Hello, welcome to Verallia Financial Results for financial year 2022. My name is Rusdy, and I will be your coordinator for today's event. Please note this call is being recorded. For the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call. This call will be done by pressing star one on your telephone keypad to register for questions. If you require assistance at any point, please press star zero and you will be connected to an operator. I will now hand the call over to your host, Patrice Lucas. Please begin. Thank you. Good morning, everyone. I hope that you are all fine. As usual, it is a privileged moment for myself and Nathalie to share with you our results. For 2022, guidance and Q&A. We have updated what I can call our ID card. Now we have 63 furnaces, thanks to the acquisition of Allied and with the furnace which has been started a few weeks ago in Jacutinga, in Brazil. We are present in 12 country or 11 usual countries plus UK. Going directly with some key highlights. What I would like to share with you first is some data about the market. Here you see the market evolution from 15 to 21, we see that the market has been growing an average of 2.9%. Our internal estimation is that the market at minimum, in being in a cautious way, is going to grow by 2% the coming years. You may have seen lately the data which have been released by the European Federation of Glass, which are showing that in 2022, in H1 2022, compared to H1 2021, the global market in Europe has been progressing by +8% in tons and +8.5% in units. We are still seeing a dynamic market in front of us, especially in a tight supply environment. Quick update on our key industrial projects. You know that these projects are strategic for us. Again, I will come back in a moment on Jacutinga, which was a big success. We still have in front of us two new furnaces which are moving forward. One in Campo Bom in Brazil. You remember that we're going to launch an oxy-combustion furnace, which will allow us to reduce by 18% of CO2 emissions compared to a traditional furnace. We are planning to start at beginning of 2024. The second one in Pescia, in Italy, which is going to start in Q2 2024. Lately we have announced additional capacity to come by 2025 and 2026. One new furnace in Spain and an additional one in Italy. This is clearly demonstrating our willingness to keep on growing, to keep on being able to go along with the market growth we see and better serve our customers. Capacity increase is obviously new furnaces, but not just new furnaces. As you know, we are working on a daily basis to optimize our efficiency on each of our production lines. As well we are working to what we call debottlenecking. Which is working on our production lines to make sure that we are pulling as much as possible from our capacity of the furnace. The job which has been done in the past month is leading to an additional capacity of 90 million of bottles for all the segments, and this will be beneficial for 2023 at least. A quick update on our new technologies, which are key for our CO2 reduction roadmap. We are on track, first with the electrical furnace, that will be launched in Cognac. We are planning the first production by the end of this year. Our hybrid furnace, which will be located in Zaragoza. Here again, the project development is on track, and we plan to start at the end of 2024. Jacutinga, so, has been launched. Was launched at the end of October as it was planned. So it's a big success, and I would like to congratulate the teams which have been working day and night to make sure it was at the rendezvous. This furnace is going to be focused on long-run beers and spirit production, which will increase our capacity on emerald green bottles in Brazil. This is obviously, this furnace is fully loaded, let's say today, with some key customers and extra capacity have been allocated. You see the numbers. CapEx for this furnace, initial target was EUR 60 million. We are just meeting this number, very good project management on time, and we're going to get this additional capacity of a little bit more than 110,000 tons per year. Again, congratulations to the teams who have been able to make that real. One other key topic we'd like to share with you is everything which is related with ESG. You know that we have put ESG at the core of the company, the core of our strategy. Our objective for 2030 has been validated by the SBTi. We are now part of the CAC SBT 1.5°C Index, which is an index which focuses on climate. We are part of that. Then, we are quite proud of the latest ratings which have been upgraded. First, platinum medal with EcoVadis, meaning that we are among the top 1% company among 90,000 company. which this is a nice reward for Verallia. CDP, we got an upgrade of our rating to A -, and MSCI as well, we got this upgraded to BBB. ESG is obviously a result as well, and we are focusing on two key KPIs. The first one is CO2 emissions. In 2022, Scope 1 and Scope 2 has been reduced by 2.7%, which is finally -10.8% compared to 2019. We are totally on track with the roadmap we have defined, which will lead us to reduce by 46% in 2030. Another key KPI is the usage of external cullet. We reach in 2022, 55.7% in 2022, plus 0.7 points compared to 2021. Here, again, we are on track on the road to meet our objective of 59% in 2025 and 66% in 2030. Verallia is also about creativity, focusing on high added value product, meaning premium. Here you have a clear demonstration of our activity. This is just few examples, but you see in each of our country we have some quite successful story. For instance, you take Spain. We have launched the lighter bottle we can find on the cava. And we are able to reduce by 125 g, this bottle compared to a traditional one. Can speak about as well the successful story of the Prosecco Rosé in partnership with Vera Wang. This is really something that we are aiming to keep on pushing because we are very convinced that it is additional services and to our customers and this is something we want to be in. One of the key moment of 2020 was our acquisition of Allied Glass. That is now Verallia UK. We confirm in November the closing of this operation, and it is a key operation for us, a strategic operation for us, first being the first one for Verallia, and second, because it is totally aligned with our strategic view. Here it means that now we are completing our geographical footprint being present in UK. Two, this is Verallia UK is a leading company in the premium glass. Obviously we see a lot of upside. The integration is ongoing, going well. Obviously we have started to work on all the potential synergies and remaining in the way we want to do business is, which means local, what I call local. It means that U.K. is in charge of the U.K. business, but being local, Verallia UK will benefit from being integrated in Verallia from economy of scales, obviously on purchasing side, but as well on R&D and technology support. In a nutshell, our 2022 results are quite good, let's say very good, and I'm very satisfied about what we have been able to deliver, thanks to the agility and determination of the teams. For revenue, we have a revenue growth of +25.3%, more than EUR 3.35 billion. Adjusted EBITDA EUR 866 million, +27.6% compared to 2021, with a margin which is improving compared to 2021, at 25.8%. Net income reached growth of +32.7% to EUR 356 million. Net debt. We are continuing delivery the company, we are at 1.6% compared to 1.9% at the end of 2021. Extra financial indicators, again, which are the core of our strategy, I have just commented it. We are on track. The dividend. We are proposing a dividend per share of 1.40 EUR, which is a +33% compared to 2021. Now I'm letting the floor to Nathalie, who is going to present in details our financial results. Thank you, Patrice. Good morning and good afternoon to all of you. Very pleased to comment these numbers for you again this month. Consolidated revenue for Verallia, we ended the year 2022 at EUR 3,352 million. As you can see on this page, the usual bridge. We were at EUR 2,674 million in 2021. That means an organic growth of 26.5% versus 2022 and 32.9% in Q4. You can see in the bridge that the volume impact is limited. We explained already that we would have a reduced capacity in the second half of the year with the timing of our furnace renovations. This is perfectly in line with our expectations. Now, the price and mixed pillar is the most contributive one. In Europe, we have run several selling price increases during the year of 2022 to compensate for the sharp inflation in production costs. In Latin America, we do that as usual, with a dynamic selling price variation. Important to note that the mix contribution has been positive throughout the year and in all the quarters. If we move by product categories, the volumes have been pretty strong, especially strong in spirits and also in sparkling wine with continued recovery in champagne, reaching new records and in sparkling wines in Absolut. We have solid volumes in food jars as well. Now you see that the FX pillar is negative. This is mainly due to Argentinian peso and to a lesser extent, to Ukrainian hryvnia. We are very pleased to introduce a perimeter impact. Now the EUR 17.5 million that you see in this bridge is the consolidation of Allied Glass in the UK. This is a bit more than one month activity only. In the 2022 figures, Light's contribution is very limited still. It will be, of course, effective in 2023. If we move by regions, in South and West Europe, the revenue evolution has been 22.1% reported. We have flat volumes despite the four furnaces renovations in H2. We've seen here very strong the spirits and the sparkling wine that I just mentioned, and very positive mix especially in Italy. If we move now to North and Eastern Europe, so important to note that UK is included in this region, in this segment of North and Eastern Europe, and it contributes to 3.2% in the growth. That is 29.3%, as you can see. We have a slight increase in volumes, and it's important to mention that it is despite the volume drop in Ukraine. You know that in Ukraine, situation for Verallia isn't changed since we had our last call together. We continue with one of the two furnaces running. I have to say here that our team in Ukraine is very strong, very committed, and doing an outstanding job throughout the year in 2022, and supportive, of course, to our customers. In Northern Eastern Europe, also strong in spirits, but also in still wines and with thin growth in beer and food jars. If we go to Latin America, you will see that figures for Latin America are again very, very strong. We have +38% of reported revenue. We have and it's +60% at constant exchange rates. The stage volume continued to be really strong in all the segments, I have to say, especially beer, spirits and sparkling wines. We've seen significant increase in selling prices to follow the inflation. You know that in Latin America, our spread is positive in each and every country, which is again, a very strong achievement of our teams there. We have successfully launched the new furnace in Jacutinga, as Patrice has said, exactly on time. The contribution to the volumes is still, of course, very, very limited. You remember it was really started to have good glass in December, but exactly on time. Again, this will be a contribution to 2023. If I move now to the consolidated adjusted EBDA bridge, the usual format, we had an EBDA, an adjusted EBDA of EUR 678 million in 2021 and we achieved EUR 866 million in 2022. In terms of margin, you have them on the right top corner. We moved from 25.4% to 25.8%, which is a strong achievement as we succeeded into compensating for the dilution of the price increases. You can see that our three pillars contributed positively to this performance. The first one is the activity and operating leverage. Here, we have Overall flat volumes throughout the year, and the positive impact is mainly coming from stock variation and valuation. The second pillar, the spread, is the most contributive as you can see. Progressively throughout the year, and we commented that to you each quarter, we have been able to offset the cost inflation in all the geographics. We have also a positive mix contribution throughout the year in each of the quarter. One important point is about Q4. We have a especially strong spread in Q4. Remember that a comparison basis here is important. In Q4 2021, we had a negative spread as we had started to see a strong inflation in energy costs and customer prices were not yet adjusted. We have a comparison effect here. If we look at the next tab, we are pleased to report that we succeeded to deliver 2.1% of cash production cost reduction. You know that our target is to deliver at least 2%, we had a strong Q4 here, very good performance throughout the group. The exchange rate effect is negative, this is mainly due to Argentina. In the EBDA margin, important to insist that there is a country mix effect and a region mix effect I should say, as LATAM performance is strongly contributing. I will show you now the regions. EBDA in South and West Europe moved up from EUR 453 million up to EUR 555 million. That is +22.5%. In terms of margin, you can see that we are pretty stable, even a bit above 24.8% to be compared to 24.7%. Here, we have a positive inflation spread, as I commented. The product mix was strong and the industrial performance was good as well. If we move to North and Eastern Europe, so here UK is included, but has really no impact in 2022, as I was commenting. Remember, the acquisition was on the November 8th. The EBDA moved from EUR 117 million up to EUR 147 million. That is +25.1%. The adjusted EBDA margin 21.1%, that was 21.8% one year ago. The positive inflation spread on pace is due to the rise in cost here as well. We have industrial performance in line. Important to mention that in ME we have Ukraine, and this is impacting the comparison versus last year. Our Ukraine team succeeded into delivering a positive EBDA throughout the year, really a strong performance. One specific point to mention, we succeeded into delisting our subsidiary in Germany, Verallia Deutschland AG. The privatization was finalized this December, so no impact in the EBDA, but important to mention, this is actually less admin work for everyone, and it didn't make sense for us to keep this listed company. If we move to Latin America, the performance continues to be really very strong. EUR 108 million EBDA in 2021, moving up to EUR 155 million. That is +52.1%. If we look at the margin, we are moving from 35.6% in 2021, up to 39.2% in 2022. Here, I think, this is always my comment, but our three pillars deliver fully. We have strong volumes, and we address this growth. It will be even more valid in 2023 as we start our, we benefit from Jacutinga too, and we work on, you know, Campo Bom capacity. We have a positive inflation spread, and the industrial performance is really excellent in the region. Moving now to CapEx and cash. CapEx evolution, we moved from EUR 256 million to EUR 367 million CapEx. As you can see on this graph, in fact the recurring CapEx were maintained at 8% of sales. We see that strategic CapEx are moving from 1.4% to 2.9%. This is fully addressing our strategic roadmap that is adding capacity to follow the market growth and in the most profitable geographics. We have the building of the new Jacutinga furnace in Brazil. The first investment linked to the new furnaces coming in 2024, that is Campo Bom in Brazil again, and Pescia in Italy. The rollout of our CO2 emission reduction CapEx that is EUR 22.8 million in the year. If I move to the cash flow generation for the year, you can see Free Cash Flow has increased from EUR 329.3 million in 2021, up to EUR 363.8 million in 2022. This, you can see that, we start with the adjusted EBITDA, we just commented. The total CapEx, I commented as well. The increase again is mainly due to strategic investments. We have the change in operating working capital, that is EUR 39.4 million, including mainly CapEx WCR variation. We had a strong roadmap of CapEx into Q4 that is explaining this EUR 75.2 million of CapEx WCR variation. Overall, I have to say we have a very good control of our overdues and inventories. Other impact, you have the usual IFRS 16 impact mainly, and to remember that last year, in the EUR 39.8 million, we had some specific CO2 effect at the end of the Phase III. You know that already. If we comment the interest paid and other financing costs, the cash out higher in 2022 is mainly due to, in fact, a foreign exchange impact. The cash tax is increasing in line with our better results. All in all, it's a strong Free Cash Flow generation for 2022 again, and perfectly in line with our midterm guidance. Looking now at the net debt and the leverage. The net debt is EUR 1.406 billion, I would say. The leverage is 1.6 x. This is after two elements that you have after the Free Cash Flow I just commented. EUR 123 million dividends were paid in 2022. We have the acquisition of Allied, that was paid in paid cash, for GBP 350 million EV. If we move to the financial structure and liquidity next, nothing major, no major change versus previous quarter. You know our well-balanced financial structure between bank and market. We have, we enjoy two sustainability-linked bonds with fixed rates that you can see on this page at a good level considering the current market level. All in all, the cost of financing for 2022 remains below 2% all included. The available liquidity is now EUR 680 million after the acquisition of Allied in the UK. Okay. Thanks Nathalie for this detailed information. Obviously 2022 is behind us. Now we are all focused with the team on 2023 to keep on delivering profitable growth along with the implementation of our ESG roadmap, which is again clearly put at the core of our strategy. For 2023 financial guidance, given a market that we still expect to remain supportive in Europe and Latin America, we are looking for revenue growth above 20%. We are shooting for EUR 1 billion EBITDA for 2023. Adjusted EBITDA, we are taking the ambition and will be around EUR 1 billion. This is what we wanted to share with you. I'm sure you have some Q&A, question sorry, and we'll bring the A. Let's move to your questions. Thanks. Thank you. As a reminder, if you'd like to ask a question or make a contribution to this call, please press star one on your telephone keypad. To withdraw, please press star two. We'll take our first question from Matthias Pfeifenberger from Deutsche Bank. The line is open, please go ahead. Yes, good morning, lady and gents. A couple of questions from my side. On the 20% plus growth, can you split that into, obviously, we can do the math on Allied, but can you split it into the bottlenecking, Jacutinga price, most importantly, and then maybe underlying market growth? You hinted maybe, I don't know, 2%, 1%-2%. Second question on the margin. Obviously the guidance implies margin dilution. You're doing probably more price increases. How much of it is from down trading, or looking at 39% in LATAM being not sustainable. Just what is the driver for the margin dilution? On the gas hedging, I think you have eliminated the slide on the rolling hedging. Do you still do the rolling hedge? What's the position for 2023, how does that compare to competition? What does it do to your competitiveness in terms of pricing? Thanks a lot. Thank you, Matthias, for your questions. First of all, speaking about growth for 2023. Obviously we are looking to go along with the market growth, which is being cautious 2%, but we can imagine it could be 3%, between 2% and 3%. Yeah. On top of that, and Jacutinga will be part of it as well, as well the actions we are taking on a daily basis, efficiency, debottlenecking and all of that. Plus the perimeter, so coming from Allied, plus some mixed impact, you know, that we are very willing to keep on developing high added value products and working on the optimization of our portfolio. In Europe, we have a good job ongoing on that. The rest will be the pricing effect with some pricing obviously carry over from 2022 to 2023, plus some additional pricing that we'll have to do. You all know that we have a clear policy, clear strategy let's say, which is to deliver a positive spread. This is how we see our revenue growth in 2023. Yeah. About margin. Margin dilution. I can take it. Yeah. Yeah. Hi, Matt. Hello, Matthias, thank you for your question. Hi. Margin dilutions, you were asking is it coming from down training or LATAM? I think the main contributor, you know, is again the price effect and dilution from increasing pricing or carry over effect as Patrice mentioned, to the margin to ensure positive spread. We have very strong margin in Latin America. But with Jacutinga of course, we are adding some fixed costs, and we will have the ramp up of Jacutinga too. Except for that, we do not see any down training, down trading or strong effect in Latin America. You have seen that Latin America has remained very strong throughout the quarters and the year. I would mention mainly the dilutive effect from price evolution. About gas hedging, Matthias, maybe you missed it, but the slide is still in the presentation in the appendix. Mm-hmm. No change about that. Okay. Okay, sorry. No change. No, no problem. No change about that. We are still very disciplined with this policy, because again, as you know, this is a tool which is... We are not traders as we said, so we don't want to play with that. This is a tool which is giving us visibility. Which this is a tool which is allowing us to anticipate and put in place some actions when it's necessary. This is a tool which is allowing us to share that with our customer visibility and protecting in a certain way our customers, benefiting from our cost, well known I mean, on the energy side. For 2023, we are in the same configuration as 20 22. We are entering in 20 23 with 85% of our needs hedged, the rest will be buy at the market value. We do not expect a really negative impact compared to spot market from what we see today. Again, with the 15% that we need to get, we'll see. We'll see. Okay. You're not necessarily hedged above spot prices, is that what you're saying? You know we are not giving the level of hedges, yet. Yeah. Mm. We only give. Let me put it another way. Are you impaired in your ability to raise prices by being hedged as much? No, no, no. I do not think so. I think what we need to look at is much more cumulative approach between 2022 plus 2023, because, thanks to our aging policy, we'll be able to be resilient and share that with our customers. This is a cumulative approach that you need to look at. Okay. Okay, great. Congrats to the results. Very well done. Thanks a lot. Thanks Matthias. Thank you. We'll take our next question from the line of Francisco Ruiz from BNP Paribas Exane. Your line is open. Please go ahead. Hello. Good morning, and congratulations for the figures as well. I have some question on the modeling and another question on more strategic. On the first one, the debt that you book on Allied, if I look at your cash flow statement, looks relatively lower than the figure that you reported of GBP 350 million. Is this just because you are booking the only the equity value or is because there are some other payments to be included? The second question is on financial cost. There has been a big delta on financial cost in the second half of the year. What I would like to know is it is just the effect of the high interest rates during this part of the year or there is some one-off on how we should understand financial cost for 2023. A follow-up on Matthias question. Could you give us an idea of how much Allied should contribute to this EUR 1 billion a bit down on 2023, and what's the effects that you are assuming for next year guidance? Last but not least is on pricing. I mean, you commented that there has been some price increases. Could you be a little bit more precise on this and how reassured you are that in this context of energy going down, the prices in the second half of the year will be maintained? Thank you. Thank you for your question. I take the first one. Allied, I think you refer to the Free Cash Flow details in our. Right. In the, in the press release. In fact, you are right. Here you have a line that is acquisition, and here you have a net of different topics, plus it is indeed only the equity. We had also some cash out for the debt related. All in all, the cash out for the impact of Allied in our cash was around EUR 400 million. In this line you have the equity purchasing purchase for Allied. It is netted also from other elements. That's why you don't see exactly the figures, Francisco. Going to the financial costs for H2. If you remember our interest rates, we are very well protected against the current increase in interest rates as we have now two sustainability-linked bonds with fixed rate. We are also with hedged on the rest of our long-term debt. The main impact is coming from in fact a foreign exchange impact, and it's pretty one-off. If we go to 2023, we will continue to benefit from of course our sustainability-linked bonds with fixed rates here. We have partial hedging on our long-term debt. The Factoring is not hedged, of course. We have the refinancing. We should, we will not be hit by the... As strong as the market, as the current interest rate level that you can see, I would say, on the financial market. By the way, could you give me the detail on the off-balance with factoring? The detail? What do you mean, the magnitude? The figure. Yeah. It's. Let me check. It's around the same magnitude of previous year, so we continue to roll our usual program. At the end of December, the total factoring was EUR 335 million. Okay. Thank you very much. About your question on Allied, which is the Verallia UK now, I mean, contribution in the EBDA for 2023 is going to be around EUR 50 million. About pricing, what you have mentioned on your question about pricing, I would like you to just keep in mind that we have our clear strategy again, which is to be spread positive. It means this is our commitment. This is what we are going to work on. What is to be noticed is that 2023, as far as spread is concerned, we're going to have a totally different profile as the one we had in 2022. In 2022, we started with inflation on our cost. We were running for selling pricing increase. You remember that we did several steps. Two, one, then into two, on a case by case at the end of the year. Obviously it's going to be a basis for comparison. When you enter in 2023, it's going to be the opposite. We're going to see the spread of which going to be, in my mind, strongly positive in Q1, then certainly going down due to the basic comparison at the end of the year. We are going to monitor pricing accordingly to this positive spread strategy. Having in mind as well that we want to protect our long-term relationship with customers. All of that, I mean, is a nice balance, good discussion, and as we have always said, we want to protect the future. It's a question of protecting our future, our competitiveness at the end of the day. With our golden rule of being spread positive. This, some of the competitors has already commented on 15%-20% increase in prices overall for the year. Are you agree with this figure, and this is, what we should understand for Verallia? Sorry, Francisco. I do not comment anything about competition on that. Okay. We'll take our next question from Michele Filippig from Jefferies. Your line is open, please go ahead. Hi, good morning, thank you for taking my question. Congratulations on the result. I have a two question on some items that has been already touched, but maybe if you can add some color. The first one is on cost outlook. According to your 2023 guidance, if we take a revenue higher by 20%, and EBITDA at 1 billion, we have operative costs in 2023 higher by more or less 20% year-on-year. I appreciate we are just in February, and this can change a lot through the year. Can you help us break down this cost inflation? Is it mostly due to energy hedges rolling down? What is the direction of travel for the other cost items, for example, raw materials? The second question is on price dynamics. I understand that, as you just said, the main driver for you is your price called spread, but energy spot and also forward prices are correcting. My question is when do you expect to give back on moderating some prices? If you comment on that, no, probably not. Do you see some of your more edged competitors, model starting to increase prices less than your or even moderating in 2023 due to lower energy costs, as said? Thank you. Okay. Thank you, Michele, for your questions. You're very good. You're right about your assumption on the total cost evolution that we see. Thank you for saying as per today, because I think we all agree that there is still a lot of volatility in the market and lack of visibility in the evolution of inflation. You're right about around 20%. Now, if we look at the nature, the cost natures, we will still see energy increase versus 2022. We have also a component that's something we mentioned already for 2022 in the raw material. We have also inflation here, especially on the cullet side. We see that cullet prices in some countries, so it's very different by country. We see inflation in the cullet prices versus previous year. We have also, you know, around 20% of our cost base that is labor cost, and there is inflation expected in 2023 versus 2022 in labor costs. Important to say that we do not see deflation. Mm. In any of our cost nature. We would say, we see some ease in the inflation, on the packaging, on the transportation, maybe on soda ash as well. We do not have, in the components of our costs that, deflate versus, 2022 as per today. I think this is Michel, an important point, this one. What we see in front of us, and with all the humility, obviously, in this volatile environment, is that we do not see a deflation. We see an inflation which is going to slow down. My guess is that could be still similar to 2022 in the first part of the year, and maybe we'll see a slowdown in 2023. For what we see for 2024 right now, we do not see any deflation. I... Again, what is important and our key keyword is agility and adaptation, and we will manage what we have to manage. Again, being responsible for the company, protecting the profitability, again, with this golden rule of spread positive. This is it. Thank you. Very valuable comment. Do you have any comment on the price dynamics question by any chance? I can repeat the question. Yes, please. Yeah. We said before that like your main driver, moving basically your price negotiation is your spread. As you just said, you will have extra inflation from the energy rolling hedges. We also like seeing the spot and the forward prices for energy correcting from the high of 2022. My question is when do you expect these back prices? Probably from 2024? Or do you have any view on that? Well, this is what I have just commented so far. I do not see any decrease in our cost. Sorry. But again, very humble about it, huh? Very humble about it. We see, cost inflation slowing down the second part of the year, and maybe to be maintained in 2024, but very too early to be definitive, obviously. That's why I was saying that, keyword or agility and adaptation and being reactive in order. Again, our master golden rule, spread positive. How we are going to manage that, and, we have, the mix that we are working on as well in order to support, to support this objective. Okay. Thank you. Sorry for asking again. No, no problem. The line was a bit broke. No problem. Thank you. We'll take our next question from Jean-François Granjon from Oddo BHF. Your line's open. Please go ahead. Yes, thank you. Good morning. First question. I just want to come back on the EBITDA same level at 26% for the EBIT margin. We see a strong improvement by more than 200 base points for the EBIT margin, to which more than 25% compared to 23% for the previous quarter. How can you explain this so huge increase despite the dilutive impact of the price increases? My second question concern the price increase expected for 2023. I understand that you wanted to comment the. Mm-hmm ... the competitor's explanation. Nevertheless, I understood that you probably could increase by in the same magnitude at 20%, the price in 2023 versus 2020 compared to 2022. I just wondering, do you consider that your expectation at 20% growth for the top line is probably precious, taking into account the price increase, probably some more volume, and for sure the scope, the scope impact. My third question, could you make an update on the CapEx amount? What do you expect for the CapEx in 2023? The last question concern the plan for 2024, presented a few years ago. Do you expect to make an update on the plan 2024, mostly in term of EBITDA margin you expect, if I will remember, between 28%-30%, but was produced the inflation impact? Do you expect to make an update of the, of the plan for the medium term? Thank you. Thank you, Jean-Francois. Nathalie, you take the first one? Yes, I will comment to the. Hello, Jean-François. Thank you for your questions. On the EBITDA margin in Q4, indeed, it was really strong. We have here three comments. I commented, and if you compare to previous year, I commented to the spread. If you go back to Q4 2021, we had a negative spread. We didn't update customer prices in Europe in 2021. If you remember, there was one price increases, annual one. In Q4, we had inflation hitting pretty strong. It had already started inflation in July 2021. Energy prices started to rise already in Q4 2021 before the Ukraine conflict. If we move now to this, I mean 2022 spread, here we have the dynamic of the several customer price increases that we did in Europe. On the contrary, there was a bit of a lesser inflation or slowdown in inflation in Q4, let's say. That is one important component. Also the net PAP, the net productivity, sorry, with the net PAP, we did deliver a strong performance in Q4. You know this one is really benefiting to the margin because it's adding euro to the EBDA and no impact on the top line. This is a good news and we are pleased to deliver that. I can add, you know, there is the mix in the country, in the geographics, with the increase contribution of Latin America step by step. Okay. Okay. About our guidance on revenue, Jean-François, we are seeing above 20%. We are seeing above. No, we are just. A lot above. A lot above. No, I mean, we are just… A little bit. it's February. Mm. You know, the world is always uncertain. We have a plan, obviously, to deliver growth. We say above 20%, and it's going to be a blended, a blend of volume growth with the additional capacities, with obviously the perimeter as well, coming from aligned, with pricing, and with mix. This is what we see as of today. It is a commitment that we are clearly putting on the table, above 20%. About the CapEx for 2023, we're going to be as per our guidance, mid-term guidance, around 10%. Always focusing on developing some strategic investment. you know, what we call strategic is everything which is related to our growth, so additional capacity with the announcement we have done, and with the two new furnaces to come in, one in Brazil and one in Pescia in 2024. As well focusing on executing our CO2 emission reduction roadmap. we're going to be around 10%. For your question about our midterm guidance, we first presented at the Capital Markets Day at the end of 2021. I mean, I would say that we are on track on every key KPI, we are ticking the box. There is one obviously which is a challenge, is the margin, the 28%-30% margin, due to the fact that the market environment is totally different coming with this inflation environment. The implicit EBITDA value in EUR, I mean, is going to match. It's our commitment on that. Do we have to update this 28%-30% margin? I mean, this is something we're going to work on at the point of time and come back to you after certainly having delivered 2023 and having a good view of 2022 plus 2023 and an estimate of 2024. What is much more important in my mind, at the end of the day is that the euro absolute value, which was behind, is going to be delivered. Okay. Perfect. Thank you very much. As a reminder, press star one to ask a question. We proceed to our last question, Julien Mura from Société Générale. The line is open. Please go ahead. Hello. Hello, everyone. Thanks for taking my questions. I have three for the last, some follow-ups, as well, two questions on ESG. The first one, it's on the north and eastern Europe region, more specifically. We're seeing some volumes growth, as you said, despite the crisis, energy, also war going on there. Could you specify a bit where is this volumes growth coming from? Is it from the debottlenecking capacities and/or underlying demand growth? That's the first question. My second question would be on ESG. Could you give a bit view on the outlook from glass versus other materials at the end of 2022 and 2023, particularly regarding the decrease in some raw materials for some substitutes to glass during the end of the year? The third and last question is regarding your furnaces, energy consumption, more specifically. You commented on fuel transition for the first half 2023. Could you give some color there? Do you expect this temporary fuel transition to last a bit longer during the year? Are there some gas shortages? As well, what kind of CO2 emissions should we expect in 2023 related to 2022 because of this fuel transition? Last question... We had four. Last question is on the rationale for the technology of the 2025, 2026 furnaces in Spain and Italy. Why have you choose for the Spain furnace, for instance, the oxy-combustion technology instead of using electricity or hydrogen? Many thanks. Okay. Mm-hmm. Thank you. I'll take the first one. Hello, Julien. Thank you for your questions. So in Northern Eastern Europe, I mentioned that there was some volume growth despite the one furnace less in Ukraine. It was not a sharp growth, now let's be, let's be clear, but market was supportive. It's not linked to any new capacity. I would say it's very stable. No specific investment in debottlenecking. We commented, Patrice commented to you the specific impacting ones. Of course, we work on efficiency all the time in all our plants, but no specific, no specific point to mention here. On your question about glass packaging market and compared to other substrates, quite difficult to answer to this question, Julien, as we... I mean, we do not have the latest information, so obviously we are quite willing each time with our business intelligence team to get additional data. What I would like to remind you is that you remember that in 2021, glass packaging in Europe was a record with 23 billion tons of glass. Compared to the past, it was a forever record. I have just commented with the latest that data we have from the FEVE, European Federation of Glass. That H1 2022 was strong again, because after a best ever in 2021, H1 in 2022 is 8% in tons and 8.5% in units above 2021. We see a market which is very dynamic in glass. About substitution, quite difficult again to answer to that. Maybe on some marginal cases, we see as well the opposite. We see with some customers, especially the one who are willing to position their product on the premium side, moving from some other substrates to glass packaging, especially on the food side, we see that happening. About energy. You're right. We commented last time that we were ready to operate with some additional fuel. The objective of that was really to ensure business continuity in an environment where a shortage could be at the door. As commented last time, we decided to anticipate, to be prepared on the technical side, but as well on the supply chain side to use some fuel. We have ramped up in Q4. I gave you a value of 20% of fuel usage. We know the current situation. I think the shortage is not likely scenario for this winter, at least. We're going to see what is going to be the situation next winter. We have started to use this fuel in Q1, and we are going to ramp down quicker than what I was commented. Means that I will not use 20% of fuel during the overall first semester. This is what we are... and here, you see, this is all about what I was mentioning, agility and adaptation with the current world we are facing. For your question about the furnace technology for 2025, I think what we have decided is to use the best technology, which is fully, I would say not validated, but fully approved and make, we have launched. Because we are speaking about 2025 here. We are launching our electrical furnace in 2023 and our hybrid furnace in 2024. Hybrid furnace is going to be for colored glass. 2024. It means that we're going to get some experience, some time to value and validate all of that. It means that we need to make a decision right now of the technology, and it was the best decision to move for Spain for oxy-combustion because it's going to be a color furnace. Hybrid furnace will not be totally and fully validated. This is why we have decided to go with oxy-combustion on this one, to be as soon as possible ready to have this additional capacity in Spain. Many thanks for all of the SMB sensors. Just one small follow-up on the CO2 emissions in 2023 versus 2022. I acknowledge that you're going to decrease the fuel usage quicker than initially expected. However, should we expect an absolute increase in CO2 emissions in 2023? In fact, we will not increase the usage of fuel. We will decrease. It was really a fuel usage was to be prepared to any shortage if we would have. As we do not see the risk anymore, as we always said, we will be agile and go back to a more normal mix to be clear. All in all, as we included a portion of fuel and we are not now decreasing, in the end, the total impact is very limited to additional CO2 emissions. Thank you. Okay. We'll take our next question from the line of Linus Fridolf from Berenberg. Your line is open. Please go ahead. Yeah. Hi, Patrice, Nathalie. Congratulations on the results. Just two questions from my side. Obviously with the guidance which was given at the Capital Markets Day and absolute value, you're kind of expecting to be, I think, well above that in 2023. I guess my question is, you know, do you view 2023 as a super normal year for Verallia? You know, and where is your comfort level in terms of like, what's a sustainable level of EBITDA or whatever to show to your customers? Then the second question was just I would kind of be interested to have your assessment of, you know, the capacity which is coming online in European Glass. You know, you've obviously announced some yourself and some in Belgium, UK. You know, like, how do you see that relative to the demand growth in the market, let's say between now and 2025? Thank you very much. Thanks a lot for your questions. I don't know what you call a super exceptional year or whatsoever. For us, we are on the road of profitable growth, so it means that we do not foresee 2022 and 2023 as an extraordinary year. We see that as a path to keep on growing, keep on developing the company and make it profitable. At a point of time, I will come back to you to present a new strategic plan. Too early to make an appointment today, let's say. If 2023 we are delivering what we have committed, obviously, I will be back to you to present what is our next steps for maybe up to 2030. We'll come back on that. Bottom line, we do not see that as an exceptional year. We see that as a good year. We are delivering on our commitments and this is a path that we want to keep on taking. If we have announced lately some additional capacity for 2025 and 2026, especially in Europe, it's because we strongly believe that we have a path for that, and this is a clear demonstration of how we want to go faster and make the company even much more profitable and delivering much more EBITDA euro. About capacity, I have commented the expected growth of the market. We are cautious with a +2% compared to an historical 2.9%. We just see the figures of 2022 in H1, which were stronger than 2021. The additional capacity which has been announced, for me are just running after the market, the market growth. We still see a tight supply environment, at least for the next two, three, four years. Perfect. Thank you very much. Once again, press star one to ask a question. There are no further questions for now. I will hand the call back to your host to conclude today's conference. Thank you very much. I think most of the question on the web, have been already answered. Maybe just, 1 question from Íñigo. How is the Allied Glass acquisition evolving? It's probably more about integration. Another one from Íñigo as well, why are you assuming that the market will grow -2% versus +2.9% over the last few years? The others have been really answered. Thanks, Íñigo for these two questions. About Verallia UK. The integration is progressing well. First of all, since January first, it's not anymore Allied, but Verallia UK. We have an integration plan, making it topic by topic, priority by priority. You know, they were already quite autonomous, and this is the philosophy we have on the business. For me, this is how they keep their autonomy, how they are able to deliver the growth they have been able to do to demonstrate in the past years or to keep on going that way. Obviously being part of Verallia, how we can support them and give and provide some synergies. The obvious one are everything which is related with purchasing. We have our purchasing power being part of Verallia UK, being part of a bigger group, and two, everything which is related to industry or CapEx technology side. It's moving in the right direction at a good pace and with a very positive mindset. I'm very glad about it. About market, you know, when it comes to market prevision, by definition, when you make a forecast, you're wrong. We have the data from the past years, and you're right, 2.9% growth. We have stated maybe in a cautious way, 2% minimum. 2% minimum, and this is what we are working with, making sure that any capacity we are going to put in place is going to be fully utilized. This is what we are. This is why we have taken 2%. Okay. I think we have no more questions. Thanks a lot for your time, for all the information we provide or just provide. We're clear. Please have a good day and see you. Take care. Bye-bye. Bye-bye. This concludes today's conference. You may now disconnect.