Good afternoon. This is the conference call conference operator. Welcome, and thank you for joining the Aquafil Group first quarter 2025 results 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 handset icon on the bottom 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, investor relator of Aquafil. Please go ahead, madam. Thank you, operator. Good evening, everyone, and welcome to Aquafil Investor Conference Call. Today, we will update you on company's first quarter 2025 results. Before going ahead, let me remind you that this presentation may contain certain statements that are neither reported financial results nor other historical information. Any forward-looking statements are based on Aquafil's current expectation about future events and are subject to risks and uncertainties that could cause results to differ from those expressed by the statements. For a discussion of these risks and uncertainties, you should review the disclaimer in the presentation we issued today. I will now leave the floor to Mr. Giulio Bonazzi for his remarks. Thank you, Giulia. Good evening to all and thank you again for attending our video conference. The first quarter recorded an increase in profitability compared to the same period of the previous year. This, despite the global economic context that continues to present challenges and uncertainties. This result is a consequence of the U.S. market recovery for the fibers for carpet and the increase in sales of eco product. The latter, to our great satisfaction, exceeded 60% of fiber turnover, achieving the target set for the current year ahead of schedule. The higher-than-expected trend in energy cost persisted in the first quarter, but subsided at the beginning of the second one. EMEA and Asia Pacific are substantially in line with the forecast. Appreciation goes to the engineering plastics area, which continues a virtuous growth process. The United States recorded increasing volumes even beyond expectations in the fibers for carpets business line. Unfortunately, the textile yarn has likely been affected by a front-loading as a consequence of the tariffs war. Order intake suggests a positive trend in the fibers for carpets and polymers product lines, while some weakness remains in the textile yarn sector. As anticipated, the introduction of tariffs has no direct impact on our business, while we are closely monitoring the indirect consequences that might affect demand. We are confident in achieving our targets for the current year and for 2026, creating long-term value. Thank you, and we are now ready to answer to your questions. Thank you. This is the conference call conference operator. We will now begin the question-and-answer session. To enter the queue for questions, please click the Q&A icon on the left side of your screen and 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 Tommaso Nieddu, Kepler Cheuvreux. Please go ahead. Tommaso. We cannot hear you. We can't hear you. Can you hear me? Oh, yes. Now we can. Okay, perfect. Thank you. Thank you very much for taking my questions. The first question is on the raw material costs, that were quite beneficial for this quarter. My question is, do you already have visibility on its dynamics in Q2? It seems like caprolactam price has increased a bit. The second question is on ECONYL. You already reached 60.5% on fiber revenues, which was targeted for the end of the year. My question is, therefore, will you continue to try to increase its weight throughout the year, so you are satisfied at this level? The last question is on utilities cost, that were higher than expected. Are you planning to take any action to make it less volatile, considering that it is a material line in your cost structure? Thank you very much. Thank you, Tommaso. Raw material cost. First of all, let's try to make or to give a clearer picture. They have been lower than our forecast, but they had risen during the first quarter. We have seen, during the first quarter, a raw material price trend of increase. This increase is nevertheless lower than our budget forecast. This is why we are saying that is bringing us an advantage. What is happening in the second quarter, on the contrary, is a decrease of the raw material prices. We have returned to the prices of, let's say, December, January, in the month of May, which means, of course, to have even higher advantage in comparison with our budgeted raw material prices. When we speak about ECONYL 60.5%, as you can imagine, we are quite satisfied, and we have given this announcement because it was inside our targets that are inside our sustainability reports and our non-financial declaration. Clearly, if convenient, we will keep pushing and trying, of course, to differentiate our sales through ECONYL regenerated yarns that are bringing, in our opinion, a good advantage in the long term. Recently, as we have spoken about the engineering plastic, the ECONYL polymer has started also to mark its presence in this business line, bringing also some interesting results in terms of sales and profitability. Energy cost. We have, let's say, given this kind of, how can I say, better cover. Because if you remember, at the end of last year, this was the major reason of the deviation from our, let_s say, planned numbers and our actual ones. As everybody knows, at least here in Europe, in particular when we speak about natural gas prices, we have suffered during the first quarter, and more during January and February, a very high price. Starting from April, we have started to see a downward trend, which has taken back the actual prices to our budgeted numbers. Still, we have not been able to recover the, let's say, increased cost that we have suffered during the first quarter. We have made some forward, let's say, purchasing of natural gas, but still limited, because unfortunately, the prices available in the market are not so favorable. We have been forced, I believe, like many other players, to stay on the spot for the bulk of our consumption. What we have been doing in the last month is to study carefully, not so much, and of course, we are working every day on trying to buy cheaper energies and utilities. In fact, we have strike a deal for electric energy for our Slovenian plant that is starting to bring in some advantages from the month of April for the future years. When we speak about natural gas, what we are studying right now is to introduce some newer technology in order to reduce unit consumptions, which of course, should bring benefit, let's say, irrespective of any gas price that you might, let's say, suffer or have in the market. This is what we can do, because, of course, cutting cost and cutting consumptions is always the best thing to do in the short, medium, and long term. Thank you. Welcome. Next question is from Carlo Maritano, Intermonte. Please go ahead. now we can hear you, Carlo. Can you hear me? Yes. We can also see you. Okay, perfect. Good evening, everyone. I just have three questions from my side. The first one is a follow-up on utilities cost. Can you quantify the impact that you had in first quarter, just to understand what would have been the margin in case you didn't have this impact? The second question is on CapEx. I see from the presentation, the CapEx in the first quarter was EUR 4 million. Given that in the business plan, there's a target of EUR 35 million, I was wondering if it is just a matter of timing of there are some investment that are being postponed. The final question is on the polymers business. You said before that in the first quarter, the engineering plastic had a good result, so I was wondering why the rest of the business declined so much. Thank you. Yes. Let's say, I will not give you the exact figure, but the impact on the higher, in particular, natural gas prices, has been more than EUR 1 million. Okay. Clearly, this has got a major impact on our profit and loss numbers. This, of course, should, let's say, return back hopefully during the rest of the year, but it doesn't depend on us. It depends on many international factors. Low CapEx. Well, as you can imagine, I guess like almost everyone, we are at the window understanding whether this kind of uncertainty is, how can I say, bringing a market stable, declining, or growing. Of course, it doesn't make a big difference to eventually delay for three or six months some capital expenditures, in the longer term. It's better to understand what is making sense. I have also to say that, these new technologies that we are starting to be applicable to our operations, were not considered in the previous business plan. This temporary suspension is giving us also the time to understand which one is bringing more return. Of course, it's better to make investments that are bringing more returns, rather than others that are making less return. Polymer business, I don't know if I have understood well your question. Let's say our polymer business is having practically two legs. One leg which is purely opportunistic, which is the sale of basic polymer. This is, how can I say? Important for us until we are able to secure a certain operation rate to our polymer plants and no impact on our utility systems. Please remember that both in Arco and in Slovenia, we are operating, or there is a third-party operator of power plants, which of course means that we have some fixed cost that we have to consider. Okay. In case also you buy forward, for example, natural gas, you must also consider that if you don't consume natural gas, you pay the penalty. Okay. As I said before, we are not having big hedges on natural gas because the market doesn't, say, in our opinion, present such an opportunity. We are carefully operating our polymer plant at a capacity which is of satisfaction. While when I speak of engineering plastic is the second leg of the business. Not basic polymer commodities, but something which, how can I say? Has been additivated or compounded with other materials to modify the characteristics of the polymer, which as you can easily understand, is bringing a much higher marginality. This is where, of course, we are focusing our attention, and we have seen, especially in the compounding part, a big growth in comparison with last year. This is a consequence of, say, the stable organization that we have been able to build. Remember that this is a new business line since, let's say, the September, October of last year. We are very confident that this business line during the coming years could bring us a lot of value and growth. Maybe. Thank you. Next question is from Gianluca Pediconi, Momentum. Please go ahead. We have lost connection. Next question is from David Storms, Stormgate. Please go ahead. Hello, thank you for taking my questions. Just three from my side. I wanted to start, could you elaborate a little bit more on maybe any of the indirect consequences from tariffs that you're keeping an eye on, aside from maybe some demand and buying pull forward? That's number one. With the rise in average selling prices in the North America BCF segment, what gives you the confidence or the ability to push those prices? Could they continue to rise throughout the year? You mentioned on the call that EMEA and Asia are in line with your forecast. Is there anything that could speed them up and bring those regions ahead of forecast? Thank you. Well, unfortunately, just like many others, we don't know actually what the indirect consequences are going to be. Strangely, what we were imagining has not happened, but exactly the opposite happened. We were eventually expecting some slowdown of demand for automotive yarns, in particular in U.S. On the contrary, we were expecting an increase in textile yarn in the North American market, and let me say, fortunately, it happened the opposite. Of course, fortunately, because the automotive and BCF market in North America, size-wise, is far bigger than the textile one. Of course, we would have preferred to have no problems, but if you have to have them, better to have on the smaller part of your businesses. I believe that nobody knows what is happening right now. Still we have a period of 90 days, which in the case of Europe, is what? At 50%. In the case of China, has now started, even though we still don't understand what is the actual import duties that Chinese goods will have to pay or be paid when imported in U.S. We don't know the rules. We don't know how to apply them. Everything is very uncertain. We don't know whether Chinese people now are saying, "Okay, we have just 90 days, better to ship whatever we can, and then, let's see what is going to happen afterward." In case we find an agreement, we keep the settlement at the same amount, or will be higher or possibly lower. It is very difficult to understand. We have seen a positive trend of sales of cars in U.S., and I believe that the only explanation is that the final consumers were afraid of possible price increases, so when they could anticipate to buy, they did. Clearly they will not buy twice. They buy once, and then they will expect that the new car will become old, and it will get a new time for buying a second car. We are, of course, at the window, waiting and understanding what might happen. Price-wise, as always, Aquafil has always been able to demonstrate that we are able to, let's say, maintain our margins and eventually pass through price increases or inflation to the market. This is, of course, still part of our confidence, and we will wait whether, of course, this will be necessary in the future in case tariffs should impact somehow our system. Even if pretending, as I said, direct impacts are not existing, and theoretically, the so-called duty drawback system in the U.S. should remain in place. We should have no direct impact, or as of today, we have no, let's say, any kind of news that might bring any kind of new tariff of import duties on top of what we already, of course, have. EMEA and Asia, clearly, there are, again, a lot of uncertainties. Yes, in EMEA, as you know, we have enjoyed the exit of one competitor, which has given us a little bit of orders that were included in our business plan. Asia, for us, Asia means from China, Japan, Southeast Asia and Australia and New Zealand. I must say that the last weeks in Australia and New Zealand have been weak, and the explanation of the customers has been because of general elections. In Australia, they are finished. In New Zealand, they should take place shortly. They say normally after election, demand should, let's say, grow and return to, let's say, a healthier level. In China, what we are seeing is a slowdown of the automotive market, okay, both for the domestic consumption and for the export. Again, the visibility is quite low and poor. Japan is still giving us a lot of, let's say, growth, which is partially compensating the weaknesses of the other final markets. How to speed up the process? Of course, keeping our organization as lean as possible, keeping an eye on our cost. I promise you that we will do it, and very likely during the coming quarters, we will give you also some updates on that. Of course, keeping innovative. This is the only thing that we can do, which is part of our Aquafil DNA. Next question is from Niccolò Beretta Zanoni, Banca Akros. Please go ahead. Hello, can you hear me? Yes, we can. Thank you for taking my question. I have just a follow-up on CapEx. Just to be clear, do you confirm the level expected in the business plan, or you consider the possibility to reduce them for this year? Well, for this year, for sure. In fact, already during the last presentations and the last communication with the market, we have always said, please be careful that when you make a business plan, you give us some numbers that are, of course, a guidance. When you launch an investment in our industry, you don't get stuff out of the shelf. Very often you have to ask for very custom-made equipment that they may have a longer or shorter delivery time. Okay? It is normal that when we give a number, then there is a, how can I say, part of the actual payment that are going to the following year. We said already last year, in fact, we have given a range because, of course, you don't know, 2 years before or 18 months before, how much of what you want to invest, in fact, is going to be paid instead of before the 31st of December, during the first quarter of the following year. Okay. On top of that, as I said before, certain investments that are not, how can I say? Let's say, short in terms of payback have been, how can I say, not want to say put on hold, but we are waiting a bit to launch the orders until we understand whether the market is stabilizing, is rising, or is decreasing. This has given us the possibility of studying these, let's say, other things that we have not considered before of this, let's say, newer technology that are quite interesting, for reducing the energy consumption in our chemical part. You know that for the chemical production of the energy is, after raw material, very likely the most important cost factor that you have to consider. Who knows, maybe better to wait 2 or 3 months more, understanding whether these new technologies are applicable to our system at this point, understanding also when the equipment that has to be custom made are going to be available for our, let's say, installation. Of course, possibly they should bring even a higher return than the other ones, then you postpone. In particular, the automation part, that was not irrelevant, because in our business plan, the first investment was the Chinese one, which is, let's say, on the road. The equipment is already installed and has started to operate. The new building, still waiting for some permissions, but it should come before the end of the year, paid partly before the end of the year, and partly because, of course, if they deliver the last part in December, it will be paid in 2026. Okay, the second important investment was on automation, in particular for the Italian plant. This is the investment that has been slowed down a little bit to understand whether the market is responding to our business plan. Maybe it will be in ballot with the possible, hopefully, energy saving part that could delay the automation one. Thank you very much. Welcome. The next question is from Gianluca Pediconi, MOMentum. Please go ahead. He's under sabotage, I'm afraid. Luca? Can you hear me? Oh, yeah. Finally. Oh, finally. I don't know what is happening. Probably, there is no video. I don't know what's happening. Sorry about that. I have a few questions. The first one, Giulio, you mentioned the pricing power of Aquafil which would be able to pass on to consumer, if there are any tariff. But the higher energy cost, the EUR 1 million that you mentioned in the first quarter- More. will you be eventually able to pass on to your customers if the energy costs are not going down? That is the very first question. Related to this, there is any update on the litigation with the Slovenia suppliers that you can share with us? The other question that I have is mostly on another comment that you made, that is innovation. I remember that last time you mentioned that you were considering scouting, entering new markets like the shipping markets, the cruising markets, and launching a new product. Is there anything also here that you are in a position to share? Very last question on the pre-buys that you experienced in North America. Are they material, so we should see some negative flow back in the following quarters? Thank you. Thank you, Gianluca. Yes, of course, we are confident in case energy prices stay higher than expected, that we are able to pass through price increases. Clearly, we are not a speculative company, but certainly, we want to defend our margins. Given the fact that the number of competitors has decreased, practically, it should be even more certain to pass through any kind of price increase. I repeat, we will not take a speculative stance. Litigation. I can't give you any, let's say, detail, but of course, we are discussing. As you can imagine, it's a tough discussion. What is most important is that the technical problems are partially solved, because this is, of course, the first target, to have a plant which is working reliably. Now, we should have a meeting with the third party management, I believe, in a couple of weeks or so. During this meeting, unfortunately, this meeting will be with myself, which is good and bad because you have more, let's say, higher part. Either you find agrees, as if you have to discuss about tariffs with Mr. Trump. Better to discuss first with someone else, then, of course, once you are close to the agreement, eventually going and strike the last shot with Mr. Trump. I'm joking, of course. Clearly, we are at the highest possible levels of Something should come out quickly. Clearly, if something comes out of that, we will communicate that to the market. As I said, most important is that finally, the most critical part of the power plant has been running now for two months without any interruption, which is very important. Innovation. Yes, of course, we are continuing our process to try to bring new products into the market for our, say, historical applications, but also for new applications like transportation, circular products, like circular fishing nets or technical ropes, or also now aerial rocks is another area of great interest. If I hear my people, they are very excited. I prefer to hear excitement from my CFO, as you can easily understand, because, of course, he sees that the new products or the innovative products are bringing results that are in line or even possibly in the long term, better than our expectation. Pre-buy in USA. Currently, we are still seeing a solid trend of order entry for our carpet yarn business in the United States. Not crazy high as we have experienced during, let's say, the second part of February and March in particular, still, let's say pretty strong, solid, and still slightly higher than our budget forecast. Hopefully it will stay like that. We have no- Sorry, Giulio, why do you think they are pre-buy? I spoke with other companies, non-Italia, they said that probably there were not so many pre-buys in the U.S. At least much less than expected before the so-called liberation day. Do you share this view or you have some intelligence for which you believe that actually they will buy some front loading orders? I don't know about the other, but I can comment about ourselves. When you have orders that are 100% higher than normal, certainly I don't see- Something weird. Okay, I understand. Sales of cars that are double than normal. That's why we're saying for sure someone has built up some stock. Clearly, this might impact the demand during the course of the year. On the other side, we are confident to eventually substituting this lower demand with the substitution of the competitor that exited the market last December, January, which we have not seen yet the orders in large quantities. That's why we are still remaining confident to keep a very high operation rate in U.S. We are even thinking, we still have some small possibilities of making some investment, substituting some older equipment with some newer one, which of course has higher productivity. I'm speaking about very little stuff, like EUR 1 million or so. We are, of course, starting and understanding what will be the trend during the next periods. Certainly, it cannot be twice the order of normal. Evidently, someone has given the order to the value chain to build up some stock to avoid any, how can I say, interruption or possibly avoiding to absorb or postponing to absorb price increases. Better to put material on stock rather than paying it, I don't know, 5% or 10% more later. No, very clear. It makes sense. I have just a follow-up question, if I may. It's on the freight rates and the possible opening of the Suez Canal, the Red Sea. That will be good to have any positive impact for you, or it's immaterial? Can be positive or negative. Can be also negative? It can be also negative. Because one of the threats that we are seeing for the future here in Europe is Chinese operators, Chinese companies, rerouting exports from USA to other geographical areas. If, of course, they don't have possibilities or they decide to reorientate part of the trade instead of to U.S., to elsewhere, the second or the first largest market in the world, that certainly is not Uruguay, is not Ghana, is not the DRC, is certainly Europe. The reopening of the Red Sea route is of course good because in case we decided to buy raw materials, we could get it quicker and less expensive. Okay. On the other side, we could also see some trade commodities coming into Europe, which could further affect the profitability and the operation of our suppliers. We are not so much afraid of direct impact because this might be in particular on the polymer side. Of course, if Chinese that are having a capacity that is 10 times or 8 times bigger than the European ones, they start sending a lot of stuff here into Europe, we might see some other supplier going out of business. This is good or bad, again, it's a matter of depending whether you find to substitute them. Certainly, you can buy from Asia cheaper, but this is having an impact on your networking capital, because of course, you will have to have material in transit for, I don't know, six to eight weeks, and material on stock for another month or two. Of course, prices should be lower. We will see. It's a complicated picture that is very difficult now to say whether it is good or bad. Let's say that today, shipping costs have decreased. They are now, don't want to say back to normal, or not for all the destinations, but for some destinations, they are quite low. For others, let's say in line with the historical prices, and for others, still a bit higher. Overall, I would say we are not damaged presently by transportation cost when we speak about shipping overseas. Thank you very much. I'm sorry that sometimes I have to give some explanations, but at the end, it's difficult for me to tell you it's good or bad, and it's bringing X or Z. It is very difficult. As a reminder, if you wish to ask a question, please click on the Q&A icon on the left side of your screen, or press star one on your telephone. For any further questions, please click on the Q&A icon on the left side of your screen, or star one on your telephone. It's late, so it's easy to make mistakes. Gentlemen, Ms. Rossi, there are no more questions registered at this time. Thank you very much. Thank you all. Thank you for attending our first quarter financial results. Hope to see you soon. Thank you. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your devices.