Vesuvius plc (VSVS) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the Vesuvius Half Year 2026 Results Presentation. My name is Patrick Andre, Chief Executive of Vesuvius. And with me this morning is Mark Collis, our Chief Financial Officer. I will start with some updates on our performance during the half year. Then Mark will give you more details on our financials. I will conclude at the end of the meeting with some perspectives for the full year 2026 and beyond before opening the floor for questions. Our performance for the half year was resilient and in line with last year's, driven by self-help actions offsetting temporary operational disruptions. Our revenues slightly increased by 1.5% on a constant currency basis. Our trading profit at GBP 74 million was similar to last year's also on a constant currency basis. Our return on sales decreased marginally by 10 basis points as compared to last year on a constant currency basis. As expected, our free cash flow generation increased significantly by GBP 41.4 million year-on-year to a total of GBP 27.5 million, driven by improved working capital discipline and stronger operating cash generation. Working capital intensity declined from 23.6% to 23.1% and is expected to improve further in the second half. Our net debt-to-EBITDA ratio improved to 1.9 on a pro forma basis and is expected to improve further in the second half. These positive trends in cash generation made the board confidence to propose an interim dividend of 7.1p per share, similar to last year's. Both divisions achieved a strong performance in terms of pricing and cost management during the first half. The structural recovery of our steel market is now becoming increasingly evident and is expected to gather [ steel ] in the coming months. The Steel Division performed very well from the pricing and structural cost reduction point of view. However, the division performance was temporarily affected during the first half by operational issues, in particular, in North America and in India, I'll come back to that. Despite these challenges, the Flow Control business unit could improve both trading profit and return on sales as compared with last year. The performance of the Advanced Refractories business unit, however, was more affected by the ongoing operational challenges and declined significantly as compared with last year. The Foundry Division performed very well and achieved significant revenue and profitability growth, supported by self-help measures and by the successful integration of the MMS acquisition. Cash management remains a strong area of focus during the first half, enabling a 50 basis point reduction of our working capital intensity and the first step in the targeted reduction of our leverage ratio. Cash management and deleveraging will remain a key area of management focus in the coming months. We continue to make good progress, even very good progress in our global cost reduction program with GBP 7.4 million of recurring cash cost savings delivered during the first half. We remain fully on track with our target of a minimum GBP 55 million savings to be delivered by 2028. The operational challenges, which affected the performance of the Steel Division during the first half are now clearly identified and are being addressed. First, as you can see on this slide, we were confronted with a quality defect from one of our suppliers of graphite raw material. This affected the quality of the production of our Charleston plant in the United States. But this Charleston side is supplying intermediary products to several isostatic plants worldwide. The consequence of this quality incidents affected several plants in North America, but also in Europe and in Asia. Fortunately, our [ quality walls ] detected the problem before final products could be shipped to our steel customers, which were those not affected. The deficient raw material was replaced and internal quality controls have been reinforced worldwide to avoid a repeat of a similar incident in the future. However, the capacity of several of our isostatic plants was temporarily reduced during several weeks, preventing us from satisfying the growing demand addressed to us and triggering significant excess logistics cost to deliver customers and avoid the disruption of their steel production. This quality incident is now, as we speak, fully solved. Second, we identified deficient maintenance practices in 2 of our important manufacturing plants in the U.S. These deficient practices were not detected and corrected in a timely way by our local regional management. As a consequence, the availability rate of some of our key manufacturing equipment has been constrained during the first half, reducing our production capacity and preventing us from following the increase in demand. Maintenance management in those plants has been upgraded and reinforced control mechanisms have been put in place to avoid a repeat in the future. Maintenance catch-up is ongoing in those plants and is expected to be completed by the end of the year, reestablishing the plant's full production capacity. We have also identified a general loss of some specific manufacturing process expertise in several of our U.S. plants, following the natural departure of some long-standing and experienced personnel as it has proved excessively difficult to identify and hire locally qualified successors. We are now transferring qualified and experienced manufacturing resources from other parts of the Vesuvius Group to the U.S. Several transfers are already effective, and we expect most planned transfers to be implemented by year-end. Taken together, we assess those 3 operational challenges in the U.S. to have impacted our global results by around GBP 6 million during the first half. At the same time, we experienced some ramp-up difficulties in our new Vizag plant in India due to the higher level of technology and digitalization of the equipment recently installed in this plant. These difficulties are gradually being solved and production bottlenecks being removed in a systematic way. Already, 2 out of the 3 newly installed production lines are able to operate at full capacity. And the third one should be able to reach nameplate capacity before the end of the year, removing any constraints for our commercial teams to follow the increasing demand for our products in the Indian market. The ramp-up difficulties in our Vizag plant in India impacted our trading profit during the first half by an estimated GBP 2 million. As you can see, all the operational challenges, which limited our growth and profitability during the first half are now fully identified and are being addressed. We are confident they will be resolved by the end of the year, enabling Vesuvius to fully benefit as from 2027 from the positive dynamic now evident in our steel markets. Turning to the steel market. You can see on this slide, our steel production evolved during the first half of the year. The size of the bubbles is proportional to the sales of our steel division in each region. The structural dynamism of steel production outside of China, Russia, Iran and Ukraine is now clearly confirmed with a 3.8% growth during the first half. Growth expanded beyond the traditionally strong regions of India and Southeast Asia to North America, which grew 5.7% with U.S. and Mexico growth more than compensating for the Canada decline. EEMEA, excluding Iran, Russia and Ukraine, where we don't sell also grew a healthy 3.4% despite the situation in the Gulf area. China steel production continued its structural decline with a decrease of 3% of its steel production during the first half. EU plus U.K. and South America still production slightly declined in the first half of the year. But production there is expected to improve from the second half, thanks to the steel protection measures recently introduced in these markets. So the structural improvement in steel production outside of China is now clearly confirmed. We'll gather steel in the months ahead and should support the performance of Vesuvius in the coming years. And an important point, we believe these ongoing positive changes to the steel market are structural. It's not a cyclical recovery. It is a structural change. They are not only short term. First, the new European Union regulations, which have been discussed for a long time are now fully effective as from July 1 this year. This should have a significantly positive and long-lasting impact on steel production into the EU as from the fourth quarter this year, once accumulated inventories of imported steel into the EU have been exhausted. Already the second quarter production in the EU, as you can see on this slide, is showing some improvement as compared with last year. So going, we expect Chinese steel exports to progressively reduce or [ at-worse ] stabilize as the Chinese government is taking action to control exports and curtail excess steel production and capacities. In parallel, more and more importing countries are introducing or tightening measures against unfair trade of steel, thereby reducing the size of potential markets accessible to Chinese steel exports. And in effect, Chinese net steel export during the first half of this year declined by 5.3% as compared with last year. The volume performance of the Steel Division in the first half was obviously temporarily held back by the operational issues we discussed earlier, especially in North America, for both Flow Control and Advanced Refractories, but also in India for Advanced Refractories. As a consequence, Flow Control and Advanced Refractories experienced temporary market share pressure during the period. Market share evolution was also impacted by tight credit control measures in EMEA vis-a-vis customers not paying on time. And by the one-off effect, of the closure midyear last year of 3 customer sites in North America, where we add exclusive supply contracts. We are confident and we expect market share to be progressively regained in the coming months as operational issues are being resolved and new production sites where we gain exclusive supply contracts are starting production, both in North America and in Europe. The Steel Division achieved a strong positive net pricing performance in the first half. The division also made very good progress in its structural cost improvement program during the period. Thanks to this and despite temporary operational difficulties, Flow Control improved both trading profit and return on sales during the period. Advanced Refractories performance was significantly lower than anticipated on last year due to those operational challenges in North America and India, but also due to a challenging pricing environment in EMEA, where some Chinese advanced refractory producers are trying to get a foothold through predatory pricing. The global impact of the temporary operational challenges on the Steel division globally was around GBP 8 million in the first half and is expected to reduce in the second half before disappearing as from 2027. Let's now turn to the Foundry Division. India and China, foundry markets continued to exhibit positive growth. North America and Japan are also for the first time over the past 3 years, starting to show clear signs of improvement. On the other hand, however, EU plus U.K. and South America markets for the time being, is still representing a little bit less than 40% of our sales remain negatively oriented. Nonferrous markets to which we have increased our exposure with the MMS acquisition are also confirming their higher growth potential as compared with our traditional ferrous foundry markets. The Foundry Division showed strong performance in both its base business and in the newly acquired MMS business during the first half. The division achieved a significantly positive net pricing performance and at the same time, gain market share in all regions. The division also fully delivered on its structural cost improvement initiatives. The newly acquired MMS crossable activity, is being very successfully integrated and synergies are on track to exceed expectations. As a consequence, the Foundry Division could increase its revenue by 8.7%. It's trading profit by 32.7% and its return on sales over the period, both on a constant currency basis. We expect the performance of the Foundry Division to continue to improve in the coming months. We maintained during the first half, our industry-leading investment in research and development at around 2% of our sales. This R&D spend is fully expensed in our P&L. This allow us to increase again our new product sales ratio during the year, defined as the percentage of our sales realized with products which didn't exist 5 years ago. At 21% our new product sales ratio is now exceeding our internal objective of 20%, demonstrating again our continued success in commercialization of our innovations. We could launch 9 new products during the first half, reinforcing our technology leadership in the market. Thanks to the productivity of our R&D organization, we maintain a full pipeline of products to be progressively introduced in the second half and beyond. We are also strengthening our robotics innovation and offering partnering with OEMs and steel producers, both for the modernization of existing steel mills and for new state-of-the-art steel plants coming on-stream. During the first half, we could secure orders for 4 Flow Control and 3 Advanced Refractories robotics equipment versus 1 and 2, respectively, for the same period last year. And you can see on this slide, 2 illustrative examples of innovative robotic solutions delivered to our steel customers this year. On the upper part of the slide, you can see the integrated robotics solution recently commissioned at our steel partner, Trinec Steel in the Czech Republic. This includes -- and this is what you can see on the picture, the first fully-robotized oxygen-lancing equipment for the label make-up area, developing close cooperation with our customers. This is a world-first innovation, which will improve the safety of our customers' operations and at the same time, improve the consistency of its steel production. On the lower side of the slide, you can see the new Tundish [indiscernible] robot assembled in our Belgium robotics center prior to shipping and installation as a new core West Virginia plant in the United States. This will enable our customers to improve its cost and at the same time, the quality and reliability of its operations. I will now hand over to Mark will give you more information on our financial performance during the first half.

Thank you, Patrick, and good morning, everyone. Starting with revenue. The key message is that revenue is resilient despite the operational challenges that we've had with positive pricing of around GBP 21 million, more than offsetting a volume decline of GBP 16 million. You can see the volume reduction is mainly in the Steel Division despite the strong growth in steel production. The box at the top shows a gap when we benchmark our regional revenue against regional steel production. We estimate that our revenue could have grown by around GBP 20 million. Mathematically then, our revenue is GBP 34 million lower compared to the market. The important point is this is not a market share loss, and I've broken it out on the table to the right. Firstly, GBP 12.6 million is customer demand, which we could not have met due to the operational challenges. A further GBP 9.6 million is from lower equipment sales which clearly fluctuate period-to-period. In addition, as we mentioned in the 2025 results, our revenues have been impacted due to the closure of free steel plants in North America, where we had very high market share which had an impact of GBP 8.5 million. And finally, we decided to avoid sales of GBP 4.5 million due to credit risk in Europe. In Foundry, excluding MMS, volumes were stable, we delivered net market share gains of GBP 6 million and offsetting these was a net market decline of around GBP 8 million. This being split 50-50 between Europe and South America. Finally, we've called out our revenue from loss-making operations, which we have closed to a move in revenue of GBP 9.2 million. So to summarize, revenue growth should have been better in this first half. Putting aside the operation issues though, there are some positives, namely, a steel market, which is showing strong growth and a strong pricing performance in both our Steel and Foundry divisions. And now turning to trading profit. In summary, it's a flat year, or flat half year. But there are a number of movements on the bridge, which require further explanation. Firstly, MMS integration is delivering as planned. When we acquired this business, it was generating a trading profit of GBP 6 million per annum, and we are already at GBP 4 million for the first half. The lower volume seen on the previous page is coming through at 60%, which is on the high side, and this is mainly caused by Advanced Refractories in Europe and is due to the lower margin contracts referenced earlier. On the positive, we have seen net positive pricing come through at GBP 7 million. This is mainly in Flow Control, but also in Foundry. Structural cost savings are ahead of expectations where we guided to GBP 10 million for the year and are already over GBP 7 million. Incentives delta as previously guided and the impact of GBP 8 million from the operational efficiencies has been discussed at length. For these operational efficiencies, we have carefully considered the [indiscernible] impact, making estimates of the future cost impact, but most importantly, the pace at which we expect to regain market share. The discontinued operations are the losses that were made on the businesses which we are closing. And finally, within the other bar there is the one-off benefits of GBP 4 million from a lower tariff which were offsetting a smaller number of items. So to summarize, the profit of GBP 74 million has been held back by operational issues, but you can also see the benefit of the ongoing improvements from the self-help measures. Once we have these operational issues behind us, our self-help measures will position us well for 2027. Now looking at the income statement. I've already covered the main trading elements here, so I'll address the finance cost, the tax charge and the minority interest line. Our finance costs are broadly consistent. Our tax rate has now come down by 50 basis points, this reduction from the prior year is mainly driven by profit mix, but also some structuring. The good news is that barring any unusual one-off items, we are now confident that our underlying tax rate for '26 and beyond is now 27%. From my minority interest, the higher charge reflects the increase in the minority share of our Indian Foundry business where we used our Indian listed shares to pay for the majority of MMS. Finally, our half year headline EPS was 16.3p, down slightly by 0.7% on a constant currency basis, leading the Board to maintain the interim dividend, which has been approved at 7.1p per share. And now moving to working capital. Working capital has remained a key priority for Vesuvius management. And in the first half, we delivered a solid result. We have maintained the absolute balance at a low level especially at the point in the year when it is typically the highest. Our 12-month average has also come down, demonstrating that the improved performance has not just been achieved at the reporting date, but it's from a lower level over the last 12 months. We have achieved this by targeting raw materials in our plants, and it's mainly through increasing the frequency of our ordering. Beyond this, we still see a significant opportunity to reduce working capital further, particularly in trade debtors where we know there is plenty of opportunity to gradually implement improved credit terms. And as we have said before, we remain confident that our long-term target of 21% is entirely valid for Vesuvius. So moving on to operating cash flow. As you can see, we have delivered a much improved cash flow conversion reporting 81% compared to 33%. This was mainly achieved by the improved working capital as well as an ongoing focus on managing our VAT balances which previously led to an outflow of other working capital. CapEx is running a little bit higher for the first half, reflecting the phasing of investment in our automated central warehouse [indiscernible] and some ongoing investment in North America. We believe it prudent to increase our full year CapEx guidance to between GBP 75 million and GBP 80 million for FY '26, which is circa GBP 5 million higher than we initially communicated. At the same time, we aim to mitigate this by further improvements in working capital as well as reducing our VAT balances further over the second half. Now looking at the free cash flow and net debt. Our free cash flow has inflected to an inflow of GBP 27.5 million compared to an outflow this time last year of GBP 13.4 million. On a full year basis, we are targeting to further improve working capital. And after paying the final dividend from 2025 and an interim dividend in the second half, we are targeting to maintain net debt at a similar level. This means that in practice, our year-end leverage will remain at around 2x. Beyond 2026, though, Vesuvius can still generate significant free cash flow. Clearly, a higher level of operating profit is required. But once the operating issues are behind us and based on a combination of market share gains and improving end markets, we expect to deliver significant free cash flow on a recurring basis. And now moving to our cost reduction program. Firstly, I do need to reconfirm that we carefully track projects to ensure only structural cost reductions qualify. We do not include, for example, vacant positions or lower maintenance costs. Reported savings have come from the closure of surplus plants, the transition of production to lower cost operations, head count reduced through automation and reductions in OpEx through better systems and reorganizations. We continue to make good progress, delivering GBP 7.4 million of in-year savings so far with a target for the year remaining that GBP 10 million. The cash cost to achieve, which are the P&L charge, excluding noncash impairments, worth GBP 6 million in H1. For the year, this will be as previously guided at between GBP 10 million and GBP 12 million. In addition, there's been an H1 noncash charge of GBP 10.4 million that relates to the impairment of which GBP 7.8 million relates to our AR production facilities in South Africa. So with that, thank you. And now back to Patrick for the outlook and closing remarks.

Thank you, Mark. The Vesuvius Group has continued to make very significant strategic progress over the first half. Our pricing leadership has been confirmed. Our cost improvement program is proceeding ahead of schedule. Our technology strategy continues to deliver the expected benefits and the turnaround of the Foundry division is now firmly engaged. The impact of those positive developments has been temporarily offset by short-term operational issues. But those are now clearly identified and are expected to be resolved by the end of the year, which will then enable the group to benefit from the ongoing positive developments in our main steel markets. Whilst we remain mindful of the geopolitical uncertainty stemming from the Middle East situation, we believe this structural recovery in our steel market is resilient. And will continue in the second half and beyond. We expect full year trading profit to be slightly ahead of trading profit for 2025 on a constant currency basis. Thank you for your attention. And now I propose to open the floor for questions.

It's Andrew Douglas from Jefferies. The standard 3 questions, please. Can you talk about European recovery and what's going to come through, hopefully, in the second half from the quota system. I appreciate [indiscernible] today giving their view. What's your view on when you think your business might start to see that benefit from Europe? And also kind of what has to happen for that to then actually take place? I'm assuming it's related to inventories, but maybe you can tell me. Secondly, on the lost revenue, how easy do you think it will be to get back that market share or get back those volumes in both Steel and Flow Control and Advanced Refractories, I'm assuming it's a bit easier Flow Control. But again, interested in what you're going to say. And clearly, MMS is going really well. So just a little bit of an update on the integration and what is going on there. And are there opportunities to bolt things on to MMS because it's been such a good acquisition for you.

Thank you, Andy. As we discussed, the global steel market has clearly engaged its recovery still market outside of China with a 3.8% growth over the first half. What is interesting is that Europe didn't contribute at all for the time being. This 3.8% was achieved without any participation from Europe. In fact, Europe was even a slight negative 0.6% as compared with last year over the first half. So Europe has not joined the party yet in terms of steel market recovery. We believe this will start happening from the second half. Our vision is quite similar to the one exposed by ArcelorMittal this morning. We believe that we should see the first step of recovery in the second half. I think it's important to be prudent in terms of pace because we believe there has been some excess import of steel into the EU just ahead of the first of July deadline for implementation of the new EU regulation. So there is probably some time needed for this excess inventories to be absorbed by the market. But our own vision is that as from Q4 we should start seeing an acceleration of steel production into the EU and definitely '27 should mark a significant acceleration of steel production in the European Union. Your second question, I think there, again, it's important to be cautious, but there are good reasons to believe that this market share temporary lost sales because of the operational incident should be, in particular, in Flow Control, relatively rapidly regain. Once these operational issues will be solved, we will have clear available capacity in North America, in particular. We have in the months to come several new projects starting in North America, where we have secured exclusive supply contract in particular for our Flow Control products, which will trigger a kind of a reversal of what we've seen now these 3 plants where we had a high market share, which closed last year, which will see the opposite in 27 in particular, with new plants starting now in the U.S., both the U.S. and Mexico. Where we have secured exclusive supply contract or we should play in the positive. So globally, I feel that the recovery of market share, temporary loss sales in Flow Control should be a relatively smooth and rapid in the coming 6, 12 months. Advanced Refractories will probably take a bit longer, because we don't have the same technological differentiation in Advanced Refractory than in Flow Control. This being said, in a growing market which is the case now of both North America and India, where the problems -- the operational problems happened. The ramp-up of our volume of sales in Advanced Refractory in both those areas should be significant also in the months to come. And we believe that loss sales should all in all, a rapidly come back also in Advanced Refractories. Your third question regarding MMS. Yes, the MMS acquisition, it's really a success. It's going very well, I would say, it's going very well first from a people point of view, which is a key of everything, as always, the management team of MMS coming from Morgan is integrating very well in Vesuvius. We are extremely happy to have them part of the Vesuvius family. They are doing a very good job integrating into the global Vesuvius management family. And this plays a key role in the success of this integration, which is clearly now on track to exceed expectations in terms of synergies, in particular. We are only now starting to deliver the synergies. So SG&A synergies are starting to flow and the manufacturing synergies will flow over the next 12 to 18 months, in particular. And this has been announced already to the unions, one of our plants, crossable plants in Germany. We closed by the end of 2027, triggering significant manufacturing synergies for the consolidated Vesuvius Group.

In terms of [indiscernible].

It's clear that we don't have anything to announce today, obviously. But considering the success of the MMS acquisition, we have an appetite to study other potential opportunities going in the same direction, which could complement even further the good success story of the MMS acquisition. So if there are -- in case there will be opportunities on the market, there are small bolt-ons that we are talking about. But in case there will be opportunity in the market, we will clearly be interested to move forward with us.

Tom Elgar from Deutsche Numis. Probably a couple of areas just to ask questions on. So I think the first part on the Advanced Refractory side in Europe, can you talk about more around what you've assumed in terms of the pricing environment? Obviously, you've made those comments around the challenges there. And what gives you confidence around your assumption? Have you tested that with customers already? So perhaps that's the first question.

Regarding the -- I mentioned during the presentation that there is some pressure on pricing in Advanced Refractory due to Chinese imports of advanced refractories product into Europe. We have not assumed any improvement in that respect going forward. I think the pricing pressure on Advanced Refractory product in Europe is there. It's, I would say, an external parameter that we have to integrate. So we have not integrated any improvement. Volume are good because the steel project is getting better, so volumes are good in Europe, but specifically for Advanced Refractories, pricing is under pressure.

And then just as a second area, you touched on the sort of outlook for Europe. So I guess, what do you expect your customers sort of inventory cycle to look like for your products, given this is a sustained improvement like we haven't seen for quite a number of years. Is there anything different that you might expect in terms of given the structural nature to the growth they might hold on, given the greater confidence hold on to more of your products. Can you sort of talk around that.

The level of inventories of our products hold by our customers is relatively low as we speak. And customers which were under themselves strong financial pressure up until relatively recently, have had a tendency to reduce their level of inventories we have not integrated in our forecast any increase of this level of inventories back to what we think would be a more normal level. But it may happen. If it will happen, it will be a further tailwind for our business. But we have not integrated this for the time being [indiscernible].

It's Harry Philips, Peel Hunt. Also a couple of questions, please. I just wanting to get clear in my mind that I'm not going to get too carried away and double count into recovery. Some of the revenue numbers you gave us, Mark, I'm just thinking that the 12.6% lost opportunity, and let's just take a sort of case at sort of that doesn't pick up second half. So I'm just thinking of the base year for steel is to then look at '27. So in theory, if you say so, we've resolved all the issues, let's say, steel does one, then you could add this in '26. You could add the lost opportunity to your base assumption for '27, would that be...

Yes. Subject to the pace of recovery, say, and -- or are we gaining the market share as well. So I think the interesting thing is we know we have backlog of flow control. So as Patrick said, we're relatively confident that we will be able to recover flow control revenues in the U.S. just by virtue of drawing down our backlog alone winning back some of the work that we perhaps have lost. But yes, theoretically, the GBP 12.6 million is there to be fully regained. And the assumption at the moment is the GBP 12.6 million obviously flows into the second half by virtue of the [indiscernible] being flat. So it's effectively it's effectively GBP 25 million of lost revenue on an annualized basis.

Yes. And then the -- just thinking about the sort of steel, the free mill closures last year, we hit on revenue this year, which you've talked about consistently. So that's not sort of new news. But obviously, with all the new capacity coming on stream, sort of you will get a bounce.

We should get a bounce. Yes, I think, I mean, we were looking at the new plants that have opened this morning in [indiscernible]. Open door plan to be opened. There's about 5 plants in the U.S. and Mexico, of which we've got supply contracts for all of them. And mainly for Flow Control but also a bit for AR. So again, that should give us a positive bounce. In fact, some of them opened in the second half of '26 and some of them are actually scheduled to open in '27.

That makes sense. And then just the equipment sales, I mean, is that 9.6%, a particularly high -- is that a greater level of volatility than you'd normally see?

Yes. I would say, yes, it's normally -- it normally does not feature in our analysis, but this time, it was a significant amount. I think there's always a kind of always volatility between the periods, but it was a bit higher than normal. What I can say, though, is that we do see quite a nice pipeline of equipment opportunities. Some of those become customer installations and drive consumable sales and some of them are just outright purchases. But we can see a high level of interest in all of our customers, particularly from the acquisition of [ Piromet ] and more generally, robotics, as Patrick touched on his slides.

And then just finally on Foundry. Just if you crudely strip out MMS, both the revenue and profit per the bar chart, sort of underlying foundry is sort of flat profit revenue, which given sort of what's happening in sort of that sort of seems pretty robust. But in terms of momentum, can you split out what the sort of underlying organic sort of progression was in the first...

[indiscernible] magnitude, Harry, is that in the improvement of the Foundry division year-on-year during the first half, 2/3 is MMS, 1/3 is the underlying base business, order of magnitude. And we expect both parts, both, I would say, historical base of Foundry and the MMS related business, knowing that it's not MMS anymore because it's completely merged with our existing business, but the MMS [indiscernible] part, both to continue to grow in the coming months and years.