets more effective. So we are doing that, and we are entertaining a very good return as for now. And this, of course, will continue because we are very much at the right time, doing and accelerating on that. That's the first bucket. The second bucket is, of course, procurement. Procurement is delivering and it's continuing. We have a global procurement organization with -- has totally shifted in terms of gear, in terms of accelerating on those products with a strong acceleration in the deliveries. And the last point is the restructuring impact and the efficiencies that also part of these efficiencies. So this continue to -- we continue to precipitate in the second part of the year, of course. Now to come back on the factory. So you're right, there is a factoring impact, which explains 1 -- a little bit more than EUR 1 billion, slightly and EUR 1.1 billion in the net debt, I would say, the next evolution during the first half year. This is the [ disfactoring ] program comes from the long term at the period of the Airgas acquisition nearly 10 years ago. It was an optimization program at that time. but it's not anymore. When we saw the impact of the data costs that we pay for factoring and the receivables compared to our net debt cost, which is today at close to 3%. Clearly, it is not making sense to continue. It was a lack of optimization. And when you see already the impact during the first part of the year, you see that -- the cost of the debt has decreased by minus 7%. When you exclude, of course, the one-off impact of the Airgas integration, the one-off cost that we have. But when you exclude that and [ complier ] compared to last year, we have a minus 7% of decrease in cost of financing, which is purely the impact of moving and to get out of this factor. So this is very good and a very strong optimization that our balance sheet can permit. So we have decided to do that was purely making sense on the cost-effectiveness can point. Now the impact on H2 is quite easy. We have in the first part of the year, I would say, stopped those [indiscernible]. So you will have also the impact in the second part of the year, but the major part has been, we're just finalizing maybe a few hundreds of factoring remaining, but the biggest part has been already accounted for in the balance sheet in the first half of the year. That's it.

Thank you very much, Jérôme.

We'll now take our next question. This is from John Campbell, Bank of America.

Two quick questions, if I can. So if I look at your first half margin improvements, you delivered definitely on your 100 basis point target. I noticed perhaps with an unusually strong performance in the Americas, you've delivered over 200 basis points year-on-year. And I think you qualified that stating that it had some help from some sort of favorable exceptional item. It would be very helpful if you could elaborate on what exactly was that item and perhaps what was the quantum? Second quick question. You've unveiled 3 major electronics projects basically in July alone. I guess the natural question is, how do you feel about the pipeline of future opportunities. I guess the implication from your 12-month opportunity set is you actually see sort of a larger opportunity than you said in Q1, but perhaps maybe elaborate on the regions where you see these biggest opportunities? And then maybe a very quick one as well. Should we consider maybe that the gas intensity of these new semiconductors is structurally higher. So should that support electronics volumes?

Thank you very much, John, for those very good questions. Margin, Jérôme, I will talk about the electronics projects.

Yes. Thank you very much, John, again, for your questions. So margin in Americas has increased significantly, you're right, plus 200 bps versus H1 '25 [indiscernible] energy. So basically, we have 2 or 3 big items. First, merchant large industry and health care activities contributed to the margin improvement through efficiencies and price increase, particularly in [indiscernible] and also efficiency also generated in electronics and a large industry benefited also some specific items that help. So that explains very much the bulk of these increases, as you said, is very significant in the Americas.

Thank you very much. So John, you're asking how do we feel about the electronics project, I would say, very good very, very good, actually, because we have a very strong position, a very strong footprint and an offer which is recognized, trusted by the leading customers. So we had, in fact, I mean, signed 1.5 all what we signed in 2025 for electronics already in the first part of the year. So very good momentum. You are asking region by region. Maybe we will start with the U.S., and I will ask Adam to say a few comments on what he sees in the U.S. on electronics project, and I'll come back to the rest of the world. Adam?

Yes. Thank you, Francois. And John, thanks for the question. So we've had a very productive quarter in the U.S. in terms of new project signings across the board, but particularly in electronics. As you've noted, we've signed 3 big new contracts for carrier gases. And we see that momentum continuing. So we have very active ongoing discussions with all of the major players in terms of expansions or new projects going on in the U.S. and feel like we're continuing to win our fair share of those projects and we see that continuing as the AI trends continue to go forward and expansions are continuing in the same way. Maybe last point I would make is in terms of gas intensity. You're right, the gas intensity is higher when you look at these new fabs that are supporting advanced chips for high bandwidth memory or for the logic needed for AI. And this is just a benefit, I would say, from the technology portfolio that we have the efficient nitrogen generators that we have and across the entire fleet of what we do for carrier gas supply.

Thank you very much, Adam, for the rest of the world, it's mostly Asia where we are also very well positioned. So if we go through some of the key countries, we see again a very strong momentum. I would say Japan is waking up to some extent. We see that there is a very strong support from the government and the key players, investment there. We are the only global international gas company to be there. We had some successful signing there. and there may be more to come. Taiwan is, of course, extremely dynamic, concentrating a lot of investment for the most advanced chips, especially. And there again, we are well positioned. Korea, of course, thanks to the DIG acquisition, now we are well positioned to meet the needs of the leading memory players, especially, you have seen tremendous announced by the key players with several new compasses, mega-campuses being announced. You have seen that we have been successful in securing some of the existing business, and there is an acceleration in the requirement really raise for speed in this area. And finally, China, where we have a #1 position also for the electronics, which is a very, very dynamic in terms of needs for the semicon industry with a good development. So when we combine all that, we see that there's a lot of green lights in this, thanks to our business model and what our customers are telling us. We are quite confident that -- this will continue for some time, again, meeting the needs of the digital world in general and more specifically the needs of AI, clearly. So good momentum and very good position on the --

[Operator Instructions]. The next question comes from Chetan Udeshi from JPMorgan.