Arkema (Euronext:AKE) Q2 2026 Earnings Call

0:01 Good morning. This is the conference operator. Welcome and thank you for joining the Arkema Second Quarter twenty twenty six Results and Outlook Conference Call. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions by pressing star and one at any time.

0:28 At this time, I would like to turn the conference over to Mr. Thierry Le Enaff, Chairman and Chief Executive Officer. Please go ahead, sir. Thank you very much. Good morning, everybody. Welcome to Arkema's Q2 twenty twenty six Results Conference Call. Joining me today are Marie Jose Dansions, our CFO as well as the Investor Relations team. To support this conference call, we have posted a set of slides, which are available on our website. I will first comment the highlights of the quarter before letting Marie Jose go through the financials. And at the end of the presentation, as usual, we'll be available to answer your question. The second quarter was, as you know, marked by the challenging context in The Middle East.

1:17 Oil and raw material prices as well as energy and logistic costs rose sharply as a consequence of the conflicts and global supply chains were partly disrupted. We saw some temporary easing towards the end of the quarter, but following the cease fire, the conflict resumed and raw material prices have moved back up. The market demand environment remained weak overall, in line with previous quarter with no recovery yet in Europe and The U. S. On the other hand, Asia continued to be well oriented, notably Southeast Asia and India, while China domestic growth was more subdued. In this complex environment, Arkema delivered a good second quarter performance with EBITDA rising 7% year on year to three ninety one million euros despite a €10,000,000 currency headwind.

2:19 EBITDA margin reached quite a strong level 16.1%, up 90 basis points year on year. This marks a significant step up and the first positive year on year EBITDA evolution in several quarters. This improvement was driven primarily by the strong performances of our Adhesives and Coating businesses, while High Performance Polymer were broadly stable. As expected and as previously flagged, the disappointment came from performance additives. More fundamentally, this result demonstrates the quality of Arkema's portfolio and reflects the strategic transformation carried out over the years to focus the group on higher value added application and attractive growth markets.

3:12 I would like now to underline the hard work and commitment of our teams who remain fully mobilized to mitigate supply disruptions, both in terms of raw materials availability and input cost inflation, closely working with our suppliers and with our customers. Now looking briefly at the performance of our Specialty Materials segments. Adhesive Solutions posted a strong quarter with EBITDA up 7% year on year. By the way, this was the best quarter ever achieved by Bostik at par with Q2 twenty twenty two. This performance was mainly driven by the segment's continued product mix shift towards higher value added solution and pricing actions to pass through the inflation of raw materials.

4:05 Volumes were indeed broadly stable with strong growth in durable goods markets, particularly aerospace, consumer electronics and industrial assembly. This was partially offset by volumes a bit below expectation in the construction market, in particular in Europe and by packaging, which remained soft. In a still subdued demand environment, EBITDA margin increased to a good level 15.1% highlighting the ongoing efforts of the team to improve the profitability of the segment. Advanced Materials delivered mixed results as you could see in the quarter. High performance polymer gained some momentum benefiting from our new business development, the ramp up of our project and the good growth in batteries, three d printing and electronics.

4:57 Pierm delivered another very strong quarter with EBITDA up 30% in local currency.

5:05 Fluorospecialties were weaker than forecasted but should improve in the second part of the year. All in all, HPP achieved EBITDA on par with last year. On the other end, Performance Additives were significantly down impacted by the Middle East crisis with particularly weak demand in some end market such as refining and fertilizers and also as you know, sulfur cost increase, which was significant. The margin of the Advanced Materials segment remained overall at a solid level, around 19%, which leaves nevertheless space for improvement. Coating Solutions delivered a strong recovery in the quarter. The EBITDA was significantly up from the low base of 2025.

5:54 Our resin and additive business both posted strong results, but I would like to highlight especially the positive dynamic of Sartomer delivering strong volume growth over the quarter, notably in electronics, three d printing and industrial coatings. The segment's performance reflects also the ongoing refocusing of the portfolio towards higher value added application as well as the agile pricing management. As a result, we were very pleased by the segment margin, which reached a high level at 18.5%. As for Primary Materials, as anticipated earnings were driven by the tighter spreads in acrylic, partially offset by the feeding out of all generation refrigerant.

6:43 In Asia, acrylic spreads rapidly declined going back to their previous levels, while in Europe and The U. S. Price have improved more gradually, which only moderately contributed to the earnings growth as the volume environment remains so far subdued. We also continued in Q2 to focus on strict cost discipline and cash allocation. We are at the end of June in line with our target to offset fixed cost inflation over the full year, which would be quite a performance, supported by a number of cost cutting initiatives across the organization. We also tightly control working capital and our CapEx are below the level of last year on track with our annual target.

7:32 As a result, the group was able to generate a good level of recurring cash flow in the quarter close to EUR80 million, which was not a given in the context of rising raw material costs.

7:46 It is also important to continue to implement our long term strategy. From this standpoint, one of our priorities remain to ramp up our major projects, including recently our Polyamide 11 and Rishan clear plant in Sigapur, our new PVDF capacity in The U. S, which has recently started up. We also started the new distillation in La Creeks in our site of Carlin in France, enabling the group to reduce the site's carbon footprint by 20% and its energy consumption by 25%. Altogether, our growth project contributed around €25,000,000 of additional EBITDA in H1 versus last year fully in line with our full year target.

8:37 I will now hand it over to Marie Jose for a more in-depth look at the financials before we discuss the outlook at the end of the presentation. Thank you, Thierry, and good morning, everyone. I'll start with Arkema revenues. At €2,400,000,000 Q2 sales were up 3.2% year on year organically. Volumes came in slightly down 1.8%, due an overall weak demand environment in Europe and in North America and to lower volumes in Performance Additives. The price effect was a positive 5.1% reflecting on one hand the pricing actions implemented by the group across all businesses to compensate the inflation of raw materials and on the other hand, the better market conditions in upstream acrylics.

9:23 Cope effect was a small negative at minus 0.7% corresponding to the divestment of some small plastic additives businesses on the July 1. Lastly, sales were impacted by a still negative 1.2% currency effect reflecting the weakening of the U. S. Dollar against the euro. This effect was more moderate than in the

9:44 first quarter. Quarter two EBITDA came in at €391,000,000 up 7% year on year mostly driven by strong performances in Additive Solutions and in Coating Solutions while advanced materials were down year on year, impacted by the weaker performance of performance additives, while the high performance polymers remained stable. Primary materials were very much supported by the improved spreads in acrylics. Quarter to EBITDA included an unfavorable currency effect of 10,000,000 Euro. Depreciation and amortization stood at 171,000,000 Euro, leading to a recurring EBIT of $220,000,000 Euro, up 11% and the REBIT margin improved to 9%. Non recurring items amounted to €78,000,000 They included €32,000,000 of PPA depreciation and €46,000,000 of one off charges, notably linked to the reorganization of our sites of Jari and Terrebonnet in France

10:45 initiated last year and to ongoing legal proceedings as well as the divestment of some small plastic additives businesses completed recently. Financial expenses stood at minus EUR35 million reflecting mainly the increased cost of our refinanced bonds. Quarter two adjusted net income stood at EUR129 million, which corresponds to EUR1.70 per share. Moving on to cash flow and net debt. Arkema delivered a solid cash flow generation in quarter two. Recurring cash flow stood at EUR78 million reflecting a well controlled working capital. The working capital ratio on annualized sales stood at 15.8%, much improved versus the 17% of last year.

11:33 I take this opportunity to commend the teams who have been able to strictly manage working capital despite rising raw material costs. Overall, the free cash flow delivered by the group in the first half was a solid print, slightly better than last year. Total capital expenditure amounted to EUR117 million in Q2, in line with our guidance of annual CapEx spend of under EUR600 million for the full year 2026. Net debt and hybrid bonds at the end of June amount to EUR3.6 billion including the EUR800 million of hybrid bonds. Our debt remains stable year on year confirming the solidity of our balance sheet in a weak market condition. The net debt to last twelve months EBITDA ratio currently stands at around 2.9 times. I thank you for your attention and we'll now hand it over back to Clery.

12:27 Thank you, Marie Jose. As you can see, despite the challenging context, we could deliver a solid achievement in the second quarter with EBITDA growth year on year. Looking at the first semester, our performance is as we were hoping. But with the first quarter a bit disappointing and the second quarter a bit higher than expected. EBITDA was slightly above last year at constant FX in the first half keeping in mind that H1 was a better half of last year and that the environment became more demanding in the second half of the year as for all chemical companies. As we enter the third quarter, demand trends remain broadly unchanged. The ongoing cost leak in The Middle East continues to limit visibility and raw material cost development and to weigh on the macroeconomic outlook.

13:14 In this context, the teams remain agile, disciplined with a continuous focus on operational excellence, pricing management in order to navigate the current environment. Cash generation and capital allocation as you know remain for Arkema key priorities supported by strict working capital management and a disciplined approach to CapEx. In parallel, we continue to build Arkema for the future and this includes the execution of our major project that you know. So we confirm, as I said before, an additional contribution to the group's EBITDA of around EUR 50,000,000 versus last year for these major projects.

13:57 Based on our H1 achievement and in the current environment, we are confirming our guidance of a slight EBITDA growth at constant exchange rates for 2026. The balance between the two semester would then reflect a traditional level. In H2, our performance should benefit notably from year on year growth in Adhesive Solutions and Coating Solutions. Thank you very much for your attention. And together with Marie Jose, we are now ready to answer your questions. Thank you. This is the conference operator. We will now begin the question and answer session.

14:50 The first question is from Katie Richards with Barclays. Please go ahead. Hi. Good morning. Two questions from me, please. Firstly, you highlighted better dynamics in the high performance polymers division, versus q one. Could you just elaborate, please, on, what is driving this improvement and, whether you have conviction that the business has returned to growth for the remainder of the year, excluding

15:25 the new projects ramp up? And secondly, I would just be interested in your commentary on the regional dynamics. You noted some improvement in North America. Could you elaborate on why you're seeing improvements there, please?

15:45 Okay. Thank you very much for your questions. So with regard to HPP, so drivers are of different nature. Clearly, ramp up of the project is participating, But we see a good growth in now in polyamide. We have, let's say, a big part of the semester where it was still subdued and we started to see during the second quarter the benefit from new business development, particularly on the high performance polymer for battery. Even auto was a bit better than expected.

16:30 And I would say electronics again battery semiconductors. So all these businesses which contribute to this pocket of growth that we have mentioned. Most of the pocket of growth basically are within this HPP. And we should see these dynamics contributing well in the second semester. In HPP, maybe among the different business line, the one which is currently more stable is

17:12 fluorosppecialties. Specialty So in fact, the growth is really coming from the pure polymers, PMPVDF and polyamide. With regards to NA, so I don't know if it was just referring to HPP or for the overall group. I wish you both this is for the overall group. I would say, as I mentioned in the at the beginning of the call, in terms of regional dynamic, we still see NA. So there are some exceptions. For example, iron ore tea, everybody knows, is doing pretty well, but it's not a big market for Arkema. But overall, NA is still disappointing in terms of underlying dynamics. So I think we have some business segments, which are growing quite strongly. But overall, still in the continuity of the previous quarter subdued demand, the same for Europe as we mentioned. So for us, I would say in terms of volume, after that, we can debate about

18:16 the pricing story. But in terms of volume, I would say that really the growth for Arkema is still coming from Asia. In China. But China, as you know, is more driven by the export from China of our customers than the domestic demand itself, which is really not so great. And by the Southeast Asia and India, we are not talking too much about it normally, but we are pleased by the momentum we saw in Q2. So basically, the geographical balance remained more or less the same as it was in the previous quarters. In maybe just to finish on NA and you saw it through the release of the result of the Coatings, the

19:06 dynamics of coating in The U. S. Including Sartomer, but even beyond is better than it was in previous quarters. Great. Thank you. You're welcome. The next question is from Matthew Yates with Bank of America. Please go ahead. Hey. Good morning, everyone. Terry, I'd actually like to pick up on your last point about sarcoma, and maybe to spend a few

19:35 minutes, elaborating on this business that perhaps has gone under the radar a bit historically. From memory, it serves many different end markets. So the growth that you're seeing, is this a function of now ramping up the capacity investments you've made in recent years? And in particular, am I right in thinking that you use UV resins for printed circuit boards? So is this tying into the strong growth we're seeing in semiconductors, etcetera? And finally, it's quite difficult because of the financial restatements that you've made on the coatings business to track performance over the years. But would you agree that Sartoma is a very, and I emphasize the word very, a very margin accretive franchise and that's been really important in explaining that 18% margin that you delivered in the division this quarter? Thank you.

20:31 Thank you. Yes, Matthew, yes, these questions are very valid. And so yes, it's true that Sartomer in fact has grown and it was disappointing in the past two years, particularly last year through a more difficult time. And we were at the same time surprised because we as you know, it's an acquisition that we made a long time ago and we strongly believe in these products which are really accretive and high value. And so we started from the base last year, which was disappointing. And this year, have a strong recovery for different reasons. First, the Asian part, thanks to electronics, to semiconductor, medical also applications, three d is doing quite well.

21:18 Because of The Middle East, but also

21:22 suppression disruption, The U. S. Part, which was more, I would say, on the was more challenging, surprisingly not because we are a leader there, is coming back to far more decent level of profitability. And Europe, we have very strong teams there and they have been able to manage stability even in difficult markets. So Sartomer as a whole was a bright point as you wisely mentioned, but it was not the only one. The Rheology LEDs through Coatex and the coating more traditional coating resins are behaving well. So the 18.5%, we are very pleased about it of the second quarter. It's not the new norm. It's better to take the H1 average with

22:15 bit weak first quarter and a very strong second quarter. But this means that we have the ingredients inside coatings to really to reach when some conditions are aligned quite a good level of results. And I think it's a good message for you and for the market because maybe you had a few questions in the past, which were valid because we saw some unexpected weaknesses. But in fact, we see that as soon as the conditions are a little bit more favorable, we see a strong leverage on the profitability of this business, and we are very pleased about it. And the fact that we separate acrylic, which was the upstream more volatile back to primary materials and the coating solution itself, which is more the downstream, give a better understanding of transparency of the profitability.

23:13 So clearly, it worked on this second quarter. Thanks very much. The next question is from Chetan Udeshi with JPMorgan. Please go ahead. Yes, hi. Thanks for taking my question. I had like it's a good very good Q2, but I was a bit surprised at the composition of that EBITDA growth. Because it seems a lot of this is in fact, all of it is driven by

23:46 pricing because your volumes are down. I'm looking at even Adhesives, volumes are flat, EBITDA is up. So it seems like there's probably some phasing benefit of lower raw materials and higher prices. I don't know. But I think the crux of my question is how should one get comfort that this pricing driven earnings uplift will not wither away once the Middle East conflict driven maybe tightness or panic buying, etcetera, starts to sort of unwind later this year? And the second question is, in your presentation, you've talked about start of Q3 in the same trend as what you've seen in the recent months.

24:32 With that context, how are you thinking about third quarter weather versus Q2 or weather versus last year? Thank you very much.

24:42 Okay. No, the question are valid. But I think the answer are very clear. First of all, if you look, it's also about the Middle East impact. But I think if you take a disease clearly, a disease Middle East has no impact on the disease. On the contrary, I would say the more you go downstream, the more the Middle East topic is a challenge and because you have strong raw material increase, Your business is very fragmented by the nature of the adhesives and we reached our best Q2 ever in adhesives. So this means that internally, we have a very strong momentum. The teams are working like crazy in order to restore profitability after last year, which had been disappointing.

25:28 And I think they are doing a good job, particularly because you mentioned pricing, but you missed something, which is a mix. For example, our durable good business, which is quite attractive in adhesives, is really growing very strongly, thanks to new business development and some pocket of growth that we have there, again, in electronic, in battery, in automotive. And it's very it was very pleasing. So, additive, I would say, is part of the answer to your question because I believe it's not at all a matter of net pricing or I mean they have been able to compensate increase of raw material, but they are at par in terms of they have been it was not easy to have a sort of neutral impact of raw material cost, but not positive.

26:21 And so it's one element of answer. After that, with regard to the pricing on specialty materials more broadly, I would say we have and it's come from Coatings, a slight net positive pricing, but most of the positive pricing is coming from acrylic as expected, even if you take Asia. Already in June, it was back to the norm of the first quarter. So

26:53 and in Q2 overall, I would say, for us and we thought about it, the impact of Middle East was positive on acrylics, was a little bit positive on the coating, but it was negative on the performance additive. So the HPP development was more than offset by the challenge which was creating on Performance Additives, the media dissertation. So to make the story short, we think that a big part of the profitability of the Q2, the large majority is really coming from our positioning, our mix, the work of the team in an environment which has some positive and some negative as you can see. And it really depends on the business. Now on the Q3, I would say that we have so we don't guide quarter by quarter. We never do that. So but you have a guidance for the full year, which is rather precise.

28:04 After that, you can see how you want to wait Q3, Q4. But in fact, we say that with new quarter is looking exactly like the same. We have seen that on the first semester. It will be the same on the second semester. There will be seasonality, but we have guided to confirm the guidance saying that we guide in fact to have a second semester, which reflects back to traditional seasonality between the two semester, which a certain level of growth of EBITDA in the second semester, mostly supported by adhesives again and coatings.

28:49 And inside, I would say, high performance between high performance product and performance additive sort of offset one by the other. So this is what we have in mind. Got it. Thank you very much. Welcome. The next question is from JD Pandya with On Field Research. Please go ahead. Thank you. Firstly, I want to ask on the upstream acrylics, where you are mentioning some slowdown in Europe. So just want to understand what happened in Q2 in upstream acrylics, both product spreads wise, where are we currently in terms of mid cycle versus low cycle?

29:39 And what is sort of your structural view on this product line in the next sort of twelve to eighteen months? And then the second question is really on the performance additives part of Advanced Materials. So just want to understand what really is going on here, you know, how much of the Middle East crisis was an effect and, you know, how much of an effect is, you know, other factors which may be stopping the performance here? And and, you know, again, when sort of can we expect full recovery? And then the last question is really just on the M and A pipeline for adhesives considering one of your competitors has recently made a fairly large acquisition. What do you see in terms of the M and A pipeline in adhesives these days?

30:27 Thanks a lot. Okay. Thank you for the question. So with regard, I would be quick on the phenylacrylic because as you could see, I think the bigger part of the call is really on the evolution of the product mix on the specialty materials. But on the upstream acrylics overall between the three regions, we have different momentum. And then I will mention Europe more specifically. But I would say that in Asia and I think we had already this discussion when I was in London in March, Is that in Asia, things are going very, very quick, but on both ways. So we had a surge and then it went down quite quickly. So we are back to square one to quite low levels.

31:25 In Europe and U. S, which is a little bit the same story, we started from low point. We were at a low cycle on both regions. So what we see now is that it get so it's not fantastic, it's just more normal. We get back close to mid cycle, means that it's hopefully something on which we can count going further. It was necessary because we were below the reinvestment point. So no nuclear volume. So now when we mentioned the slowdown in Europe, sometimes you have to make it was important to restore the margin and it was our priority. So instead of shifting the volume, which was more the policy last year where really the margin were anyway difficult.

32:19 This year it was our approach was more balanced. And this is why you could see temporarily, it was just you cannot extrapolate the quarter, but we decided in the second quarter to restore the margin to close to normalized condition in Europe. With regard to Performance Additives, it's already difficult to separate all the factors. What is clear is that Middle East is a big like the elephant in the room. Why? Because Performance Additives is really the business line, which is supplying by the nature of this product of Performance Additives supplying to polymers, for example, has been impacted by Middle East because they have an important part of their business in Middle East, okay? And on top of that, more indirectly, but at the end, it was direct.

33:16 It's like this, one of the big raw material is sulfur, which has gone to site. So it has been a very big impact for them. And then as you know, part of the fertilizers, so then agrichemicals are linked to sulfur production, so sulfur cost. So in fact, they have the three elements at the same time and it has been a big factor. Now there are some other factors, is that just because of the global context, the demand is not bright. They also suffer from it. This is why we have a portfolio of business line. And this is why we have, I think, a strong Q2. Is that because while the Performance Additives is underperforming, here's the line that are more where we expect or even better than expected.

34:04 And that's the beauty of the portfolio. Now when can this factor reverse? The big question is when does Middle East cease? And nobody knows. So difficult to answer your question. But again, in this situation, you have pros and cons. So Middle East has some positive impact, has some negative impact. We manage them with speed and with agility. And last question regarding the M and A in Adhesives. So we have a pipeline as usual by nature everybody has a pipeline in Adhesives. But it's not a priority today. Our priority is what we did in Q2 is to take the profitability where we want.

34:50 We have made in the past three, four years several acquisition, investing also in CapEx for adhesives. And we put we have also reorganized top management a year ago in the adhesives. And for me, the priority today, and I told that to the team, is you deliver organically. If there is really something on the market, which is really an exceptional opportunity, we can consider it. And anyway, it will be a small size bolt on, not big ones, but we can live without it. So it's not the priority of the day in the current context to make acquisition in Adhesives. Let's focus on continuing to profitability. We have a lot of possibilities in all the different business line of Additives.

35:42 Okay. Thank you. Thank you. The next question is from James Hooper with Bernstein. Please go ahead. Good morning, everyone, and thank you for taking my questions. I have two, please. The first is on cost controls. They appear to be more effective than previous years. Have you changed anything in the organization to promote this? And is there an opportunity to go beyond just an offset from 2027 onwards in the medium term? And then secondly, I want to kind of follow-up on the margin profile of some of the projects that you're are there significant start up costs associated with these? Or kind of in another way, are these projects expected to kind of be part of the mix effect you've been referring to in twenty seventwenty eight as they're fully ramped up? Thank you.

36:36 Okay. So on the cost control, I would change the issue with the organization. I mean the way Arkema is working, think we work a lot of empowerment. I think and then clearly, given the, I would say, the state of the global economy and with the demand which is subdued, at least for Europe and U. S, the teams understand pretty well the need for cost control and for offsetting the inflation. The way we work, this is the discipline of Arkema and the mindset of Arkema and the culture of Arkema. It's not like we launched a sort of a big plan, which with one element, which will overwhelm all the other elements. It will it is a sum of elements of taking advantage of retirement to reinforce the creativity, to our productivity, so to do it in a smooth manner.

37:41 And I think it has been quite successful so far. We are also in line with our 3% headcount reduction. And we are also attentive to any new forms of working like digital. We are starting to ramp up on digital. We have some quite good projects and we'll get more and more. So we have plenty. I would say, it's really a sum of initiative, but the organization is for most of it staying the same. But the objective has been reinforced because of the because we are agile, because we adapt to what is the economy. And so far we really delivered just some as you could see some summary of what we are doing Page four, which explain you that we are really aligned with our objective now for the frankly speaking for the midterm, so let's say the next three years.

38:35 If we can offset the inflation in the higher inflation world, I can I will sign now? So I think it's for chemical company to offset the inflation is a good target. So I would not commit to more, but I will I'm ready to commit to try to offset inflation for the next few years as we say. And it goes with 3% headcount reduction as we have announced already. On the new project, one, it is fully ramped up, but on some projects like Singapore, it can take five years. On some like PVDF, small expansion, it can take two years. Once it is fully ramped up, it's accretive to the margin of the company, but it takes a few years to ramp up.

39:28 On the start up cost, I think not anymore, I would say. It was maybe the case a couple of years ago, but not anymore. Are some ramp up costs, but they are all, let's say, in EBITDA. So the only handling that took place as nonrecurring costs was the Singapore startup cost, which was extremely material and that we classified as non recurring. But any start up cost of any new project is anyway a part of the fixed cost of the company. Knowing that the vague of big project, major project is behind us, so now we are it's more incremental. So it's not a topic anymore.

40:13 And now we really focus on the business ramp up. And so we ramp up slower than we would have expected three in the group, but we ramp up and we will be in line with our target this year. Thank you. The next question is from Laurent Favre with BNP Paribas. Please go ahead. Yes, good morning. I'm sorry that I'm going to go back to the Adhesive comments for the second half as it seems that you are fairly confident that that will drive EBITDA growth for the group. And I'm a bit puzzled because comparables are exactly the same between first half and second half in terms of volumes. If you think about raw material inflation, you may not have seen all the inflation in Q2.

41:03 And then on the volume side, you're more likely to have seen pre buy than postponed orders. So I'm just wondering, given all the uncertainty, all the issues around construction in particular, I'm just wondering what drives that confidence. And I'm not saying I doubt your confidence. I'm just wondering what's driving it. No, but I think remember that last year first quarter was really stronger than the second one. So we'll grow compared to our base, which last year was disappointing. And you know that I took some action to following the results that I consider for our disease based on our expectation disappointing.

41:52 So I think the base of last year was not a strong one. So I think we grew compared to this base. Now we see, especially in durable goods after a lot of work, a lot of good momentum of new business development, which we led. Now on the prebite, I'm not really agree with you on the disease because if you look at the volume growth, we are at zero. We are at zero in Q2 and we are at zero in H1. So you don't see a difference between first quarter and second quarter. And in the first quarter, obviously, there was mostly by April. And now between construction and the rest of the business, clearly, it will come from industrial adhesives and more than construction.

42:42 But no, I think we have a good momentum. Now we are not going to say that the growth in adhesives would be fantastic and we will be growing in adhesives in the second semester. We have been growing in the first semester. Everybody is pleased about it. And but and again, compared to a base last year, which was not fantastic. Okay, thank you. You're welcome. Any further questions, please press star and 1. Mr. Leonardo, there are no more questions registered at this time. The floor is back to you for any closing remarks.

43:36 Okay. So I would like to thank you for your question. It was interesting. And don't hesitate if you have any further questions to call Beatrice or James. They would be really open. And I wish you a summer break also, a very nice summer break and looking forward to talking to you again. Thank you. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.