Hello, welcome to the RHI Magnesita Half Year Results 2023 Webcast with Stefan Borgas, CEO, and Ian Botha, CFO. The webcast will consist of a presentation followed by Q&A. If you would like to ask a question, please click on the Questions tab above the slides on this webcast. We'll also be operating a video bridge, the details of which have been shared with analysts only. If you would like to register a question on the video bridge, please use the Raise Hand function at the bottom of the screen. Until then, please mute your audio and video. I would now like to hand over to Stefan to start the presentation. Stefan, please go ahead. Thank you very much. Good morning from Vienna for this Half Year Results Presentation 2023. I would like to highlight three key messages from these first half results. First, we are in the middle of a period of very weak demand, which has reduced our sales volumes by 9% year-over-year. We have been able to grow our revenue in the first half through little bit higher pricing when compared to the first half of 2022, not compared to the second half, but compared to the first half, and mostly through delivering our strategic sales initiatives and through the contributions from M&A. The lower production volumes have an impact on our fixed cost absorption and increase our production per ton of refractory products markedly. Second message: We expect this demand weakness to extend into the remainder of 2023, the outlook is really uncertain. We might experience pricing pressure from our competitors in the latter half of the year out of the short-term volume considerations. I don't hope so, it could happen. Third message: From a strategic perspective, our M&A strategy is taking off and has good momentum. Over the last 20 months, we have welcomed eight new acquisitions to our group, they are making a meaningful contribution. We have made progress in key target geographies and in key target product segments. Every asset that we acquire brings complementary attributes to our global network. We'll get into this a little bit later. As I mentioned in the introduction, we have been able to offset the reduced sales volume so far this year, mainly thanks to the contribution from our acquisitions. Price increases versus the first half of 2022 helped a bit also, but really, this is the smaller part. If you look at our price index, starting at the beginning of 2021 up till today, steel refractory pricing is now 70% higher, and industrial pricing of refractories is almost 50% higher. Prices needed to rise by this much for us just to be able to maintain margins on top of the significant cost increases that we have seen over these two and a half years. Compared to the first half of 2022, the pricing in the first half of 2023 was 13% higher in steel and 39% higher in industrial, because much of the price increase still happened in the second half of last year. These price increases are now the reaction to the business cycle in which we are, with costs moving and then refractory costs, prices moving up accordingly. At this point in the cycle, we are now benefiting somewhat from sector diversification, as the strong price recovery in the industrial segment comes later and comes now when the steel business is already starting to weaken. More so, we are benefiting from a strengthened operational performance that is also recognized by our customers. We have been working very hard behind the scenes on what we call our machine room or engine room. We have managed to get our PIFOT, our Produced In Full On Time KPI, up to the highest it has ever been. At the same time, customer complaints are at a record low level now. These are the real foundations upon which we can build a successful business into the next years. I mentioned that plant capacity utilization in H1 has been quite low, at 76%, compared to 83% in the first half of 2022. This is because demand is lower, and on top of that, we have intentionally produced less in order to reduce inventory a little bit from the very high peaks at the beginning of 2022. You can see this in our inventory tonnage coming down. The utilization in the third quarter will drop again markedly to below 70%, where it is at the moment. The effect of this historically low demand is that instead of variable cost burden from energy, raw materials, and freight costs that have all released a little bit, we now have a fixed cost challenge to face. Fixed costs are being distributed over a much lower volume of production, which pushes up cost per ton of products. In Q3, actually, more than any relief from variable cost reduction. In other words, any benefits from reducing input costs that might be happening right now is wiped out or more than wiped out by higher fixed costs per product, for as long as the demand and the shipped volumes remain so subdued. Until now, we have been handling this lower volume environment pretty well. We are focused on continuing this track record into the second half of the year. Let's move into the details. Health and safety first. This is one of our core values and stands at the beginning of everything we do. We had a poor performance in the first quarter, unfortunately. That means our lost time injury frequency rate increased, while the total recordable injury frequency rate reduced. In the second quarter, we took measures here, and the focus areas for the improvement were more disciplined protocols for the workplace inductions, new people coming, and more comprehensive safety trainings, especially for new hires. In the second quarter, as a result, we had a notable reduction of accidents. Notable. Our target, however, can be nothing less than zero accidents, and we continue to work towards this goal with all the passion we have. We are paying particular attention right now to finger and hand injuries, which was a major cause of the incidents in the first quarter. Let's go to the financial highlights. This environment that I described means the following in numbers that you can see here. We have grown both revenue and EBITDA, with a slight decline in EBITDA margin from 11.8% last year to 11.6% this year. This shows you the fixed cost pressure. This is higher than the average of 10% for 2023 that we originally guided and that we feared we would incur. We have outperformed in terms of pricing, in particular in an industrial business, and we have delivered on our strategic sales initiatives also pretty well. From an operative cash flow perspective, we have delivered an excellent performance, turning around the outflow of EUR 84 million in the first half of 2022 to an adjusted operating cash inflow of EUR 228 million this semester. This is a cash conversion of 114% of EBITDA. It is the opposite effect compared to the same period last year, when the cost of inventory increased, were a burden during the inflationary period. Now, that variable cost comes back down again, we get the opposite benefit. The swing itself is not unexpected at all, although it's executed well. On the right-hand side of this chart, you can see that despite allocating EUR 208 million to M&A in the first half, which is a combination of cash consideration and some additional working capital assumption into those acquired businesses, we have been able to de-gear significantly from 2.7 times net debt to EBITDA that we have reported at the end of June 2022, to 2.1 times net debt to EBITDA today. Let's go and deep dive in the business a little bit. In steel, we have held the gross margin more or less at the same level as in the second half of 2022, but it is 80 basis points lower compared to H1 2022. Year-on-year, revenue has grown by 5%, even whilst volumes reduced by 8% broadly, in line with the market demand weakness that I described before. Prices are 13% higher, but the benefit is offset by much lower fixed cost absorption per ton, like described. If we look at it by region, overall, we are in line with the market movements, except in East Asia, where we had a stoppage at a key customer, our largest customer there, which is why our volume performance was away from the average for the region. In India, our sales volumes were boosted by the M&A activities, of course. We grew well ahead of the average in what you can see is the highest growth market globally at the moment. Steel revenues from India, West Asia, Africa region is now roughly equal to our Europe and Turkey region and will eventually outgrow our old home market. Let's look at the industrial division. There, we saw strong revenue growth of 20% due to a recovery in pricing. This is a late-stage business, late-cycle business, so pricing comes later from previously very low levels. This is the sector diversification effect that I mentioned in the introduction. We are ambitious to lead the refractory market in improving sustainability. Our recycling activities are a core pathway for us to reduce the CO2 emissions in the short term and now. For us, leading it as an example for our industry. The rate of use of secondary raw materials has continued to increase. It is now at 13% from 9% one year ago. We have measured that since the beginning of 2018, when we first started to really work on this problem and come up with real-world solutions, now, we have avoided the emissions of over 1,000,000 tons of CO2, which would otherwise be in the atmosphere now. This is a good achievement and one that I'm really proud of. We have all delivered this together with our customers. These are real reductions in CO2. They are not carbon offset projects or green energy certificates. These are physical tons of CO2 that would have been directly emitted if we hadn't taken these actions. We are continuing to take our recycling activities to the next level, as well as working on the next stages for using alternative fuels. How to meet the challenges of capturing and the sequestering of unavoidable process emissions is also one of the focus areas for the next years. Our M&A strategy is gaining momentum. RHI Magnesita has completed five acquisitions in 2023 and year- to- date, and eight in the last 20 months. We have been able to make progress in key target geographies and production and target product segments. Every asset that we acquire brings a range of complementary attributes to our global network and to the RHI Magnesita family. Our new colleagues also bring new knowledge, which we happily, and at times humbly, integrate into our thinking and into our doing. Through our M&A program, we will be able to serve our customers better than we are doing now, as we build a broader product portfolio, generate network efficiencies, strengthen the local production for them, increase our geo-geographic reach, and in all aspects, get closer to our customers. We are pleased with the progress we have made in India this year, which is the fastest-growing major refractory market in the world and will be the second-largest region for RHI Magnesita at the end of 2023. We acquired two strategic businesses there that will be highly beneficial to our customer offering: Dalmia Bharat Refractories and Hi-Tech Refractories. We have increased the number of plants from three to nine. We are now present in parts of India, which we could not reach very well before. This is vital to service our customers better. The merger with Dalmia Bharat strengthens our presence in India, in the industrial markets, somewhat in steel, but mostly in the industrial markets. The HiTech acquisition supports our offering in flow control, especially in the high-value market segments, due to the very modern plant in Jamshedpur. We are now well positioned to provide the refractory products and services that India will need in the coming years from within India itself. This will reduce India's reliance on imports, which are less reliable and bring logistical and working capital challenges. We have also made excellent progress in China, where we also made a flow control acquisition, Jinan New Emei, following our investment in Chongqing for the cement market at the end of 2021 in the second deal. Our acquisition of Sermas in Türkiye was the first of the eight in the past 20 months. It is now making a material contribution to our financial performance, and the synergies we hoped for are beginning to be realized really well. Taken together, these acquisitions have generated EUR 19 million of EBITDA in the first half, and we now expect around EUR 40 million contribution for the full year from M&A transactions. I will now hand over to Ian, who will take you through the financial section. Ian? Thank you, Stefan. Good morning, ladies and gentlemen. By way of introduction, I'd like to bring out three key observations in our financial performance in this first half. Firstly, we have once again demonstrated that this is a cash-generative business, with a 114% EBITA cash conversion rate in this period. Free cash flow has completely turned around from an outflow of EUR 146 million in the first half of last year to a positive cash flow of EUR 167 million in H1 2023. Secondly, I would highlight that the strong cash flow performance was partly driven by working capital release in the base business before M&A of EUR 84 million in this first half. Working capital is down by EUR 165 million over the past 12 months. This is part of the natural cycle of our business and the reduction of input prices. The reduction is also down to the greater stability of our end-to-end supply chain and the work we've been doing to increase efficiency across our network and to gradually manage down our inventory levels towards our targeted coverage ratios, always without harming the customer experience. Finally, I will draw your attention to our margin resilience and the consistency we have shown through a highly volatile period in maintaining our EBITA margin, sometimes in difficult circumstances. This reflects a number of things: the essential nature of our product, the benefits of our geographic and sector diversification, the fact that we can pass on cost increases through pricing, as well as the investments that we have made in reducing our cost base and restructuring our production network. Turning to the profit and loss, RHI Magnesita's revenue and earnings in the first half were strong. We grew revenues by 9% as pricing and M&A offset the effect of lower volumes. At the EBITA level, we delivered a 7% increase in reported EBITA. This was helped by a currency tailwind, which reduced our costs in certain geographies where currencies weakened against the EUR. Without this tailwind, EBITA would have been flat. The EBITA margin was stable at 11.6%, compared to 11.8% in the prior half year. Finance charges increased. This is very largely due to balance sheet translation losses. Our net interest expense are also up. This is in line with our guidance as the cost of debt increases on both our new debt facilities and the floating interest rate element of our debt, which is about one-third of our drawn facilities. With a stable effective tax rate, the higher finance charges more than offset the increase in EBITA to deliver a slight reduction in adjusted EPS to EUR 2.53 per share. In line with our established dividend policy to pay an interim dividend roughly equal to one-third of the previous full year dividend, we've declared an interim dividend of EUR 0.55 per share. Turning to the revenue bridge, this gives more detail on how we offset the impact of 9% lower shipped volumes. We've mentioned the price increases in M&A. Here, we have also stripped out the impact of the group's strategic initiatives. Here we are talking about the sales initiatives, which included growth in target geographies of Turkiye and India, growth in flow control, and increasing the proportion of our sales through solutions contracts. The price increases that we've been putting through in response to higher costs have helped us to deliver the revised overall target a little earlier than we last communicated. It is pleasing to see that our strategy is translating across into higher revenues, even as we pass through a period of relative weakness in demand for our products. Adjusted EBITA increased by EUR 12 million to EUR 200 million, but was broadly in line with the first half last year after adjusting for currency. We have achieved this despite lower sales volumes and fixed cost under absorption. The key drivers of this are improved pricing year-on-year, the strategic initiatives, and importantly, the contribution from newly acquired businesses. We continue to demonstrate the ability to set pricing at a level which maintains margin. We have again extended our track record in delivering stable EBITA margins and cash generation through the cycle. Pricing was particularly strong in our industrial segment, demonstrating the benefit of sector diversification as our industrial projects have helped to support our financial results during a period that was weaker for the steel market. As guided, the vertical integration margin remained low at 1.8%. This was more than compensated by a record refractory margin of 9.8%. Even during this period of low vertical integration margin, the contribution remains positive. This means that our internal raw material assets are able to supply the group at a lower cost than it would be to purchase the material in the market. The red area of this chart is only available to a refractory producer that owns upstream assets, such as we do. The steady growth in the refractory margin reflects the higher prices and the efforts that we've been making to rationalize and to optimize our production and distribution. On the cost side, the refractory industry as a whole has been going through a reduction in key input costs of raw materials, energy, and freight. The benefit of this has been offset by lower absorption of fixed costs at plant level. We are running at around 76% of full capacity, which is significantly lower than usual, and we're doing this to match market demand and to reduce our inventory volumes in order to manage working capital. The key indicators that you can see on the right all indicate that energy, raw materials, and freight costs have reduced. CPI is also well below its highs. We remain in an inflationary environment for wages. At the top left, you can see that our cost of goods sold, in absolute terms, has actually increased by 9%, whilst shipped volumes have reduced by 9%. The cost pressure is clear to see. Turning to working capital, we have been successful in releasing working capital from the base business before M&A, with a reduction of EUR 84 million since the beginning of this year and by EUR 165 million from one year ago. Underpinning this working capital re-release has been an almost 20% reduction in inventory tonnage year-on-year before M&A. We have delivered this performance as the end-to-end supply chain has become more stable, particularly sea freight, and as we've seen improvements in our own inventory management. Importantly, this has been done at the same time as we have improved our customer experience and improved our customer reliability, which is essential for our customers. We have also been successful in reducing our accounts receivable since the beginning of the year, even with higher pricing year- on- year. This has been partly offset by a reduction in accounts payable, which is due to the low raw material price environment and low raw material purchases. Working capital intensity, including M&A, was 26% and excluding M&A at 25.7%, and we would expect the intensity to remain at around these levels for the time being. Moving to capital expenditure. We've been investing in our production facilities and our raw material plants to create a more technically advanced and cost-competitive footprint with a more localized supply chain. Our Production Optimisation Plan is now in its final stages. At our Dalian and Radenthein facilities in China and Austria, we are doing the final refinements of our new Manufacturing Execution System, at the Brumado raw material plant in Brazil, we expect that expansion project to ramp up in the first half of 2024. Separately, in Chongqing, in China, the new state-of-the-art plant to produce refractories for the cement sector will be ramping up in the second half of this year. The investments that we have made in the rationalization and the modernization of our assets is what lies behind the strong performance you are seeing in the first half of this year. Our guidance for capital expenditure this year remains unchanged. It's EUR 200 million. That consists of EUR 85 million of maintenance CapEx, EUR 95 million of project CapEx, of which EUR 20 million was carried forward from last year, and EUR 20 million relating to our M&A. We've generated EUR 228 million of adjusted operating cash flow in the first half. You can see from the left-hand chart that with the exception of 2021, when we had the increase in working capital to offset the major disruption in global supply chains, our business has a strong record of cash generation. In the six month period to the 30 June 2023, operating cash flow plus the EUR 100 million equity raise in India was more than sufficient to fund the M&A, whilst delivering a decrease in both absolute net debt and in gearing. Turning to net debt. Here you can see the impact of the strong cash generation and 12 months trailing EBITDA on our net debt and on our leverage ratio, which have both reduced during the period. We are now at a pro forma leverage ratio of 2.1 times. This includes a full 12 months contribution from businesses that we acquired during this period. It compares to our peak of EUR 2.7 billion at the 30 June 2022. We benefit from a significant liquidity buffer of EUR 1.4 billion and a long-dated amortization profile with long with the large maturities now pushed out to 2026. We have fixed interest costs on two-thirds of our debt facilities, with the remaining portion floating. In the second half of the year, it is likely that gearing will increase as EBITDA is guided to be lower. We also have EUR 90 million of cash outflow for the acquisition of SEVEN Refractories, which we completed on the 17 of July, and a second-half weighting of our CapEx. Thank you. With that, I'll hand you back to Stefan to conclude. Thank you very much, Ian. Let's look forward for the next month. What's the trading outlook? Following this strong performance in the first half, we expect the EBITDA margin to be between 10.5% and 11.5% for the full year, and to deliver at least EUR 360 million of EBITDA, including the acquisitions. Net debt will remain above 2.0 as we continue to execute our M&A pipeline. Due to unprecedented global weakness in the construction industries, we are preparing for customer demand to remain very low in the second half of 2023. Whilst cost inflation, and therewith our variable cost, has fallen compared to the highly volatile situation last year, we now face a new challenge to absorb fixed costs across much lower production volumes. This is keeping our cost per ton of refractory products at their previous levels as long as demand doesn't pick up significantly or if it doesn't fall significantly. We don't have any room to reduce pricing without suffering in profitability. Our competitors are in a similar position, and this should mitigate price weakness. Ladies and gentlemen, RHI Magnesita is executing on its strategy. We face these challenges with a much more efficient network and with processes that four years ago, when we embarked upon our successful Production Optimisation Plan. If we had not done this change, we would now be in a much worse shape. Our operational discipline, our machine room, is clearly improved, although it's not perfect, of course. We have been able to deliver growth through our M&A strategy during a downturn in our customer markets, and we will continue to do so in the next quarters and focus on integrating these new businesses and deliver synergies. We are continuing to improve our operational delivery, our machine room, upgrade our supply chain planning processes, simplify our product portfolio, streamline our business processes, and now rebuild our IT infrastructure. Overall, we call this project activity "The Big Six," because they're all interconnected. Thank you so much for your support, for your energy, and for your emotions for RHI Magnesita. We are now very happy to take your questions. Thank you very much. If you would like to ask a question on the video bridge, please use the Raise Hand button at the bottom of your screen. If you cannot see the Raise Hand button, please click on Gestures, where you will find it. When it's your turn to ask a question, please unmute your audio and optionally, your video. If you choose to turn on your video, you will be visible on screen to our online audience and live with Stefan and Ian in the studio. For those watching on the webcast, please use the Question tab above the slides. We'll now wait for just a moment to give analysts a chance to register their questions. Our first question today comes from Harry Philips, from Peel Hunt. Harry, please unmute yourself and optionally start your video if you would like, and go ahead. Yeah, good morning, everyone. This is all. Good morning, Harry. Good to see me. That's a shocking sort of angle, anyway, apologies for that. Good morning to you, I'm just very put off by that. I shouldn't have turned the video on. You look brilliant, you know? You're too kind. three questions, please. Just on solutions contracts and how they're going, and I'm sort of thinking particularly in this environment where pricing pressure might come to bear is that manifesting itself in solutions contracts, or are they running a different dynamic? Then just around pricing itself, beyond simply just raw material price movements, are you already seeing that, or is it just something you are anticipating post the summer break? Lastly, just on M&A, obviously, eight acquisitions in 20 months, it seems churlish to say, "Is there more to come?" There is, you know, certainly in the context of the broader industry, more competition seemingly for assets. How are you sort of lining up in that environment, please? Let me start with the solutions contracts. Actually, by design, the solutions contracts now hurt us because we're suffering together with our customers, right? On the solutions contracts, we're mostly priced on the basis of customer volumes. We As they reduce, we reduce as well. Nevertheless, customers really like this. We like this, we continue to actually grow the percentage of solutions contracts moderately, calmly, and in a very controlled way. It doesn't help profitability at this point in time, because we have the same fixed cost, and we get paid on a lower level. Pricing movements, yes. We already see a large number of pricing discussion everywhere around the world. Customers, of course, show us the same variable cost charts that you saw in the presentation by Ian earlier. They ask us to reduce prices because the cost goes down. Our commercial professionals are very diligently, calmly, and with a lot of details, explaining them the offsets on the fixed cost side. So far, customers understand this because they have the same exact problem. As steel and cement and glass volumes go down, their fixed cost absorption is also a huge problem for them. If you look at steel prices, they're holding up quite well. We have the same effect throughout the chain. Hopefully, things will not go up in disaster. The discussion is certainly at the forefront of the, of our interactions with our customers on the commercial side. M&A, look, this is a long-term commitment of the company. It's part of our strategy execution. Pretty much every acquisition that we did in the last 20 months, takes around three years. From the day you start discussions until you actually close, it takes three years. We cannot stop and start short term. We have a pipeline, we have lots of discussions ongoing, just expect this to continue. Of course, this is a volatile part of our activity because sometimes nothing happens for a number of months or quarters, sometimes there's a larger transaction, this is a little bit lumpy. In principle, this is the avenue on which we are. The industry wants to consolidate, needs to consolidate. I think we earn a lot of respect with many of the companies that join our family. We treat the people really well. Actually, we love what they bring to us, and hence, the number of discussions is more on the up than on the down. That's great. Thanks very much indeed. Thank you very much. Our next question today comes from Mark Davies Jones, from Stifel. Mark, please go ahead. Thank you very much. Morning, both. A couple of things from me, please. Firstly, could you talk a little bit more about the industrial side of the business? I think earlier in the year, you were relatively cautious, particularly around cement, and you weren't seeing much activity then. I get the point about it being later cycle, and so the pricing has been slower to come through, and that's good. Could you talk a little bit about underlying demand? The second one was on the capacity utilization point, obviously running at very low levels. How long can you tolerate that? Is there stuff you could do to take capacity out, or do you think the network is effectively optimized, and it's just a question of waiting for a cyclical recovery? Look, on the industrial business, we have to separate between cement business and the projects business. The cement business is much closer in its nature to the steel business because it's a little bit more transactional. It's an annual cycle. We feared to have a very weak cement season in the beginning of this year. It was a little bit better than we had anticipated. It will be much worse in the second half of this year, mostly because customers will be ordering much, much later. Some of this demand will move into next year, of course, cement production everywhere is really down, so the repair needs and the revamping needs will be lower. The next year, cement season really will show this downturn much more. On the pricing side, cement is closer to steel. We're more in a just-in-time, cost-to-price relationship. The industrial projects cycle is really what is making up this pricing strength now that you see in the first half of this year, because it made up the pricing weakness that we had in the industrial business one year ago. This is the business where you have a project that you discuss with customers 18, 24 months before they need the material. You fix all the terms and conditions because it goes into their CapEx cycle. They need a reasonable amount of predictability for their CapEx execution. The projects that we execute now have been discussed in the, in the peak of the cost increases. Therefore, they are now coming through. This restoration of margin in the industrial business as a whole is just a restoration. We go back to the regular historic rates. It's not a fantastic peak because we were always at this high 20s and not at the mid-20s level of margins. This is the effect that you see here. It's a late cycle business. The adaptation of the production network to the lower demand is, of course, a topic that we discuss every month, every week, depends on where we are. We will not, for the time being, shut down facilities in large scale because the shutdown cost and then the ramp-up cost later just don't make sense for this to do. So we adapt individual production lines. We stop one or the other kiln, ramp it down. It takes the better part of a month, and then keep it down for a few months, and then bring it back when the demand comes back. We're, we are in a demand, in a low demand cycle from the construction industry. Eventually, construction will start to pick up again. We don't know whether this will be in the fourth quarter of this year or in the fourth quarter of the year thereafter, but sometimes in this period of time. So we don't want to let people go in a large scale or for sure, not shut down plants because we will need them again. This is. We, we've been in this many times, so we are very careful on this. In geographies like Europe, we are investigating or we're assessing whether we take advantage of some of the government programs, furlough programs. All over the world, we're asking our employees not to do any overtime. We ask them to take some of the accrued vacation that has been building up over the past, but, you know, this is not a brutal activity. There's a lot of small management happening here. At the end of the day, it's a higher fixed cost that we have, and hopefully, our customers will understand this as all competitors in the refractory industry have the same suffering under the same feature. Thank you very much. Thank you very much. Our next question today comes from Vanessa Jeffriess from Jefferies. Vanessa, please go ahead. Yeah, if you wanna adjust your camera a little bit. Thank you. Sorry, not the best angle for me either. Maybe if you could just go into a little bit your volume expectations by region, particularly in steel. It feels like you're saying that the weakness is maybe more on the industrial side, but given the sequential EBITDA decline you're expecting in the second half, I'm just not clear if you're saying that volumes are going to worsen or stay the same? Yeah, that's what we're saying. In also in steel, we're at a historic low. I think the global steel demand is the lowest that it has been in 15 years. In Europe, it's the lower. We have the slowest steel pour in the first half since 1994. China has a massive reduction in steel production. China and Europe are the worst, but in all other geographies, it's the same, and honestly, we don't see a very significant recovery. It's the same effect in steel than it is also in cement. It's driven by the construction industry and over some triple effects, about 60% of our business, almost 60% of our demand, is eventually triggered to the construction industry. As long as that doesn't recover, it affects every sector. On working capital, maybe what your expectations are for the second half. Ian, you wanna take that one? Vanessa, our expectations is that working capital will flex with underlying demand. We continue to believe, post the M&A, that we will look at working capital intensity around 26%. Inventory, we've got the potential to reduce it just a little bit more on our finished goods, where we are currently at two months of forward-looking demand in terms of our cover. We wanna get that down to 1.8-1.9. There's a little bit more that we can do. How this impacts the end year number will very much depend, as Stefan highlighted, on what the profile of any demand recovery looks like, and do we absorb working capital at the very end of the year, building up to a stronger first start in 2024 or not? Certainly, we would be expecting intensity around the 26% level. Thanks, and finally, great, you've hit the flow control initiatives a little bit earlier than you recently guided. What else do you think you can do around flow control now? look, finally, the machine in flow control is coming into motion. It's moving quite nicely, especially in the higher-end segments. Certainly, the acquisitions in India and China will help on this. One of the particular areas of concern in flow control is the mixes, other mixes material that go into the tundish, into the vessel that is used, that is the storage vessel before the steel gets poured. There are a lot of mixes in there. They are magnesite-based. In some parts of the world, we have suffered under the cost pressure from the Chinese. This is one of the issues, particularly raw materials coming from Turkey. With the Turkish lira now normalizing to a exchange rate that, well, probably is where it is closer to where it should be compared to the value of other currencies. This has released a little bit, so there's some hope that also in this part of the business, we will come back to where we were before, because this is actually an area where we lost volumes rather than gained. Thanks. Thank you very much. Our next question today comes from Jonathan Hurn from Barclays. Jonathan, if you'd like to please unmute yourself and optionally start your video, please. We'll just give you a moment. Yes. Good morning. Can you hear me? Yes. Loud and clear. Brilliant. Perfect. I just have two questions. Firstly, can you just talk a little bit about your expectations for the vertical integration margin in the second half of the year? The second question, also on margin, you've obviously put a range out for the year of 10.5%-11% then. Can you just talk us through the assumptions behind that range? Obviously, you've guided to around about sort of EUR 360 million. What margin does that EUR 360 million assume? Yeah, certainly. Morning, Jonathan. On the vertical integration margin, we would anticipate that it's going to remain broadly flat at the levels that we're seeing at the moment. Chinese raw material prices have come down. Anecdotally, we can see that there is some reluctance by certain producers to stop selling in at these weak prices, but there isn't really a catalyst for an improvement in the vertical integration margin that we can point to for the second half. Certainly, I would work on around 1.8% in the second half of the year. This is a very low number relative to what we've seen for well over a decade in our business. We continue to believe, over the medium to long term, that two to three percentage points from our vertical integration, increasing to 2.5-3.5, when the Brumado project is up and running, is the right number for our business. From a margin perspective overall, we did 11.6% for the first half. We're guiding 10.5%-11.5% for the second half. If you work on us achieving the midpoint, which is probably not a bad number, that means second half down at 10.4%. What we can see is vertical integration margins staying flat. We can see a headwind coming through from EUR strength, that will impact us in the second half of the year. As Stefan highlighted, we are going to see further pressure coming through on fixed cost absorption, more than offsetting the small additional benefit that we get from lower costs. We have the pricing pressure coming through. Great. That's very clear. Thank you. Thank you very much. Our next question today comes from Dominic Convey from Numis. Dominic, please go ahead and unmute yourself and start your video. Good morning, both. Just like to follow on Jonathan's question, if I may. I guess the EBITDA bridge on slide 17 just shows how many moving parts there are this year. I guess the, the more difficult for us really is to try and quantify that fixed cost absorption other than the clues you've given around it being below 70% in the second half. Should we assume sequentially a similar impact in EBITDA as you've seen in the first half coming through in the second? I guess then in terms of the trade-off between volume and pricing, it feels as though pricing hasn't yet weakened. I guess perhaps just give us a little bit of color how you see the shape of Q3 and versus Q4 evolving through the rest of this year. Thank you. I think on the fixed cost absorption, unfortunately, you have to assume a higher burden in the second half. This is the major reason why our margin will slightly go down. Ian mentioned 10.4% in the question before, the major driver of this is higher fixed cost absorption. There's a bit of a price erosion, a crumbling of prices built into this as well, because eventually, I think there will be some competitors who get antsy, and they're gonna take some volumes at lower margins. It's okay as long as it is limited, but here or there, we might need to react. I also, on the, on the pricing, we will see some erosion, hopefully not too much, at least a big erosion we have not forecasted in our guidance now. Okay. Thank you very much. As a reminder, if you'd like to ask a question on the video bridge, please use the Raise Hand button at the bottom of your screen. If you cannot see the Raise Hand button, please click on Gestures, where you'll find it. We'll just give people a few more moments to register their questions. Okay, we have no further questions registered, so I would like to hand back to Stefan for any closing remarks. Thank you very much for listening. Thank you to all our customers and employees for your hard work during this semester. Thank you for our shareholders, for your support. Let me just summarize what I said at the very beginning. This was a semester with a historically low demand volume, which we could absorb in terms of profitability resilience, because of all the work we have done in the past years on stabilizing the company, on improving significantly its operations, driven by the M&A and also by a little bit supported by pricing resilience. This weakness, unfortunately, will not go away in the second half of this year. It is global, with the exception of India, and it's driven by the weakness in the construction industry, and it will remain here. From a strategic perspective, we will continue in this time, based on the balance sheet strength and on the cash delivery strength of our business, with our M&A delivery. We will continue to pursue value-creating additions to the Archer Daniels Midland family and thus build our franchise into the future. Thank you for listening. Have a good day. Goodbye from Vienna. Thank you.