Hello, welcome to Q1 2023 business update and outlook organized by Umicore. My name is Alan. I will be your coordinator for today's event. Please note this conference is being recorded, and for the duration of the call, your line will be on listen only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you will be connected to an operator. I will now hand you over to your host, Mathias Miedreich, CEO, and Wannes Peferoen to begin today's conference. Please go ahead. Thank you very much, and a good evening to everybody who is listening. I'm, as said, I'm here with Wannes, to talk to you today, and to give you an update on our Q1 performance as well as how we see the outlook for the remainder of the year. If we go to the first page, you will see that catalysis is the first topic that we will talk about. I'm very happy to confirm that as planned, catalysis continues with its strong performance also into this year. The very good cost position and strong volumes enable a performance that was again increased above the levels of the previous year. The volumes have especially been strong in Europe and North America, enabled by the local market dynamics and a favorable platform mix, on top of that, combined with a good traction in HDD in Europe, but as well again in China. In addition to this Q1 performance, AC also made significant steps to further secure its future performance by securing a strong majority of the Euro 7 awards for gasoline that are now largely concluded, resulting in a further market share growth versus Euro 7. Altogether, the assumption that we have that the Q1 2023 or the year of 2023 will even outperform the record year of 2022 are fully confirmed by these results. In Precious Metals Chemistry and Fuel Cell & Stationary Catalysts, we also have a solid start into this year. If we go on the next page to E&ST, we can also report here that the first quarter has been executed as planned and as anticipated for E&ST with its different business units. The RBM performance was broadly in line with last year and is expected, as we said before, and we can confirm that later also in the outlook, to continue to be in line with the previous year performance for the full year. As we had communicated earlier, the implemented lithium hedging mechanism is in place and is working as planned. That, of course, is good in a volatile lithium price environment. We also have very good traction in the preparation of our 2024 volume ramp up. You know, we talked about in previous calls about substantial growth that will, you know, introduce end of 2023 and then get full traction in 2024 through all of the programs that we are qualifying, through all of the contracts that we have been securing. We can in this call today tell you that per the latest view, this is fully confirmed. And also we have some good news to share that we see as a proof point as well on this growth forward because we've been able to close a new agreement with the Chinese battery OEM for the local supply, so China, supply in China of high- nickel CAM. This, as we said, is in itself a good news because, as we know, as you know that in China we have still capacity that can be utilized. With that agreement we can do that pretty short-term as the first deliveries will already start end of 2023. Cobalt & Specialty Materials, we saw as anticipated, a normalized performance below the exceptional profitability that we saw in Q1 2022 that was driven by a favorable cobalt price environment. For Metal Deposition Solutions and Electro-Optic Materials, we also saw a stable year-on-year performance. If we move to the next slide, we will talk about our third business group, Recycling. Recycling also started with a good operational performance into 2023. PMR, Precious Metals Refining, had a solid input of PGM-rich industrial by-products. At the same time, you can see also on the chart on the right side, the PGM price levels saw a visible drop in the first quarter, especially rhodium and palladium. This of course is a headwind for the results, but also it reduces the availability of PGM-rich recyclables. With that, the Q1 result for Recycling, for PMR and Recycling has been as anticipated below the previous year. Battery Recycling Solutions, we see a continued strong interest from the customer side. Interestingly, more and more, you know, the customers, and I think we have discussed it in one of the previous calls, that are the cell makers that want to have partners to recycle the scraps produced in the gigafactories that are now steeply ramping up in Europe and in North America. We are profiting from that with our current setup that we have, but also the plan that we have already communicated to build more capacity of battery recycling in Europe. Jewelry & Industrial Metals had a lower year-on-year performance, also driven by the impact of lower PGM prices in the recycling part of it, but also a lower demand for gold and silver investments products. The Precious Metals Management group had a slightly higher contribution compared to last year, driven by favorable trading conditions. Those trading conditions are always favorable when there's a volatility, and that's what we see. Going to the next slide. This will already be my last slide before we have a chance to go into Q&A. I would like to conclude this short presentation by sharing the full year guidance for our three Umicore business groups. For catalysis, the Adjusted EBIT, EBITDA is expected somewhat above the 2022 record levels, slightly above current market expectations. As we said, continued strongly the performance story of automotive catalyst. They continue to benefit from strong market position in gasoline catalyst applications and the further recovery of the automotive supply chain in the Chinese heavy-duty market. In E&ST, the Adjusted EBIT, EBITDA is anticipated somewhat below the 2022 levels, slightly above current market expectations. We said already before that this is due to the mix of the business units because Rechargeable Battery Materials, we confirm that earnings are expected to be in line with the 2022 level. In Cobalt & Specialty Materials, we see normalization in 2023 compared to the exceptional 2022 profitability. Recycling, we see an Adjusted EBIT and EBITDA expected to be in the lower range of the current market expectations, and this, as you might see, it's a mechanical impact. It's impacted by the lower PGM prices and the related less supportive supply environment for PGM-rich recyclables. Of course, this is taking into account the current outstanding strategic metal hedges. To summarize this presentation, we had a strong start in all three business groups into 2023. Operationally strong first quarter. Catalysis is on track to again beat the previous year in growth and in profitability. E&ST is absolutely in plan for our 2023 performance as we have foreseen it, and for the 2024 growth, and we have some very promising recent news to substantiate it. Recycling will remain operationally strong over the semester with the recent decline in PGM pricing, creating some headwinds in earnings for this business group. With that, I would like to close the presentation, and we would be happy to go into a question and answer session with you. Thank you. If you'd like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. You'll be advised when to ask your question. We'll pause for just a quick moment to allow everyone an opportunity to signal for questions. We will take our first question from Sebastian Bray from Berenberg. Your line is open. Please go ahead. Hello, good evening, thank you for taking my questions. I'll start with the guidance for Rechargeable Battery Materials in light of the comments around lithium hedging policy. On an underlying basis, X metal service business unit, am I right in saying that profitability is up year-on-year for 2023 versus 2022 as per the guidance? Hi, good evening. Wannes here. Looking at E&ST, I would say, looking at the different components for RBM, we are in line with last year, and also for CSM, as we have shared earlier, this is where we had exceptional strong results in 2022, and therefore 2023, we absolutely accepted some of the decline. Here, I would say we are also in line with what we anticipated. Just to clarify it, from what I understood at the full year call, though perhaps I've misunderstood, we have the 2022 EBIT for Rechargeable Battery Materials which is not disclosed, but benefited substantially from high lithium prices. What you're saying is for this year, the nominal number is going to be pretty similar at the EBIT level. Correct. I don't know what the lithium price hedging effect is, or if that's purely taken out, but to me, it sounds as if the underlying profitability of rechargeable battery materials, excluding lithium, is up year-on-year. Is that right, or am I wrong with that assumption? There's a couple of elements to consider. I mean, as you rightfully indicate, last year we had the lithium margin that contributed. In the course of last year, we also started implementing de-hedging, reducing the exposure or taking away the exposure to the lithium price volatility. At the same time, we also carried over some of the lithium margin, meaning that we locked in the prices, so the price delta. Now this year, we're delivering the products, we're shipping out the product, we are effectively materializing some of that margin. That's one element. The margin, it's less than last year. Another element that also plays a role is last year we had the start of Nysa, where there's also quite a bit of, testing mass, volume, mass production testing, that was executed, and that is also at lower pace this year. Those elements all take into account, I would say we're rather flat rather than line with last year. That's helpful. Thank you. The second question is on the catalysis segment. Can I probe for comments about winning the majority of Euro 7 business? If I were to take the market share of Umicore as it stands on a run rate basis for gasoline platforms, does Umicore already have over 50% market share in Europe? In other words, is the use of the phrase majority a new thing, or is it just a bigger majority for Euro 7? Thank you. Yeah. Actually how it should be interpreted is that today we have a certain market share. It's a strong market share in gathering in Europe, and I think we have not disclosed this market share. Now what was happening is that the sourcing for the Euro 7 portions has been going on for the last couple of months and is in Q1 of this year coming to close because all of the major platforms have been sourced. In looking to what Umicore has been able to win out of those sourcings, we can clearly see that we have won the largest share of the incumbents today. That will effectively, when those projects go into production, which, you know, Euro 7 is projected to be 2025, will then also materialize in our market share. What I can confirm is that the market share of Euro 6 is below the market share of Euro 7. In other words, through the recent project wins, we will be seeing our market share going up from end of 2024, and then especially, on 2025 onwards in that segment. That's helpful. Thank you. Last one from me. Chinese contracts that you have won, is there anything different about the pricing of that contract relative to the rest of the world? Is there some type of spot linkage, or is it fixed price? Yeah. Let me maybe give you some flavor to that contract. At this point in time, and you will also see that we didn't disclose a name here, because it is still an ongoing negotiation for other elements of that. You might remember that some time ago we had said that our strategy was to combine business deals between European volumes and Chinese volumes and to basically kind of a package deal approach. This agreement that we now have is a positive confirmation of that because the Chinese portion of it has been secured, and we are executing it towards the ramp up end of the year. Which is excellent news for us because it's very short term ability to utilize capacities that were not utilized so far. On the European portion, we are not yet so far, or not yet to say that we can confirm that we have secured the business. We have agreed with our customer that we would only go in further details once the full, you know, package has been concluded. Bear with us a little bit. We will give you more details, but unfortunately cannot do it right now. That's helpful. Thank you for taking my questions. We will take our next question from Georgina Fraser from Goldman Sachs. Your line is open. Please go ahead. Hi, Mathias. Hi, Wannes. I was just wondering if you could give us some idea on the kind of impact that the new Recycling guidance might have on your cash flow or any other assumptions that we should be taking into consideration on what you've seen in the first quarter and any impact on the outlook for cash on the back of that would be helpful. I know that the last time that we spoke, it sounded like there was quite a lot of activity going on in terms of battery material negotiations. If you could give us an update on the pace of those kind of customer inquiries, and if you could give us an idea of further contracts to expect. Thanks. Yeah. Thank you, Georgina. I will start with the second and give the first then to Wannes. Indeed, the traction is pretty hot, if you want. There are two regions that in fact affected. It's Europe, where mostly the discussions are around those package deals that I have just touched. Of course, it is North America, because in North America, we have said last time that we are working with several customers for the North American business opportunities. That is also further progressing. I could say the optimism that you have hopefully heard from us during our last call, I can confirm that this optimism is continuing, if not increasing. We will further work on this in the course of the year. We are already very happy that we have now, the ability to give you the news on the Chinese contract. We see that also as one of a stepping stone of others to come, of course. Okay. Coming to the cash flow generation, maybe looking first at the first quarter, what we see is that the strong performance of Catalysis is that we again are well ahead of target, basically, in the cash flow generation Catalysis. Also looking at Recycling. As you know, there is that exposure of the EBIT and EBITDA to the PGM prices. On that end, yes, there is a negative impact on the cash flow generation. As you also know, looking at the working capital, this is where declining PGM prices help and even more than offset the impact that we see on EBITDA. Overall, looking at the cash flow generation, also here we are well on track. That's very helpful. Thank you. We will take our next question from Ranulf Orr from Citi. Your line is open. Please go ahead. Hi there. Thanks for the questions. First just going back to the Chinese agreement, supply agreement. Can you confirm, I know early stages if that's take or pay at this stage? Secondly, can you quantify or help us understand what the PGM headwind for Catalysis this year is likely to be? I understand it benefits when PGM prices are rising. Just those two for now. Thank you. Very good. Let me, I mean it's on the China topic, please bear with us because we don't wanna violate what we have agreed with our customers. I can give you maybe a little bit more flavor on what this actually is. It is, you know, 20,000 tons of high- nickel cathode active materials. While we normally use the conversion factor of around 1.5 into gigawatt hours, here it's a little bit less because it's high nickel and it's when I say high nickel, it's actually above 80%, so going into the high nickel area, which means translated it's around 15 GW hours, 14.8 GW or something like that. The reason why I'm mentioning that is because you might have also heard in the last weeks and months that there's an increased, you know, success of Chinese OEMs, Chinese battery BEV OEMs to export to have credential models also in Europe and North America. Of course, the European market requirements are different in terms of driver behavior and customer preferences. While in China, of course, still LFP is a very, you know, largely used solution, but with the increase of this export performance of the Chinese OEMs, they more and more need also for NMC and especially high nickel NMC type of technologies. That's we were very happy that we can support one of them also in that regard. I cannot give you any more, you know, contractual details of that. We will be able to do that one once we have concluded the other side of the story as well. Bringing it to Catalysis and the PGM headwind. As you rightly say, we do experience some headwind in Catalysis from PGMs. At the same time, looking at the net effect, we have been able to offset, and that's, first of all, we see a year-over-year volume growth, so we have that volume impact. Looking at the margin side, this is where we continue to make progress, and this comes from the product mix, where we have a more favorable product mix and also where we have been able to further increase prices, on the one hand. We also continue to improve on the operational efficiency. All those elements, looking at volume and margin, enable us to basically absorb, to offset, what we have as headwind, from PGM in Catalysis. Great. That's very clear. If I could just sneak in a final one. Could you please give us an update on the timeline for starting construction in Canada, please? Yeah, absolutely. What we have said earlier is that we will start construction this year, or let's put it the other way around. That, to be able to fulfill the requirements of our customers to produce for them when they need the material, we need to start construction within 2023. We are on track for that plan. Okay, thank you. We will take our next question from Geoff Haire from UBS. Your line is open. Please go ahead. Yes. Good evening and thanks for doing this call quite late. Just wanted to ask a couple of questions. Just a confirmation question. On the Recycling, I take it that the lower working capital offset the EBITDA, but did it also offset the free cash flow generation in the first quarter from Recycling in the quarter? The other question I had was, just given the inflation that we're seeing on a global basis, are you seeing inflationary pressures on the CapEx that you sort of guided to back in June last year at the Capital Markets Day? I just wondered why you haven't given a full year fit guidance as is normal at this time of year for Umicore. Thank you, Geoff, for your three questions. I will take the middle one in CapEx, and Wannes Peferoen will talk about the cash flow and the rationale on the guidance. Now, of course, the, the plans that we are building are not immune of inflation or let's say the inflation is everywhere in the world. Now, there are two effects that we have that counter against that. The first one is that we are continuously working on optimization of CapEx density, which is a process that we had started already long before the inflation was hitting. We have, you know, further increased that. To a certain extent, we are able to compensate inflation by simply using less CapEx density, and that worked out pretty well for the projects that we are carrying forward. There is the other mechanism. Actually three mechanisms. The second mechanism is our customers, because for some of the contracts, and we have disclosed it earlier, some of the key contracts, we have also an inflation coverage on CapEx. Which makes us, you know, even more immune on that. There is a third layer which also, you know, looks promising and looks in the right direction that, you know, in this business for this activity, especially in North America, there's a lot of government grants and funding in place, and we had closed agreements previously. Governments are also understanding that with an inflation that is happening, this needs to be revisited. Also here we see very positive signs. Overall, I can give you the confidence that this is not a major headwind that we see. Okay. Taking it back to free cash flows. As I mentioned earlier, the price effect of PGMs on the working capital is favorable, and it's a multiple versus the price effect on the EBITDA. Free cash flows-wise, yes, it is favorable, I would say, in the short term. Looking at the full year guidance, as you might have seen, looking at the PGM prices and the recent evolution, it is still rather recent, looking at the last couple of weeks. That's where we prefer to see how it evolves over the next weeks, to what extent it stabilizes or it recovers or further deteriorates, before we give any further guidance or be more precise, I would say. Yeah. I think the overall message that we wanted to give is the business has started in the year as planned. We are progressing over the year. As we have said it before, there is only one change that should be taken into account, which is a mechanical impact, obviously, of precious metal prices to our Recycling results. Our automotive catalyst will do the outperformance of last year and is better than the market expectation. In E&ST, all boxes are ticked for RBM in performance in 2023, but as well, the ramp up for 2024 and going onwards. Of course, you can expect that in Recycling, we do everything possible from an operational point of view to find countermeasures. At a certain extent, it's just a mechanical thing that we have to see. As Wannes has rightfully said, it's too early and too recent that we can give a, you know, solid, top-level guideline. We prefer to guide you on the different segments because this absolutely gives you the granularity that we think is important to know. Sorry, can I just confirm, did Wannes just say that you'll be updating the guidance in two weeks for the full year for the group? No. What I meant is that we will be evaluating over the next weeks and months, basically. Oh, sorry. How the PGM price- Sorry. Yeah. Situation is developing. You can expect that our target to have a more quantified guidance will be our half year results moment. Okay. We will take our next question from Chetan Udeshi from J.P. Morgan. Your line is open. Please go ahead. Yeah. Hi. Thanks. Just following on from previous question. Can I confirm that based on what you are indicating at the moment, we are looking at something in the range of EUR 720 million-EUR 730 million of EBIT for the group. I mean, this is just my calculation based on what you discussed for different segments. Or is that materially different? Or what you think is the group number is materially different from that? The second question was just coming to Energy & Surface Technologies guidance. You know, the EBIT in this division was EUR 55 million in second half, and I'm a bit surprised what will drive that number up from that, let's say, EUR 110 million run rate in the second half of last year to what you seem to be saying closer to EUR 150 million, EUR 160 million. Because some of the I mean, the metal prices, cobalt, nickel, are down from second half at the moment, and you seem to be saying the volumes are not going to improve much in cathode till the end of the year. What is driving that uplift from second half run rate, which seems quite a significant uplift from second half run rate in E&ST for full year 2023 in the guidance? The last question is, I mean, can you quantify the benefit from the structural hedging, from, you know, metal prices? Because, you know, it's an important piece of the puzzle, and given the, you know, the upcoming CapEx ramp, you know, I guess it's good for us to know how much cash can be lost from, let's say, the strategic metal hedging in the next year or two if the metal prices were to remain at these levels. Thank you. Yeah. Thank you, Chetan. Three very relevant questions. Let me again answer the middle one on the E&ST guidance, Wannes will talk about your calculation that you made and also the hedging topic. Let me build again the E&ST guidance for you block by block. Last year we had a certain impact of lithium on the result for RBM. Going forward into 2023, we see that we have two elements for E&ST. The one hand we say that RBM will have a similar performance or the same performance like it had in the year before, while CSM, Cobalt & Specialty Materials, will be below the previous year's performance because there is a less favorable cobalt price environment, which is a quite significant impact in that business. Let me dissect the section now for RBM. In RBM, we have, again, in this year, a certain impact of preferential lithium treatment that we have been able to lock in in the year before, and that has a consequence now in the year of 2023. That's one element, but the impact is less than last year. You rightfully say, how can then, in this sense, how can you say that the performance is the same? There are two additional elements that are different compared to last year. The first one is the operational performance in Nysa. Last year in Nysa, we had a lot of start-up costs that were weighing on our margins because we went into the qualification processes, the mass production trials, all of the things you need to do to start up a plant where you have to clean the plant, et cetera, et cetera, to three months of cleaning before you can start the production. This year, we also have continued preparation for ramp-up and launch, but they're, to a much less extent, cost-intensive, and we are much more efficient how we are doing that. That is an upside in, if you want, operational performance, less cost, replacing a less favorable lithium impact. The third element that you also will see then in the second half of the year, especially in the fourth quarter, is, as we said, an increase of activity, so production volume that will then carry out into 2024. One part of that is also to be contributed to the Chinese contract that have been able to close because that will already start production with a smaller volume in Q4 2023. That would be the building blocks why we can say that there is a similar performance year-over-year. It's the same number, but it's a different composition, much more driven by operational impact at that point in time. Coming back to the other two questions, I hand over to Wannes. Yes. Looking back at the first question on the more concrete guidance, again, I think the purpose of today is that we do give a good insight of the different components of the group, and what is happening and how it's evolving, and how we are performing. At the same time, again, given some of the recent volatility on PGM prices, that's where we again prefer not to be precise at this very moment in time, given that we also wanna evaluate how it will evolve over the next months. Going back on your question on, can we share the benefit that we create from structural hedges? You're right. Indeed, we have structural hedges in place. As I recall, well, we shared the ratios during the call, the last call we had mid-February. That benefit is typically not something that we share in detail, those benefits, but they are included in the guidance that we give. It's part of that guidance. That remains the open exposure, those that are not locked in. That's something where allow me to come back to that where we are mid-July with the with an update on those exposures. Thank you. Can I just confirm on E&ST, are you expecting, let's say, you know, if I read slightly above consensus of, let's say, EUR 150, do you think first half, second half will be equal in terms of contribution, or do you need much bigger second half to get to, say, EUR 150 million for E&ST? Yeah. I think from the structure of the business, the second half will be, you know, on the higher side versus the first half, because naturally when the peaking, when the business is peaking up, that's the effect that we would see. Yes, second half will be better than the first half. Understood. Thank you. We will take our next question from James Hooper from Bernstein. Your line is open. Please go ahead. Hi, everyone. Thanks for taking my questions. I have a couple, if I may. Just going back to the Euro 7 wins, congratulations on It sounds like you've been gaining share, but what are your customers saying I think is particularly that they like the Umicore share? Is it perhaps kind of integrated offering between EV and ICE, or is it technological? And then my second question is an update on battery cycling plans, if you please. For example, Fortum has just opened a facility in Finland. There seems to be some momentum in this space. I was wondering if there are kind of plans to update the Hoboken facility or open a second one. Thanks. Yeah, absolutely. First of all, Euro 7, we see actually two reasons why hopefully many reasons, but mainly two reasons why the customers choose Umicore outside of course, competitiveness and quality, et cetera. The first one is really technology, because technology, we must not forget that Euro 7 is still a technology game, and the technology is paying out for the customer mostly in a way that they can fulfill the regulatory requirement with a minimal amount of PGM. That's what the Umicore technologies provide, and that's why the customers source us versus the competition. The second reason why they source us indeed has to do with our engagement in battery materials, but it's not in a way to have a couple deals that, you know, we get awarded a battery business and a catalyst business at the same time. It is more. That's live feedback that I get from the CEOs or the senior leadership of our customers, is that they say, "Hey, Umicore, in what we see into the future, probably is the only company that has skin in the game in combustion engine as well as in electrification." Because I don't want to talk about competitors, but all of them make choices where they are only on one or the other. With that, they simply tell us that if we have to do risk management, what is the, you know, I'm not even talk about most reliable, but what is the partner with the lowest risk that in the future, something is going not as we want it, then it's Umicore. The automotive industry always hates markets that are going down, where players are delivering parts or things that actually see no future. With that, they do crazy things on pricing. The history is long of that. They think, and I think we are fully convinced that they're right, working with Umicore gives them the advantage that we have skin in the game on electrification and would not sacrifice that with any strange moves that we would do on automotive catalyst, number one. Number two, Battery Recycling. Indeed, as I hinted a little bit in my presentation, we see quite some traction from the customer side. When I say customer, it is in this case, of course, also the automotive OEMs, but more pronounced are the battery makers, because the battery makers face a very big problem. That is, they ramp up their manufacturing sites with a high scrap rate, and they know that over the time of the production, they will never be able to go below 5% - 7%. It's a considerable amount, and they want to have partners that work with them on that. We are in discussion with some of those to see how we can make it happen. In terms of preparation, we stick to our plan for Battery Recycling. We see our, you know, conviction confirmed that this is not a market that will happen post-2030 when the, when the, end-of-life batteries come back, but it's a very active market that is forming right now and is mainly driven by battery scrap from gigafactories. Thank you very much. That's very helpful. We will take our next question from Riya Kotecha from Bank of America. Your line is open. Please go ahead. Hi. Good evening. I have a few questions, please. First, Volkswagen officially announced their Canada battery plant with a 90 GW hour capacity, while your agreement with them covers about 40 GW hours. Should we interpret this as potential upside to Umicore's current agreement? And if so, how do you think about incremental investment required to support growth here more generally, even because auto OEMs seem to be focusing on this region given the IRA? My second question is whether you can clarify the subsidies you expect from Canada. VW mentioned about a 10% CapEx subsidy from the Strategic Innovation Fund. Do you expect similar for your plants? My third question is on the China contracts. Are you able to tell us a bit about the length of the contracts? More widely, to what extent will the profitability meet the margin targets that you set out at the Capital Markets Day of about 20% EBITDA? Related to this, and lastly, may I ask why it has been harder to negotiate the European proportion of the contracts? Is it because of the contract structure or the pricing? If there is a European part, would that be upside to the 20,000 tons or just a reallocation to this plant? Thanks. Thank you, Riya. Very, very good question. Let me go step by step. First, Canada, 90 GW hours. Indeed, our MOU that we signed with Volkswagen is lower than that. Now this 90 is also a projection into the future. If you can look at this, there's a certain start, and then there's a continuation. Indeed, there is an upside. First things first, and we don't have to make decisions today, to invest more to cater that, because that will be a matter of time, as we first concentrate on the first steps on the 40. If we find agreements, that will, going further, also be, as the first step, is a value-creative investment for us, we will consider that. I, as you hopefully see it, as a good news. You're right, the traction for Canada is really good because a lot of OEMs, cell makers, and others are going there. We are more than confirmed that this is the right decision. This also comes to the second question, subsidies. What I can tell you in terms of subsidies is that what you hear in the IRA context in the U.S. that there are subsidies that go up to the level of 40%-50% for companies that invest in the U.S. You can be sure, I can give you so much granularity. You can be sure that in Canada, that is not less, because it's actually, you know, a means of competitiveness of Canada. All in all, I could say that the investment in Canada has the same mechanics than if it would be in the U.S. with the IRA. Quite significant ratios here. In China, the two questions on the China business. First of all, the length, yeah, it's a long-term contract. I'm not able to give you yet the exact lengths because this is part of the overall discussions. Yes, the profitability of that business is, you know, supporting the plan that we have, that our RISE 2030 plan in terms of the target profitability. Now, the question is the European discussion, yes, it's an upside, it's not a relocation. The China business is for China. The EU portion is an upside to that. Why is it harder to discuss? Because in Europe we, of course, have the requirement that we apply the same, you know, contractual conditions that we would apply for any other customer that wants us to invest new money because it would mean, of course a capacity or I'd say, more CapEx to be invested. For that, as usual with these contracts, we take our time because we think that we have very good arguments to create very favorable contractual conditions. All the other agreements have shown that, and there's no reason why it shouldn't be here the case, but that takes longer time. Also, of course, the side effect is that the SOP date for Europe is later, while the China SOP is already this year, end of this year. Europe is, you know, out there. We have also more time to conclude it. Overall that explains why the timing is not the same. Okay. That's clear. Thanks so much. We will take our final question of the day from Ranulf Orr from Citi. Your line is good, open. Please go ahead. Hi. Sorry for coming back with more questions. Just a few. Firstly, or back to PGMs. In prior years, you've at least quantified what the PGM price impact on EBIT would be at current levels. Would you mind being able to do that again for us now? Though I appreciate there's price volatility. Secondly, on Recycling, you know, it seems you often benefit as well and, you know, not just from rising prices, but from very volatile PGM prices. As you say, prices are exceptionally volatile at the moment. Does that mean we could see, you know, significant offset to the declining prices and earnings not being as negatively impacted as one might expect? Just thirdly, on cost inflation across the group, like you did for last year, could please give us an idea of the amount for this one? Thank you. Maybe let me start with the last one because I didn't entirely get the middle one, let's say. Looking at cost inflation, that's something I think we have guided somewhat on during the discussion we had in February. We had a significant cost inflation effect in 2022, and that's where we said looking for 2023, we again will expect a substantial cost inflation. Now, as you know, on the energy side, that's where the cost has come down. On the one hand we have some of the energy consumption for Recycling in Belgium to a large extent hedged, but still there's also still an exposure, which creates some upside. I would say on the cost inflation, yes, that will be lower than what we initially guided on. Looking at PGM, I see your point. I understand your question, where you indicate in past you have been guiding even at current levels. Still, I mean, again, it is very recent. It's something we have seen over the past weeks. Already over the past few days, we see some of the PGMs, in particular rhodium, we see it moving up again. Again, here, we believe it's too early to give a precise guidance looking at today's and current volatility. Maybe on the middle question, not entirely sure. Maybe can you repeat the middle part, the second question? Yeah. I understood that when PGM prices were volatile, your trading business was able to. Mm-hmm. capture, excess profitability. We're seeing very high levels of volatility in the market, and I was wondering if again you would generate sort of super normal profits as a result of that. That is entirely correct. Indeed, in volatile times, that's where the trading business creates more margin. And what we also already have seen, have witnessed in past quarters. That is entirely correct. Okay. And can you quantify or at least sort of point to the relative impact of the declining prices versus the high volatility in terms of the division's earnings? I don't have it immediately with me, so that would be, no, that would be hard. All right. Thank you. Thank you for all the questions today. Now I will hand you back to your host to conclude today's conference. Yeah. Thank you very much for the good discussion. As usual, very on the point questions. Thanks for bearing with us with the kind of guidance that we have given. We are convinced that the progress that we have made in implementing our RISE 2030 strategy and the recent proof points that we can report out for our different segments are very encouraging for the year. As we have said, we will revert back in the midyear section when we report our H1 results. We will be able to give a more precise guidance. Please bear with us. We want to make sure that the volatility that is currently seen is better understood and not based on some data points in recent times. Thank you very much and looking forward to our next exchange. Thank you for joining today's call. You may now disconnect.