Good day, welcome to Tessenderlo Group 2022 results conference call. Today's call is being recorded. I would now like to turn the call over to Stefaan Haspeslagh, COO and CFO. Please go ahead. Thank you. Good afternoon or good morning to everyone. Welcome to our call in respect of the Tessenderlo Group 2022 results. First, we would like to start with the key events of the past year. The first one is the combination of Tessenderlo Group and Picanol Group into one industrial group. We have been doing this as informed already quite some times to simplify our group structure and increase the transparency. We are trying to have one single industrial group with a single stock exchange listing and a single board of directors, all of these increasing the transparency of our operations. At this moment, this very moment, Tessenderlo Group is holding 100% of the shares of Picanol Group. As a result of this transaction, Picanol Group became a full business unit into the Machines & Technologies segment of Tessenderlo Group with effect of January 1, 2023. This is really the major event of the past year, which will have for the future a major positive impact on our operations. This means that at this moment we have the following segments in our group. It's Agro, Bio-valorization, Industrial Solutions, Machines & Technologies, and T-Power. In the next slide, you can see the various participants or units per business unit. In Agro, we have Crop Vitality, which are our U.S. operations. Tessenderlo Kerley International, which are the rest of the world in respect of our fertilizer business. NovaSource, which is our crop protection business, and Violleau, which is our organic fertilizer business, mainly operating into Europe. In Bio-valorization, we have PB Leiner operating worldwide and Akiolis operating mainly in France, but already in the meantime, also in Spain. In Industrial Solutions, we have the DYKA Group, which is consisting of DYKA, BT Nyloplast, mainly producing fittings, and then GTB, doing distribution of our products into the U.K. market. Also included in Industrial Solutions are Kuhlmann Europe and Moleko. In Machines & Technologies, the following companies are part of this unit. It's Picanol, it's Proferro, Psicontrol, and Melotte. In T-Power, we have our T-Power electricity generating operations. We come to the T-Power plant, and we have again obtained our permit to build the plant. We still have some objections, but we believe that we can overcome these. We are awaiting the decision of the government, which direction they want to take, and we can tell you that we will only construct new plants if the project is a viable project. In PB Leiner, we have entered into a joint venture to produce fish collagen. You know, we are producing pig-based, pork-based gelatin, beef hide-based gelatin, beef bone based gelatin, and now we have a fourth part of our portfolio, which is fish collagen. We have entered into a joint venture with our Chinese partner, Hainan Xiangtai Group in China, on the Hainan Island, for the production and sale of high-quality fish collagen peptides. Under this agreement, the joint venture, 80% owned by the group, it will produce fish collagen peptides based on our technology. The combined strengths of the two companies will enable a robust premium product range to meet increasing global demand for fish collagen peptides. We had already feedback from various markets that our product is being recognized as one of the top products in the fish collagen segment. In the US, Tessenderlo Kerley, we have now started the production of our plant in Defiance. In this construction program, we have started with first the construction of the new storage area for distribution of our products in the local area. We will start up the construction most probably by the end of this year to be operational by the end of 2024. Tessenderlo Kerley International, we are proceeding there with the construction of our new plant in Geleen, where we will be producing Thio-Sul. It is very well located on the waterways in Holland to distribute all over Europe our Thio-Sul product for the various crops that it is used for. We expect the plant to be operational by mid-2024. We have some key events after balance sheet date, whereby we entered into a joint venture with our plant in Acorizal for the production of gelatin with the D&D Participações Societárias of Brazil. They are one of the leading tannery groups in Brazil. We have organized a close cooperation. They have taken a 40% minority stake in our PB Leiner plant. We believe that the combined strength of the two companies will not assure only a sustainable supply of raw material, but will also help us to optimize our operations and logistics in Brazil. The transaction was closed in January 2023. Akiolis, we have the acquisition of a plant in the Catalonia area, whereby we will be doing the rendering of pig and poultry meat. It's a really interesting plant, interesting located in the middle of the pig and poultry farming and slaughtering regions in Spain. With this acquisition, we are entering into the Spanish market, which is the first international position that Akiolis will be taking. We start operations during the Q1 of this year. Tessenderlo Kerley International, we have made an agreement there to acquire the activities of Esseco in respect of the fertilizer business they are producing for Thio-Sul. We will be distributing the products under various names, Secofit and Agrifix, which will mean that we have a broader range of products to be offered to our ag customers. The deal will be operational as of March 2023. Kurt Van Eetvelt, if you explain and give an overview of the results of 2022. Thank you, Stefaan. If we look at the results of the H2 of 2022, if you look first at those results, on the left side of the table, we see that the revenue has increased by about 18% to EUR 1.25 billion, It is an increase by about 13% when excluding the foreign exchange effect. The Adjusted EBITDA for the same period increased to EUR 187 million. It's an increase by 10%, or when excluding the foreign exchange effect, it's an increase by about 4%. For the full year, the revenue has increased by 24% to EUR 2.6 billion, and the Adjusted EBITDA has increased to EUR 435 million. That's an increase by 23%. It's slightly better than our own outlook late August last year when we stated that the Adjusted EBITDA for 2022 was expected to be between 15%-20% higher than the previous year. You can see in the table below, the Adjusted EBITDA was also impacted by an FX impact. The FX impact amounts to about EUR 23.5 million. That's mainly impacted by the strengthening of the US dollar. The net result of the year, EUR 227 million. It's higher than compared to prior year when it was EUR 188 million. When excluding the foreign exchange gains, the result would have been EUR 221 million compared to EUR 173 million. These FX gains are mainly related to intercompany transactions which are not hedged. The capital expenditure for the year amounts to EUR 113 million, higher than last year. These investments also includes several major growth investments like the acquisition of the assets of B.V. Fleuren Tankopslag earlier in 2022. It's a tank storage and transshipment company for liquid products in the Netherlands situated. Also, we started with the investments for the construction of our new Thio-Sul plants, one in the United States and one in the Netherlands. All these investments made at the capital expenditure in 2022 was higher than the year before. The operational free cash flow amounts to EUR 157 million. Despite a very high Adjusted EBITDA, in fact, operational free cash flow is lower than in the previous year, mainly because of the increase in trade working capital. The increase in trade working capital amounts to about EUR 165 million compared to in 2021 when there was also an increase, but the increase then only amounted to about EUR 70 million. The net financial debt decreases from EUR 75 million to EUR 59 million. If you look at the contribution of each segment to the group revenue, we see that in fact, the split did not change materially compared to prior year. Agro contributes about 38% to the group revenue, Bio-valorization 31%, Industrial Solutions 28%, and T-Power 3%. If you look at the group Adjusted EBITDA per segment, so in total EUR 435 million, Agro is still the biggest contributor to the group Adjusted EBITDA, EUR 173 million, so about 40% of the group Adjusted EBITDA. Bio-valorization contributes EUR 114 million, so it's also a significant increase compared to 2021. Industrial Solutions, EUR 85 million, and T-Power, EUR 62 million. If you look at the performance of the different segments, the Agro segment, there we see that the revenue increased when excluding the foreign exchange effect by about 23% in 2022. The H1 of the year, we saw an increase by 39%. H2 of the year only increased by 7%. We have to take into account that prices were already increasing in the H2 of 2021, which made it comparable for the H2 of 2022 more challenging. Also we have to note that these historical high prices that we saw within the Agro segment also negatively impacted demand. If you look at the Adjusted EBITDA when excluding the foreign exchange impact, the Adjusted EBITDA increased by about 7%. In the H1 of the year, we saw an increase by about 50%. In the H2 of the year, there was a decrease of the Adjusted EBITDA by 36%. It was impacted by lower sales volumes, cost increases, which got fully reflected in the cost of goods sold, as well as inventory write-offs in the segment for about EUR 7 million. The decrease that we saw in the H2 of the year for Crop Vitality into Tessenderlo Kerley International could not be offset by an increase of the NovaSource Adjusted EBITDA. In the second segment of the group, Bio-valorization, there we see that the revenue has increased in 2022 by almost 20%, mainly thanks to an improved product mix and also the market prices for fats and proteins that increased substantially compared to previous years. In 2022, the prices for gelatin products were increased, and this was necessary to compensate the higher raw material, energy, and transportation costs. The Adjusted EBITDA in 2022 increased by about 37%. You see also in the H2 of the year, the increase was even 62%, thanks to favorable market circumstances for fats and proteins and also for gelatin products. This mainly had also, as I said, a positive impact in the H2 of the year. For the Industrial Solutions segment, there we saw an increase of the revenue in 2022 by about 17%, mainly thanks to DYKA Group, where the revenue was positively impacted by, first of all, an improved product mix, but also the Q4 contribution of the newly acquired production plant in Gaillon, and also increased sales prices which increased during the year and which were implemented to compensate the higher costs. Also, the revenue of the other activities within Industrial Solutions, Moleko and Kuhlmann Europe, increased during the year, thanks to favorable market circumstances. The Adjusted EBITDA for the year increased by about 10%. The H1 of 2022, there we saw that the Adjusted EBITDA of DYKA Group was still able to increase. This was more than offset in the H2 of the year due to more challenging market circumstances for the DYKA Group. The Adjusted EBITDA of Moleko also decreased in 2022, impacted by the expiration of the customer agreement with Barrick Gold, while on the other hand, the Adjusted EBITDA of Kuhlmann Europe increased thanks to favorable market circumstances. The fourth and last segment of the group, T-Power. There we see that the revenue of T-Power has increased to almost EUR 81 million, also the Adjusted EBITDA increased by EUR 10 million. This increase of the Adjusted EBITDA could be realized thanks to contractual impacts, including the indexation and also efficiency payments, which were linked to gas prices. The higher gas prices made that we also received higher efficiency payments. Also in 2021, there were more development expenses included in the results related to the intended construction of the second power plant. The costs incurred for the development were lower in 2022. Also to mention is that the EBIT of T-Power was also negatively impacted in 2022 by an impairment loss of almost EUR 38 million. This is an amount which was recognized in EBIT adjusting items, previously called also the non-recurring items. A recoverable amount of the cash generating unit was determined based upon the value in use calculation, this result was lower than the carrying amount. A recoverable amount was EUR 240 million. The value in use was in fact negatively impacted by, on the one hand, a higher weighted average cost of capital, which increased to almost 10%, also being impacted by the increase of interest rates as well as by lower forecasted future cash flows. As you know, for T-Power, the cash flows till June 2026 are rather secured with a tolling agreement with RWE, while the cash flows after that period are more uncertain based on the forward-looking assumptions, which are impacted by the current market circumstances. In total, an impairment on the assets of T-Power was recorded for EUR 38 million. If you look at the reconciliation between the Adjusted EBIT up to the net result of the group. An Adjusted EBIT of just above EUR 300 million. EBIT adjusting items, previously called the non-recurring items, minus EUR 12 million. In the table below, you see that the impairment losses are included for EUR 38 million. Provisions and claims had a positive impact for EUR 13.5 million. It's mainly related to our environmental provisions, which are being discounted. Here we see that the higher discount rate has also led to lower provisions. There was a positive impact included in EBIT adjusting items. Next to that, we also sold at year-end 2022 our U.K. pensions fund. In fact, all the risks were being transferred to an insurer. Currently we are in a buy-in phase for the pension fund, and the premium that we paid to the insurer was higher than the pension obligations at that moment, leading to a loss, a settlement loss, which is included here for EUR 7.3 million. The final big impact in the EBIT adjusting items is the electricity purchase agreement, which is not for own use, where we saw during the year a positive contribution of the contract, and we also had a positive variance in the revaluation of the contract. In total, a positive impact of more than EUR 21 million. Adjusted EBIT minus EBIT adjusting items brings us to the EBIT of EUR 288 million. The net finance costs EUR 4 million. They include borrowing costs for about EUR 7 million. Borrowing costs which will decrease going forward. We reimbursed in 2022 our bond at seven years for an amount of EUR 165 million. The interest rate on that bond was 2.875%. We replaced this bond only partially by two loans of EUR 30 million each, carrying a fixed interest rate of about 1%. Going forward, the borrowing costs should normally decrease. Next to the borrowing costs, we also had some foreign exchange gains included. The income tax expense, they amount to EUR 62 million, mainly taxes that we pay in the United States, in France, and also in Belgium. Share of results of investments, EUR 4.8 million, brings us to a net result of EUR 227 million. How can we reconcile the net financial debt 2021 for EUR 75 million to the net financial debt at the end of 2022 for EUR 59 million? We had of course the positive contribution of our Adjusted EBITDA, about EUR 435 million. There were several significant items which impacted our net financial debt and which led also to a cash outflow. First of all, we had a change in working capital. Working capital trade and non-trade working capital in total led to a cash out of EUR 176 million. We had income taxes that we had to pay, EUR 75 million. We had the capital expenditure, EUR 113 million. We also had the acquisitions of businesses in 2022, which also led to a cash out of EUR 42 million. These acquisitions were the Lannate label in the NovaSource portfolio of the group, and also the new DYKA plant that we bought in France in Gaillon. Despite a very high Adjusted EBITDA, we invested a lot, which made that in total, the net financial debt only decreased by EUR 15 million to EUR 59 million. The outlook for the year 2023, we anticipate, in fact, a continued high level of economic uncertainty. Based on the currently available information, we expect that the Adjusted EBITDA in 2023 will be lower than the 2022 pro forma Adjusted EBITDA. The pro forma Adjusted EBITDA includes not only Tessenderlo Group, but also the result of Picanol Group, and amounts in total in 2022 to EUR 467 million. We expect in 2023 to have a Adjusted EBITDA lower than EUR 467 million. An anticipated increase in the Picanol Group Adjusted EBITDA is expected to be more than offset by a decrease of the Adjusted EBITDA of the other segments. At the annual shareholders meeting of May 9th, the board of directors will propose to the shareholders to approve a growth dividend of EUR 0.75 per share. The policy of the group going forward will be to distribute a dividend of between 7% and 15% of the annual Adjusted EBITDA, always taking into account the cash availability and also the short-term cash needs. For the financial calendar for the remainder of the year, publication of the annual report is foreseen on April 6th. Annual general meeting of shareholders will be on the second Tuesday of May 9th. The half year results will be published on August 24th. Thank you, Koen. Maybe one thing to add to the financial calendar, we will pay the dividend on May 31st, and the share will be quoted ex-coupon on June 2nd, to complete the financial calendar. Thank you very much for your always very clear explanation. We are open for any questions that you may have in respect of our presentation. If you do have a question, please signal by pressing star one on your telephone keypad. Please ensure that the mute function of your telephone is switched off to allow your signal to reach our equipment. Again, it is star one to ask a question. Our first question today comes from Christian Faitz of Kepler Cheuvreux. Yes, thank you very much. Good afternoon, gentlemen. Two questions, please. First of all, can you remind us how much of your Industrial Solutions business is geared to construction, and how do you see demand at present, i.e., in Q1 and maybe also a glance into Q2? Second, on Agro, would you continue to see healthy pharma demand? Can you maybe highlight how much of your specialty fertilizers also get to specialty cultures such as vegetables as opposed to raw crops? Thank you very much. Thank you for your question. In respect of your third question, we see indeed that the construction industry is in Europe at this moment under some pressure. We see this in terms of volume and margin. We are quite confident that the introduction of new systems and new technologies is giving us a good position not to have a major impact on our numbers as we see at this moment. In respect of your question, of Agro, we position our products as a specialty, not only because of the crop it is used for, but also in respect of the technology it is used with. Lots of our products are used for irrigation or for foliar treatment. Meaning that whatever is the crop, it is a specialty because it's used in precision agriculture. In that respect, we position our products as a specialty crop fertilizers. It is not to do necessarily with the crops. It is also to do with the way and the way of precision, how it is applied. Thank you. You would continue to see solid farmer demand and maybe to clarify on the specialties. I mean, my observation is at least that demand from the specialty culture, such as vegetables, is rather low at the moment, due to various reasons. That's the background to my question. Thank you. Yeah. We are applying not only to vegetables but also to broad acre. For example, in California, in U.S., in Spain in Almeria, it's partially vegetables, it's partially cash crops such as wine and other things. You have broad acres. We have various pallet where our product is being applied in precision agriculture also. Okay. Thank you very much. Thank you. Very helpful. Thank you. The next question comes from Wim Hoste of KBCS. Yes, good afternoon. I also have a couple of questions. The first one would be on Agro and specifically with regards to SOP. There was obviously the impact from the sanctions on MOP in 2022. Can you maybe elaborate on the availability of MOP for you in 2023? How much volume do you have secured from regions like Canada, et cetera? How can we assume the volume evolution of SOP business in 2023 versus 2022? That's the first question. The second one would be on bio-valorization. Can you provide a bit more color on the outlook there? I think Darling Ingredients was a bit more cautious about fat prices and the outlook in general. You had a very good, certainly H2 in gelatin. What's the outlook for that business? A third question would be on the dividends policy. Can you offer a little bit more color on how do you see the dividends evolving? The range is rather broad, 7%-15%. I think you're now more at the high end of that range. Would you strive for a stable to growing dividends within the range? Can dividends be very volatile from one year to another? Can you provide a bit more color on that as well? Those were my questions. Thank you. Thank you, Wim. In respect of your availability of MOP for the SOP production, we have at present no problems to find the necessary MOP in the world market for conversion into SOP. In respect of bio-valorization, you are right. There is indeed a pressure on fat and protein prices right now are going on. There is a correction on these prices due to price corrections on competing materials. We will follow the market there, and there can be indeed some pressure on the results in respect of Bio-valorization. In respect of the dividend policy, our target is as we mentioned in our prospectus for the merger, is to have a dividend policy. Two, we will now strive to have some stability in respect of our dividend that we'll be distributing to our shareholders. It's been a long time that we have been in a position to do so. We have been confirming in the merger operation that we put it as a top priority to distribute the dividend. This is exactly what we are doing right now. We strive for as much as possible in light of the circumstances at that moment, at least to have a stable dividend policy for the next years. Okay. Very clear. Thank you. Once again, it is star one to ask a question. The next question today comes from Frank Classen of Degroof Petercam. Good afternoon all. Three questions please. First of all, on the Picanol business, if you look at 2022 on the pro forma numbers, it was not really a high contribution, EUR 20 million and EUR 32 million. What are the main drivers for 2023? Why you think that the EBITDA of Picanol can increase this year? That's the first question. The second question, CapEx budget. Could you help us how much CapEx you expect to spend in 2023 on the particularly probably on the digital plants? Finally, a technical question on the dividend, the new shares which were issued due to the merger. Are these already entitled to the dividend or do we have to look at the number of shares at the end of 2022? Thank you. All right. Thank you for your question. First, indeed, the Picanol EBITDA was at EUR 32 million. We expect an increase during this year. Contributors will be to start with our Electronica business, which is really going very well, which is expanding based on customer demand in the European markets for controllers. Secondly, we expect also a stronger year for Proferro activities, whereby we provide mainly the agro construction machinery business. The Agro machinery business and the construction machinery business for casting iron solutions, which is where we see also an increasing demand at present moment for the rest of the year. In the Picanol business, we see that we are able right now to have some better margins offsetting the price increases that we have been facing during the last year. Our CapEx budget is about EUR 140 million. One of the things which has become very difficult to predict is an exact number in respect of CapEx due to the continuous problems in respect of supply of investment equipment. We are faced still today with delivery times from nine months to two years for specific equipment. In respect of the dividend, all shares that have been issued also due to the merger will qualify for the dividend. Okay. That's. Thank you. That's helpful. Thank you. Our next question comes from Stijn Dem eester of ING. Yeah. Good afternoon. Stijn De Meester, ING. Can you hear me? Yes, go ahead. Okay, thanks. Four questions, if I may. The first one is on Agro. Can you share some light on the current application season in, yeah, mostly the U.S. and how it is unfolding given sort of adverse weather events and sort of a buyer strike, which we read in, in the press? The second one is on the working capital expansion in 2022. Is that mostly price or volume related, and would you bank on a working capital release in 2023? The next question is on T-Power. What is your current thinking on T-Power post 2026? A final one is on the CapEx number. Maybe, I missed the number. Is that 140, or did I misunderstand? These were my questions. To start with the easiest question. Yeah. It's 140. Okay. That's what we expect. In respect of your first question, I think we are faced with two phenomenons going on right now. Normally, the axes in the planting season should have been started already. However, due to cold weather in the northern hemisphere, it has been delayed. Planting season still has to start in a major way, which means that there will be quite some logistical issues to overcome to supply the market. We can tell you we have our stocks ready in the field close to the market so that we can really attend any upswing in the demand. The second thing is that we see is that distributors have quite some important stocks still at their warehouses from the past year where everyone was scared that we'll be short of supply. These needs still go into the market before we will really see an upswing of the demand to the producer. In respect of T-Power, after 2026, it is really difficult right now to give a clear view on this. There is two options, basically, or three options. One is that RWE would continue a tolling agreement with us. The second one is that we would be selling into the market. The third option is that we would make new agreements to sell our capacity to other potential customers. Thank you. What would be your preferred option for T-Power? This will really depend on the market in 2026 and the three years after that. Right now there is very little visibility longer than three years. Right now it's very difficult to put your finger on it and give an exact strategy there that we will be executing. And given this. As soon as we have more clarity, we will be informing yourselves. Given this lack of visibility, how confident are you then still with the second plant and the project this year? Well, the second plant is, as I told you in the presentation of the key events, it remains one of the decision of the government if a second gas plant is needed or not. That's the first thing. The second thing is, what will be the subvention that the government will be allocating to that plant? The third thing will be a financial and economical analysis if this project is viable or not. If it is not viable, we will just not go ahead. Yeah. Basically, it depends mostly on government incentives. Correct. Yeah. My question on working cap expansion in 23, 22, sorry, whether that's volume or price related, and is it linked to sort of the fact that you probably have also increased inventories in the U.S. to cater to sort of upcoming demand? When you compare to the previous years, always at year-end, we have a buildup of stocks for distribution. We can always take into account that there could be an early season. We always have stocks available for an early season or a late season. In the overall, we expect that working capital should be going down during 2023 because we have been having a price impact, and we see now that prices are relaxing in the market in respect of the raw materials that we are buying. Okay, thank you. As a reminder press star one to ask a question. We have no. Oh, pardon me. All right. We have a question from Wim Hoste of KBCS. Yes, good afternoon again. Two follow-up questions, please. First, can you maybe explain what the reasoning is around the shares of Verbrugge? What will you do with those shares? Will they be canceled? If so, yeah, when will you take that decision? Second question would be on Industrial Solutions. Can you maybe talk a little bit on the outlook for Kuhlmann Europe and also, yeah, Moleko after the expiry of the Barrick contract? How do you see that business evolving? All right then. Thank you for your questions. In respect of Verbrugge, what we are looking at as a first step is the merger between Verbrugge and Picanol, which should be happening, half, 2023, which will have no impact on the valuation of the total group. The second step will be done probably within 18 months from now to two years in order to comply with the agreements we have made with the tax authorities in respect of this operation. The outlook of Kuhlmann and Moleko, we are very positive in respect of the evolution of the usage of our products for the treatment of used water and the production of drinking water. We see there a real positive evolution. On the other hand, as you know, the contract with Barrick Gold has come to an end. Why has it come to an end? Because the ore that they used to combine with our product has come to an end. That ore is not available anymore, meaning that we have stopped the factory and that we will be seeing where we will be using these equipments for the future. Mm-hmm. Thank you. Okay, great. Just if I may follow up on your commentary around the Verbrugge shares. Am I right to conclude that a cancellation of those shares is then likely within period of 1.5 to two years from now? Is that what you're suggesting? Correct, yes. Okay, clear. Thank you. Thank you. As there are no further questions, I would like to turn the call over to Stefaan Haspeslagh for any additional or closing remarks. All right. I thank you all of you for your attention, and attending our call. We are very pleased about the past year, where we believe we have realized historical record in respect of EBITDA generated in the group. We are also proud that we have been able to continue to invest in our long-term project for Tessenderlo Group and for Picanol Group, whereby we are putting sustainability as a top priority for the future of the group. Not only sustainability we consider important, we want really to be part of the circular economy. Circularity has been a top knowledge of the Tessenderlo Group for so many years. I just want to tell you that also our business in Picanol Group, Proferro, we are converting basically iron into high technology. Being part of the circular economy and being part of the sustainability of sustainable goals for the future, we really want to be part of this movement, and we are strongly making all teams inside the group alert to work on this and to make this really a target for the future. I thank you very much for your attention, and we talk again to each other in the month of August. Thank you. Bye-bye. With that concludes today's conference call. We thank you all for your participation. You may now disconnect.