Solvay SA (SOLB) Earnings Call Transcript & Summary

I hope you enjoyed this morning's presentation as much as I did, and it gave you a little bit more insights into the exciting future of the future Solvay organization. My name is Jodi Allen. I'm the Head of Investor Relations for Solvay under its current perimeter. And I'd like to welcome back our webcast viewers who may or may not have been part of this morning's session. We have a very exciting afternoon planned for you today because this afternoon is all about Syensqo. And by the way, after the separation, I'm very fortunate to be joining the Syensqo organization with the rest of my colleagues here today. So let's go through the agenda. We're going to begin with Ilham Kadri, our incoming CEO that will tell us all about the vision and excite us about what's to counter. Then we're going to move to our Chief Technology and Innovation Officer, Mike Finelli, to tell us a lot about our future innovations and give us a glimpse into some of the things you'll get to see for yourself firsthand during our innovation showcase today. Afterwards, you'll hear from 3 of our business presidents. You're going to hear from Mike Radossich, Rodrigo Elizondo and Peter Browning, and they represent the materials and consumer and resource segments. After that, we'll introduce you to our incoming Chief Financial Officer, Christopher Davis. And finally, Ilham will close our day and will be followed by a Q&A session with the entire management team. Afterwards, as I explained this morning, we will have an organized session that takes you through a bit of a tour of the innovation showcase. So I ask that you stay seated because we will organize you into groups, and I'll tell you a bit more about how that will with potential risks and uncertainties. So please make sure you see the disclaimers in our presentation, which can also be downloaded on our Investor Relations website. Are you ready? welcome to Syensqo.

Hello, everyone. Welcome to the Orange team, right, after the Blue team this morning, and thank you. Thank you for all of you for joining us today. It's a big day as we embark on an exciting journey into the future here at our new headquarter. It's an honor and privilege to stand before you as the CEO or incoming CEO of Syensqo. Syensqo was in fact born out of a vision, a vision of innovation and growth and our dedication to making a meaningful impact in our industry. We believe Syensqo has an important role to play, and we will create breakthroughs that's advanced humanity. I invite you today to our new world. Our team of explorers are all around you today, fully equipped and ready to launch this mission to be the innovation leader centered around customers and the value we create for them and with them. You may be asking, okay, Ilham, but what will be different? The logic is straightforward, better focus with an opportunity for sharper capital allocation. And we know that in structure like this comes better accountability. It is a good thing for our teams, including the new teams we need to recruit. It's a good thing for our customers. They will have one operating model focusing on their pain points we want to resolve. And you may -- some customers and investors may also prefer pure payers because they see an opportunity for re-rating for example. You heard it, better focus, better accountability and more strategic flexibility. This is the name of the new game. Put simply, the separation will accelerate our value creation. As you will see and hear today, either on stage or during the innovation show and tell tour, we are uniquely positioned to deliver long-term growth enhanced by our relentless focus on our customers. And by the way, I talked to you a lot about our customer obsession. This is our philosophy that will guide our decisions by understanding their unmet needs, their pain points, their problems, anticipate them. We will be the first point of contact that caters to the unique demands, delivering customized solutions and actually sharing in the value creation. This will enable us to build long-lasting relationships, which make our customers win and we would like to win with them. And as you know, again, I was lucky to start this process already in recent years. We will intensify many things. We will intensify our innovation-focused culture. Our research and innovation team will be given the support and the resources they need to develop new frontiers. Develop cutting-edge technologies that are at the forefront of our industry and makes us win. And to make all this happen, we will have a difference, actually disciplined approach to our resource allocation. That's what you can expect from us, which we will prioritize growth investments with the most attractive returns. So let me share with you why Syensqo offers one of the most compelling investment thesis in the industry. First, we are a company that is structurally positioned to continue to outgrow our markets, supercharged by our culture of innovation that is fully aligned with the megatrends that are shaping our society, they are shaping our planet. Second, we have the most differentiated portfolio of technologies in our industry, and I mean it. We are a leader in our markets. You will hear more from our team today about the Syensqo growth algorithm. We have won. How will we translate the growth of our underlying end markets into revenue growth. Third, in addition to our strong record on top quartile sales growth, we are starting from a position of financial strength, measured by our best-in-class margins. You know them. Our returns, and we are targeting to make them even stronger. And finally, the best. We have the people because it's all about people and people and people, and they are here with you today. Actually, I believe we have the right people to deliver on our promises with new ideas and new perspectives. Now speaking about our leaders, let me introduce you to our new athletes. These are the people that will lead this new chapter. You may notice we have 4 newcomers, some joined a few months ago, and it feels like they've been with us for years. Welcome home, by the way. You are going to give us a fresh perspective, and I like it. And I'm in a great company with these seasoned professionals. I also want to highlight our refreshed Board of Directors. In fact, it has been -- it was part of our strategy with the current board and the current chair to have a stronger governance. Believe it or not 60% women didn't aim for it, but it happened they are the best for this hiring. 60% women, 60% independent directors. And for the first time in our history, a director based in our largest region of sales and human capital, the United States of America. I'm so thrilled to partner with our independent Chairwoman, Rosemary Thorne with whom I worked previously. And our Board exhibits a good balance of existing and new experienced directors to deliver against our mission, our vision, our strategy simply towards creating more value for our customers, for our employees, for you, our shareholders. Now let's take a look at our new company. This is Syensqo. We have over 13,000 people, across our 62 sites, with 12 major research centers spread around the world. And as I mentioned, we have best-in-class margins, which showcase our high-quality, high value-added technologies and these specialty businesses are now, by the way, delivering as much cash. That's a good news that our sister company, you heard from this morning was not the case 5 years ago. So ladies and gentlemen, we have entered into a new era and look at us. We are already one of the world's largest specialty companies in the world. Now of course, we are global. But at the same time, we are very close to our customers. Look at our balanced geographic presence with facilities in close proximity to our customers where they need us around the globe. And by the way, we have launched now 3 regional hubs in the Americas, in Asia, in Europe to better serve our customers. And you will see, by the way, our senior leadership team members who are already located in different regions, you will see us sharing our time equally between regions. And frankly, we will go where the customers need us. You may also take note that the separation has shifted the company to be more U.S.-centric. This is beautiful isn't it? The U.S. gets a lot of things right these days. We shall have the highest percentage of net sales in North America followed by Asia. We like it, too, as we can further penetrate the Asian markets with our newly nominated Chief Asia Officer. And this is quite different, quite different picture to our current company today. In fact, these are more just than just growth opportunities. They are disruptive trends. Some of them some of you call it, megatrends that will shape our society, that will shape our planet for decades to come. What is even more exciting is that there is a clear acceleration to invest in these technologies. The market is real. Technologies that support the energy transition that supports clean mobility, that's preserve our natural resources and improve the quality of life. You will hear more about all of this from Mike Finelli, our Chief Technology Officer, who will tell you some fascinating stories on how we disrupt and stay around, please, after the presentation because he will experience more during our show and tell innovation showcase tour. Listen, at the end of the day, we want you to leave this room here, our headquarter convinced that Syensqo's portfolio is ideally placed to leverage these megatrends that will fuel our innovation pipeline, that will fuel our growth. So now before we look too far ahead into the future, it is worth highlighting that leadership positions we have already achieved here as a leader in the top 3 leading positions across 90% of our markets. We have developed these positions across our portfolio because a number of growth markets and we have created actually trusted partnerships and relationships with our industry leaders, our customers and some large and winning brands. As an investor, I'm sure you appreciate the variety of end markets we serve, bringing a good balance compared to our peers, which will also support business resilience including in tough times and outperform our peers in the long term. Look at one of my favorite slides. In fact, or more importantly, our technologies are vital. They are already improving the quality of life, which, as I mentioned earlier, some try to envision advancing humanity. Look at this, you can find our solutions and innovation in so many areas of your life. From the plane, some of you took this morning to the car, you drove to get to the airport and if you drive a hybrid car, I love it even more because we can double the opportunity compared to the combustion engine. You can find us in the medicine packs and medical procedures supporting your health needs. Syensqo makes all of this possible. So as a new independent company, Syensqo business profile will be significantly upgraded. Think about it. We are now a pure specialties company. We will operate 2 business segments, materials and consumer and resources. So let me describe their distinct profiles and commonalities. Materials first, has a high capital intensity with longer product life cycles with high barriers to entry, either through IP, intellectual property or through long-term sales contracts, we have enhanced offering a significant value proposition to our customers in markets like clean mobility, electronics and health care. And by the way, this value proposition affords attractive margins higher than the company average, whereas now the innovation we developed in the consumer & resources segments have a shorter time to market and demand much less capital, and I like this complementarity by the way. These solutions are found in markets like agriculture, coating, home and personal care, where customers are seeking more bio-friendly or sustainable chemistries. This division has made significant progress under the leadership of Mike Radossich, our President of Consumer and Resources, presents with us today. I'm so proud of him and the team. With his team, he drove margin improvements in the recent years, changed the business culture, prune the portfolio divested businesses where we were not the right owners. Yes, we are bored. We did all of this and trust me, me personally, I don't recognize this business from 5 years ago, and the best is yet to come. Now despite these differences, the 2 segments are also complementary. Remember, both are specialty businesses with a common approach to their markets, both share an obsession for customers, offering differentiated and sustainable solutions. Both will share systems such as digital customer relationship management tools, ideation, AI, machine learning to service better our customers and equally innovate faster. And finally, both of them focus on innovation-led growth aligned with the megatrend I just referenced. Moving to another of my favorites. People. People and people and people. I'm very proud to highlight what I consider to be a best-in-class team and I am fortunate. We have built this organization during the past 5 years, and this is why you see results. And they have demonstrated passion, loyalty commitment to success. And I'm so thrilled to begin this new chapter with a diverse and highly engaged organization, look at the engagement score. By the way, approximately 1 in 4 employees beyond the executives we are have bought shares. Our people have skin in the game. Now I'd like to share our strategic direction with you. It simply builds on 4 pillars. We are a growth company. We have a growth engine and we will extend our existing leadership positions by bringing technologies to the market that leverage the megatrends and solve our customers' needs and unmet needs. Innovation leadership is at the heart of our new strategy. And we all recognize that the world is changing at an unprecedented pace and to thrive in this dynamic environment, we must propel our innovation to new heights and continuously raise the bar. We will do this by investing in sustainable solution in the midterm and beyond, by the way, making circularity part of the design of our molecules because our customers, our employees, our kids, you, our shareholders, want a cleaner and greener solutions in your daily lives. This is how we will create value to drive growth, always baked by a religious capital discipline. You've seen it from us in the past 5 years. This is going to continue prioritizing, obviously, our strong cash delivery to fuel the growth and reward shareholders. Let me now walk you through each of these pillars to provide more context. Syensqo is today in the great position of being a leading provider of technologies in electrification, in defense, in civil aviation, in aerospace and in a diverse range of consumer technologies. Going forward, we will drive even more growth by expanding our presence and influencing our markets, both organically and through the strategic partnerships we have created. Moreover, the combination of the growth market we serve and the technology shifts that we are exposed to, will fuel and accelerate our growth over the coming 5 years. Our business presidents will take you through some of these in more detail, but let me take just one example, my favorite, light weighting. We love metal in this company, I love metal because we can replace it. Whenever you have the opportunity to replace a piece of metal with solutions that are lighter, consume less fuel if the object is mobile. And at the same time, you offer a lower total cost of ownership, we are a winner. This is good for the planet and good for the pockets. By the way, we do this in cars. We do this in planes. We do this for your e-bikes too. This is the power of Syensqo. This is a story of growth and this is what inspired me personally, what inspires our teams each and every day. So maybe you are asking yourself by now, how do we plan to extend our leadership position. Remember that in the past few years, we have invested in and upgraded our front line, implemented formal training programs. We launched a virtual sales academy during COVID times. Winning sales awards never happened in the company. We promoted the hands-in culture. We moved from being traditional farmers to hunters. We like both by the way in Syensqo, farmers and hunters. In fact, we now have about 25% of Syensqo workforce as a customer-facing team and matched at least in my own professional career over the past 25 years. Why is that important? We want to be the first person, our customers call, not when they send us the bill or the invoice when they have a problem, when they think about the new opportunity. You will be delighted to hear from Peter Browning, the President of Specialty Polymers business, he will share with you some great examples on how we just do this, solving the unmet needs. And to do that, we need to do it in -- to do in our homes, what our customers they do in their homes. We need to know their application processes better than anybody else. This is why we centered our application labs, where our key customers are most active in their respective markets, beating this building, by the way, you will see during your tour where we host our thermoplastic composite application lab for our defense customers. Or in Seoul, in Korea, where we have the largest battery line in the world in Boston or in Lyon, with the largest biotech facilities in the company, and finally, in Shanghai, where I inaugurated personally a few months ago, our largest AI digital lab in the world. Yes. We will continue to invest in new capabilities to support our growth and accelerate our time to markets. And when we develop a solution for our customers, for our partners, we try to adopt a repeatable model, a winning algorithm, then we go one step further, and we will be doing a better job definitely in the future in sharing the value creation with our customers. This is how we delight our customers. This is how we win with them. So as you can see here, we have already committed since I joined the company back in 2019. So a number of major capacity investments that will drive a significant part of the growth. Many of these, by the way, are brownfield investments, except in the U.S., where, by the way, we received an IRA, now firm subsidies, Mike collected the right in Washington, D.C. We are happy about that. To fund our battery projects, resulting in even higher returns. We made investments in Sulfones polymer in India, for example, to support our growth in health care and in water purification. All these projects together are expected to generate at least EUR 500 million of EBITDA as maturity. And as a growth company, and as you can expect from us, we have even more projects in the pipeline for the period beyond our midterm plan horizon, which we will highlight a bit later. Let us now move to how we expect to propel our innovation leadership to new heights. The businesses that comprise Syensqo are already widely recognized by our customers as leaders in providing materials and consumer technologies. And our commitment to innovation drives us to develop those new products that exceed expectations and deliver these value-added benefits to stay simply ahead of the curve. Therefore, a few things are important. Strong IP, for example, protection is not only important, it is essential to our future success. Did you know that's about 50% of our sales today are either IP or long-term contracts protected across both materials and consumer segments and they are gaining traction. With the vitality index of 20%. What is vitality index? It is sales from products less than 5 years old, okay? And I can tell you, again, in my 25 years of industry experience, this is truly best-in-class. Did you know that 15% of our people are working in research and innovation? 15%. Do you understand now why we are called Syensqo?. So as I mentioned at the start, we want to be the benchmark for innovation. We will stay ahead. We will create breakthroughs in technologies, solid batteries, for example, bio-based personal care solutions. And to achieve this aim, we will continue to enrich our research and innovation pipeline across both business segments and of course, in our growth platform, which Mike Finelli will explain in more detail a bit later. Look at this, we measure our pipeline. This is not a wishful thinking, a concept paper. We have about EUR 3.5 billion worth of nonrisk-adjusted sales in our pipeline. And to support our growth, we are increasing our annual research spend up to 5% of sales in the future from the 3.8% we had, had in 2022, a level which was already significantly higher than the average of our peers, as you can see in the slide. Our customers expect this from us as they rely on us for their own future. This is what leaders do. Now let me tell you and tell our existing shareholders and the new ones who wants to invest in a growth company. Welcome. This is the place to be. Look at the blockbusters project. This will drive the next phase of growth and profitability beyond our current mid-term plan. They range from next-generation batteries, solid to hydrogen storage to hydrogen production, and they are all projected to deliver in total over EUR 2 billion of additional sales beyond 2028. Turning to our third pillar on how we will expand our share of sustainable solutions. Sustainability is not just an ethical obligation. It is also a strategic advantage as it aligns with the evolving values of our customers and our partners. Most of you probably are familiar with our One Planet commitments. But here, what you can see is that we have adapted it to the Syensqo growth strategy with more demanding targets by the way, aligned with 1.5 degree trajectory. And we will seek SBTi's Scope 1, 2 and 3 for the new company, just like we did before. Look at our commitments on the slide. We remain dedicated to reducing our environmental footprints. We will become carbon neutral in 2040, so faster than the current company because we can do it, and we can afford it. Our top line growth will be increasingly driven by circularity, as I told you before. We are reinventing a circular chemistry. I wish I'm younger in the lab. Where we prepare each product for the second usage, for third usage for the NX users. We are committed to a higher amount of circular sales. Actually, 50% commitments higher than our current company's target today. Of course, I cannot finish the One Planet section without speaking about our commitment to people and their safety. Safety will always remain a top priority. One accident is one too many. And of course, we continue to close our gaps in Diversity, Equity and Inclusion, towards gender parity. And like our sister company this morning, we are fully rolling out our living wage promise globally by 2026. And like we did before, we will provide updates on Syensqo's One Planet progress on an annual basis, seek auditing from our external auditors who are present today. So let me share with you a pride of ours, and you can read it, then I can have a sip of water. We recently received from a committee of leading automotive OEMs an award and recognition for the remarkable creativity implementing our environmental sustainability practices. This is why people come to us. Not only is this a source of great price, it's also a competitive advantage. Sustainability ambitions are organized around bringing more clean and natural solutions to our customers to support their environments and ambitions. We are there Scope 3, and we will deliver. Syensqo make our customers sustainable. Now moving from Scope 3 to our own Scope 1 and 2 inside our walls. We will continue raising the bar, cleaning our home. This slide details our energy transition projects already underway today, which encompasses renewable energy projects and process improvements, all designed to reduce our emissions. Did you know that Syensqo is the #1 solar farmer in the United States of America in the chemical industry? Globally, 65% of our sites are using 100% renewable purchase energy. During my visit to China a few months ago, the authorities praised us as all our sites in China are powered with 100% renewable energy. By the way, China is the first Syensqo's country moving to 100% renewable. Kudos to our Chinese colleagues. That's what our people do. And why this happened? Remember, for those who are following us, we set up a harmonized internal carbon pricing, remember? Since 2019. We doubled our carbon pricing from EUR 50 a tonne in 2019 when in the EU, the pricing was 25, you remember? we increased it to EUR 100 a tonne in 2021 when it was 50 and prior the Russian war by the way. And this helps us to build better formula pricing to drive better, cleaner investments. We embedded this in our One Planet. It's in the way we innovate. We invest, we produce in the way we incentivize by the way. This approach, which we will continue has ensured that our capital investment decisions worldwide contributes positively to the resilience of the company in the face of climate change risks and is also oriented towards achieving our carbon neutrality by 2040, latest. All these investments we are planning for will be value accretive, of course, generating returns well in excess of our cost of capital. Finally, the fourth pillar. Capital discipline, I like it. I like discipline. It will remain our guiding light as we navigate the path to success. And as our CFO, Chris Davis, will demonstrate in his section. The separation projects will give us enhanced firepower and actually optionality to create value. We will continue to make prudent financial decisions, ensuring that every investment is well thought out and aligned with our strategic objectives. That's what you have seen from us. During the past 5 years, this is not new. And you can expect it again and again. This slide details our priorities for our cash generation beginning with sustaining our operations to our growth capital expenditures. And you can see that by leveraging our resources wisely, we will fortify our financial strength and have the ability to provide shareholder returns as part of our strategy to drive long-term value for our stakeholders. This make me now nicely to our midterm financial targets, which are aligned with our growth focus strategy. Our priorities will be on growing our top line sales, always both markets and our peers. Strengthening our margins and continuing to improve our returns. And of course, we remain committed to a strong investment grade rating. And now we'll let Chris to share with you more details on how we plan to deliver on these targets. So to wrap up, ladies and gentlemen, this new strategic direction is not just the blueprint for our future, this is a declaration of our commitment to accelerate growth. We are structurally positioned to outperform our growing markets and we will extend our leadership and best-in-class profitability through the investments we are already making and through our increased focus, the separation will bring us. Innovation, it sits at the heart of who we are. This is what -- where we are good at. We are athlete in innovation. Not only we are the innovation leader, but we have the ambition to establish ourselves as the innovation benchmark, driving even more differentiation to our offering. And as always, you have seen it from us again and again, we will stay disciplined. We will continue to have a disciplined approach to how we allocate capital, always designed to deepen and accelerate the value creation for our stakeholders. And now it gives me the great pleasure to introduce you to our Chief Technology and Innovation Officer, Mike Finelli.

Thank you, Ilham, and hello, everyone. I'm delighted to be here today as the Syensqo CTIO. Since my earliest years as a child, I have been fascinated by science, and I've been blessed to be in this industry for the last 30 years. And as much as science has advanced humanity in those 30 years, I believe what science will accomplish in the next decade alone will surpass the progress we have made in the last 100. Now I'd like to share with you some of those advancements that will have a tremendous impact on humanity and our planet. Over the past couple of years, Syensqo has created 4 growth platforms with dedicated teams focusing resources in materials for batteries, thermoplastic composites, green hydrogen and biotechnology and bio-resources. A platform in Syensqo is a dedicated team of people who have access to products and technology across the entire group to solve problems for customers within their market megatrend. We put all of the R&I, all of the development and all of the commercial people together to work as one team to make it happen bringing visibility, focus and the start-up mindset. All 4 platforms play a very important role in the decarbonization of our planet through electrification and light-weighting and biotechnology, for example. And combined, by 2030, these platforms have market opportunities that exceed EUR 10 billion. And to ensure our success, Syensqo has been investing disproportionately in these new markets. And over the last few years, we have increased our R&I effort by 4x, and we now invest about 22% of the overall Syensqo research and innovation budget on our platforms. Now let me dive a little bit deeper into each one of these platforms. So Humanity is starting its fourth energy transition, thousands of years ago, we used wood as a primary source of energy. Hundreds of years ago, the world moved to coal. And when the automobile was invented, it drove the need for oil and gas. And now we're moving to alternative energies, solar, wind and hydrogen. At this time, it's going to be the electric vehicle that drives the electrification of our society. And as a leader in lithium-ion battery materials, Syensqo has developed a product portfolio to enable the battery technology of the next 2-plus decades, which will help enable EVs to help society transition away from fossil fuels. So in Gen 2 batteries, these are the batteries that are in your cars today, we help solve range anxiety by producing the most advanced PVDF binders in the market. Due to our PVDF superior adhesion, battery makers can put more active ingredients in their batteries, which helps increase energy density and to service the customer needs, as Elon just mentioned, Syensqo is committed to build 2 world-class integrated PVDF plants, one in Europe and one in the United States. These 2 investments will allow us to serve more than 10 million additional electric vehicles. Now Gen 3 batteries. These are the batteries that will enter the market in the next couple of years. They also require Syensqo's, high-performing PVDF, but due to higher voltages and higher temperature cycles we will need new solvents and electrolyte salts. That's where our Energain and our LiFSI come into play, delivering lower flammability and much more stable electrolytes. Now looking a little bit further down the road, we find Gen 4 batteries. These are the famous solid-state batteries. And while a few manufacturers have announced and have introduced some initial solid-state batteries today, large-scale Gen 4 battery commercialization will not happen until later in this decade and a gradual ramp-up in the 2030s. However, Syensqo is already ahead of the game, and we have invested in Europe's first sulfide pilot plant. Sulfide chemistry is the leading solid electrolyte technology for Gen 4 batteries. So as you can see, Syensqo's road map aligns well with the industry road map and regardless of the technology, we are ready to capture that growth. Now let's move on to hydrogen. Hydrogen will become the new oil. In the next several decades, it will disrupt the balance of geopolitical power as countries that have no play in energy today become major exports of energy in the form of hydrogen. And because of this, governments are racing to get their first and are partnering with industry to build the needed infrastructure. And as of January 2023, more than 1,000 hydrogen projects have been announced worldwide. Now there's 3 main components of the hydrogen economy, hydrogen production, hydrogen transportation and storage, and then the consumption -- hydrogen consumption. And for Syensqo that means fuel cells. And Syensqo has technologies to enable all 3 areas. For green hydrogen production, we are developing and producing critical materials for the membranes that split the water molecule, H2O, into H and O. There are 2 technologies used today primarily alkaline electrolyzers and proton exchange or PEM electrolyzers. Syensqo is the only company on the planet, the only company on the planet that produces membrane materials for both technologies. And this part of our business is doubling every year and we continue to expand quickly to keep up with the demand of our customers. For storage and transportation, Syensqo is working on solutions to store green hydrogen in vehicles. With our high-performance polymers and thermoplastic composite technology, we will enable production of high-pressure storage tanks that could be produced at high rates that are safe and recyclable. And finally, there's the consumption of green hydrogen. And this happens in a fuel cell. This is where hydrogen is recombined with oxygen to generate electricity and also generating water as the only byproduct thus completing the cycle from water to water. And we are a leading producer of the only chemistry capable of accomplishing this feat. Now if my hydrogen story has not been compelling enough for you, let me leave you with this thought. Our society will not reach carbon neutrality by 2050 without a hydrogen economy. The next platform I'd like to talk about is our renewable materials and biotechnology platform, which we just launched last year. Let me start by saying that the way we make chemicals today, it's about to change in a dramatic way. Today, we build large chemical plants with dozens of process steps covering many, many acres of land. Tomorrow, we will do most of these steps inside a microorganism and we'll be able to fit these plants inside large warehouses. Millions of years of nature's evolution are now transformed into breakthroughs in how chemicals are produced with the help of artificial intelligence and new genetic editing tools. Let me share a few examples to try to make this real for you. We can start with sugars or even waste oils and we use Biotech to develop new classes of bio-surfactants that are bio-based, biodegradable and significantly less carbon-intensive. Biotech is also finding ways to convert CO2 into carbon negative chemicals. And one of the problems with carbon capture technologies is what do you do with the captured carbon? Biotechnology, biotech is finding solutions. Through synthetic biology, micro algae can convert CO2 and light into proteins, nutrition and oils and pigments, reducing the carbon footprint across diverse applications. So ultimately, biotechnology gives us the potential to create new chemical structures that are simply not possible with conventional chemistry. To illustrate some of the progress we've made over the last year, we have signed a strategic partnership with Ginkgo Bioworks to investigate the field of biopolymers. We have acquired a former Zymergen lab in Cambridge, Massachusetts in the United States. And we're also building a multipurpose microbiology lab at our R&I center in Lyon, France. So as you can see, we are well on our way to realizing our ambition of combining science with sustainability. Our fourth platform is thermoplastic composites. Imagine if we could create -- if we could produce aircraft at the same rates that we produce automobiles. Thermoplastic composites have the potential to do just that. As you will hear from Rodrigo in a few moments, carbon fiber composites are a great growth market for Syensqo, but you might be wondering what's the difference between a thermoplastic composite and our traditional composite business? Well, the difference is in the resin that is added to the carbon fiber. Traditional carbon fiber composites use thermoset epoxy resins. A thermal plastic composite, as you can imagine, uses a high-performance thermal plastic as the resin. Epoxy resins need to be cured in large ovens for many hours and cannot be reworked after they're cured. And this is fine for small volume critical parts, but if you want to produce for high-volume applications, you need to use a thermoplastic composite so you can form parts in minutes, and they can be reformed or reworked as needed, which dramatically increases the possible applications and markets for our composite business. You will see TPCs being used in the most demanding applications across several industries. In aerospace, TPCs enable high-volume rate production, reaching 5x to 10x faster manufacturing rates than thermosets. Our main applications in the aircraft industry are secondary structures, such as the Nacelles and window frames. And I want to invite you, don't miss the opportunity during the innovation showcase to see the Airbus helicopter door made with our TPCs with our lab right here in Brussels. In the Energy segment, we have solutions for offshore and onshore risers as well as flexible pipes. In these applications, TPCs bring up to 30% weight reduction and up to 40% lower carbon footprint versus steel. 40% lower carbon footprint versus steel. In the automotive industry, TPCs bring flexibility, high throughput, functional integration and recyclability. And we're working on a very confidential but exciting application where we can replace a part that is currently made from 22 welded separate parts but we can do this with one piece of TPC over-molded with one of our specialty polymers. Our single step process reduces the total cost of ownership, which is critical in high-volume automotive applications. And our thermoplastic composite growth platform brings end-to-end innovation from polymer design to composite structures under one roof leveraging both our specialty polymers and our Composite Materials portfolio. So let me sum it up. First, these growth platforms represent a massive opportunity for Syensqo to create and capture value in a 10 billion -- more than EUR 10 billion market. Second, these platforms are aligned with sustainability, playing a critical role in the decarbonization of our planet. And finally, our investments to fund this growth are well underway as evidenced by the capacity expansions and the investments in pilots and labs that we've already mentioned. And as I previously said, we have reached a pivotal moment in science and I'm super excited. I am looking forward to leading our innovations and platforms through this transformation. So now I have the pleasure to hand the floor over to the President of our Specialty Polymers business, Peter Browning.

Thank you, Mike, and good afternoon, everyone. I'm going to start with an overview of our Materials segment and then go into more detail on Specialty Polymers. Before handing over to Rodrigo, who will cover Composites. I get a real buzz from turning ideas into solutions for our customers. And this afternoon, it's my pleasure to introduce how our materials cluster does this better than anyone in the industry. As you know, this is an attractive high entry -- barrier to entry business, delivering industry-leading margins in excess of 30%. We've grown our top line by more than 7% per year over the last 5 years. We've done this by delivering solutions to our customers in auto, in aerospace, in electronics and many other industries. At core differentiation is an unmatched portfolio of technologies. We offer an extensive and proprietary range of high-performance polymers and innovative compounds. And we have high-performance carbon fiber composite materials. No one else has the breadth of portfolio we have. When customers come to us, they don't ask for polysulphones or PVDF. They ask for the best technology at the lowest cost of ownership. And with Syensqo, they get the right technology for the performance they need quickly and reliably. So Syensqo offers a unique value proposition compared to other material suppliers. On top of the unmatched portfolio, we work together with customers such as Boeing, Bosch, TSMC to develop tailor-made solutions that solve their application performance needs at competitive cost. And today I'm going to be sharing some of the examples of the benefits we bring. We focus on customers who are looking for this creative relationship. They come to us for the capability to innovate for their specific at the right cost and speed, regardless of the technology used. They reward us with their business in leading edge applications and long-lasting partnerships. Now let's have a more detailed look at the Specialty Polymer business. And I'd like to cover the markets we serve and how our unique business model will deliver strong growth. Whilst there's only time to give you a taste, my colleagues animating the innovation showcase, we'd be delighted to answer your questions and explain why our customers give us an increasing share of their needs. So we are already a successful growth business. From 2005 to 2014, Specialty Polymers made a series of acquisitions to build a unique portfolio of high-end polymaterials whilst doubling the business size. We use this technology to solve complex, high-value problems in fast-growing markets. Since 2014, there's been a relentless focus on organic growth, which has once again doubled the business to its current size of just over EUR 3 billion. Following Mike's overview of our platforms, I'm going to focus on some high-growth segments in the core portfolio. In addition, I'll introduce you to some of the customer relationships, which make our business so successful. So Specialty Polymers is focused on 3 markets: Electronics, Transportation, Life Solutions. These segments offer a strong growth dynamic, supported by clear megatrends, hyperconnectivity and miniaturization in electronics, electrification and light weighting in transportation and access to health care and resolving water scarcity and life solutions. For all 3 areas, sustainability and circularity are critically important. Collectively, these megatrends provide a clear long-term tailwind for the business. In electronics, our materials are almost certain to be in the PC you have out or in your briefcase, the phone you have in your pocket, the smart watch you have on your wrist. We're currently working hard with the major technology companies to ramp up their virtual reality projects. In transportation, the move to electrical vehicles provides a huge opportunity beyond the battery materials that Mike discussed. Each electrical vehicle, as Ilham said, offers us twice the revenue opportunity of a conventional car along with far higher growth as EV penetration continues to increase. And finally, Life Solutions is focused on 2 key segments: Health Care and Water Purification. In both, there is a long-term trend towards the use of our materials due to their superior cost performance compared to more traditional alternatives. Before going into some application details, let's look at the positioning of our products and how we compete. But looking first at the left, the polymer industry segments into 3 tiers at the bottom are the commodities, polypropylene, price-driven sold at EUR 1 to EUR 2 per kilo. In the middle, engineering plastics. Now these are sold based on application performance, but with many producers, pricing is typically in the EUR 3 to EUR 6 per kilo range. And then lastly, we operate at the top part of the pyramid supplying specialty polymers like PEEK, fluoroelastomers or sulfones. These are also sold on application performance but are complicated to make and need substantial technical support. They're sold EUR 10 to EUR 10,000 per kilo, and as a result, are only used where other polymers can't offer the performance needed. So what are customers looking for from these specialty polymers? Typically, when applications require performance across multiple criteria then these are the products used. So if you need great thermal stability, coupled with lightweight and electrical conductivity, then it's us, you call. We're not the lowest price, but we do enable the lowest total cost of ownership. Our product offer is supported by best-in-class technical service and deep R&I competencies. Across my business, there are nearly 1,000 chemists, physicists, engineers working with our customers to provide leading-edge support in target segments. Given this combination of great support, high-performance products, we solve problems that no one else can. We do this through market-orientated teams that combine sales, technical support and R&I to deliver tailored solutions which are both sticking and economically rewarding for us and our customers. A great example of where these products are needed is the semiconductor industry, which were ultrahigh purity and complete reliability in extremely demanding process conditions. Our EUR 300 million business is split pretty evenly between materials for building new fabs and products that are consumed in the process. And our forward order book gives us really strong confidence that the 6% to 8% annual growth rate you see is robust. This growth is backed by significant investment in our production network to ensure that we scale as our customers do. And the key assets we have in this segment beyond our technology, are the direct access to semicon OEMs and a demonstrated ability to innovate and a higher level of trust based on consistent superior quality. This powerful combination makes us very hard to compete with. Did you know that our relationship with TSMC, the world's largest semiconductor manufacturer has grown 50-fold in the last 5 years. Let me tell you how. We have rapidly built our business through direct supply and also as a material supplier for their value chain. In doing so, we have broadened our offer from 1 product family with EUR 2 million revenue to 5 million with EUR 100 million of revenue and set the stage for substantial growth in the coming years. By working directly with TSMC, we're able to specify our materials and get a detailed understanding of their needs for next-generation processes by providing transparency on quality, we build trust in the solutions we offer. And TSMC formally recognized this in 2023 with a supplier award, which underscores the strength of our partnership. The outcome of this is that our business with them is disproportionately focused on their foundries making newer, smaller chips, offering growth both now and into the future. Moving to transportation. I'd like to focus on automotive, a segment in which we are generating revenues of about EUR 1 billion, 35% of this is in electrical vehicles and in hybrids. And this exposure will drive strong growth over the coming 5 years. Whilst battery is key, nearly half of our EV revenues come from other applications resulting from electrification and the drive for light weighting to extend vehicle range that Mike discussed. Our products are used in E-motors to improve performance and reduce motor weight. Battery housings and cooling systems are made with Syensqo materials. Charging is a great area of growth for us. Additionally, as vehicles move to higher voltage circuits, OEMs move to our material. And I'd encourage you to talk with the team in the innovation showcase to learn more about these applications. and how Syensqo contributes to make them successful. Let's look at some specific value propositions for EVs. By insulating an e-motor magnet wire using Syensqo PEEK, OEMs can reduce motor weight by up to 25% and whilst improving motor power, moving from metal to polymer and battery casings offers a 25% weight reduction versus aluminum and up to 40% versus steel, but also gives superior protection against battery fires. It offers easier functional integration, for example, of the battery cooling system. So what does this mean to an average driver? It's the equivalent of saving the energy needed for one return trip from Brussels to Paris every year. Once again, we're making timely investments in both R&I and capacity to ensure we have the right capabilities to reliably serve these demanding applications. Another relationship we're really proud of is our long-standing business with Bosch. Historically, we partnered with Bosch the world's largest auto Tier 1 on materials for their emissions control systems. But over the last 5 years, the development focus has completely shifted to materials for electrical motors. We've leveraged our strong relationship in auto to penetrate their consumer business. And there's a super cool robot chef in the exhibition that you can have a look at. For the future, there's work ongoing with their fuel cell team as well as their next-generation E-motors, and we're cooperating to support the significant semiconductor foundry investments that are being made in Germany in the coming years. The combination of growth in existing business plus penetration into new segments has led to multiyear double-digit growth driven by a laser-sharp focus on understanding Bosch's emerging needs and how we can leverage our capabilities to best serve them. Let's finish with an example where our materials are used to save lives. Within the health care segment of our Life Solutions business, we have a long track record of double GDP growth, which we see continuing well into the future. A great example of this is the sulphone polymer that we're supplying to dialysis equipment manufacturers. More than 65% of dialysis patients in North America and Europe use cartridges containing our material. And we work closely with the established market players to improve the material supply to enable better long-term survival rates for patients and very high customer loyalty. We're also innovating to extend treatment to the 2/3 of people, mostly in the developing world who had kidney failure, but today don't have access to dialysis. Our innovation in this area improves survival rates for patients whilst offering great long-term growth driven by increasing treatment numbers, notably in the developing world. This really is an area where we're doing well by doing good. To summarize, Specialty Polymers is a business with an outstanding track record, which has a pipeline of projects and customer-driven investments that will drive its growth far into the future. We have deep competencies to meet the needs of our demanding customers. This gives us a clear growth driven -- organic growth-driven path towards a EUR 5 billion business by or before the turn of this decade. I'd now like to pass over to Rodrigo, who will explore the other part of our materials business, which also offers super growth opportunities.

Thanks, Peter, and good afternoon to everybody. I am very excited to lead a business that is fully positioned and equipped to address a market that is expected to grow by a factor of 4 by 2035 and by a factor of 10 by 2050. The growth is driven by sustainability and fueled by the technology and innovation capabilities we have at Syensqo. It is my pleasure to be in front of you today and transmit my optimism and my enthusiasm with all of you. I will provide you an overview of our activities with focus on our core market, aerospace and defense where we play, the value we bring and the dynamic and outlook of the industry we serve. I will conclude with our long-term outlook of the overall composite materials market, which includes aerospace and other innovations and applications that were covered by Mike in the growth platform section. So please fasten your seat belts. For those of you who flew today, the aircraft surely has Syensqo materials. So as the cars of the Formula 1 teams that are on the podium at any given Sunday. Our focus is on high-performance composite materials that are used for everything that flies. This includes commercial aircraft, business jets, helicopters, fighter jets, drones, satellite launchers, et cetera. And this also includes planes on wheels, like Formula 1 cars or very high-end supercars, which is a market that we use as an accelerator of new technologies that can progressively be applied in aerospace. We operate in a very concentrated industry with very high entry barriers. Clearly, the highest entry barriers, I have seen in more than 30 years covering different industries. And the reason is very simple. It takes about a decade to develop a new aircraft and the service life of this aircraft is several decades. This means that our customer relationships are very sticky, and the big names in the industry will only work with very well-established suppliers with proven capabilities and commitment to this industry. Syensqo is without the question on top of the Elite suppliers. Without getting too technical, I can say that our range of products are used in every part of an aircraft, structures, mobile parts and nonmobile parts, engines, interiors, the floor, ceiling, overhead, galleys, which are part of the aircraft that is used to store food and emergency equipment. To the casual observer, an aircraft is a big body with wings, engines and wheels. But if we pay close attention an airplane is the assembly of thousands of parts, every single part, even the smallest one is carefully engineered, tested and tightly specified. Materials with specific properties need to be developed for its specific use and industrial scalability needs to be considered very early in the design. The needs of the industry are deeply rooted in our value proposition. We have a product portfolio innovation capabilities and a very highly specialized technical support to enable light weighting in high-performance applications. Our contribution starts from the very beginning of an aviation program. We work in partnership with our customers from the design phase. I really encourage you to spend some time at the showroom today, so you can get a better flavor on what we do and especially how we interact with our customers. It is worth noting that there are no after-shelf materials in this industry. Every product we supply is made to order, designed for a specific program with specific requirements and following a unique specification. Most importantly, once a product is specified in a program, it stays for the duration of the program. Why is lightweighting so relevant in the industry? Well, aviation is not different from any other industry. Sustainability is on top of the agenda. The sustainability road map of the industry includes 2 main elements. One is the use of sustainable aviation fuel which has a higher content of fuels from renewable sources, but it's also much more expensive than conventional fuels. The second element is fleet renewal. Basically to replace existing aircraft with more fuel-efficient ones. And this is why lightweighting plays a very important role in the sustainability road map of our customers. For example, it is estimated that 1% weight reduction can lead to a 0.75% reduction in fuel consumption. In fuel consumption, accounts for 20% to 40% of the airlines operating costs and the vast majority of their CO2 emissions. Therefore, lightweighting is very critical to the aviation industry as it is the answer for both sustainability of the industry and also its competitiveness. What is the outlook for our industry. I can say that the future is very bright, and it is also very predictable. Post COVID recovery is very solid. Our largest segment, Commercial, the order books are full for the next 8 years. The airline industry is operating now at 100% of capacity for domestic travel and nearly at 90% capacity for international travel. Just to illustrate the growth that is coming, and it's coming from several sources. Today, there are about 23,000, 24,000 commercial aircraft in service. Over the next 20 years, 75% of those planes will be replaced by more fuel-efficient air crafts. Additionally, a fleet nearly the size of the existing one will need to be built to support the industry growth. All in all, more than 40,000 commercial airplanes will be built in the next 20 years. This is massive, and it's also real. The Defense segment will also continue to grow following defense spending. The growth will come from both existing and new programs. Overall, we anticipate high single-digit growth just from higher build rates on existing programs. New programs and applications will add to this growth. Again, growth is very predictable, and it's also steady. The evolution is clear. Composite content in airplanes is increasing since the technology was introduced in the 1960s. The aircraft being designed today will be lighter, will be more fuel efficient and will contain more composites. This is true for commercial and for defense. We also have the Advanced Air Mobility aircraft that are almost 100% composites, as lightweighting is even more critical for battery fueled aircraft. Now a few words about defense, which accounts for approximately 1/3 of our business. Like in commercial aviation, our coverage in defense is very comprehensive. We supply solutions for aircraft, helicopters, drones, et cetera, again, anything that flies. We expect this segment will continue to grow organically and through new programs in Europe and in the United States and their allies. Our most notable defense program in terms of technology and money is the F-35, in which we were involved since the inception of the program. We are the largest supplier of structural composites and adhesive in the program. Everything you see in this picture is ours. The fact that our solutions were chosen for the largest military program in history shows our technological leadership. You may know that F-35 has been extremely successful with several European countries, including Belgium, placing new orders not so long ago. A very exciting segment that is evolving is advanced air mobility. And it is very exciting for various reasons. First, it is a completely new industry that over time will revolutionize air travel. The concept has attracted very high levels of investment and many of the start-ups are backed by large, well-established companies. As I mentioned before, lightweighting is paramount for these aircraft and our potential for innovation in this space is enormous. We have solutions for primary and secondary structures, rotors battery packs, interiors, motors, et cetera. We clearly have the resources and infrastructure to win in this segment. We have technical capabilities and application labs from our historical involvement in commercial and defense. We have a number of partnerships in this space. It is a new industry and many of the players are start-up companies. And for sure, there will be winners and there will be losers. And Syensqo will be a winner. Our conviction is that Advanced Air Mobility will become a relevant market in the next 10 years and eventually may become as large as other segments like defense or commercial. As I mentioned in the beginning of my presentation, the growth opportunities for composite materials are substantial. We will see growth in our traditional markets and in developing applications. The common denominator is sustainability, and I do believe that sky is the limit. Now in conclusion, for materials. Peter and I share today why we are excited about this business segment. We have something that is truly unique in our market. And we have an unmatched portfolio of technologies that create real value for our customers, which supports a more sustainable world. As the innovator leader, we have a robust pipeline of blockbuster projects that will address some of the most disruptive megatrends, and we are backed by a very strong track record of robust growth. There is no doubt that we will take this business to new heights. Thank you. Now I would like to pass the floor to the President of our Consumer & Resources business, Mike Radossich.

Hello, everyone. I'm very excited to be here today and talk about our Consumer & Resources segment and why we're very well positioned to win now and over the long term. So when we say consumer and resources, we're referring to a rather diverse group of businesses that serve attractive end markets. You'll find our solutions inside a broad range of products, including plant protection, shampoos and body washes, paints, chocolates and pastries and even the beneficiation of core metals, which is leading to e-mobility and the clean energy transformation. What's common across the portfolio is that we leverage our core technology platforms like surfactants, monomers, polymers and green solvents along with our best-in-class application and formulation expertise, to deliver value-added solutions for our customers. Now over the past 5 years, I've led several of the larger consumer market segments through a transformation, where we streamlined our innovation pipeline and pruned our asset base, in line with our optimized mandate. In turn, we significantly grew our revenue while strongly improving our margins and returns. And now I'm honored to expand my responsibilities across the entire Consumer & Resources segment and work with our talented teams to unlock its full potential. In the interest of time today, I'll focus on just 3 of our core markets. Agricultural specialties, Home and Personal Care and Mining Chemicals. But again, if you're interested in better understanding our other markets, I invite you to visit our innovation showcase later in the day. So what makes consumer and resources a strong fit for Syensqo? First, strong secular and sustainability trends are driving each of our markets. In fact, sustainability is the driving force behind what I'm calling a tectonic shift in our markets. Demand has never been higher for more natural healthier and more resource-efficient solutions. And these are precisely the areas in which we're investing our resources. Next, we held leadership positions across our key markets. We're partnering with our customers to anticipate their needs in developing tailored solutions, and we continue to upgrade and expand our portfolio of differentiated technologies and formulation capabilities. Today, more than 50% of our portfolio is IP protected, which is truly a differentiator and another example of our focus on innovation. And on the last point, we run what I call an asset-light business model. Our manufacturing sites are flexible and multipurpose. They're spread across the globe and are close to our customer base, enabling us to be responsive to their needs. And with the CapEx to sales ratio at just 5%, delivering on our growth across these varied and highly profitable market segments enables us to drive a superior return on the capital we employ. Now this winning strategy has allowed us to outgrow the market over the past 5 years, and we're very well positioned to grow twice as fast as the underlying market going forward. As I just mentioned, we held leadership positions across our key markets. And these are very broad and diverse markets. So I just want to quickly show you the subsegments where we're recognized as the industry referenced. Here, customers come to us first when they have challenges to solve. So now let's take a closer look at the first of our 3 focus segments for today, starting with Agricultural Specialties. Here, we are a leader in crop protection and seed care solutions, working with the goal to improve crop yields and to do it more efficiently. There are a number of trends that have shaped the industry's focus like growing attention to pest resistance issues, regenerative agricultural practices and the reduction of carbon footprint and environmental impacts. In addition, regulations are driving improvements across the industry, such as the EU's Green Deal and Syensqo is right there, working hand-in-hand with the top agro companies to enable the industry's transition to more sustainable agriculture. And now I'd like to share a couple of examples on how we're responding to these trends and challenges. First, our green solvents are innovative, IP-protected solvents that have an excellent safety and environmental profile. They're specified in our customers' product registrations and are set to grow at 15% to 20% given their greener profile. And in my second example, this year, we proudly launched microplastic-free seed coating solutions. These products will help our customers to formulate seed applied biologicals that enable precision farming and have a much more positive impact on the environment. And you can see the strong sales growth we expect for this product line. Turning now to our Home & Personal Care business. We are a leader in hair care and cleansing solutions, working with the leading brand owners across the fast-moving consumer goods market. Here, performance and sustainability are absolutely essential in the industry. Customers need our help to reduce their carbon footprints and to introduce more bio-based solutions while satisfying increasing regulatory pressures. These disruptive shifts are leading to the introduction of new technologies and significant reformulation opportunities. And all of this is helping to transform the entire value chain towards more responsible sourcing practices. And let me share an example of this. In our Beauty Hair Care segment, if any of you washed your hair this morning with a condition shampoo, there's a strong chance that contains our product. A prime example is our recently launched maternal brand. It's a product line of bio-based and biodegradable polymers. These products are derived from guar plants, which are largely sourced through our Sustainable Guar Initiative in India. And this initiative is proof of a successful collaboration across the entire value chain between Syensqo as a key supplier, our customers who are leading brand owners in the personal care space like L'Oreal, P&G and Henkel, local guar farmers and even an NGO. For nearly a decade, this SGI program has trained guar farmers in sustainable agricultural practices to increase their yields season after season and has trained women of these communities to cultivate vegetable gardens contributing to household income in this very impoverished region of the world. This project also ensures the robustness of the supply chain and responsible sourcing to our customers. This is an initiative that we're all very proud of. And from a growth perspective, it demonstrates how our innovation and sustainability initiatives are enabling us to outpace the market while still delivering against our CSR objectives. And now turning to last of our 3 focus segments for today. Let me spend a few moments on our Mining Chemicals business where we are the leader in metal and mineral mining solutions. In this market, there are several trends driving a surge in demand for metals including e-mobility and the need for more effective battery metal recycling technologies. Related trends focus on operational and sustainability issues, such as the need for mines new mines, expansions of existing mines or yield improvement of existing operations. And these dynamics align very well with our value proposition and capabilities as we've been successfully serving mining companies now for well over a century. And now I'd like to focus on just one example highlighting the value we bring to the industry. For the Mineral Processing segment, we support the flotation process which is one of the industry's leading separation techniques. And while my colleagues are introducing technologies to replace metals, you can see by the numbers, the need for specific metals, like the ones we're focused on in our mining business, like copper and battery metals are only growing stronger. And in this segment, we believe we can far outpace the overall market with our differentiated value-creating solutions. And regarding our business model, it revolves around providing tailored customer technical service, which has led to long-term trusting partnerships with all of the leading mining companies. And building on our service approach, we've introduced digital solutions to help our customers leverage our expertise and make real-time improvements to their mine operations 24/7. This is truly a value differentiator. So I hope this gives you a better understanding of the businesses we operate and how we operate them. And these businesses have earned their place in Syensqo after executing a successful turnaround. They're now very well positioned to drive above-market growth and are backed by committed and highly talented teams. I feel we have the right DNA to deliver now and in the future, and I couldn't be more excited to lead this strong and dedicated organization as we execute against the next chapter in our growth journey. Thank you. And now let me turn it over to our CFO, Chris Davis.

Thanks, Mark. For those of you that I have not met, my name is Christopher Dave, and I'm delighted and privileged to be here today as Syensqo Chief Financial Officer. My colleagues have done a fantastic job in setting the scene as to why Syensqo has such a bright future as it embarks on its journey as an independent listed company. With that in mind, my intention is to put all that you've heard today into a broader 5-year financial context and to give you more detail on how we will deliver and achieve the midterm financial targets as set out by Ilham. The numbers presented on this slide demonstrate Syensqo's proven track record of delivering strong profitability and creating value. Looking at the last 3 years to 2022 Syensqo has delivered more than 300 basis points of EBITDA margin improvement with EBITDA margins above 23%, and a material increase in return on capital employed which has more than doubled over the same 3-year period to approximately 11% in 2023. To put this into an industry context, Syensqo has consistently outperformed the majority of its peers, delivering top quartile sales and EBITDA growth growing at a CAGR of 9% and 14%, respectively. With that in mind, let us turn our attention to our midterm targets. Looking ahead to 2028, we are structurally positioned to continue to outperform the market enhanced by the opportunities that lie ahead of us. We expect to deliver above-market revenue growth, along with further margin expansion and improving returns on invested capital. Mostly, our 3 key midterm targets are organic sales growth of approximately 5% to 7% CAGR through to 2028, almost 2x the expected growth in our relevant markets. EBITDA margin expansion to mid-20s and improved return on capital employed to mid-teens by 2028. It is also important to note that potential inorganic opportunities may form part of our growth strategy, and these would be over and above the targets that are presented here today. As I will outline in the following slides, we are targeting to generate more than EUR 7 billion of cash over the next 5 years, of which EUR 3 billion will be available for further value creation including shareholder returns. From a capital allocation perspective, Syensqo will prioritize growth above other uses of its cash, albeit with clear return parameters. Along with Ilham and the team, any such spend will be governed by a rigorous and disciplined capital allocation framework. Finally, we will continue to target a strong investment-grade credit rating. Now let me outline how we will deliver on these targets. Syensqo will achieve a compound annual growth rate in revenue of between 5% to 7%, albeit that this will not be evenly distributed over the period. This will be achieved by 3 key drivers all linked to what you have heard from our colleagues over the course of today. Specifically, volume growth, which drives approximately 60% of the increase will come from existing products and programs. This is expected to be driven by, amongst others, automotive lightweighting, health care, mining and electronics as well as a recovery in aero, consumer, agro and HPC. As many of you are aware, in some instances, the issue is not one of demand, but rather capacity constraints. And through debottlenecking, we aim to increase supply, for example, sulfones capacities. Approximately 30% of the increase will be driven by major investments in our innovation platforms, as outlined by Mark Finelli. Some of these are included in our midterm plans and include, for example, the investments in 2 new PVDF capacities in both Europe and the U.S.A. albeit these investment returns are back-end weighted in the 5-year plan. And last but not least, the balance of the increase in revenue will be driven by improved mix and sustained pricing discipline and sales execution. Turning to profitability, over the midterm, we are committed to maintaining best-in-class EBITDA margins as we accelerate top line growth and maintain tight discipline across our cost base. As an organization, we will be targeting mid-20s EBITDA margins, which will be delivered through the growth and margin accretive sales as outlined in the previous slide, which in turn will drive improved asset utilization and dilution of the fixed cost overheads. This operating leverage and further cost savings initiatives will see a real reduction in unit costs over the period. Included in the EBITDA forecast is the dissynergies of approximately EUR 55 million to EUR 40 million, as previously communicated to the market relating to the separation. As you are aware, Solvay has delivered more than EUR 500 million in cost savings over the past 4 years, of which a significant portion relates to Syensqo. It is our intention to continue this discipline and more than offset these dissynergies through detailed cost savings initiatives that have already been identified so as to ensure that shareholders are cost neutral in as far as the separation is concerned. That said, as we had outlined in the presentations today, Syensqo is a growth company that is exposed to a number of exciting megatrends. It is our intention to pursue these opportunities and as such, there will be increased spend on research and innovation, which will increase to approximately 5% of sales. We do not see research and innovation as a cost, but rather a profitable investment. It has allowed us to build competitive advantages and technologies over the years as we continually upgrade our portfolio. By way of example, approximately 20% of our current sales are from new products or applications that were not in our portfolio 5 years ago. These investments will not only support the delivery of our midterm growth targets. But given the longer-term investment cycle of some of these projects will also serve to drive growth beyond 2028. Moving to return on capital employed. As I've already mentioned, returns remain an important metric for Syensqo. We are targeting an improvement in our return on capital employed from approximately 11% in 2023 and to the mid-teens percent by 2028. The key drivers of this ROCE improvements are simply a function of, firstly, margin expansion, which drives greater earnings from the business. Secondly, the increased volumes on existing assets, driving both efficiency and utilization benefits as we continue to switch our existing manufacturing footprint. And then further, growth investments that drive higher returns. These investments will increase our asset base in the midterm with earnings to follow at a later stage. Turning to cash generation. Syensqo will deliver more than EUR 7 billion of cash over the next 5 years. This cash will come from the higher earnings as well as maintaining discipline in working capital management. Approximately 30% of the cash will be allocated to Sustenance capital expenditure, which includes, amongst others, spend on asset maintenance our One Planet initiatives and investments in our IT systems to support our operations, which we believe will deliver significant benefits over time. A further 25% will be spent on growth capital, including capacity expansions in PVDF production and cell phones in the U.S.A., research and innovation projects and attractive growth projects with returns exceeding 15%. These 2 allocations of capital underpin and are included in our 2028 targets. What this means is that we have a further 45% or EUR 3 billion of cash available to create further value above and beyond the targets set out today. And this includes additional growth capital, value-accretive M&A, shareholder returns and further balance sheet deleveraging. Importantly, we will ensure that there is effective competition for any discretionary capital that we allocate to growth, making sure we balance both the short-term and the long-term objectives as well as ensuring balanced allocation between the materials, consumer and resources and platforms portfolios that build on their competitive advantages. Turning to the next slide which sets our liquidity profile, anticipated on separation of Syensqo from Solvay. As we commence our journey as an independently listed company, I'm pleased to report we will have strong levels of liquidity available as demonstrated by the EUR 1.7 billion of undrawn committed bank facilities and a further EUR 1.2 billion of cash on hand. With net debt expected to be EUR 1.6 billion, our gearing will be below 20%, and our net debt-to-EBITDA leverage ratio will be 1x. The key message is that our debt levels are comfortably within requirements to maintain our credit rating, which at BBB+ and Baa1 with S&P and Moody's, respectively, is in line with our June 2023 expectations. With that in mind, I'd like to bring your attention to our disciplined capital allocation framework. As you've heard from the previous presenters, Syensqo is in an enviable position, not only being a leader in its field with expertise and innovation, but also being exposed to some exciting opportunities for growth and investment. We have also shown on the previous slides that we currently have a strong balance sheet and that approximately 45% of the EUR 7 billion in cash generated over the next 5 years, will be available for further value creation. As a company, we will be focused on ensuring that allocated capital delivers at or above the respective hurdle rates. Cash generation remains strong and that our overall capital management program delivers returns to shareholders over time. That said, one of the key ingredients to deliver value for shareholders is ensuring capital discipline. One of my key priorities coming into the role is to ensure we continue our disciplined approach to capital management and cash. And as such, we intend to focus on key underlying priorities and how we allocate or use our excess cash. One of our key priorities will be on ensuring we maintain a well-invested asset base that is fit for the future so as to deliver more with less. We intend to maintain flexibility so that we can pursue options through the cycle. And as such, we will ensure we have sufficient liquidity available at all times. Finally, we value and will maintain our strong investment-grade credit rating, which secures us access to the committed debt facilities we require and allows us the ability to do so on desired terms in exchange for appropriate pricing. Therefore, we will take a balanced approach to capital management. that will enable us to realize not only the growth objectives and opportunities that the business presidents and Ilham have shared with you today, but also allow us to continue to invest in the platforms that Mike has spoken about, which drives significant value for Syensqo and its customers. The key message today from a financial perspective is Syensqo will deliver profitable growth with improved returns over the next 5 years, and importantly, has a strong balance sheet and cash generation to create value for all our stakeholders. If you don't mind, if you can indulge me for a moment longer, and I don't think you need your iPADs for this. I would like to share with you my initial observations as I've come into Syensqo and into Solvay. I've now been in the role for approximately 2 months. And as a newcomer to the business, I've had the opportunity to visit a number of key sites and locations before taking on the role. And I have to say that my experience has been nothing short of inspiring. I have felt an overwhelming sense of excitement mingled with anticipation as staff have embraced the separation. Everyone I've met sees Syensqo as a place where there are opportunities to learn, to grow and to contribute to something larger than themselves. It is that passion that will allow them to continue to push the boundaries of what they think is possible and continue to achieve the innovation that has become such a way of life for Syensqo. Am I glad that I've joined Syensqo, absolutely. What I've seen to date fuels my determination to make a meaningful impact in this role and to be part of something that I have no doubt will be truly exceptional. Over the next few months, I'm looking forward to meeting with investors and analysts and to understand what is important to you. With that, I'll now hand you back to Ilham. Thank you.

I think it's very difficult to add anything to just Chris and the team say. I knew that today would be very special, specifically for me, it has been one of the best ride in my life, but I didn't expect this. So thank you, guys. Honestly, so inspired and so excited and I always say that our people are our greatest assets. And today, you are getting a glimpse of what that means. And I don't just mean here in the room but also outside the room. You will meet them in our innovation booths too and all around the company. And I think Chris said it as a newcomer. There is a lot of excitement. You see it in the engagement score, 80%, 80%. So we've heard some great things today. Hydrogen is the new oil. Thank you. Remember it, right. I will remember it, right? Rodrigo, your markets are growing very fast. Factor of 10 by 2050. Can you accelerate a bit? And every time, I listen to Mike and Peter discuss lightweighting, I think we got a lot of questions from the analysts and the community about PVDF and batteries. You heard that lightweighting is even more important. I come always even a long way and energized. So thank you. Today was no different and Mike, you've just done a great job. I think you have been an inspiration to me and to the whole team in the past 5 years. And we both know that consumers and resources has some real great hidden jewels and I'm counting on you and to the team to grow twice as fast as your market. So ladies and gentlemen, we are now coming to the end of today's inaugural events for Syensqo. Before I forget, how you will find Syensqo on your trading screens. We made this easy for you. I'm going to spell it Syens and you will find our new ticker here, Syens, simple isn't it? Just remember the spelling. So please remember now what is Syensqo? Quite simple. We are growth. This is us, and this is only the beginning. Thank you very much. So we welcome your questions.

[Operator Instructions]

I'm sorry, I've got 3. I mean the first one is around the value pricing, which is a part of the growth through to '28. Obviously, there's a lot of concern also in Syensqo about next year. and particularly around specialty polymers. So I'm just wondering, have you tasked the management with keeping at least net pricing flat, if not pricing. Second question, is there something about inorganic growth, obviously, on the potential spend. My understanding is Specialty Polymers is probably not a focus for that given the market. But just around that question then around also the other side of that disposal because, of course, you have some non-core business. You also say there's no [indiscernible]. Obviously, there's been a lot of debate about the portfolio, and particularly some of the consumer businesses going in. So a little question around that. And then the last one, composites, which I think you test with getting the margin up to Specialty Polymers, obviously, new heights. Obviously, it's done very well. It had a lot of cost cutting and paper took it there, but Specialty Polymers has moved ahead. So when we look forward, whether it's realistic for them to be similar sort of margin.

On pricing, I think you say that since the fall 2021, I knew that this is one of the things I wanted to test in the company didn't have time with the team before. They had to go through COVID, et cetera. And in the fall 2021, we started the training I was talking about in my prepared remarks. And believe it or not, we started testing our value pricing prior to the Russian world. Inflation helps us, obviously, really helps us to deploy what we wanted to do. So yes, I think you said it very well. I promised that the markets with the team, net pricing flattish in the second half. I mean you've seen our quarter 3, too early to talk about quarter 4, but that's exactly what we are doing. So you can expect from a Syensqo type of company, right, like Solvay, right, to really look at where we can practice value pricing, which means that we share the value we create with our customers. We may not have been doing this properly in the past. That's why we educated, we trained our people. But obviously, in areas where we are less differentiated if there [indiscernible] costs are down, we're giving away some pricing. We did this in quarter 3. We did this in quarter 2 already, right? But our net pricing, we will fight for it. And that's what we have seen in quarter 3. So we've been with us. This is -- I think you've seen it in -- and maybe Chris, you can share a bit you've seen our projection. You've seen the pricing contribution to our next sales growth and top line growth, it's pricing and mix because we're going to also bring some new innovations, which are going to price better at a higher contribution margin. Maybe Mike Radossich can explain how he's now managing his business. He has done the deepest transformation by looking at contribution margin by reactor, right? We were not used to do that in the past. Our salespeople where actually incentivized on some sales, not knowing is it coming from volume on pricing. Now we look at the contribution margin. They are incentivized according to contribution margin, which is extremely important, right? So that's one. And I think early next year when we would share with you our budget 2024. I know you are impatient to get more glimpse on that, be patients we'll come back to you on that. Organic growth, I think you talked about specialty polymers. You want to pick it up? Peter?

So I think the question on Specialty Polymers was around pricing power. So let me start with pricing power, then maybe move to inorganic growth. So on pricing power, for the majority of our portfolio, we feel very comfortable with our current pricing power. As raw materials go up or down, we may move our pricing up or down with our customers to some extent. But the majority is pretty stable. On a significant part of our portfolio, I think this further we can go on pricing power. There are several lines where we're at capacity today, where I think we can explore a little more. And then on some of our portfolio, it may be interesting to reinvest a part of our pricing power to improve our shares and growth. But overall, I think I'm very comfortable with the outlook that you gave.

Then there was a question on composites. And obviously, the question is, yes, you done a lot of cost cutting, which we did, by the way, in 2020. This business has -- Syensqo generated how much, Chris, on cost savings from the EUR 500 million of ?

Of the EUR 500 million, I think the largest portion of it related to Syensqo.

Yes. So probably even 60%, 1/3 was composite materials. So we've done a lot, including closing 2 plants, which were at lower returns at that time. But the best is yet to come. You want to talk about that.

I hope that the market evolution that I presented in the slide is kind of self-explanatory. The effect of 2 consecutive crisises because one was an accident crisis and then immediately followed by COVID was very bad for the industry. So we are in an industry where the supply chain is extremely long. So when it fell, we knew ahead of time that it was going to take a very long time to recover because again, continuing with my narrative to build an airplane is a very, very long process. So when we did the cost cutting, we knew that the market was coming back, but we also knew that the market was not coming back fast as it did in other segments. So we basically did what we had to do. Then as we started to see the market going back up again, we became fit again, and now we are ready to ride the wave that I described. So you will see the dynamics of this market are different than other markets that move faster up or down. And I think we did the right thing at the right time. And now we're doing the right thing at the right time. And we have a lot of visibility.

So yes, I mean, Rodrigo said this very well. Syensqo really washed off inflation every year since I joined the company, right? So we are good at knowing where to cut the bad costs. When you are a growth company, you need to be prudent, right? Not too much cut your costs if you know they carry your growth. So that's the balance with the team you are seeing. The second advantage, specifically in COVID is that we were not sitting on carbon fiber assets, right? So we variabilized some fixed cost compared to some peers, right? So yes, I mean, I'm very encouraged by the growth perspective. I mean you've seen the presentation. This is predictable. It's going to happen. We are in narrow bodies, right, where the composite is what, 25%, 30%, right? penetration, we can go up to 50%. 1/3 of our business is defense. We love defense business, I love it. It carries innovation before it goes to civil aviation. So I'm very excited about this, not to talk about the thermoplastic composites platform, which will come whenever it is, right? Aviation is going to take a bit longer because the qualification and certification signs, it's a bit long, but it's going to come, right? And then the other question, no [indiscernible], I mean, I say this, we've done it. Can you tell them what you've done in maybe in resource and consumer.

So in 2019, we launched the optimized mandate. Under that mandate, we divested noncore assets. Personally, in the Novecare business, we divested 5 plants in our commodity amphoteric business. We continue to look at opportunities to drive cost improvement, but the large part of that optimization is now behind us. As you mentioned, we built up a lot of muscle over the last 5 years, nothing like we've ever done before. We looked at contribution margin per reactor hour per product. And if it wasn't core, it wasn't strategic, it wasn't part of a larger portfolio, we looked to divest it or look at other strategic options for it. So it's been a tremendous run over the last 5 years. And again, I think that there's more opportunities for us to look at. And with my expanded responsibilities, I'm going to go hard at that as well.

Absolutely. Really, the muscle is there, we will always assess whether we are the right owner or not.

I also have a couple of questions, please. First one would be on the margin outlook for materials and the remainder of the portfolio. I think materials held up relatively well in the recent past. There was more pressure at solutions. In the underlying EBITDA outlook or margin outlook you gave, what's kind of the split or momentum between the 2 parts. If you can talk about that. And then second question would be on the dividend policy. Solvay Group will have a stable dividend at the combined group mentioned to keep that dividend stable and split between Syensqo and Solvay. So what is the kind of dividend policy that you will apply within the cash buckets that you elaborated on? And then the third question would be on the outlook for the Aroma business, which has been under significant pressure in the last few quarters. How do you view that one strategically and also from a competitive dynamic point of view. Those were the questions.

So we'll do materials, Peter, Mike, you do C&R EBITDA and margins on Aroma, then dividend you, Chris?

We talked a little bit about where the pricing was going in Specialty Polymers in the segments. That will lead us to decent maintenance of our margins. So I wouldn't see that as a significant concern.

And we are in the league one top margins, right? I mean at one point of time. It's more about understanding your value pricing and the value you create with your customers. I want the team if they deliver 100 as a value, we share the value creation 50-50, has nothing to do with the price, right? Nothing to do. If I give lightweighting, if the object is mobile, it's consume less fuel, it's emits less CO2. We lower the total cost of ownership, there is a value. So we're getting better at that. The best is yet to come. We are just now scratching the surface. But you have to be differentiated. You cannot fool yourself. You have to look at the mirror and say, am I bringing something very different from our competitors. And I hope with Peter's presentation, you've seen that. And you're going to see it in the innovation tour, right? How much is complicated, unique when you bring the power of the and. They don't come to us with one spec. They come to us where there are many, many specs. And this is where we can provide solution agnostic to polymer. They don't come to us because we are a peak producer. They should not, by the way. They should not, right? So I think that's going to come over. And I think, as Peter said, margins are not a problem there. We'll continue increasing our share of wallet, looking for new applications and continue promoting our new solutions.

On the C&R, we're continuing to align our costs with the lower volume and demand outlook. There will be some solid operating leverage when that volume does come back and in this market, we're continuing to take share of wallet as well. So we continue to push our teams to grow. We have a very strong value proposition, and it's not just the product we're selling the solution and the application support behind it. As far as our Aroma business is concerned, yes, the dynamic has absolutely changed in that market segment very rapidly. There's been a lot of capacity that's come online in China. I view us as having a pretty strong position. We have assets on all 3 continents, something that no other supplier has in the industry. We have to fix this business. There's no doubt about it. And we will and we're aligning our teams to come forward with projects to do that and again, rightsize our cost to the current volume and the demand outlook. We're going to fix the business.

And here, I mean, you cannot say, so I'm going to say it for him. This is the team who has really increased drastically the return on capital employed. I like cash and I like return on capital employed. Because before Mike's time, it was fill the pot, we were filling the pot. He did not only pruning the portfolio and letting go some businesses where we were not the right owners, but he dared with his team to really look portfolio of products, we pruned the portfolio of products, and we started pruning the portfolio of customers because sometimes they don't pay for the value we bring. So I think what you see the 20% you've seen on margin has been already improving. It doesn't mean that it's not going to normalize, right, if the demands are weak. But I feel really better than 5 years ago, with the discipline on how to fill the pots in consumers, the right business. Really, we are way ahead now of the curve. Now we need to continue upgrading our portfolio, bringing that differentiation. And I think Mike has explained lots on Aroma [indiscernible] Dividend? .

Yes, you're right. On the dividend policy, we haven't come out with a public statement, for example, we have a new board, and we intend to work with that new board to come out with the policy. That said, I think it's been quite clear, at least I think from my message today is that we are a growth company and allocation of cash will focus on growth, making sure that it hits the right parameters, and that's where it will go. We will look to do shareholder returns to the extent that we can and it comes in one of the frameworks of the capital allocation framework. That said my experience from the past, I was in a company that had a progressive dividend. And those can become unsustainable when you get to a point where you're paying more than 100% of your earnings, and we moved to a payout ratio. So that's just my experience.

A few questions. I think throughout the presentation, there were a couple of times where you referred to 50% of portfolio being IP and long-term supply protected. Can you expand and discuss what exactly you mean by 50% of the business being protected? The second question I had was there was -- there was a mention of EUR 500 million of EBITDA contribution from new projects. Is that until '28? Or is it some of that is actually spilling over beyond '28? And can you talk about the phasing, how much might come in the next two years versus how much is coming actually in the outer years? And the last question was on the CapEx. I think the implied CapEx intensity for the group as a whole seems to be like 9% to 9.5% of sales. And within that, I think I heard consumer is 5. So clearly, the materials bar is over 10%. Why is it so high? Because you mentioned you already have a well-invested asset base. So why is the density so high for the materials part?

So IP, maybe we can talk about IP in the growth platforms and then the long-term suppliers' contracts in composites as an example.

Yes. So on the IP standpoint, I think as you saw on the one slide, we have over 1,600 patents in place. Those patents give us protection. And what I mean by that is that competitors can't just make that product. And as we said in our materials and our products, these are specialties. So customers buy them based on performance. So unless you make exactly what we've made, which they can't be because of the IP, they can't match our performance. So that's what we mean by the IP part, right? So we're protected from competitors copying what we do.

So that's an important point, Chetan, in any science research invested companies, your IP. And I think what we are trying to do better now is really to cut reinforcements of the IP. It means you know your intel in the markets, you collect competitive products, and you know where people are infringing and you go after them. You will see us doing that, right? I was very public in China even in my -- was in the news. So I can talk about it about IP protection. To give you an idea is one of your favorite guys is suspension PVDF, right? So let's take it in the U.S. to not make it controversial. But you know we have IP and the United States of America put tariffs, right, Mike? 20%?

There's the 301 tariffs, they were 25% plus the normal harmonized tariff of 6.5%. Those are the tariffs here.

So when you got this, you really. Each investments, we look at all of this, our IP position subsidies, yes or no and protection geographic possession, specifically now that some of our products and solutions are considered as critical materials. The other protection, and that's the 50%, right? probably 50 more percent here is IP on the Specialty Polymers, the Composites is the long-term contracts, right? Can you explain a bit Rodrigo?

Yes, in this industry, in aerospace and defense, as I mentioned, and this is applicable also for contracts. The supply chains are very, very low, let's say, to develop a new product, in a new aircraft takes a very long time. And the contract visibility that we have is quite long term, let's say, in this industry, one year is nothing. You talk about multiyear contracts. And on top of that, they are not the normal commercial contracts. You are engaging into contractual agreements where you are let's say, specifying a price which with indexes on a certain quality, on certain ability to change, et cetera, so we basically have a very good end-to-end coverage on what we do because as we enter long-term contract with our customers, we also try to get our back-to-back customers with our suppliers because we do buy some things. And as I mentioned in my presentation, this gives a very, very good visibility and predictability it's how this industry operates. To add to this remark, sometimes for example, when the financial community analyzes certain performance in one quarter, in this industry one quarter doesn't mean much. Everything needs to be aggregated into several quarters at the bare minimum.

So in my words, they kick you out if you do really, really something wrong. And frankly, it's not -- I mean you have to earn the trust. Productivity is important. I think Rodrigo told you. I mean, I've never -- I worked in many sectors in my life, aviation is extremely manual and not automated yet. And that's why you see still bottlenecks out there across the supply chain, not only us, but our suppliers. So I think in the next decade, there will be a real transformation of the aviation, including true technologies like thermoplastic composites Mike talked about. But definitely the stickiness of our long-term contracts as a plus and gives predictability and visibility.

Yes. Just on the CapEx, I think we've publicly stated that over the next 5 years, we'll be spending about EUR 3.9 billion CapEx, and it's roughly spread evenly over the 5-year period. I think there's a slight jump in 2025 and 2026. That said, more than 50% of that spend is on Sustenance, which includes leasing. It includes maintenance of your assets, it includes One Planets initiatives and it includes IT. The balance is then split between growth and R&I. And are the 2 biggest growth projects that we have over that period are the PVDF plants. And that capital is weighted towards kind of from now through to 2026. But importantly, the capital intensity metric, it starts at about 11%. But by the time we get to 2028, it's sitting at about 7%. So it does come off to normal levels. .

The EUR 500 million.

I think the EUR 500 million that was referred to on the slide was the projects at maturity. Now the biggest ones that are included in that $500 million would be the 2 PVDF plants.

But the U.S. one were not realized fully in between now and 2028, because we just started. You've seen our joint venture press release announcements with Orbia. We need what, 3 years, guys to...

It will ramp up the full capacity by 2032, 33 something else.

So it will take time, Chetan get to the 5 million EV cars we will supply, so part of it is there. But anyway, the CapEx is in the envelope. The good news there is that we got the subsidies of almost half of CaPEx. It's now covered by the IRA, which DOE has given us, so it's official.

We're under contract. That is really important point to be in the contract.

Which is cool. It's not about taxes or whatever, it's really -- they reimburse our builds on steel, et cetera. So we really like that. The PVDF in France, Europe is almost behind us, right? I mean 2/3 is the [indiscernible] money. We already did this. You've seen the sulfone. You've seen some CapEx on consumer resources. But yes, so different maturities, but we wanted to give you transparency on the EBITDA we're going to bring, which is pretty cool. And all of this is an IRR, which is both -- what we said that's all remember, 15%. So we will get there.

I'd just like to ask a question around the creation of this company and the benefit. When I look at the financial targets you've put out today, both in terms of top line and margin, that looks broadly consistent with what the business is already doing. So where is the step change in operational performance that you would hope would come with a more focused accountable entity you described? Or is the biggest benefit of creating this company, the financial flexibility you have from the balance sheet and the dividend policy to allocate capital going forward?

Yes, I mean, obviously, I talked a lot during my speech, right, about the rationale, but we've had probably 23 months with you guys explaining the rationale. And one of those is that we are -- I mean, look, we are undervalued. I mean look at our assets and our results since 5 years. I mean nobody can argue that the valuation of these outstanding assets is not there. But more importantly, as you mentioned, this is a growth company. And therefore, we have put guidance now on top line growth, right? You're right. I think you noticed very well, many of those businesses have been growing at that level of growth. But listen, I mean, we are already higher than any peer out there, right? Can we do it? Yes, we've done this in the past. Peter has shown you what we've done in Specialty Polymers. And more or less, if you take material ESCO business, we grew what, probably 5% between '13 and 2022, so almost a decade, right, more or less. And in the past years, I have been in the job, double that, but pricing was part of it, right? So what we are saying is we're going to grow twice our market. That's what you need to think about this way. Whatever the market does, and I'm sure we all have in mind 2024. So I do as well. But bear with us, whatever the market does, what our peers they do, including the formidable one, we want to outgrow that growth rate. So that's how quality of growth and through penetration, I think I hope that the team did a good job and convinced you, it's not only about the market, it's penetration with technologies, be it in a plane, the narrow bodies, be it in EV, I think Peter shown you, 30% plus of our sales are in EV and even if I don't know, Oxford is saying, what, 2% auto build rate -- growth rate next year, EV will grow, what 19%. So we like that because there is a shift of technology out there with EV and hybrids. There is a penetration of our technology because we bring lightweighting. Remember, it's not only battery. It's everything under the hood, application, right? And I like the switch because in ICE, in a conventional engine car, we sell 6 kilos. You move to EVs, 9 kilo and hybrid is 12, we love it. We can sell more. This is the repeatable algorithm. Our team is now to master, right? It's new for us to just repeat, that's algorithm, but I like it. We have a winning solution. We know how to do it. We know the customer. If you have a battery case in Specialty Polymers with Volkswagen, why it doesn't go to Toyota and to Tesla, right? can go everywhere. And this is where we need to become an algorithm machine making repeatability day after day as soon as we have a success story.

If I may, just some reflection because I think if you're not inside the business, it's quite difficult to transmit. But maybe in the showroom, you will get the flavor. I call it the customer interaction model that we have in what you will see in the showroom is very common throughout the company. You can be talking about an airplane or agricultural seeds or thermoplastic composites or automotive, that customer interaction model, I think it's very valid across. And as an executive of this company, I think Ilham has been doing an outstanding job kind of like replicating this customer interaction model, which has been refined in the last years. It's just my reflection.

And the last one is that the new investments will bear fruit at the end of the range, right? I mean, like the PVDF in the U.S., whatever. So you will see a higher growth rate at the end of the cycle than before.

I mean if I can just further that point. So I mean we made it quite clear that a number of these R&I investments are longer-term investments. So what you should see back-end weighted, they're going to deliver on 2028 and beyond and hence, we're increasing our R&I spend in this business to capture the megatrends that we're exposed to.

Absolutely. Anybody else?

Sebastian Bray from Berenberg Bank. Just to your point on the back-end loadedness of some of your investment pipeline. How long does it take to load the PVDF plant fully in an environment of normal utilization? And what visibility does Syensqo have on the prices that are going to be achieved by these PVDF facilities at this stage. I assume that take-or-pay contracts were a little premature at this stage, but if they exist, it would be helpful. Could I just ask for a point of clarification as well? The tax incentives and other benefits of about $57 million or close to $60 million. I can't remember that were mentioned earlier. Is that new information that was released today specific to the U.S. facilities? Or is that a combination of benefits across the EU and the U.S.? And is all of the benefit now of governments for the PVDF facilities out there? In other words, let's say you invest about EUR 1 billion across France and the U.S. The EUR 230 million is what the state pays.

On the U.S. investments, right? You are talking about the tax incentive you've seen in the.

That's just the U.S.

But we'll get you the -- so maybe the PVDF plant. Mike, do you want to take it?

Yes. As far as how long does it take to fill -- well, first, it depends on the build or fill. It depends on the size of the plant, right? So the one that we have in the U.S. probably going to take about 5, 6 years, depending on how fast the industry takes off based on what we expect today. The one in Europe will fill faster than that because it's smaller.

Yes. And the way we look at that is that we follow our customers' investments, right? So the battery makers, I mean, even the Chinese now are contemplating or are working on investments in Europe on batteries, right? So we go with steel on the ground where our customers are. So in the U.S., for example, we are in conversations in Europe as well, actually, we pushed back on some long-term contracts because we're going to keep some flexibility, right? So we know the PVDF business very well. We are vertically integrated in Europe. In the U.S., our alliance with Orbia gives us that vertical integration, which I truly believe is barrier to entry is a must to have. So when you think IP, obviously, we talked about IP it's not only IP protecting with patents is some raw material and vertical integration with the geopolitics today and the complexity of making some raw material travel between regions is a mess to have in some areas, right, to protect our business and to be viable.

Can I add something, which I think is important. Half of our PVDF business is completely outside of battery. So the other half of our business is in semicon on oil and gas for things like flexible risers. That business is contracted out typically 3 to 7 years, and we have excellent visibility on its growth and its pricing and its pricing is contracted. So I think that the battery business is a huge opportunity. And the rest of the PVDF business offers a great backstop on that opportunity. I don't know if that's helpful.

That's helpful. Could I also confirm, is it 31% of tariff for China export into the U.S. for PVDF [indiscernible]?

Yes. There's 2 parts, right? So you have the 301 tariffs, which is at 25%, then you have the normal harmonized tariff code of 6.5%. So the total is 31.5%, yes.

And this is the U.S. Remember, guys, we did also our coming out in quarter 2 because of the PVDF margin, and we even shared with you, right, that the margins were flattish, right? Even if the PVDF going to batteries, right, we gave away some pricing, 142b story and all of this. But the margins in other segments Peter was talking about was not only holding up but some increasing.

We never answered the $57 million.

Yes. You say that now?

No, I don't think I ever answered your $57 million -- that is a grant from the state of Georgia for the plant we have in the United -- the one we're going to build in Georgia. So that's the U.S. investment. And that's mostly tax credits and things like that. So not...

It's purely U.S.

Frank Claassen, Degroof Petercam. We've got a question on the transition services agreement, so let's say, the contract you've closed with your soon-to-be former parent for IT and back-office functions. If I'm not mistaken, that runs for 2 years. So yes, what kind of steps do you need to take in the coming 2 years? And what kind of costs are involved to, let's say, yes, be safe when the contract rolls off?

Yes. I mean separating, I've done this once in my life in the U.S. and it's always -- the most difficult thing is the IT, right, part and the digital part of it. 2 years is what's going to -- we're going to do it in 2 years. If we can do it quicker, obviously, we'll do it. The good news for us is that we are coming from the same parent company. This is not unfriendly divorce. This is a wanted separation. So we are writing the separation on our terms, both the right terms to protect the interest of the 2 companies from the costs perspective, from the benefits of restructuring, right, and on the exit plan. So the way it's going to work, Syensqo is copy pasting some -- I'm not an IT expert, but copy-pasting some ecosystems, right? As for now, we will have this TSA and service agreements, which Syensqo will pay for to the new Solvay, right? And obviously, smoothly, the teams join at the hips. Between the 2 companies, we'll be working, one, on building up a new system, right, and the other one on exiting and simplifying its system. Because one of the rationale, ladies and gentlemen, I'm not sure you get it, is it's under the same roof. We have different needs. Solvay needs simplification, standardization. They need a simple kitchen, different kitchen, different basements. Syensqo needs CRM, customer relationship management, sophistication in [ II ], right, pricing dynamics, understanding how much is cost, a different perspective. And we can't do that half pregnancy in between. By doing this, we have a unique opportunity in the coming 2 years to really fit-for-purpose the system to allow us to meet our strategies with our customers. And that's the hidden benefits, right? I mean -- and it's huge, huge in the company. I really believe it's going to revolutionize the way we are operating internally and with our customers, ERP to ERP. I think there are so many things, supply chain management. We don't have visibility always on what the customer -- they stock or not. I mean you ask us about stocking in batteries, you remember. I hope this is behind us by now.

It's behind us.

But just answering your question was a nightmare because the system are not built, right, in the value chain. And that's what we need to do differently as a specialty company. So I think you will see that separation, and the cost of doing this is baked into our plans.

It's Laurent from BNP. Ilham, I've got a 2-part question on PFAS. The first question maybe for Peter or Mike is around production. And can you remind us where you stand on, I guess, the phaseout of PFAS in the PVDF production, for instance? I think you had a target of 2026. But my understanding is that you may be doing this a bit faster. And then the second question is on PFAS in terms of significant liabilities that you're highlighting in the listing dock in your presentation. What are the milestones that you have in mind or that you want us to have in mind to assess, I guess, how significant those liabilities are?

So maybe the surfactants, New Jersey and Spinetta...

I think I'll answer PVDF and -- yes, I can handle PVDF and then Peter can talk about the overall PFAS situation in the GBU. So with respect to PVDF, just to be clear, we produce 2 types of PVDF: suspension PVDF and emulsion PVDF. Suspension PVDF, which is the 2 big investments, the one we keep talking about, right, the U.S. one and the one in Europe, that's suspension PVDF. It never use surfactants ever. It doesn't need them. It's a suspension technology. So I just want to be super clear, that technology does not require fluorosurfactants. The emulsion chemistry, which is what we produce in New Jersey, right, that's used for architectural coatings and other markets. That's where we phased out already -- in June of 2021, we phased out the use of those surfactants and we've gone to a non-surfactant technology, no fluorosurfactants at all. So in the case of PVDF, we are out completely of any surfactants. And just to be clear, again, we only ever use them in the emulsion chemistry. So I think Peter can comment on the rest of Specialty Polymers.

Yes. Thanks, Mike. So we are replacing our fluorinated surfactants with nonfluorinated surfactant systems in all of our fluoropolymers. Those fluoropolymers where we did not feel we could do that reliably, we have already exited all the business. We have exited or are exiting all businesses we consider to be consumer-facing. So what we're going to be left with is a portfolio of fluoropolymers, which are made without using fluorosurfactants by the end of 2026, the date we gave. In addition, we have invested hugely, around EUR 100 million, in pollution abatement systems to control all of the affluence and releases from the plants where we make these products down to below detectable limits. So I feel really confident that we've created a business system that's robust for the future. Maybe Ilham?

Yes. I mean, I think the PFAS is one of the things we pride in this organization since 5 years because it's an innovation story. We exited New Jersey back in July 2021. And I'm so proud that before the split, we are getting into a settlement with New Jersey. We passed the 90 days. It's in the provisions. You've seen it. We told you how much cash we are going to spend next year, and the rest is remediation over 30 years. And by the way, we are now in negotiation with former owners and people from whom we bought those surfactants. As a responsible company, we took the whole number, but you can expect it to be lower than this. But let us make the homework and announce it when it's ready. On the PFAS and the fluorosurfactants, it's what Peter and Mike told you. There are 3 things, 3 strategies from Solvay. Exit the fluorosurfactants. We believe that the world should run without it. We did this in New Jersey, and we are doing it in Spinetta in Italy. Yes, Laurent, we already switched to a non-bioaccumulable surfactant. It's already clean, right? Even that surfactant will be exited latest by 2026. Number two is the lowest emission possible, right? So that's what we are doing. It's really working closed loop, right? We put EUR 40 million of investments in water treatments in Spinetta, for example. So our ambition is to have a technical 0, we call it, which means that you don't detect it anymore in air, in water or in soil. So that's the future of -- and number three is innovation. And we've shown it in most of the PFAS replacements we've been doing with our customers, but also in how to make the forever molecule remove the forever, right? So we are investing with academia, with partners, with start-ups to see how we can remediate differently and reuse the PFAS in the future. Those are our 3, right? Now as you know, the fluoropolymers of low concern will remain, right? I mean those are necessary for batteries, yes? Without fluoropolymer, there is no battery. Without fluoropolymer, there is no green hydrogen.

No hydrogen.

No semicon.

There is no semicon. And I think you've read the press. So I think the value chain, obviously, is looking at that. So for us, we're a responsible company. That's what you can expect from us. A responsible manufacturer will always raise the bar. And for us, legislation is the floor.

And can I go a bit further on? I think there's a substantial opportunity here. This part of our business is profitable. And by acting responsibly, proactively investing and explaining what we're doing to our customers, I think we significantly enhance the value proposition we bring to the market. So I think that helps us build share, build margin over time, and it's the right thing to do.

And just want to add one more point. Ilham, what, 4, 5 -- 4 years ago, now we started -- well, we quadrupled our R&I effort.

Yes. They were EUR 10 million. They became EUR 100 million now.

And I could tell you, many of our competitors are now trying to go into this direction with non-fluorosurfactant technologies. We are far ahead of our competition in this space. We are doing things that are quite different, and there will be some patents coming out in some time. But we've got some technology and things that we are doing that is quite different and a different route to solve this problem. And it's because we started way, way in advance.

And again, just to quantify that because the number is quite compelling, nearly 300 man-years of research in solving this problem from our customers since 2019. So you've got to be of a certain scale to be able to deploy 300 man-years of research over 4 years.

And we are very happy with did that. That's why now you have more transparency on, Laurent, the provision, specifically on the New Jersey, which is our largest case. And I'm so happy that we give that transparency and clarity before this place. It's so important. And we can afford it by the way, so that's what we are doing.

So one small follow-up on our famous PVDF. Just to help us and also being a bit more excitement, just in one of your slides, you had EUR 1 billion of sales from automotive in Specialty Polymers, if I'm not mistaken. And you had 35% of sales from EVs. And you said half of that is actually non-battery related. If I work down, it means your battery PVDF business is actually not that big. It seems less than EUR 200 million of sales. Have I got anything wrong?

Yes. I mean this is a number we've never given you. But yes, continue doing the math, Chetan. So I mean our business in auto is not only PVDF. We kept telling you that. I think you are not far from the truth. And even our PVDF business is not only going to auto and batteries, which we told you by the way in quarter 2.

I guess you could have helped us by saying we are trying to hit the wrong bird. But it seems like...

We told you. Maybe I will do a better job in financial communication, Chetan, next time. Yes, yes, we -- if PVDF pricing with 142b in China has a cold, we don't have a flu, definitely. That's the message. And we are diversified compared to other peers, you're right, because 50% is non-auto, by the way, risers and other things. And I mean -- and that's what we tried, I hope today, to tell you is that we are agnostic to technology. When customers they come to us, they need to find that solution to their problems, they should not care about PVDF, PEEK or a compound. And if it's PVDF or one of its compound, we'll give them at a lower total cost of ownership. And I think that's the only differentiation where you should come to us and not to any of other peers because we don't just sell PEEK or just PVDF or just polysulfone. That's a different selling game and value proposition this company has given to the world.

So just to exemplify that...

Watch it because if not, you're going to give him the number.

We see a lot of people coming to us saying, this flooring stuff, you've got other ideas? And the answer, of course, is yes. So a significant source of this business is replacing some of those products that people are uncomfortable with. That gives us growth opportunities.

There were questions up there or not? No?

Any other questions? We have a few more minutes, if you'd like.

No? Everything is clear. Well, thank you very much. Thank you for your time, for your engagement. I know it has been a long day. Special day for us, for our teams. We've been working hard for the past 23, 24 months. It is like crazy. It's like 2 IPOs you are running, and I would like to thank our teams who have been extremely committed to make this happen, both the blue and the orange. We still -- we try to be schizophrenic, but we are still one team, the blue and the orange. And there is much of value creation between those 2 companies. And I hope today, if not -- we'll be around. I mean we would like you to go to the [ Innovation Tour Show and Tell ] to feel, to touch the products and the solutions. But definitely, the management team will be around to address more of your questions. So thank you very much. Thank you.