Earnings Call: Q2 2018

Aug 16, 2018

Ladies and gentlemen, thank you for standing by. I'm Stuart, your Chorus Call operator. Welcome and thank you for joining the Weenberger Conference Call for the first half year results of 2018. Throughout today's recorded presentation, all participants will be in a listen only mode. The presentation will be I would now like to turn the conference over to Mr. Klaus Ofner, Head of Investor Relations. Please go ahead. Thank you, operator. Ladies and gentlemen, welcome also from our side to the Vina Bagger Earnings Call on Half Year Results 2018. Vina Bagger Representatives on today's call are Jaime Schoig, CEO and Billy Van Reed, CFO. Mr. Schoig would open the call with a summary of the key developments of the 1st 6 months our strategic priorities as well as I'll now hand over to Mr. Shoj for the executive summary. Thank you, Claus. And, from the whole Vina barrier team, a warm well to this conference call and happy afternoon from Vienna. I'm glad to report on a very strong first half year for our group. We had a convincing performance as far as the numbers are concerned, a strong 5% rise in turnover, which comes from organic growth in the 1st 6 months, which resulted also in an 18% growth in EBITDA to EUR 214,000,000 and also on the net profit side, even bigger extent of growth which relates to 28 percent to more or less of 1,000,000 of net result in the first half year. So in all, in a nutshell, in all of our, divisions, we have seen a strong improvement of organic performance And therefore, we believe and we see that happening that we are fully on track on our goal for like for like KBITDA grows to in the range of EUR 450,000,000 to EUR 470,000,000 by year end. So we confirm our year's guidance as far as EBITDA is concerned. It is also important that we know that all the profitability enhancements initiative that we have been, performing and putting in place with respect to our industrial portfolio gaining full effect and momentum that we have done also in the 1st 6 months already a set of value creating acquisitions. And I will sort of elaborate on this a little bit later and that all the restructuring measures that we have indicated at the beginning of this year, begin invading 1,000,000 in February. And then obviously after the first quarter, that all of these measures, be it in Germany, be it in Austria, be it France, to be, to summarize very quickly. The most important ones are fully on track and are implemented. And then on top of it, we are continuing and beefing up our process of asset sales around the group. So here also, we are in good shape. As such, when we see the overall development, the 3 pillars of our strategy, meaning organic growth with the 5 percent in the first half of the year, you see the strong track record of Vina Burger being able to realize this. And by the way, ladies and gentlemen, is 5 percent growth is not coming from the market only and supported by positive market trends because we operate in markets where there is stability for a slight decline. So as such, we show with our strategy and our strong commitment renovation and to strong performance in the market that we are able to outgrow them and to have this organic growth, strong organic growth in all of our markets. The second one is basically the main DNA of our growth. Main because we focus on it in all the different business areas. It's still operational excellence. Where we have obviously produced the improvements and have been able to do so over the last years in order to make our business more competitive more effective and more efficient. And here, obviously, we will even improve and increase our efforts in the 2 years to come order to bring the VINA Burger business to a different level and even a more competitive one with respect to other players in the industry. And the third one is obviously the growth that we see, the potential for our company to grow in field that, link to our businesses to our platforms where we can add on different products and different sort of business in a way where we create obviously very substantial synergies and secondly, improve the performance of these businesses due to the course of integration and add on to our ongoing businesses. So in this slide, we have, as we have indicated also after the first quarter of this year, reviewed very carefully all measures that we have been taking in our businesses. We respect to the operational excellence. We have used external support for that, different sort of external supports because we obviously have done and undergone a number of improvement efforts in different areas of our business. And the good news that I can give to you is that all of these measures and they have been carefully reviewed by external experts. They have been viewed as very positive. The right ones for our business and the ones that bring us forward and have the right competitive edge, maybe on the cost side, but also on the strategy side, for example, in the field of digitalization of the business or on further innovation front. So again, a very positive news that management today is focusing on the right areas of improvement and they have given us the comfort that we are moving in the right direction and basically have indicated 2 major things to us. We should even give it more emphasis, emphasis in the sense of people resources, human resources to put the necessary structure on top of this improvement and this efforts to improve our business and also provide, especially when we talk about manufacturing to provide the necessary CapEx in order to realize these improvements. And by doing so, it was the clear determination of all the people working intensively in the last weeks on this project. That the group as such can bring up the potential on the EBITDA upfront to $120,000,000 by the end of 2020. So actually from the originally, if you look what we have been communicating so far to you, 1,000,000 of EBITDA potential to increase this CHF 45,000,000 to CHF 120,000,000 by the end of, 2020. So an impressive and substantial improvement of our efforts that we will undergo in the next 24 months. We are confident, and we obviously have gained this confidence during only the last month, but during the last years that we are able to realize it because we have proven so as a track record in the past. And the measures that we have undertaken in the last years show the results and we are therefore increasingly confident that we will be able to realize such savings coming forward. Obviously, this savings potential of 1,000,000 is linked to the cost structure of 2017. So the basis, as a cost improvement is the structure to 2017. And therefore, we will be able to realize these cost improvements in already this year. And in the next two team on top of it, not only to steer it, not only to realize it, but to track it and report on it. So we'll have a regular report coming through, because we believe as a company of Inaburger that it is important not only to set targets, but to achieve them. And obviously, we'll link it also to the remuneration in management as far as the goals are concerned. So again, a very important step forward in the operational improvements for the company in effect. Secondly, we have identified and we are working on a very attractive pipeline of deals of M And A activity for growth. Growth in the fields that we are active in and also fields that are linked to our business where we see obviously that we can improve our position in core markets. That we can create on top of our existing strong platforms, additional value by this acquisition and where we always will and are committed to strong discipline. We have shown so in the first half of this year by acquiring for example, a pipe specialist in Norway that adds to our existing portfolio, a portfolio of products with insulated pipes that we can sell through our structures, not only Norway, by the way, but also in Sweden and other countries. So again, a very good example for value creation and margin improvement as far as products are concerned in this region. The next example, we have bought a family business in the Netherlands, 2 production science in facing bricks, integrating it very quickly fits perfectly in our core culture. And by the way, as the markets are strong, strong in the Netherlands, strong also in the UK, we have created additional capacity in order to satisfy this increasing demand. So quick integration, faster, production improvements and obviously cost cutting in the existing units and also full utilization of the plant. So an ideal example for quicker execution on the M and A front. And last but not least, you have seen also an example of portfolio Optimisation moving out of the Austrian activities of Semrock, the concrete paper producer, where we didn't see the necessary growth where we have not been able to realize the improvements in margins that we had expected. So we have successfully sold this business and have now sort of invested in the growing Eastern European with substantial substantial margin improvement. Coming from obviously investments in the Hungarian market, the Croatian market and also by the takeover of smaller producer of crude pipes in Romania and area where we wanted to grow. So good examples for this execution of, of, I would call it margin driven and margin improvement M and A strategy that we put in place. This year, we still want to commit is CHF 200,000,000 for external growth. So this is the growth potential that we see for this year and money that we have allocated for M and A activity for Vina Becker. When we talk about the industrial portfolio. We talk about review and we have indicated to you that we will in the first half of this year detail review our industrial portfolio. We did so, and we have seen that out of this portfolio, we want to dispose of certain assets and certain activities that are obviously not producing the returns and will not produce the returns that we expect from industrial activities that we don't see fit strategically speaking. And as far as the market position is the competitive landscape is concerned. And therefore, we want to exit this business. We have clearly earmarked those. We have defined those and we will sort of in due time and course, sell those businesses. Please and I strongly would ask you to actually rely on us that we do it in the right way and to the right moment and that we don't sort of communicate right now which assets these might be. But together with assets that are non operational, we see a potential of 150,000,000 in the time spent from now till 2020 in order to realize this sort of disposal program, so 150,000,000 on proceeds will come towards us that we can then reinvest in our business on top of the normal ongoing growth CapEx that proceed for the business. So if we look at 2017 2018, the first half, you see a strong improvement in margins, an improvement that is showing that Vanaburger has gained momentum, momentum in growth, momentum also in margin improvement and the 140 basis points, meaning the increase from about 12% margin to 13 nearly a 13.5 is a strong signal that we are not sitting there and waiting for improvements, but actually working hard in gaining these improvements. And we will do so further as we speak. So all in all, you have seen us moving from the 2017, SEK 415,000,000 EBITDA to a guided range of SEK 450,000,000 to SEK 470,000,000 year. And you will see us move further in the next years because as we communicate to you, we see this potential from our side independent from any market development of 1,000,000 of EBITDA to come our way doing the necessary improvements that we have identified. So a strong signal again from our side that we are moving towards our midterm target of $600,000,000 as a company. In a nutshell, Vinaberg is operating in a a European market infrastructure wise and residential wise that can be characterized as a strong growth market in Central Eastern, especially Eastern Europe and Western Europe being more stable environment. So this is to be seen on the market perspective in two words, and this will continue for the rest of the year. Some of you will ask us questions about the UK. We feel very confident with respect to the UK. Again, this year, in the 1st 6 months, we have gained momentum in the UK. We have gained market shares. Pricing is good and strong. And we obviously, as a producer of bricks, we call us European producer, not only UK producer, can satisfy this increasing demand on in the UK with products that come from the UK and where we have increased already capacity, which obviously distinguishes us a little bit to our competition because Winneberger invests into the future sustainable and long term vision. So we actually don't sit and wait on maintenance CapEx or we actually go proactively in and do this so that we are ready for all sorts of developments. And here also from the continent side, we have created capacity in the very important product segment of soft mud to have the necessary products ready for the UK. The same is in Central Eastern Europe, where we have seen obviously a strong upward trade in the need and requirement for clay blocks for construction. Here we have must fold our capacity. We have increased our capacity and are also ready to satisfy the demand level. So again, here, strong commitment for from Wienaburger sites to the growth in the different areas of the business. All in all, for this year, we confirm the guidance on the EBITDA side. We see the normal CapEx level moving in the range of CHF 160,000,000 for the overall business, for Winnebarger and the growth CapEx in the range of about SEK 200,000,000. So in a nutshell, I think I have summarized the most important events And, I think it's now about time to take your questions. Thank you very much for your attention. Ladies and gentlemen, for questions. Questions. The first question is from the Good afternoon gentlemen. Thanks for taking my question. I'll have 3. I'll probably go one by one. So my first one is on your full year 2018 like for like EBITDA guidance. Which given the strong run-in H1 implies only an 8% like for like growth in H2, which might seem a bit conservative given the Eastern European pricing and the Easter base effect in Belgium. So I wanted to get an understanding of maybe what are the regions or products where you don't still have the utmost visibility on or where there could be a risk? And I guess seeing from the outlook that France has become a bit worse, are there any other markets or product where you're a bit there's been more of a risk profile? Thank you. Eve, at this stage, I think the only thing I confirm that obviously on the French market, we see, some sort of decline in activity after the measures of the French government that have been put in place on the real estate side. And therefore, we see a certain decline in activity, yes? On the French market. On the other hand, I just want to draw your attention to the fact that what we communicated also at the beginning of the year. That the renovation market in especially Western Europe is soft. Obviously, there's less government initiatives with respect to encouragement of refurbishing and investment in sort of energy efficiency in old housing stuff. And on the other hand, energy prices are low at this stage so that people have not been necessary incentive to invest. So these two things, I think, are important to note when you talk about the businesses such. Okay, thanks. My second question is on your fast forward 2020 program. When you mentioned that the EBITDA potential is increased from 1000000 to 100 20,000,000, yet your medium term target of 600,000,000 EBITDA by 2020 is unchanged. So I presume that your organic growth expectations have been revised downwards. So could you maybe run us through the the medium term view and also maybe the different components that you have identified in this program you haven't identified before and why? Thank you. 1st of all, let me draw your attention and you rightly did so that we said that we are reviewing all our initiatives with respect to their potential and obviously to the fact that they can be realized. And again, I think here we have the strong feedback, not only from us, but also from outside, that these measures are well underway, that they will produce actually more than the original potential because we can go faster, quicker, and allocate also resources. By doing so, we will allocate about between 1,000,001,000,000 of CapEx in the next 2 years in order to achieve them. So there will be CapEx on top of it, we are allocated to realize those $120,000,000 of potential in additional EBITDA. So there are new efforts that we came up with in the last couple of weeks months. So again, here is a strong focus from our side to realize these improvements in EBITDA by our own. Let's say it in this way. And when you talk about the midterm target, if we have not revisited at this stage because we said important to let you know that we are currently undergoing these efforts. We will have a Capital Market Day a little later this year where we'll certainly sort of focus on strategy and especially on the midterm in order to update you on that because let me be frank on it. I mean, this $600,000,000 is now obviously when you look at it from the perspective to performance this year adding this EBITDA we are moving closer. And I think what we are showing to you at this stage is only we are closing the gap by our own efforts, I think that's the strong message from Mavenaburger's side. We were not talking about M and A. We were not talking about organic growth at this stage. We just show you that Werner Burger is able to achieve such a midterm target already by its own efforts and focusing on its own performance. Okay. Thank you. And finally, my last one is on your strategy in the Pipe and Paper division, where your recent acquisitions suggest you're increasing more and more your exposure to higher value products. Has your appreciation of the more commoditized industries changed in the last few years? And would you be willing to cultivate the industry? Thank you. I do think, from our perspective, we are well advised to move in the direct that we are currently moving in in the sense that we up trade our product assortment and move out gradually from the commodity side of the infrastructure business. And therefore, focus ourselves investment wise in M and As wise on this part of the business. So you want to see us as somebody who is just consolidating capacity on the infrastructure side. Thank you very much. The next question is from the line of Matias Fifeenberger from DB. Please go ahead. Yes, good afternoon. Maybe a couple of follow ons on this $600,000,000 question and the pillars for it. You gave us the numbers for the 3 pillars in the past. And now, basically, it's a, $80,000,000 delta from the OpEx that's really stepping up your a game, I guess. But also you kind of stripped out the FX impact from going to a like for like guidance. So it's a delta of 1,000,000. And the guidance was more than 600. It's more than 600. Now is this like, you have been maybe slightly above 600 before and you are now maybe closer to 700, but not yet there. So how can we see this? I mean, also the M and A proportion is, I guess, now time has passed and you have realized this, but overall, it's more than the EUR 50,000,000 that you quantified in the past. So it's really probably, I don't know, SEK 120,000,000 delta and still you haven't changed the overall target, maybe just some color there. And related to the M and A, we appreciate your speeding up and you've also quantified the multiples, for instance, last year, so we can be showed you're not spending, too much six times, I guess. But can we also be assured that you're not buying kind of earnings at the cycle's higher peak earnings. Can you maybe, I'd like to totally shed some color of what the integration opportunities from some of these acquisitions? Sure. I think on your second questions, we, as management and Veena Burger, in recent years, has certainly not overspent. You have seen the multiples that we have paid in recent years with respect to businesses that we have bought and also successfully integrated And again, when we look at this year's performance, they are all in line with this very strict and very, very sort of to the point management on financial criteria. And I can only say one thing, we will stick to this policy. And implement it. If we say that there's enough interesting opportunities out there, then it means that we are working on those. And if it if we see that there's a potential out there for us, then we will grab it because it's the right moment to do so. We don't see that in these markets that we operate, especially when it comes to this product that we are over the cycle or whatsoever. We are confident that we can realize growth in these areas and that's why we do this. So allocating these resources means that we have a sustainable growth in these areas and we want to grow our business. But I think it's a well orchestrated move on the financial side with strict criteria on one end and on the other hand strategically moving in the right direction as far as our portfolio is concerned. On your first question, I will hand over to Billy because I think I have already answered this in a way to Eve when I said that we have given a strong indication what we are capable of doing, but really will add to that. Nichilu, if you read carefully what we have written as well, we said we've now added things like commercial excellence into the whole program. Which if you appreciate when we started with our $600,000,000, guidance basically we said, okay, it's going to come from the market. It's going to come from market growth. Now we are much more in a position to pinpoint and say, okay, which type of action we're going to take and how we can improve the margins that we are going to make. And that's a part of the whole business because the time horizon is short as well. We'll do other things in logistics. We've also highlighted. So we will be putting more bone to, flesh to the bone. So to say on the next time when we meet each other, at the end of September, beginning of October, probably. And there we then will go into more detail on the thing. Markets are what they are. They are growing in certain bits and pieces as you appreciate. Also, last year, nobody had foreseen what was up in the French market. And the most important message is we are able to do things ourselves and we do not have to wait for a recovery in the market. And that was also initially our view on where the company is going. And that remains holding. And whether that leads us to 600 plus, we always said it's going to be above 600, but to quantify what markets will be off 2020. I think it's, it's not the correct way. Yeah. Okay. Fair enough. Very helpful. Many thanks. Next question is from the line of Stephan TruBridge from Kepler Cheuvreux. Please go ahead. Yes, good afternoon gentlemen. Thanks for taking my questions. We were just in fast forward 2020, and, I would like to stick with that briefly. Could you share with us, because you said it was, this incremental EBITDA potential was found with the help of external support after the ATM, you said, that there is basically a new, external support source coming in. Can you share with us? I mean, it was a very short period in time now a couple of weeks. How much they contributed to this incremental the finding. This would be the first question. Then secondly, I would be interested in IFRS 6 seen. I mean, obviously, it's just around the corner. Could you update us, as well on that, what the potential EBITDA impact would be and also, on, the net debt side, because if I'm not mistaken, I think, on EBITDA, this will also add quite a chunk. So then we could easily get to the 700,000,000 alone with, let's say, the EBITDA, uplift you get from fast forward plus IFRS 6 18. And then, the 3rd question I would be interested in would be in the pipes and pavers division now in the first half of the year. Particularly looking into Q2, in Eastern Europe, the margins developed quite nicely, but also in Western Europe, I've seen a margin improvement. Could you update us what have been the drivers here? And maybe on a negative note in the Western European clay division, obviously margins contracted. Volumes have been also done what are you planning to do here? What are the drivers? Thanks. Well, thank you for your questions there. We'll try to deal with them one after the other. I might start with your reference to certain events with respect to sort of reviewing our, our sort of efforts. I clearly, and I'm, I want to state that I clearly said it at the beginning of this year in the conference call and after the first quarter also that we are undergoing a strategic review process on the portfolio and also on the efforts that we undertake in order to determine First of all, are we going in the right direction? Are we sort of moving fast enough and are there is there more potential to be grabbed as we speak? And it is to be seen independently from an AGM. It's something that we are anyway doing and continuously doing because we are a company that monitors very carefully its development and we obviously see us in a competitive lens Cape. And therefore, we want to be not in the pack, but the leader of the pack when it comes to the performance in cost and savings and potential. And by the way, we want to be not only there for a week, or a month, but on a sustainable level and obviously show the performance on the long run. And that's why it's so important that we do this thoroughly and not only over 2 or 3 weeks, and it took us obviously the first half of the year in order to review everything. And Billy has mentioned that it's not only focus it on 1 or 2 aspects. It's focus on the whole business, from purchasing to the perm manufacturing to the sales admin to the digitalization process. So a multitude of efforts that we are currently undergoing and here to set clear targets for the company come up also with a target. I think that's the major and most important message that we have given to you. I also tried to state at the beginning of my introductory statement that the consultants, not the only one, the consultants clearly gave us the feedback that the efforts that we were putting in place in different parts of the business are the right ones, have the right levers and create the right potential. And the important message was obviously to intensify these efforts and put additional resources in CapEx and in manpower into these efforts. And therefore, we come up with this increased potential of 1,000,000. What consultants do, they give you frameworks. They don't give you solutions. They give you ways of thinking and way of approaching that. That's also why we use various consultants at various stages, and they seem to confirm whatever they're saying. Secondly, the the measures come from the people themselves because they have to be convinced that they can do it. Otherwise, it would not communicate it. So it is not how much it comes from external, how much comes from internal. This is the figures we put forward and the figures we we commit to. Basically, that's on the consulting side. Your next question on EFS, we, of course, now looking into this, you can already we already do similar adjustments for rating purposes. And roughly, at this moment, but this is our very preliminary figures that we do. If we would apply IFRS, our debt position would be increased by something like 200,000,000, and we would have an additional EBITDA of $45,000,000. Clearly, the $45,000,000 is not factored into whatever we communicated at this moment. And then your question on margin improvement, first of all, if you look at the the margin in Western Europe, you have to take into account that we in CBME, we have some restructuring costs in there in Germany. So they're negative 1 offs. If we in fact, if we strip those out, I see an improvement in the March very clearly. So basically in every single, business unit or region that we are active with every product, we have seen margin improvements over the last half year, and that is a very strong message. And that comes out a combination price increases, which we have put through everywhere, but also efficiency improvement. So that's the main drivers of the general margin enhancements that we have seen. And last but not least, let me add something to 2020. Ladies and gentlemen, I think it's important to note that from our perspective, we give you and try to give you a rather accurate year guidance at the beginning of every year in order to sort of measure us. And we just wanted also to say clearly when we put this package together, this 24 months package that, with respect to our performance, we see potential for further EBITDA growth in the years to come. And obviously, this is linked with the 2020 sort of midterm that we have determined years back, by the way. So let's say 2 things. First of all, I do hope sincerely that the world does land in 2020 and obviously all of it continues. And, Bina Bagger will go beyond 2020. That's, I think, our sincere wish to do so. And that obviously, we don't limit ourselves at only one number that is the million number because, obviously, I think we all are here to sort of improve and get beyond that. And I think we will make every effort as you can see from a company's perspective to not sort of be shy of such a number. And if the right circumstances are there, be even above those. Yes. So this is, I think, from a clear perspective from my side. And as I said also, mean, from we have, we already indicated at the later stage this year when we come together for a sort of strategic updatescapitalmarket. We will sort of go in more detail with you on this, probably also on a targeted above or beyond 2020 and not only 2020. Okay, fair enough. So cut a long story, short you would feel comfortable if consensus moves for 2020 to plus $600,000,000 EBITDA or at $600,000,000 EBITDA ignoring IFRS 16 We put this I think you have all the elements there that gives you the very comfortable or not as you wish at this stage. Okay. Fair enough. And just the last follow-up question on the 5 percent growth we have seen in H1 'eighteen versus 2017. Usually you had provided us with a revenue bridge. Could you share with us? Maybe how much of that has been the volume price, ethics, and a consolidation effect? Thank you. The majority of the 5% is actually price increases, because you have negative where you guys step out the consolidation effects and the, effects, which weigh out the other more or less, then I have a price increase and a little bit of volume increase in the holding. Okay. Thank you very much. Next question comes from the line of Marcus Ramos from Rcb. Please go ahead. You mentioned that this $120,000,000 savings target requires $40,000,000 to $50,000,000 of CapEx. Could you also elaborate on the associated OpEx requirements? We will not have an increase in the OpEx requirements for this program, specifically in 2018, in the sense of restructuring costs, so one offs But as Jaime mentioned also in his in his comments to the whole thing, we are adding headcounts to the group. Definitely, if you want to realize certain things, you have to bring additional people on the ground which then have to realize additional improvements. So we will be that's again, that's something we will go through and then give you a more precise indication of where we go to, I would say myself from OpEx, it will only a small bit. It's not a big hit. Okay. Interesting. Because on recent cost savings that was always always came along with quite some restructuring costs. Okay. Just one one thing. I think we are not talking here. We are not talking about the same. Because efficiency enhancement programs and operational excellence programs are not about cost savings. I think we have always been very clear on that when we do cost savings, meaning cutting of capacity or adjusting, then we are talking really of restructuring costs, whereas when we are talking here about improving the business as such, then it is about additional potential. Okay, clear. May I also ask regarding the buyback, which is almost completed, do you consider stepping up this program? You're marking another millions, a couple of millions for buybacks after this 1% has been bought back think we clearly communicated this 1%. And I think you will appreciate if I say at this stage, we have nothing to communicate. Thank The next question is from the line of Florence O'Donoughue from Davy. Thank you. Just a couple from me. 1, just on costs, would appreciate an update on some of your main costs, particularly energy and in the case of pipes, maybe resins. Second question is, pipes as well. I know you have a Turkish business there just looking for some confirmation on the relative size of your interest in Turkey. And then finally, just in terms of Eastern Europe, obviously, which in all areas is going very strong at the moment, Is there any parts of the business in Eastern Europe or any regions where you're becoming capacity constrained, or do you still have room to grow the business, with the existing infrastructure? Thank you. I will ask before really jump in on the 2 first ones. On the Eastern European side, you see probably in certain regions. I mean, obviously, you know that our product cannot travel for enormous distances. But I think at this stage, we feel comfortable with the setting that we have. As I said, we will do some debottlenecking, left and right and can justify or can satisfy the demand level in the local market. I mean, it goes without saying if the pace of growth continues, we might have some shortages in certain areas. We'll try to manage them, but it is not the most important concern at this stage. We've also the multi bolt in the wall, everything that we still have mold in, in Hungary. So we still have to bring that capacity into the market and that as a possibility. To come to your other questions, energy, we have no headwinds, because we covered forward. So we'll be relatively flat on this year for the energy price resin, fluctuations are very reasonable. So, that helps us as well on the prices price increases we've put into the market at the end of last year and the beginning of this year. So they come full into the market. To reassure you about Turkey. Turkey is a, 1st of all, it is a very profitable market. If I look at it in Turkish lira, because it's in in infrastructure pipes and in, irrigation. So it's a good business in Turkey, one of the top names in Turkish market and it represents less than 1.5% of our sales. It's just unfortunate that the lira is, is fluctuating as much as it is at this moment, but maybe we'll look at it whether it's an opportunity to produce over there and then bring it to the rest of euro environment. So that's for as far as it's for Turkey. That's brilliant. Thanks, Willie. Thanks, Alan. Next question is from the line of Miguel Borrega from UBS. Please go ahead. Hi, good afternoon, everyone. I just got the question on the U. S. Obviously, you're seeing substantial organic growth here over the last couple of quarters. Can you give us maybe a little bit more color on the pricing environment Have you seen any substantial changes since the borrower for Thera merger? And maybe a question linked to that Since you're now acquiring new plants, could you tell us about your aspirations for the U. S. Market overall? Would you can see the larger acquisitions to consider at the market or you're only interested in smaller deals or maybe, waiting for other players to consolidate? Thank you. Thank you very much. But it's a very interesting and helpful question. I think we always said that our North American unit is a strong one that we have created a very efficient platform for growth there and as we have pointed out, we have seen strong growth, not only in the last half year, but in the last sort of years there. And we are moving in the right direction. We also see that by doing an acquisition like we did last year taking over at produce in the mid SIPPI area. We grew our business not only regionally, but also in the areas where we are well already active. So adding on such family business on our platform proved to be very successful. EBITDA enhancement was there profitability went up as well. So we will clearly look at these opportunities and we believe and there are obviously interesting opportunities out there for us to grow our business in North America. And we'll pursue this because demographically speaking, this is a market that is set for growth and the overall economic environment is also set in the right direction. So you will see us again under the circumstances that I've mentioned earlier, meaning a strong financial commitment in order to gain here necessary payback. And to pay low multiples substantially lower than, obviously, contemplated and paid in the U. S. In other construction and in material arenas. So here, again, a very disciplined approach, yes, then we will grow our business and we believe we have a very strong form and a very solid one for such growth. And there are very some very interesting opportunities out there for us to grow it. Thank you very much. The line of Sara Vanna Bala from Berenberg. Please go ahead. Just one left for me. Regarding the $120,000,000 EBITDA improvement, do you have any kind of visibility savings each year. And it seems that some of this has already been implemented, out of the GBP 128,000,000. So perhaps if this can be side as well, please? Thanks. Yes. I think if you take this 120,000,000 and we pointed out that it is linked to the base of 2017, 2017. I think as a fair assumption, you can take into consideration the 1,000,000 I included this year. And the rest will then be split over the years to come. And here I we will give you a very clear guidance on this number, but I mean, you can, at your ease, split the number 100 in 2, whatever. 4060. 6040 or 4060. Okay. All right. Thanks. Excuse me, Mr. Ofner, there are no further questions this time. We hope that you will join us again at the latest on November 8th when we released the Q3 results and it was, as for the non today, very likely end of September, early October, there will be the opportunity to meet up again and test your discussions at the Capital Markets Day event for a strategic update. What is left for today is to thank you for your attention. Have a nice day, and goodbye.