Verallia Société Anonyme (VRLA) Earnings Call Transcript & Summary

Hello, and welcome to Verallia First Half 2025 Financial Results Analyst Call. My name is Laura, and I will be your coordinator for today's event. Please note, this call is being recorded. [Operator Instructions] I will now hand you over to your host, Patrice Lucas, CEO, to begin today's conference. Thank you.

Good morning, everyone. Thanks for joining us, and welcome to our H1 financial result call. So as usual, Nathalie and I will go through our presentation, and we'll have the Q&A session. I will share with you some key highlights and Nathalie will present in detail our numbers, and then I will come back on our guidance. As an introduction, just to remind you that Verallia is the global leader in glass packaging. We are #1 in Europe, #2 in Latin America; and #3 worldwide. On this chart, you have our ID card. You have on the left, the '24 split of our sales by segment. And as you already know, one of our strong assets is our customer base, more than 10,000 customers, and the diversified and balanced end market in which we operate. We do operate in 12 countries with 35 plants, with 64 furnaces. Please not also that we are running 19 cullet recycling centers, allowing us to control about 50% of our needs for external cullet. Let's now move to some key highlights. First, I would like to share with you the completion of 2 key investments in 2 new services, 2 brownfields, 1 in Brazil and the other 1 in Italy. Both projects have been completed and production has started. In Brazil, in Compo Bom, the furnace was commissioned in May and is bringing an additional capacity of 330 tonnes per day. The objective here is clearly to develop our sales in a sustained Brazilian market growth. In Italy, in Pescia, the second furnace was coalition beginning of the month, providing an additional capacity of 300 tonnes per day. This additional market capacity will be dedicated to the growing segment for food. Both furnaces are using an HeatOx plus oxy-combustion technology, which is providing a reduction of CO2 emissions by 18% compared to a traditional furnace. So these 2 furnaces are ticking 2 boxes, they will support our objective of both organic growth and decarbonation. Next key highlight is about our confirmation of the launch of our first hybrid furnace in Spain, Zaragoza. In this case, it is not an additional capacity, but the replacement of an existing furnace. We do expect to operate up to 70% electricity and using oxygen instead of air for combustion. This furnace will bring a 55% reduction of CO2 emissions compared to a traditional furnace. Plan is to heat it up in a few weeks from now, let's say in Q3, and clearly, after our full electric furnace launch in Cognac last year, this is clearly an additional step forward of decarbonation roadmap. We will take some time for lessons learned, and if needed optimization. And then we will enter in a step-by-step deployment phase aligned with our decarbonation roadmap to reduce our Scope 1 and Scope 2 by 46% in 2030 compared to 2019. The third key highlight is about product innovation. You know that we have launched our Air range product offer. We started with our 300-gram bottle Bordelaise bottle and then with a new jar offer. Objective of this range is to offer best-in-class lightweighting products. And lately, we have completed the range with My Air. My Air is a new standard for single-serve solution for 20-centiliter beverage with a disruptive weight of 105 grams. This product is aiming to address the ready-to-drink nonalcholic beverage or still wine segments. With this new proposal, we are leveraging the full capability of glass as a packaging solution, and demonstrating our ability to innovate and support our customers needs. Last key highlights is about BWGI tender offer for Verallia shares. So as announced last Monday, the offer is successful, passing the 50% threshold and BWGI is owning now 70.31% of Verallia shares and 62.81% of its voting rights. The threshold of 50% being passed, as planned, the offer will be reopened at the same price of EUR 28.30. AMF issued yesterday a notice formally announcing the reopening from July 31 to August 13, and final results will be known just after the closing of this second window. The settlement-delivery offer or the initial offer of the initial window, the first window, will take place on August 1, so at the end of this week. This step being completed will continue rolling out our strategic roadmap, focusing on creating new value for our customers, employees and shareholders. Before moving to -- before giving the floor to Nathalie, a quick overview on Q2 and H1 results. The positive news are; one, as seen in Q1 a volume recovery, still in a difficult market environment, but we keep on seeing volume recovery quarter after quarter; two, our stronger cash generation compared to last year, which is one of the key objectives for '25. 'and last, a rebound in profitability in Q2 of 457 bps compared to Q1. So in detail, so Q2 revenue is down by 2.5% year-over-year with an organic growth of minus 3%, giving an H1 revenue down by 2.4% with organic growth at minus 3.3% year-over-year. Q2 adjusted EBITDA is EUR 204 million, minus 10.4% versus last year, with a margin at 22.5%, giving an H1 adjusted EBITDA of EUR 351 million, minus 18.7% versus last year, with a margin at 20.4%. About net debt, our leverage is at 2.6 at the end of June compared to 2.1 at the end of last December. And finally, our net income is at EUR 68 million minus 45.6% compared to H1, giving an EPS of EUR 0.76 excluding PPA. So let's now see in details with Nathalie the details of these results.

Thank you, Patrice, and good morning, everyone. Let me give you as usual throughout our second quarter and half year results. So let's start with the Q2 consolidated revenue variance analysis. So you can see here the bridge between our Q2 2024 sales that were EUR 928 million, and our Q2 2025 sales that are EUR 905 million. So as said by Patrice, our organic growth is minus 3% in the second quarter and minus 3.6% excluding Argentina. You can see on this bridge that the volumes are contributing positively, plus EUR 19.5 million, broadly in line with the first quarter. And knowing that in the first quarter, we had a low cost base, which is less the case in Q2. So again, this is one of the positive highlights of the quarter, this positive volume growth. We have a strong performance in full end year and all segments are showing positive organic volume growth. The price and mix is negative, minus EUR 52 million. This is primarily reflecting the carryover from 2024 price reduction still in this second quarter, and we have some negative mix impact. The ForEx is negative, mainly linked to Brazil and Argentina is showed as a separate. And we have, in this first half, a perimeter impact that you will see because of the acquisition of the Italian business of Vidrala that took place in July 2025. So this leads for the full half year to this bridge. So an organic growth of minus 3.3% for the full half year and minus 3.9% excluding Argentina. Again, you can see a continued organic growth in volumes. We had a targeted commercial policy and nearly all the segments contributed positively this year with a specific outperformance in Latin America, I will come back to that. The price and mix is still strongly negative. So we see the same shape as what we saw for Q2. So same covenants with carryover effect from 2024 price reductions and negative mix impact. And again, here, the perimeter is about Corsico or the Vidrala business in Italy. So looking per region, so as the usual Southern and Western Europe, Northern and Eastern Europe and Latin America. So here you have the revenue. So the reported revenue in Southern and Western Europe declined by minus 0.3%, but with a scope impact, so at constant scope, we had a decline of minus 4.5%. We have higher volumes even excluding the contribution of Corsico, so organic lower -- higher growth. And again, here, most segments record positive volume growth with a little exception in sparkling wine, that are slightly down. If we move to Northern and Eastern Europe, we can see here so we have some ForEx impact. That is why you see 2 charts that is quite limited. We have reported revenues declining by 6.4%. We have lower selling price in the market that is showing still some moderate signs of recovery, but again, recovery. We have volumes up slightly in H1 in the most segments. And in this region, as 2 specific mention about premium spirits in U.K. that continue to be quite soft and suffer still and still wines in Germany in a difficult market environment. When we move to Latin America, so we have reported revenue declining in million euros, but still really linked to ForEx. So you can see a nice growth if you exclude the ForEx impact. We have a strong volume growth in H1, especially in Brazil with a good momentum in all segments and a strong performance in food jars and non-alcoholic beverage and beer. So how does this translate into adjusted EBITDA. So let's start with the second quarter. You can see on the top right the adjusted EBITDA margin. So for Q2, it's 22.5%. Let's remind that we were at 18%, 1-8 percent in Q1. So we have a nice improvement sequentially in the adjusted EBITDA margin Q2 versus Q1, even as you can see also, we are still behind 2024 that was at 24.5%. But again, a nice sequential evolution. We have -- here, you can see the pillars, the Europe pillars, bringing us from EUR 227 million 1 year ago in Q2 to an EBITDA of EUR 204 million second quarter '25. So the activity is contributing positively by EUR 15.7 million. We have the effect of the volumes that we just commented volume growth. We have a negative spread price-mix/cost in the quarter by EUR 56.4 million. But even it is still negative and as expected, we have less negative spread in the second quarter compared to Q1. And this includes unfavorable mix impact in this quarter again. You can see that the net productivity, so the PAP program continues to contribute nicely above the target of 2% cash production cost reduction. We are at 2.3% in this quarter and that leads to EUR 11.9 million. In the other pillar, EUR 11 million you have perimeter effect, so contribution of Corsico in Italy, plus a nice contribution of SG&A reduction in this quarter. And you have a negative ForEx of minus EUR 2.6 million and some decline -- a slight decline in Argentina by EUR 3.3 million. So again, as a takeaway, still a nice result in the margin versus Q1. So looking now at the full semester. We have an adjusted EBITDA margin on the top right at 20.4%. And again, the compound of the 18% and 22.4% we just saw. In the pillars, you have the activity contributing positively EUR 34.2 million. This spread is negative by minus EUR 142.6 million. So you can see that Q1 was more negative than Q2. The net productivity contributing on target, 2.3% decrease in cash cost production, so bringing 24.4% -- EUR 24.4 million, sorry. And the other P&L that is also contributing positively. And then that leads us to the ForEx and Argentina being slightly negative. So a positive impact from volume recovery even if we are still, of course, suffering from the negative spread. So by region, let's look at the adjusted EBITDA and the margin. So in Southern and Western Europe, we are at 20.6% adjusted EBITDA margin that is EUR 243 million adjusted EBITDA, so decreasing versus last year by 15.7%. So the same pillars in the Southern and Western Europe so positive activity contribution, negative spreads and product PAP. And in addition, we have the perimeter effect of Corsico acquisition here. Northern and Eastern Europe grew up adjusted EBITDA evolution. We are at EUR 49 million adjusted EBITDA in this half year. That is a decrease, significant decrease by 36.6% in -- versus last year. And you can see that the adjusted EBITDA margin is at 13.6% compared to 20% last year. So in terms of pillar, we have a positive activity contribution, especially in Germany that is slightly and slowly recovering. But we have a strong negative spread, again, lower selling prices and negative mix that is quite significant in the region. In H1 in Latin America, so we had -- we posted EUR 59 million adjusted EBITDA and the decrease versus previous year is linked to foreign exchange. And you can see on the top right that the adjusted EBITDA margin is a nice 32.2%. So a strong performance still, even slightly behind last year. So again, especially in Brazil, activity is up and the spread is negative but much less negative. So we have a very nice performance in this region. If we move to cash elements. CapEx, we keep CapEx under control at 6% of total sales. So it's quite low compared to previous year. It's a mix of different planning in furnace repairs. So we have less busy planning in -- especially in H1 compared to previous year. And we're also at the end of our new capacity, new furnaces, so Compo Bom in Brazil and Pescia in Italy that Patrice mentioned to you. This CapEx, they include, of course, the rollout of Zaragoza hybrid furnace that we just presented to you as well into these figures. Cash flow generation. Clearly positive news and positive amount in the -- performance in the first half. We have generated a free cash flow of EUR 66.2 million. That is a significant improvement compared to previous year, where we started the year with a negative free cash flow of minus EUR 49.2 million. So we have EUR 150 million improvement here. And you can see the cash conversion is high at 70.5%. We have lower operating working capital outflows, not only coming from CapEx this year that you see here. And we also enjoy lower interest paid and financing cost and lower cash tax. So all this coverts again into a positive free cash flow generation. The leverage, as a result of what we saw previously, is at 2.6x at the end of June. Let's remember that is after a dividend payment that is -- that occurs every year in May, and that was EUR 202 million, so explaining partly the -- mainly the deleveraging versus 31st of December. Now here, the structure -- our financial structure and liquidity. So specific point linked to the tender offer from BWGI. We have here -- you can see one line of EUR 1.6 billion certain funds bridge loan. So as already published and communicated, we have entered into a bridge to cover potential put exercise on the first 2 bonds that you see on this page. So the sustainability-linked bonds, the EUR 500 million, one from May '21, and the second one from November '21 of EUR 500 million. These 2 bonds are -- I mean, the change of control in that just occurred that will occur on August 1, will trigger possibility for the bondholders to exercise their put. So it's fully covered, as you can see by the bridge of EUR 1.6 billion and even more. Let's remind that the third bond, the 1 of November 2024, is not under the change of control clause. So it doesn't need to be covered by the bridge. And just sorry, the available liquidity of the group is still at a nice -- is at a nice level of EUR 810 million.

Thanks, Nathalie. So about our guidance. Let's start with some market insight situation, what we see today. We still see a soft consumption in Europe in still an uncertain environment with slow global economy, with geopolitical and trade tensions, and obviously, these geopolitical tensions are creating a very volatile environment. Nothing really new compared to what we commented in Q1. And in fact, which is leading to cautious and kind of weight and see position of many consumers and customers. Nevertheless, we believe in some support to glass demand from the end of destocking in most segments. We still see a market environment in LatAm being supportive. And finally, about capacity, we continue to see permanent capacity shutdowns across Europe with regular announcement from the industry. So facing this situation, what is key for us is to keep our focus on self-help measures and cash flow generation. And to be more specific, what I can say for our outlook for H2 is, one, we expect a continued pickup in activity supported by our furnace openings, so our 2 new additional capacity in Brazil and Italy and as well the reopening of our second furnace in Ukraine. Two, except in U.K. and Germany, in H2, as expected, we are back to normal use of our installed capacity, but to be clear, ready to adapt again with agility, if necessary. Three, we do expect in H2 as it has been commented already for Q2 by Nathalie, a lower negative carryover and spread impact compared to H1. Four, you may have seen that for any -- the profitability of H1 is not at the one group. We are suffering in Northeastern Europe and to be much more specific in Germany. And this is why we are expecting a profitability improvement, thanks especially to the restructuring actions already taken. And five, we continue preparing the future, rolling out our decarbonation roadmap with Zaragoza hybrid furnace launched in Q2. It's all about focus on short-term priorities delivering what has to be delivered to secure the future, but at the same time, to prepare for the future and the growth to come. That being said, so about our guidance, we maintain our full year '25 guidance, assuming geopolitical and macroeconomic environment does not deteriorate further. So it means that we want to deliver an adjusted EBITDA around EUR 800 million full year, and a free cash flow of more than EUR 200 million. Thanks a lot for your attention. And now we can move to the Q&A session.

[Operator Instructions] We will now take our first question from Louise Wiseur of UBS.

So the first one is with regards to your price/cost spread in Q2. It seems that you still face some cost inflation in Q2 given the price/mix effect on the top line is lower than the price/mix effect on the EBITDA. Although I agree, it was an improvement versus Q1. Could you give us more color on this in Q2? You said last time that you expected cost inflation for the full year can be close to neutral or slight inflation for the full year, given you will benefit from cullet deflation. So how do you think about this now? And could you tell us about how you think about the price/cost spread for the full year. Are you able to quantify the impact? And do you still expect it to be significantly less than in 2024? The second one is with regards to volumes. The flow-through of volumes from the top line to EBITDA was actually very strong in Q2. Is that how you think about it for the rest of the year? And the last question is with regards to the change in capacity in the market. You last mentioned -- I mean, last time you mentioned that there were 13 furnaces that closed in Europe since late 2023. Have you seen further changes? And how do you -- how much does that represent as a percentage of the total capacity in Europe on a net basis, i.e., including those who are actually adding capacity in the market?

Okay. Thanks a lot. So I will take maybe the last one and let Nathalie for the two first questions. So about capacity, the main bulk of the adjustment, I believe, has been already announced, and this is what we commented at the end of March. Since that we have seen a few adjustments, especially additional one in France. And that's about it. So -- and we will see if more is coming. So it is about similar to what we commented in H1. And this is about, if I am not wrong, an equivalent 15 furnaces representing what we can say an adjustment of 7% of total capacity in Europe to be specific. About the spread, Nathalie, you want to comment?

Yes. So in fact, we are -- we expected the spread sorry to be a bit less negative in Q2 and continue to have this trend moving into H2, mainly because of the carryover effect from 2024. If you remember, in 2024, we decreased prices throughout mainly the first half but it was more spread in time that, again, what we see in 2025. So it means that when you compare yourself to '24 to last -- previous year, you have your comparative prices in '24 moving down. So the comparison, the comps get a bit easier in the second quarter. And again, in H2, most of this carryover effect is in H1 this year. On the cost element, we commented to you in the first quarter that we had a specific, especially in the energy, quite strong inflation in the non-hedge elements. If you remember, spot prices in energy were quite high in the first quarter. We don't have that in the second quarter. So we are back to a cost inflation that is pretty natural, in fact. And we don't have these negative elements on the cost side that we had in the first quarter of 2025. And moving into the H2, I won't give you the exact number. But again, just as we said previously, we see this spread being less negative step-by-step throughout the year. In terms of volumes, so I think your question was on our view for the rest of the of the year, if I understood properly. Otherwise, please do not hesitate to raise again your question. So we have -- we see a positive organic growth in volumes. We -- this is what we project for the second half of the year. Don't forget that we have also additional capacity. We have completed the furnace we presented just starting to produce in Brazil, where I know that momentum in the activity is good. So we have a quite supportive environment in Latin America. And we have also Pescia furnace. And step by step, as we commented, we -- also in the rest of the group, we run at a higher capacity percentage, the exception being, as we said, the U.K. and Germany.

Just if I may add on the volumes. Also, the flow-through of your volumes from the top line to EBITDA was very strong. Is that how you think about for the rest of the year? Is that how should we think about a similar flow-through for H2?

Sorry, I was not sure I heard your question right, so yes on the flow-through. So in the activity pillar, you have the full translation of volumes, but you also have inventory valuation and some country mix. So that explains that you don't have the direct -- you have some different elements in moving here. You have some other moving parts than the pure organic growth in volume.

We will now take our next question from James Perry of Citi Group.

Just a couple. Let's just start specifically on Northern and Eastern Europe. This seems to be underperforming other regions quite significantly with the all-time low margin in H1. Does that mostly relate to Q1 difficulties? Or has there been much improvement in Q2 and even early Q3? And would you be able to talk a bit more about the Germany restructuring, and what you think is needed for meaningful recovery here? Secondly, just on global consumption trends and trade flows, would you be able to comment a bit more on any changes in customer behavior and order patterns and how it's developing in early Q3? For example, what are you hearing about export trends? And have you seen any customers shifting supply chains at all that could lead to market share gains for you?

Thanks a lot. So for any situation, you're right, the margin at which we are today is not a clear satisfaction for us. This is the result of market difficulty. And yes, Q2 is better than Q1. In Q1, we were impacted by lower market, lower volumes, let's say, but Q2 is improving. And in Germany, so as you -- as we have communicated, last year, we decided to definitively stop one furnace. We did the first restructuring plan of about 100%. And in '25, based on the current situation we are facing, we have decided, as announced in Q1, the launch of an additional cost restructuring plan, which is about to be finished and which will impact positively starting in H2, with expected full impact in 2026. And on top of that, we have decided to optimize our capacity for a period of time. And it's not definitive, but we have decided to cold start an additional furnace in Essen, which means that in our Essen plant, as we speak today, there is one furnace running instead of two. All of that will lead to size and to adapt to market reality and to get the best profitability we can get from this market, plus additional traditional, I would say, cost-cutting measures and especially focusing on the PAP. Hope it does answer to your question. About the global consumption and export trends and all of that, quite difficult to give -- we do not see any single pattern, I would say. What we can see -- what we can say is maybe some of our customers did push a little bit sales in Q2 before the famous August 1 deadline, for the tariffs to be implemented between Europe and U.S. We have that. But we have others which have been waiting for to better understand what would be the situation. And as we speak, so in the last hour or so, there is this agreement. I'm not sure if we say agreement, potential agreement with this 15% tariff. And it's not clear at all as we speak, if wine and spirits are in or out the kind of clause of exclusion. And we do understand that it still has to be negotiated. So we are still cautious about that, obviously, focusing and ready to adapt if necessary. But let's say, less concern to what was potentially announced beginning of the year for wine and spirits for U.S. On the other side, we see some positive signals from China because -- especially on the conduct side, where an agreement has been formed. Duty-free sales are restarting. So we see much more positive news flow from China than from -- compared to before.

[Operator Instructions] And we will now take our next question from Francisco Ruiz of BNP Paribas.

I have a couple of questions as well, if I may. The first one is, let me understand why you are still -- or why you are now increasing capacity when you already highlighted the current situation in terms of uncertainty, especially in Europe, why you are increasing volumes, but your main competitors are not in this Q2? So what is the urgency to put a new furnace in Italy? And a follow-up on this as well is if you could give us the current situation of capacity utilization. I mean, you commented a new furnace stopping in Essen, also not full capacity in U.K.. So if you could give us a figure that we could play with. The second question is regarding CapEx. So well, I understand that the expansion CapEx is lower, but also the maintenance CapEx is well below. Should we see an improvement of that figure because it's really low compared to the historical average and what is the average of the sector or we should say something like around 6% in this year. And if you could give us an idea for what is the calendar of furnace [indiscernible] for the second half of next year?

Okay. Thanks a lot. So for capacity, additional capacity, as I have commented during the presentation, this additional capacity are rely specific. The first one in Brazil. So it's clearly because we see a supportive market in Brazil. This was already part of our plan, and we are going to run full capacity in Brazil. So in Brazil, for us, it's a no-brainer. It's a way to keep on growing along the market growth and get our share there. So Brazil I would say it's a no-brainer. Italy in Pescia, it's much more specific because in Europe, we do see potential growth for food segment. Globally, it is a segment which is going to grow in the years to come. This is a segment where we believe that we have some opportunities. And this is why we decided to maintain this additional capacity in Pescia for food. You may know that when you want to do efficient business in food, you need a specific setup of your process. And really in Italy, this is what we wanted to do, moving in operation side, 1 to 2 furnaces where -- 2 furnaces in the plant, it's a way to be efficient and we have a good setup. So we do not see any issue with that event as a potential upside. About installed capacity globally in Europe as we speak and the plan for H2, and this is what we commented already, we plan to run, let's say, a normal capacity usage in France, in Spain, in Portugal and in Italy. Where we are still facing some difficulty is in Germany, and I have just commented that before. And here, just for us the question to wayside and adapt to reality in market. One, this is what we are doing with some benefit to come in H2. But in U.K., it's much more a temporary situation where in U.K., we have -- you know that we are much more dedicated to spirits. 75% of what we are doing in spirits. And in spirits, with are still quite low and below what we were used to do in the past. So here, I mean, it's just a question as well to adapt and to be prepared to restart of some capacity when we see volumes picking up much more than what we see today. The bond CapEx, No, you're right. The 6% is a little bit low. It's quite lower, let's say. So there is a calendar effect and it has been said by Nathalie. Let's keep in mind as well that we are starting to get the benefit on the CapEx deflation after this high period of inflation we had in '22 and '23. So we start to see good benefit of that. And last, yes, you're right. In H2, we will have much more CapEx. And if I have to give you a number for the full year, we should be around 8% for full year '25.

Just to add, we had only one furnace repair in the half. So we had [indiscernible] strategy. So we know that we have planning -- different planning from semester to semester and from year to year.

Hope it does answer to your question, Francisco.

We will now take our next question from Philippe Lorrain of Bernstein.

Just wanted to follow up a little bit on volumes because I know that there is a weaker contribution from the volumes to the sales bridge in the second quarter versus the first quarter. And we see the same effect on the activity contribution in the adjusted EBITDA bridge. So I just wanted to get like a bit of more detailed comment on like gradual development and so on?

Okay. So in the EBITDA bridge in the activity pillar, we have the impact of the additional volumes. We have also some inventory variation impact. And we also have the impact of fixed cost that can be not absorbed when we are not running full capacity. So in fact, that explains that you don't have a direct -- full direct flow-through. I mean, from your volume -- when I commented volume evolution. So in the first quarter, as we commented, we were running -- or, let's say, the second quarter, we are step-by-step coming back to full capacity in the country as Patrice commented, except in Germany and in U.K. So it means in the first quarter, we still have some -- we have more fixed cost not absorbed. In the second quarter, on the contrary, we have a few -- we have a part of cost for the startup, for example, of our 2 new furnaces, Compo Bom and Pescia that are not yet fully absorbed and that will be fully covered in the second half.

Okay. No, I wanted more to comment maybe like on the one that you've seen in the top line because for Q2, the volume contribution was EUR 19.5 million, but it was EUR 24 million or so like in Q1. So why is this that it's getting like a little bit tougher, especially if I compare to the starting point of sales, which is like actually higher in Q2 2024 than it was in Q1?

You have a slightly lower Q2 volume impact indeed in the bridge versus Q1. It's not massive. It's more related to country mix here, depending on which country is increasing more or less, but that's a minor impact here.

Okay. So not just related to volumes, but also to the mix in ASPs across the countries?

It's volume impact, but you know country by country, you still yes, the unit value per country, you also have some country mix impact in each of the lines.

We have no further questions in audio, handing it back to the management for webcast questions. Thank you.

All right. Okay. This is David Placet speaking, I'm the Head of IR. I think we got questions from 2 participants for the webcast. So first one is a set of questions from Inigo Egusquiza with Kepler. First question -- there's like 4 questions there. First question is what can we expect from the new shareholder in terms of impact on strategy or any other change? Anything you might tell us around your midterm strategy ahead of the upcoming Capital Markets Day? So this is the first question. Second question is, can you please comment on the trends by region when it comes to Q2 volume? Third one is, how do you see pricing for 2026? And the last one is, why did you decide not to sell your Argentinian subsidiary?

Okay. Thanks, David, and thanks, Inigo, for all these questions. So about the impact on strategy, I mean, as we've said, for us, it's much more continuity of BWGI as shareholder of the company. They are sitting on the Board. So they are -- they were supportive already all the strategy and plans, which were ongoing, implementing ongoing [indiscernible]. So for us, it's much more business continuity. This is a way to secure to be, again, a little bit much more long-term oriented to support our strategy and the creation -- value creation of long-term run. About the -- and this with CMD to come in Jan, this would be an opportunity for us after this quite interesting period of inflation, destocking and all of that to come back to some fundamentals of our business. And especially, this would be the opportunity to convert to some capital allocation topic and all of that. But no big change or downturn in strategy to be expected. The key word is continuity and continuity for value creation for the company, our employees and the shareholders. About Q2 volume trend by region. I mean, it's quite similar to what we had in Q1, I would say. In Europe, what we had is a low single-digit organic growth, obviously, boosted with our Corsico acquisition in H2 last year. So all in, it's much more mid-single-digit growth, I would say. On the -- and in LatAm, so we have high single-digit increase, again, as we commented during Q1. This is why we see a positive momentum. For 2026 pricing, a little bit early to comment on that. This is obviously what we are going to begin after the summer break preparing '26, and we are going to see what are the markets -- market trends, update the businesses to come and all of that with obviously the first objective on our cost situation. About Argentina, as we said as well, nothing new here. We were solicited to -- for this business. We said day 1 that could be -- we could sell if it was a value creation again and if it was for a good financial deal. After weeks of discussions, finally, we concluded that the proposal or the offer was not at the level we expected. And for us, Argentina is a good business. So no need to bargain and to give for a nice price this nice business. So this is why we decided to keep it. And this is clearly something that we enjoy. If this a relative affordable business, our profitability. So obviously, what we say to keep it. I think I've answered the questions?

Absolutely. Well, thanks to Patrice. And we have one last question from [indiscernible], which is, can you please elaborate on current capacity utilization levels in Europe?

Well, I mean, in Europe, so again, to make it simple, France, Iberia of -- this is what we said. Except U.K. and Germany, we are running as standard, meaning that we are running full speed, except the planned maintenance that we have to do, which is the standard of this business. So we are running full speed compared to last year where we are much more around 90%. So in H2, we are going to -- in U.K. and in Germany, we are below that, much below that. As I explained, we have put some temporary measures to cold start some furnaces. And we are not back to normal to make it simple. So we are still in the phase where we -- but the good news and what I do see positive is we are back to normal, a big part of our business, and waiting for better days, adapting, taking with responsibility the measures we have to take where it is necessary.

Great. Well, thanks, Patrice. Thanks, Nathalie. I think this is it on my end. Thanks to you all.

Okay. Thanks a lot to all of you. I hope that most of you, us as well, will take the benefit of the summer break to be fully energized to face the second semester and prepare in 2026. So if it's the case, I wish you a good summer break.

Thank you. Bye-bye.

This concludes today's call. Thank you for your participation. You may now disconnect.