NV Bekaert SA (BEKB) Earnings Call Transcript & Summary

So good morning, everybody. Warm welcome from my side. I'm happy that you took the time to come over and also the people online. Welcome to the Capital Market Day of Bekaert. As you've seen in the movie, Bekaert the company of more than 140 years existence, putting us really in a lead and exceptional lead company being more than 100 years. And as you know, 99% of the companies don't make it to the century, except the ones who are changing for the better. And that's basically what we want to share with you today, is about the transformation we achieved till date, the results, second lead the strategic choices moving forward; and third, our ambitious from shared value of valuation creation for all our stakeholders in the future. So let me spend some time quickly on Bekaert. Most of you have been following Bekaert as the last couple of years, a global leader in terms of steel wire transformation and coating with the footprint around the world. We serve our customers with R&D centers close to the markets in all the regions we are active in. And since 2019, we've been working very hard on improving the financial performance of the group. This has resulted in a financial performance improvement and a strong TSR total shareholder return of above 130%. At the same time, we've been investing in the future, building platforms for growth. And you can see on the slide a number of our product brands that will be explained by the team later, which are nice platforms for growth, driven by the sustainability agenda and macro trends in the industry. So as you know, took office in first of September 2023. I joined Bekaert 3 years ago as the CEO for the Specialty business as the COO of the group, and I was really attracted by the opportunity of a value creation agenda. To lead the company to its 150 years of existence and to make a positive impact on the way we live in this world. So let me share with you some of my strategic focus areas. The first one is we want to continue the journey to become a market-driven organization and doing that by focusing on clear segments, developing global product brands, enhancing the already strong Bekaert product of a company brand globally. Secondly, is making clear choices where we play and how we will win in these segments. And this will give a clear role of each of the divisions and the focus areas. Supported by an operating model where the corporate functions, the group functions, we talk about our technology R&D, engineering, procurement and the business enabling functions like Finance, HR, legal and digital -- high-performing organization at [ Gocha ]. And what does that mean for me? Is that basically with our 24,000 employees have a shared such ambition of what we want to achieve for the future, having the discipline of working together, following up on our commitments, having trust and trustful organization and basically a supporting organization to see these ambitious targets altogether. At the end this will create value for all the stakeholders, starting from our customers, our employees, our communities who work and live in and as well our shareholders. In the period of the succession planning and my onboarding as the CEO, I had the opportunity to work even more closer with the leadership team. And we've been working on translating these strategic imperatives or strategic priorities into our business plans moving forward. And I'm really fortunate to have a strong and a very diverse leadership team joining me in this journey and in leading -- coleading this next phase for Bekaert. And I would like to take the opportunity to ask my colleagues to stand up for a minute. So you will have the opportunity to have some of the leaders on stage presenting on for their businesses, and you will have the opportunity to meet the other leaders during the coffee break or during the lunch. Thank you. On a daily basis, we have more than 24,000 people and teammates, which are engaged, which have a diverse background, which have a lot of experience in the business they are doing bringing the values of Bekaert to life, serving our customers on the daily base and earning their trust. So some of you who were there at the CMD meeting of 2021, even while it was a virtual one. So it would be interesting perhaps raise your hands if you have been attending the virtual one. Good, great. So you will remember the [ article ], the strategy of strategic imperatives, we had 3. One is we want to perform is to transform and to grow. So let me update where we are on that progress and that based on our different businesses. Let me start with Steel Wire Solution. Steel Wire Solution is really the beginning of Bekaert. In 1880, that's how it all started. Steel Wire Solution brought as globalization about as technologies, engineering capabilities and often they have been pioneering a lot of the technologies that are now used in some of the growth platforms. So a very important for our history, but also for our future. So with Steel Wire Solutions, we've been focusing in the last couple of years on performance improvement and also portfolio evolution and that with the intention to have a clear foundation of moving forward. Rubber Reinforcement, I often call it tire enforcement because that's the industry we are serving. We -- through the years and we started 1950. So in 70 years, we've been eloping a global leadership position in the tire industry. We've been serving all global tire makers. And important to know is that we basically helped the entire industry to go from bias tires to radial tires. And all of us today drive on radial tires. So we've been really innovating, helping scaling and transforming an industry globally. But also moving forward. The tire industry and the OEMs of cars and trucks have their sustainability agenda. So through our innovation approach, we are helping them to achieve these objects. Myself having worked more than 10 years for the tire industry leader worldwide, I know the importance of tire construction in terms of the safety, in terms of the performance and in terms of sustainability. So this industry will be there in the upcoming decades with interesting agenda on further innovating the product offering. Let me move then to BBRG. BBRG more recently through the joint venture and elated the 100% ownership. We've been pivoting a new fields of play, mainly more in the ropes, steel ropes and then also later in the synthetic ropes. And this business has successfully finalized the turnaround, and Bruno will talk about that later. So we are not pivoting into more products and services and into some potential future growth platforms based on the capability of the right to play we developed in this industry. So we are talking about off-shore wind, and we'll come back to that as well later. And last the Specialty Business. In the last couple of years, we've been working on building a couple of growth platforms, and this will be leveraged moving forward. So this improvement -- or these actions performed transform growth in all the different businesses has basically improved the profitability of the Bekaert growth. So we are proud about the performance over the last couple of years, bringing EBITu from a 5% level to above 8%, between 8%, 9% level. And also important is the mix of the businesses. So we increased from 23% to 40%, the mix of the growing businesses. Now this performance improvement has been realized by contribution of all the businesses. As you can see, the growth businesses, they double the profitability from 7% to 14%, but also the core businesses, Rubber Reinforcement and Steel Wire Solution, improved the EBIT percentages. We'll be focusing on more sophisticated products. We're reviewing our portfolio in terms of cyclicality, commoditization of products. And certainly, as mentioned before, in some of the updates, a very strong pricing power and operational excellence. At the same time, we've been improving on our ESG agenda. First of all, the Scope 1 and 2, emissions reduction of 15% but also qualifying 45% of our product portfolio into the sustainable category. We have a long-term target to bring it to 65%, and we are year-to-date at 45%. So as you can see over the last couple of years performed transform growth. We use all the levers to improve the performance. And moving forward, we will continue to do, but with a higher emphasis also on the growth platforms. Through the strong performance operationally, financially, we also have a very strong balance sheet, which will allow us, let's say, to do the necessary investments in all the areas we want to do. So let me spend some time. A lot has been achieved. I'm very -- looking forward to the further value creation of Bekaert. So let me share some of the house. As mentioned in my priorities, becoming a market-oriented organization, being clear where we play, how we focus and how we win are key. How do you do that? So basically, we want to focus, make clear that each division is focusing on key markets with potential for growth and that we constantly review the portfolio of our businesses. So let me share with you the segments or the end markets, the different divisions we're focused on. These are all markets where we deserve the right to play and to win. So Rubber Reinforcement, focusing on the global tire market. And Annie will explain to you much more in detail our performance with our plans forward. Our legacy business Steel Wire Solution, which is serving multiple end markets. So to that historical globalization, we have a portfolio in SWS, which are regional leading products, correct, serving different end markets. And we will continue to elaborate on that business unit during the presentation of Francois. On BBRG, due to the history, the legacy focusing on advanced lifting and Mooring segment and the Specialty businesses will focus on 2 end segments. One is the energy transition and the other one is construction decarbonization. So let's spend some time on the attractiveness of these markets. So the more established markets is the tire industry. So for tire cord and bead wire this is a EUR 7 billion market. We call it a target addressable market for our businesses. The growth there will be driven by the trend in mobility, the evolution of the population. We see some growth areas talking about India, Southeast Asia. And there will be innovation evolution of the public performance driven by electrification, but an important one is all the circularity. Most of the tire manufacturers are working how to go from tire to tire, recycle all the materials, making a tire after the use of the tire back into a new tire and give it a second life or a third life. We want to play a role in that sustainability and circularity field of play. Second, an industry which is really shaping is the energy transition. We all know to have our climate ambitions realized. We need to go through decarbonization, electrification and have a higher level of renewable energies. So an exciting market with new growth potential with new technologies, roughly size of EUR 7 billion as well. The third end market we want to focus on is the lifting and mooring. So a market also with nice growth areas with, nice innovation as well, focusing on decarbonization, urbanization, as you know, that part of the advanced lifting and mooring offering is our elevator belts, which Bruno will talk later about as well. And then finally, the construction industry. If you look, of course, at the total construction industry, it's an EUR 11 billion business. Now here, we are focusing on the reinforcement of concrete. The market that is addressable for us to go from the traditional reinforcement steel and steel rebar into fiber reinforcement. And we foresee the upcoming couple of years, a potential conversion of that market towards a EUR 2 billion market. And we see there an acceleration, and Raf will talk about that based on the sustainability policies, the requirements, but also the innovation in construction. So 4 markets, with nice opportunities for growth and for innovation and for us also value capturing. So all the divisions will have a clear role within the Bekaert portfolio. So let me start with the core businesses. So tire reinforcement in Steel Wire Solutions. We have today market leadership positions that we want to reinforce. A subtle difference between Rubber Reinforcement and Steel Wire Solution is that Rubber Reinforcement, we are clearly #1 in a global market. Steel Wire Solution, we are #1 or #2 in more regional and local segments. So we will reinforce our leadership there. But commonly for the 2 is about how to improve the sustainability, how to continue to improve margin and being a strong cash generation for the group. The cash generated to reinvest in their own business but also cash generated to support the growth platforms. Due to the history of SWS and the existing of the portfolio or some of the businesses to many life cycles, we will continue to look at the portfolio of SWS, very granular, and Francois will explain you which lenses we are looking at this business. So let me pivot to the growth platforms. So all of them have an established position in certain segments, and basically, we want to scale it up. That means scaling up with commercial activities, but also with operational activities and with technology and innovation activities. And we will do that organically. We will do that through partnership collaboration, but also inorganically. So in terms of M&A, we are looking at really selective M&As and bolt-ons that can complement our access to market, our go-to-market, our experience, our technology, our product offering, so that we can extend the part of the value chain we can serve. And this is often required by the customers who really look at partners like at Bekaert to basically take away headaches from them. The more we integrate some of the offerings the more we bring services and products, the more they appreciate our value creation. So these different divisions, different end markets, with a clear agenda and clear financial also expectations, which I will come back later on. But let me spend a minute on the group. What makes these 4 divisions or these end markets, how do we create value by being together within the Bekaert Group? To the legacy, we developed a lot of capabilities in terms of technologies, engineering. As you know, we have our own engineering department, developing the equipment, which is proprietary, which is exclusive, which is innovative for the product and the services we bring. And we are doing that additionally for steel, but also we are going beyond steel. So in terms of other materials, in terms of transforming materials coating materials. And that will have -- that capability is helping across the board, the agenda of the different divisions. And it can go from process improvement to further improve the quality, the performance, the cost of our products and services. it's helping us to advance and generate and launch new of our existing products, but also go into new markets. And we have a couple of nice examples in our products today that are really based on technology developed experience in the past that are pivoting helping us to go into new growth areas. And as mentioned, a couple of key important partners. First of all, our customers. A lot of innovation is coming to a request of our customers, understanding their agenda and basically working in cooperation with them to solve some of the challenges moving forward, but also with partners that have capabilities in that value chain or in that ecosystem. We will keep on extending that collaboration with them. At the same time, we'll continue to review our portfolio. And as many of you know, we closed recently the sale of our LatAm South Chile and Peru operations. And Francois will give you some more perspective on that. Now this portfolio review is across the board, of course, the different divisions where we will constantly review the best place, the best home for our businesses. On the other hand, in terms of CapEx and resource allocation, we will continue to double down and increase the investments in the growth platforms. Now I want to emphasize, we will share -- Taoufiq will share later our CapEx projection. Still more than 50% to 60% of our investments are in support of the core businesses. So going to a balanced approach in terms of investment of our resources. So let me share some of these global brands. And these global products we will be deploying and which are a result of investments done in the last couple of years. And let me start with perhaps the most material one, which all know is our Dramix offering, the fiber reinforcement for concrete, talk about flooring, tunnels, infrastructure and so on. Basically, we are in the phase of accelerating and deploying to investing in key markets. And Ralph will tell you a little bit more about the priorities of the markets and the potential of the different end segments. The second one is our Currento brands. It's a critical component in making clean hydrogen for the electro largest machines who are making green hydrogen. There is a business we are in ramp-up, both commercially as basically also from an operation point of view. We have already a nice business today, which we expect to grow with nice growth rates in the upcoming years, and Inge will take you through our offering and our future field of play as well. Our brand Armofor in terms of pipe reinforcement. Basically, we are in a qualification, homologation phase with some nice potential in the future. And the last one, called it last kid on the block, and you can see our product also later in the small showroom we have with us here is Ampact in the e-mobility space. So on the last 2, Bruno for Armofor and Francois for Ampact will share with you our plans. So let me share now based on these plans, our value creation agenda moving forward by, first of all, sharing some of the financial midterm targets, sharing how we are progressing on our sustainability commitments and how we create attractive shareholder return. So from a financial performance, based on the performance and the outlook of our core business and the growth platform that we're gradually scaling with different speeds. And I want to emphasize here that we are in new businesses in new industries that need to scale up themselves. And so there is certainly a dependency on scaling up with other industrial players worldwide. We are projecting a midterm growth above 5% on a annual level, 5% moving forward on the midterm. Secondly, from a profitability point of view, we want to confirm our profitability on the double-digit side. So targeting 10% profitability EBITu in '26 and with the potential of an upside, all depending on the scaling up of these growth platforms. Keep on delivering a strong return on capital employed and making progress on our sustainability offering from 50% further up to the 65%. Taoufiq in his presentation, will elaborate more on these financial targets. As mentioned, each of the division has a different role to play. And so we have also different expectations from a financial contribution. From a growth in the core segment, we expect more around GDP, 1% to 2%, 3% growth in the upcoming years. And in profitability returns above 9% with a good return on capital employed of 18%. For the growth platforms altogether, we expect on the midterm growth rate of more than 10% with a strong profitability contribution to the group above 15% and a cash generation -- return on capital employed of 25%. It's good to mention that the targets for the divisions and growth are excluding corporate non-allocated overhead costs. So this journey will bring us to a very balanced portfolio of businesses, where half of our profits would come from the core businesses and half of our profit is coming from the growth business, while we are improving the profitability of the group through the upcoming years. As mentioned, the journey on ESG, today, 45% of our products sold are qualified under the EU taxonomy as sustainable products, bringing up to 50% to our 65% target. At the same time, working on our ESG agenda. In order to protect the planet, we continue the journey to reduce our CO2 cars emission by 46%, further engaging of our employees based on that shared ambition that purpose-led leadership to higher rates of engagement and continue to work with our ecosystem supplier base on integrity and also compliance in the full value chain. This allows us to continue to create nice shareholder return, progressively improving our dividends, complemented by share buybacks, creating a very nice total shareholder return and Taoufiq will expand on this topic later. What are the criteria? How do we look at it, how do we evaluate the investment opportunities for our cash? So key takeaways I would like you to take in the remaining of the morning and the future is that we have realized a nice transformation year-to-date. We have a clear strategy of moving forward, clear priorities, clear areas where we want to win and also clear how we want to create value with superior returns for all our stakeholders. And I would like to wrap up with reflecting on the history of Bekaert where we are who we are today, thanks to generation of pioneers at Bekaert in the last 140 years, who brought the company where it is now. And I'm really convinced that this generation of Bekaert will also untap the potential of this group moving forward. So thanks for the attention, and now open for the Q&A session.

Wim Hoste, KBC Securities. I wanted to dive a little bit into what you said about the clear strategic choices of where we want to play and how we want to play. There have been some divestments, Steel Wire Solutions, Chile, Peru, do you have any thoughts on what is left in your portfolio that might not fit in there for the longer term? Any thoughts on where restructuring is still needed?

Yes. Quickly we'll, moving forward, continuously review the portfolio of our businesses across the different divisions. But of course, if you look at some of the divisions like tire reinforcement, that's a business you're in or you're not incorrect. So that's very clear. But there are other divisions like the specialty business, where we have a couple of offerings, but also in SWS or in the BBRG. We will continue to see which ones are having the potential for the future, not looking only at the portfolio -- of the growth aspect of the potential, but also the capability that these businesses bring us. So I think we need to look at different lenses of the contribution of the businesses. And on the specific question on SWS, we will come back later during the presentation of Francois on how we look at the different portfolio of the businesses including SWS.

Okay. And then one question on the underlying EBIT margin target of 10%. Is that -- yes, it's a target for '26, but is that also a target across the cycle beyond '26? Or how should we interpret that...

Correct. So it's a clear target for '26, and we are on the journey and the road map to deliver on that, and we've built up the credibility in the last couple of years to deliver on the commitments we made. The potential on the upside, correct, will also depend on how the new growth markets we scale up. And it's not 100% depending on our Bekaert offering, we will make sure we are clear to scale up and to support the industry and scaling up but depends also some of the external factors. And these growth platforms will also drive a lot, as you've seen the higher profit margin businesses because we bring more innovation, new products, new value to the market, and that will give the upside potential after '26.

Alexander from Kepler Cheuvreux speaking. So I was just wondering on the targets on the -- of the EBIT underlying margins. I was just wondering why the focus is not on EBIT margins and then instead of EBIT underlying? Because I thought most of the transformation programs are behind us. So I'm just wondering why the -- there was not an additional focus on EBIT instead of EBIT underlying margins? Are you foreseeing any transformation programs going forward?

The good note, correct. As mentioned, I think we will continue to look at the portfolio of our businesses. It's not only on the divestment, but it's also on the realignment of the footprint, for example. So as you've seen, we have a global footprint, which was a strong asset also during COVID period to serve the markets locally to serve the customers. But we will keep on looking at opportunities basically to drive efficiency in the group, and that can lead to some further rightsizing of some of the manufacturing footprint.

And then also the EBIT underlying margins of more than 10% does imply that there's not going to be a high inflationary environment like we've seen in the last 2 years. So is that your vision forward that there will be not a lot of inflation. And can we, therefore, expect that most of the 5% growth that you project is going to be volume growth? And let's see.

Unfortunately, nobody has a crystal ball, correct? So -- but I think the assumption we took here what we present here is basically on a constant outlook, correct? In terms of inflation rates, whatever the normal ones. So it's correct, your assessment that most of them of the growth will come from our strategic growth in the areas, yes.

Stijn Demeester, ING. One clarification on the sales growth CAGR, which you see in the midterm. Can you clarify what you mean with midterm and what happens in the near term? Are you looking more for sales growth in the 1% to 2% range? Or do you see other challenges, opportunities in the midterm that could deviate from those numbers?

Good based on the current situation, the economic situation and a little bit uncertain, which is still around on how the economy will evolve in a different components, correct? And we have different outlooks depending on China, Europe, U.S. and some other growing economies. In that context, so we are very realistic in the outlook of the upcoming 1, 2 years, monitoring very closely what the growth will be from the markets we are in today. The 5% CAGR is coming from, as we mentioned, the balanced -- rebalancing of the portfolio we have. And I think our aggressive or aggressive double-digit growth in the new platform, the timing of this growth is depending on the scaling up of some of this industry. And that's why we are not very specific yet on the 5% growth, which we see more moderate in the first couple of years. Now having said that, you will fully endorse that and support us, if there is the opportunity for us to capture that amount early, we will, of course, do that. So we are doing everything. You'll see the modularity of our capacity ramp-up we are preparing is to be ready to ramp up faster, if needed and capture that growth faster.

Yes. Frank Claassen, Banque Degroof Petercam over here. Question on the Specialty businesses. You've indicated that your target markets are now energy transition and construction decarbonizations. But in the specialty business, there are also businesses which may not yet focus on these target market side, for instance, the Hose and conveyor belt activities. Does that mean that those activities in Specialty business still needs to start focusing on these target markets? Or could they be up for sale? Or how do you see that?

So we -- these businesses have already since the last 2, 3 years, right, we've been targeting this energy transition market that means in the innovation that we do with our customers, the products we are developing are focusing more on the energy transition. Examples, and Inge will talk about it in hoses hydrogen hoses, yes. So it's -- it's correct that this business is today, for example, like hose wire and conveyor belt is more in the hydraulic hoses, but gradually, we are pivoting our investment and our focus. So my expectation is by setting the clear focus areas, we will gradually pivot our portfolio and the focus of these businesses towards these end markets. So you're fully right, that it's not 100% pure play, but it's a pretty high degree. If you look at specialty business, if we split the business in 2 construction is a pure construction play with Dramix building products Raf will talk about it. And in energy transition, we have our hydrogen play will grow significantly in the upcoming years. We have everything we do in filtration, which is about filtering of gases, materials, clean, high tech, correct? We have our ultra-fine wire, which is supporting solar panels. And then we have our combustion technology, which is in the middle of the energy transition, correct? We're in the field of gas burners and heat exchangers where we're making those more sustainable, but also seeing how we can pivot in future heating solutions. So you're right, but the direction is very clear on where we want this business to focus on and develop their portfolio. On the long term, if we cannot reposition them in energy transition, we will continue, as mentioned, to be evaluating if they have a place in our portfolio.

Maybe you can make the last question and we'll move sorry.

Yes. Sorry, just one quick one for me. Chase from Kempen. With regard to the selective M&A, you talked about in your growth markets, Obviously, you have quite a strong balance sheet at the moment. Do you see going forward that we could -- you'll continue to do some smaller equity investments or also some maybe transformation or larger M&A deals. Do you have a view on that?

So we have a concrete pipeline, correct, targets that we are monitoring and looking at, working on. This will be -- we go bolt-on from size and Taoufiq comment a little bit, but about EUR 50 million to EUR 300 million type of targets bolt-on selective M&A, mainly to reinforce our presence in the ecosystems, the target end markets we are focusing on. So that's the type of size of expectations of M&A you can expect in the upcoming months and years. Good. Thanks for the Q&A. We will have the opportunity to guide at the end of the session to further when you have full view. And I would like to introduce now Annie, who will take you through the wonderful world of the tire industry and our business.

Thank you. So thank you, Yves. Just to recap, Yves mentioned Rubber Reinforcement, we focus on the end segment, which is tire reinforcement which is a $7 billion addressable market. And the key words about Rubber Reinforcement is to perform. So for the people here, who follow the very long of Bekaert on the new phase. Recently joined Bekaert March 2023. It felt like I have been here already years. So before joined Bekaert, I have had responsibilities in strategic growth, operational roles and also P&L responsibility, both in China and in Europe. Very proud to be part of Bekaert. So today, I have 3 parts to share in my presentation. First of all, overview of Rubber Reinforcement business. Secondly, how do we align ourselves with the emerging market dynamics? and last but not least, how do we develop -- deliver very strong financials. So like Yves mentioned, Rubber Reinforcement business is a very focused business. We have only one end segment, automotive. And in reality, we deliver key components for the tire makers. And another nature of the Rubber Reinforcement business is we are a global player. And if you look at our drag coverage, it's rather balanced. And Yves mentioned, we have grown our global footprint in the past 70 years together with our customer. That's why you can also see the graph actually we're very well distributed in the global footprint. And on the one hand, it's a clear signal of our customer intimacy. And on the other hand, it's a clear differentiation because given the geopolitical uncertainty, more and more customers value the strong footprint, well-balanced across globe. We are a clear market leader. About 1 out of 3 times around the world are using our products. If you have noticed the tires you car, you probably would already recognize one of the brands, which we have shown here as an example because we supply all of the top 30 customers worldwide. And here, you see famous global brand, you see famous local brand. You also see what we call regional players. So the Rubber Reinforcement business is a key account business. So what's the nature of the key accounts, a very important nature is this long-term collaboration. So our collaboration with our accounts is starting from a very early engagement on the joint development in terms of R&D, like Yves mentioned. And also, we have quite long term, typically 3 to 5 years sales agreement with our key customers, which have a committed shelf wallet. And would that then help us? It helps us to create that partnership as an innovation platform. By working with all the leading customers in different countries, we become the de facto industry standard for tire reinforcement. And we have very, very close collaboration with our customers in the short-term planning because of this committed volume, that means we can quickly adjust also our short-term resource allocation and consequently improve our operational results. And we are very often in strategic dialogues with our key customers that means the strategic alignment with the key customers and also the engagement on future footprint are very much seamlessly aligned. And you see in the middle, our 2 products, Yves mentioned we sell steel cords and bead wire. And we -- you see the picture below, which is a full important end segment. Trucks and buses, passenger cars, motorcycles and off the road like mining. So basically, our core products deliver into all important end segment. So why those 2 components are so important to the tire makers, although the volume for them is not that big. Those components work like bones for bodies for the tires. Like if mentioned, those are the key contributors to the performance of tire in terms of safety, in terms of steering, in terms of weight and rolling resistance and it determines durability and load and consequently drives also the stability agenda for the tire makers. And all those features are enabled by our key technology and capability. our leading experts in design, our capability to understand the metal and the tools, do the while drawing, to the finest diameter and coating, which is create a beautiful adhesion between rubber and steel and also our internal capability, not only understanding the process, how the metal will be produced but also the machinery design so that we can achieve ideal processing for the products. So just recap. What is the role of our Rubber Reinforcement in terms of the group? We are a clear market leader. We align with the strategic agenda of Bekaert. We deliver all the margin improvement potentials. And the last but not least, we are a very strong cash generator for the group. And we will continue to deliver cash generation also to fuel the growth of Bekaert. So how do we align as a strong market leader with the engaging global dynamics? We are serving 2 major ad segments. One is passenger cars, one is the truck and buses. So they are slightly in terms of the different dynamic. But if you look into the deeper of each and every segment, they have also their unique nature. So why passenger cars are very important for us? Because about 85% of the tires are coming from passenger cars. And the OEMs are very much dependent on the performance. So here, the key words is that we can differentiate together with the tire makers, consequently create differentiation also for the OEMs. And why are trucks and buses important? Because normally in the truck tires, you would use more than 10x of the tire cord comparing to the passenger car. So from an addressable volume point of view, it's very important for us. It's more than half of the volume, which we could deliver from a tire cord perspective. And here, very interesting element is the whole replacement market for the truck business is getting more and more professionalized, often under the management of fleet management. So consequently, the total cost of ownership is a key driver. Again, if we look at our global markets, we also see and feel the different market dynamics, which create potential growth opportunity. Yves mentioned organic growth in the different regions, which were observed Southeast Asia or India, there you see the CAGR of more than 4% growth. We also observed the rise in light trucks, which is often driven by the last mile delivery. Here, we see a growth of CAGR of more than 8%. And it's not only an opportunity to upgrade our product portfolio, it also drives future collaboration with our customers to address that emerging need. And electric vehicle, I do not need to mention. I think often -- maybe some of you in this room already start to switch to the EV. 2022 EV is about 14% in the core car. But if you look at today 2023, I think the percentage is much larger plus China is playing very interesting dynamic in the EV world, not only because they're very much creating a local system of innovation in China, but also the EV players, very aggressively attacking the market outside of China. And last but not least, sustainability is going to be a game changer because OEMs and the tire makers, they are targeting at net zero. They are looking at sustainability and whoever creates innovation together with them on that domain. It's going to define the future game of play. So understanding who we are from the history, build on our strengths, understanding our market dynamic, also understanding what the future might lead us make us to choose these 4 key value drivers for Rubber Reinforcement. So market leadership through innovation, selected growth, sustainability and resilience in operations. I will go into details, market leadership through innovation. So our collaboration is very much starting with the joint development our customer because we have been growing together with them, we clearly understand the need of the tire makers in terms of weight and rolling resistance in terms of durability, total cost of ownership sustainability, just to name a few. And with the leading experts and facilities and our partnership, we have been able to create new generation of reinforcement solutions in the past and also continuously. One example showing on the right-hand side is a typical way how we define the pace of product upgrade in this industry. We define that technical normal tensile to high tensile to super tensile to ultra tensile. In account of technical term, basically, we are able to achieve the same load, with much less steel material or if we use the same parameter of the material, we will be able to sustain higher stress. Why is so important? Because, on the one hand, this key element drives the performance of the type in terms of rolling resistance. On the other hand, it also helps the tire mix in terms of the total cost of ownership because the center, the steel you need. So there's rubber you will need to go into the tire. So that's a clear proof how we have been continuously drive the product upgrade in the industry. And Yves also mentioned Rubber Reinforcement business is a low-growth business by choice because we -- obviously, we can grow much faster by tracing the volume. The question here at which price? That's why strategically, we say, it's a selective growth because growth is a choice. And the choice is in the geographies we choose is also in the higher value creation segment. And by definition, that means a portfolio upgrade that means a careful choice of customers that means also a careful choice of value creation. So recent initiatives, we have built -- we are building our low-cost platform in Vietnam, which is highly welcomed by our key customers. We are also starting a brownfield expansion in Puna to further strengthen our market leadership position in India. And also in China, we are very aggressively introducing higher tensile product again, addressing performance and the total cost of ownership at the same time and drive that product upgrading in China. Sustainability, our view on sustainability is across the entire value tree. So with our suppliers, we are defining together with third party certification, which define what are the recycled content because this is a very, very early stage. So today, we are able to deliver Bekaert-based certification already to our customer Bridgestone. Looking at our -- our internal process and organizations, we are actively working on reduced working on enhancing results efficiency and also most of our renewable. And we are also working on our workforce. And here, our performance in sustainability contribute to Bekaert Group's ambition of 46% reduction of Scope 1 and Scope 2. And last but not least, very important is the sustainable solutions we deliver to our customers. And just to give you 2 highlights. On the one hand, we commit to deliver the higher recycled content products for bead wire, minimum 70% and for tire cord minimum 50%. And we are also able to reduce the rolling resistance of the ties of 2% to 3% based on a higher tensile product solution. So then how does that link to our financials? I have explained the commercial approach. As explained that we do have selected -- a selective growth consequently drive much stronger value generation. While another important element to deliver strong financials is on cost. And if you look at the cost of Rubber Reinforcement, the biggest part is on the raw material. And its [indiscernible] worth is the energy utility cost and labor and the others. So we do have program working -- addressing all the key levers there. So those program partly is based on continuous improvement, but another part of the program is driven by our innovation in terms of process know how. Again, give you examples. We -- our R&D team has been continuously working on rail road standardization, and this consolidates the wire rod. And on top of that, our new breakthrough heat treatment technology helps us further to process the material, again, giving us more possibility to do viral standardization and do diameter consolidation to simplify and to enlarge the supplier pool and being able to further optimize the wire rod cost. And we also have new processes, which helped us for resource efficiency. In summary, this year, in the first 9 months, we have delivered $25 million cost savings through those internal programs and more than half of that actually coming from the innovation. I guess China is a question. So yes, it's a very, very important market because more than 50% of the global production is in China. And it's important because this is where the music plays, where the customer is very intensive. The customer of all customer playing lots of dynamic and the competition are also very aggressive. So this is really the place where music plays. When I joined the Bekaert, I think the first mission given to me is to work on China. Why? Because first of all, it's important. Secondly, we are not doing very well financially. Here, I think it's not only a strategic question, it's also an operational improvement question. So what we have worked together with the team is to, first of all, align the strategy, China strategy is China for China. And secondly, not only we need to be in China, we also need to be strong in China, again, applying the same logic, what can we do on commercial, on pricing, on selective growth, on the portfolio optimization. And consequently, what can we do aggressively in term of cost improvement. So clearly, we have a very strong local team. Once we align on the strategy, once we align on the action plan, the team is very able and resilient in execution. On the right-hand side, you can see the results. First of all, we are able to seat -- to place the seating for the higher tensile products, which we see a very nice ramp up. And in our forecast, the higher tensile will be 10x in 5 years comparing to 2019. What does that mean? That means close to 1/3 of the volume we sell in China will be coming from that higher tensile solution. And we were also able to already deliver 5% EBIT margin improvement. And bear in mind, this is based on structural change improvement in terms of top line and in terms of the cost position. So we are able to sustain that level of improved profitability in China. And we refocus our production. Now more than 70% of the production is China for China, and we are self sustainable in terms of the supply chain setup. And we did a footprint consolidation with the closure of one site in Chongqing. And on the one hand it helped us to reduce exposure to price-sensitive segments. On the other side, it significantly help us also to improve our capacity utilization. So with all the different showcases. And I think with the people who are more experienced than me with the financial facad, actually, rather reinforcement is a very stable business, even in the difficult time. we have experienced [indiscernible] disruption of the global supply chain. We have experienced the utility crisis. And with all those ups and downs in the market, our financials in rubber reinforcement has been stable in terms of EBIT, in terms of gross. And with the program and the strategic clarity we have been picked up and driving today, we are very confident that midterm in 2026, we will further be able to improve our EBIT margin to more than 10% and with a ROCE of about 15%. So in summary, Rubber Reinforcement, a clear market leader in tire reinforcement. We are the de facto industry standard, and we continuously lead innovation and sustainability. And we have a clear and defined strategy and we are resilient in execution. And consequently, we will deliver our margin improvement as well as remain a very strong cash generator for Bekaert as a group. Thank you. Open for questions.

Martijn den Drijver, ABN AMRO, Auto. You mentioned in the presentation actually shown in the presentation limited growth for Rubber Reinforcement. Why is that? If you look at global auto combining passenger and bus, usually 2% to 3% volume growth, then we have the sales mix changes going through higher tensile. We're also moving into electrification, which means higher weight, meaning more demand for Steel Wire Solutions, excuse me, our solutions. So why is there a limited growth expectation? Are you foreseeing market share loss? Can you elaborate on that element?

We do see market growth very much in line with the GDP growth. So you're spot on to say this market from a volume point of view is growing. On the other side, we also faced certain commoditization, because some of the products we have lots of competition. And most of the competitors start [indiscernible] because we write this product portfolio upgrade curve. And then it's a risk. In that risk, they follow us, they try to learn, then they have a lower margin expectation. So it's a constant balance that we continue to write our risk by innovation, by upgrade our portfolio and also working on our efficiency and cost productivity by innovation. And in that sense, we continue to lead that risk. That's why I tried to explain. If we want to grow, we can grow faster, no doubt. The question is at which price and at which margin level. That's why we say we do selective growth, which guarantee much better value creation. Of course, if we can grow more and faster if we could create that pivotal moment of certain product transformation, a ride on sustainability, we for sure will grow. So there is no limit of the appetite of this team to grow faster.

And just a follow-up on the internal program, the cost savings. So EUR 25 million in the first 9 months, would you be willing to share what type of targets you have for the total savings and when that could be achieved?

We do achieve the total sub target savings for this year, because you will -- we have also confirmed our forecast of financial for this year. So yes, we do deliver on that.

But what -- would you be willing to share what is the total target, not so much related to specifically this year, but what is the total target of cost savings from that program?

It's a year-on-year evolution, which is a kind of in the similar range. Yes. We do have a year-on-year cost saving program, which, on the one hand, we have a Bekaert Management System, BMS type of saving. On the other side, we have innovation driven type of savings. Yes, we do have this rigorous program. Yes.

Well, Martijn, it will be a rough [indiscernible] same volume on [indiscernible]

It's more or less.

So the CFO is indicating that the EUR 25 million to EUR 30 million will be on an annual basis, so recurring.

Yes.

Yes. Frank Claassen from Degroof Petercam. A question on -- you've indicated that the tire manufacturers want to recycle more of the tire cord. Can you elaborate what kind of role could Bekaert play in this process? How does it work? Do the tire manufacturers collect the tire cord themselves? Do you have to remelt it? Or how does that work, that recycling process? And what can Bekaert play kind of role here?

So now, I think it's a journey we are in front. So if you look at the short-term priority on the sustainability for the entire industry is basically using the recycled steel. So that's where Annie and the team and all of us are working on to increase the content of recycled steel in the steel cohort. Now all the industries are trying to work with recycled steel, right? And there's only limited availability globally on recycled still. And we need to make sure that we do the right thing for the world. And it's not by having competition between the different industries to capture the recycle steel that we are improving the world. So I think that's the first priority is to have that implemented. And that's why [ bit wire ] is very important. That's where the most steel is used. That's where the most recycled steel can be used. So that's [indiscernible] ongoing program. Then in terms of tire to tire and many tire companies are working on their program, how they can recycle tire cord to [indiscernible] everything -- first of all, recycle the tires, then you have the retreading programs, which many tire manufacturers have, correct, which is already giving a second third life to truck tires, not a passenger tire. So today, there is a recycling, but not from tire to tire. It goes into other applications, visiting to concrete or into energy generation. So our key customers, and we have innovation programs with the top customers that we are working on is to see, first of all, how do you dismantle, because basically, it's an interesting question because the tire cord addition to the rubber must be very good for performance, but it's on the downside to recycle, because you need to dismantle the tire cord from the rubber. So it's a really high technology of to say, okay, on one hand, I can get for the performance and durability performance for the tariffs, which is about safety. On the other end, I make it that I can, again, dismantle or separate the tire court from there. So we have innovation programs with the top customers working. Don't expect in 1 year's time, but that's something that will create value in the long term if we bring with these solutions. We're also looking at investing in companies, who are doing that, correct, dismantling these tiers. You're right that the whole recycling of used tires in the whole industry. So there's a question from the ecosystem, how do you recover your own tires? How is the tire making, a, recovery is on tire to recycle, let's say, the component. On the short term, we are also working on some other things where we use recycled tire cord in construction. And perhaps Raf can talk a little bit later about it. It's a small contribution, but it's contributing to waste reduction and recycling of materials. So I think it's an all menu that we are working on to help the industry.

Yes. And it's a journey.

Again Wim Hoste, KBC Securities. I also have a couple of questions. First, on the China for China strategy and also linking to that the ramp-up of Vietnam. I think in the presentation, mentioned that there was already more than 70% of your volumes going for China that are produced -- sorry, 70% of the volumes produced in China or for China. Is it a target to go to 100%? Or -- and how should we look at the Vietnam ramp-up linked to that? How fast will you fill that plant? Can you maybe elaborate a little bit on that?

Yes. So our plan is also following -- or it's a strong collaboration with the customer plan. So first of all, China for China strategy, and in a sense, we focus this strategy following or aligning with the progress our customer is making. So we're straightforward, if our customers still keep that volume in China, we would not push that volume out. So that's why at the moment, there's still a balanced view of a limited portion of the China volume still delivered for customers outside of China, because that's the wish of the customer and engage in Vietnam clearly help us to be able to de-risk and also to capture opportunities whenever a customer saying, we would like to have that switch. We are ready, we are there. And a lot of all key customers showing interest of our footprint in Vietnam. Ramp-up of Vietnam, today, we have about 10-kiloton and we will continue to ramp up, again, based on the speed of negotiation with customers and based on that volume reallocation. But we are ready there. Yes.

Okay. And then a question on the margin differential of China and the rest of the world I think it was also mentioned that there is -- with the savings, a significant step-up has been made, how do margins compare in China now with the rest of the rubber reinforcement business.

Slightly lower, but our ambition is to make sure China is not dilutive.

Yes. Okay. And then a question on ST/UT, I think it was also mentioned for China, what the targeted breakdown is in a couple of years. But on a global level, what's the breakdown of ST/UT versus the lower end of the portfolio?

UT seating is very quick in China, because that the market surprisingly or unsurprisingly very much welcoming innovation. So we are not seating UT product that fast in the rest of the world. In India, we are doing lots of ST seating, again, to write that kind of product innovation curve. So again, this is based on the market dynamic based on the segment dynamics.

[indiscernible] More [indiscernible] questions [indiscernible] ST/UT is roughly 40% of our volume and over the next 2 to 3 years, it will be at 50% [indiscernible].

Alexander from Kepler Cheuvreux. Just wondering, in the last CMD, it was mentioned that you had a 3-year advantage over competition. Of course, you had additional R&D, et cetera. But is the competition already catching up with the higher tensile cord? Or is -- are you still having a very big advantage versus the competition there?

Yes. I have a lot of respect of our competitors because they learn fast not only from a counter technical point of view, taking assets as a leading example, but also from a kind of equipment point of view. On the other side, it's not very easy to get that profitability. Yes, they claim being able to do it, but you have to look at the whole total picture, what is their scrap rate, what is their cost position? Are they making money or actually switching to a higher tensile, meaning for them very dilutive in their margin. So I think the catch-up is for us a continuous push to make us continue to lead that risk. But on the other hand, it's not that easy. Yes.

Can you share the capacity utilization across the 3 regions in light of the strong margin recovery in China over the recent year?

In China, we are now fully utilized, 100%. Our utilization -- so our utilization in EMEA is around 80%. So -- and then for the U.S., it's more a balanced mix of [indiscernible] import and what we do produce locally. So...

[indiscernible] Europe or [indiscernible]

So [ Ideol ] utilization for our business is around 80-90, because normally, we would still be ready to capture the growth, because our long-term engagement with our customer is shell [indiscernible]. So percentage of their volume going to us. But it's not a fixed volume. So if we do not have a certain flexibility in terms of utilization, it's difficult when the economy go up, we will not be able to capture that growth. So [ Ideol ] utilization for us is 80-90 and we can go to 100, and we could even put a little bit more people and so on, try to push that to 105, but that's a limit. That's why we would never try to target a 50% utilization across different regions.

Yes. And I can add to that [indiscernible] sharing. So you need to remember that the [indiscernible] for qualifying our planes for specific construction. So that means you -- as Annie said, you need to give some flexibility depending on their demand, their product mix, you can have more demand or others, correct? So having that flexibility is key for us.

So. I end with my part and hand over to my colleague, François.

So good morning, everyone. I'm delighted to be here today and to introduce to you the strategic and financial path forward for Steel Wire Solutions. So I'm Francois Desne, I'm the Division CEO of Steel Wire Solution and also BBRG. And today, I'll present to you the path forward for SWS as one of the 4 divisions of Bekaert. And to do so, I'll articulate my presentation around 3 parts. So first, I'll give you a brief introduction of the division. Second, some of the measures we have taken in the past few years to improve, let's say, the portfolio, but also achieve higher resilience. And last but not least, what you can expect for the future shape of the division going forward. Steel Wire Solutions is a EUR 1.5 billion revenue division. We are truly global. So we serve more than 4,000 customers across the world. And we have -- we deliver product in about 100 countries. We produce in 15 production plants and have a 6,000 employees. So we have a truly global footprint. If -- actually you would benchmark ourselves with competition, you would see that our footprint is fairly consolidated, so that provides a very good asset base from which we leverage best practices to share across the sites, but also benchmark the performance as a way to continuously optimize the cost and efficiency of our production. You also see that we are fairly balanced in terms of geographic exposure. We are present in the main 4 regions across the world. And we serve various markets and applications, energy, utility, automotive across each of the 4 regions. If we zoom a little bit on what we do, you would be probably surprised to know that Bekaert has an invisible contribution to many of the products and applications you use on a daily basis. That is true for energy and utility where we provide solution to reinforce power and transmission cable, and you see one in the picture there. But -- and that is providing electricity to your homes, but also to your offices where you work. We also do a reinforcement with armoring of telecommunication cable, including its subsea applications and that is essential for data transfer, Internet and all expansion of infrastructure you have in telecommunication. In automotive, we have various applications in spring in [indiscernible] components, but also tailgate product application that we use, for instance, in the trunk of SUV and where we have growing share of wallet and growing volume and market position in China, for instance. We are also positioned in niche applications, medical equipment. You see here on insulin pen, where we provide specialty high-grade steel wire solution for Precision Spring, where we enable here the function of dosing. And I'll come back to this when we talk about innovation, but also a very nice growing niche of business, where we have expertise to support. We have also a presence in consumer where we supply products requiring both flexibility and mechanical strength. You see here Champagne cork wire, construction application and also agriculture, where we've moved away from the initial 140 years of barbed wire, which was at the genesis of the Bekaert Group. And today, focusing on more niche application in one yard of vertical farming, which are also small, but attractive and growing market segment. And we have, in these various segments, established a leading position, acting mainly on 3 pillars. One, and of course, it's at the essence of Bekaert, its operational excellence. And that was alluded before. We have the BMS, the Bekaert manufacturing system, which is, in essence, is a culture of performance. So when you cross the gate of a shop floor of the Bekaert site, it's about performance in safety, in quality, in cost, in efficiency and in delivery to make sure we excel in this area for the market for ourselves, but also for our customers. Excellence is also in procurement. We have a dedicated program across the sites, across the portfolio to ensure we buy at the best price and with the best performance for material that we use. Complexity reduction, obviously, in SWS is a daily endeavor. And last but not least, also digitalization. So digital is digitalization automation is also a part of the road map we have for our sites. And here, whether you go on management execution system, digital operating planning, but also digitalized [ S&OP ], is an exceptional part on how we modernize our footprint to make sure we constantly improve efficiency of our operation. The second one is the one I like very much because I always think that commercial excellence is underutilized in industrial group and activities like the one of Bekaert and more precisely of Steel Wire Solutions. So pricing is something we constantly work on, and I'll come back to this later, not only on the management of pricing, but also on the tool we use for pricing segmentation as a way to improve also arbitrage we have between different application product and segments and portfolio as a way to actively improve margin mix of, let's say, a business we are operating in. And last but not least, innovation in a sense, working on 3 pillars that were also in the presentation of before. First, the wire forming, wire shaping, which is one of the core expertise for decades of Bekaert. The second is surface treatment coating, how we improve the performance, how we functionalize the performance of the wire for specific dedicated special application. And last but not least, also what we do in-house with the Bekaert engineering group to design equipment that are allowing to process this high-performance wire, but also ensure cost effectiveness and high quality to serve in a reliable way the market. So now let me take you through, let's say, the evolution of our portfolio and what we have done in, let's say, in the past few years, also as a way to give you a few proof points before we go on the plan we have for the year going forward. First of all, it was presented by Yves, I think bake out steel wire solution has a very clear mandate within the group. I think, of course, we look for market leadership in the segment we operate in, and we align this with the sustainability agenda of the group. But the 2 essential mandate we have for the division. One is to continuously improve our margin and our margin mix. And second is to generate cash. So strong cash generation is also our main objective. And you see that we are the only one also with the mandate and portfolio. It means that we have to challenge the basis we have of a segment where we operate the customer, the technology base as a way to make sure that we are an innovative and growing market segment now and for the future. So I was mentioning some proof points. So past 4 years, I think we have transformed and built and we further do so a very strong foundation, resilient foundation for profitable growth. In 4 years, we have doubled the EBIT margin from 3% to 7%. We have also substantially significantly improved the ROCE from 8% to 20%. And we have also substantially delivered cash for the group from EUR 130 million about to this year, more than EUR 100 million, and that will be with a cash conversion of about 110%, 120%. So how have we done that? We have worked in essence on 3 main pillars. You see on the left that first, we have focused -- sharpened the focus on the industries and the market segments that are core to Bekaert. This is valid for energy and utility, but also mobility and other industrial niche application segments that are allowing to be present in growing, innovative and attractive market segment. The second one is the regional exposure. We have drastically reduced our exposure to Latin America from 45% to 17%, and that with a portfolio move, which I will come back to a little bit later. And you see on the right side that whether we are on, let's say, construction or agricultural segment, attractive segment that are in core. We are constantly pruning and challenging the margin mix and how the product performing -- are performing versus the target margin we define for each one of the region, each one of the segments and each one of the product we supply to the market. And so we have improved that from 60% of the portfolio on target with margin to almost 75%, and we have ambition to -- and clear target to do more in the years to come. So that's about what we do to manage basically the portfolio with the pillars on operation, commercial innovation, I mentioned before, but we are also taking bold structural move to improve also structurally our portfolio. And you know that this year, we've announced we've signed in March, the divestment of Chile, Peru, which was a very big decision for Bekaert. I mean for Steel Wire Solution, it's about 30% of our sales, EUR 650 million on more than EUR 2 billion basically revenue on a global basis. And importantly, and what I want to share is also how we look at this divestment, because it's not just about the divestment. It's how we -- what type of filter of lens we apply when we look at strategic fit of business for the future of Bekaert. So this divestment has helped us to reduce exposure to commoditized products. So portfolio of segments where we see limited potential for growth and limited potential for innovation and high degree of competition. So that's one criteria. The second criteria is to reduce exposure to cyclical market segment. And in this case, it's reduction of exposure to low-end product in agriculture and the construction market. And last but not least, it's to improve also the cash generation of the, let's say, the division. And in this case, to go out of what I call industrial retail, so the kind of Home Depot like, because what few people know is that in this, let's say, EUR 650 million of sales, you have 60% of the portfolio that was in industrial retail, where you had supply of cement of metal sheets even of gloves and of helmet, so things you use for construction. And that is interesting business, but definitely not core to the strategic portfolio and the future of Bekaert. And I think it's very different from the other segment we have across the group and across the region for Steel Wire Solution. And therefore, an obvious candidate for divestment, because also the expansion was based on branches and shops and basically a network that you would expand and that was very high demanding on working capital. And as a matter of fact, was over-proportionally using working capital versus the rest of the portfolio. So you see that here, a very clear criteria on how basically we screen businesses and how we decide what to keep and what to divest. What is not on this slide is also that for us, we were extremely proud to divest and to find a good home for that business. So what we've, in essence, achieved is a good price and a good home. So you've seen before that we divested EUR 136 million, so multiple of 6, which I think is arguably a very good price. And second, a good home. So we could divest this business to the Matetic and Conrads family, which has been our partner for 75 years. And I think we were also pleased to find, let's say, a good home for these employees that were part of the Bekaert family for so long. So now that was the past and how we have performed, but what are we going to do and what's our ambition for the future? And I think this ambition is extremely clear. So first, we are going to articulate, let's say, the improvement of Steel Wire Solution around 4 pillars. With the objective you see on the left side to deliver 200 basis points improvement on margin, so from 7% to 9% EBIT underlying from 23% this year to 26% next year. And we do so by working on 4 different pillars. First is pillar commercial, pricing and mix. So it's introducing and strengthening the pricing discipline supported by tools and I will come back to this on a specific, let's say, methodology we have in this space, but also to sharpen the focus and to continue to sharpen the focus on core segment in order to continuously improve the mix. The second one, of course, core to Bekaert, its operational excellence. So it's to continue to deploy to strengthen, to evolve to improve the backout manufacturing system, which has been at the core of Bekaert and will remain part of our methodology to offset and even strive to exceed inflation in order to defend margin. That's why you see that the contribution of the second block is only, I have to say, 25 basis points because here, we include the effect of inflation that we compensate or overcompensate. The third part is innovation. And innovation, to put things into perspective, you see that our ambition is to move by 2026 to a portfolio where 10% of sales is coming from innovation. Is that ambition, it's very ambitious because product from Steel Wire Solutions are around since 140 years. So if you think about life cycle, there are technology still in the portfolio that were at a genesis of Bekaert. And here, the ambition is to go more on a life cycle that will be 10 years or less. And where actually, today, we have less than 4% of our sales that are coming from innovative product that we define as a product we introduced in the market in less than 5 years. So that's also definitely, let's say, an ambitious goal, and we are on our way to constantly, let's say, improve this, and we will target and deliver this by 2026. Last, but I also have to say on the, let's say, innovation part is to continue to have our role of incubator, and we have Ampact. I'll be very pleased I already introduced Ampact this morning to 3 guests and I will be very pleased after the session to also give more detail, technical detail on this very exciting technology we have in Steel Wire Solution, but it's to have this role of scaling up and this ability to scale up incubation product and target application that can deliver for Bekaert EUR 100 million, EUR 200 million of potential in the years to come. Last but not least, is this continuous proactive management of business portfolio, which includes, of course, segment in customer technology and product portfolio, but also supported by a constant review of the footprint in order to make sure that we scale the footprint to the needs and to the cost, let's say, required to support the business. And here, you can always expect that we will have a very dynamic view on how we approach our footprint and the site we have across the globe. Now if I zoom a little bit on commercial excellence, which will be 1 of the key lever, again, on the pricing mix, you have 75 basis points for the next 4 years. You see on the left side, it's commercial excellence dynamic pricing. And here, a tool that I consider is always underutilized in businesses like Steel Wire Solution where we can not only on the management of pricing, how we go after pricing segmentation, but also the tools, AI. So you can actually do a lot. And actually, the complexity you have is when you introduce digitalization, not anymore a problem because you have all tools to support decision, arbitrage, identification of leakage and in order to have a much more proactive pricing management. It's also about increasing the process efficiency order to cash quotation to price. So have a very proactive management and supported with digitalization, automation of commercial activities. And the active portfolio management, I mentioned before. And how are we looking at segments. So we have a myriad of segments across the regions, but we are very clear on the criteria. So first, sizable market opportunity; second, growing market segment; third, innovation potential as a way to sustain, I would say, the margin and even expand the margin and improve the margin mix of the Steel Wire Solution; and of course, potential for adjacencies. So whenever possibility to add solution to add functionality to the solution we provide to the market, as a way to improve also increase revenue and improve margin. And we do so in focus with the Bekaert, I would say, strategy for the group. So energy utility, you see here, but also mobility, sustainable construction, natural hazard protection, for instance, but also high added value industrial application. Now on innovation, and I've taken 3 examples on how we approach innovation from 3 different ways. So first, it's innovation in traditional segments like energy and utility, where we promote, let's say, performance -- high-performance wire, high tensile Bezinal product to reinforce power transmission cable and also migrate from ACSR to ACSS. So new type of, let's say, power cable, power transmission as a way for us to accompany growth in market segment. And here, we have a very strong position, leading position in the U.S. infrastructure market. And if you look actually at the last 4 years, this is a market segment very sizable for Steel Wire Solution that has grown with a CAGR of 17%. And going forward to 2026, we foresee a CAGR of 15% because of all the infrastructure investment you have to modernize basically the infrastructure on power distribution in the U.S. We also have niche application, and this is in the medical segment where you see high carbon, high-performance wire that we use in, let's say, medical application like insulin injection pain. And I have to say, unfortunately, this is a growing market, because diabetes, obesity is a problem and we see that as a growing problem, a growing challenge health challenge in Europe, but also the U.S. and Asia. And we have, at the moment, we are supporting our customer with strong double-digit growth on sales and accretive margin towards the rest of the division in Europe, but also U.S. and even Asia, we start now to support development in Singapore, and we are eyeing also the Chinese market. So also they are very nice, very growing, very innovative segment where we can capture growth and value for Bekaert. And lastly, the incubation. So the Pioneer basically mindset we have in Bekaert where we go with venture, it's not just the wording to go beyond. I think here, we really venture outside of our comfort zone, and we leave the steel to go into the copper. And here you see applications of the happening, which is the coating of a very specialty polymer with chemical resistance, corrosion resistance, high conductivity, high mechanical performance, but is also allowing the banning and the forming to do this kind of data that you see on the picture, and that are basically used in a state for electrical vehicle. So just to put things into perspective, this is 3 to 5-kilo of coated copper wire in each electrical vehicle. So if you do the math of what that means in terms of market potential for products with -- that are innovative, it's extremely attractive for Bekaert. The other point is talking about life cycle, once you enter in automotive, you're not guaranteed to have a life cycle of 2, 3 years. It's more linked, I would say, to the platform rather than the model you see coming up every 2, 3 years on the street, but it's definitely a shorter time line in terms of product life cycle, and it's much more demanding, much more innovative and therefore, much more attractive. And the underlying market segment is also definitely growing, right? And I think I don't have to demonstrate that EV is the future. And that's why for us, this product is particularly exciting. So it's just a few innovation that we have, let's say, in-house and that we pursue, but I could go also on mobility, on construction and other segments where we are constantly trying to find new innovation in constant dialogue with our customers and with the market. And so what you can expect with this focused customer innovation and also efficient investment. You see, I mentioned that we were at about 60% of the portfolio on margin in 2019. We upgraded that to about 75% in 2023, ambition is to be at more than 90% of products that are on margin related to the EBITDA and cash we have as a focus and as an objective for 2026. The second part you see in the middle is 10% of sales coming minimum from innovation, and that would be a huge improvement versus what we have today, which is 4% or below, and to keep in mind this efficiency of cash, it doesn't mean that we under invest. I think the business requires about 3% of CapEx on sales. So we'll continue to have that intensity of CapEx going forward. And this is more than enough to sustain the asset base and to continue to improve, digitalize, automate, let's say, the production we have. But that also reminds us of the objective we have the mandate to deliver a strong cash for the group in order not only to finance and reinvest for our growth, but also to support the growth and going forward of the Bekaert group. So 4 numbers I want you to keep in mind when we work outside of the room. First is the growth, we'll be slightly below GDP, 2%. Why? Because focus is in the short term, not top line. I think focus is the portfolio mix and it's to reorient the portfolio of what we have on growing segment. I was mentioning energy utility with a 15% CAGR in the U.S. And that's the type of repositioning we want to achieve. So that would mean that we will also do a certain choice on other segments and hence, balance a little bit the growth rates, but 2% is what we will deliver by 2026. It's 7% to 9% margin on the EBIT underlying. It's a ROCE. I mean, this year, we'll achieve over than 20%, and we commit to achieve every year on a recurring basis, more than 20% of ROCE and then strong cash generation. Sometimes we have structural improvement. Like this year, we are going to deliver 110% to 120% of cash conversion, but we commit in the next 3 to 4 years to deliver consistently every year, 90% or more of cash for the group. So last key takeaway for what you have to remember when you think about steel wire solution. So yes, we are a diversified business. but we are a leader in the segment where we decide to play, and we deliver not only margin improvement, but also strong cash generation. for the group. We are on a journey. We have improved and we will continue to improve towards higher and more stable profit and cash generation for Bekaert and what you can expect in terms of the future shape of the division, is a transformative management of the portfolio in order to make sure that we deliver on our margin mix improvement, but also the cash generation for the group. Thank you. So I'll take questions.

Martijn den Drijver from ABN AMRO, again. First question, a bit of a sneaky one. But why are you also the CEO of BDRG?

Why am I also the CEO of...

It used to be 2 separate people.

It used to be 2 separate people. I guess, I'm the CEO because I think if you look at the announcement in the year, so I joined Bekaert in 2022, a little bit of history about myself. I come from 25 years experience in the downstream chemical industry. I worked in large corporations, like for instance, BASF, which you might know. Joined Bekaert in 2022. And I guess that the improvement plan we've put in place in Steel Wire Solution within 12 months was probably enough for the CEO and the group and the Board to decide that with the team and the very competent team we have in BBRG, we could do the same and also lift up the performance. It's -- I agree with you, it's different challenges. I think if you look at BBRG, you're more on the on the growth, and you have significant platform, exciting platform that you will see later. But I think that is also from the logic and the approach, any things we can do, let's say, jointly. And I think that's why I've been giving this challenge.

Okay. Then my second question, kind of sneaky as well, but the general target for the low growth part of the business. So one that Yves described was 10%. Annie just described RR EBIT margin target of above 10%. You say in the presentation, 9%, that's probably then rounded, or is there a specific reason above, because mathematically, if you go 9% in SWS and above 10% for RR, the combined business should be well more than that's the target that we have.

Don't forget that on the business division, you have the corporate cost, so you have...

Yes, but those are excluded.

Yes, they are excluded in the division presentation.

No maybe you're right. At the total level, it's included.

So when you add to the total division, then you have to deduct the 1.5% about of -- and Taoufiq can elaborate or allude more on that. But that's the reason. So what we present is the division EBIT.

Okay. And then the final one, if you could provide a bit more clarity on that portfolio change, because you obviously understand that you're looking for high growth, high value-add markets in which to grow, but for example, what are you going to do with the agricultural business in the U.S.? What are you going to do with the nail business in the U.S. Can you be a bit more specific about that drive from 75% to over 90% that you've shown on the previous slide?

So the 75% to the 90% is what I call a product or, I would say, price point to the markets that are on target margin. And of course, the target margin are very different, whether you look at regions, our segment at end use and industry. So now I think in terms of focus, it's very clear. I think Bekaert and we have the focus to be -- and I will repeat myself on a sizable growing, attractive, innovative market segment. So we see that in energy utility. So you can expect that there we will definitely drive an expansion of our exposure to that market segment. In mobility, broadly defined. And there we have existing portfolio, but we see huge innovation potential, and that's what I presented with Ampact. And then on the portfolio that you have, you have decarbonated construction, natural hazard protection, rock fall protection, where you can also have all sorts of products that can very nicely contribute to providing solution in climate change application. And last but not least, that's part of the complexity, but I think easy to manage in SWS on industrial niche application. So whether that's going to be in the medical application or special equipment. But also there, we are looking at highly demanding technical application where the portfolio will be allowing us basically to improve margin mix while maintaining cash generation. And that is pruning, I would say, the portfolio on low-end construction on lowering agriculture. And I was mentioning to one of the guests this morning, that in certain sites, we keep a certain segment or certain product also to maintain good utilization of assets above 90%, also as a way to be cost efficient. So I think there is all parameters we'll use, let's say, to filter the portfolio, but with the ambition to constantly improve, let's say, margin mix we have in the division.

Chase Coughlan from Kempen. Just a quick one on potential divestment. So the Chile improved divestments, obviously closed not too long ago. And I think all things considered, there was one -- a decent multiple as well. Now in this new market environment, do you see the divestments that you're going to continue doing? Do you see those on considerably lower multiples? Or how do you see the divestments market looking at the moment?

So in terms of divestments, first of all, we -- so we have nothing concrete at the moment. But as Bekaert being 140 years in the business, we are constantly monitoring the situation and evolving, let's say, or looking, let's say, at options we have. Now on the market, I don't think that we could say that the last 3 years with COVID were very favorable. So at the end, it depends on the opportunity. And I think we have shown that in even difficult market condition because '23 was not necessarily an easy year. We've been able to generate a very, let's say, acceptable or nice multiple on this transaction, also finding a good home for the organization. So I guess it all depends on the dynamic and the opportunities we have. And Bekaert will never sell at a bad price. I think if we also think that there are no conditions and I think it was also the case for Chile, Peru, if the multiple would not have been there, we would have probably waited, because we've been here for 140 years. So we are also patient to make sure that we achieve the target we set for ourselves.

Maybe if I could just follow up on that. Because I see you still have a 17% in LatAm. I think the majority is still also rather cyclical there. So 2 questions on that. One is in LatAm specifically, do you have a clear vision on what needs to happen in that region? And then also, do you consider APAC also cyclical?

APAC, Asia?

And do you then see more of your exposure in the future more towards EMEA and North America specifically and [indiscernible]?

Good questions, several questions. I have to answer them. So first on LatAm North, I mean 2 comments. I mean the first one is one has to understand, it's a very different business we have in Chile, Peru versus what we have in LatAm North. So as I mentioned before, in Chile, Peru, you had 60%, of 6-0 percent of the business that was industrial retail. So again, cement, steel sheets, gloves, helmets, so things, very nice, very interesting, but not at all the strategic fit of Bekaert going forward. So obvious candidate for divestment. This is a very different business we have in LatAm North. And if you look both on the positioning of, I would say, the segments, as well as on the financial performance, it is not dilutive to the performance of the division. So today, I think to your second question on that part, yes, we have a very clear vision of what we want to do, both in terms of financial ambition that are in line with the financial ambition of the division, but also in terms of the transformation of the portfolio mix. Two very concrete example, in Ecuador, we start -- so we are exposed in Colombia, Ecuador, the 2 geographies in construction and agriculture. That's correct. But we have also a project and very concrete market opportunities energy utility in Ecuador, and we just signed, let's say, a contract to supply steel wire for the metro lines in Bogota in Colombia. So also architecting this shift towards a portfolio of segments that are in line with the strategic focus of, let's say, Bekaert, but also still wire solution. So that's for LatAm North. The part on Asia, I think, yes, we see that certain areas, if you would now ask me how do I look at Indonesia versus China, Indonesia has definitely more of a cyclical I would say, business, even if it's smaller, EUR 40 million of sales, it's definitely more of a cyclical business, more present in agriculture, construction. Whereas if you compare to China, we are much more in automotive, also industrial application, and they're also migrating successfully the portfolio to achieve a much better margin mix. So I think it's a dynamic picture we have in Asia. And there, I think we will continuously look at opportunity we have to improve, improve the segment portfolio, the customer portfolio, industry we play in, but also the footprint yes. And that's -- I think you can expect from us that, that part will be continuously and dynamically managed.

Then maybe a second question. Just a busy now medical springs, [ Ampact ]. How much do they represent of sales today? Is that still rather small? And then maybe on Ampact, it's a very competitive industry in there. I guess you are, at the moment, one of the fewer players that offer this. Where is the competition coming from? Do you -- I mean do you foresee more competition in the future? Or do you think that this is really your niche market that you are going to be able to catch all of market share?

So it's again a question with multiple questions. So I'll try to answer all of them. So first of all, I invite you to the showroom to discuss Ampact, because if I start on Ampact now, we are there for 20 minutes. I would say on Bezinal, of course, if you look at Bezinal, I mean these are traditional technology we've had. And I think the whole strategy, commercial strategy we have today is to leverage and bring them to the strategic segment we have. If you look at energy utility, it's a very substantial part of -- we have about EUR 400 million of sales in the U.S. in the energy utilities segment, where we have you can say, arguably more than 50% market share is something where we generate a very substantial share of our revenue there, again, with more than 15% CAGR in the past 4 years. If you look at the medical spring, indeed, it's more niche application. So there, you are more in the kind of multiple million euro of sales. So it's not the next EUR 1 billion division of Bekaert. But yet, these are attractive market segment. Why? First, because they are innovative and second, because you have growth potential in 2 adjacencies. So the first one is geographic. So we start in Europe and we expand in the U.S. market, which obviously for diabetes is a very strong market with very -- unfortunately, very strong market potential. If you look from a health perspective, but also Asia, I mentioned Singapore and China. So you have one adjacent or, let's say, growing potential when you think of geographic expansion. And the second one is on application, because this pen are now also already used in obesity treatment, and that is something where if you look at the pharma where treatment are getting approved and it's getting increasing adoption there. It's also something on the health that has to be addressed and that is providing for medical applications like this very high potential. And there, we have really a niche positioning and almost sometimes an exclusive, let's say, supply of technology and therefore, that's attractive because growing and with a margin that is accretive to the division. And Ampact, I mean, today, also there to be transparent, we were nowhere 18 months ago. We decided to venture into the transformation of copper and the coating of copper wire for -- because the underlying -- the vision we have is the underlying market of EV is growing. There are a few players active today, German Japanese player, Italian players and Austrian players. So it's still a consolidated supply base, and it's highly technical. And again, I think we can discuss in the showroom. So there today, we are more in the incubation, very difficult to say how much of that will deliver in the years to come. But the ambition like we have for [indiscernible], for [indiscernible] is to be on growth platform that are delivering EUR 100 million or multiple hundred million euro of business on a global basis, and that's basically the goal we have when we look at this type of new incubation project for Bekaert.

We have one more question.

Stijn Demeester, ING. To expand on the portfolio review team, do I -- so if I look at the bar chart on Slide 60, I deducted 75 basis points of the 200 basis points improvement is linked to this review. So do I say correctly that if you don't sell these businesses, then that part doesn't materialize? And what is the scope in sales that is linked to the 75 basis points, which is currently dilutive?

I mean, first of all, when we say portfolio, I mean, there are segments we exited in China, in Europe, in the U.S. and where we are not publishing, because sometimes it's a few million here, a few million there can go up to EUR 10 million, EUR 20 million. And again, remember, that's why we have a 2% growth ambition, because as we prune the portfolio, not necessarily always divesting EUR 600 million like we did in Chile, Peru, but kind of optimizing, I would say, by segment, by region, by application. I think that's what basically we do. And I see we've kind of modeled that indeed, there is a 75 basis point potential we can have, is it that with divestment not necessarily. It can be selling of customer list, but it can also be an exit and replacing this or migrating to other higher margin segments. And there, when you say what's the scope, the scope is EUR 1.5 billion. I think we constantly, let's say, look at the portfolio of application. In agriculture, there are some applications that we don't like, some others like vineyard that are contributing very nicely to margin. Same for mobility, same for energy utility, same for -- and we are also what is also unique and what is also key is you have to understand that we have also regional segment strategy in each one of -- if you look at China or Europe or U.S., the portfolio is also not the same. Portfolio of segment we have is not the same. And because needs are not the same and also technology sometimes that are required by the market are not the same. And therefore, that's extremely dynamic. So the portfolio is [ EUR 1.5 billion ] that we put under review constantly to improve. And the team working on this is the leadership team of SWS, and I think we do this on a daily basis.

Good morning, everybody. I realize I stand between now and first break and some of you might be looking forward to that. But I hope you will bear for me with me still some time I would like to tell you a bit more about BBRG short for Bridon-Bekaert Ropes Group. That is now well positioned to grow in the advanced lifting and mooring sphere. But before we go there, let's look where BBRG is today. BBRG is engaged in the design production and commercialization of high-performance ropes and advanced courts. We do that on a global scale, and we are known in the industries where we work as a leading innovator. Within BBRG, we distinguished 4 main product categories. Steel ropes is the traditional part and still the biggest part of BBRG. There we talk about high-performance steel ropes in mission-critical applications, and our specialty is on heavy-duty applications. So larger-sized ropes that you will typically find in mining, offshore oil and gas and heavy-duty cranage in crane and industrial. Another product line is synthetic ropes. In synthetic groups, we are not a traditional synthetic ropes player. They mainly play in the marine environment. BBRG is more into advanced engineered synthetic ropes that you find in applications such as mooring permanent mooring and temporary mooring, mining equipment, heavy lift links, these type of things. On the other side of the diameter spectrum from large-sized rods, steel rods and synthetic rods, we have our cords, Advanced Cords, very fine cords. Cords with extremely high tensile strengths, but superior fatigue properties. These cords, they are used to reinforce powers in applications like elevator belts -for belted elevators, timing belts, but also a new product, Armofor or a product that is not that new, but it is getting a lot of new attraction in the market, which is reinforcement of thermoplastic pipes, that starts to see more usage in oil and glass, and I will elaborate on that later. And the last but not least, that is the advanced services, the advanced ropes services with all has to do with inspection of ropes to improve lifetime of rope monitoring through the lifetime of the ropes and the VisionTek technology, which is a technology that we acquired a number of years ago that is really a superior visioning technology on which we build for this business opportunity. Looking at the figures, BBRG last year, close to EUR 600 million revenue, 2,500 people that are spread around the rope. So we have acquired global footprint, 14 plants. You can see nicely spread around the globe. Unfortunately, Africa is still a bit missing. As a result, we have revenue nicely spread across the different geographical areas also. And the segments, you can see on the other chart, mainly mining, number one, energy number two, energy is still a lot of oil and gas, but renewables becoming more important, train and industrial, but more on the heavy-duty side, as I already mentioned, and then the next one would be elevator because of this position we have with elevator belts in that particular segment. Some of you, many of you who have been following Bekaert for a while know that this division of Bekaert was in distress. As a matter of fact, we were loss making back in 2019 when Bekaert took 100% ownership of this business -- of this division. Therefore, the focus on the past year has been on a profit restoration. And you can see the result of our profit restoration efforts in the graph. I think the -- it has been quite successful, sorry. The drivers for this profit restoration have been on the first hand, portfolio optimization. Stepping away from low-margin accounts, low-margin projects, low-margin subsegments and focusing on those accounts, products subsegment, where with value creation -- with innovation, we can create more value for the customer and, therefore, demand better margins. The impact of this optimization has been quite important. That's why in the first year, we have even seen a decline in the top line, but that has been the importance. A second driver very important is then adapting the footprint at -- to that new mix, but at the same time, trying to consolidate searching economies of scale. We have done that in North America, closing the Canadian plant, consolidating in North America. We are, at the moment, doing that in Europe, closing the German plant, consolidating in the U.K. But we have also expanded capacity in those parts of the world where profitable growth was still possible. And then the third lever, and my colleague, François and Annie have referred to that, that is in the genes of Bekaert, these are the traditional improvement programs we have of commercial excellence, working on the pricing, operational excellence, working on the cost and this all supported by constant innovation on the product side and on the process side on making those products more effective. We believe we have realized the target of the profit retaliation plan. And we are now -- we also are sure that they are embedded now in BBRG as it stands today, and we are now looking forward to reinstate growth for this division. Taking it back to each slide. Indeed, BBRG has moved from troubled side to one of the growth platforms for Bekaert, but slightly different still with a strong cash generation from the traditional part of the BBRG. Where are those growth opportunities? Growth opportunities that are driven by market opportunities in itself related to global trends like sustainability, digitalization, urbanization. One examples is elevator. The elevator market is a constant growing market. Urbanization and growth of population makes there is a constant drive for more housing, need for high-rises. High-rises need elevators and that is a constant growth segment. We play there with our what we call hoisting cord, the cord to reinforce those belts, but we are now also very close to qualifying as a belt supplier ourselves. So we will go downstream and produce and commercialize those belts ourselves and another product called Flexisteel which basically is a 1 cord belt. It all drives on the same performance of that product that allows a much competitive machine room for the elevators and a more energy-efficient elevator. This is an important driver because it's not only urbanization, but also sustainability and to show the importance in the past 10 years, the growth rate of belted elevator has been twice as high as the growth rate of the traditional steel ropes elevators. Although steel ropes, we would say, it's a product, for instance, we have BBRG, we are not very active in. So we are focusing on that. Other growth opportunities, I already introduced it a bit when we looked at the different product categories of BBRG is the advanced digital services that we are offering based on our VisionTek technology. Sustainability, one of the drivers to achieve sustainability is extend the lifetime of the products. That's the first that you would -- you need to try to do. In many applications for ropes, ropes are changed out just after a number of months or a number of years. It's just time-based. First thing you need to do is make it condition based. It changed the ropes when the conditions demand that the ropes should be change the health. And the ultimate step or the next step is monitor the role through its usage so that you optimize the usage of the ropes and extend to the maximum possible the lifetime of the rope. And this is particularly relevant for very expensive, very large-sized ropes, and these are exactly the fields in the rope world where we are playing. The 2 other growth opportunities are slightly bigger, and I will elaborate on those a little bit further. One is related to offshore wind and more particularly floating offshore wind. Still very nascent, but with strong growth outlook and where the world is in need for a mooring solution, which we are pretending to supply. And the other one has to do in the midstream oil and gas field, there is a drive, a change from switching from traditional steel pipes to reinforced thermoplastic pipes. And with Armofor, we have an excellent candidate to play in that growth opportunity also. But look, let's look at these 2 opportunities in a little bit more detail. First, floating offshore wind. When the world wants to achieve its net 0 target by 2050, a lot of new renewable energy will be required. That's going to be solar, also wind. In wind, traditional wind solutions, meaning onshore wind and bottom fixed offshore wind, important growth drivers for us also when we talk about heavy lift cranage and heavy lift slings, but the next one that will also be needed in order to get to the overall target is floating offshore wind. So wind turbines mounted on floaters that are floating in the sea. The latest estimates are, but the comp will certainly -- that is going on now, we'll certainly update this figure. There's going to be a need of about 250 gigawatt of floating wind capacity by 2050 in order to realize the net 0 target. I mentioned that is nascent and people who are following that know that the start is a bit difficult. And there are announcements on difficulties on the supply chain, there are delays of projects and we cannot deny that. So if we sum up all the announcements of the different governments around the world on what their ambition was for floating offshore wind by 2030, then we should have 23 gigawatts installed by the end of this decade. Now if we look at the latest update of the Global Wind Energy Council, who actually look at what are the projects who has the permits, what is the stage the project in and we add up what can be achieved by 2030 then we are more looking at 10 gigawatts by the end of the decade. So a big gap, but still sizable. Why? Because 10 gigawatt of floating offshore wind in terms of more in solution that is required for that represents more or less EUR 700 million of synthetic mooring line market for us. And on top of that, about the same size of additional components in the mooring line, all types of hardware that are also included in those mooring lines to make them work, anything between the anchor and the actual floater. I mentioned the second EUR 700 also because what is maybe new for Bekaert and certainly new for BBRG is we also want to play there. We want to present ourselves as a solution provider in mooring of floating offshore wind. Why is that? We have been very early in our engagement in this sector with participating in a lot of demonstrated projects. Today, that's the only thing that is out there, this a demonstrated project. As a matter of fact, we have 3x more demonstrated project than our next competitor. This means we have learned what the impact is of different types of synthetic fibers in the mooring solutions. What are the demands of different types of floaters, tension like platform, SPARs, barges, all types of things. This has allowed us to sit at the table and to engage with 3 out of the 4 leading companies who actually have assets in the sea or in the water of today and who are most likely to be the first one to achieve farm scale capabilities. And from that interaction, we have learned that indeed, there is a need, there is a demand in the market for a single point of accountability for the entire mooring solution, meaning between anchor and floater because it's a very complex thing. And somebody needs to manage this and come up with innovative solutions because if floating offshore wind wants to achieve it LCOE target level cost of electricity in this case, targets that are out that are set, yes. It's not going to happen by just taking whatever we know from offshore oil and gas mooring and then squeeze all the component suppliers to get cost out. They're just not going to be enough. We're going to have to come up with innovative solutions for those mooring of floating offshore wind, how it is different from the traditional oil and gas mooring. That's why we are working also on 2 parallel tracks. On the one hand, we are working on innovation of the synthetic part of the mooring solution, the pure synthetic ropes other type of fibers, maybe more flex fibers that can be useful in certain things. Other examples are integrated buoyancies, applying certain coatings that would allow for seabed context, all elements that can contribute to a lower total cost of ownership of the mooring solutions, but at the same time, on the right-hand side, looking at partnering with component suppliers that we believe based on what we have learned in those many pilot projects can make a real difference in terms of cost in the mooring solutions. And 2 examples are there. TFI Marine, we have announced we have taken a participation in TFI Marine already more than a year ago. And we are also their exclusive representative for mooring, floating offshore wind -- for mooring, for floating offshore wind. They have a, what is called TFI SeaSpring. They have load reduction device that can reduce the peak loads of the mooring line by more than 50%, which has a huge impact on the design and therefore, the cost of the mooring line. And you may have read it was announced last week here. We have also acquired a company called Flintstone. They have -- it's an engineering company, who has designed a quick connect solution, a quick connector, and this is very relevant also for the cost in terms of the cost of installation because it has a huge impact on speed of installation. When you are mooring an oil platform, a huge ore platform and you have to hook up 12, 16 mooring lines, it's not that relevant. But if you have to more -- tense home of even floaters in a wind farm and each has 3 to 6 more lines then a quick connector makes a big difference. Moreover, it's not only a quick connector, it allows also for quick reconnection and reconnecting of the floater is relevant because the idea of the floating offshore wind industry is that they will throw back the floater with the turbine when maintenance is needed. So very nice opportunity in floating offshore wind. The next one I said I would elaborate a little bit more on is the Armofor opportunity. Midstream oil and gas and mainly in the Arabic peninsula, Aramco, the Saudi Arabian oil major up north the Abu Dhabi, oil major are driving this. The switch from traditional steel pipes to reinforced thermoplastic pipes, they call them TRPs. To -- why are they doing that? The driver there is, on the one hand, reduction in total cost of ownership. It's faster installation. It is -- requires much less maintenance. They see that today, a lot of those steel pipes that were installed 10 years ago are creating headache in terms of repairs of corrosion problems, treating with corrosion problems? So that is one thing. But the other thing certainly is also they are keen to present themselves that in oil and gas, they are also doing an effort to contribute to the ESG target to recarbonize what they are doing. And at least in their midstream applications by switching to plastic pipes, they can reduce in their Tier 1, Tier 2, up to 60% of carbon emissions and 50% of energy consumption. It doesn't change the Tier -- the -- sorry, the Scope 3, of course, which is the downstream but, in certain combinations, very relevant in the midstream part of oil and gas, as I mentioned, you easy installation or easy armoring of those pipes with steel reinforcement is a candidate for steel reinforcement and a successful candidate, I've may already said, for steel reinforcement of these type of pipes. This allows to size the market, just to give you the idea that, I mean, there are thousands of kilometers of pipe out there, 1,000 kilometers, switching to still reinforced thermoplastic pipes could represent anything between EUR 50 million and EUR 200 million in Armofor sales. Why this big range because it all depends on what is exactly the temperature, what is exactly the pressure and that determines the number of layers of this Armofor pipe that you will need. So it's a bit of a guide range. But definitely, things are at the point of changing. And that is mainly driven to the Abu Dhabi National Oil Company, who have very recently done an extensive field trial, 60 kilometers of RTP pipes from 10 different -- across 10 different pipe designs from 8 different suppliers, yes. That's both for water injection and hydrocarbon transportation in a wide variety of temporary ranges and pressure ranges. And the pipes reinforced with Armofor have come out successful on that test, on multiple occasions because we have offered Armofor reinforced pipe through different of those more than one of those pipe suppliers. So we are very optimistic about this opportunity going forward. How do we address that market? Of course, those oil majors are not looking for reinforcement. They are looking for a pipe supplier. So the way to go to the market is working together partnering with those leading pipe suppliers that address this market and that have chosen Armofor as the reinforcement element when steel reinforcement is required. Together with these people, we are also codeveloping further solutions to widen the application date of this type of pipes. At this moment, working on high sour applications in the oil and gas field, there is a typical distinction between suite applications and ever more sour application test to do with H2S pressures in the liquids that you need transform. And if you can come up with a higher sour solution, the application -- the field of application becomes along there. So to conclude on BBRG, we have been working on the profit restoration in the past years. This turnaround is now complete and we have set the foundation for growth. We have identified multiple growth opportunities. The two main ones, like François mentioned, with potential of hundreds of million additional revenue are floating offshore wind mooring and Armofor for steel reinforcement of thermoplastic pipes. This will allow us to realize double-digit CAGR in the coming years, while maintaining that EBIT margin also double digit above the current level. Thank you. And I take questions if there are any.

We are running a little bit of time. So I suggest to take coffee now and any questions we have on Bruno section, we will answer the questions at the end.

Or during coffee is also possible.

We'll take 15 minutes break. [Break]

A very good morning to all of you. There's a lot of passion and enthusiasm about the topics that we're bringing and not just with the presenters but also with the Q&A. So that's very much appreciated. Good I have the pleasure to introduce to you our growth volume and what we're delivering in the area of construction decarbonization. Now I'll build my story up in 3 different chapters. So first of all, is establishing where we are today and what have we achieved in the meantime then look a bit more ahead and what is the opportunity ahead and how do we make sure we maximally capture that. To then sum up of why we are so excited about this growth story? First of all, construction decarbonization, I'm sure needs a bit of an explanation. So as Yves was pointing out, the construction space is a vast space, $11 trillion total addressable market. So what is the field of play that we choose in that big container called construction? We look into decarbonizing that space by applying an engineering-driven specialist approach that actually converts traditional reinforcement, steel rebar, mesh, by greener and smart reinforcement solutions. That is exactly what we do. And we don't do that across the space. We do that in selected segments. So segments where we have the combination of, on the one hand, an attractive market, a sizable market, a high-growth market. On the other hand, also that ability to win and the ability to really make a difference on those criteria important for our customers. So those business segments are depicted here on the left-hand side, and we operate primarily in flooring with customers like Amazon, recently also a Tesla job. We look into tunneling and mining, often related to, for example, metro projects. We also look at Infrastructure, the broader infrastructure space, where we look at port infrastructure, but also road enforcement, for example, and then Renovation. Renovation also a critically important element, for example, in bridge repair or in external installation of certain buildings. We address these opportunities with a portfolio of well renowned brands. And the line share of our business is actually covered by the brand that Yves already mentioned, the Dramix brand. This is very strongly resonating in the markets where we operate. This is also a brand that has already existed throughout several generations of products, and we have the 3D, 4D and 5D generations of which the latter 2 are patent protected. Another brand that I'd like to highlight is Falconix. Falconix is a relatively new brand in the portfolio. It is linked to how we professionalize the service offering. And professionalizing not only means that we actually charge service revenue, but also that we leverage this service capability to break open the more advanced applications, the more challenging applications like, for example, rafts or foundational force. Now the most exciting part of this slide is on the left-hand side, where we're in this conversion game in which we are the market maker in which we take our customers by the hand with an engineering-driven approach to actually deliver a greener, lower carbon and smarter solution. And there you see the worldwide penetration of fiber-based reinforcement. And so in the most mature, you could say, of the selected segments, it is only 20% today that is actually being converted and tunneling and mining 15%. In Infrastructure, it is less than 1%, quite negligible, the same on Renovation. So that's what is critical in my message here that this is only the beginning. And we're really at the start of this further conversion the upside potential is huge. Now the other bit of good news is that we don't start from scratch. And this is already a business in which we have a good critical mass and a very firm position obtained with 700 employees spread throughout the globe, highly experienced, highly networked, Construction is a people's business. So that's for us a cornerstone of our success. Those teams together, they delivered EUR 400 million in 2022. Spread over the business segments, as I depicted on the previous slide. So firmly in flooring, also tunneling, Infrastructure and Renovation are the smaller segments, but also the faster growing ones, are the ones where we have most momentum in terms of growing applications. In terms of geographies covered, we see the strong dependence on Europe, also Middle East, but now also Asia and Americas and also there, the smaller components are the fastest-growing ones, really attributing the fact that we're globally diversifying further our portfolio. You see that we operate in this space throughout an operational footprint that is nicely geographically derisked. And it really allows us to provide excellent service levels to different customers throughout the globe based from north to west, east to south -- east to west, north to south. Good. The value proposition that we actually delivered to this segment is clearly one that is strongly resonating with what is important in construction. First and foremost element is related to safety. Safety in the construction space is always the key point of concern. And so not having to maneuver these bulky nets, not having to maneuver these bulky rebars and measures is a safety improvement for our customers on their job sites. Second element, needless to say that sustainability strongly resonates in construction, 40% roughly of the anthropogenic CO2 is allocated to this industry sector. So giving there our customers the ability to make a big difference by reduction of steel, by reduction of concrete actually allows us to really make a meaningful 35% improvement on the overall CO2 balance of those projects. Cost and efficiency always key drivers, obviously, and for sure, also in construction, so using less material, using less time, but also needing less scarce labor are 3 core elements that also help us to further improve on the TCO, the total cost of ownership, equation by at least 10%. And then the last big value pocket is durability of the asset owner of the user. So he has a longer life out of these assets, also lower maintenance costs, better flexibility, for example, on repositioning of some of these frames and racks. And so also a happier user in the end of the asset. Now this activity has a pretty long history in the group. And so that also means that we have an unparalleled track record and possibility to build up references in this market. that really allow us to further have proof points of the value that we can bring. Let me highlight just a couple, and not all of them on this slide, but in flooring, for example, what I'd like to draw the attention to is the one that's at the bottom, that's a Norwegian project. In industrial flooring, obviously, Ford, Noon and in Amazon and so forth, are very well known. But the example here is more about elevated slabs, so going vertical and opening basically a new vector of growth by looking into intermediate flooring and high-rise buildings. For this, we have developed a concept that is called Sigma Slab together with a partner with CCL, a leading partner in posttensioning and so the combination of fiber reinforcement and these strengths and the post-tensioning capability allows us to make that happen. And also in this obviously very safety critical application gets the proper endorsement. And so on that one, as you can imagine, it's quite a regulation and norm sensitive. But once we break through that, literally, the sky is the limit. If we look at tunneling and mining, there I'd like to highlight the one at the bottom, which is in Kanpur, a secondary city in an Indian environment. India, obviously, going through an infrastructure boom, also hopefully political stability that will further enable strong growth these coming years. And in Kanpur, we've been able to establish a concept of mechanized tunnel boring so with these precast elements, and established fiber-based reinforcement and in our Dramix 4D product as the standard for this approach. And that is really a tremendous catalyst for further growing in the Indian environment. And we see that a massive amount of metro projects coming up. And so for example, the Delhi Metro project is already eyeing the same solution because of that proof point because of our flagship project in Kanpur. On Infrastructure, let me highlight one at the bottom, which is about electrical cabins, and it opens up a bit of minds on the diversity of underlying applications, obviously, in infrastructure. All the electrical cabins in Italy need to be actually responding to a certain CO2 reduction criteria versus their historical performance. And fiber-based reinforcement has been the tool for many of our customers to achieve that. Not just by reducing the amount of steel but also by reducing the -- basically, the thickness of the walls of these different components. And that has really given a very strong momentum and a nice volume application in Italy in infrastructure. So all these different elements combined have actually resulted in the growth trajectory, as you can see on the slide here. So throughout steel wire fluctuations, and we've been able to deliver a 7% CAGR over these different years. And what is more important is that also on the profitability, we've been able to gradually further improve. And that is linked to various elements of the mix. I've been explaining the geographical mix. But there's also in terms of product mix, a huge improvement, and with now 50% of the portfolio in those patent-protected products. And we also see more and more of those higher-end applications that I've been highlighting on the previous slide. Another fundament obviously, and has been also mentioned by my colleagues is this fundament of operational excellence and making sure that we continuously questioned our footprint choices. All of that has culminated into 40% market share. So clearly, a market leadership position as we are roughly 3x the size of the second player in this space. So far, we've been very much sort of backward looking. Now we want to obviously look ahead and see what the bright future brings. First of all, the role of our activity in the group is quite clear. As you can see on this slide, it also was presented by some of my colleagues. So in construction decarbonization, we further built on that leadership position. We are strongly aligned with sustainability and we want to grow in that region, application and also offering space, both organically and inorganically. And inorganically, we're looking into new materials, and we're looking into adjacencies like joint solutions. And we're also looking into what Annie was mentioning in terms of circularity of steel from tires, the possibilities of recycling some of that steel in construction purposes. But so looking ahead, first of all, from a macro perspective, we see that many of the current trends in the industrial space at large, but particularly in construction, are really wind in the sales of greener and smarter reinforcement solutions. Urbanization, a very obvious one. I already mentioned that in an Indian context, the amount of metro investments is very, very sizable. Sustainability, clearly climbing up that buying criteria is in our industry. Government spending, we see build back better in the U.S. We see Gati Shakti in India. So a lot of investment there in renewing infrastructure core, putting up new roads and new infrastructure. And innovation is also an important driver. And that's really the accelerator of pace in what you can say is a relatively conservative industry. The fact that we see more and more of that investment into construction tech is really helping us to change that conservativeness and really accelerate the pace of change. Other than that macro view, also wanted to share a bit, you could say more micro view on a specific segment, a specific segment, and I think that -- yes, the most mature one of the previous slide is flooring application where in industrial flooring, the average job adoption was 20%. Remember from that very first slide, but this slide gives a bit more granularity as to how these different regions actually adopt that solution. And we see that in steel fiber reinforcement, market penetration. On the right-hand side, you see a country like Germany. So roughly 60% of all the industrial floors in Germany adopt steel fiber reinforcement. Highly mature markets, fiber is competing with fibers. And so in that sense, a very established and interesting market. But on the other side of the spectrum and I highlighted there the top 3 economies globally, they are clearly only in the beginning. So I think this message very clearly further demonstrates that although this business is out of its infancy and is already there, but there is still a huge upside, a huge potential ahead. Now how do we capture that? And how do we indeed leverage on the fact that we are well ahead on that learning curve, whether it's in terms of references, in terms of experiences, in terms of customer credibility, we do that with this 5-step approach. And we look into a scalable model, into a repeatable model that allows us to take the different regions through these maturity steps that I was illustrating on the previous slide. The first one is all about customer centricity. And this is a market in which there's ecosystems making decisions instead of individuals. And so we always have to work with different contractors, different design offices, consultants, but we navigate that space better than anybody else. We've really been able to understand in different geographies, how we can find the necessary accelerators because that's point number two. So these key decision makers can really make a difference. And for example, Amazon is one of those parties that obviously has a very strong sustainability agenda. And we want to make sure that throughout all of its activities, it actually reflects that. And so also on the way that they design their warehouses. A third key element of the repeatable model is how we drive specs and how we drive norms and regulations. In a space that requires us to convince these norm and regulation bodies, not the most dynamic environments, but really asking for persistence and credibility. And those are 2 things that we have built up over these previous years. And so we can steer also the norms and regulations in the right directions for markets to become less conservative. The fourth one is on innovation. As you've seen on some of the references, we are the ones that help our customers track the most difficult nuts and the most challenging applications, breaking new ground. That's really what we stand for and what customers come to Bekaert for. And so that also helps us to not just be present in the top of the pyramid, but because we are there, really the market leader and the innovation leader, we also get involved for the bulk of their other projects. And that way, we can further cement our market share position. We don't do that on our own. We like to work with key partners with the leaders in the different industries. And it's very clear that Holcim is a name that strongly resonates and they're looking into, for example, lower carbon cement options. And there, we want to be the solution of choice to be combined then with those different chemistries behind low-carbon cement. So that's also one of the areas where we could develop with them. And Zacua Ventures is an example of a key partnership where we go invested in order to have a good connection with the startup community with that construction tech community that I was referring to earlier. All of that we do on that foundation of this asset this highly experienced team, this reputation built over 40 years as well as also this solid Dramix brand. So in summary, we operate in a market, in a conversion market that has a strong tailwind push by the key trends that we see on a global level. We occupy in that space a #1 position, a head start vis-a-vis any competitor, 3x the size of the number 2. We also have this list of patented and unique assets, whether it's on products or on patents or on references or on customer connections. And we bring those together in that repeatable model in order to get the different markets through these maturity stages. All of that combined allows us to, together with innovation, make sure that we further sustain that high margin profile of the business and continue to lead in this space. Thank you. Open for any questions this time.

And that's attractive financial profile, do you also have like targets in terms of EBIT underlying, which you want to achieve?

Certainly. The -- as also, Yves has been sharing some for the growth platforms overall. The ambition is to contribute to a 15% overall EBIT ambition. And that is no different for this growth platform. So that's also for us our North Star.

Okay. Wim Hoste of KBC Securities. Two questions for me. First one would be on the IP protection. How long is that still running on 4D, 5D?

It's more than 5 years that I can certainly tell. I would -- I think it's 7 or 8 between the 2. And what we also do is we make sure that we have a pipeline of new innovations coming to market. And so we are, at this moment, looking into quite promising further steps, further generations in order to create a different window of opportunity going forward.

Okay. And then second question would be on the competitive landscape. Yes, I think ArcelorMittal has been a competitor of yours in this business, but could you maybe elaborate a little bit on the dynamics you see are the new players popping up and in what regions? How do they try to compete? Is it fueling on price? Do they also go for an innovation agenda. Can you maybe also elaborate a bit on that?

Certainly. The first message that I'd like to share is in terms of competition, we look primarily towards traditional solutions, so primarily towards rebar and mesh. And as you can see from the adoption rates, there's plenty of space there to conquer. And that's our first focal point. Within the fiber space, there are obviously different solutions out there. There, we are clearly recognized as a market leader with a portfolio of products that is differentiating. 4D, 5D already commented on, but for example, also blowing the fibers is something that Bekaert is doing ArcelorMittal is not applying at this moment. This allows us for a sort of gradual dissolution of your fibers in the concrete better and homogeneous distribution. And we also look into galvanized fibers, for example, for certain applications where that's of value. That's also a differentiator versus, for example, ArcelorMittal. So we try to, on the product front, maintain that step forward. And we also look into the right fiber for the right application approach. So we also not just look at steel, we look at it from that customer's perspective. And in some cases, synthetic fibers, for example, can also be the best solution. And so that's also an element of our portfolio that is further growing primarily in the U.S. market, and it allows us to capture the full customer needs agnostic of the type of material or technology.

Alexander from Kepler here again. Because you mentioned that, yes, we provide the services to the customer. I'm just wondering if you make a sale, how much of that is related to services that you deliver? And how much of that is actually related to materials that you sell?

No, that's for sure, a good question. I think the -- on the service monetization, it is, today, we have an important presales effort that we undertake. So we are market makers. So we invest considerable amount of money in that presales effort. For example, that construction in Norway, I think, is an extreme example, but if you go into elevated slabs, a lot of presales effort is needed. And in those projects, we sort of capitalize on that in the product sales. And so it's not categorized as a separate service revenue, but it's reflected in an obviously a very high presales cost and a very high presales investment. The service revenue as such, today is relatively small, but of magnitude less than EUR 1 million. It's only the start. We launched that platform earlier this year, but we see it taking off very rapidly. And we see that connected to that service revenue, that is obviously also a product revenue associated with it, typically in those more demanding applications where we can add more value. So that's also giving us the higher margin potential.

Martijn Drijver from AMRO. Can you just refresh my memory, please? Why would it not be applicable in multi-tenant, so apartment buildings, flooring, tunneling service and renovation. Why not apartment buildings? It seems like a huge market.

For sure, for sure. And I think the applications that we have chosen. So I said their -- partly their size is what the terms are focused. The other is the ability to win. And the application that you referred to, residential applications is more critical. I think if you look at the floor, it's what is called the hyperstatical construction. So it has multiple support points, whereas in an elevated slap in an apartment book, the risk profile goes up considerably, of course. So that's also an application that requires a combination of them of fiber reinforcement with strengths, for example, as the example of Norway showed. And that's also an area where regulation is way more strict than on the industrial flooring. So it takes a lot of time to make sure that we have the regulatory support to go into elevated slabs. We have that support in parts of the Nordics. We also are now having projects in Saudi as well as also in Northern Africa, and we have our first ones in the U.S. coming about next year. But these are clearly projects that require more proof points and more interaction also with the norm bodies in order to get really into volume mode.

Just a follow-up. So that means this is obviously not going to be of importance in the current strategic period, but it's a more long-term prospect?

Correct. Correct. The elevated slabs, for example, is a relatively minor part in our overall growth story. Absolutely.

And maybe just 1 quick 1 for me, Chase Coughlan from Kempen. With regard to the penetration, so sort of similar to the previous question, in some of these applications like Renovation, Infrastructure, why is it so much smaller than flooring, for example? Is it that it's simply not as applicable? Or it's not as people aren't as aware of the benefits in that area? Or why is such a disparity there?

Yes. I think the fair answer is that those are areas with a relatively recent focus and also areas in which we are more still in a phase of further infrastructure, as you can imagine, it's still a very wide bucket of different applications, so in which we are further prioritizing and selecting those areas that really deserve that focus. In construction, we have typically an invest harvest cycle of 2 years. You don't walk into a market immediately have the success. It takes quite some time to develop it. So we have to pick and choose quite carefully which doors were not during those 2 years because if we were not the wrong ones, after 2 years, nothing comes back, right? So that's also why in these markets we continue to be putting the right efforts, putting a disproportionate investment, but on those pockets that really give that return later down the line. Okay. Thank you.

All right. I think you got all excited about the wonderful world of [indiscernible] and beyond and my turn, and my objective is to keep you as excited for Energy Transition, right. I'm going to further zoom into the hydrogen opportunity. Good morning. My name is Inge Schildermans. I'm the Senior Vice President of Energy Transition and 20 years with the company. Now Bekaert will play and is playing a key role in the Energy Transition because we manufacture the necessary solutions for the energy uptake and its integration. And we do this in the spirit of the energy trial. First of all, security of supply. So what are we contributing? We manufacture solutions that are used in the most critical applications, high pressure, high temperate corrosive. Secondly, sustainability. We do this in a sustainable setup. All products will reduce the environmental footprint throughout its life cycle. And last but not least, affordability. Our technologies will strive to make the transition affordable by focusing on the long-term total cost of ownership benefits. I will take you to 3 sections, giving a bit more transparency of what is energy transition all about within Bekaert, focusing us on the hydrogen opportunity and then share a bit what's more, what's next. In Energy Transition, we employ close to 1,500 people. And as you can see, we already have a very global footprint, we serve our products from 14 different locations all around the world. And in 2022, we reached the top line a bit higher than EUR 400 million. But what is part of energy transition? In energy transition, we currently span over 5 key field of plays. We are covering the value chain from the generation till distribution to the application and use with connected offerings, with global brands. Within Hose Reinforcement, we provide wires that reinforce hoses in the most critical applications, high-pressure hoses. In Fiber Technologies, we are a market leader in high-end filtration applications using metal fibers currently now on the brand, Bekipor. But we also supply statuary automotive solutions for automotive glass bending and also direct comfort heating, mostly used in electrical vehicles. Within heating solutions, we manufacture and sell burners and aluminum condensing heat exchanger components for [indiscernible] used in the residential, the commercial and industrial heating processes. Within Ultra Fine Wire, we are a technology leader in a very fine core wire used for cutting off solar wafering and semicon wafering. And last but not least, and that will be the main topic of today. We are active in hydrogen. And we provide key components for electrolysis cell stacks. We provide porous transport layers that is branded on the name Currento. Now what you can see over all these different end markets is we take a #1, #2 position in those markets. We have a technology leadership with high-performing products. And what makes us unique for competition is that we have unique underlying assets that help us to pivot small into completely new areas. And let me share an example of this one. We would not have been that far in Currento for hydrogen, having that market and technology leadership where we are today. If you would not have used the deep expertise and experience of our fiber technologies and filtration applications. We have been using the processor, the technologies, and that has really brought us to where we are today. And not only that, we also have a very long track record. We are more than 50 years in the market and more than 20 years with Currento, actually in the market. We have been first specked in with leading players in these industries and this has been a result of the very healthy P&L performance. However, there is more. With these 5D fuel of place, we can also enable various new energy transition markets. These connected offerings, these global brands are called the full value chain. But if you look at the generation part of that value chain, I think that is covered well enough with the hydrogen opportunity. I will zoom into that later on, but there is more than hydrogen. If you look at the middle part, transmission and distribution because of all the trends that we see in the markets, decarbonization electrification, renewals update, there is also more and more demand for more safe, smart solutions for the reinforcement of hoses. For example, the bunkering hose is being used for the transportation of ammonia from ship to shore, from ship to ship. Another application is the reinforcement of hoses for the fueling and the refilling of hydrogen for transportation. But not only in that middle part, not only in transport and distribution, but also in the end applications, we see significant opportunities in the energy transition. And allow me to focus on the heating part because in the heating landscape, we see a significant transformation ongoing. There is a clear need to go from fossil fuels towards electrification. Now this will take a very long journey. This will not go and will not happen overnight. And that is where bekaert comes in because we provide solutions to help make our customers make that shift in every phase of that evolution. For example, with our solutions currently, we already bring much more environmentally friendly solutions for the fossil fuel burners. We've made our products also hydrogen ready. So from the moment that natural gas is going to be replaced by hydrogen are going to be mixed in, all products are there and are ready to take off as of day 1. Moreover, for those applications where there is a trend to electrification, we already work together with partners to work on hybrid solutions. So partners with heat pump components and we, with our burner and gas boiler components offering a hybrid solution to the market for those applications where electrification is not yet possible. And we are looking into to see if we can have a play in heat exchanges for heat pump components. And why is that? Because if you want to completely make heating green, you need to do that with heat pumps. And if that electricity for the heat pump is coming from renewable sources, it's green heating. So we are going to see that as a play for us and heated change for heat components as well, leveraging our market access because there's our ecosystem that is making the shift, leveraging our global brand, leveraging our global footprint and leveraging our partnerships in the market. So we have a clear mandate within the group. We are a growth driver for bekaert, having market leadership in specific end markets, offering sustainable solutions to the market, and we'd like to expand that with selective bolt-on M&As in specific end markets. So let me zoom in into the hydrogen opportunity. The world's energy landscape is seeing significant transformation. Nations drive to fight climate change, but at the same time also securing energy supply. And clean hydrogen is a critical tool in helping to decarbonize that market. If you look at -- the hydrogen being used today being used in industries and refineries, we already talk about more than 95 million tons of hydrogen. So imagine replacing that with clean hydrogen. And then we didn't even touch the new applications such as heavy-duty transportation or green steelmaking, it just will only drive up that demand. Now 99% of those hydrogen use, is coming from fossil fuels. So -- and that is where electrolysis comes in because electrolysis is the process of making clean hydrogen. Electrolysis is the process where you split water into hydrogen and oxygen. And if you use electricity from a renewable source such as solar and wind, you call it clean hydrogen. Now there are different types of electrolysis technologies. Some of them have advantages disadvantages. You have the more mature alkaline electrolysis. You also have the high-performing alternative being PEM, Proton exchange membrane electrolysis; and this is exactly where bekaert is playing. But you also have the more emerging longer-term anion exchange membrane electrolysis and also there, bekaert is focusing on. So what do we do as bekaert? We provide key component porous transport layers being used in these electrosis industries. There is a very strong momentum. Climate science is as more clear as ever. You cannot have net zero if there is no clean hydrogen, right? But also the political momentum is very high. It's anything but fading, especially in those areas, in those regions like Europe and North America, already front runners for a couple of years, but they even have, let's say, elevated their financial commitments only recently. But also the announcements of green hydrogen project is still everywhere. I think that landscape is very, very dynamic. If you look at the last 12 months, they have been announced extra capacity of close to 57 gigawatts, bringing the total announced electrolyzer capacity by 2030, close to 270 gigawatts. Now from those applications of those technologies, we're already is clear, which electrolysis technology is being chosen, 40% to 45% is [indiscernible], and that is where Bekaert is active. However, the FIDs or final investment decisions are few, there is some uncertainties and timings due to delays due to higher costs due to regulatory uncertainties. Now despite these uncertainties and timings, it's clear that this market is huge. It's big and it's there to stay. And we, as Bekaert, we are ready to ramp up and take that accelerating in the electrolyzer industry. Now we take as a base case scenario that there will be an annual electrolyzer market of 50 gigawatts by 2030. The AEM in these markets, they announced 80 gigawatts by 2030. So our scenario is a base case scenario. However, whatever scenario is going to be big. But what we are confident in is the next 3 years. And why is that? Because we have insights on what our customers are asking for demand. We know what they will be putting on the market, and we have been underpinning that via long-term supply agreements. So we have visibility for the next 3 years. We say that there will be a 10 gigawatt of an annual electrolyzer capacity by 2025, 50-50 divided over PEM and over outline electrolysis. And we are already there since a long time. It all started in 1997 with the initial development with the Nippon Institute of Technology in Japan. Now since then, we have been building several proof points in different regions in the world, especially Europe and North America. But it is only as of 2021 because of the widespread support from governments, from industries, from societies at large, that we have been accelerating that market and technology leadership position. Now what have we been doing? We have been investing in footprint in existing Bekaert locations in Japan in Belgium and in China. We have been investing in R&D facilities in our R&D center in Belgium. We have been investing in breakthrough technologies in the ecosystem that we're integrating into our next-generation product offering. We have been, as a market-driven organization, collaborating with all the key players in that industry working together in several consortia focusing on the breakthrough the next generation of electrolysis solutions. And currently, we are building our gigafactory. We want to have an operational 1 gigawatt from that multi-giga factory as of 2025, expandable to 5 and 10 gigawatts and beyond. We are a market-leading Tier 1 component supplier in the PEM electrolyzer industry. We provide Titanium porous-transport layers for the electrolysis cell-stack eventually also with the platinum coating on top of it, and this is representing 15% of the value of the stack. As mentioned already, Pioneer for more than 20 years in this area, we have been building up the trust and the commitment of our customers because we secure the supply. We are not the bottleneck of that growth. We do this with a next generation of product that is able to generate much more value for them, lowering their total cost of ownership. And we do this with the highest quality as possible, still knowing that the customers are still fine-tuning their final offering as well to the market, right? And we do this in a sustainable setup. Our business pipeline consists of the top 10 AEM players in the industry. We are qualified and spec-ed in with most of them, and we are in the process of validating with the rest of them. These top 10 AEM players, they are fast scalers themselves. They have reliable demand. They have some uncertainty in timing, but they have built a fast tactical themselves. They already have invested in their gigafactories or the constructing ones in the next 3 years. But this landscape is also fast evolving. Currently, as Bega, we are serving more than 300 customers in the different phases of the development journey of those customers. And how do we do that? In our scaling approach, we actually have 2 main priorities. First priority is scaling to follow the demand of our customers. Like I said, we want to be the bottleneck of our customers. And currently, we are the strongest and most reliable of their partners. And we do this moderately, meaning that whenever there is a request for an extra demand, then they invest in the next capacity buildup, this is triggered by a firm demand of the customer because it's underpinned with long-term supply agreements. And we have good visibility in the next 3 years what the volume is all about. Second priority is about doing this faster than the competition, going fast to the experience curve and ramping up these footprints, bringing the cost down for customers in this way. So far, we have been building up a footprint of 2 to 2.5 gigawatt in the existing footprints of Bekaert. And we are building up that giga factory, of which we'd like to have that first gigawatt operational in 2025, expandable to 5 gigawatts and beyond. But what's next? What's more? So from today's position, being a component supplier porous transport, brand name Currento to the PEM electrolyzer industry, this is currently representing an addressable market of around EUR 0.5 billion. What you want to do more? Our customers ask us to provide much more value to them by going vertically into the cell stack, by offering solutions, breakthrough solutions with less precious catalysts being used, by offering them lower total cost of ownership and by offering them membrane electrode assemblies, and this via a very specific make-or-buy strategy. So not only going more vertical offering more value to the customers in that direction, but also bringing value beyond PEM electrolyzers and going into the other electrolyzers industries as well. We are already visiting in the more emerging AEM market, anion exchange market. However, we are also looking into the more mature alkaline market. So both -- the combination of both going vertically and horizontally increases the estimated addressable market to EUR 4 billion by 2030. Now being a market-driven organization means that we are not doing this all alone. We are collaborating with the key players in this market with the key players in the vehicle system. For example, we are collaborating with Toshiba for the manufacturing and the selling of these membrane electrode assemblies, using the brake technology of Toshiba and reducing the Iridium content with more than 90%, and this is massive. The technology license will be targeting to sign before the end of the year. And we are working with several customers. And with 1 lead customer, we are targeting to have a commercial solution into the market as of 2025. So this was, let's say, elevating zooming deep into the vertical part of our next steps. But as already mentioned, we also like to offer value beyond PEM electrolysis. We have a leadership position with titanium porous transfer players in PEM, and we're using that position to pivot into nickel porous transport layers for the AEM market. And next to that, we are exploring a position in the more mature alkaline water electrolysis by selective bolt-on M&A specifically in this area. And why is that? Because we can bring strong synergies together. We bring here the market access of Bekaert, the global brand, the leadership we've built up so far, the global scaling and of footprint, and we all do this because we want to address key customer needs of the future, which is supply chain chaining -- scaling of the supply chain, apologies, to make it less complex to reduce also geopolitical risks that we see, reducing dependencies of China for some of the raw materials, but also increasing the system efficiency by having more performance products and putting products in the market with a lower cost for our customers. So let me summarize then the key takeaways. I think it's very clear that the hydrogen segment is going to bring significant growth to the Bekaert Group. We are operating in a highly attractive market where we're offering critical components to that industry doubling the sales year-on-year. We have been building up that leadership position already for more than 20 years. We have inspected in with the most important players as of day 1. We have strong partnerships with the key industrial players in our ecosystem. We have a well-developed ramp-up strategy. I mean we are big we have the capital, we have the structure to scale. We have the abilities to scale, while mitigating the risks because we have a modeled approach. And then last but not least, we also see growth beyond what we are doing today, a market expansion potential, leveraging the expertise that we have beyond the current PEM electrolyzer market. Thank you very much. Now I welcome your questions.

[indiscernible]. With your modular approach, can you elaborate a little bit on what your competition is doing? Because if they are of the opinion that they can build more capacity upfront, and you mitigate risk by that modular approach, you might lose out because they want that product now, not tomorrow or next year. So can you tell me a little bit about what the competition is doing in particularly this aspect?

Well, when we look at competition, you can look at different levels of competition, those that copy exactly what you were doing, so on the product that we are having. And there we see that they are not scaling as fast as we ask -- we're already in the market for more than 20 years. So we have we do have, let's say, a leap forward. We can also look at substitutes in that market, right? So not talking about metal fibers I'm more talking about metal powders and meshes. However, we are converting them into battle fires. There we see that some of the competitions are putting capacity in place. But the difference with Bekaert is that we are doing this globally. So we have a global footprint that we are leveraging already -- let's say, plans that're already existing from already there for several years using that technology, using these processes and scaling it from there, doing this globally, and that is not something that we see competition is doing.

Two questions. First one is what kind of investments are needed to fund those ambitions that you just shared. And then secondly, would it be fair to say that part of the market is still hesitating between alkaline and PEM? And what would it mean for these ambitions if the market would shift to the more mature and, I guess, cheaper technology? I'm also a bit puzzled by the 45%, 55%. Is that currently the state of the market? So yes...

Yes, no problem. All right. Very good. Your first question, what is the investments that we're doing in this area. So our fixed presentation will show it later on that over the next 3 years in energy transition as a whole, we are spending EUR 140 million CapEx, growth CapEx. And the majority of that will go into hydrogen, of course. Your second question was about the -- excuse me?

For 3 years.

So EUR 140 million for the next 3 years in energy transition as a whole, growth CapEx, the majority going into a big bar going into hydrogen. Second question was about the differences between more mature alkaline and PEM electrolyzer and what is the 1 will take over from right? Well, like I already mentioned in the beginning, a lot of these electrolyzer technologies, they have an advantage and disadvantages. And that is why there is a constant search for the next-generation breakthrough. For example, if you look at the mature alkaline, they're already there for many, many years, but they are less able to cope with the intermittent nature of collecting with renewables, where then PEM electrolyzers does have that advantage. Now in PEM electrolyzer, you're working with more precious catalysts, which is -- would then consider to be a disadvantage versus the more mature alkaline. What we as big as we are working on that, by reducing drastically the amount of pressure catalyst needed to do for the same performance or even higher. And that is what we're actually saying with Bekaert. We are technology-agnostic, meaning that we don't only focus on 1 technology, but we make sure that we're also there with the winners of the future and with the winners of today. So yes, then answering on your third question, we do see the next 3 years based on what we have from customer demand, that there is more or less 50-50 or 45-55, division between PEM and alkaline electrolyzers.

Alexander from Kepler Cheuvreux. Just what market share do you have in an technologies right now, specifically, if you can mention that.

Well, we can say that we have built up a market leadership close to 55%, 60% within and technology.

Okay. So on your graph, you showed that you expect 10 gigawatts by 2025. [indiscernible] probably there's going to be about 4.5 gigawatts. If you make the calculation, you are anticipating that you will lost -- lose some market share.

I think no, we don't anticipate that -- absolutely not. Actually, the opposite. We really are reinforcing that market leadership position because the products that we are going to bring on the market is going to help reducing the cost of electrolyzer. And that is still a pain point within PEM electrolyzers. They are still more expensive than the more mature alkaline. But what we are doing is making sure that they can reduce the air costs.

But your current capacity, if I recall, in total?

Currently, yes.

And you are right now than planning, not additional, that's question.

Wen Hoste from KBC Securities. A question on the contract structures. Can you maybe elaborate a bit on durations? Also, what kind of security of supply or volumes do you have in these contracts, given that, yes, you are investing significant amount in the coming years?

Of course, I will not highlight the details of the contracts. But we're talking about long-term supply agreements, where there are commitments from both sides, of course, where we have also flexibility from our side that if there is a more upside on the customer side that we are also able to deliver them. We also work with minimum take-off pays, meaning that we have a minimum volume being secured because we do the investments of fund and this way we also partly derisk.

Yes, [indiscernible] again. This 2 gigawatts of capacity, how much of revenues does that mean for you at the moment?

Well, that's a Well, I'm not sure if I can really elaborate specifically on how much gigawatts, how much top line. But probably that will come more and more clear when you're further down the journey, and are we able to disclose a bit more details on that front.

Okay. But you indicated that this year, you're going to double revenues, right?

Yes, we're going to double sales on yes.

Sorry, can I ask a question on when you're discussing with customers, do you find that -- I mean, I think the problem with hydrogen energy is now still quite expensive. And in order to bring down the levelized cost of hydrogen obviously, a large part the CapEx, the component prices. Do you find that your customers are trying to push down your prices quite a lot. Is that quite aggressive? Or are they quite complacent?

Well, no, I think the whole industry has a clear target to bring the cost down. That's one of the main debtors to really be successful. And if you look at our customers, the AEM players, by the end of this decade, they would like to have a reduction of 50% to 70% in that one, and it's playing on all levels. And we are a part of that equation, of course. So what we are doing with everything that we bring on the market the next generation, we would like to contribute 20% of that cost reduction in that customer journey. Okay. Then I think we can close down the session. I'll hand over to Taoufiq for the final financial.

Thanks, Hello, everyone. So as you can see, a lot of passion and optimism about our plan going forward. As a CFO, I tend some time to bid the enjoyment diminisher when I ask the question, show me the cash. And in order to avoid that you ask me the question, I will try also to explain where is the cash, what we intend to do with that cash? But let's start first with the landscape. So I mean, again, you've heard it this morning, I think that we have a solid plan, which is backed by solid business opportunities. So we're dealing with an environment where many of our customers will be dealing with a series of inflection points. And this is clearly a big opportunity for us. So we think that as Bekaert, we're uniquely equipped to address these challenges. These challenges, which are also related to many secular trends. So they're there to stay, and they represent long-term opportunities for us as a company. So we have a series of competitive advantage, which will clearly make us the leader in the markets where we want to play. We have obviously a compelling financial profile. We will discuss later on about the strength of our balance sheet, the track record that we have in terms of financial performance, and we have the luxury of being in a financial situation where we can think about our growth and the way we return value to our shareholders with a lot of serenity. So just stepping back a little bit over the last 3, 4 years. So we have been dealing with a kind of a choppy environment, a very volatile environment. But at the same time, I mean, we have been really focusing on using these difficulties as a catalyst to strengthen the company. So we have strengthened our product mix. We have put a lot of effort to get away from this perception that we were somehow cornered into the commodity business. We have done a lot of pruning of our portfolio. It's something which is ongoing. We see some of the obvious results in some of the performance that we are currently delivering. And this has been extremely remarkable, again, in a very complicated environment. And we see that despite all these headwinds, we are still able to deliver a very decent sales expansion of 3%, taking us to about EUR 4.3 billion in 2023. At the same time, we have been relentlessly working on our cost base. We have done selective portfolio adjustments. We have worked on our footprint. And all this has contributed to the significant jump in our profitability, so 300 basis points in a matter of years. Cost, P&L has been a focus, but we have been also very much focused on the balance sheet. So we had a big burden of the debt 4, 5 years ago, and we have significantly reduced that. So now we're enjoying very comfortable debt leverage. So we're operating currently with an estimated debt leverage of 0.6x EBITDA. And this is again the luxury position, which allows us to think with serenity about our future. It's something which remains at the heart of what we're doing, focusing on the cost, managing the balance sheet, and it's something which is embedded in all the minds of all the people working with us. As a result, I mean, you see, I mean a dramatic 137% increase in TSR, a very strong performance in a relatively short period of time. So let's go through the different components of this improvement. So as I mentioned, the environment was very complicated, but we have delivered a steadfast sales growth. So 3% CAGR through leading us to EUR 4.3 billion. The way we're doing it is by focusing our organization on key components of the commercial actions, focusing on pricing, driving pricing, understand where the value lies and how we can monetize this value. This has been one of the cornerstone of our of our strategy. The other aspect is focusing on the value embedded into our products. And this has gone through innovation and sustainability. You've heard a lot these 2 words this morning. It's at the heart of what we're doing, and we will further capitalize on those things. So we have not only offset all the headwinds associated with the environment. We have built the foundations, which will position us in terms of growth for the future of the coming years. So 2023 product-wise, we're in a comfortable place. We have done a lot in terms of cleaning our portfolio, pruning our portfolio, further enhancing it. We're building this pricing power. We see recurring results coming out of the pricing power, and this will further consolidate in the years to come. So that's top line. Let's look at the cost. So I touched quickly on it. It has also been at the heart of what we have done over the last few years. We had a lot of low-hanging fruit. We tackled this low-hanging fruit. Now we're embedding the cost optimization into our ways of operating. So we want to make sure that every euro we spend in our operation generates value for the company. And this is something which will be an ongoing exercise. So we keep hearing about the fact that, okay, Bekaert might have tackled all the cost opportunities that they have, not completely true. We still have additional opportunities, and we want to keep focusing on that. Same goes for the SG&A. So we have tried to mitigate the cost creep that can come during inflationary periods, but without compromising on the capability building that we have. So you see that the profile of the company is dramatically shifting. It requires other capabilities to be able to enter into the carbonized construction into hydrogen and so on. So we have built this capacity while keeping a strong focus on our cost base in terms of supporting function. And you see the result again, a dramatic improvement of our EBIT delivery, a very strong 8.5% to 8.7% on EBIT for 2023, obviously, in the context where the environment was somehow against us. So I mean, we know that we were entering, at the beginning of the year, into a deflation period. So we had to deal with that. Benefited from it in some areas, but it has also impacted some of the initial volume assumptions. We had to deal as well with, some of you know it, the usual inventory revaluation that we need to do. So if you exclude these one-off events, I mean our pro forma results should not be very far away from the 10%. And we hope that '24, at least in terms of input costs, will be more normalized, and we will be really able to deliver performance, which is reflective of our potential. So cost P&L, part of the focus. The other big focus for us was the balance sheet and the cash. So Bekaert is a cash machine. It will remain a cash machine. We delivered very strong operational cash flow. We have optimized the way we manage our working capital. We have a strong focus as management team, as colleagues, as employees in the company because a significant portion of the incentive compensation is also based on cash consideration. So there is a very high level of awareness when it comes to the cash from all the layers the organization. So very cash coming -- very strong cash coming from the business. We are able to translate it into a very strong free cash flow. And this is, again, what is giving us the ability to think about a solid, strong, consistent policy to return this value to our shareholders. So we have been able to find significant increase in terms of dividends. We have been able to finance a EUR 240 million program in share buybacks, and this thanks to all the efforts that we've been putting on the cash. So now if we focus a little bit more on our capital allocation policy. And this is really at the heart of what we're doing. It's driving all the different components in terms of P&L, balance sheet and the way we operate. What fuels this policy is obviously the cash generation. And what fuels the cash generation itself is the focus on the cost and the focus on being frugal in the way we're managing our balance sheet. So we're confident about our ability of generating cash. We have never failed on that objective. We have a running machine. So the fuel of this policy is well established. We need also to think about our future. So that's why we want to make sure that our asset base continues as a key catalyst of driving our innovation and our ability to drive technology. And that's why we're spending EUR 100 million in improvement of our asset base. And we're also thinking about the midterm and the future primarily through R&D and where we're investing million per year with the ambition to keep growing this figure in the coming years. So cornerstone to this policy to make all this work is that we need to maintain a strong balance sheet. This is our absolute must, and we want to keep operating within a leverage range of 0.5% to 1.5%. This is absolutely key for us. We realized over the years that this is what gives us the comfort to be able to think about our growth ambition with serenity. And all this with 2 ambitions; the first one is to fuel growth, and the second one is to be able to return value to the shareholders. So one way or the other, the growth is also interconnected with the return of the value to the shareholders. We are still aiming at consistent growing our dividend distribution. We're still aiming at doing share buybacks obviously contingent to the prevailing economic outlook, debt leverage opportunities that we might have in terms of M&A, while at the same time, keeping an eye on the overall valuation of the company and the share price. So balance sheet, already touched on that, but I think it's good to repeat really establish where we are. We have a very strong balance sheet currently and in the future. We have ample liquidity, EUR 473 million expected by year-end. We have unused revolving credit facilities. So a sizable volume of liquidity. We have the luxury of a very, very nice debt profile. Most of our debt is fixed, and it's very cheap, at 2%. And on top of that, we have well-spread maturity levers, so we don't have any big maturity wall facing us. And this is how we're confident about our ability to still operate within a 0.5 to 1.5x EBITDA leverage. So CapEx. We're an industrial companies. So we need to invest on CapEx. We have also growth ambitions in some specific segments where we see our future growth potential. So we had a normalized level of CapEx in the range of EUR 180 million to EUR 200 million. We will have 2 years where we will be investing above par, primarily because of the plans and the scale-up that we want to execute in our hydrogen business. We will have 2 years where will be spending EUR 250 million each, EUR 500 million in total, EUR 140 million will be dedicated primarily to hydrogen. And you can see that we can grow construction business, and, to some extent, our ambition in [ armor ] for lifting and [ mooring ] in general with a relatively small level of investment. So size-wise, the total volumes might be big, might look big, EUR 700 million. But actually, the intensity of this investment as a ratio of sales is rather limited. So we're able to optimize the way we're doing our investment in CapEx in a very efficient way. So our plans are value-driven. So every euro we spend goes through a very significant level of scrutiny. So we make sure that every euro we spend in CapEx is driving the value that is meant to deliver. So you can see the result of this disciplined focus and performance in the way we have been driving value to our shareholders. So a massive jump in the dividends that we have been distributing since 2018, 136%, on the back of a very clear policy where we aim at growing consistent dividends. This will continue, and we have a plan, which is giving us proof point that we can continue sustaining this policy. In terms of share buybacks, we have complemented our dividend distribution with 2 share buyback programs. I mean, again, it's contingent on a series of criteria, and I will not repeat those, but it also forms part of the way we want to return value to our shareholders. So M&A, M&A has not been a prominent part of the narrative of Bekaert story in the recent years, but the landscape is changing. So we do see opportunities. And in the overall context of what we're doing, growing and our ambition to grow, we do see opportunities that we would like to capture. And the kind of opportunities that we would like to capture are those where technology and innovation intersect with our synergy capability. And when I refer to synergy capabilities, it's basically our ability to scale up our knowledge of the markets, of the customers, our footprint and our strong technical knowledge. So it's catalysts for us to extract even more value from these M&A opportunities. So we will not be doing massive big transactions. So we explained that we want to go up to EUR 300 million. The pipeline, as it stands now, is made of a relatively small opportunities, but it's opportunities, which are very relevant to our growth ambition and to the narrative of our future expansion in more added value segments. So a couple of examples of how we're doing this, and how we're tackling it? So we're tackling M&As from 2 angles. First one is what we refer to as the strategic acquisitions. So again, a size ranging up to EUR 300 million. It's, again, opportunities where we want to build a position as a leader in terms of technology, where to build the position in a given market. We are not looking only at adjacencies, but we're primarily focusing on synergetic capabilities. Another soft way for us to build this positioning in terms of technology or positioning in market is by doing tactical investments. These are not financial investments. These are investments where we position ourselves with partners to develop technologies, to build the knowledge and also to allow us to build the position where we can influence the future of the market and the segment. So that's for the past. Let's have a look at where we want to go. So we have a track record of setting targets delivering on them, and overdelivering in some states. So over the last 5 years, we have set 3 different targets. The first 1 back in 2018, we were aiming at 7% over the cycle. The cycle for all the CMDs we have done so far were a 5-year cycle. So we have delivered on this 7% 2 years later. In '21, we gave another target of 8% to 10%. We have also delivered on this target in '22 on 8.1%. And the last guidance we gave was 9% to 11%. And in 2023, on a normalized basis, we should be there. On an actual basis, we are in the range of the 9% or not far away from it. So for next year, what we wanted then, Yves touched on that. We wanted to provide simplified set of guidances with an expected top line growth of 5% and EBIT margin of 10%, ROCE of 20% and sales from sustainable solution of 50%. So sales, we want to remain prudent. I think that somehow the view on the very short term is muted given all the uncertainty around the environment. So we want to remain cautious with our ability to significantly grow the top line for the first years of the plan. But as usual, in Bard, we will remain very opportunistic. We have the capacity needed should the market change dramatically. But what is key for us during this period is to accelerate the growth and the contribution from the growth platform to progressively replace all these businesses, which are very much dependent on the cyclical -- on the cycles, on the volumes and so on. So EBIT, we have simplified it. We're aiming at target above 10%. We're very unfortunate that we had to deal with some external factors in 2023, which is generating some noncash impact. We would have been very happy to be able to bring the demonstration already this year that it's something which is within our reach. But anyway, we have the foundation to make that. And again, a confirmation that we will be remaining -- that we will remain focused on cash and cash delivery. We're aiming at a very strong ROCE of 20%. So in the overall buildup of the group performance, each business and each segment will have a different mission. And we are basically clustering these segments groups, the core businesses and the growth platforms. The growth platforms will be our profitability generators. They will be consuming some cash because they need to scale up during the first years of the plan, but this cash will be financed by the more established businesses that we'll have in the core. This is basically how we will be driving the businesses and the target settings for the years to come. So the other catalyst for our performance improvement will be relying very much on the speed of execution of the shift of the mix from the contribution in terms of EBIT coming from each of the businesses. And I think that this graph speaks for itself. Over a very short -- relatively short period of time, we saw a dramatic shift in terms of profit contribution from each of the segments that we operate. So in 2026, we're expecting that the growth platform, albeit smaller in terms of top line, will be contributing to 50% of the overall group performance, thanks to their significantly higher level of profitability. In turn, this will impact the overall performance of the group, and you see that we are also expecting, as a result of this shift, 150-basis-point improvement in terms of gross margin or gross EBITu margin expected by 2026. So a couple of things, which encapsulate, I think, the key takeaways for the company. We have a track record. We have a strong balance sheet. We know how to generate cash. We're focusing on cost. And we have a comfortable position, which can allow us to think with serenity about our best [indiscernible]. I think that the plan is clear. We will further fine-tune it. We will further simplify it, but we have all the fundamentals to make it work. So track record of improving margin, continuous focus on the balance sheet. It's something where we are not going to release the pressure. So again, when you look at all that, I think that as a company and also as a management team, we seriously believe that the best is yet to come for Bekaert. With that, thank you very much.

Martijn den Drijver ABN AMRO, ODDO. Can you elaborate a little bit on that net debt-to-EBITDA in relation to the share buybacks? Is there some sort of threshold? Let's say that if at the end of the year, you haven't done a significant M&A -- that's if net debt-to-EBITDA is below 1 that you will go for an SBB? Or does it need to be below 0.5. Can you elaborate a little bit on what your thinking is in terms of debt elements?

Yes. So I mean, as I tried to explain a bit the leverage will not be the only driver for us to assess whether we do an SBP or not. It will be depending whether we have an opportunity right in front of us where we invest. It will be also forward-looking. I mean if we see a massive disruption in the overall economy, we will probably not do it. For the moment, that's not the scenario. But if all this consideration, the key consideration -- key consideration are met, we will continue doing share buyback. I think that over the last couple of years, we have realized that it has a significant accretive impact on the share price, and we will continue doing it. We have a concern, obviously, around the overall impact that it has in terms of volumes. And we will need to mitigate some of that. I discussed the point with some of you. There are different opinions about that. But it's clearly something that we are clearly looking.

Okay. And then my second question is on working capital. You mentioned in the slides working capital to be roughly 15% of sales in 2023. Is the work done, do you think? Is that the level that we should assume going forward? Or can you improve upon that going forward?

Well, I think that the big easy part in terms of improvement has been done. Now we will need to approach it from a more strategic we have very different working capital profiles in the company, from streamlined businesses who do not need a lot of working capital, to complex businesses where we have long lead times and things like that. So we want to focus on those businesses, how can we further streamline what are the technical tools, which will allow us to leverage better the working capital company. So we still have opportunities to manage it. What makes the exercise a little bit difficult is that we have some segments where we're scaling up. By nature, which will require bit more inventories, a bit more receivables and so on. But when we do an overall assessment, we still believe that we have the possibility to further improve it.

Okay. And my final question is, you have a target which is called EBIT underlying margin. But why not exclude the FIFO over adjustments? Why do make it more simple for all of us?

Well, first of all, FIFO is included in EBITu. So between EBITu and EBIT it's -- yes, I mean it's an accountant debate basically to put it simple. So we've been discussing...

This is a non-IFRS metric anyway.

Yes. Yes. We've been debating that, and we're trying to see exactly what this FIFO means. I mean there are fee interpretation. Is it an inventory adjustment? Is it the purchase price translation effect. So it's an exercise that we're conducting. Its technical subject. We are not over it yet, but we're working as well. So we might come with adjustments on that in the coming months.

Yes. Frank Claassen Degroof Pete, again. Also a question on the EBIT margin target. Previously at the Capital Markets Day, you indicated to 9% to 11%, so you had a range. Now you say more than 10%. Is there a specific reason why you haven't idea why you haven't given a range but more, let's say, a more open end towards the upside?

Happy to take that question. So first of all, as you mentioned, I think the objective for us today was basically to give you a perspective on how we look at our business, the current business but also potential and give you a perspective on how the future could look like. And if you look at the portfolio of businesses we are targeting in these growth businesses, correct, and high-margin business or technology, differentiating business, so we see a future potential of higher profit margins. We'll bring the profit margins of Bekaert above the 10%. So there were 2 things that we've been debating is being in a very volatile environment, but being more specific in timing, so that for 2026, we will deliver on these commitments from EBITu and also sustainable solutions. On the growth side, we already debated how the upcoming years could be doing bit benefited could navigate, correct? And then after this 2026, right, we want to be more open on the upside potential based on the growth platforms we have. That's basically the logic we applied.

Alexander from Kepler Cheuvreux. Yes, what would be a main trigger to be highly above that's 10% margin. Would that come from hydrogen? Or would that come from other areas?

So yes.

Can I just?

Yes, sure.

With a very able answer time if we're able to scale faster what we have currently planned. I think it will be 1 of the main catalysts which will accelerate the shift in the margin generation profile of the company. And this is what will take us above the 10%.

And if I can add, no, right. If I could add, if we would be controlling that time, that would be easy, right? And as mentioned, we are dependent on the supply chain scaling up let's say, scaling up of competitors for competitive components or colleague components, I would say. So I think it's more the perspective how quickly are these industries where we are now focusing on growing. Not to forget as well that we continue to drive improvement in our core business the business we are today. We talked a lot today about the growth platforms, and they will change the portfolio of Bekaert moving forward. And to come back to this morning session, this is the objective of this leadership team, correct, to continue to drive this performance, to transform mainly on the portfolio side and position Bekaert with an interesting portfolio and industry profile as well moving forward.

Okay. And maybe then coming back to the capital allocation, I mean the question has already been asked. But you said if 3 specific points are not met, we will be going for a share buyback. Of course, if you look today and if those 3 -- you would be targeting share buyback and dividends together of, again, EUR 200 million for the next -- or every year that your 3 specific reasons were not met, and maybe if you could just repeat the...

Well, we will randomly change the amount, but you won't get used to it. No, I mean, again, half joking. We don't want to give the feeling that the share buyback are something which are recurring. It's something that we position whenever we have the conditions required, which are meeting at the same time. So this is how we want to position that. So now the plan is giving us confidence that the conditions or the selection conditions for establishing the share buyback will be met. So there is some certainty that we will be continuing with the share buyback. It will be obviously contingent to the usual approvals, discussions and so on. The calibration will again depend on different type of factors.

But just to come back on those conditions, so can I be -- for specific -- can you be specific and say, okay; one, the leveraging shouldn't be both 1.5x, of course; two, there're no real M&A targets; and then three would be there's not really a huge CapEx plan, and those are basically the 3 real factors.

And there is one which is missing, which is the business outlook. So I mean if we see a big wave of inflation coming our way, I mean, we might be probably a bit more hesitant to go for it as an example.

Seems we've been very, very clear during the presentation. I know guys, a moment. I think it has been a long morning for all of us and basically some closing message. But let me start with thanking the audience here in London, but also people who took the time remotely to attend and to listen in. From our side, the objective of today was to bring you basically the story how we look at our business as Bekaert, and the performance we've improved, but also into the future. We recognize that the Bekaert, due to the long history, I would say our success is also our challenge as a complex and a wide portfolio of businesses. Our objective today was to give you insight in how we look at it, and how we want to move forward. And I hope that we give you more clarity on the focus areas in order to assess the potential and the performance. So I would like also to thank the team, the leadership team. I think they bought passion, their businesses, their product with a deep knowledge of this experience. And this is only the level that you see here, but we have all our people in all the businesses, divisions functions, of course, supporting this journey. Last message I want to go back a little bit to bring a company existing more than 140 years. And I've been following Bekaert to the Belgium and also being a customer of Bekaert now have the opportunity to in Bekaert. In this 140 years, Baker has been really bold and pioneering going globally, going in Latin America, going in China, growing new business. And if you see that the SWS, let's say, the mother of our businesses is stil around, it's very nice, profiles and products that someone like the tire cost more than 70 years later. I hope we convey resources that we are working on a portfolio of new jewels, right? Can somebody say today which 1 will become the future [indiscernible] or the future SWS, not yet, but I'm sure from the couple we have -- the seats we are planning here today or where we are building in the last 2, 3 years, I'm convinced these are a couple of EUR 0.5 billion, EUR 1 billion platforms out there in the future. And of course, that comes with risk when you invest and so on, and our role as leaders is to choose the right battles, the right spirit, the right timing, but that's really -- at least I would have you take that with you that we are here tiding today. And hopefully, some of you will see in 10, 20, 30 years some of the things that we've been harvesting in 2030s of the potential of this. So I would like to close here guy if it's okay. I invite everybody who is physically alone for joining us for lunch and also having a safe travel back afterwards for the people following remotely, a good afternoon. Thank you very much.