Forvia SE (FRVIA) Earnings Call Transcript & Summary

Good morning. This is the conference operator. Welcome, and thank you for joining the FORVIA Third Quarter 2022 Sales Conference Call and Webcast. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Olivier Durand, Group Chief Financial Officer. Please go ahead, sir.

Yes. Thank you. Good morning, everyone. I'm with Alice Schmauch and Marc Maillet, respectively, Deputy CFO and responsible for Investor Relations for this call. Welcome, everyone. So this morning, we will present, in fact, the updates on Q3, not only on the revenues but also on events in the period, in particular, on deleveraging, the management of the current context, and in particular, the energy crisis and the development of our order book. If I go to Page 3, on the main events on the commercial side, we have a strong order intake year-to-date of EUR 24.5 billion. I want to highlight 2 things about this. Number one, we are selective. We have beef-up our criteria of selectivity, in particular, on the cash aspects. This is in order to foster our cash generation and also to be in a stronger position in our inflation negotiations. However, the demand is clearly there on the different aspects of our portfolio. And it's interesting to see the quality of the order intake of Q3. We got a major deal with Daimler on the complete seats for EUR 1 billion. We got additional wins in hydrogen and in particular, with a long-haul truck leader for mass production of hydrogen storage systems. So the cumulated order since the beginning of the year on hydrogen is more than EUR 800 million now, which is confirming our impact in this activity. And the third one that I would like to highlight is that HELLA has won around EUR 1 billion of awards in the past quarters with 8 different electrical vehicle models with German premium manufacturers and phygital shields, let me explain once second what it is. In fact, when you have an electric car, you are now, in fact, having more flexibility in the front of the car because you don't need a radiator and you don't need the exit of the air in the front of the car. So this front, you can use it differently. And with lighting possibilities of leads and the innovation of HELLA Lighting, we are proposing solutions to use this one in flashing and lighting perspective and also a protection, in fact, of the sensors and the radar equipment that can be in the front. So it's helping, in fact, the car in terms of design and in terms also of utilization, autonomous driving, and other applications. And we are clearly a winner in this field. The second thing I would like to mention is the other development of our hydrogen activities in Q3, we have been selected in a significant manner in the context of the IPSA financing at European level on the hydrogen activity. We have been allocated EUR 213 million on our tank activity, which we own 100%. And we have -- we can say also that Symbio, which is our 50-50 joint venture with Michelin has been granted significant level of financing support from this IP for their own activity. So clearly, it's allowed the development of this activity in a financial improved manner and the development of the hydrogen solution for Europe development. The LR, which has still a difference in timing, as announced its results for their Q1, i.e., June to August. Once 2 things to mention is the improvement of profitability expected over time and which is in line with, in fact, our expectation. And the second point is that there will be alignment of the closing calendar with HELLA at the end of the year. There will be a short fiscal year of 7 months ending December 31st. So next year will be the same calendar, the same quarters for HELLA for FORVIA as a whole, which will help on the visibility of our activity, which is a good thing. And last, an additional confirmation of -- that we are in a good direction on our ESG practices with the inclusion of FORVIA in the CAC 40 ESG index. And the more financial side of activities in Q3 as some on our deleveraging activities. So number one, as announced, we have the sale of HBPO shareholding to Plastic Omnium. The antitrust reporting well. There are 4 clearance to get have been received already, including this week, the one of the European Union. So we are on track for closure expected end of this year. The second thing to mention is that we have different trials ongoing. They are progressing quite well. So we expect at least another deal to be announced by the end of the year and possibly several. On the financing side, in complement to the HBPO sale, we achieved EUR 0.5 billion of new financing in Q3, meaning that the remaining refinancing of the acquisition of HELLA has been divided by 2 in Q3 from 1.7 remaining in July to less than EUR 900 million currently. And we have other financing that we are looking at to complement this refinancing as soon as possible. Now I will go back to the Q3 sales activity and try to lay out the different elements, both by regions and by business groups. So number one, EUR 6.6 billion, up 92% on a reported basis, clearly, very strong growth. If you look at constant scope, i.e., excluding the consolidation of ELA, which is representing 54% of this growth. And excluding currencies, you have a 31% growth year-on-year at constant scope and currencies. This is representing an outperformance of 490 basis points excluding the current unfavorable geographical mix. As you know, we are heavily present in Europe, and Europe was the one growing the list. But I think what is important, even more than our performance is the overall growth of the market. The market has increased by 29.5% in Q3 from a low base of last year, but this is reflecting not only the recovery of China from lockdown of Q2 but a solid activity in the region. We still have lockdowns in some places of the country. The [indiscernible] growing so much in this remaining contract environment is a good sign. The second is that even though they are still semiconductor shortages and stop and goes, they are less prevalent than before. And this [ long ] environment of the production, and I think it's true not only for us, but also for our competitors is -- and our customers is, in fact, getting a little bit less constraints from a product spend standpoint, which is a good thing, and we expect this to remain the case for the rest of the year. And you will see that reflected in our upgrade of the guidance. If I move by business groups, so start [ sitting ] in Page 6, seating represents 30% of our revenues strong outperformance in revenues by 1,140 basis points on the back of a strong increase in China. As you know, we have a very strong historical base, but we have extended this with Chinese OEMs and notably with BYD, which is one of the strong developer of business in China and a winner on the - another winner in the electrical vehicle landscape. So we are with them in a significant manner, and we are also with American electric vehicle carmaker in the region. So very, very positive development from a revenue standpoint in seating. Interiors, we are, in fact, at an organic growth of 27.7%, slightly below the growth of the market. This is reflecting, in fact, the regional mix, first of all, because by regions, we have been quite good and some unfavorable customer mix in Asia in which we grew by 20% only. Moving on in Page 7, on Clean Mobility. Clean Mobility represents 18% of our revenues for both commercial vehicles, hydrogen and our ULE solutions for passenger vehicles. The revenues have increased by 22%. This is below the automotive production growth. This is reflecting the development of electrical vehicles. But I would like to highlight that year-to-date, we have grown organically by 18% compared to 9% on the production. So a solid performance and very important for us given the cash contribution of our cash cow. ClarioElectronics, representing only 4% of the total business of the company. This -- the performance is 24% organic growth year-on-year. This is below the market for one reason, which is that in China, the main plant has been affected by lockdown, measures of the government related to COVID in the province of Jiangxi which we are operating and the factory has not been able to operate during several weeks. So it's more an external factor than really a level of activity. The order book is solid in Clarion Electronics. Page 8 to reflect the HELLA contribution. So one message before we will present from now on the new segment reporting for the FORVIA organization. So we will highlight, in fact, lighting electronics and life cycle solutions. HELLA has started this in their quarterly publication that was presented the months ago on the revenues. We are doing the same here, and we will do this in full at the end of the year. So you see that electronics, in fact, is actually higher than lighting in terms of activity on the back of high demand for energy management and the different component business and body electronics that this business group has. If I move on to more regional look at our revenues of Q3. So all the revenues here are reflecting the total FORVIA activity in the region with scope effect, reflecting, of course, the HELLA consolidation. So Europe, strong outperformance of 820 basis points. This is the case, in fact, on all the major business group, Clarion Electronics being small in the total. So sitting interior screen mobility have been slightly below the 30% and above, in fact, the growth of the market, which was 20.3%. North America outperformance of 220 points in the region. This is mainly sitting interiors, Clean Mobility, a bit lower on the reasons I mentioned before. Even though we are not talking about profitability strictly on Q3, just to highlight that [ Ireland Park Evolution ], i.e., our Michigan seat business that we have highlighted as being problematic is progressing well in -- on the operational side, we are in a very good direction. So we confirm the trajectory presented in the summer. Moving on to Asia in Page 10. So strong market growth, 33.6% and strong activity on our side. We have an outperformance of 200 basis points in -- on top of the evolution of the production in the overall Asia, which means that clearly, China, which is the main contributor for us in the region, as you know, is performing extremely well. We grew organically by 38.4% in China, and we're setting BYD being a key contributor. The rest of the world, I will not comment too much, but this is related to our activity in South America and South Africa. Just to say that we are, in fact, quite -- we are very careful about our activity in South America and South Africa is a good profit pool. Now moving on, on the other topics that our revenues, a bit more details in Page 12 on our disposal program. So as a reminder, HBPO sale of a 33% stake represents 30% of the program. And as mentioned before, we are on track on the [ antitrust ]. The second point is that we anticipate that we will have at least one announced before the year-end and possibly several. So progress on the other files is good. And I want to highlight other files. We are working on different files, which is above -- clearly above the target of EUR 1 billion, in fact, to ensure that we are able to complete and that we are not dependent on a single deal, and this is clearly working. Moving on, on Page 13 on the refinancing. So you see the detailed table is recalling in fact, what was at stake in this domain. We have, in fact, initially to finance EUR 5.5 billion in relating cash EUR 4.9 billion, given that the family that was the owner of HELLA has been, in fact, participating to the Faurecia shareholding and is now the biggest shareholder of Faurecia reflecting the confidence in the merger of the 2 companies. So the real cash financing was EUR 4.9 billion. And you see that with what has been done in the past period, and I would like to highlight the last part since the start of '22, the capital increase in June, but also what has happened in the summer with the EIB and the syndicated loan that we did with banks in Latin America, mainly Mexico had good financial conditions, plus the divestment of HBPO remains less than EUR 900 million to do. And we are working on the 2 things. #1, complete the disposal program and number 2, different financing in order to ensure that we are fully refinancing deal acquisition by August 23 when the bridge-to-bond mature. Moving on to how to protect our profitability and cash generation. So a highlight on the energy crisis management in Page 14. As you know, the spot price of energy bill have exploded in the recent period in Europe. And I would like to highlight what is our position and situation on this. We have put hedging in place before this crisis. And this hedging, in fact, allow us to have, in fact, more than 90%, I think it's 94% of '23 being covered, which has 2 benefits. Number one, we know how much will cost the energy next year for us. Number 2, we know we have, in fact, that is increasing by 1.8x, a major one, but compared to the spot price evolution that you see on the right-hand side, clearly, a difference. The second thing is that we are doing our work internally to protect, in fact, on the energy consumptions. So 2 things. We had launched before this crisis, a self-production program, part of our sustainability ability activity. And we are underway to have 1 million square meters of our -- the root of our plants covered with solar panels. The second is that we have deployed a program of frugality of energy consumption in Europe that we call We save energy across all our sites in Europe that will consist in lower heating that will consist also, in some cases, in closing some days on the non-production sites and also, in fact, giving pullover, the sweaters to the people so that we can work properly. And the last thing is that in July, I mentioned that we are launching -- preventing measures regarding ensuring that we are able to have -- to avoid direct problems on our production from energy shortage. Those measures are now in place. We have reviewed 2,600 suppliers in order to check their situation. And for a few of them on which they were a topic, we have defined to buy in advance or to have them produce in consignment for us so that it can be done now rather than in the middle of the winter, which is the most risky period in Europe. And on our side, we have done a safety measures as well. So we are doing the things that are in our capacity to ensure, in fact, continuity of service in the winter. In Page 16, we have the upgrade of our guidance. So given what is happening currently in the market with production volume getting better with constraints overall, getting lower, they remain quite important. We are still in a constraint environment, but this is less the case than before. We are revising 2 things that were present in our guidance. So one is on the volume. So we expected so far million vehicles for the year, i.e., H2 equal H1, and H1 was the world trend plus full lockdowns in many China in Q2. We see that, in fact, IHS Standards & Post Global Mobility later forecast is at EUR 79 million. We see that Q3 and our EDI were strong. So we revised -- still in a prudent manner to 77 million vehicles. The second is we are taking into account the evolution of currencies and in particular, the strength of the U.S. dollar. So the average we are taking for the year is 1.05 on the back of the current situation on the U.S. dollar and same on the [ renminbi of the Chinese ]. So the 2 elements combined with the other performance we are achieving strong backlog allow us to say that in terms of revenues, we should expect EUR 24.5 billion to EUR 25.5 billion compared to EUR 23 billion to EUR 24 billion previously, an increase -- a sizable increase, which is the combination of the factors mentioned above. The second thing is on operating margin and net cash flow in a [ prelet manner ], we maintained the range and the guidance we said before, but it means an operating margin, an absolute increase on the back of the additional revenues I mentioned. In addition, confirming our priority on deleveraging, we are targeting a net debt [ EBITDA ] equal to 3 at the end of December. As a reminder, the waivers of continents that was negotiated in H1 led to no covenant tests in June and a move to 3.75 for December '22. And it's clear that with what I'm mentioning, we have no topic in this respect. And in conclusion of my presentation, just to mention that we expect, and we -- you are welcome to come to our Capital Market Day in early November. It will be, in fact, in 2 days. The first day on the third will be really on medium-term strategy ambition and also our actions to manage, in fact, the current environment and conclude our deleveraging. And the second day will be more focused on ESG strategy priorities on November 4, and we call that an assistant EBITDA day and you are, of course, welcome to both of those events. And on this note, I am, in fact, available for -- we are available for your questions.

[Operator Instructions] The first question is from Michael Jacks with Bank of America.

I have 3 questions. I hope that's okay. The first one is just on the cash flow guide. It seems to be very conservative, given that you printed [ $100 ] million in the first half. EBIT in the second half is shaping to be up by, I don't know, at least 50% half and half. So we'd expect in very rough terms, at least EUR 300 million of additional cash generation in the second half. I know you mentioned that you need to build safety inventories, but this would need to rise by more than 10% on the inventory balance to notify cash flow for the second half. So how should we think about that? And perhaps I'll stop there and ask the other 2 questions after that.

Thank you. So indeed, I prefer to remain prudent on the cash flow. I think there are several reasons. One is, in fact, what you mentioned on protecting the winter, I think this is -- we have to secure that. And if it means a bit of cash at this year instead of beginning of next year, I think it's a good one. The second one is conclusion of some activities. And the third is that we did some increase of factoring in H1, and we are not -- we are not doing this in H2. So in fact, excluding factoring, we are talking about an improvement of performance in H2.

Understood. My second question is on asset disposals in HELLA. Is there an asset value threshold for which you would require minority shareholder approvals?

No. So in fact, on the disposal process, we have to ensure that, in fact, the process is [ HELLA ] and that the evaluation is confirmed by a third party. But actually, I think it's a good thing because this is what we should do anyway. And this is, for instance, what has been done for the sale of HBPO and has been presented in details to the shareholders of HELLA during the general assembly at the end of September. So perfectly normal requirements. And I think it's a good practice anyway in any disposal.

And then my last question is just in terms of the plan for upstreaming disposal proceeds. Will this be done through an intergroup loan or through dividends?

So just to come back on the previous point. I would like just to highlight that the disposal program is a FORVIA 1 and not HELLA 1, i.e., we have considered different assets in the HELLA portfolio and in the Faurecia portfolio to be considered inside. So we should not consider that EUR 1 billion will come out from HELLA. It's not the case, not at all. Related to upstream, we are looking at other 2 aspects.

The next question is from Giulio Pescatore with BNP Exane.

The first one to go back on the free cash flow guidance. I mean your margin and top-line guidance, your new one, it's quite wide still. And I mean it does imply a swing of about EUR 300 million from the bottom end to the higher end. Is it fair to assume that if you were to reach the guidance on the upper end, you would in fact generate a positive free cash flow? Now I have another one, but I'll just, yes, ask that later, if that's okay.

So if we are on the upper side of the revenue side, we should be also good on the profitability and possibly on the cash. I prefer to remain prudent and maybe it can be set conservative but to remain prudent because on the environment. But I agree with the comment. That's…

Understood. And the second one on interest costs. Can you give us an idea of the headwind from the higher interest rates that you're seeing in the market that we should expect for next year? I know that only 1/3 of your debt is on variable interest rates. But yes, you can just give us a rough idea of what the headwind could be on interest payments.

So as we are mentioning the -- in fact, we have completed the vast majority of the refinancing. So we know the interest rates for it. You see that, in fact, we have a cost of financing of 3.25% on the existing one. The second point I would like to highlight is the example of what we did with LatAm banks in which we got 3.35%. So clearly, we have the majority being done. On the remaining part, it will depend what I anticipate with the evolution is that we can have an increased short-term of the interest cost next year by EUR 50 million, but vice versa the interest cost of this year has been, in fact, abnormally [Technical Difficulty] H1, #1 because of [ ForEx ] and number 2, of specific integration costs. So when you take the combination of this, net-net, I would say that you have a negative of EUR 50 million and a positive of EUR 50 million easily. So the net financial cost for the company for next year, I do not expect an increase.

The next question is from Christoph Laskawi with Deutsche Bank.

The first one would be on the potential impact from inventory build at the OEMs. Obviously, we saw today at renal, other OEMs have commented in the same direction for Q3. Did you see that as a big driver for your top line during the quarter? And do you expect any changes going into Q4? If you could just comment on the latest run rate of production. And then a question on the orders that you highlighted, both at HELLA and Faurecia. Could you comment on the synergy effect that you potentially had on winning those orders in the RFQs and the discussion with the OEMs? And those are my 2 questions.

Thank you. So inventory buildup in OEM is a very relative element because we are still today at very -- at low inventories at the OEM level. It is getting a bit better, but it's not yet returning to, let's say, the level that existed before the crisis. So -- but it is an indication of a bit less constraints on the supply chain overall. It doesn't say for me anything about the aspect of retail activity per se yet. And maybe since we talk about inventories, it's still the case that we have high level of inventories on our side. This is -- this will get better progressively on 2 fronts: number one, less stop and go and supply chain issues, but it will be progressive. And second, operational improvement that we have to do. which is more a story for next year than, in fact, immediate effect this year, given timing of correction of inventory and then payment terms. And this is another reason for me to be prudent on the cash flow. For me, our guidance is a minimum. So I hope you understand what I mean. On the synergy effect, you know that the synergies that we have committed in the context of the integration first of all, on cost and purchasing real estate, back-office functions. This is what is behind the EUR 250 million of synergies by EUR 25 million. We have also a potential on revenues, and we got already, I think, EUR 300 million of orders on -- coming from the synergies. One example is the CCH deal obtained by the electronics part of HELLA with a French customer because of the presence in France. And I think there is a cost fertilization based on space, which is not exactly the same between the 2 companies. So this is a good thing. So we see actual cases already happening. If anything, I believe it will be higher than what we said initially, which was EUR 600 million.

2 follow-ups, if I may. One, I mean, I appreciate the comment on energy that you've given in the presentation and the press release this morning. Are you already starting to discuss with the OEMs to pass on part of the headwind that you see? So the gross headwinds you've made clear. But should we expect that as net? Or is there certain offset rate that you have? And just one follow-up to something that you said before. Did you say interest costs for next year are flat? Or are you seeing an increase? I didn't catch that.

So on -- so on energy, yes, we are negotiating a recovery of the excess cost that we are facing. Absolutely. Recovery to be as high as on raw material, I'm not so sure, and I'm not betting for a complete recovery because it's less structured than raw materials in which you have contract agreements and practice in the past. But the circumstances, very exceptional. What we have done, thanks to [ FORVIA ] thanks to our action is to moderate this impact heavily. You see it -- in fact, several times less than it could have been. So clearly, we have to share that with the OEMs, and this is part of the negotiations ongoing. On interest, I was probably not clear. I expect for the remaining part of the refinancing to be at higher cost than what we got so far for sure. I was just saying that the total financial cost of the company between this year and next year, net-net, should not increase because this year, we have exceptional factors in the financial cost related to the integration, related [Technical Difficulty] that should not repeat themselves next year. So that's why I'm saying, net-net, I should not have an increase.

The next question is from José Asumendi with JPMorgan.

This is José from JPMorgan. A couple of questions, please. Can you comment on the price increases? You have carried out sequentially in the second half versus the first half for the price increases driving revenues in the third quarter. Then the second question, I'm aware that this is a revenue call, but if you could please comment in an environment where [ FORVIA cap ] production is flat, and can FORVIA still improve our earnings and generate cash flow? That's I think one of the key questions we frequently get asked around the company.

So on your first question on the -- on price increase, I guess -- and you are mentioning on inflation recovery. So I can confirm what we said in July, i.e., that in H1, we were recovering 80% of it that we have, in fact, deals and negotiations to, in fact, have a better performance in [Technical Difficulty]. There is a bit of a mechanical aspect to it, which is that our deals and practices on raw material recovery is based on the lag compared to the external reference price. So since, in fact, on many raw materials, we had a peak in May, June, and we have a reduction, not a return to the past, but a reduction compared to this peak. Actually, it means that the lag will be incorporated in the deal and will foster in fact, the recovery in H2. And that's why we say 90% in H2 is really a normal number. There is the aspect of better governance internally to manage that, but there is also a bit of a mechanical, which is we will get in Q3, something that we didn't get in Q2 because of the evolution of the curve of the main raw materials for us. On the second question, so if I understood the question correctly, tell me otherwise, you are saying if we expect production next year, for instance, to be flat, which I think is a good anticipation. We should not bet on an increase overall in improve our financials and in particular, on the cash flow. So on the profitability, we have been impacted by 2 things. One is this Michigan contract in the States. And clearly, with what has been put in place, this will not impact us next year at all. So you have a mechanical benefit on this one. The second is the recovery of inflation, better governance and in fact, moderation on the raw material evolution should allow to have clearly a further improvement in next year on raw material is a full recovery by the end of '23. Now moving on to cash flow. We have increased inventories this year. And we will decrease inventories next year. So we will have a double effect compared to this year because instead of having a cash out because of inventory, we will have a cash in net-net because of decrease of inventories. They are not only the environment if the semiconductors continue to be less complicated, still a topic, but a bit less complicated, it will help. And second, we are taking measures to beef up our inventory management. And the second point, what we say of activity of orders as a direct cash impact. When we limit our order intake, we limit what we call the upfront. The upfront is what is the amount of cash outs that you have to mobilize between the time you sign and the time the production is starting, the time of development. And in this time of development, you have R&D, you have CapEx. You have sometimes training of people because it can be a new technology or a new process. And we have, in fact, reduced our ambition on order for this year and for next year, saying selectivity will help us present several hundred million in cash flow savings for next for '23 and '24. It does not change our ambition midterm given the backlog we have and given the timing for translation. But in the context of uncertainties and the priority we have clearly on deleveraging the company, this is the right thing to do. So on the back of those elements, we will have cash flow generation next year.

The next question is from Pierre Quemener with Stifel.

Yes, sure. Do you hear me?

Yes.

Yes. Olivier, I would have 2 questions, which are forward-looking. The first one, do you plan to have top-line growth into next year, given that a recession is likely, especially in Europe, which accounts for roughly half of your business, that would be the first question. And probably digging a bit deeper, I guess, when I speak of Faurecia with investors, I mean the main concern is the elephant in the room, your balance sheet. Net debt should rise to roughly EUR 8 billion end of this year. What is your plan to accelerate and step up deleveraging into next year? Do you expect significant free cash flow? I know you have given some of the bricks answering the previous question, but could you consider stepping up the disposal plan beyond EUR 1 billion, number one? And what could be the level of free cash flow next year, given that we are heading once again, in a very uncertain environment, so as to, let's say, decreased net debt by at least EUR 1 billion into 2023?

Those are perfectly fair questions. So the balance sheet is not the element of the wound is actually the priority in the room. We are perfectly conscious that in this environment, it's even more important. In a normal context, you do a big acquisition, you have to clean up your portfolio of activities. In a context like this one, you have to do it even more and the faster the better. But on disposal, I want to make sure we are doing the EUR 1 billion. The portfolio that we have, in fact, identified for the disposal is higher than this level. If we are able on this portfolio to do more, we will do more. But today, I would say, to complete the program of EUR 1 billion, and let's see if more is possible. On the aspect of evolution of revenues next year. Overall, we are not contemplating a growth of the market. And we believe that within this market, China will be a good element. And Europe, it's an uncertainty. But maybe I should say that there is a big difference between the retail market and the production market. the production market remains under constraint. And in the European case, during several weeks, the launch of the train or production in Europe was blocked because of certain elements that were coming either from Russia or from Ukraine. So when you compare year-on-year, you have to take this into account. But we'll be cautious. We will, in fact, flex our cost to face the uncertainty so that we are in capacity to adjust if necessary. We expect a bit of top-line growth because of the overperformance, but that's it. Now the -- with this, we are targeting free cash -- significant free cash flow next year, not only because of the activity, but frankly speaking, first of all, because of working capital management and CapEx moderation. The last factor I can mention is that we are on track on the synergy of the integration with HELLA. The impact this year is, of course, limited because you have an aspect of ramp-up and will be sizable next year, which is contributing, in fact, to the positive evolution between '22, '23. But those key questions are at the center of what we will present in the Capital Market Day because we want to highlight in detail our plan to [Technical Difficulty] that we are working to consider, in fact, not only the potential of FORVIA, which is a very clear one, but also to face the headwinds of the current environment. So those things will be addressed and we -- and can be discussed in detail during the Capital Markets Day. Absolutely.

Thank you, Olivier. If I may comment, that's instrumental, I mean the deleveraging, if you want to get all the positive attention of investors and subsiders into your medium-term plan, I guess the deleasing will need to be addressed at first. Thank you.