Ladies and gentlemen, welcome to the Optima's q12020results conference call. I will hand over to check you an office to go and manage your social with CFO, madam, sir. Please go ahead.
Hey. Good morning, everyone. Welcome to Afinab 2120 reserve conference calls. With me today are Marie Jose, our CFO, and the So the global situation has continued to evolve since we had to look at our strategic update on a personal We've enhanced Fridays. I'm expecting for the increasing in 2018 medical space.
I know it just beginning to choose final optimization. Meanwhile, economic environment, as you know, continue to be done. Alright? With the second part up currently expected to be the low point of the year. Consultant pricing, as you know, to develop our visuals implemented by Gavin Watts in medical trade around the world.
First of all, I hope that you and your families are well. And before I start this conference call, I'd like to express my gratitude to everyone who's bringing his contribution one way or the other.
If any part of the
to the fight to get this terrible virus. Crane, of course, for the end workers who are the of onto this flight. The social commitment in this crisis through free delivery of gender hospitals supply a licensure calling us to make protection equipment on medical devices, or financial donations. Our management and our team's control of this. Do you have this expression about solidarity?
The health and safety of our employees is our utmost priority. Itself to focus on employee safety. In parallel, we are making sure operation are running as smoothly as possible. So actually, most of our plans have been running since the beginning of crisis, and we implement quick and significant measures to mitigate the impact of this crisis on our results. Slide.
We detailed our first quarter paper loans and outline some elements of the ARPU. As always, we will answer your questions at the end of this call. I will now make a few comments on the first quarter of the shipments before we cannot even exclude the financials in mortgages. I would like to analyze the following key points. 1st Q1 results were in line with our expectations.
They were impacted by the emergence of the pandemic in China and in Europe in the second part of the quarter. The picture varies significantly by end market and aggression. Overall, we estimated the impact of the COVID 19 in Q1 at around €100,000,000 of sales and €45,000,000 on our EBITDA. This is in line with a gain of 40 to 50,000,000 we get a strategy of that. And from the return standpoint, around 2 servers in total related to Asia and the rest to 0.
We're used to have now nearly 5%. To drop that more of the storage tools, to the estimated impact of the COVID 19 on our top line. This reflects more particularly declines in this a spot to share already gathered in any tourist markets, which affected the speech of the industrial, and we are occupied by the policy. It's a national, solid demand in a few end markets such as packaging, notably within a disease, artificial, And in certain emerging niche application used for the virus such as this infection, medical, and protective barriers, and what? In which option, I was able to use the workers can be the following.
We have 3 well identified specific immigrants. The COVID-nineteen which is negative impact estimated at €45,000,000. Your national track, January in France, into the new national pension scheme, which affected prosecution by RED and cost us nearly 50 in euro. And impact of delivering costs in European in Fluorogases, which amount to around €20,000,000,000, then we should a prepaid, a continued end of the day. Excluding these elements, our EBITDA was stable with a different picture by segment.
The new client in JBT of specialty material essentially came from the This was a run over the evening performance. If you keep in mind, the analyzing challenging equipment complex, which was prevailing at the end of last year in the fueling market. And the distribution continues to perform very well. We're calling double digit EBITDA goals. Of the team by ABGoring Pops European Program.
We have put in place a number of strong visuals, and we'll have to adapt to this crisis to mitigate the effect on our and to focus first and foremost on cash flow generation. I will give 2 examples. Reducing fiscal 2020 my €15,000,000 creative to 2019, a €100,000,000 creative to have the check, including decreases in all dimension of the company, operation for manufacturing to initiate it. We do see inventory a €100,000,000 related to the initiating the checking level of €700,000,000, while further maintenance of a significant step up in investment, dedicated to our even if the short term requires all our attention and a considerable amount of resources. It is critical to continue to seek and work for the long term resources beat the regular record after the crisis causing limitation of our 2024 strategy presented during the 3rd period.
Michelle, so we build the acquisition of Lee with the English leader in Tallahasiv, waterproofing system, and full operation solution, which they developed a good instructor. At the end of the quarter, we started the capacity expansion. To support building on the rapid success of the 1st student. We moved on with a site preparation on the final day that's put in by the event project in Singapore and ensuring that the CapEx will be implemented here. That's not the fact is critical development for our hospital.
Finally, in Q2,
we expect to close the divestments of our optional career in Phoenix business. Reviews to our mission, which we currently have a strategy of next on the cross sell to become a pure specialty maintenance payer by 2012. Thank you,
Jenny. Are we confident in comments starting with the bridge, on turnover? So sales are about 0.7% compared with last year at 1,000,000,000. The negative volume in of close to minus 5% that Jenny granted. The price effect, I've also had negative 5% of that on sale compared to 2 119.
This impact mainly comes from a lower copy price within the Coating Solutions segment and the tough market conditions in a refrigeration within the intermediate. The price effect was slightly positive in the TV. Thanks to the manager who was taken last year. To improve product mix and was quite resilient in advanced materials with a limited minus 1.7% effect. Please, also note that we enjoy a policy of 3.4% for coming from the integration of Amazon and Progyny acquired in the second half of last year.
I'm well. I'm from the acquisition of sleep. I would be in a busy, and that's going to inquire, in January this year. We are as well a 27 percent positive currency effect. Mainly, I'm expecting a stronger US dollar versus the euro.
Basically, the rate, for the first quarter of 2020 was at 1 10. Compared to a one of 14 for the first quarter of 19. I applied to a QA details, 300,000,000, which is 19% lower than last year's level. Including an approximate $345,000,000 for negative impact in 2019 and detailed by sharing of the various segments. Depreciation and amortization reached €140,000,000, up 17,000,000 year on year as a result of the start of several production units and the integration of acquisition.
Now for retirement, you need to amount to €160,000,000 and rebate margins to that 7.7 Non recurring items include the €14,000,000 multi pr motivation. And the €14,000,000 was nonrecurring charges related to restructuring expenses, asset write off and acquisition costs. Financial results and at a minus €23,000,000, which is slightly lower than last year. The difference coming mainly from noncash, actual changes in certain employee benefits. At that trying to suite in exceptional life, Internet cable, a 21% of recurring So, definitely, our q 1 adjusted net income amounting to 1000000 euro.
Which corresponds to a €1.31 per share. Moving on to cash flow and net debt, You see that Q1 free cash flow amounts to, more than such €8,000,000 to be compared to the €73,000,000 in Q1 'nineteen and to a minus €25,000,000 in Q1 'eighteen. So free cash flow reflects the impact of a lower EBITDA and includes our regular seasonal increase in working household sales trading of Q1 versus Q4. The working capital ratio for annualized sales and that's 16.5 percent versus 15.1 percent last year. I have highlighted by Kenny, a time for monitoring has been put in place to track inventory evolution and cash collection.
So can we talk to expenditures amounting to €92,000,000 in the quarter? Versus the €109,000,000 in the first quarter of 'nineteen. So after we mentioned, we intend to reduce capital expenditures by the 100,000,000 payrolls compared to our initial, target, of 700,000,000. And as a result, So we should end up with a total recurring and exceptional CapEx expenditure, at around €600,000,000 this year. Net debt reached 2.48 in your euro at the end of March 2020.
So including €1,000,000,000 of hybrid bonds. This represents a a slight increase of €150,000,000. Connected to our mandate, of last September. Coming mainly from the M and A on January 4 90 €1,000,000 and from the operating cash flow period. As a reminder, please note that we temporarily carry a clear brand new general hybrid bond in duplicates.
Since we took advantage of a favorable market conditions in January, to which you a €300,000,000 of selected hybrid bonds at the Journey coupon of 1.5%. In advance, of our initial 300 and €1,000,000 hybrid bond maturing is also for this year, which has an interest rate of 4.7 fine. Our balance sheet remains extremely solid. That debt including high bills represents 1.89 our last 12 months EBITDA. We are also very comfortable with our efficiency level.
We stands at 1,500,000,000 euros at the end of March. I sent moreover our pension obligation stand at around €400,000,000, which is a very manageable level in the current policy market. Thank you for your attention, and we now hand it over to Carrie from your
So as I mentioned at the beginning, the COVID 19, continue to spread across the world, and how was sanitary situation involves as well as a precise impact on world economy are still quite uncertain at this stage. So, like, the most of our peers, we decided a month ago that the 2020 guidance we gave when we published the 2019 results was no longer relevant. Management means a drop in reading and transcription related segments in Europe and in the US. Platform affecting the disease including solutions segment. Offset evolution for the month of April is estimated to be around minus 17% year on year, including the perimeter effect of around +3 percent 19 q 1, which means a constant scope in April of February shut overall by the 20% year on year.
The gradual improvement should return your life from offset funds from June provide you that the lockdown measures are listed in Europe and the US as currently expected. We also believe we should be in a position to have a team of you on the prospect for the full year in the summer. I stated that the investor inventory, we are very confident to go through this crisis and then now should we check. We are benefiting from a diversified beta end market and concrete. So we're going to go over to niche application.
Here's the fight again, the virus. And other innovations. The strong balance sheet including a relatively low level of pension obligations had a strong liquidity position. Our gas station measures on cost and CapEx and some benefits from lower raw material will add mitigating the drop in demand. As you can see, we focus on what we can come forward and are implementing a very weekend, we have experience of activities and operations.
As you know, our culture are wounded at shared, oriented, and our teams have stepped up deliver the determination and initiatives quite well. We are focused on first to to capture liquidity, we are fully attentive not to return any way our ability to resolve when the recovery material assist. Our focus on sustainable innovation, operational short responsibility and portfolio evolution is unchanged. And we remain fully committed on not slowing down the execution of the 2024 room back. Someone's becoming a pure pleasure and special thing.
Okay? I thank you very much for your attention, and we allow to get your message shortly, ready to answer your questions. Thank you.
Thank you. If you wish to ask a question, please press 1 on your replacement keypad. 0 and 1 on your replacement keypad. You have a first question from. Please go ahead.
Yes. Thanks, and good morning, Marie Jose, Cherry, and to the whole arching.
I have three questions, if
I may. First, can you talk about the sequential development so far? I mean, how April compares to March and what is your order book value for May? Secondly, you say that
you want to reduce cost by 15,000,000 can you elaborate on the actions you
are planning? You mentioned SG And A, but can you help me
to understand if these actions
are more temporary only or also sustainable. And, certainly, on your, cut in CapEx budget, and you had a postponement of maintenance CapEx And if so, if the, doesn't mean that
you are shifting into next year or,
anything else related to that? Thanks.
Thank you for your the first one after. So they are really beneficial. So I'll just have to check in fact, it's close. First of all, it's not a 1 CapEx specifically. So all across the world.
We are not fulfilling any, investment we wanted to do that because we believe they were all if, we are ongoing reviewing of, most important CapEx. So we saw about, the delay, which means that, first of all, physically, it would take more time because of the comp containment, measures. This means that things we we simply cannot do because you don't have a set of vouchers. Okay. So you you will have natural delay.
On top of that, we are deciding to traditional CapEx on which, based on the set perspective, we can wait a little bit. We are also, using this barrier to negotiate, to renegotiate on certain the CapEx, vendor model. This means that we obtained because your price has decreased because, the economic is down. We are able to, check the unit prices now. And with and with all that, we are able to reduce the we have a store, just to to put it on Medicare because at the end, the show will not be, to know what we sold screen also will make sure it will be.
So it's just a much more delay that we keep, to a certain extent of how many years. And we certainly don't take any risk as we do on maintenance and safety. We need to do that. Question is regarding our CapEx. It's all across the board.
It's not the delay and renegotiation. And I think this, correspond to 15% or in order. I think it's reasonable in the current context. With regards to the 6th course, again, it's all across the board. It goes from, SG And A and,
the
as I mentioned, we try to, to, jeopardize any ability to enroll. So, again, we try to to to reach a balance to be recently born, to be, just calling me what we want to achieve that was supposed to be originally born. Example of, examples you've opted out everywhere. I would say, starting from renegotiation of any purchases to, social media travel is absolutely in the US, in operations, there is some sense right now but without, the momentum of open site, etcetera. So it's very weird to cut some marketing costs because we don't need them on the Mister Lamonta.
With regard to the other loop, I think it was your question on the first, on the first, vote and how we see, May and June, after after I forward, I would say we consider that may is more or less, like, like, like, for you, for everybody. It's all sitting here. That's what I told you on the floor. And we wanted to share this number with you, but they should be, to see more on it, the same kind of, you know, we should start to see some granular as a really granular, improvement starting in June is this, clicking the blowdown, our activities away. Everybody is expecting in a different computer on the road.
Thanks.
Thank you. Next question from Alex Short from Barclays. Please go ahead.
Hello. Yes. Hello. Sorry. I'm here.
Thank you for calling. I I have 3, but, hopefully, but quick questions. On this cost savings, you talk normally about being able to offset 50 to a 100% of normal fixed cost inflation through specific measures. Can you just confirm whether your expectation for 2020 is that you will now be able to offset all of the normal fixed cost inflation given that you've announced another 50,000,000 program. So I'm interested in understanding the net effect about fixed cost inflation.
Secondly, in adhesive, you talked about the best a pull up mix, which is accretive to the price components. Can you talk about whether your customers are asking for like for like price increases or below oil price. In other words, the same ton of adhesive this year. Compared to last year would be very helpful. And then your comment finally on from an APMMA, you talked about the ink normalization continuing.
Can you confirm whether spreads spreads that you're seeing are still higher than this time last year, which is what you saw in the fourth quarter of last year, whether they've now started to track below the same level last year that we've had for them.
Get it. So for sure, with regard to, the cost saving. So to give you it's just a good picture. Every year, you know, where I want to to say about, between one So I was in vision of this course by, Cisco and value workers. What you know, what you don't type in what we have said is a valuable cost component, which is, every year that would be this year.
Which means that when we did that, what we call the budget for 2020 compared to the date of 19, We have an increase of 60,000,000 of fixed costs. This increase of fixed costs was net of the savings I've mentioned in fixed cost and in the. What will we be what will we are shipping in 2020, and we are quite confident because in fact, complete the answer to Martin, we have already collected the of everybody on the initiative, and we are exactly where we saw it will be. So we are very confident, and this is one of the strength of our to be able to to react quickly. So from the budget, we plan that with a digital market environment, which was 60, we go to minus 50.
Okay. So all in order, compared to the the 2020, we will set one of those compared to the team reference point, we said the 50. And the, which means that also your question, yes, we we we deliver the variable cost savings. We deliver the fixed cost savings. But on top of that, with, the purchase, the contact with the black box set clearly.
And on top of that, we will say 15 inches compared to the 19 level. So it's quite a significant savings because you you are in fact all the savings together. The one who wish you are for setting facial, you want to save to them, to try to adapt, especially as you can to the website and not set those up. You, you make, in the next release. So there was a question, which may be, so, Martin, I think, what is the loan last year.
Oh, just, one shot, the clearly, and we should not bring up any proof where I bring it to a company or 3 company. Significant factor from what we said is sharing this specific context. It's not the kind of things you can maintain. The long term. If I take problems, for example, obviously, we are not going to stop calling when the recording is coming and when the the consignment with the redeveloping.
So, what would be interesting, but it's not a topic for today that we start to think about it. Is how we think about the longer term, how can we exclude other measures, replace what is really short term by something which is more than that It's not the topic for today. It is by definition something we need to have in mind. And what is interesting today is the way we work with people at home. You see that you can certainly make it more simple or more efficient.
So there are ideas which margin that we try to collect for the longer term. So now, with regard to the NLEs, Yes. There is a little bit of, of pressure on pricing, but, you know, I believe it's some of itchy. It's not we are working a lot on the project mix. So our project mix is gonna be, changing a lot of modules.
So And, when you talk about the raw materials, as you know, between what your price is decreasing, and when you get the benefit in your account, you have 6 months. So of course, Brazil does mean that, there is a little bit of pressure on pricing, but which is reasonable because, you cannot, you know, specialty, and, And I think we've announced that, rather well, in the, in the disease, but you may, you know, as I mentioned, it's really the evolution of our mix on the high end of high end of, the price product and hygiene products, organically, but also in terms of, the acquisition. I don't think I understood what your point, but the spread is not improving now. We have some sales organization, which is We see that with the current contact, but the automotive is down. You have some, some units of price pressure.
So we get it. You have also some raw material benefits which attenuate. This, press release back into the call. I continue to, normalize it, but in a reasonable way. Thank you.
Next question from Emmanuel. Okay.
Alright.
Three questions for me, please. First, Why are you saying in your press release this morning that the negative impact from illegal imports in Fluorogases in Europe, which up in June. Is it just due to the basis of comparison? Do you expect that business to to recover?
I can also, visit an operator at this point that we have the impact last year. Which means that our end of May, we should have a bit of comparison, which is
comparable. Okay?
Okay. There is nothing as related to the authorities that will be able to stop those, in court.
You know, the authority, they are not silent, so they are solo. So it's more difficult in this world to So I think that we have seen quite a ton of items, but to get, Zulu to be a plug on should be the normal world. But, I don't think that this is, main topic of the current partner with, for this, co finance and financial measures. So I will not bet on that. What we bet on is that the date of of our address?
And even sorry, even in the normal world, so I could just leave aside, you remember, we said that we should expect an improvement at the end of this year. You have been offsetting the cost issue. What's this? How do you get it? How are you getting it off?
Yeah.
Okay. Thank you. 2nd, you talked a little bit about all materials for for adhesives, but as group level, the whole raw materials were down a lot now since the beginning of the year. You said do release and change until your end, is there could there be a significant support for your EBITDA margin is here on ECSP to quantify it.
Oh, I did not quantify this one because the situation is still very volatile. So what is the main impact of the young people use on that raw material benefit? But so all these elements cost and raw material that to mitigate. That's the main factor this year will be about value. So then you have a opportunity with no which would be, in particular, our coast and the raw material.
So that is right up to raw material. We have a very, a strong drop of zero price, well, once a week. Between the, and then the food channel from art to refinery. It's okay. We go.
Cave code and then, draw a note from this message in what we buy in delegate cable. So you have the food chain and then you have stock. So basically the payment industry for special to give you call, like, us, much anticipated when pursuing your price, the, more stable. Which actually is on sale. You have 6 months between, when it comes and when it's the right to us.
So you have to, there will be some benefits but not in the short term. So, you have some, some lab, but it will be a very much, which will be at as a as cost. And,
Okay. And my last question, why have you not been able to get your working capital in line with your annualized sales in q 1. Do you think this ratio should improve in the coming quarters?
But first of all, I will have a question which we have failed on the on the cash flow. In fact, last year, as you remember, was a bit as difficult for came up with a positive cash flow in the first quarter. In the we are in the Q1 rather comparable to the Q1 2018, which was considered to be a good type of amount with the limited, the negative also. No. Clearly, what has happened on the and we have to be moved it from that on the server.
Actually, you are the, starting mostly in, in the Southern And Greater, Central. Okay. And after that, we need to adapt to all your plans everywhere, in the world, where, which are, you know, continuous process. You need to adjust your raw material, and it takes a little bit of a time, but you cannot, you know, a business. You just adapt, put on light to a drop in sense.
So this is an explanation that, if I remember, what has been optimal in each of, sales growth. We have been able to adapt, quite, rather quickly compared to the rest of the industry. So worried about that. It's a good payment of attention and thank you for mentioning, but I see it's normal when it's just arrived. We have a few months of, to hold up to to to that.
That is very much of attention. So we will we will follow it, but we are really working on it. And don't know if we used to have a proper continuous process, you know, just
That's the idea.
Thank you. Next question from Zashar from Education City. Go ahead.
Hi, sir. Thank you for taking my questions. This is Natasha. Hi, Terry. I'm gonna review first.
Just on the, working capital,
do you see any signs of your customers, having any financial difficulties in meeting and commitments. I guess I guess to put it another way, are are you bad debt provisions in line with within the vicinity, or or how how are you seeing them move upwards?
And then the second question is on why can you provide some color
around the utilizations in that division? Are are are they still on cloud still running in line with utilizations, seeing, at this at at these levels last year, or or are they when you get lower utilization? And then finally, on, caustic. See, the raw material change and what's expected to come through the interactive 20, but now it's the current oil price is possessed. Can you provide some color around how long before you get paid then?
And what the potential more than expansion could be, please?
Thank you very much.
Sorry for me. On the last time you could repeat. Okay. So on the on the first one it's the attention for everybody. So far, I think, we have a little bit of a scratch but which is quite limited on a on a on a or receivable.
So it's a negative attention because, you know, in this world, which is quite challenging, so customer may have some, if you could see, this would have, a follow-up on it, and we are very strict on the payment. And, that's so far. It's, we manage it, the situation at the end of sculpture is a is a key that needs a doctor, then she had attention.
Contract insurance in fact, actually, on a on these emails, with the, actually, a very strong performance at Yohannier, which supports it's the the low premium we pay on the contract. So we obviously monitor, we provide the credit limit that, before we can have, a patient on a regular basis by by the agency, So it's it's a very, you know, very close, attention that we are paying to this metric. At this point, no in bad debt balances across the company. We definitely see a tendency for visitors who are followed. We are standing down to the something that is required to make other high level in the organization.
At this point, the line that said with the with the historical inventory that we have on the on the website.
Thank you. Is being, around the world. We have a lot of nutrition, as you can imagine, in 1 of 2 days, so one of the few markets, which is, Really? Anytime the the oil and gas, January, but, what's, Raza. Okay.
But now, we expect to have some some, like, the total for the time you're giving calls, we see was a good rating. So we don't see if there's any more left here, but, it's, it's good, in good rating. So with regard to to those tickets, if you have to see the structural rate of short term and maybe that is the arena in Q2. I'd like to talk to Cheryl, which is, I thought that was nice in the US and Europe because of the conflict that is making a so they will be impacted by that, but I think your question was more of, if you could, be of this, specific, First of all, we're seeing, by all the actions we have presented at the Investor Day, restructuring, we continue to improve this margin. We don't show it down by the And, coming back to the question and your question.
In the course of the small semester, you should see some benefit from our raw material Yes. He's your first day, and he's, today.
Great. Thank you.
Just a quick follow-up. How much of both of his, PODDIY?
I would say, we into industry work and construction including digital set. It's 5050. Okay. And of these virtual set is really a minority part, minority part of the, what you call, CNC, which is we need the transcription and the distribution, but it's around 10% of the total set of, of the procedure. But in the second quarter, when you say construction, this is a core construction and do it yourself.
Which will be impacted by the lack of people of our customer. I'm being on the on the works, and, with the shots which are closed. It's free. And I think to see this service. It's just a work which is like that in the, you know, in, for, starting mid March mid March, then you put on the phone, sir.
Okay? Thank you.
Yes. Good morning. You know, glad that you stopped there.
I've got two questions. The first one, actually, is a double
1, on operating leverage.
So first of all,
on timing of savings, so either on the 100,000,000 gross savings on on the 15 minutes. So I was wondering if you could talk about how much you specialize Q1, bearing in mind what you just said on the phone that you cannot hear from me overnight. The second question on leverage is given that we have a new divisional stretch, we can't really, you know, look back at history to to try to set them up over to an average. I was wondering if you could talk a little bit about the areas where you would do a q 1 offset where it was higher than what you would hope. Maybe it was banked in line.
And in particular, some comments on items, materials would be helpful given that, you know, the same drop was disabled and the same drop, which is a bit surprising. That's that's the first question on the beverage. And the second question is completely on PMMA. We're hearing a lot of templos on between demand, on, you know, work from home, but also protective measures in retail environment, which is helpful to MMA demand. Against that, obviously, that's Escoffier in autos.
I was wondering if you could tell us how you think about those, you know, you get bad budgeting factors for demand for team and a. Is it just a a small story, or should we actually execute the energy man to be resilient?
Okay. I would say limited in July. It's quite limited, but we should be able to discuss this. This is your longitude. So which means that we speak the rest the last three, for most of it.
Okay. The 50. Yeah. I talked about the 50 because now we have to resolve compared to 'nineteen. This is the the same problem that I wanted to extend the mechanism.
We are through to the minus 50. But now, so the 96th year, it's, 2,000,000 in Q1 and the rest are being split. Maybe it's a power dose, but, if we re identified semester out. So you should have a weighted average of the 3 quarters, which is more on the last two quarters, but you who will have some already in the in the fuel, in the fuel industry. Okay.
We don't have to that's not do. So your, your question, I would say for for me, but I look at my Jose, there is a good correlation between the sales and EBITDA. Yeah. We have some, utility also. We have some, good margin business, which has been, a part 3.
So maybe in terms of for that mix. It's a little bit longer because we are not on some high margin application. We stop our, I think, to the refinement. And, it's a difficulty with a colleague because it's a it's a little bit different from last 2 months in quarter to quarter. The project made mentioned very quickly, because it depends for me on what is happening in every country.
And which is changing every mode. So maybe in this, we'll check that in this quarter, we will maybe more back even higher for I am on the, not seeing a I am not seeing any products. And and the margin, we are losing 4 points of margin, which is, which is certainly slide the capacity close to 19%. So we bring out to, the process or, workarounds or to participate to the predictions for this sheet. But clearly, our sheet got, we don't have so many, but there are a full, in France and in the US, unfortunately, we see any progress, compared to what we said in Brazil, it's a fast growing business.
So it's a good business to have. It's quite developing. Expectation from our customer. We have been able to read very quickly. But at the end of the day, in terms of, impact of the profitability, it's nice to have that it's not from the exhibition to, offset of the opportunity.
Thank you very much. Thank you so much. Thank you.
Next question from the
is Chan from Redburn. Please
Good morning, everyone. 2 for me. First, put on China. So it's under the various sources out there suggesting a recovery in China. It'd be great to provide the sort of color of what you see in the United States, crisis at the end markets.
It might be too early to to ask for much you
think that is structural versus, I
think, you know, on restocking. And my second one is if it's a strategy, if that's okay. Do you envisage any further nonrecurring assets from the court of credit for pruning or divestment beyond what we've mentioned at due to protect on Ciaomi and COVID captures. I remember that there was a target of divesting 700,000,000 sales. Before this, they were supposed
to have been there. Sir, you can
get your views on that.
So I'll I'll just ask you one on the recovery, Shana, and we should share that sequentially is bigger, between, fab, and not sure. I told her, what is happening in China is that China, it depends on your local export to Europe and US. Even more to US. And, this stuff has been done. So in separate step, I mean, in China, with some close and minus free China is not, revolving anymore.
Really. So we have to see, like, in March, we have to see the level of 7, which is the most minus 10%. And that's what's what's left here on same period, which are not able to differentiate depending on which product line and and markets we are talking about. But, it's more or less minus 10 being the fact that China, depending on export. And these export are impacted by these lowdown initials in the in the US and in, in Europe.
In Asia, you have Shaina, which is not the center of the chairman, which are, recalculated. And you have a substitution which is nearly free of download. So and, it's one of the events also impacting the Q2 on, you know, because we have the strong positions there. I've been trying all the times very good, but then, we reached out for me to, for a few months. With regard to the, I would not come back to the CND today.
Also, this is a proposal. He was very clear on what we want to dispose and I don't see what you mean. Like, as long as it, I think we have enough of our flight, and the strategy was very clear. You know, exactly what we want to dispose of. And we are working on it.
You know, we have not to do stuff and, as a market condition, we have come back to normal
Great.
Thank you. Next question from Jack Haire from UBS. Go ahead.
Good morning. This is Jeff Haire from UBS. I just have two questions. To ask. I I was wondering, could could you split out the, uplift and margins you saw in the back of computer solutions?
He stood out the contribution from, raw materials and the next, please. And then secondly, I couldn't hear the answer properly to first question on the phasing of CapEx beyond this year. So you've taken a $100,000,000 this year. Oh, we'd add that in to the next couple of years back in to the to the to the projections that we've had, before, the deployed the 1Q4 on the 700,000,000 for next year.
No, in fact, issue, we are talking about 15%. 15%, it means 1 more than a 5 So, basically, the answer could be, we did it by 1 month in the app in average, all our traffic. Okay? This is the way you would look at it. So It will not be added to next year.
This one from 5 months, which is for this year or not, but if you look at it on the wrong on December 24. It's nothing. And this would be, with a with a big contract. This means that So we're not it will not be added up next year or the year after, which means that we are the the world. It's not a year.
So what I think is delayed by 1 month and last, which is what we expect to offer. Okay. So it's more to do that, and you will not get, I did that next year on the full year. It should be there, which is now on the structure. Is that clear on this part?
From the first quarter, of the price because we do the pricing versus raw material, cannot say we're getting me, but, it's a continuing see of, what we got in the in the first quarter. The second item is more an element of continuity, but based on what, you I think you referred to, which is this big drop in the old price. This is what I'm trying to explain, before, just to be a bit more patient And because of the time, it, it takes to go from your price to the raw material result, but I did have then can it go and then do a stop in the. And, normally, you have the the area which is that's so far from 6
Just to confirm then the 130 basis point increase in EBITDA Margin Adhesolutions. That one's all a combination of cost reduction and mix.
Interest reduction. Okay. Thank you. And the raw material benefits we got because it was done. It was more combination of pricing and raw material is a continuity of what we did last year on-site.
Okay? If you look at and the margin development of the civil semester. In fact, the continuity of the first, quarter. Okay?
Thank you.
From Latruth Bank of America. Go ahead.
Hey. Good morning, everyone. A couple
of follow-up on some questions that were asked earlier in the call. The fur the first one's around fire chemicals.
I just wondered if you could
be a little bit more granular about the different applications for that product, a sense of how much is neutral versus the fuel desulfurization and the and the polymer agents and and how those latter businesses are doing in this sort of environment. And then the second question is is on the strategy execution. I think earlier, you said you are working on it. I'm just wondering if elaborate what exactly that means. Does that involve legal separation, or actively talking potential parties?
Thank you.
With regard to telco chemicals, it's about fifty-fifty between nutrition and what is refinery and petrochemical and as well for angasanin application. Early nutrition is the leading web of, results. I would say on it. Oregon has been, but when it's not. It's not.
It's more refineries. Okay. It's got to the wrong it's a very efficient application. And we have plenty of issues also improving and nutrition. Which are not the typical, because I don't mean to, type of application.
Over one, it has been a great for Lydia to the first quarter. There is a little bit of, obviously, but, compared to what we see about other kind of market is still okay. But the big driver all the time being is really, nutrition. And over the whole time, he's, as a moving of, resilience. Was one month ago.
And then I mentioned 90% of, opinion, she's really focusing on managing the civil quarter. That change the COVID, and it's really a little bit of complexity, which, as you can imagine, for a company like this, it takes really time. For possibilities. I'm still not working on it, but, to have contacts just today. Contact that we have come and I believe that even before the capital I think we'll be worried about that.
After that, let's do a couple of parts of we have the refocus of managing that combines the grid. And so it's not the most we have since we accelerate, but my message is that while there is no discontinuity impact, we also are working on it going to ensure the possibilities but, again, the chemical just belongs to them. And if I can just ask for more.
Just around the high performance polymers, you you've mentioned repeatedly on this call also exposure, which we totally understandable. But are there any other significant end markets or products we should think about as being important putting in a second half recovery in volumes in the in the polymer business.
Of the of the current situation. You are, go through the rest of post mortation. We don't have to mention it too often, but it's, it's a fact for what is best and truck is suffering nearly as a tool. You have any colleagues. You have already, I would say, down the street, which are suffering Uh-huh.
That we look more of the regular parts, the very regular recovery, just about half of the year. So clearly, I would not be focusing on the electronic some, because it's very need to to consider, like, to try the wallets today. I think it's good to normalize because I don't know, other market. There is only application shared up with regard to the credit report I was mentioning of of the month. That's also medical.
There are plenty of possibilities which are, one nine one of just incremental, but when you present to Visa, it will be proper. So I'm gonna some, some improvement packaging. So we continue to be stronger. All over the years. So we have application that is even considering advanced material.
It could be, it's, it could be not one market construction, it. Chat, at which level. So this is a very quantitative story for that. And, recognition because there is still a consultancy, but if you think about it, it could be there.
Thanks very much, and that's a lucky one.
Okay. Thank you. Thank you. Next question from
Andrea thing first. Please go ahead.
Yeah, actually, thank you
for the opportunity to ask us. And I have 3. I'd like to come back to the session before.
If you look on April and you
sent your states were down by 70% and excluding scope 20%. I'm gonna make difference between your business line, or is that all over the place in this magnitude? And secondly, you heard that our automotive restarted production. Is there anything in the incoming orders that you see, pick the uploads that are still very, very slow? And maybe one word on Ahmed in the current environment, how is that business doing in this change environment?
I'm not, I'm not I'm not receiving to nutrition and mining is, it's quite crazy. Yeah. It's it's good to hear because, people think that's a long ago and, we're busy because it's, one of the mistakes which are really yet. And what are you thinking? So to come back to your to your point, the the variation between, you see that when you do my concrete, by any basket, the picture of Larry, not only is very different, depending on which country, which market you're talking about, but the picture is changing from week to week post to month.
For example, it is, which has been quite tricky to get in the first quarter. We've talked already at this couple of months after significant issues because construction that is linked to lockdown measures. And when it's locked down the shop with, Ethan, then we pick up quite quickly. So it's really very urban institution. It's very difficult to, to give you, the, the guidance by market, by it's pretty big.
And sometimes it's just pretty commercial. You do you take some was quite okay for everybody, suddenly, it was up down. Philippines was assumed to start again and see what for, I believe, in the remaining. So that is what we did. And so, this is not your Google picture.
It's also a bit more accurate than the way you start to dig in because I can tell you things which will be, wrong tomorrow. So far, Mister Gilberto, we have not been so wrong, even we don't share everything with you because I mean, it's not anymore to commit to things that we will check, tomorrow. I think it's important for us to share this information on April, saying that, as I said, in April, we're around by 17%. She made a 20% at constant school as you need to have information which shows value for you. We bring up to, again, to this, to make sure it should be the same kind of, magnitude.
But, again, it's not a guidance for me because I receive a consultancy and sometimes there are political uncertainties. And our feeling, but to get a Safin, which is, not together. It's Safin, is, with the the policy lifting as a low down in the phone call, please. June should start to be a little bit better. This is what we see.
We just set out so much better. We should show some improvement. But, again, there are a lot of speculation about feeling that this is what we wanted to share with you, but we don't want to be the side because, there are plenty of elements which know we've got a material on the new or any company just how, to sign in every component, with the students of my kids, including my own country. When I see in France, you you you listen to, politics. They are still a lot of questions.
So we try to give you some of the work on which you can work. And, we, in, in this scenario, we're going to be more, more specific. Okay?
Okay. Thanks.
And she's not gonna talk again, or is that, she's still saying that she's learning on the capital market billing and we need to get, you know, we are beyond the difficulties of the of the context, which will come to the certainty of our capability to go through the see some ability to remote. Right? It will be time to reboot. We have to do that. Okay.
Thank you. Yes. We have one last question from.
Hi. Good morning. Good afternoon, and thanks for taking my question. Terry, just one for you. There were reports in February that claimed our team affected the interest of activist that's valued, with our team at tech tips, free inspection to review its portfolio.
I'm just wondering, in light of a little bit of what you said about the strategy, Could you give an update to where the overall M and A can stand right now and whether that strategy is conducted by coronavirus
also operation fee. We have this strategy, which has been very clear, which has been presented today, everything is there. And so our strategy is right here. So once we move, I think we cannot be, most see around that is exactly what we want to do. It's, it's a roadmap for 20, 2024.
It's very consistent with, what we have been saying, after sir, so many of the questions that you guys are asking us. So I think just look at it, really, if you have questions, this can be the market. This will be, something you could also know, and you said that I see increased. It'll be much a very wet, to return and the script is very clear. So you said in the script, everything is there.
You may be asking what we want to do, and we go to the support, about this, the road map. And I think I should at all. We have very interliners, on this road map.
Okay. Thanks.
Okay. So thank you very much for all your questions. It's quite quite a really cool, but we appreciate it. All the different questions. I wish you with her in the in the context, and, we've got consent.
We've continued to work out. Thank you.
Thank you. Ladies and gentlemen, this concludes this conference call. Thank you for your participation.
You may now disconnect your lines.