Good afternoon. This is the Chorus Call Conference operator. Welcome, and thank you for joining the Aquafil Group Industrial Plan 2024/2026 web call. As a reminder, all participants are in listen-only mode. After the presentation, there will be a Q&A session. For operator assistance via web call, please press the headset icon on the left side of your screen. For conference call assistance, please press star zero on your telephone. At this time, I would like to turn the conference over to Ms. Giulia Rossi, the Investor Relator of Aquafil. Please go ahead, madam. Thank you, operator. Good evening, everyone, and welcome to Aquafil Industrial Plan presentation. Today, our CEO, Mr. Giulio Bonazzi, and our CFO, Mr. Roberto Bobbio, will go through some results highlight of first half of 2024 following the presentation of the industrial plan 2024/2026. After the presentation, as a reminder, there will be a Q&A session. I will now leave the floor to Mr. Giulio Bonazzi. Thank you, Giulia. Hello, everyone, and welcome to the presentation of our guidance for 2024, 2025, and 2026 financial years. Let me start, first of all, with the volumes one. The first semester of 2024 has seen an encouraging 10.7% higher volumes in comparison with the same period of last year. You remember that last year we have got a very good or still the last good first quarter, while starting from the second quarter, the crisis hit the market and consequently also our sales. This 10.7% plus is made by a very good 20.8% in the European market, which is a compound number of the fiber plus polymer business, but I will come back later about this spread. While the Asia Pacific has continued its trend of growth with a good 13.8%. What has been unfortunately below our expectation has been the American market in both fiber sectors. For carpet as well as for textile application. This is a negative result that I want to comment late, but we are also, I tell you very much now that we are very confident that we will recover this number during the coming periods. You remember for sure that our target for 2025 is to approach the 60% of revenues at the end of the financial year 2025. During the first semester of 2024, we have been close to 53%, 52.8%, with a remarkable growth in comparison with the same period of last year. The trend of growth is continuing. When we speak about the main accomplishments vis-a-vis with the targets that we gave November last year for the guidance of the previous three years period, we want to tell you this. The net financial position is on track with expectations. Let me remark this because I have always remembered you during the previous presentations that we are very much focusing our attention to reduce our leverage, which is, of course, important. Roberto later will give you a little bit more colors because we have the impression that, of course, sometimes we are not able to explain the final number with, let's say, the problem related to the accounting principle of IFRS 16, which is hitting our net debt. We have scored a very good reduction in personnel cost. You have to know that we have reduced our headcounts of around 15% from June 2023 to June 2024. Very important. As you can easily understand, this will show its strength, its final absolute number during the next financial year, because part of this reduction has taken place during the last semester of 2023 and another part during the first semester of 2024, and the effort continues despite, of course, the volumes are set to increase. The rationalization of the working capital has been very much in line with our forecast. To give you a number, we have reduced our inventory approximately of 20% in volumes in comparison with the first semester of 2023. We have practically fully absorbed the necessity of increasing volumes driven by the crisis of the global transport and logistical system and the war starting that caused a lack of certain raw materials because of the sanctions imposed to the Russian Federation. Very important this also because clearly it means that we have produced less than what we have sold with a lower absorption of fixed costs. Clearly now we are practically at the lowest possible level, of course, our profit and loss will remark even better numbers. We have been very good in managing our production cost, especially because of lower utility impact. You remember for sure that last year, second semester started our new cogeneration plant in Ljubljana. Sorry, it is not our, it is belonging to the service company, E.ON, from Germany. Despite, because of IFRS 16, we had to increase our debt of around EUR 16 million. Of course, the combination of this power plant in the full year, plus the lower energy prices or better natural gas prices, has given us the advantage that we were considering last year. We have scored a higher production efficiency as a result of the head count reduction and better utilization of our operations. We have been very careful in managing our capital expenditures. Just to give you the comparison, the first semester of 2023, we had invested around EUR 18.4 million. This is net of IFRS 16, so not considering, of course, the let's say, amounts that we have to write to our balance sheet. While this year we are at EUR 9.2 million. This is clear why we are reaching the target of the net financial position despite a slightly lower EBITDA in comparison with what we have announced at the end of last year. This is of course very important. Clearly, in 2023, there was also an effect of the carryover from the previous year, which is much lower this year because of the lower investments that we have made at the end of last year, and this will continue also during the second part of 2024. Now, let me hand the mic to Roberto Bobbio for giving a little bit more quantitative numbers. Thank you very much. As we saw already at the end of August, we would like to go again back on our EBITDA performance on the first six months of the year. The first six months has shown an increase in EBITDA compared to the previous year, both in absolute terms and in percentage terms. At the end of August, we are at EUR 32.6 million and 11.3%. This is a very positive trend, this trend should be analyzed or looked also more in details during taking a deeper look at the performance of current year. In the first quarter, the company delivered an EBITDA of EUR 15.2 million and a 10.3% profitability margin, while in the second quarter of the year, it delivered a EUR 17.3 million EBITDA, meaning a 12.3%. This is a clear trend of improvement, a clear trend in the direction of the recovery of profitability, which as you know, for the company is in a range between above 13% to 15%. That's where 13.5%-15%, that's where we aim to go. Of course, this performance is even more, let's say, very positive if you look at the previous year, second quarter, where, as we mentioned before, there has been a slowdown, while in this year we are clearly see a catch-up and an improvement. There are other elements that make us think or believe that what we have seen so far is the clear direction and a remark for an improvement. In particular, we are seeing that benefits from efficiencies that we just mentioned before, of rationalization of cost and efficiencies are starting to deliver the results. The optimization that we made on an implementation of certain activities in terms of reduction of utilities cost, not only for their absolute term, but also in terms of production needs, are giving their results. This notwithstanding a slower market of USA fiber and the EMEA on the NTF, as we mentioned, and by a temporary misalignment, as it always happen when there is movement of raw material cost between the price and the raw material cost. At the end of June, the net financial position is equal to EUR 243 million below, meaning an improvement of EUR 5.5 million compared to December. The EUR 243 million of net financial position represents the lowest value since December, 2022, and is a clear path in the direction that we want to go, meaning an improvement of our net financial position and getting back to what are the covenants with the banking institution. At the end, as a result, the leverage between the net financial position and the EBITDA has decreased from 5.2% to 4.98%. This is a trend that is showing the will of the company to pursue this target for this year and also for the upcoming years, and has made a lot of effort and efficiencies to get to that. After a quick review of the first six months results, I think it's time now to get back to and to focus on the financial plan for the upcoming two years, for which I give the floor to our CEO. Thank you, Roberto. Again, let me remember that the EUR 243 is including the effect of the IFRS 16. Yes. While last year we had given a target that was EUR 225 million-EUR 235 million, which was without the effect of the IFRS 16. If we compound the two numbers together, the EUR 243 is fully in line with reaching the EUR 225 million-EUR 235 million. I'm sorry to remind this. Please, if you want to have some clearer understanding of what this mean, you feel free to contact Giulia Rossi and Roberto Bobbio, because we can give you the exact, if you are not, let's say, finding them easily on our financial report, the exact impact of the IFRS 16. When we speak about the 2024, 2026 financial plan, there are a lot of things that I would like to tell you. Of course, the conclusion of this financial year with slightly lower EBITDA number in comparison with what we had given at the end of last year, but altogether not so distant considering the 2024 and 2025. Then also the reasons why we think that it's the right moment for, let's say, raising additional fund in order to, let's say, push the growth of the company. Of course, explaining how we have made this planning or this new plan in order to understand where are the main focus, what are the main critical points, and where we have, of course, to drive our attention. What are, first of all, the recent market trends and the competitive arena? You remember that shortly ago I said that the U.S. market has been the one unfortunately delivering lower volumes. The reason is, let's say, twofold. First of all, an agreed early termination of a contract with a major buyer for a residential application, which is an integrated company, making its own fiber. Also during 2021 and 2022, they were short of product. They ask us to supplement their internal production with some, let's say, work from our plant of Cartersville. Looking that there was a crisis in 2023 that reduced their sales, they ask us for an early termination. We agreed also because we were thinking that the recovery of the volumes given by the exit of INVISTA that took place a few months before, would have been faster. Unfortunately, it has been slower, I'm happy to announce you that, during the last NeoCon, which is the exhibition of the carpet market in U.S., the customers finally launched all the new products and are finishing the old stock deriving from the previous collections made with competitor yarns. We are expecting, and we are seeing already starting from the middle of July, a trend of growth of orders in our portfolio also from the American market. Now we are also eager to wait the effect of the interest rate cuts of the Fed, which should impact positively the automotive market and the residential market, being the automotive market important for our carpet yarn business, while the residential market more important for the application of our Aquafil O'Mara, textile yarn business. Also, we are expecting a volume growth during the coming period, even if we are not considering a big increase of the market deriving from the exit, which has been announced of another competitor that will take place between December 2024 and January of 2025. Altogether, we believe that despite, we are not, let's say, dreaming about a booming market, we will be able to recover during 2025 and 2026, the volumes that have not come during 2024. Europe is in different trend because we have seen during 2024 that the market has, let's say, stopped the decrease. On the contrary, we have been able to score a little of increase. Also, we hope that the market situation will perform better, especially after the, let's say, absorption of the inventories of our customers in the textile yarn business as well as also, there is a player that has announced that has stopped already production for carpet yarn in Belgium. Despite, we are also here, we are still prudently considering a market which is holding at the present level or nearby. We think that we are able still to have a little consolidation and a little growth of our volumes. This also because finally we have been successfully launched some new product applications in other area that I will comment a little bit later. Of course, in Europe we think that the polymer sector will continue the recovery. We are luckily not involved for this application into the automotive market. Of course, what is suffering now is mostly deriving from the automotive application. We are not in that application. We are more in the home or white appliances or industrial plugs application, which is on the contrary quite strong also because of the electrification of the transportation system. We are, let's say, thinking that the growth of the polymer business for Aquafil will continue steadily also during the coming periods. In Asia Pacific, we are continuously seeing, let's say, a growth of our market. I have to tell you also that this will be the area where we intend to focus our attention in terms of capital expenditures, because it's a place, it's a geographical area where we are running full, where we are still from time to time in the necessity of going into conversion or, let's say, taking some conversion from our competitors or shipping some material from Europe to Asia. Of course, it is far more efficient to manufacture in Asia instead of in Europe. Also in Asia, in Korea, namely one player has announced that it is going to stop completely its nylon fiber production. Of course, we believe that we will also be able to take part of these volumes. Why at this point to increase the capital? Why, if things are getting better, if things are heading toward the right, let's say, situation, why to raise capital? Because of course, we are presently very much holding certain investments that are having a high return, including areas where we are running at full capacity and where we need, not only, in Asia Pacific, but also in USA and Europe. We have certain part of our operations that are running full, and we see that there are some opportunities. Of course, if we have some finance available, we could also consider, certainly not in 2024, but who knows, in 2025, middle of 2025, or eventually in 2026, to take part to the consolidation of the market or, let's say, returning, also considering some, let's say, stronger expansion of our product portfolio through acquisitions. Clearly, if you don't have finance available, you can just think about these opportunities that are passing by, but you are not able to take them. Of course, in the meantime, since you raise funds in the year number 1, and then you use the proceedings during the year number 1, 2 and 3, you will enjoy also a better, let's say, financial rating, which will help you to get finance at a better cost. Please remember, let me repeat, that the major shareholder, Aquafin Holding, has expressed its intention to subscribe its pro quota share of the capital increase. We are not expecting hundreds of million of EUR from the market, but only the part that will not be covered by Aquafin Holding. With that being said, what are the main assumptions of our industrial plan? This is very important. We are considering, for simplicity, selling prices and key raw material prices in line with the first semester of 2024. This is particularly important to underline because, as Roberto has just mentioned, we have got a temporary disalignment during the first semester. It means that we have got a steep increase of raw material prices that has been reflected in product selling prices increase, especially during the third quarter of 2024. It means that we are having a little of reserve in the formation of the margins between, let's say, raw materials and selling prices. The new plan is designed to further strengthen the group's competitive positioning through volumes increase. At this point, we are continuously reducing our cost. We still have room for improving our cost, but it is crucial that we return to grow our volume. We are really pushing harder and harder to increase our volumes in order to return to the profitability, which is in our, let's say, target around 14% of EBITDA margin. We have some additional investments that can accelerate the growth part, of course, part that we will partly leverage through the capital increase. These initiatives will be selected among high technological improvements because we have some new technologies that are presently operating in Europe and U.S.A. that we want to introduce into the Chinese market and increase some capacity in Europe, as well as transforming some equipment in the United States. Not increasing capacity, but simply transforming with this new technology. Of course, working for increase of efficiency and automation of the production process, which is very important in order to curb the inflation of the labor cost, as well as the scarcity of labor, which is a global factor despite the crisis of manufacturing, which is presently hitting, let's say, all the major markets, including China. Finding labor is more and more difficult, which is causing a continuous increase in hourly wages. This has been dramatic during, let's say, the last two, three years in the United States, but also very big in Europe and in Central Europe. A cost rationalization which will drive a good, let's say, improvement of our performance. What are the key indicators for the full financial year of 2024, 2025, and 2026? We are targeting an EBITDA of EUR 65 million, which is below what we have announced last year, mainly because of the lower volumes in the American market. Without considering this effect, we were fully in line with what we had forecasted. For us, it's important to recover volumes in the United States, and we will recover volume because the market will have a slight better demand, and also because of the exit of the two companies, one that took place in 2022 and the second one, which will take place between end of 2024 and beginning of 2025. The net financial position, including IFRS 16, but including also the capital increase, should be in the range of EUR 207 million. We are working at trying to get even better than this, but this is, as of today, our number that we would like to share with you. Clearly, with a very, let's say, good or better ratio between EBITDA and net financial position. Please let me remember also this. We are still sure or, let's say, confident to reaching the ratio of 3.75, which is the main ratio of our financial covenants. The capital raising, it is not driven by the banking sector or by reaching of covenants, but is aiming at having a faster growth and financial flexibility for taking opportunities. What are the expected results for 2025? We are a little bit less optimistic than we have been at the end of last year, but still thinking to hit a number between EUR 80 million to EUR 87 million, and a consequent net financial position, including IFRS 16, between EUR 185 million and EUR 195 million. In 2026, going between EUR 90 million to EUR 96 million, with a net financial position, always including the IFRS 16 effect of EUR 157 million to EUR 167 million. Where we have to focus our attention? Of course, beside still the possibility of reducing cost, we need to grow our volumes. In the carpet yarn business, we think or we are aiming at increasing our volumes between 7%-9%, which is practically holding in Europe, returning to what we had forecasted or a bit less of what we had forecasted of 2024 in the U.S. Of course, getting the growth of Asia. In textile yarn, it seems that we are aiming at a big growth, but in reality, if we benchmark this with the pre-crisis numbers, we are still far below what was the number of 2021 and 2022. It's a partial recovery. We have lost 35%, and we intend to recover less than half of it. We are confident that we will be able to get there. While the polymer business has scored a very high number of +40%, please don't misunderstand me. This is easy because, of course, we were in early stage of introduction of our new investment, we think also that during the next financial year, until we reach the practical full saturation of our equipment, we will keep this growth rate. Of course, as you see, we will stabilize it to a more normal number because, of course, we need to invest in capacity. Even if we invest in the year number 1, we will get the product in the year number 2. Of course, as you can understand, the investments that we will make during the 2026 financial year will bring or should bring results during 2027. When we speak about carpet yarn, we think we will score an additional growth between 2%-4%, also because of the new applications that are especially going into technical yarns, circular products, both for carpet or for technical products like fishing nets and technical ropes, as well as, of course, applications in the rug business, which is an industry next to the one of carpet. While textile yarn, we think we will return to a more, let's say, normal growth between 4%-7%. Altogether, we are targeting a compound aggregate growth rate between 2023 and 2026 of +4%. In textile, +7%, because we had lost much more than in the carpet industry. While the polymer, clearly 2024 and 2025 are giving a very good number of +30%. I think that yes. With regard to capital expenditures in the period of 2024 and 2026, considering of course the capital raising, excluding the effect of IFRS 16, we think we will invest this year between EUR 24 million-EUR 26 million. In line or on the low range of last year, partially absorbing the lower EBITDA in order to reach the target. This number should increase a little bit during 2025 and 2026. Altogether, there will be around EUR 30 million-EUR 35 million that are for ordinary investments, which are practically the one that we are making during the first six months of 2024, plus EUR 60 million or EUR 65 million aimed at increasing or optimizing production capacity or for the development of new product innovation. This is what we want to do. What are, let's say, just to give you some names of what we intend to do. We have an innovative, so-called, we call it internally, OneStep technology. It means that today this production is made in two steps, if it is now one step. Okay? Or, let's say, it is in one system capable of delivering certain yarns that are similar or that can substitute the two-step system. With, of course, as you can imagine, good effect on cost as well as on working capital. This is today working in Europe, working in the U.S. It is a technology fully developed by Aquafil, where Aquafil is building the equipment, we are planning to establish this technology in China. This is the core of our investments for 2024 and 2025. Of course, engineering plastics improvement because the business has just started, we are seeing some opportunities for partially modifying existing equipment and adding a little bit of capacity here and there. Not, let's say, big numbers, but with very high returns. New high-performance fiber for specific applications. For those who are more closely following us on our social media, you will have seen that certain airlines have started to use our carpets, normally made by ECONYL fiber for aviation, which is very much demanding in terms of flame retardancy, because it is normally utilizing wool because of flame retardant properties. Cruises, in this case also with our circular carpets that could theoretically, after use, be, let's say, disinstalled and sent back for recycling. Technical materials, we have launched some circular nets, both for trawls, which means for big vessels, as well as for aquaculture, so for farming of fishes. We have customers both in Europe as well as in Japan and Asia for this kind of technical materials that are ECONYL based. In this case, in the case of aquaculture nets, are nets made 100% by nylon that are also hitting the target of recyclability that the European Commission has fixed for 2025 in the directive for the Single-Use Plastics Directive application. New technology for recycling multi-fiber fabrics. This is very important. We have deposited certain patents at the end of 2022, December 2022, that have consolidated during 2023 and 2024. We are now building a pre-industrial operation in order to be able to welcome certain mixed fabrics like nylon, spandex, elastane fabrics, which is very important for our, let's say, customers when they make sportswear applications, active sportswear, yoga wear, Pilates wear, and of course, cycling and why not swimwear application. Ecodesign, because this is very important for reaching circularity in carpet and rug business, where we are having some interesting products that we are spreading into the market, helping us also to, let's say, better penetrate the market and gaining market shares. Efficiencies, of course, always important. You must never forget that you must keep your cost under control. In our plan, there is, let's say, a growth of unit labor, hourly labor cost driven by inflation, but nevertheless, we are still working. You remember last year we closed our plant in Scotland. We are still working for an industrial consolidation in our Asian platform. Of course, still, we have a big room for cost optimization of our ECONYL system from the ACC, Aquafil Carpet Collection, Aquafil Carpet Recycling, but also within our ECONYL plant. It's a new technology, as you can imagine, the room for optimization is much bigger than for consolidated technologies that are operating in the petrochemical systems already since 50 or 60 years. Industrial automation, this, in our opinion, is also a very strategic matter because of, let's say, curbing labor scarcity, as well as, of course, reducing the impact of the inflation hitting the labor market. Of course, variable cost optimization with certain investments that we are making, especially in our chemical plant, but also in our textile plants. As Mr. Bonazzi guided you through the major assumption of our plan, and based on these, the focus and the results that we are planning to reach are seeing, as said, an EBITDA for the end of this fiscal year in the range of EUR 65 million, that then will move in the range between EUR 80 million-EUR 87 million, and then between EUR 90 million-EUR 96 million. Of course, as you can see, and as we mentioned, in the first year, while the major part will be represented by the recovery and the volume growth, while we are planning efficiencies to be stable and to deliver both in 2024, 2025, and 2026, as they also did, and they are doing during this current year in 2024. For what concerns the net financial position, as we explained, by the end of this year, including the EUR 40 million capital increase and including the total amount of the ROU, the IFRS impact, the net financial position foreseen is in the range between EUR 207 million, aiming, of course, to do better. Coming back to the financial result of expectation for 2025 and 2026, we are seeing a range between EUR 185 million-EUR 195 million for 2025, and EUR 157 million-EUR 167 million for 2026. As you can see in the chart here, as we did also in the past, we divided the various flow apart from EBITDA and CapEx, which in this case are excluded the impact of the IFRS, because we want to give you a clear idea of what are the investments. The cash out. The cash out and the investment related to it. We will have then interest and tax in a range between EUR 18 million to EUR 20 million to EUR 27 million next year, and other variances in which here we do include the impact of the IFRS and the working capital variances, and then the same for the bridge between 2025 and 2026. Last but not least, as we already announced during the board of 2020, end of August, on the 29th of August, we launched the process for the capital increase, and the next steps on the short term to see the shareholder meeting foreseen for the 10th of October. Of course, the company is, for the time being, working and will continue working on all the other activities that are foreseen to complete the operation and the activities by the end of the 2024. Of course, we are working with two major partner that are assisting us and supporting us for these activities. That are Lazard Bank. That are Lazard. As a financial advisor, as DLA Piper as legal. Advisor advisor. In order, of course, to fulfill perfectly all the obligations that. Absolutely council is asking. Let me finish this presentation, opening the Q&A session. I hope that we have explained what are the good and bad results of the first part of 2024. I hope that you remember that the EBITDA of the second quarter has increased in comparison with last year's second quarter of almost 78%, that the net financial position is going into the numbers that we had projected. Of course, we have to work very hard in recovering the volumes that we had previously, let's say, thought to recover during 2024, especially in the American market. Thank you for your attention, and now I would like to open the Q&A session. If, of course, there are questions that I hope to come. Thank you. This is the Chorus Call conference operator. We will now begin the question-and-answer session. To enter the queue for questions, please click on the Q&A icon on the left side of your screen, and then press the Raise Your Hand button. Please do not mute your microphone locally, and when prompted, make sure you turn on your webcam in the pop-up window. If you are on the phone instead, please press star one on your keypad. The first question is from Niccolò Storer of Kepler. Please go ahead. Mr. Storer, your line is open. Please go ahead. No voice. Boycott. The next question is from Gianluca Pediconi of MOMentum. Please go ahead. I think we have technical problems with the audio. Maybe Mr. Pediconi, your line is open. Please go ahead. Okay. Hi, Giulia, can you hear me? Of course I can. Hi, Gianluca. Good afternoon, gentlemen, also Giulia. Ladies and gentlemen, I have a few question. The first one, when I look at the EBITDA bridge on slide 17, I just see the volume and efficiency effect, but nothing about the mix. I understand that prices are assumed to be flattish, but we will see an increase in the ECONYL brand to 60% of the fiber revenues. Does it imply that there is no better mix due to a higher proportion of ECONYL, so that ECONYL is not actually having a better EBITDA? That is the first question. The second one is about your volumes assumption. I would like to have a little bit more granularity. How much of your expectation in term of increase are due to some competitor exiting the market in a different region, and how much is actually driven by the final market demand? How much is due to market share gains, and how much by the market? Last but not least, on the technicalities of the capital increase, the additional information, actually they are not there yet. You can confirm that you are still open to potentially dedicate a part of the capital increase to strategic investors if, obviously they are willing to join. Thank you. Thank you, Gianluca. I will start answering to the third question, the answer is yes, of course. If a strategic partner comes and is interested in, let's say, participating into our capital, it is always a good opportunity, we will consider it carefully. If, of course, the conditions are there, we will also follow these conditions. This is the easiest question to answer. When we speak about always going from last to first to volumes assumption, of course, we are considering a market apart in Asia Pacific, which is relatively flat. We are not considering a market that recovers in terms of absolute terms. Our assumptions are, of course, to enjoy larger volumes from the exit of the competitors, which is, of course, in our opinion, relatively prudent, plus more than market share gains. Yes, of course, we think that through ECONYL we can gain some market shares, but also some new applications that should deliver better quantities. The technical yarns that I have explained, the rug business that I have explained, these are new products and new applications, as well as also in textile yarns, we are following the same trajectory, the same path that should deliver and give us more opportunities to sell products. This both in Europe and in United States. With regard to the impact of the ECONYL margins, I leave the floor to Roberto. Then eventually I will add some comment. Well, as you know, it's always very complicated to make a long forecast and a long budget provision or forecast for in dividing by quantity between ECONYL and non-ECONYL. Of course, we are targeting to reach the 60% of the weight of ECONYL, and this is also the reason why the volume increase or the benefit on the EBITDA on the volume increase is very strong, especially in the first year, but also in the second year. The target is, of course, to recover our EBITDA percentage to bring it up to what we were saying before, in the range between 13%-15%, let's say 15, 14% or even more. This is possible also thanks to an important contribution from the ECONYL business, which is, of course, more than compensating also the increase of our polymer business and our mix. This is to give you, let's say, a quick answer on the volumes. Yes. If I may. Yes. Clearly, recovering such volumes, the impact on our profitability is quite important, quite big. If we add on that also the better margins that the ECONYL products normally deliver, that are averaging a much higher margins, the number would be better or far better. We want to deliver this result. We have, considering that these, let's say, guidelines are already pretty positive, we decided to hold some of our optimism in order to deliver finally these kind of results. It's nice to promise, you have also to deliver if you want to support your credibility. Yes, ECONYL products are normally having a better margin, also because we tend to sell them into the higher market segments. ECONYL production system still has a big margin for improving of cost. There are always some misalignment between petrochemical raw materials that are changing prices quite rapidly. While of course, we have to absorb the inventory of raw materials which is on our shoulder. You have some misalignment that may last also longer than a quarter, so let's say around six months. With lower inventory, this misalignment is, of course, normally shorter. Certainly, the ECONYL products are delivering better margins. Thank you very much, gentlemen. All the best for the coming capital increase. Thank you. The next question is again from Niccolò Storer of Kepler. Please go ahead. Good afternoon. Can you hear me now? Yes, you made it, Niccolò. Perfect. Thank you. I have a few questions. The first one is, again, on expected volume growth for 2025. I was wondering if you can give us some more detail on which% of growth is expected to come from the exit of competitors, and how much is expected to come from results of your CapEx, provided that, if I understood well, the contribution from broader market growth is expected to remain at zero. Related to that, I was also wondering if the volume effect on slide 17, where you show the EBITDA bridge, is totally related to higher revenues and leverage effect, or if in that, you're also taking into account some measures to improve your cost base other than those related to efficiencies. Another question, again, on efficiencies. I was wondering which costs are attached to the four efficiency measures you are mentioning on slide 16. Maybe if you can give us an update on your covenants on debt, if they have remained those we had in mind, so 3.75 times debt on EBITDA, and if these have been now restated, basically. Thank you. We start from the covenant? I start from the covenant. No, there are no changes compared to what are the covenants that we are publishing on our books, and are the same of last year. As we mentioned already at the end of last year, we have obtained waiver for the current year. The next, say, measurement is on December, and we believe that we are going to reach all of them by December 2024. Thank you, Roberto. A little bit more color again about expected volume growth, which is clearly the core or the main part of our growth of EBITDA, because there are also effects on lower cost, driven by the big decrease in personnel that we have scored during the last 12 months, and that we are continuously developing during the coming months. Also, by automation that we have introduced, and by other measures that we are working, like for example, the startup of the new line for polyester carpet recycling that is starting up, unfortunately with some delay in our Phoenix operation. Yes, the volume is the core of our guideline. We are considering that Europe, net of the new applications, is around flattish. We want to consolidate the growth of 2024, plus gain a little bit from the exit of the competitor. I would say that Europe is relatively flat with some slight improvements because of these two effects. Asia is fully driven. The market is growing, it is a matter of capacity. With this new OneStep technology, we are able to hit a market segment which is not covered by Aquafil, which is medium to lower carpet tile market, especially in China and Southeast Asia and Japan. Also Australia is an opportunity for this kind of product. If you don't have the capacity, you don't deliver them. You need. Cost a lot To supplement these products from Europe or from U.S. is logistically not possible. We are all testimony the crazy movement of the logistical and container prices that we are experiencing also during this year, which are, of course, impacting also our profitability, even if now they start to return to more normal levels. Also the time to market is making this impossible, and also the raw material prices are making this impossible if they are not ECONYL-based, of course. With regard to the American market, the biggest part of the growth is related to the final successful shift from the INVISTA platform to Aquafil by, in particular, two customers. Sorry if I don't give the names, but they finally launched all the new collections at the last NeoCon of June, and they are now starting to collect the orders. We are seeing a slight improvement of the automotive market since, let's say, three, four weeks time, we feel may be consequent of the expectation of the reduction of the interest rates that will be made by Fed when it's next week. Next week. We have seen today the cut of the European Central Bank. This should also impact positively the production of Aquafil O'Mara, which is going into residential upholstery and residential mattresses, which are, of course, very much influenced by the cost of capital and the cost of lending in the U.S. To give you an idea, we are not speaking, we said, if I remember now correctly, it is 4% CAGR that we are expecting. Next year, the biggest growth should take place in the U.S., partially recovering the volumes that unfortunately we have not recovered this year. The rest will be recovered during 2026 and the following years, and by Asia Pacific because, of course, of the new technology and the trend of the market, which is on the growth stage. Efficiencies, slide 16, did I understand? Slide 16. This one. Efficiency. In addition to volumes. Yes. In Asia, we are working for consolidating a certain production that are today in two different operations in one. This will not, of course, give the same kind of labor savings that can give in Europe or U.S., but can give, let's say, lower working capital because we will have just one inventory, one stock instead of two, and working also to improve the efficiencies of our partner in Japan, which is now, let's say, operating with an excessive saturation of its machinery. We are helping him to partially bottleneck its capacity. In ECONYL, we have a lot of room still, let's say, improving hardly our Aquafil Carpet Collection, as well as we have introduced, as I have said shortly ago, the new section for recycling of polyester carpets. Unfortunately, this is deserving a little bit of attention. When we started our adventure, which is, of course, the one that has caused the major troubles in our last years of carpet recycling, the model was considering to buying nylon carpets for recycling. Unfortunately, the market at the end, for different reasons, couldn't deliver the nylon carpets we were expecting. In fact, the supplier decided to process carpets by himself because of raising subsidies that, in this case, was a negative influence. We had to start collecting carpets by ourselves. This process started in 2018. It has continued during 2022. We have seen investments during 2023, and is consolidating in 2024. We are projecting at the end to collect the carpets that we intend to recycle fully by ourselves in our ACR facility of Phoenix. As you can imagine, when you are collecting carpets, you get paid little or much, but you cannot say, "I just want nylon carpets and I don't want other carpets." We had also to change our operation. It was not a super major investment, but it costed more in terms of timing and of engineering. We were projecting to start up this section in February of this year. There were some delays. Finally, it started up during the summer, and we are now starting to deliver the first trucks to our customers, and we think we will be fully operational for 2025. This will give a very big impact in terms of cost saving. Industrial automation, I don't need to give you any explanation. Variable cost optimization, we are still working hard to improve certain, especially energy prices and labor cost or labor productivity in our facilities. Of course, better saturation of the plant gives better cost optimization. Yeah. Maybe a quick follow-up on this, just a clarification on efficiencies, if these measures are coming at a cost. Last question, maybe on CapEx, if you can maybe highlight which are the, let's say, three most expensive initiatives you're going to undertake among those you mentioned. Thank you. Yes. If you go on slide 19, on the, let's say, voice other variances, are included two parts, cost savings as well as the IFRS Sorry, they are the IFRS 16, while the cost saving are in the improvement of the EBITDA. Let's say we are targeting a cost reduction between EUR 4 million to EUR 5 million per year, of course, we have to net this with the labor inflation. Yes. Okay. Clearly, next year we will have a bigger saving coming from the reduction of personnel that has taken place in such a massive way during the last semester of last year and the financial year of 2024. Of course, we hope to have even better numbers. We still have further possibilities for reducing our cost, I repeat, especially in the ECONYL part, we will work harder to score these opportunities. Sorry. Yes. What are the main Well, the main, apart of course, the ordinary CapEx, if we go back to the slide number Sorry, I'm not so good, especially when they print back. 14. Thank you, Giulia. 14. No. That one. All right. Thank you. Slide number 15. Okay. We have indicated a number of EUR 30 million to EUR 35 million of ordinary CapEx, which is the normal CapEx that we make on top of maintenance, I remind you. Okay. For, let's say, improvement and updating of our infrastructures, the EUR 60 million-EUR 65 million in three years. Of course, 2024, 2025, and 2026. The biggest part is the expansion of our Chinese plant. We have proceeded to acquire the last piece of land next to our facility, next to our property. If we had lost this opportunity, we would have got no possibilities of expansion of our plant in the near future. We will start building next year a new building. In this way, we will be able to make two things, consolidating the two operations between the two Asian operations, the two Asian plants. Secondly, also bringing back the inventory, which is now on rent by third parties with prices in China that are continuously rising. They are reaching or sometimes even surpassing the per square meter cost that we have in Western Europe. Believe it or not, this is the current trend. Bringing back this, having the opportunity of making this investment is for us important also because, of course, since we are not on rent, we will have a lower impact of IFRS 16, which is quite. Annoying. Annoying. Sorry if I have to repeat, we have something like EUR 40 million of net financial position, which is deriving from IFRS 16, which is a figurative debt that you have to write because of accounting principles. Of course, the new extrusion tower for the OneStep technology plus the equipment of the OneStep technology. By far, the most important investment is related to this Asian, let's say, capital production expansion, as well as we will increase the capacity with this OneStep here in Europe and transforming some lines in U.S. from older to newer systems. This is by far the most important voice is, I repeat, a very new and efficient technology and it's delivering outstanding results. Thank you. The next question is from Anthony Manara of First Europe. Please go ahead. Hang on. There you go. Continue. There we go. Good day, Giulio, Roberto, from New York. I just wanted to ask you the question, if you could elaborate a little bit on IFRS 16 and how it affects your profitability. I understand it's regarding leases and declaring the asset on your balance sheet. I just wanted to understand who's holding the asset and how the leases work. If you could elaborate a little bit on that and what's the structure. Does this involve the holding company? I don't know where the asset is. Is it a building? Is it the plant equipment? How does it work exactly? Maybe, Roberto, I see your puzzled face, and I'm wondering if maybe you could. No, I'm trying. Well, it's not really a puzzled face. It's a puzzled face because I also find it puzzling. Yeah, I will try to explain, if I may. The IFRS 16 is an accounting principle that basically obliges you to put financial debt for facilities or any kind of items that you have for a certain leasing period. You inscribe in your books a debt, and then you amortize it during the contract of the lease. As simple as that. The problem is that when you book it at the beginning, when you start a new contract, you book the total cost that you are foreseeing or the total payment you are foreseeing actualized at year one. For example, if you have, let's say, a 10-year contract of EUR 2 million for leasing a factory, you need to book on your As a liability, EUR 20 million right on year one, and then you go decrease. This is, of course, as a distort Well, is what the accounting principle foresee, and this is the rule, and that's it. Of course, for certain companies, especially when you are renewing for longer period, this is giving an information which sometimes needs to be, let's say, at least divided and explained and highlighted because that gives a better look or better understanding, can provide a better understanding what is the, let's say, the real debt when we think about financial debt with the banks and not third parties, with the banks and or figurative debt that you have for leasing contract. It has a negative effect on your EBITDA? No, it has a positive effect. It has a positive effect on EBITDA because it goes on amortization. You amortize it. It has a very negative effect on your net financial position. Net financial. I give you a concrete example of last year power plant that E.ON built in our premises in Aquafil Slovenija. The plant has costed EUR 12.5 million, and we have written a negative impact on our net financial position exceeding EUR 16 million. You say, "How the hell you have built a plant of EUR 12.5, and you have written a debt of EUR 16.5?" Yes, because in the contract with E.ON, there is also the maintenance of the power plant. Maintenance, which is considering the ordinary maintenance, like change of lubricants and rolling parts and others, but also the change of the turbine. We have the right, after certain working hours, now I don't remember, five or six years of operation to have a new or completely modernized turbine. We are paying for this. The accounting principles and our auditing company has obliged us, what? To write a negative number on our net financial position of EUR 16.5 because the cost of the plant plus the cost of maintenance actualized at the current interest rates was making EUR 16.5. There will be a moment after year number 4 or 5, which will make extremely attractive to buy back this plant. We have the possibility to buy back this plant every year. There will be a moment in two lines will cross, suddenly we will buy this plant, I don't know, for EUR 5 million or EUR 6 million, but we will cancel. Your profit will be positively affected by that. Because as you can imagine, E.ON, which is a big multi-utility company, is not cheap when managing this plant and delivering back to us electricity and steam. We will have, of course, improvement of our EBITDA, considering the two effects, the cancellation of the current depreciation, but of course, the recovery of the EBITDA margin of E.ON and the big decrease of our net financial position. I know that. How far along are you on this process right now? I mean, is it a period where. Well, this is the second year of operation. Very likely it will become interesting during the third or fourth year. Anthony, clearly having the money, we can consider to make it also during 2025. If you don't have the money, you can just dream to make it. In 2025, you can decide on what is the most profitable use of the proceedings of the capital raising. Is it to buy back the power plant from E.ON? We will consider. Is it to, let's say, discuss some potential acquisition or market consolidation? We will consider. Is it to maybe anticipate? Even if you launch an investment, you take maybe 12 to 18 months to have it on operation. We can't spend more money than what we have indicated. Our stomach cannot digest more CapEx. I mean, our engineering department at first. Sorry. It's a very technical matter for accountants. It just seems to me that the market should be able to look through that, and it isn't. It's just taking the facts in front of. Yes. Sometimes, evidently, we are not able to explain ourselves. Sometimes, the market is not considering. In any case, this is something which is hitting every company. It's not just on Aquafil shoulder, but every listed company must follow this accounting principle. Yeah. Honestly, last year, we were surprised. Normally, this is applied for real estate lease and not for power plants. Okay. They decided that we had to take this, we have taken it. I understand. We can decide whether. Thank you very much. Thank you very much for your answer. That clarifies a lot. Thank you. As a reminder, if you wish to register for a question, please press Q&A on the left bar and raise your hand or press star one on your telephone. The next question is from Carlo Maritano of Intermonte. Please go ahead. Good evening, Giulio and Roberto. Three questions from my side. The first one is related to the growth in volumes expected in the polymers business in 2025. I was wondering how much of this growth is related to the engineering plastic business and how much to the traditional polymers business. The second question, I go back to the carpet recycling center you mentioned before. I was wondering if they are now profitable, and they contribute to your EBITDA, or if it's something that we should expect from 2025. The final question is on the assumption in terms of cost of net debt in your business plan. Thank you. I let Roberto answer into the third question, which is the assumption of the cost. Assumption of the cost of our debt starts, of course, from the current cost, we have estimated a decrease of quarter from 0.25%, roughly on a yearly basis. I think we've been enough prudent in order to, let's say, have a little bit of room. As you probably know, the average cost of our debt at the end of June is around 4.3%. Of course, it's made between a fixed part and a variable part, we should consider the fact that during the upcoming years, we will see a substitution of debt issued at a fixed rate with that fixed and variable rate, we will get back, let's say, to the current market, Euribor interest in the upcoming years. That's why we build up this estimation. Thank you, Roberto. Polymer growth, it's equally divided between the two types. Engineering plastic or engineering polymer and, let's say, basic polymer. The last one, we are discussing interesting contracts for the next years. There are very interesting discussions that are making us very comfortable with this, let's say, growth number. In any case, this is something which is not hitting much our margins. Even if we should score a little less than what we have, let's say, given as a guideline, this doesn't change much our profitability. More interesting is, of course, the part of the engineering polymer. Partly, we intend to reach the saturation of our equipment that we have built during 2022 and 2023 and started up practically this year or at the end of last year. Okay. Also we have interesting projects for launching ECONYL applications into the engineering polymer market. We are confident to start selling ECONYL polymers and engineering polymers in the engineering plastic market. We have already started during 2024, which is still marginal, but in 2025, we intend, we think, we are confident to go close to, let's say, 5% of our total volumes between polymer and engineering polymer, which will hit very positively our marginality, because as you can imagine, in this case, there are a lot of interesting results. We have seen, but maybe this is a bit for longer term, a big impact about discussions of automotive players of what ECONYL can deliver to fulfill the obligation of the End-of-Life Vehicles Directive, which has just been approved by the European Parliament, that is prescribing that for the year 2030, every car should have inside plastics having a minimum post-consumer recycled content of 25%, which, of course, ECONYL can deliver. We are having interesting discussions of what we can develop, not only with automotive companies, but also with global compounders that are servicing the automotive industry. You know very well that if you want to service on a large scale the automotive industry, you have to have a global infrastructure, which we don't have. We need, of course, to have alliances with people that are having infrastructure in Asia as well as the North and South American continents. This is, of course, something that we think will deliver during the next It's not only during the next two and a half years, but I would say during the next five to 10 years, interesting opportunities for Aquafil that are today at zero or almost zero. For any further questions, please press Q&A on the left bar and raise your hand, or press star one on your telephone. Mr. Bonazzi, there are no more questions registered at this time. Thank you, operator, thank you all for attending our presentation of the business plan guidelines for 2024 and 2026. We hope, of course, to come back soon with other positive news with our third quarter financial results that will be published in November. Thank you again for your patience of listening to us. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your devices. Thank you.