Vallourec S.A. (VK) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Vallourec Q2 and H1 2022 Results Conference. [Operator Instructions] I am pleased to present our today's speakers, Philippe Guillemot, Chairman of the Board and Chief Executive Officer; and Sascha Bibert, Chief Financial Officer. I will now hand over the call to Jerome Friboulet, Head of Investor Relations. Sir, please go ahead.

Thank you, and thank you for joining us for Vallourec's Q2 and H1 2022 results presentation. I am Jerome Friboulet, Head of Investor Relations. Joining me today to comment on those results, we have Philippe Guillemot, Chairman and CEO of Vallourec; and Sascha Bibert, Chief Financial Officer. This conference will be recorded, and a replay will be available. It is also on audio webcast on our Investor Relations website, and the presentation slides are available for download. Before I hand over to Philippe Guillemot, I want to add that today's conference call contains forward-looking statements and that future results may differ materially from statements or projections made on today's call. For your information, the forward-looking statements and risk factors that could affect those statements are referenced at the beginning of our slide presentation and are included in our universal registration document with the French financial market regulator, the IMF. This presentation will be followed by a Q&A session. Now I would like to give the floor to Philippe Guillemot.

Thank you, Jerome. Good morning, everyone. In today's agenda, we will cover Vallourec's second quarter results, the outlook for the year as a whole, and give you an update on the progress of our new Vallourec transformation plan. First, let's take a quick look at the highlights of the second quarter. I am pleased to announce that we have delivered a solid Q2 performance, particularly with respect to EBITDA, which came in at EUR 160 million, representing a significant EUR 115 million rise on the previous quarter. This strong performance is driven by the positive trajectory of the worldwide tube business, especially in the U.S. Our North American business has benefited from a very favorable operating environment, thanks largely to the recovery in oil and gas drilling activity, and we have been able to more than offset inflationary effect with pricing initiatives. This enabled the group to deliver strong overall performance in spite of the lower-than-expected contribution of the iron ore mine, which, although operations have restarted, continues to operate below its full typical levels. At this stage in the year, we have sufficient visibility to quantify our EBITDA performance for the year as a whole, which we expect to land between EUR 650 million and EUR 750 million. With the mine operating on a normalized basis, we would have expected an EBITDA for the fiscal year of approximately EUR 1 billion. Free cash flow was impacted in H1 by the investment in inventory necessary to address the current buoyant market, but will be positive in the second half as working capital stabilizes at current levels and EBITDA continues to grow. We have also made progress on our new Vallourec transformation plan. The closure process of the German plant has been launched with the attendant headcount and overhead reorganization measures at other European sites also underway. Finally, I have made several new appointments to our executive committee to ensure we have the right team in place to successfully drive this ambitious transformation. Now, I hand you over to Sascha to comment our Q2 results.

Thank you, Philippe, and good morning, everybody. Q2 results came in as expected and as I indicated already in our Q1 call. Sales and EBITDA increased compared to prior year as well as compared to the prior quarter, and we expect this sequential improvement to continue throughout the year. Generally, the trends are very different for our tube business, which performs very well especially in the U.S. and the mine, on the other side, which continues to be challenged by waste storage limitations. Specifically for Q2, tube volumes are up 13.6% to 433,000 tonnes, particularly driven by the North American business. Group revenues are up disproportionately by 36% and over 50% for the tube business, which means a very strong increase in the average selling price of our tubes. EBITDA was EUR 160 million in the second quarter, of which about EUR 34 million for the mine. As Philippe said, if adjusted for normal operations of the mine, i.e., using budgeted volumes and actual prices, the EBITDA would have been around EUR 240 million, i.e., more than a 60% year-on-year increase. Operating cash flow after CapEx but before changes in working capital was positive. As we invested again into inventory, free cash flow was negative. In the second half, we expect free cash flow to turn positive most likely towards the end of the year. Turning to Page 7. Group revenues were impacted positively by FX and negatively by lower mine revenues. The same holds true for EBITDA. However, here you should note in particular that our pricing initiatives are starting to pay off as we're able to more than offset cost and inflation, therefore, increasing our margins. The last effect called mine/other includes various components. The pure mine effect is about 3/4 of the total. In addition to the information displayed in the EBITDA bridge, I want to highlight the following: SG&A costs have declined as a percentage of sales. Depreciation has increased slightly to EUR 49 million from EUR 35 million, with about half of the increase resulting from FX. Financial income was only an expense of EUR 8 million, somewhat supported by FX. The net interest expense embedded was minus EUR 22 million. The most noteworthy development below EBITDA is the EUR 456 million expense in so-called asset disposal, restructuring and other. About 3/4 relate to provisions for the social plans and associated fees, including for France, Germany and the U.K. Please note that the related cash out is concentrated in 2024. Additionally, we have included nonrecurring costs, including provisions for the mine, and other impacts like accelerated depreciation related to the restructuring. Finally, there are also a number of asset disposals included. Among them, the sale of Vallourec Bearing Tubes. The year-on-year comparison of this line item is especially pronounced as we recorded the book gain for the sale of land in Germany in Q2 2021. A book gain for the sale of the remaining land can also be expected once the transaction is closed as the book value of the remaining land is close to 0. The cash effective part of the total EUR 456 million will impact the cash flow statement disproportionately in 2024, say more than 55% of the total, another 25% in 2023 and about 20% in 2022. Moving on to cash flow on Page 8. When thinking about cash generation going forward, keep 2 items in mind that are impacting this quarter. First, a cash-effective EBITDA which is still below the run rate we expect in the coming quarters. Second, a substantial increase in working capital up until end of Q2, almost exclusively a buildup of inventory. As a result, as cash-effective EBITDA continues to grow and the working capital development flattens, free cash flow will turn positive. Specifically to the bridge on the slide, we start with EBITDA of EUR 160 million and then adjust for noncash items, which in this quarter predominantly relate to provisions, which were increased in prior quarters, however, now released in this quarter given the favorable environment, leading to a positive effect in the P&L, but without cash implications. We then deduct interest and tax payments of EUR 49 million and EUR 17 million, respectively. The category Other of EUR 32 million includes remaining cash-out from adaptation measures from prior years, and also cash-out related to the mine incident. The major driver of the negative free cash flow is the increase in working capital of EUR 187 million, which is literally entirely driven by an increase of inventory. As of June end, our inventory stood at close to EUR 1.5 billion, an increase of EUR 600 million since Q2 of last year. The inventory is roughly equally spread across our regions with slightly lower values in distribution regions like the Middle East. To summarize once again, no cash is lost. But in contrast, we're generating margin-enhancing business. To do this, we invest into working capital, predominantly inventory. As the EBITDA growth and working capital growth starts to flatten, cash conversion will pick up, which we expect already in the second half of 2022. Further out, we will benefit again from mine cash flows, as well as from the uplift in recurring cash generation from the new Vallourec project. Then, also the cash out for restructuring measures will stop, which also broaden the cash flow significantly. Page 9. Net debt predominantly follows the trend of free cash flow. Asset disposals and others also include the payment into an escrow account related to the mine incident. End of June net debt stood at EUR 1.39 billion, with the majority of the gross debt having maturities in 2026 or 2027. So no refinancing needs in the foreseeable future. Given our view on the cash flow development going forward, year-end net debt will likely be lower than at June end. Now I'm handing back to Philippe for the assumptions driving our full year outlook.

Thank you, Sascha. Let's look at our assumptions for the remainder of the year, starting with the mine. As a reminder, in January 2022, following exceptionally heavy rainfall, some material from the waste pile associated with the operations at our Pau Branco mine fleet into a nearby rainwater dam causing it to overflow onto a nearby highway. Fortunately, there were no casualties and the structure of the dam was not affected. However, as a result of this incident, the operations of the mine were temporarily suspended. At the beginning of May, we were able to partially restart operations using an alternative waste pile. Under these conditions, volumes extracted in the first half amounted to 1.1 million tonnes. In the second half, we now estimate a further 1.5 million tonnes, bringing the annual production to 2.6 million tonnes. This is also the assumptions embedded in our EBITDA outlook. At the current time, we are in discussions with the local authorities to secure the use of all the alternative waste piles to be able to continue production. We are, of course, also working as fast as possible on additional safeguarding measures, including drainage system reinforcement and stabilization of the subsoil layers to return to normal operations using the original waste aisle. Our present evaluation of the situation is that the full release of the west pile and the normal resumption of operations will not occur before Q2 2023. Our tube activity continues to operate against a very positive backdrop. In North America, the highly favorable conditions of the first half appears set to continue into the second half in both price and volume terms within a market that remains very tight in terms of available supply. In Europe, Africa and Middle East, Asia, oil and gas volumes are expected to continue to modestly recover in the next few quarters with any rising costs fully, fully passed through to customers. On the industry side, the outlook for volumes is natural in a softer market. However, similar to our other segments, pricing power remains strong, and any cost inflation is expected to be fully offset by price increases. In South America, oil and gas volumes are expected to increase, leading to steady margin improvement throughout the year. On the industry side, the outlook for volumes is positive and trending in line with current levels. As in our other geographies, price increases continue to fully offset cost inflation. Based on these assumptions and trends, let us now take a look at our outlook for the year 2022 as a whole. At this stage of the year, we are in a position to quantify our expectation for EBITDA which is projected in a range between EUR 650 million and EUR 750 million. This is significantly above the 2021 level of EUR 492 million. Moreover, at the normalized mine activity level, we estimate EBITDA would have been approximately EUR 1 billion in 2022. Now an update on where we are with the new Vallourec Transformation Plan. A quick reminder, this plan is twofold. First, reshaping the industrial footprint, closing German operations, a process which will take place over 2 years, and include the sale of the land and buildings and relocation of all European rolling activity for oil and gas to Brazil, streamlining of all the European operations with the consolidation of all trading activities in a single location at Aulnoye, France, the closure of the Saint-Saulve heat treatment line and Bellshill trading line and the disposal of Vallourec Bearing Tubes. While Research and Development Center in Aulnoye will lead all group research and development activities. Streamlining overhead in line with our new manufacturing footprint to lower our breakeven point and create a business that is free cash flow positive throughout the cycle by creating a leaner organization in all regions, reducing overhead and sales on cost, notably for further slim down headquarter, introducing process automation for all transactional processes and consolidating super function in shared service centers to leverage our scale, adopting a more selective approach to research and development and IT project with strict retail and investment parameters, implementing a decentralized business model with super functions located close to production sites. Our objective for these actions is to generate EUR 230 million of recurring EBITDA and EUR 250 million in ongoing cash uplift by end of Q1 2024. I have also reinforced the Executive Committee with 4 further senior appointments: Enrico Schiappacasse as Senior Vice President, Group Strategy and Development; Nathalie Joannes as General Counsel; Ludovic Oster as Chief Human Resources Officer; and Pierre d'Archemont as Senior Vice President, South America. You can read a bit more about their background in the biographies on this slide. The appointment of these new leaders complete the team, which beyond January '23 will be tasked to execute the new Vallourec Transformation Plan and make Vallourec a key player of the decarbonized economy. Let's take a look at what our new industrial footprint will look like in 2024. Following the reorganization, our entire production facilities will be located in competitive and low-cost production zones of the Americas and the Eastern Hemisphere with a reduction in rolling capacity of 700 kilo tonne. This map shows our future rolling capacity by location. Please note that this capacity will not equate directly to our future sales tonnage, which will be consistent with our strategy of value over volume, as well as impacted by practical limiting factors such as steel plant capacity. By focusing production in these areas, we are also reducing our carbon footprint. On Slide 19, we show an illustration of the P&L and cash flow profile of the implementation of the new Vallourec plan. On the left-hand side, you can see the expected EBITDA trajectory towards our objective of generating a EUR 230 million recurring contribution. The full run rate is expected to be achieved at the end of Q1 2024. On the right hand, we highlight the indicative profile of the one-off cash flows. It shows that the bulk of the cash outflows are concentrated at the beginning of 2024. We expect to secure the cash inflows from items like sale of land and buildings, but also working capital in the earlier part of 2023. Consequently, the restructuring is not expected to impair liquidity. In sum, the new Vallourec plan does not generate a significant recurring uplift to earnings, will not only generate a significant recurring and cash flow, but is also self-funded with minimal cash out over a short period of time. Before turning to questions, a few points to conclude this presentation. Vallourec is making progress. Our Q2 results were strong and EBITDA, up by EUR 150 million compared to Q1. We are confident, at this stage in the year, we can quantify our fiscal year 2022 outlook at EUR 650 million to EUR 750 million despite the mine operating well below capacity. With the mine fully operational, we would expect EBITDA to be approximately EUR 1 billion. After the first half where we were invested -- where we invested inventory to satisfy robust demand, in the second half, free cash flow will be positive as working capital stabilizes at current levels and EBITDA continues to grow. Our tubes business continues to benefit from a highly favorable operating environment, notably with very strong pricing dynamics. Finally, our transition towards new Vallourec is fully on track with key actions already underway, and the leadership team completed. Thank you for your attention. Sascha and I are ready to take your questions.

[Operator Instructions] We already have a question from Jean-Luc Romain from CIC Market Solutions.

I have two, actually. One is related to the mine. My understanding was it could maybe operate up to 70% of normal capacity when it will restart. It looks more like 35%. When do you expect or what could be the ramp-up to getting back to normal? That's the first question. My second question relates to a contract, but Tenaris recently won in Brazil for good high-end equipment. Usually, this would have been -- Vallourec would have won this kind of contract. Can you update us on the competitive situation between you and your main competitor relating to Petrobras, which we used to see as the monopoly for Vallourec?

Okay. Thank you for your questions. So first, your question about the mine. I don't know what is -- you did... [Technical Difficulty]

Ladies and gentlemen, please hold the line while the speakers are coming back. Ladies and gentlemen, speaker line has been disconnected. Please hold the line while they're coming back. Dear speakers, we can hear now.

So I start back from scratch. We had some connection issues on our side. So I'm going to repeat my answer to the mine. So yes, you made a quick math dividing, I assume, how much we will produce this year by the full capacity of the mine of 8.7 million tonnes. But your calculation, obviously, doesn't take into account the fact that we are not operating the mine for the full year over the 12 months. As you remember, we didn't operate the mine in the first part of the year. And likely, we may not operate it in the last part of the year, which is the assumptions embedded in our forecast for the fiscal year 2022. But when we operate the mine, we are around 70% or slightly below. Now your question about when will we resume full production. As we said, not before Q2 2023. The reason why is because it takes time to recuperate the historical file that -- where the landslide happened. We are working on drainage systems. We are addressing the soft layer that we discovered in this pile. Unless we want to be fully, fully secured when we will resume full operation, obviously, it takes a bit more time. But again, purpose is to start and start forever with a very, very, obviously, secured environment. So that's what we are up to these days. As we mentioned, we are working on another temporary solution. But for the time being, we don't have the approval for this other temporary solution. It may come, but it's not the assumptions we have taken in our fiscal year EBITDA assumption for the year. So more to come later in the year.

Please also note that the 1.5 million tonne production assumption that we have embedded into the outlook is very much skewed to the beginning of Q3, i.e., by the end of July and August, and July is basically done. We have produced most of what we have assumed. The rest would then be upside if it comes.

Okay. Thank you, Sascha. Again, keep in mind that our EBITDA foreplan for the year is taking -- I won't say conservative actions on mine, but what we are sure about, okay, what we are really sure about, which, by the way, reflects the fact that our tube business is overperforming. Now let's go back to your question on Tenaris. Brazil -- Tenaris in Brazil. It's true that Tenaris got, yes, significant share of, yes, of bid at a time where, as you remember, markets were depressed. Everybody was fighting for volume. And at that time, Vallourec decided not to dump prices to secure volume. Even though, as you know very well, we have a unique position in Brazil as we have a very strong localized operation to produce tubes for Tenaris. Since obviously, the -- there have been other bidding processes and discussions on new long-term agreements. And without giving you any indication of what will be the outcome, I just can tell you that we are obviously competitive and we are expecting to have our strong position in this long-term agreement. So I don't know if Didier wants to complement my answer, but you should not read what has been announced by Tenaris. The fact that we are losing significant market share in Brazil, in a country where we have a strong and performing operation, is not -- it should not be the reading.

We have another from Kevin Roger from Kepler Cheuvreux.

Yes, on -- yes, can you hear me?

Could you repeat the question, please?

Yes. I did not start it. So the first one, sorry for that, but I come back on the mine. Because when you look at your message right now compared to what you say in Q1, it's completely different. And so when Jean-Luc did the calculation, so if you took your capacity and you divide it by half, so it's a half year capacity of, roughly speaking, 4 million tonnes, you say 1.5, so you are running at a bit more than 30%. You said last time that it should be close to 70%. And you said that you would be able to be close to 100% after a 3-month ramp-up period. But now you basically delayed the production to 100% by almost a year. So can you give us a bit more color on what is happening in Brazil, if it's related to the authorities that do not want to give you the validation, et cetera? So I was wondering if you can give us a bit more informed that right, please? And the second one is related to the U.S. So environment in the U.S. is very supportive. I was wondering, do you see any welded capacity coming back? Do you see some players reopening welded capacity and that at the moment in time, it will lead to potential price decline or price pressure in the country, please?

So I go back to the mine. Again, if you divide the capacity by half, and you said 1.5 divided by 4.4. But again, as Sascha said, most of this 1.5 million tonnes will be produced between July and August. So when we run, we run at 70%. But when we are stuck, we are at 0, that's for sure. So what we are just saying to you is that we have a temporary waste pile that we are going to use to the end, and this -- the capacity of this temporary waste pile allow us to produce what we will produce in the year, which is 1.1 million plus 1.5 million, 2.6 million tonnes. Again, we are working on another temporary solution. But for the time being, we have not yet the green light to use it. And anyway, in parallel, we work to recuperate the [indiscernible] waste pile. So why it takes longer than what we said in our communication at the end of Q1? The reason is very simple. Since we have discovered that we have a layer of soft soil that need to be -- this was not known at the time to communicate it because of the feeling, in the meantime, we have had ample time to do geological analysis of the content of the pile, layer by layer. So that's why it takes a bit longer. And as I said -- and here, we are fully aligned with the local Brazilian mine authorities and national mine authorities. What we want to do is to do really something that will definitely, definitely to fully secure our historical pile. So that's why it takes longer. So I hope I've been clear on what's going on with the pile.

Yes, I can understand. So just to perfectly understand, it means that basically, the mine will contribute to Q3 EBITDA. And based on what you see right now, the mine would be closed in Q4, if I want to understand. If you do not have any other...

Exactly. You got it. The assumptions embedded in our forecast for year is exactly that one. You may have a good news somewhere in the year, but I don't know. So I'm not going to bet on it for the time being. And anyway, as our tube business is definitely performing very well, over performing, I think it more than compensate this shortfall we have on the mine, okay? As far as welded capacity is concerned, for the time being, we have no indication that it's coming back. In fact, to reactivate this capacity, you need to recruit people. And as you know, the job market in the U.S. is very difficult these days. And we have not -- so far, we have no indication that these capacities that were shut down during the long flow of the last year have been reactivated. So no indication that this may disturb the market.

Next question comes from [ Karl Osten ] from Jefferies.

This is Alan Spence from Jefferies. I think there's a misunderstanding of the coding. I've got a couple of questions. I'll take them one at a time. First one is just around the guidance. What are you assuming in terms of the tubes volumes for the second half underpinning that?

Assumptions on tube volumes. Or I will let Sascha.

I think it was Alan, if I'm not mistaken. So in terms of volumes, I mean, we can speak about tonnage, so we can speak about sales revenues. But in terms of -- staying in terms of tonnage, we had 433 kilotons in Q2, which was a bit higher than the tonnage we had in Q1. And our expectation is that they will be once again higher sequentially in Q3 and Q4, and I would say, markedly, combined with our price outlook that will also then impact positively the sales. So now I hand you back to Philippe or to myself for the follow-on questions.

That's perfect. On the balance sheet, I appreciate your comment in the presentation that the debt is long dated and there's no need to refinance it. But if I understand, the bond does become callable next summer and at an 8.5% coupon is quite a large amount of interest out per year. Will you look to opportunistically refinance that in the next 12 to 18 months?

Alan, I would say that is an opportunity. It's an option, but nothing that we need to decide today. It's good to know that we have that option, but we'll just take it a bit further out.

Okay. And last one is just a clarification. If I heard correctly, I think you said the mine contributed EUR 34 million in EBITDA. Was that for the second quarter or for the first half? And was EUR 34 million the right number I heard?

I did say EUR 34 million roughly. Indeed, it is a Q2 number. But to be honest, I think since in Q1, it doesn't -- it didn't do anything. It doesn't make much of a difference.

Next question comes from Guillaume Delaby from Societe Generale.

Two questions, if I may. First, I would like to thank you for the disclosure regarding the tube and the mine revenue and EBITDA. That's really useful. And glad to see that in Q2, the mine was profitable. Two questions from my side. First, once again on the mine, sorry about that. But on the 2.6 million tonnes, which are planned for 2022, what should be the proportion which will be sold externally? This is my first question, versus what will be used internally? And my second question is a broader question, if we compare this cycle to what has happened between 2006 and 2008, where basically Vallourec was generating a normalized EUR 1.5 billion EBITDA per annum. If I'm listening to you, I get the impression that we might be back to this kind of normalized level by 2023, 2024. Could you maybe provide some comments or some color when comparing this cycle with this previous 2006, 2008 golden cycle?

Guil, it's Sascha. I'll take your first one and then hand over to Philippe for the second one, i.e., comparing cycle today, possibly the future with the past. With respect to the mine and your question of sales external, sales internal, maybe I can shortcut the answer a little bit and take also out the complexity. The EBITDA assumption that is commensurate with the 1.5 million tonne 2H production is a low double-digit million figure. Maybe that gets you to the point directly. And otherwise, we don't expect to change much in terms of internal and external sales. Now for the second one, I'm handing over to Philippe.

Yes, your question about how you should read the future trajectory of the group as far as EBITDA is concerned. Well, first, as you see -- well, first, the mine at some point will resume full operations, and we will be in capacity to extract the 8.7 million tonnes of capacity we have in the mine. And as you know now that you have better visibility on how profitable the mine is, you can easily guess what could be the contribution of the mine at full capacity. So that's one element. Then about the tube business. As with the new Vallourec, we are closing Germany, stopping, I would say, the losses that were associated with our German operation. You can easily guess that the future of Vallourec will be what, will be the sum of the U.S. market which we consider will continue to be positive, at least for the next few quarters. And today, it's definitely the case. When you see, as I explained earlier, our pricing power, which is, yes, coming from the fact that there is more demand than capacity available on the market. Then as far as Brazil is concerned, I think Brazil is a very -- has a huge potential. I think we have -- you've seen the capacity map of the group. We have capacity, which is used on the domestic market, which is a profitable market. And then you have, obviously, Brazil as a base to export which will -- obviously will be more competitive than Germany. So will mechanically improve our profitability of the market we address from Brazil. And then you have our Asian footprint where, again, we will be very strict on our value over volume discipline, and we will use that capacity where are we on the market, where we can enjoy high profitability. So yes, it's clear that I think the embedded profitability and EBITDA of the tube business is likely to be higher than what we deliver right now. So -- and on top, obviously, you have the streamlining of the organization. All the headcount reduction we are doing as a consequence of the simplification of our footprint. So part of this EUR 230 million will flow in addition. So is the EUR 1 billion EBITDA something that we will consolidate as we go? My answer is yes.

Next question comes from James Winchester from Bank of America.

So most of mine have actually been answered, but one final one for me, please. In a kind of a hypothetical scenario where you need to ration volumes, your German assets, let's say, over the next 18 months due to the lack of gas. I guess, firstly, what is the likely impact? And secondly, what are the routes you can take to actually alleviate this impact?

Okay. So if I understood well, your question is about the potential impact of gas shortage. First, gas shortage is only in Europe. So it may potentially impact our German operations and, to some extent, our French operation. As you remember, these are loss-making operations. So if I am a bit -- the less you produce, the less you use. So that's, I think, one way to answer your question. But nevertheless, we look at it. So we have ready plans right now in case we have less gas supply than what we need. And based on our estimation, I think this impact to a certain level is not material and does not compromise at all our guidance for the year.

[Operator Instructions] We have another question from Baptiste Lebacq from ODDO BHF.

A very quick question on the slide, Page 19, and the illustrative cash flow profile that you gave us regarding the restructuring. Clearly, if I understand very well the chart, it means that in Q1, you should receive some cash in, thanks to the disposals. That means that you are certainly in negotiating phase with potential buyers. Is it, let's say, a good reading? And clearly, we should see an acceleration of the new flow regarding the disposal in coming quarters if you are able to register some cash in at the beginning of 2023.

Shorter answer, Baptiste, yes.

Thank you for the short answer.

But again, when you look at the cash profile of the new Vallourec plant, as you understood, they are cash in and cash out, which offset more or less each other. So at the end, you are in this plan able to generate an additional EUR 230 million EBITDA with no impact on our liquidity.

[Operator Instructions] There is no more question.

Okay. So again, thank you very much. So again, our Q2 performance is just the illustration of the fact that Vallourec is back on a strong positive improvement of performance. When you see the guidance for the year, I think you understand that our tube business is overperforming compared to what we anticipated in Q1. And the mine is obviously taking longer to be back at full production, but sooner or later it will be. And ultimately, we'll have, obviously, the nice combination of the two, which is obviously what we're working on very obviously in the next few months. Again, thank you very much. And hope to see you for more of one-to-one discussions. Thank you.