Good afternoon, this is the Chorus Call Conference Operator. Welcome, and thank you for joining the De Nora First Half, 2023 Financial Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an Operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Ms. Chiara Locati, Head of IR and ESG. Please go ahead, madam.
Good afternoon, ladies and gentlemen, and welcome to our first half 2023 financial results conference call. I'm Chiara Locati, Head of Investor Relations at De Nora. With me on the call today are Paolo Dellachà, CEO of the group, and Massimiliano Moi, CFO. They will drive you through the main achievements and financial results of the first half, 2023. We will open up a Q&A session. I would like to remember you that the slides of this presentation have been made available in the Investor Relations section of our website. With that, I would like to hand it over to Paolo. Paolo, the floor is yours.
Thank you, Chiara. Good afternoon, everyone. In the first six months of 2023, we performed a single-digit revenue growth, thanks to Electrode Technologies, to Water Technology systems, and Energy Transition business. Despite some project scheduling in the second quarter and the headwinds in some product lines, such as the pools, still impacted, as expected, by the destocking phenomena downstream of the value chain. Our profitability has remained strong, north of 20%, in line with our guidance, driving a sounding cash flow generation and therefore a net cash financial position, even after EUR 24 million of dividend distributed. 2023 will be a consolidation year after the extraordinary results of 2022.
Nevertheless, we are successfully building up on our business model to exploit the growth expected in the next years, both in the Electrode technologies and Water Technology business, and in the Energy Transition space, with the specific dynamics of an innovative market. Our backlog is solid at EUR 722 million. The Energy Transition pipeline is materializing thanks to the new orders secured by our JV, thyssenkrupp nucera, in the hydrogen space. By including these orders, our consolidated backlog would jump above historical level of December 2022, that was EUR 790 million, embracing 2.7 GW of Energy Transition projects. We are developing our manufacturing capacity worldwide, as well as enhancing our plants' automation level. Regarding the Italian Gigafactory project, we have just signed the agreement with the Italian government for a EUR 32 million grant within the IPCEI scheme.
In addition, we are consolidating our partnership with thyssenkrupp nucera, which successfully completed its IPO in July. Lastly, we are working on our sustainability profile and the leading ESG rating agency, MSCI, assigned De Nora an AA rating. Let me highlight that the strong positioning in all our target markets, our solid global footprint, the competitiveness of our technologies, the diversification of our products and geographies served, and our strong aftermarket share of sales, make our business model robust and resilient, even in a softer macroeconomic environment, and position us the partner of choice for the future sustainable development. In this slide, you can appreciate some of the KPI of our H1 2023 performance that Max will comment on later. Let's go now to the individual segments.
As already mentioned, in the first six months of 2023, the growth of Electrode Technologies and Energy Transition business units offset the normalized performance of the pool division. Our Electrode Technology business is confirmed to be stable and profitable, with a low single-digit revenue growth and about 26% EBITDA margin, despite the effect of some chlor-alkali projects scheduling, which has been expected to speed up in the second half of the year, and despite the headwinds of the electronics market. The aftermarket revenues accounted for 40%, confirming the strength of our business model, which is well equipped to cope with low economic cycles, thanks to the top level of our after-sale services and the solid and long-lasting relationship with our primary customers, who are leaders in their respective industries.
Let me underline once again that our real level of aftermarket revenue is higher than the accounting figures, due to the products sold as new, that actually go into service final destination. Our backlog at the end of June was broadly in line with the figures of, for March, covering project execution with new important awards. In particular, in Q2, our joint venture, thyssenkrupp nucera, gave us a huge order for a leading chlorine and caustic soda producer, OxyChem, in the U.S., in Texas. Leveraging the non-proprietary electrode technology, our JV will provide best-in-class technology for a highly efficient electrolysis plant. The project is expected to be completed by 2026. We are equipped to adapt our versatile manufacturing facilities to accommodate this significant supply agreement. The robust backlog and the quality of the project in execution keep us confident to continue growing in line with our plans.
Let's look now at the Water Technology business. In the first half of 2023, our Water Technology business unit achieved a double-digit growth in Water Technology systems, WTS, with healthy profitability and a solid backlog, which only partially offset the ongoing normalization in the pool division, driven by the destocking tails. The softer performance of the pools product line continued in Q2, with a reduction in volumes and price decrease due to the noble metal cost indexation. As anticipated during the result conferences in March and May, we expect 2023 to be transition year for pools, with a slight improvement in the second half, even if the slowdown of the first two quarters will not be fully recovered. We have set our action plan to catch the expected recovery in the market, rely on our leading positioning in the sector, and our cutting-edge proprietary electrochlorination technology.
The pools product line remains a very attractive segment, led by electrochlorination and automation of existing pools. Our strong position in the market and world-class technological offering make us confident about our mid and long-term strategy and industrial plan targets. With regards to our Water Technology Systems, we are riding a growth trend aimed at the sustainable use, reuse, and treatment of water and wastewater, both in municipal and industrial sectors. We are well positioned in this space with a proprietary and comprehensive portfolio of technologies in disinfection and filtration and in electrochlorination. In the slide, we mentioned, as an example, two projects we are realizing with our ozone technologies.
In Bahrain, we are enhancing by 100% the daily treating capacity for reusing up to 400,000 cu m of sewage water for irrigation and agricultural purposes, working out one of the largest civil ozone plants in the Middle East. In Brazil, we recently won a project for a leading steel company. We will provide advanced wastewater treatment processes to remove harmful pollutants to meet the environmental requirements, otherwise not achievable with the conventional treatment methods. Finally, in April, we concluded the commissioning of Hong Kong to provide the citizens with safe drinking water throughout our on-site chlorination technology, characterized by high operational efficiency and environmental sustainability. Now we go to Energy Transition. Our industry-leading Energy Transition business unit, representing more than 10% of the first half of 2023 total turnover, is growing at a rapid pace.
Revenues increased seven fold to EUR 47 million compared to last year, reporting positive double-digit profitability in line with our 2023 guidance. We are constantly at work developing our Electrode Technologies, setting them up to play an increasingly important role in the Energy Transition via the decarbonization of refineries, chemicals, and hard-to-abate industries, and mobility in the coming years. In the first six months of the year, we have produced the equivalent of 400 MW of products for green hydrogen generation out of our unparalleled order book. By the way, the Energy Transition backlog at the end of June was equal to 2 GW.
If we also consider the 700+ MW order recently signed by our joint venture with nucera, with H2 Green Steel in Sweden, our backlog jumps to about 2.7 GW, further enhancing the visibility of our revenues in 2024 and 2025. In the meanwhile, other projects have achieved important milestones for our joint venture with nucera. One is the MOU with Unigel to extend the project in Brazil from 60 MW- 240 MW, and the capacity reservation agreement for a multi-hundred megawatt contract in the U.S., expected to be realized soon. We maintain a robust market leading position worldwide in the green hydrogen space, along with our joint venture with nucera. De Nora Electrode Technology have been selected by almost all large-scale funded projects around the world.
In this early stage of the hydrogen revolution, we estimate an impressive market share of 90% of all green hydrogen projects, close to our, close to or post FID, thanks to the strength and reliability of our technologies and large size of project relying on De Nora. Let's look at the Energy Transition pipeline. We are at the core of the green hydrogen value chain, providing best-in-class technologies for water electrolysis. As previously mentioned, De Nora electrodes have been selected by almost all large-scale funded projects around the world. Just to reiterate from previous calls, we are facing an unprecedented market opportunity in this high-growth space, as alkaline is expected to be the electrolysis technology of choice for 2030 and beyond, especially in large-scale projects.
Here we see the pipeline for our Energy Transition business unit, which in total stands at 42 GW and is broken down into different layers: 3 GW of deals, 7 GW of actively pursued projects, and 32 GW of identified pipeline. As you can appreciate, about 60% of our whole deals correspond to secured orders, MOUs or capacity reservation ready to be turned into backlog. While the remaining 1.2 GW are projects with a high probability of award in the short term, meaning less than a year. We believe the green hydrogen revolution is here, and we are powering it today with our technologies in projects all around the world.
We view further growth in the industry and our business unit as regulations in the U.S. and EU become finalized, as end, off- takers become more accustomed to the technology, and as the difference between various water electrolysis technology becomes more apparent. In India, Asia, South America, and of course, Middle East, the high availability of competitive cost of green power, given green hydrogen, and impressive potential that can assist European energy security and Energy Transition goals at the same time. Let's look at the capacity in place and evolution to serve this promising pipeline. We are pursuing investments worldwide in brown and green fields to exploit the market growth opportunities, improving our versatile manufacturing capacity from 2 GW-6 G W by 2025.
We are also enhancing our existing plants innovation and robotization level in line with Industry 4.0 principles that guarantee a low environmental footprint of the products. Starting from Asia, our multi-year expansion plan is progressing. We're enhancing the capacity of the existing plants in China, at Suzhou, and Japan at Okayama, and the project will be fully dedicated to producing alkaline water electrolysis and chlor-alkali cells and electrodes. We expect equipment installation and commissioning will take place by 2023 for the Chinese project, while the commissioning of the Japanese plant is set by 2024. Our gigafactory project in Italy is progressing, and we plan to start the construction work by the end of 2023.
In addition, in July, we signed the Italian government, the agreement, the granting within the framework of the IPCEI scheme, public funding of EUR 32 million to finance our gigafactory project. We are glad to see that the administrative process has been accelerated. We also hope to obtain soon the confirmation of the additional funding for which our project is qualified within the IPCEI fund. In Germany, we are expanding our Energy Transition manufacturing capacity and investing in the enhancement of our production efficiency and process optimization. The project is among 41 large-scale clean tech projects, which have been selected for funding through the EU Innovation Fund. Finally, in the US, the expansion of the plant in Ohio, we changed the fuel cell components production as the first step is progressing.
To wrap up, we are ready to play a key role in the transition towards sustainable energy through green hydrogen, building up our pipeline and at the same time investing in production capacity, considering and monitoring the development pace of the green hydrogen revolution. Second, our Electrode Technologies and Water Technology systems are solid and profitable. At the same time, we expect pools to start recovery in the second half of the year, and then grow in revenues and profitability from 2024. Despite the impact of a challenging macroeconomic environment, we are very satisfied with the results successfully reached year to date. With that, I would like to leave the floor to Chiara for a quick update on our ESG journey.
Thank you, Paolo. Our commitment to ESG remains strong, driven by our business deep vocation for sustainability. Our Energy Transition division aims to dramatically reduce our customers' carbon footprint in the hard-to-abate industry, green chemistry and mobility. Our water treatment technologies are focused on providing clean water to the communities through safe, sustainable, and environmental-friendly solution, and supporting industrial customers to obtain high quality water for their processes. Regarding our operational impact, we are pursuing our plan to generate solar energy at our production sites worldwide, with a target of 8 GWh by 2025.
By the end of 2023, we are working to reach about 3.3 GWh of installed solar energy, including the 1.3 GW h already installed in Germany in 2022, new installation in Italy, at Milano and [Colonia plants] and Brazil, which will cover between 15%-30% of the annual energy needs of the site in Germany and in Italy, and more than 100% in Brazil. The launch in 2022 of our diversity, equity, and inclusion committee, named Each for Equal, has been fruitful in this first part of the year. We supported many initiatives aimed at enhancing the diversity culture and sensitivity in our group, improving professional opportunities and training occasions, and striving to create an open and comfortable place to work.
We are also carrying our initiative to support local communities in which we operate, and initiatives focused on our people's well-being, such as the recently achieved certification for the Great Place to Work and the launch of gender equality certification process in Italy. In addition, we are further improving our governance profile, as we are working on adopting a new anti-corruption policy and updating our code of ethics. Our commitment towards ESG has been positively evaluated by the world's leading ESG rating agency, MSCI, which assigned an honor a AA rating, positioning our group among leading companies in each industry for managing sustainable opportunity and risk. Finally, we are working at our ESG strategy and roadmap, which will be delivered by the first quarter, 2024. Now, I leave the floor to Max for the financial results review.
Thank you. Good afternoon, everybody. Let's start from revenues. In the first half, we report a 2.4% revenue growth, which is a 4.1% at constant FX rates. In my view, a positive performance, given the overall global economic and market situation. Such growth is driven by our Electrode Technologies and Energy Transition, while, as expected, Water Technologies is still suffering from the pools normalization trend. In terms of aftermarket and service, we accounted overall at 30% of revenues, but this percentage is even more positive, and in particular for Electrode Technologies, the aftermarket accounts for 40%, and in Water Technology system is at 38%.
In terms of geographies, we see the increasing incidence of EMEA, which accounted for 38% in the first half versus a 31% in the same period of last year. This is mainly driven by the ramp up of the Energy Transition and the growth in our Water Technology systems. Looking at more details, in terms of Electrode Technologies in the first six months, the growth has been mainly driven by the chlor-alkali membrane projects in Asia and in the US. While at the same time, the electronics performance suffered the Asian and the global market conditions.
Taking a look at Water Technologies, the revenues were down year-on-year, mainly driven by the expected performance of pools, that has been partially offset by a good double-digit increase in Water Technology systems. Indeed, the normalization trend in the pool, which started in Q3 2022, also continued in Q3 2023, suffering from the stock entails, and at the same time, a price decrease due to indexation to noble metals. For pools, we expect a slight improvement in the second half of the year, even if the slowdown of the first half will not be fully recovered by the second half performance. Water Technology systems is having a very good performance, with the revenues growing at 24% year-on-year.
This is supported by a strong backlog that we achieved at the end of 2022, and Water Technology System is expected to continue such a positive growth also in the following quarters of the year. Finally, our Energy Transition continued its quite impressive growth, reporting a 7x increase year-on-year, thanks to our solid backlog, and despite a revenue trend moderation in Q2, which is due to production mix and some project scheduling. We expect in Energy Transition project execution in line with the plan in the second half of the year, driving final year revenues in the low range of the 2023 guidance.
Overall, for the next two quarters, we expect an improvement in all the business units, driving the year-end revenues toward the lower part of the revenues guidance range. In terms of backlog, our June 30th remains robust with EUR 722 million. If we consider the orders secured by our JV, nucera, for the H2 Green Steel project in North Europe, this figure will jump to the high record level reported in December 2022. Overall, strong backlog and positive evolution, considering the secured orders. In terms of electrodes, the backlog at the end of June was slightly higher than in March. Mainly thanks to new project, OxyChem, which we received in the second quarter.
Finally, in Water Technologies, the backlog reflects on the one side, the, the, the normalization of the pool business, and on the other side, the good performance of Water Technology System, that also had on the other side, a robust, a robust Q1 order intake, driven by new installations. In terms of operating cost, we have a COGS in H1, increased both in absolute value and in terms of incidence on revenues. This is mainly a consequence of a different product mix, both in electrode and in Water Technologies. In Water Technologies, in particular, we suffered the lower performance of pools, which in turn was impacted by the destocking process, accompanied by the normalization in the noble metal price.
G&A costs reported an increase, mainly due to corporate structure enhancement, to support the business development. Finally, our R&D costs were about EUR 7 million, out of which, roughly speaking, 70% dedicated to Energy Transition, testifying our strong commitment to play and to maintain a leading role in the green hydrogen evolution. Just to remind, our R&D activity has now over 100 years of history in electrode development. We have five R&D centers worldwide, with more than 100 researchers that are engaged on a daily basis in developing our technological leadership and enhancing the efficiency and the sustainability of our products and solutions.
Taking a look at the vitality index of our products in the first half of 2023, this was equal to 19%, improving versus the 15% of the full year 2022. These are clearly driven and thanks to the Energy Transition growth. Our EBITDA in first half was equal to EUR 86 million, representing a good 20.5% margin on revenues, which is even slightly higher than our expectation. Electro technologies showed both in Q1 and Q2, a solid 26% EBITDA margin aligned with our historical trends. Concerning Water Technologies, the year-on-year performance is mainly attributable to a lower incidence of the pools division, which has a higher profitability than the Water Technology system product lines.
It is worth, though, to underline that WTS reported an increase in the EBITDA margin due to a good performance in terms of volume, and, therefore, a better absorption of cost and an effective, also, cost control. Our Energy Transition reported a positive 12.8% EBITDA margin, which is in line with our guidance for 2023, where the Q2 performance reflects a different product mix compared with the first quarter, and having a volume of moderation due to some project scheduling, an increase of indirect costs, such as R&D. Overall, we expect an year-end profitability, which is in line with the guidance.
Okay, just to give you an idea, from EBITDA to net results, we have amortization and depreciation that were basically in line with H1 2022, with a slight increase that follows the investment curve. The evolution of net financial cost in the first half of 2023 is mainly driven to a negative impact in terms of foreign exchange, and while it was positive in 2022, and by the increase in the European and U.S. interest rates. Even if we have, as you may remember, we have in March, decided to early repay about 56% of our senior facility, exactly to streamline the group's financial structure and reducing the overall cost of our debt.
We expect that this reduction will have a full positive effect also on the financial cost in the second half of the year. In terms of net profit, we achieved EUR 46.7 million. That compares with EUR 39.7 million of first half 2022, representing a +18% year-on-year, and a good 11% on revenues. Taking a look now at the networking capital evolution, we see at end of June EUR 307.4 million, with a 35.6% incidence on revenues. That is an improvement compared to March 2023, and well below the level of first half of 2022.
The main dynamics underlying this are an improvement in our trade receivable, an increase in our advanced payments from customers for about EUR 7 million, driven by new contracts achieved, and an increase in trade payable due to a lower purchase of noble metals that are paid short and also demand a relevant down payment. Net cash position at the end of June is positive by EUR 8.4 million, which is stable compared to Q1. The cash flow from operation is sound and positive and this allowed us to cover the EUR 24 million of dividends and the EUR 20 million of CapEx investment.
Very positive networking capital and cash generation in Q2 with EUR 52 million that allowed us to remain stable after dividend and investment. In terms of evolution, we expect further positive performance in terms of cash generation by year-end. Remaining on year-end and guidelines, we, considering our backlog and the expected market evolution, we confirm our target in terms of profitability and financial structure, with revenues that will land in the low part of the guidance range for year-end 2023. With this, maybe I leave to Paolo for final remarks.
Finally, let's say five final remarks. First, our growth path continues despite the challenging macroeconomic scenario. Second, the Energy Transition business is growing at a rapid pace, 7x the revenues versus H1 of last year, 2022, with a sounding positive double-digit profitability. Point three, Electrode Technology business grows at a stable pace with a robust EBITDA margin of 26%, and Water Technology business unit performances were supported by the robust positive trend of Water Technology Systems, WTS, product line. Number four, solid consolidated backlog and concrete pipeline of the Energy Transition business support revenue growth visibility. Last but not least, 2023 guidance profitability on track, revenues at low part of the range. Now we are ready for the Q&A session.
Excuse me, this is the conference operator. We will now begin the question- and- answer session. Anyone wishes to ask a question may press star and one on the telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Matteo Bonizzoni of Kepler. Please go ahead.
Thank you. Good afternoon. I have three questions. The first one relates to this swing of the margin in Electrode Technologies, which was pretty, pretty significant from the first quarter, 20%, to second quarter, which was 3.6%. All in all, the first half was still above the 10% target for the full year. Can you, first of all, explain a little bit, provide some data for this big magnitude, now, from 20% to 2% to 4% in just one quarter, just to understand what's behind? Second question on this division is, is this 12%+ margin accumulated for the first half, is representative for, for the full year, or maybe 10%, just if you want to comment about that.
Second question is as regard the consolidated financial targets, which you have confirmed. You have flagged also that revenues could be in the low part of the guidance range. I, I, I wonder also, the EBITDA could be maybe in the low part of the EUR 175 million-EUR 185 million guidance range, or not necessarily. The third and last question is as regard your pipeline in Energy Transition. My question is the following one: How this 3 GW of whole deal compare to the order which you need to hit the 2025 revenue guidance of EUR 500 million-EUR 600 million? My guess is, is that you expect much more than 3 GW to get there. Thanks.
Okay, I take the, at least the first couple for sure. So the difference in EBITDA in Energy Transition, Q1 and Q2, is driven by some lower volumes in Q2, which means worse absorption of some fixed cost, and increasing R&D cost. Third effect is a mix effect, we had best profitable mix in the first quarter versus the second. Overall, we confirm the 13%-15% target, which is the current and future level for our Energy Transition. There could be some variation quarter by quarter, but overall, this is our double digit 13%-15% that will, that is here and will stay. In terms of EBITDA, in percentage wise, so EBITDA margin, we are absolutely confident in a good performance.
In terms of absolute term, depending on the, of course, revenues performance, it could be that EBITDA may be in the low, in the low part of the range, but for sure, in the high part, percentage wise. Our profitability is not impacted in terms of incidents on revenues, if any, is slightly above our expectations. I don't know, Paolo, you want to comment in terms of pipeline on energy?
Yeah. Yeah, yeah, absolutely. Yes, Mateo, hi, the, the, the, the whole deals of 3 GW is the first level of our pipeline, right? For sure, it's a very good news that 60% roughly of that list of deals is somehow already secured, but the number of projects that we're dealing with, through our partners, is growing and is very solid to give us confidence about achieving the 2025 guidance.
Okay, thank you.
The next question is from Chris Leonard of Credit Suisse. Please go ahead.
Hi, guys. Hopefully you can hear me. Just two questions, or perhaps actually three. Focusing on the Energy Transition division, when we think about price per gigawatt, I know there was slightly lower volumes maybe in the second quarter, but it does look like price per gigawatt or per megawatt reduced, and is that because of the iridium pricing coming down or is this something which is really just due to the mix which you highlighted? It would be helpful to get a better understanding of the differences in mix for the different projects you might be doing in the second quarter versus the first quarter.
Looking at away from the Energy Transition segment, second question on chlor-alkali, encouraging to hear that you were getting orders through for the replacement into membrane technology from diaphragm and the OxyChem order. I just wonder if it's fully hit your backlog yet, because the news flow last year for OxyChem was that this contract was very big, CapEx was sort of $1 billion on, on, on their side as, as your customer or t hyssenkrupp customer. How much should we sort of be expecting for you guys in terms of the backlog, and helping us give you sort of visibility on future revenues? Those are the two questions. Thanks.
Okay. Okay, thank you. On Energy Transition, yes, the, the main reason of the difference between Q1 and Q2 is mix, meaning that by executing projects, the, the, the content in terms of technical specification, varies project by project. The, the, there can be differences that have, of course, an impact on revenues based on the specifications. The specification very often depend on what is the renewable source behind. If there is hydro, there is wind, there is solar, there is a mix of them, the technical specification of the scope of supply of the order changes and consequently, the price per MW changes accordingly. That's the first point. The second point, what we have announced, what our JV has announced, is the first conversion project of Oxy.
What you might have read is that Oxy will go through a long-term conversion project that will involve different factories in North America. What we have been announcing, which is part of our backlog and of our JV backlog, is the first. It's one conversion for diaphragm to membrane of one plant in Texas. There might be much more to come over the next years, but of course, the first contract is the one that we can talk about.
Just to follow up on that, is there any kind of sizing of, of the potential opportunity you could give us for the, particularly the North American market, for the upgrade into membrane from diaphragm? Obviously, you guys have a very strong market share, on the electrodes for chlor-alkali globally and, and particularly strong in the US. I think it's right in saying that Westlake and Olin also need to upgrade. Is there any kind of sizing you could give for how big that opportunity is?
No, not really, not really. The only one who made this, this announcement is Oxy. These projects are considered that are on medium to long term. Meaning converting factories working 24/7 is quite a demanding job. These guys make announcements, but then they go one by one into the individual projects. It will take a huge number of years to face this conversion, and it's almost impossible to give you a size right now. Great. Okay, thanks so much. Thank you.
As a reminder, if you wish to register for a question, please press star and 1 on your telephone. The next question is from Isacco Brambilla of Mediobanca. Please go ahead.
Hi, good afternoon, everybody. Thanks for taking my questions. I have two. The first one is on Electrode Technologies. If you could give us a bit more color of the underlying trends between chlor-alkali, electronics, and electrowinning. Ideally, even giving some sort of a pace of growth or decline for each sub-segment. Second question is on pools technologies. If you can comment even qualitatively, at this stage, how much of the stocking, in your point of view from discussions you have with clients, has been completed? Thanks.
Okay. Thank you, Isacco. In the Electrode Technologies, we have, of course, different segments that we, that we serve. We only mentioned the main three, which is chlor-alkali, electronics, and electrowinning, we have, we have many more of a smaller scale. Chlor-alkali is, as usual, very stable, is growing, is giving us very good profitability. Electronics is leaving a headwind kind of moment, you might, you might know that already because the, the, the many information about that, it, it really depends on the final product. When we talk about smartphones, tablets, and, and, and laptops, for sure, the, the, the, the finished products providers are leaving a moment of a bit of saturation of the market with slowdown of volumes.
In the components, meaning chips, PCBs, and whatever, it's, there's also some destocking going on, while, for example, in lithium batteries for electrical vehicles, there is a, a continuous demand, growing. There is also a demand for 5G infrastructure, and now for artificial intelligence infrastructure. It's a really a mix of different trends all put together in the macro family of electronics. On top of that, you, you can imagine there is also a matter of geopolitical issues. There is a very high concentration of these customers in Asia. Within Asia, there are a lot of movement, moving from Taiwan, China to Malaysia, Korea, Japan. There is also some resourcing back to Europe and the United States, even in very minimal quantities compared with what Asia is doing.
It's a complicated market where I remind everybody, we have a very strong market share, very strong leadership positions. We are in contact continuously with our customers, also offering them innovative solutions. In general, we are seeing this year a little bit of difficulties of this market to continue their growth pace. In electrowinning, on the contrary, we are seeing a very good trend, where volumes are good, the growth is as per plans.
In terms of the stocking in the pools, we believe that the vast majority of actual stocking process is behind us. For the second part of the year, we expect at least the stabilization of the demand, and for sure, we will see a rebalance back in growth in 2024.
For any further questions, please press star and one on your telephone. The next question is a follow-up from Chris Leonard of Credit Suisse. Please go ahead.
Follow up on, on the strength you're seeing in the chlor-alkali market at the moment, saying that it, it's stable and growing well in, in the first half. There's been some news flow from the chemicals companies that there's been maybe a slowdown in volumes for caustic soda or chlorine production. I'm just wondering if, if you're seeing that, and equally, if, if you think it's got any kind of impact for you on, on the servicing element, the aftermarket, for refurbishing the electrodes, or really, this, this isn't really something which has been impacting you to date, and you don't see it impacting you in the, in the coming quarters? Thanks.
Actually, you know, thanks to our after-sales services, Chris, and considering the waves of install base that has been put in place some years ago, that now is coming to maturity for reactivations, we are not really so much connected to potential little slowdowns of the production rate of these companies. We are really driven a lot by, apart from the conversion we just have been talking about in the U.S., we're very much driven by a lot of reactivations activities that are going to take place in the next months and years, with very high concentration in some areas of the world where the install base has been put in place five, six years ago. That's quite impressive in terms of growth.
We are very confident on chlor-alkali to, to be able to respect our plans and guidances.
Thank you.
Miss Locati, gentlemen, there are no more questions registered at this time.
Thank you very much, everybody.
Thank you very much.
We are here available for any further questions off-site.