Welcome to Solvay's Q3 2021 Results Conference Call for analysts and investors. For the teams, it's originals. Good afternoon, everyone, and welcome to our third quarter 2021 earnings call. My name is Jodi Allen, and I'm joined virtually by our CEO, Ilham Kadri, and our CFO, Karim Hajjar. Today's call is being recorded and will be made available for replay on the investor relations section of our website. I would like to remind all participants that the presentation includes forward-looking statements which are subject to risks and uncertainties. You may refer to the slides related to today's broadcast, which are available on our website. With that, I'll turn the call over to Ilham. Thank you very much, Jodi, and hello, everyone. As always, I'll begin my remarks with the health and safety overview shown on slide three. Today, we have 49 colleagues who are infected with COVID-19, unfortunately up from 52 at the end of July when we last talked together. We have to remain obviously vigilant, and we are gradually and carefully reopening our administrative sites with all the measures in place to protect our employees and ensure high levels of safety. We need to return to work in hybrid mode. This is our new normal at Solvay. On the top of that, when necessary, as you know, we'll continue to use the Solvay Solidarity Fund to support people in need. Before we move to the results, I would like to highlight another announcement we made this morning. As we execute on our Solvay One Planet sustainability roadmap, we continue to look for areas to strengthen our commitment. One of these is within our climate pillar, and I'm really thrilled to share that Solvay is targeting today carbon neutrality before 2050. With the obviously global warming set to reach or exceed 1.5 degrees by 2040 and extreme weather events becoming increasingly common, it's an imperative that we take decisive actions. At Solvay, we acted decisively to raise the bar, setting realistic yet ambitious targets that we know we will reach. Our climate neutrality target represents a vital step forward in our journey towards net zero emissions after obviously we launched our Solvay One Planet, and we joined the Paris Agreement, SBTi last year. Our roadmap entails an investment up to EUR 1 billion by 2040 for all businesses other than Soda Ash. For Soda Ash, we have identified investments of approximately EUR 1 billion by 2040. This will be partially funded by non-recourse finance, and importantly, we fully expect this investment to also generate compelling economic returns. We look forward to sharing more with you on this journey during a future ESG webcast being planned for December 1st. We are also proud that our site in Brazil recently received the highest biodiversity rating from the Wildlife Habitat Council, a respected international organization focused on biodiversity conservation practices in the private sector. Solvay is the first chemical company in Brazil to achieve such a rating. Finally, we are honored to have received an award from Cefic just this week for the restoration and ecological plan for our Torrelavega Soda Ash site in Spain, a great example of typical remediation efforts applied at our plants. Let me now move to our results. I am very proud of the strong performance we delivered in the third quarter, despite the challenging environment facing the whole industry. In fact, our employees are doing an excellent job managing this environment of inflationary pressures. I'd like to say to them, thank you. Thank you to our teams globally for your continued hard work. The efforts are paying off, and without you, we would never be in such a good position after such a crisis. As you know, sales in the quarter were up 25% on an organic basis and up by 6% versus 2019. I'd like to highlight that most of our end markets are back at the level of 2019, and the demand continues to be very strong. I would suggest the example of Specialty Polymers hitting a new sales record in the quarter. As we told you previously, this was driven by continued strong demand for our high-performance polymers used to lightweight various parts of the vehicle and automobile, but also used in electric vehicle batteries. Both areas grew by similar amounts in the quarter, around 50% year-on-year. Other markets contributed to the group's double-digit growth versus quarter three last year. In fact, markets growing between 25%-30% included auto, electronics, and building. Markets growing between 15%-20% included mining, consumer goods, agro, and healthcare. In fact, volumes were higher than 2019 levels in every business outside of composites. Geographically, all regions delivered double digits organic sales growth versus Q3 last year. Europe was up 20%. Asia Pacific by 22%. North America was up 24%. Finally, Latin America was up 45%. Let's now discuss about the inflation, obviously. Inflation, given its significant impact. You may recall that we had been projecting these significant increases for several quarters, and the impact has sharply increased in the second half as anticipated. We are progressing well in securing price increases, and we will be unrelenting in protecting our margins in the face of these significant and ongoing industry-wide inflationary headwinds. Navigating within such an inflationary market is impacting everyday life. Again, our customer intimacy, our highly valued technologies, together with our good energy hygiene and management, efficient procurement processes and the structural cost saving program initiated two years ago, have allowed us to post another strong EBITDA performance. We delivered on cash, and I'm happy with that. This is the 10th consecutive quarter of positive free cash flow generation. All in all, we are above last year levels on a like-to-like, like-for-like basis. Year to date, we have achieved double the cash flow versus 2019. Before I pass the floor to Karim, we would like to celebrate a couple of recent achievements and reinvestments for growth in line with our strategy. We are adding new Thermoplastic Composites capacity in the United States of America with the completion of an investment in Greenville in South Carolina. The new product line will have the ability to manufacture unidirectional composite tapes from a range of high performance polymers including PVDF, PPS, and PEEK, help customers in energy, aero, and auto markets by reducing weight and emission while being recyclable and circular. Second, we have also announced the creation of a new JV for the production of highly purified hydrogen peroxide for semiconductors. The JV is scheduled to begin operations in the first quarter of 2023, enabling penetration of this critical ingredient into a new market and will have an initial production capacity of 30,000 tons per year. You may remember in July, we explained to you our strong leadership position in batteries and the potential it represents for Solvay. A couple of days ago, we announced that Solvay is advancing its innovation power in the electric and hybrid vehicle market to develop the next generation of solid-state electrolytes for batteries. On the ground, investment started with the opening earlier in the year of a dry room laboratory and a research and development pilot line in France. As you know, Solvay is leading the development of advanced inorganic materials for solid-state electrolytes, which is a key component for solid-state batteries. We're accelerating the scale-up of these materials. Full operation is anticipated for the second quarter of 2022. Also related to polymers, recycling is an important element. Solvay, together with scientists, has conducted a proof of concept showing that PVDC has the potential to be recycled. As you may know, PVDC is used in food, beverage, and healthcare multilayer barrier packaging throughout the world. Now that this initial breakthrough has been achieved, we are inviting fellow companies operating within the plastic industry to play their part and to set a global PVDC recycling stream to close the loop. I also wish to highlight our latest innovation project is one I'm really proud of, and it started actually last year. We created a unique and long-lasting disinfection technology, and it's now commercialized by Reckitt, global market leader in their iconic brand, Lysol. The technology was just launched in France this month, and it will launch in Germany in the coming weeks, followed by other European countries in 2022 and in the United States of America in 2023. Our Solvay Bicar bicarbonate technology has been successfully tested on one vessel of La Méridionale, passenger ferry operator, you can see in the south of France, and we'll extend our solution to all the engines of the ferry. The partnerships will enable compliance with International Maritime Organization, IMO regulations for the reduction of what we call in our jargon, sulfur oxide emissions. They will facilitate the removal of 99.5% of particulate matter. Finally, our Soda Ash is an essential material for the production of lithium carbonate by the Chilean chemical company, Sociedad Química y Minera de Chile. Believe it or not, this is the biggest lithium producer in the world, whose production is based on the natural brine resources from the Atacama Desert. We managed to close a multi-year agreement and expect to supply about 170,000 tons of Soda Ash this year, and we'll reach about 200,000 per annum from 2023 onwards. This is a great example, and remember, you know, I told you that Solvay is serving the battery. This is yet another one, where going beyond the material businesses for future term business and leveraging our full portfolio. Now Karim will review in more detail the group segments and financial performance. Karim? Thank you, Ilham. Good morning. Good afternoon, everybody. I will start with an overview of the three business segments, and I'll refer, as usual, to figures on an organic basis, which means at constant portfolio scope and currency. Before going any further, let me remind you that the six businesses divested early this year, together with the currency fluctuations, are expected to impact full-year EBITDA by around EUR 120 million. At this stage, the impact is EUR 16 million for the third quarter, EUR 87 million for the nine months thus far. Into the materials segment on slide seven, you'll see that sales in the third quarter were up 26%, 26% against Q3 last year. Sequentially, up 6% versus second quarter this year, driven by another record quarter, as Ilham mentioned, in the Specialty Polymers business. Sales in this business unit alone were up 32% in Q3, reaching EUR 570 million. This reflects continued high demand across all key markets. As Ilham referenced, growth across all markets served by the business and the continued upward penetration of materials into, and in particular, electric vehicle batteries, where our technologies can be found in binders and separators and enclosures, as well as heating and cooling applications. Altogether, these grew by almost 55% over last year. That's not the only market growing double digits. Our polymer sales into electronics also grew around 60% for the quarter. This was boosted by semiconductors, electrical components, as well as smart devices. Sales also grew 10% in healthcare, and that includes polymers that are used in medical devices and pharmaceutical packaging. Turning to Composites, sales are up 6% year-on-year as we start to see some signs of recovery. This quarter was the first with year-on-year volume increase since the beginning of the pandemic. It's also the third consecutive sequential improvement. It's important to note that our top line will be unaffected by supply chain, labor, and manufacturing issues. The recovery that we're seeing is mainly visible in single-aisle aircraft. But do keep in mind the high level of inventories that are still there for the 737 MAX. We need to see that reduce before we see more pronounced acceleration of production rates accepted by customers starting in 2022. Sales to the space and defense markets also grew in the quarter and have remained resilient. Moving to profitability, the EBITDA of Materials in Q3 increased 52% year-on-year, and EBITDA margins improved almost 600 basis points to 32.7%, primarily driven by the record sales of the Specialty Polymers via sustained pricing and significant cost reductions, especially in the Composites business. Turning to Chemicals on slide eight. Third quarter sales in the segment up 20%. All businesses experiencing organic growth year-on-year. Soda Ash sales were up 80% for the quarter, and that's driven by higher volumes, slightly offset by lower prices. Demand trends in the third quarter were similar to what we saw in Q2, with sustained demand in the building market, where flat glass is used, while the container glass market, that's used in hospitality, restaurant, and catering, HORECA industry, slightly improves sequentially, although it still lags its 2019 levels. Sales in the bicarbonate production line continued to be very strong. It's about a quarter of our business now, the bicarbonate production line. It's very strong mainly in the U.S., driven by our Solvay technology that's used in flue gas treatments, which, as Ilham highlighted just a few moments ago, it represents a long and significant business sales. Peroxide sales were up 11%, driven by volumes and prices. Market conditions remained strong in HPPO, which is used in automotive and building industries predominantly. Volume growth was further supported by customer wins in the electronic markets. Our silica business had another strong quarter. Sales grew 17% with strong continued growth in the tire market. The business also continues to benefit from market share gains, thanks to the penetration of its sustainable solutions, including our highly dispersible silica for tires that enable better rolling resistance and far better wear. The Coatis business in Latin America is going from strength to strength. It continued its record run, sales up 70% in Q3 last year, reflecting continued strong demand, pricing wins, as well as pricing actions. Wrapping up, the EBITDA for the chemical segment increased 19% year-on-year, thanks to high volumes in all businesses, high prices, and also very small contribution from our recent new joint venture, which is in Russia and Malaysia. Putting all this together, it translated to an EBITDA margin of 27.3% in the quarter. Now I'm gonna turn to the solutions segment, which you can see outlined on slide number nine. This segment delivered sales growth of 28% this quarter. Beginning with Novecare, sales were up 25%, driven by double-digit growth across key markets, including coatings, adhesives products used in auto and building infrastructure markets. We also saw more robust demand from our sustainable technologies, which supported the double-digit growth sales in Agro as well as HPC end-user markets. You may have noticed that we also have now provided separate sales figures for the oil and gas business, which today represents about EUR 100 million in sales in Q3, a sharp improvement over last year. We really hope that you welcome this additional disclosure, not least because it helps to also highlight the significant progress being achieved by Novecare in all its non-oil and gas markets. Unlike most of the oil and gas business resided with the Novecare business unit in the past, and we've added one product line to our Technology Solutions business because that also supports the oil and gas market. Now what we have is a distinctive business where all of our fracking activities reside. The Novecare business delivered sales growth of 26% in Q3, again reflecting the continued strength in the electronics sector, particularly in our semiconductors. Although products used in the automotive sector showed modest growth against last year, the business is now feeling the impact of the slowdown in production related to chip shortages that I'm sure we're all aware of. In Technology Solutions, sales were up 27% in the quarter, driven by higher volumes and strong pricing across the mining sector. As we mentioned last quarter, we are gaining market share with existing customers and we're winning new customers as well. Other product lines, including phosphorus specialties and additives, are also progressing and also boosting the growth. In our aroma business, sales are up 16% in the quarter, driven by strong demand in food and beverage as well as flavors and fragrance, flavors and fragrance markets. Wrapping up solutions, the segment delivered 28% EBITDA growth versus Q3 last year, reflecting the strong and continued recovery across most markets, whereas the EBITDA margin was stable at 18.3%. Now I'll move to the group financials. First and foremost, I would like to share some elements that are related to the inflationary cost increases that we experienced in the first quarter, because they reached EUR 145 million versus Q3 last year, and a sharp increase versus the second quarter. Please note, the impacts I'm highlighting are after our well-established hedging practices. To give you a bit more color, about 80%, 80, of this increase relates directly to raw materials and energy and the balance to logistics. Keep in mind that a significant part of the energy increase is related to the spike in natural gas in Europe, which manifested itself in the latter half of the first quarter. As a result of these developments, we now estimate that the full year cost inflation will be of the order of EUR 400 million, at 400, rather than the EUR 350 million we indicated in mid-July. That's the backdrop that has really motivated us to really drive and accelerate the increase in prices as the main lever that helps us to maintain our leading margins. Moving to cost savings on slide 10. Once again, we managed to generate new additional cost savings, this time EUR 41 million in the first quarter. There are three main areas for that delivery. First and foremost, restructuring, which came in at EUR 18 million, and that reflects the reductions in labor related costs. You know that we've launched different simplification and restructuring plans, such as in Composites, that really across the group will continue to deliver. These plans have thus far resulted in EUR 171 million of savings since the beginning of 2020. Indirect cost reductions came in at EUR 15 million, and that also reflects the benefits of programs such as the zero-based budgeting that we put in place last year. Finally, productivity efficiencies that also came in with EUR 6 million in this quarter. This brings our year-to-date total structural cost savings to EUR 172 million. Therefore, I can confirm that we are on track to achieve our full year guidance of EUR 200 million. Now, you may also remember that our objective is to achieve EUR 500 million structural cost reductions by 2024. We remain well on track. Indeed, at the end of 2021, the cumulative cost reductions over the two-year period should amount to EUR 375 million. That's EUR 200 million more than fixed cost inflation. Now, these cost reductions, together with strong top-line performance that you've seen, have allowed us to post another strong EBITDA performance coming in at EUR 599 million, which represents a 31% organic increase against last year, and 87% against 2019 as well on a like-for-like basis. That's really encouraging. Now, what I also want to do is to highlight that this EBITDA performance has been achieved in a very specific context. At the beginning of the year, the impact from increasing raw materials, energy and logistics, inflation 2.2% and 2.3%. That totals EUR 210 million so far this year. That is unprecedented. Therefore, these new market conditions, these headwinds require new action. They require a new way of facing off these headwinds. We've been actively pursuing those price increases across our businesses to mitigate the significant headwinds. I can tell you that's an example. We've been engaged very deeply with customers as we seek to both meet their needs but also preserve our margins, because everybody understands the necessity to maintain that balance and increasing balance in our commercial relationships as we navigate together through these challenging times. Again, you can see actually there are strong margins showing that we're making progress. That said, there is more to be done. We can never relent. Of course, I can tell you that the focus of the entire leadership in Solvay and for the entire commercial organization is very much on maintaining our leading position in the market and driving pricing up. That is key. I will suggest to you that it has been our priority number one for quite a few months this year. There's more. Cash is where it matters as well. It's where the rubber hits the road, as we say. In terms of page 11, you know it is important to us. We worked really hard more than two years to drive sustainable and consistent improvements in cash generation. I'm really pleased that we're continuing to deliver. For the tenth quarter in a row, we are delivering positive free cash flow, this time EUR 276 million in the quarter. Since the beginning of the year, the total is EUR 692 million, slightly higher than the first nine months of last year when we exclude scope, currency, and the one-time elements that you recall we highlighted last year. Now, I would like to highlight a few additional elements to give you some color on that free cash flow. Let's start with working capital. The current top line growth is driving a natural increase in our inventories and our receivables. We are managing it very, very carefully, and up to now, everything is completely under control. Just look at working capital to sales, you will see that. It speaks for itself. As of end of Q3, we're about two times better than we were at the beginning of 2010, for example. Stronger than 2019 as well. That discipline is here to stay. Two, CapEx. You see that we spent EUR 412 million in the first nine months, which is broadly the same amount as last year. Now, despite our best efforts to resume, to ramp up our investment plans, we were impacted by raw material shortages and supply and capacity issues that, again, are very well-known for all industries, many industries. Now, as a result of this, we now expect to finish the year with a total CapEx slightly below the EUR 700 million, target below EUR 700 million, and you know that we compare it with the EUR 700 million-EUR 750 million we indicated to you at the very beginning of this year. Third point I'd like to highlight in free cash flow is, as you know, we're deepening, we're accelerating our restructuring programs. We've spent EUR 31 million in cash to make that happen, which brings the nine-month total to EUR 92 million. That's the highest I've seen for many, many years. It's actually EUR 26 million more than last year. The payback is very compelling. Finally, what I'm gonna say is, in fact, it's certainly not the least impact, but it's very important as we continue de-leveraging our balance sheet. The benefits of all the work done on pensions and on our debt are paying off and are visible in the bottom line, with pension financial charges together being EUR 32 million below the first nine months of last year. As a result of all these actions, our free cash flow conversion ratio is close to 44% for the last twelve months. Finally, before I turn back to Ilham, a word on our net debt. The level at the end of September 2021 is slightly below the end of 2020, where strong free cash flow and the inflows related to the fixed divests make more than offset both the dividend payments of EUR 388 million and EUR 102 million voluntary contribution to our pensions that we made in Belgium, in fact, in the first quarter of this year. Can I remind you that we still have plans to make another EUR 300 million in additional contributions in the next six months, which will bring the cumulative additional pension contributions to about EUR 1.1 billion. Indeed, on the question of debt and pensions, it's useful to take a step back in time and to really take note of the cumulative progress on our global indebtedness since 2019. Ilham, I'm not sure if you realize this, but since you became CEO, the fact is, and this is a real factor, that our balance sheet has strengthened by EUR 2.5 billion in just 10 quarters, with a fall in net debt from EUR 5.5 billion to EUR 4 billion now, a fall in pensions from EUR 2.7 billion to EUR 1 billion. I just wanted to make note of that because, you know, when you look at each quarter individually, we may sometimes miss the big picture. With that, I hand you back to Ilham, who will provide our outlook for the remainder of the year. Yeah, thank you, Karim. Thanks to the team. I now comment on our outlook for the full year shown on slide 12. We are very pleased to confirm today our full year EBITDA guidance for 2021, despite the key headwinds facing the whole industry today. The fourth quarter was indeed tough to navigate, considering not only the strong demand in a lot of markets, the usual softness during the holiday season, the chip shortages impacting some auto businesses, the raw material, logistics and supply chain disruptions, and potential power restriction in China, as you all know. Some of our plants that are sold out one day and have to slow down or stop the day after because of these issues, and discussions with clients on price increases or difficulty to deliver products. In fact, managing these uncertainties has become an integral part of the daily job of our teams. It's also somewhat difficult to anticipate the full impact of price increases and disruptions, given the very high volatility we see with some raw materials and with the energy crisis in Europe. As Karim mentioned, our best estimate for the full year inflationary cost impact is now about EUR 400 million. Things are changing rapidly, and we are fully mobilized to respond effectively, and we are ready. Notwithstanding these challenges, our focus on the top line gives the confidence to confirm our EUR 2.2 billion-EUR 2.3 billion EBITDA guidance for the full year. I remind you this represents 20%-25% growth on an organic basis against 2020 and around 4% against 2019. 13% excluding Composites and oil and gas, which have a slower recovery. On cash, we are increasing, as Karim said, our free cash flow guidance and now estimate generating around EUR 800 million for the full year, which will represent a free cash flow conversion ratio between 35% and 40% higher than our strategic commitment and three years ahead of time. In short, we have not forgotten the lessons learned during the COVID crisis, and we are making good use of them today to make Solvay even stronger. This means we will continue to be innovative, think differently, be close to our customers, drive value, and to think optimize. We will continue to implement our growth strategy and look forward to the future, a future that will be more sustainable for sure. By now, Karim and I will be happy to take your questions. Back to you, Jodi. Yes, thank you, Ilham. We will now move to the Q&A portion of the session, and I ask that you kindly limit yourselves to one question per analyst if possible, so that we can address as many analyst questions as possible today. Thank you, and I'll transition now back to the moderator. Thank you. Ladies and gentlemen, we will now begin our Q&A session. If you wish to ask a question, please dial zero one on your telephone keypad, and you will enter a queue. After you are announced, please ask your question. Once again, please dial zero one on your telephone keypad to ask a question. We have the first question from Matthew Yates from Bank of America. Sir, please go ahead. One. I've got one cash flow question and one operational question, if that's all right. From the cash flow, you're talking about EUR 2 billion cumulative CapEx for decarbonization. That's over the next 20 years. Is a simple way to think about this EUR 100 million a year spending, or is it more concentrated and front-end loaded than that? The operational question relates to Soda Ash. Obviously, energy prices are up a lot. I think IHS are talking about $30-$80 a ton, depending on feedstock. I'm not sure if you agree with those numbers, but is there a way to think about the percentage price increase you need next year to pass this through? Is it around 20%, or am I way off there? Yeah. I may start, and Karim, you follow. I may start with the second question, and then follow up on the net-zero carbon neutrality. You may have seen the IHS publication, which spoke to per ton 20%, more or less for Europe in 2022. Also prices up in APAC above EUR 300 a ton, as we speak, it's actually around EUR 250 still at the moment. In EMEA, you can take them as a proxy. You always know that we at Solvay, you know, we are in the higher end of this. The way to look at it is that, you know, obviously, this is a high energy-intensive business. Obviously, we have a policy of also energy hedging. We don't disclose the amount of it, but it's protecting us and helping us. You're seeing our numbers in terms of pricing in the Soda Ash business, the possible cost savings, although we don't disclose it on a business unit level. Believe it or not, this is the first time in our history where we have started renegotiating the prices on Soda Ash business, right? In a given year for contracted business at normal times. Our customers are understanding. We are discussing it with them. Obviously, as we are in quarter four, we are also having the discussion as to the traditional renewal for next year's pricing. More to come, as usual, and you've seen it through my tenure with the team. We will ensure that we protect our margin and continue ensuring that in each business it deserves the prices it should deserve. On the neutrality, and maybe Karim, you can give a bit of color how we're gonna fund it. Obviously, you've seen us announcing carbon neutrality, and it's a big day for Solvay because we are part of the chemical industry, which is harder to abate industry. We've been working on this since my arrival in the company in March 2019. Obviously, Solvay One Planet was the first step to declare a bigger ambition on sustainability. We've signed the Paris Agreement. We joined the SBTi last year. We reduced Scope 1 in 2019-2020 by 4% structural decrease in emissions in 2019-2020. Scope 2, 32%. This shows that we did it, you know, on high value projects with good returns. Soda Ash, you know, Soda Ash represents last year, I think 2020 was 64% of our emissions. There is a Soda Ash case and a non-Soda Ash, and that's why we are making a split. On the Soda Ash side, it's about exiting coal. We have seven sites in Europe which are still using coal as primary energy. Since I joined the company, we are now, you know, announcing the second plant, Dombasle in France, in Germany. We announced earlier in the year exiting coal, which has been approved by the board of directors yesterday. We are doing it through recourse financing, obviously. We don't anticipate CapEx declining sharply. We have asked the team to do it in very simple, is to show me and to show us and obviously, we can do it at lower than the cost, including vis-à-vis our natural imported, you know, competition. That's what we are doing with those two investments. Moving away from coal or gas, you see it now with the spike in gas prices. In effect, it supports our, you know, let's be frank, the independence from highly cyclical energy, right? This is what we're gonna do with biomass based on wood chips in Rheinberg. Here we are using what we call RDF, refuse-derived fuels, which is, by the way, from the rice waste, right? We burn the waste. This is gonna be good for the planet, but also profitable. Karim, anything to add on financing? No, sure. I mean, Matthew, I think I don't have a better indication than your average of EUR 100 million a year. I think it is approximately. But the reality is, it's not gonna be as linear as that. However, the important point, I'll go back to what Ilham has said, is there will be a fair proportion of that that will be non-recourse financing. So yes, we use the strength of our balance sheet, but the cash will stay with us as well. More importantly, this will not get in the way of our growth plans, and it also won't undermine the capital discipline and the real success we have on generating returns. I say that because what I really like about this from a true financial standpoint is the returns are really compelling. This underpins the resilience. It improves the competitiveness of all our businesses without in any way disrupting our growth potential. That's what I find particularly attractive. Clearly, let me give you an example. We announced recall Rheinberg saying we moved away from coal earlier in the year. Soda Ash, we've announced Dombasle. Both of them benefit also from project financing. Again, this is an example of let's say being smart, using other people's money wisely, let's say. Putting in the equity we need, and that helps us to move the agenda. As I said, the returns are very, very strong. Hope that helps. Yes. Thank you. Thank you. Next question from Mubasher Chaudhry from Citi. Mubasher, go ahead. Hi. Thank you for taking my questions. One, Ilham, can you elaborate on your conversations with your customers with regards to the price increases that you're seeing in the current quarter? Is there an understanding that the pricing will need to come down when the volatility will come off, say, for the quarter of 2022 and therefore, we see the margin remaining flat, as opposed to margin expansion for you? Second question is a bit longer term. On capital allocation, with the strategic review of the Soda Ash division and the strong performance that you're seeing now, are you open to large scale M&A or keeping the focus still very much on cost containment and efficiency execution, before you turn to thinking about M&A? That'd be helpful. Thank you. Yeah, thank you very much for the question. Well, listen, on pricing, you know, frankly, you know, although it's painful specifically the level of inflation we see now and, you know, it would be, you know, very unusual and first time in my career I see such pricing such short period of time. Actually, part of me likes it. It's just our value proposition, and it's the best timing to go and get pricing. Not only for commodities, obviously, but also for specialties. Yeah, I mean, you know, we are discussing constructively with all our customers, right? Our sales team is working hard. You may remember, actually, I told you after 186, and working on our costs, and I think Karim has given you a color on how the infrastructure now is getting leaner, better, more efficient and productive at Solvay. Now is the time we are switching gears to the growth potential of Solvay. I think frankly, even before joining the company, that's what attracted me. We are the only one who has all these Specialty Polymers and carbon fiber Composites know-how in one home. We are unique there, and you see it now. When I told you back in 2019 at the growth strategy launch, the GBU platform and the Thermoplastic platform is gonna be the emerging growth platform. I mean, frankly me, even me, I couldn't believe that it's gonna be so quickly, you know, increasing and growing after a year and a half or two years. We have unique value proposition. You see that our sales in our sales bridge, we've achieved EUR 139 million in price increases in the quarter versus EUR 145 million cost impact. Those are the data. There is more to do given the headwinds, which remain and are clearly increasing in quarter four. We expect this at the end of the year, but I told you EUR 200 million-EUR 250 million, now it's more up to EUR 400 million. We are still continuing to increase prices. In open volumes, we have energy surcharges. We are putting it. I told you this is the first time in our history where even contracted business like in Soda Ash, we are putting it on the table. Customers, they understand. I mean, they look at the numbers and the data like you do and I do. That, that's extremely important. We are anticipating the 2022 price negotiations, they are underway. It's too early now to talk about it. As you know, for contracts, there is a lag between cost increase and price increase. On average, at Solvay, it's three months, right? But for some customers, for example, I mean, commodities where prices we are capturing, you know, increase right away. Indeed for the sustainability of it, I think what I like is it's just specifically the specialty portfolio. Now we are looking at our value proposition, our value pricing, and obviously if we believe that we were not pricing enough and well our products and solutions through these periods of renegotiations, including, by the way, the terms and conditions. Karim, you wanna address the other questions? Other questions really around capital allocation and M&A, et cetera. I mean, and you mentioned Soda Ash. All of them on Soda Ash has announced a carve-out, but maybe that's at some point portfolio flexibility, of course. In the moment the focus is on driving that improvement. The financials, you can see the results speak for themselves, but also in terms of sustainability and the key targets. Most of you on M&A, we are clearly looking. We're looking to upgrade our portfolio with discipline, absolutely with discipline. We won't overpay ever. We will make sure we focus on returns. We look, and clearly we have some dry powder. Look at the cash on our balance sheet. To my mind, of course, we're looking very selectively in where that's very strategically coherent. Where we find opportunities, we don't hesitate. If, you know, acquire. Okay, it was small, a small business on Agro, not bad, because we saw that we're clearly a very good owner that can drive a lot of value. My only regret on that particular one, I wish it was 10 x bigger. That would have been nice. What I'd say is we are looking. Cash funding is not a constraint to our ambitions. It really is around driving the agenda organically in the first instance, priority number one, but also the portfolio lever is there, and we'll keep our eyes open to find the right opportunities there. Thanks, Mubasher. Thank you. Next question from Jaideep Pandya from On Field Investment Research. Jaideep, go ahead. Yeah. I'll stick to one question only. The Soda Ash business that you have, the steps to carve out, interestingly, quite a few other assets at least are being rumored to be on the market, actually more in the U.S. with, you know, rumors on Tronox and Tata. And if you add all this capacity, then it looks like almost, you know, 75% of U.S. capacity is up for sale. Just wanna understand, you know, how do you guys see this in the context, you know, what is really driving so many businesses to or so many players to actually put their assets up for sale? And, you know, how do you see, like, say, future of Soda Ash in this, in this backdrop? You know, is this something where all options are open, i.e., even an IPO, or is this something where you're gonna carve it out and definitely sell it either strategic or a financial? Thank you so much. Yeah. Hi, Jaideep. Thank you for the question. You know, I remind you that we announced the carve-out, right, of Soda Ash a while ago. Actually, the COVID-19 has delayed our plans, right? Because we were already just, you know, ready in early 2020. We started this a bit later and the objective of our carve-out is to enforce the internal financial and operational transparency and accountability and increase the strategic flexibility, and this remains our focus at the moment. I've done carve-out in my career. I know they can be complicated, specifically for a founding business like Solvay, and we indicated that in February 2021. It's gonna last approximately 12-15 months. You can expect, you know, better news by the end of 2022 next year. When and if we make additional M&A decision, we will inform the market. At this stage, there are no decisions. We are just dealing with the carve-out and doing the right thing here. To give you an example, a significant number of legal entities out of total of 400 entities need to be reviewed, and we proceeded carefully through this time. You know, a transformation is a process, not a destination. I mean, we are not top sellers, and we are guided by improving service profile in order to create shareholder value. That's key for us, and we've done it with 60% more for the client than the peers. When we believe we are not the right owners, when we believe they are commodity, you know, we make a deal, provided people are paying the right multiples. Look, frankly, I'm not gonna speculate on what's going on in the market. I'm watching like you and, you know, anything you can get quickly for beautiful business line soda ash, take it. Thank you. Thank you. Next question from Chetan Udeshi from JP Morgan. Sir, please go ahead. Hi, two quick questions. First, you know, if you see this Q1 at least, the company was successful in keeping the net pricing close to zero almost. In other words, the pricing increases offset more or less the higher energy cost. Can you give us some sense of how you see that going forward? I think that would be useful. Second question is forward. I think you mentioned something about the project for solid-state. I don't know if you can give us some color on what is the chemical backbone that you're using. Is it based on PVDF or is it some other material that you are using to develop your solutions for the solid-state? Thank you. Yeah. Thank you, Chetan. On pricing, obviously it develops every day. I think I'm satisfied, not totally satisfied, right, with where we are. I think the team has done a good job. Obviously it's always difficult in a given year to go and renegotiate established contracts. I think, as I told you, Chetan, and the team, I think I was frankly during my career, inflation times are really good times to really challenge your pricing strategy, right? As we speak, we hire people to help us internally then to review thousands of contracts, terms, and conditions, this formula pricing in, inbounds, outbounds. Do we have the right formula in terms of energy, in terms of logistics, in terms of raw material and vulnerability here and there. Whether we have a sole supplier, we are validating and qualifying more than one. We are discussing that sort. I give you the extreme example of Solvay historically in our history. Frankly, when I put it on the table with the team, obviously things happen. When you go, the customers understand, but it's fair. It's very credible. They need winning suppliers. We are doing this. We are on pricing every day. The costs are increasing. We don't see them decreasing. I don't have a crystal ball on energy and gas for next year. I'm hearing different energy companies, and we have our intel how where it's gonna go. I am now counting with the team that each one cost. I'm not gonna keep up. If it does good news, it's gonna be an upside. Therefore we are keeping our pricing momentum, and we are reviewing it every week with our team with the corporate team. We are doing just that, and this is important. Then the question about batteries. Again, very happy that we, you know, since 2019, we really played the batteries game as a platform. The way, Chetan, as a platform, I'm not sure what really struck you guys in 2019, was my first nine months in the job. I was struck by the power leading technology, you know, power position of Solvay. When I say we circled the battery, I'm weighing my words. I mean, battery is captured in the anode. We are in separators. We're in electrolyte. We're in casing. Now we have even Solvay lithium mining. We are technology agnostic, and that's what you are alluding to probably, Chetan. We are making anode captive, separator material is developed, and it's coating an electrolyte. Battery technology is using those different types of chemistries, and the answer is we are present in all. Different generation of batteries, we're talking about generation two. We are already defining generation three and generation five, which is the solid. We are working on this. Now on the technologies beyond PVDF, it's what you asked for. We're not gonna disclose which one is our preferred one because we have still competing, you know, technologies, but we are working on several ones. The launch of these dry room labs and another line to assemble and already, you know, maybe what solid-state of tomorrow can be, is a testimonial that we are progressing very fast with our customers. I think I answered the question while I answered my question. Back to you. Thank you. Next question from Geoff Haire from UBS. Geoff, go ahead. Hi, I just got down to one quick question and probably, actually a long question. First looking from Q4 pricing, I think you said between EUR 30 million-EUR 400 million of cost increase due to raw materials and energy. I think by implication that would mean you'd need to get prices up by 9%-10% in Q4. Is that roughly where you think you can get from the negotiations you've had so far with customers? And then the second question, just sticking on the solid-state batteries. When you launch this product commercially, is it gonna be for EVs or is it gonna be for consumer electronics first? And when do you think the first revenue will come from it? Morning. Good afternoon, Geoff. On your first question, I mean, your maths are not that they're right or wrong, but here's the maths. We said, I said EUR 400 million is our estimate for this full year. We had just over EUR 60 million from memory in Q2, EUR 145 million now, so we're EUR 210 million of the way there. That implies further headwinds of the order of EUR 190 million-EUR 200 million in Q4. Within our guidance, what we said is we will give you. We expect to deliver EBITDA for the full year between EUR 2.2 billion-EUR 2.3 billion. I'm not gonna give you a precise answer. What I can tell you is we have factored in an expectation that we will mitigate now. Part of that will absolutely come from pricing. You saw what we did in Q3. The run rate of what we saw in Q3 and that hasn't fully crystallized will also come through to the bottom line. In terms of euros, I can tell you, but I don't want to give you a percentage because I think it could be unhelpful in many respects. You guys were looking at. I do expect us more than ever to really maintain our leading margins. I said it differently. We really like the fact our EBITDA margin now, nine months to today is 24.1%. If I ignore 2020, look at 2019, that's 1.1% better than 2019. I'm not gonna say that's not gonna reduce the level, but yes, of course, there are always little, you know, seasonal impacts, et cetera. Do expect us to keep those leading margins. That's really what we're saying. It may not be linear from one quarter exactly to the other. The focus on pricing will absolutely be maintained and will drive us up. Actually again, so to speak, and thanks for the question. Obviously as you know, the generations are truly based on current PVDF, we have a roadmap. We more than double the capacity since I joined the company and be patient with us. We're gonna tell you a bit more about our plans, either in the coming quarters or during a future Capital Market Day. We're happy with that. As we master, we know and frankly, we can do a better job in making it more efficient and productive. The holy grail will be the solid-state obviously. With generation five, it's further out, probably, you know, post 2025 to the end of the decade. We have trends arise as well from governments and we put together demo plants and we have small scale FPC and we are, you know, upgrading it with some very different competitiveness there. There is a bigger prize there if we can move to solid-state electrolytes to give you a lot of performance, right, and safety technology, number one, highly valued by our customers. Nobody wants to recall cars because of the problem of, you know, famous fire, but also the weight and energy density and the affordability, right, and the cost of ownership. We get to that and I think we are protecting our IP wherever we can, and I can tell you more in the coming, you know, quarters. Back to you. Thank you. Next question from Sebastian Bray from Berenberg Bank. Sebastian, go ahead. Hello, good afternoon, and thank you for taking my question. It's on the Rare Earths business. There is quite a lot of news flow coming out of China about some rather outrageous price increases there as of the moment. If I add up the capacity that they have at La Rochelle and elsewhere, as a rough guess, I think it's about 20%-25% of processing in this market. I remember back in 2010, 2011, there was a big spike and this had a quite positive impact on EBITDA. If this were to repeat, would we be looking for, let's say, EUR 50 million-EUR 100 million of EBITDA uplifts from this segment? Linked to that, how do you think about demand for rare earths on a 10- or 15-year view in terms of the erosion from the autocatalyst business versus the use in EV electric motors? Thank you. Thanks. I think it's an interesting question you're asking. I think the situation today is different from the past that you allude to. I don't believe that we're in a bubble, which is what we saw in the past. I wish I could tell you I see EUR 50 million to EUR 100 million, you know. You know what, I wouldn't hesitate to tell you that if I really believed it. What I can tell you is that we are a niche market. In some of the markets we're serving, customers are serving, essentially we're a fading business with diesel, et cetera, over time. They're fading. But fundamentally, what we've described is very much so within our expectations, let's say, we've factored in within the economy, and for example, we've factored in these expectations. I really don't think we're in a bubble with a significant upside at this point. Thank you. Thank you. Next question from Laurent Favre from Exane BNP Paribas. Sir, go ahead. Yes, good afternoon. It's a two-part question on materials. The first question is around pricing and raw materials. You only had 1% pricing in Q3 for the division. I'm assuming that there wasn't a lot of pricing, and there wasn't a lot of raw material inflation. I was wondering if you could talk about maybe the delayed inflation in Composites because of the fiber contractual arrangements, and also what you're expecting in terms of the fiber inflation in Specialty Polymers. For the second question on Specialty Polymers, on Silica, you previously had a declining car production. The issue with chip shortages. I'm surprised that polymers have managed to have the highest earnings on record in the history of Solvay when car production is about 20% below all-time highs. I'm just wondering, is it that the non-auto part of Specialty Polymers is doing phenomenally well, or is there some risk of inflation? Thank you. Yeah. I may start, Karim, and I'll start probably with Specialty Polymers, right? You've seen the numbers, obviously. This is quarter on Specialty Polymers, and we expect it to be this way. Let's just start with the market situation. We hear a lot about auto and probably you are trying to compare us with other peers. From OEM perspective, there was no major slowdown yet in quarter three, right? From Specialty Polymers perspective, actually our demand has been extremely high since January, by the way. Yes, we did have some customers' orders cancel here and there, even in quarter three, so we still see a slowdown in quarter four, and this is factored in our forecast. The story on our results, it is a bit in my mind, personal, if you think through it. Even with, you know, some softness from demand, we still have full plants, right? That's what we see. I mean, full operating capacity utilization here. There may be some inventory, but we don't think there's much yet. Inventory built up based on our intentions to start with our customers. Here I should be clear from last year, because last year when the COVID-19 hit us, we didn't have a picture of the book, and we didn't wait to price it. We're doing some of the book now, where we have a perspective on what's going on, and we are in better touch with our customers. Some part of the value chain had no inventory, so they tried to rebuild, but it's getting consumed immediately, so no backlog. Therefore, you know, many of our customers believe it or not, are still screaming for inventory in quarter three and, you know, that's what we know from our intelligence again. Intense demand from consumers is still there. People are still buying cars. Now, OEMs are giving priority because of the chip shortages. You've seen it for two or three years. The high-end, high-margin vehicles, and those are either EV or luxury brands, high-performance vehicles. The sweet spot of Specialty Polymers allows, frankly, the OEMs to sustain their margin. Specialty Polymers are used in these types of vehicles, therefore we see, you know, high demand in quarter three, specifically on those areas. We see continued penetration of EV and hybrids, as you know, where we have more weight in these vehicles. Remember my six, nine, 12. Six in ICEs, nine in electric and 12 in hybrids. The OEMs, you know, favoring those, you know, models is working for us. All in all, the forecast, the market is probably getting softer. We feel somewhat affects us in quarter four and in forecast and it's in here already. Please note, I mean, we talk about auto and batteries and all like that, but all other markets on Specialty Polymers side also are performing very well and growing at high rates. All of these feed into superior performance in quarter three and a new record. Do you wanna talk about the actual carbon fiber, Karim? You wanna do that? Yes, please. Carbon fiber, as a reminder, our exposure is a bit more significant here than our competitors. Meaning we are not 100% vertically integrated into carbon fiber. We secure a large portion of our needs, as you know. This means we have less of an issue with fixed costs, right? As you know, last year with the slowdown and halting of civil aviation, we did what we could. How we structured our infrastructure, two plants have been closing. Third one is on the way. We didn't lose volumes. Frankly, composite materials, when the aviation, civil aviation is doing well, getting back to 2019 levels, which we expect by 2023, it's gonna be far better business. That's very healthy and higher margin than what we've seen from ex-Cytec or even composite materials within Solvay in the earlier days of this decade. Indeed we secure our needs. The contract section provides some protection. We have formula pricing, as you know. We are also able to do the pricing obviously, because we have those formula pricing, we have multi-year formula pricing as we have people also reviewing those formula, yeah, definitely we can tack on some pricing. Thank you. Thank you. Last question from Alex Sloane from Barclays. Sir, please go ahead. Hi there. Just to go back to the auto question on auto. If you look at the numbers, your auto sales and materials for your auto sales are down 20% this time last year and up 45%, so that's up 15% over two years. Global car production is down 10%, but it's 2019. Alex, I'm sorry to interrupt, but you're cutting off. You're gonna have to repeat your question. We cannot hear you. Thank you. Okay, it's fine. I'll give this a quick try. I'll see you a couple after and see if that's better. Okay. Just try again one more time, and then if that fails, feel free to reach out directly. Have one more go, please. Okay. I hear what you're saying about auto industry shifts and the margins doing from their prioritizing premium cars. This time last year, your sales to the auto industry was down 10%, so it's down 20%, but now they're up 45%. That's 15% higher in the third quarter this year relative to third quarter 2019. Over that two-year period, car production is down 10%. Alex, I'm sorry, your voice is intermittent. We're gonna have to take it offline. I do apologize. I wish the connection was better. I'd love to answer your question openly today, but we'll take it offline with the team. Thank you. Next question please, operator. Thank you. We have no more question. Back to Jodi for the conclusion. Yes. Thank you everyone for your participation today. Indeed, Alex, feel free to follow up with us. Anyone who has additional questions, the whole IR team is here to help you. Thank you so much and have a great day. Thank you, ladies and gentlemen. This concludes the conference call. Thank you all for your participation. You may now disconnect.