Good afternoon, this is the Chorus Call conference operator. Welcome and thank you for joining the Ariston Q2 and H1 2024 Results Presentation. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star one on their telephone. At this time, I would like to turn the conference over to Claudia Introvigne, Head of Investor Relations. Please go ahead, madam. Thank you. Good afternoon everyone. Welcome to Ariston Group Q2 Results Conference Call. My name is Claudia Introvigne. I recently joined the company as the head of investor relations and I want also to thank Albert who had the role of head of Investor Relations at interim. He will continue to help us in his role of head of strategy. With me here today there are Maurizio Brusadelli, our Chief Executive Officer and Riccardo Gini, our Chief Financial Officer. Our presentation will last about 20 minutes then we'll open up the session for questions. As a reminder for those on the phone, the slide deck is available on our investor relations website. I will now turn the call over to Maurizio. Thank you, Claudia, and good afternoon, everyone. Also from my side, let's start, and I am on slide 3. As you all know, we have already released our preliminary results last week together with our 2024 updated guidance, which are confirmed and which we will comment today. Q2 2024 was another very tough quarter, even beyond the expectation of the entire industry, with the prolonged weaknesses in demand after the exceptional market peak experienced in 2023. The market is normalizing, and we are transitioning through a year that is the worst in our 95 years of history. Even during COVID, we have not seen a demand as weak as in 2024. Heating markets in quarter 2 have continued to be strongly negative across Europe, especially in Germany, France, Switzerland, and Italy. In some of these countries, the heat pump market continued to drop more than 40%-50% in volumes, leading to a heating market dropping more than 30% in value. The causes are known, but prolonged normalization of the German market after the 2023 peak, the stocking that is ongoing, not yet completed. Germany and France incentive schemes that are confusing and that were delayed. In this context, we see the service and parts business performing better. The market is buying more maintenance than going towards renewal. Our diversified portfolio give us some hedge in navigating through the current context. Traditional gas and oil heating technologies are performing better than heat pumps. Water Heating is proving even in this challenging context to be more resilient. This translated in revenues down 17% in Q2 on a year-over-year comparison on a like-for-like basis. We will speak about like for like in this presentation because as you remember on last 26 April we were informed through a Russian decree that we had lost the management of our Ariston Thermo Russia plant which had contributed for around EUR 100 million in 2023. In terms of revenue, we have deconsolidated the business starting from end April and we are presenting our P&L numbers without Russia both in 2023 and 2024 numbers going forward to margins lower sales volume draw lower margins. We expect to be back to the standard H1, H2 seasonality in profit generation before the 2022 and 2023 outliers. So this year will be more normal as before 2022. Riccardo will comment more on that later. The strong deceleration of our Central European markets has also contributed negatively in terms of mix. We are reacting to this extreme weakness in the demand through a series of cost cutting initiatives whose impact will be more visible during H2 and in the following years. We will comment on this program a little bit later. On the positive side, we are satisfied with our quarter to cash generation. We have been able to generate a positive cash contribution despite the EBITDA decline thanks to our work on inventories reduction and CapEx optimization. Following the prolonged and continued weak market demand, we think that the recovery will be longer than initially foreseen, probably with a long U- shape instead of a V- shape. 2024 will represent the bottom year for the market and for Ariston Group and we are again reviewing downward our expectation while enhancing our efficiency programs. We continue to believe that the midterm fundamentals remain intact, as we will see during the presentation. Moving to slide 5, a quick reminder about who we are before going into numbers and guidance. We are a player active in thermal comfort with balanced exposure to heating and Water Heating. We are present in 40 countries and Europe represents more than 70% of our consolidated revenues. Heating on the left, including gas boilers, heat pumps and other heating system is the market currently in a strong negative momentum after the positive peak of 2023. It is negative in Europe and Europe is where our presence in Heating and Water Heating is more balanced. Water Heating on the right is a more resilient business and our main business outside Europe. It benefits from the presence in market with growing population and still low but rising penetration of Water Heating solutions. Service and parts is a growing business, especially in Europe where maintenance is preferred to renewal in these days, moving to slide 6. In order to understand better the magnitude of the move in the market demand, we present here an example of the German heating market. Germany is our largest market. Total revenues in Germany accounted for nearly one quarter of our group revenues in 2023. As you can see, the heating market in Germany had a 4% growth in volumes in the 10 years starting 2013 ending 2022. Being mainly a replacement market, the market growth was higher in value thanks to the enriching mix of high efficiency and renewable solutions. In 2023, we suddenly saw a 34% increase in volumes. The German government introduced incentives for heat pumps in 2023. At the same time, there was a fear that gas boiler would have been banned from 2024. In addition, in 2023 the increase in value revenue was even higher than 34% thanks to the product mix. As you know, heat pumps have a higher value and also thanks to inflation. 2024 is a transition year. We have seen a normalization of the demand with destocking ongoing. We expect it to last of the year and still some regulatory uncertainty caused by the delays in setting up the new IT system which has to process the incentive request. I will now turn over the call to Riccardo who will provide more details on our Q2 and H1 results. Thank you. Thank you, Maurizio. Let's start with slide number 7 where as a first thing we want to show you the quarterly change in net revenues, always on a like-for-like basis. Those we rationally consolidated from end April both in 2023 and 2024 figures numbers are as always disaggregated by their main drivers organic and FX effects. We don't have any contribution from M & A this time as everything is embedded in the organic bucket. Foreign exchange effect this time is negligible too. As you can see, top line was down by 17% year-over-year reaching EUR 621 million, mainly organic. The organic performance was affected by a prolonged strong weakness of the heating market even beyond our initial expectations, especially for renewables. While Water Heating proved to be more resilient even in these adverse market conditions, the impact came mainly from volume effect and negative country mix while pricing which was resilient until Q1 began to show some signal of weakness. Let me flag some positives included in the set of financials like the service and parts component and which posted a solid growth year-over-year and also the American region which grew organically. As a consequence, H1 revenues declined by 15.5% year-over-year, reaching almost EUR 1.3 billion in revenues. Moving on into slide number 8, we share the sales breakdown by geography. The strongest correction is still taking place in our largest area which is Europe decreasing its way to 72% versus 75% in Q2 of last year and 74% in full year 2023. Net revenues in the areas are at EUR 447 million -20.3% year-over-year, driven by our top three markets such as Germany, France and Italy which were strongly down mainly due to very weak heat pumps demand. Asia Pacific and Middle East Africa net revenues were down by 11.8% to EUR 116 million with some geographies delivering positive growth such as India and South Africa, while China showed a soft demand and a difficult external context affected most of the geographies. Finally, America's quarterly revenues were EUR 58 million +5% year-over-year with both Water Heating and Heating Business that continued to improve. Moving down along the P&L, slide number 9 focuses on adjusted EBIT performance in the quarter. The EBIT adjusted margin has been 4.3% down from Q1 and more than halved versus last year, reducing by 6 percentage points as a consequence of operating leverage as a key driver. Combined with the stocking counter mix and labor inflation effects and with the continuation of this perfect storm which is mainly volume driven, we enhanced our initiatives on cost containment that we will talk more about later in this presentation. For the sake of completeness, the reported EBIT had as main adjustment the component of EUR 46 million impairment on the Russia business plus EUR 6 million of purchase price allocation amortization from past acquisitions. To help you with the comparison, let me repeat that market normalization is favoring the comeback to our business typical seasonality. On the graph on the right you can see that the average 2017-21 EBIT adjusted distribution was roughly split at 30/70 between H1 and H2. As regards cash flow on slide 10, free cash flow in Q2 was positive for EUR 27 million versus EUR 6 million of prior year. Despite the EUR 95 million reduction in EBITDA, free cash flow improved by a meaningful amount. This was due to the positive working capital contribution mainly driven by the continued effort and success in managing the inventory reduction which we look at as a significant achievement considering the large top line reduction. To provide you with more color on the other moving part of our performance, we have the detailed half year cash flow statement slide in the appendix. Let me briefly underline the following. Taxes paid slightly decreased by EUR 12 million due to timing, lower CapEx. It was almost EUR 30 million versus nearly EUR 40 million in 2023 because of our optimization and prioritization actions. Positive contribution of EUR 34 million from provisions and other changes from operating activities positively affected by the EUR 46 million Russia impairment being a non-cash item. Finally, on the right hand side you can also find a snapshot of our net working capital decrease in Q2 2024 compared to Q2 2023. As you can see the stocking helped us to reduce the net working capital ratio on revenues by circa 1 point compared to the prior quarter. Instead, last year on the same time frame we actually experienced the opposite. Hence we shall take it as a good achievement. On slide number 11 you can notice the movement of our adjusted net cash position during the year. On top of our EUR 575 million adjusted net position at year-end 2023, we had a positive contribution from free cash flow in the Q2, which reduced the negative contribution from the free cash flow from our business operations in the H1, as we mentioned before. Then there was the cash outflow for acquisitions or perimeter variation, which mainly includes the Egypt plant acquisition we announced back in February, amounting to roughly EUR 21 million and EUR 3 million negative impact of the net financial position write-off following the Russian subsidiary deconsolidation. Moreover, we had a dividend payout for EUR 63 million paid in May, EUR 14 million cash outflow for financial and FX charges, and finally EUR 15 million of positive non-cash items, which include mark-to-market derivatives, IFRS 16 liabilities variation, and the exchange rate variation effect on the net financial indebtedness. In a nutshell, despite the adverse market conditions and considering EUR 63 million cash out for dividends, we managed to limit the impact on the net financial position closing the year. All these items made our adjusted net cash position negative by EUR 688 million, increasing our leverage up to 2.1 from 1.4 at the end of last year and from 1.7 as of the end of March. Higher but still solid and safe level. Finally on slide 12 it shows a picture of our net financial indebtedness composition compared to the year-end 2023. We can see the liquidity figure decrease to EUR 254 million driven by free cash flow, negative performance affected by seasonality and adverse market conditions, the Egypt plant acquisition, dividend payment, and early repayment of mid-long-term debt. Consider that if we compare the figure with the same period of last year that is more representative given the seasonality of our business in terms of cash flow, we continue to run the company on a robust balance sheet. A closer look at the other indicators reveals a successful effort on duration of our debt, average maturity of 4.1 years and the EUR 900 million available pool of committed and used credit lines to fuel organic and inorganic growth. As of June 30, about 90% of maturities are spread between 2027 and 2031 and about 2/3 of our long term debt are fixed rate or hedged. So far, despite challenging market conditions, our capital structure is safe and sound, providing us flexibility to pursuing further organic and inorganic growth opportunities. I now turn over the call to Maurizio who will provide you more details on our cost initiatives, market trends and business outlook. Thank you, Riccardo. So let's now go on slide 14 and before speaking about the guidance, we would like to present a series of initiatives that we have launched to defend our margins in the current market weakness in the short term with the impact already in 2024. We are working on labor cost as already announced with hiring freeze and temporary unemployment, on indirect costs as travel, rental or services and on technology with a reprioritization of new developments. Actions on both OpEx and CapEx with optimization of the timing without cannibalizing of a future growth will have a combined EUR 70-80 million impact in 2024. Circa half of it is coming from cost. We have also launched a program called Fit-2-Win whose main target is to create a leaner and simplified organization with reduction of redundancies which will help us to control and reduce our fixed cost and to reinforce our margins. In parallel to our efficiency program, we continue to work for our future growth. Our focus on innovation and thanks to an integration of Wolf, Brink whose acquisition happened in 2023 is resulting during last quarter in the launch of a new Elco brand natural refrigerant heat pump developed from Wolf distinctive technology. This new product was introduced in Q 2 in Switzerland, Germany and Austria. Our focus on sustainability resulted in June in the certification of our decarbonization targets by the Science Based Targets initiative. Now moving to slide 15, it is time to speak about guidance which is strictly linked with expectations of market demand in the H2 of the year. You can see here that our geographies and products are different and we would like to present you this to help you understand the main dynamics of the demand in the different places and markets. As you can see on the left side, while in Europe Heating and Water Heating are more balanced, in the rest of the world we are present mainly through Water Heating. Europe is our main geography representing 72% of our revenues in H1 down from 74% in full year 2023. It is our weaker region in 2024 with a 19% year-on-year decline in H1. In Europe our main countries are Germany, Italy and France where the heating demand is strongly down this year. We do not see immediate signals of recovery in the market differently from our initial belief. The recovery will probably have a long U- shape lasting until the end of this year. We see the demand in July still weak in line with Q2, especially in heating. Some positive signals are coming from the approvals of incentives for heat pumps in Germany, which in June were +40% month-on-month. But the numbers are minor as the market demand is still weak. We continue to see positive signals from our service and part businesses which shows that the renewal market is still decelerating in favor of maintenance outside Europe. We suffer in Asia Pacific and Middle East in Africa due to the current difficult extreme external context. Summing up all the above, we expect a still weak H2. As we already said, 2024 is a bottom year and we expect a recovery from 2025. In the mid-term, the market dynamics are confirmed. This is a market of renewal with mid single-digit growth rate which could see in Europe an acceleration thanks to the EU regulation and from lower interest rates outside Europe we expect Water Heating market to continue to grow thanks to a growing population. Summing up with the increasing penetration of Water Heating solutions. Americas markets represent a positive exception in this scenario. It is a stable growth in Q1 and Q2 and could continue also in the mid-term. Let's now pass to slide 16. We confirm 2024 being a transition year with a strong negative momentum that will lead to a long U-shaped recovery. As I just said, we are at the bottom of this U- shape in the mid-term. I want to reiterate one more time. We strongly believe in the fundamentals of our sector and of our business model. The heating business is mainly a replacement business and once the short-term volatility will be over, we'll be back to growth. Buildings are counting for more than one-third of emissions in Europe. More sophisticated high-efficiency and renewable solution will be needed to achieve the decarbonization targets. Water Heating business is steadily growing in the mid-term. Our business model with a good balance of heating and Water Heating coupled with a complete set of high technology and easy to install solution position us well to serve at best our installers and users for any solution they will need in the future in 2024. Organic growth as a consequence of all we have said until now in this call, which can be summarized in weaker than expected market demand beyond the industry expectation. We review our guidance. We now expect 2024 revenues to decrease by -12% to -15% year-on-year on a like-for-like basis. The bottom of the range assumes no recovery in as to which is the worst case scenario. The guidance, as already mentioned, includes Russia until end of April both in 2023 and in 2024 numbers. On the profitability side, we expect now it to be circa 6% already including the management action on cost plan for 2024. New management actions have started and we will see their impact next year and in the following years. This U-shape should have its bottom in 2024 while from 2025, also thanks to our management actions, the adjusted EBIT margin should begin its recovery. Finally, I repeat what I had said during the last call. I want to reassure that we will not take any rational decision to cut costs needed to support our future growth. We do not want to sacrifice future growth for the short term. We are following the same approach on CapEx. We are adjusting the timing of the investment to follow the top line evolution and to stay close to our 4% outlook without cannibalizing our future growth. As an example, we have just inaugurated a new production site in Serbia, a greenfield for the production of accessories for our renewable products which will start operation at the end of 2025. Cash generation will be concentrated in Q4 as per previous years. We are active in M & A, assessing many opportunities. We are spending a significant share of our time on it. We are not in the game to make any deal. We are focusing on opportunities that have a strong strategic rationale with our technological portfolio and or geographical footprint. Given the current value of our share, far from their fair value in today's Board of Directors, we have decided to anticipate some acquisition for the future LTI programs and we are starting to buy up to 3 million shares in the market. Thank you everyone for the attention. I think now we pass to Q&A. Thank you Maurizio. We have now completed our presentation and we are available for your questions. To make sure that everyone gets the chance to speak, I invite to limit the number of questions at each turn to maximum 2. Operator, please open the line. Thanks. Thank you. This is the Chorus Call conference operator, and we will now begin the question-and-answer session. Anyone who wishes to ask a question may press *1 on their touch-tone telephone. To remove yourself from the question queue, please press *2. We kindly ask to use handsets when asking questions. Anyone who has a question may press *1 at this time. Star one. We will pause for a moment while questioners join the queue. The first question is from Vivek Midha with Citi. Please go ahead. Thank you very much everyone and good afternoon. My first question is following up on your comments around pricing where you said pricing started to show some signals of weakness. Could you please quantify that and quantify what assumptions you've made around pricing in the guidance? Thank you, Vivek. Yes, I mean, as we said and as you probably might imagine, given the weakness of the market, obviously competitors are becoming nervous. We saw pricing to be a little bit higher and intensified in the last month and for the next, for the full year guidance that we put in, we included some pricing. So obviously we continue to closely monitor the price evolution in the market. There are obviously promotional activities that are always part of the game and a greater activity on pricing is on product lines that must exit from the market as of January 2020 due to regulation, for example, split pumps with 410A refrigerant. So this is what is happening and this is what we will continue to monitor. We banked some of this pricing in our guidance and we will continue to monitor the market. Okay, thank you very much. My second, or just a follow up on that, is there any color you can give us to the magnitude of those price cuts? And I'm just taking a big picture to you. You're reiterating your mid-term guidance of an Adjusted EBIT margin of over 10%. But in terms of that pricing weakness, how can you get comfortable with that mid-term recovery? Clearly you're taking out costs and so on. But if there's that pricing pressure persisting, how much visibility do you have on where that could go? Thank you. Yeah, I mean as I said, the pricing is becoming a little bit more acute given the market, which is very weak. This is not a big magnitude. So we are not talking about the big pricing action that we see in the market. So we are confident to continue to guarantee the margin on our products that we have. And then on top, I have to say that we play in the medium high part of the market, so we are not playing in the lower part of the market. We have all the technologies and I think, I mean we are very well positioned and in parallel we continue to work on our cost efficiencies as well in terms of production, product development and footprint. So nothing alarming, I would say. Thank you very much to you. The next question is from Brijesh Siya with HSBC. Please go ahead. Hello. Good afternoon, everyone. So I have question on your volume guidance and volume. You talked about volume being down more than 30% and I assume the initial earlier Q1 comment about volume being roughly halved in heat pumps still continuing. So when you are looking into the recent numbers, you do not see any pickup. But in your full year guidance, you're roughly saying that even the Q4 recovery also is not going to come. I mean, first we said -12% to -15%, which is, and then I said -15% would assume not a recovery in the H2 as you ask. In Q4, despite the better comparison versus last year, the upper part of the range is implying a recovery in the second part of this year and especially in Q4. Okay, and just on the margin, you talked about 4.3% in Q2, or that's what you've delivered. How should we you talk about H2 being 70% skewed towards it? And so how do we see Q3 margin evolving versus Q2? I mean, what we expect is obviously a sequential improvement in Q3 and Q4, subject to the top line. You may remember that before the exceptional two-year peaks of 2023 and 2022, our profit was more skewed to Q3. I mean, these are the same expectations that we have this year. That we will go back to a normalized Q3, Q4 and up to recovery versus H1, especially in Q4. Okay, so. Okay, fine. Thank you. I'll be in the queue. Thank you. The first question, the next question, sorry, is from Axel Stasse with Morgan Stanley. Please go ahead. Hi, good afternoon everyone. Thanks for taking my questions. I actually have a follow up question with regards to the margins. You said that you are part of the higher part of the market and not the lower part of the market. But many players in the industry are actually seeing this. So can you perhaps elaborate on what this actually means? Yeah, I mean, being in the upper part of the market means like Wolf Elco brands in Germany are playing above the market level, not at the entry level. We know that there are players that are playing purely for pricing and they position themselves in the lower part of the market average. Obviously our technologies and our innovation and the quality of our products sustain the premium price position versus the market that we have. So that is what we mean when we talk about upper part of the market. You see less pricing. I would say movement in the upper part versus the lower part. That's what you mean? Yes, obviously. And I'm sure someone will ask me about stock level. Obviously there is much more stock level in the lower part and maybe less known or less strong brands that took the advantage to enter. Especially in heating heat pump last year where there was high demand and low supply. So we sell both a lot of them and half of them is difficult to sell. Okay, perfect. My next question is about the excess inventory. Could you provide an update on this specifically in the biggest markets? So for example Germany, France, but also Italy, how comfortable are you to get this excess inventory cleared by the end of the year or even perhaps it will also go into 2025? Thank you. Yes, overall we observe a decreasing level of stock of heat pumps and gas boilers in our channels with different dynamics, market by market. In Germany the stocking is still ongoing. Obviously the weaker the demand is, the longer the restock will be. And on heat pumps, while the demand is improving, this could last until year end. I think in Italy the destocking was already ongoing, is more advanced versus Germany, especially in Italian pipe. I would say we are close to the end of the stock level. In France the market is still down strongly also in quarter two. So the restocking is still ongoing and we expect this to be better in H2 too. Okay, thank you all. Back in a queue. Thank you. The next question is from Alessandro Cecchini with Equita. Please go ahead. Hello everybody and thank you for taking my questions. The first one, actually it's on your efficiency initiatives. If I am not wrong, you stated about EUR 78 million half cost, half CapEx. So talking about cost, we are talking about EUR 35 million-40 million in 2024. I was just wondering if it's everything included in the H2. And secondly, how much do you expect in terms of additional impact for 2025? This is my first question. Yes, thank you, Alessandro, for raising the question. You are right on your interpretation. What we can tell you is that we actually initiated on this efficiency program at the beginning of the year. We launched a number of initiatives that are aimed at minimize all the spending, all the unnecessary spending, from hiring freeze to temporary unemployment, to services postponed or cut. So we went through inside out each bucket of the entire organization. To answer your question, part of the savings are embedded in the H1, another part in the H2. Maybe it's more squeezed into the H2. And that's also a driver on the profitability on a full year basis. So that's why, starting from the H1 margin, we are aiming to reach the 6% circa 6% on the Adjusted EBITDA on a full year basis to complement. Yes, part of these savings are meant to be. I mean to generate upside for next year as well. But let's take a step one by one. Yes. Maybe just to build on. So as we said, something will stay and something will be even higher thanks to the Fit-2-Win program that I spoke about, which will give the majority part of the benefit in 2025. Okay, because I was wondering about this. So your embedded guidance, you made EUR 57 million of EBIT in the H1 and then basically double adjusted EBITDA in the H2. So it seems to me that there is not a big step up in terms of cost efficiencies between H2 and H1. So therefore your improvement in margins, it's largely driven by seasonality, not your efforts in terms of cost cutting, if I understood correct. Yeah, I don't know. I can go briefly. Honestly, we might have a different opinion. If you look at the revenue of H1 and H2, obviously they are different, but there is not a big increase enough to in absolute. We started these actions in Q1 and the more time we waited, the more this action will be stronger. So we are confident on what we said and we are confident that this will help us to recover in H2 too. Okay, thank you. About this. My second question is you said about the buyback of 3 million of shares. You changed, you have changed recently the governance set up in order to reach potentially 18 million. So it seems to me a little bit shy this kind of buyback given the price of the stock. So I was just wondering your consideration, your overall consideration regarding this topic that has been in the market since some months. Thank you. Yeah, thank you, Alessandro. We think it's all about the company value. So the way the stock price where it is as of today, it's worth to make an investment when it comes to our capital allocation criteria. We agree that an additional maybe buyback will be a capital allocation solution at the current price. So that's the main consideration we have. In the same instance under the current circumstances, we need to find the right balance between the benefit on shares and liquidity during the buyback execution and the impact on the free float when the buyback is over and shares are held by our treasury. So those are the considerations we have gone through. Okay, many, just one point. It's a sort of follow-up on margins. In the H1, I saw that gross margin declined by around 100 basis points. It's entirely due to country mix or price. Just to have your flavor on this kind of 100 basis points slowdown in gross margin. The majority is country mix. So, as we spoke, Germany for instance, but many other countries, it's country mix, to answer your question. Okay, thank you. You're welcome. The next question is from Michele Baldelli with BNP Paribas, please go ahead. Hi, good afternoon to everybody. Can you hear me well? Yeah, we try. You can go. Yeah, thank you. So I have a question relating to the trends in Europe. If we can break it down between the different product categories, I mean Water Heating and Heating, because it seems that Water Heating probably could have been more than heating, which means that the -20% for Europe could have been worse for the heating. But given that in the heating there is also some services in the aftermarket, the sales of equipment, is it down by 30% in this, in Europe and in these 30%, what shall we assume then for heat pumps and boilers? Is it all concentrated for the heat pumps and boilers are, let's say more resilient because looking to the Burners service division, which is a kind of component used also by the gas boilers, they. Are not so much down. I'm just wondering what shall I think about this? Thank you. Yes, thank you. Maybe I'll give it a try. So obviously the pricing, as you said, is acting differently in the different technologies and in the different markets. So the division that you spoke about is really a specialty division. And this is where we wouldn't see the impact on pricing in the heating. I would say as well that the pricing effect is normal. Nothing different than what we saw in the last year when we talk about heating, which is where the market is weaker and where it is weaker for longer than anyone in the industry would have expected, coupled with the stock that we spoke about that are in the system, are creating a bit of pricing tension, especially in the lower part of the market. I would say especially in renewables, which is the technology that is suffering the most in terms of last year decrease. I hope I was clear. Hello? Yes, it's clear now, but does it mean that these segments are going down by even more than 50% or my assumption is too far from reality? No, I mean, it depends if you talk about volume and pricing. I think if we look per se on heating, heat pump in general, so the market of heating heat pump in Europe is down 46% in the countries where we play. So we don't consider the Nordics and I think in value is a similar decrease. That's very helpful. Thank you very much. The next question is a follow-up from Brijesh Siya with HSBC. Please go ahead. Hello again. So on the pricing side, could you please provide a little bit color around who those players? I know Maurizio, you kind of touched upon, there are few players who entered the market. If you could just tell us whether those are domestic manufacturers who are active in those or maybe the Asian producers who are kind of trying to boost to and have a foothold in the market. That's on the first one and the second one, the cost saving. Riccardo, if you could just tell us what's the cost you are incurring to achieve those EUR 70 million-EUR 80 million of efficiency and I guess CapEx part is obviously simple one, the rest EUR 30 million-EUR 40 million. How much you are spending to achieve those? Yeah, so as you might imagine, I wouldn't list who is doing more discount or is doing a less discount. I think what we can say is that the stronger you are in the brand in the market, in terms of brand values, in terms of presence since history of stronger technology, the less you need to discount. So if you are a new player in the market and you have refrigerant that are different than the ones that are more sophisticated, obviously you tend to invite people on pricing. One other point that I would like to say that I always mention when we talk about heating, heat pump purchase, the price of the machine is only a fraction of the total cost of investment that you would need to do in your house or in your flat to place a heat pump because you will have to insulate much better the apartment. So yes, there is a little bit of pricing problem. But remember the total investment and cost is maybe 3-4x the cost of the machine. So there is an influence but it's not so big. So I hope you understood from my first part of the answer what I meant. Maybe now we go on the question to you, Riccardo. Yeah, so let me try to elaborate or reiterate. So yes, on the EUR 70-80 million, as Maurizio indicated, half of those are actually CapEx. So when we went through the prioritization, we made conscious decision not to jeopardize the future of the company. When it comes to the other part on the OpEx, I mean cost components are various from labor cost, temporary unemployment where we have low volume and therefore we can reduce temporary workforce hiring freeze is another action. We implemented indirect costs. So all services that we feel can be pushed ahead, those are the actions we implemented the rental services technology wise. We revisited our spending on technology as well. So it really goes down into each line item of the P&L in each bucket where we have a spending geography wise business unit. That's the exercise we have gone through in the last few months. We started and we are committed to run it on a full steam in the second part of the year. Understood. So Riccardo, if I just understood correctly, it's more like a cost control rather than cost cut. You're not kind of incurring any cost to achieve these EUR 30 million-EUR 40 million of savings? We are also considering some permanent. Yes. So that we may incur some severance costs as we are approaching the H2 of the year. Yes. So I think you have to keep in mind that we do both structural and so permanent, this is what we call and this will have a cost for the company. Are we able to quantify that? I mean, for the moment, the magnitude that we have in mind is around EUR 10 million for this year. Sorry. And Maurizio, just coming back to your answer. I think you rightfully pointed that the heat pump cost is only 1/4 or 1/3 of the overall cost for installation. So in that case, the question comes is the price cut really helping those players drive volume for them or it's just that's what they want to try to do it and they're unsuccessful. I mean, as we said before, given the big decrease of the market of heating heat pumps, they said that the ones that are trying on pricing are not very successful. So I think it is a normalization after a peak and pricing will not and is not moving the demand. So we have to wait and make sure that the fundamentals are right and strong for the future and the renewables will recover for sure in 2025 and accelerate in the next years also thanks to EU regulation. So with the market down 46% and the value similar, we don't see any impact of those pricing actions. So the European legislation will help us to accelerate. But as we said, this acceleration will happen in 2025. We thought this could have happened in up to 2024, but it's not. Understood. Just last one, on the market share, are you seeing any big movement in market share happening within Europe? I mean, if you do the market value versus what we are doing, you can feel that we are doing better than others. So overall we are performing better than others. I would say, as you know, we are very strong in Water Heating and this is where our performance is stronger. In terms of overall we are doing fine with plus and minus as always. But we are confident on our ability to execute better than others in the market. Okay, fair enough. Thank you very much to you. The next question is from Isacco Brambilla with Mediobanca. Please go ahead. Hi, good afternoon everybody. A couple of questions on my side. The first one is on efficiency actions. Looking at these EUR 35 million-EUR 40 million OpEx savings, how should we think about the sustainability in the coming years? So are we talking about cost savings which may remain in your PNL in the coming years or more contingency actions to defend margins this year, but that vanishing as business normalizes? Second question is on net working capital. Wondering if there is a range which you feel confident to commit by year-end, say, corresponding to the range of top line you are guiding for. Yes, thank you for your question. Obviously on the first one we said we are doing this because we are obviously in a tough market situation and not anymore, as we thought, in a growing situation, but with what we call Fit-2-Win. We really want to understand which are the inefficiencies that are part of our way of working that will help us to be stronger as well in the next years. So, I would ask you to expect benefits in 2024, 2025 and in years to come with all the actions and thinking that we are doing together, as you know, with a long-term strategic plan that we are doing that we call Destination 2030. We spoke about this with some of you. That will be probably revealed in the next 6 to 12 months to the market. So we are really doing a comprehensive work to position us even stronger and to be ready to capture the opportunity of a growing market as of 2025 on the net working capital. I will pass to Riccardo, obviously this year. It is a challenging year, as you know. And probably Riccardo will say the number or the magnitude that we expect, maybe a better absolute. I think you have to remember that the company was a champion in working capital in the past. Until the situation is normalized, we cannot promise you that we will go back to the level that we had before. Riccardo. Yeah, thank you. So you are absolutely right, Maurizio. We used to be one of the best performers in the industry. I think also this year we had done a very disciplined job on all the levers. So receivables. We have no deterioration. Despite some challenges, such as Red Sea or other complex markets, payables. We did continue to do a pretty good job by managing the days to pay. And last but not least, on inventory, we actually managed to decrease it despite the continued decrease on the top line. So to answer your question, we are committed to continue to optimize it. As you have seen, we closed the H1, end of June, at 17%, EUR 474 million. We, I mean the optimization is pretty much linked to our top line trend in terms of relative terms. So it's all about the denominator but absolute value. We absolutely committed to improve it. Maybe a quick follow up, any sort of medium term target on this since it may be more easy for you to assess it rather than this year which has exceptional circumstances? Yeah, we are aiming to go back in roughly 12%, 13%. I mean it's something we want to continue to invest and make sure that at some point we are improving as we have done in the recent past. Okay, many thanks, Riccardo. You're welcome. The next question is a follow up from Axel Stasse with Morgan Stanley. Please go ahead. Yeah, I have some follow up questions, if I may. The first one was about the balance sheet. You said that the balance sheet is still sound. Sorry, but the leverage is still pretty high versus the historical levels. So can you perhaps provide a leverage level that you think is unsustainable and that you don't want to reach? Is it three times, is it fair to assume three times or is it even higher than 3x? The reason I'm asking is because you still have this desire to do some M&A and I just wonder also if the shareholder return, that is divi, could. Be at risk here. That is my first question. Yes, to answer your question, the leverage may slightly increase by the end of the year because of the EBITDA. Okay. That being said, we are not looking at it as a concern, as a constraint. You should also remember that from a balance sheet perspective, we can rely on the EUR 900 million unused and committed credit lines. So the flexibility is still there. And I mean we want to remain investment grade. We don't want to deviate from the commitment we actually made since the beginning of the IPO. Okay, very clear. Then my last question was about pricing. Sorry again to come back to that. But if we see some pricing pressure coming from the competitors, even if they are in the lower part of the market, and if we look at your historical EBIT margin of around 8.5%, if I'm not mistaken. Can you just please elaborate on how you want to reach again this medium-term guidance? Is it through cost-cutting programs? Is it through efficiency? I just want to understand why suddenly we should go back to. At least you aim to go to 10%. Yeah, I mean obviously this year is very tough and scale is impacting everything and the percentage as well. So as of next year, I think a combination of different factors. So the top line that will grow the cost efficiencies that will happen in the structure but also the continuing cost efficiency that we have from our wonderful procurement team from technology will help this as well and obviously not next year but as of next year we will start to go back in a growing percentage of profit margin with a combination of bigger scale growth and continued efficiency. So on top of the mix will help us as well. This year we set the country mixed impacting us and next year will on the contrary will favor us. I think we are well positioned to go back to a growth trajectory that we had to stop this year given the incredible and unexpected tough market situation. Okay, thank you very much. There are no more questions registered at this time. Ms. Introvigne, the floor is back to you. Thank you. Thank you all for your participation to our conference call. The investor relations team is available for any follow-up you may have and good afternoon to everybody. Thank you. Bye.