Part of the conference call, the participant will be in listen-only mode. During the question and answer session, participants are able to ask questions by dialing pound key, then five on their telephone keypad, or by clicking on the green hand button on the web player. Now, I will hand the conference over to Giulia Rossi, Investor Relations. Please go ahead. Thank you, operator. Good evening, everyone, and welcome to Aquafil Investor Conference Call. Today, we will update you on company first half 2026 results. Before going ahead, let me remind you that this presentation may contain certain statement that are neither reported financial results nor are they historical information. Any forward-looking statement are based on Aquafil's current expectation about future events and are subject to risk and uncertainty that could cause results to differ from those expressed by the statements. For a discussion of these risk 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 year of 2026 closed with positive results, in line with the goal set for the current year. The first six months of the year confirm the group's solid foundation, showing an increase in profitability and a significant improvement in the net financial position. On a geographical level, Europe recorded growing volumes in textile yarn product line against a still weak market for carpet yarn. Engineering plastics and other polymers remain substantially stable compared to previous year. The United States reporting growing volumes in both the textile and carpet yarn product lines. The Asia Pacific region showed a positive volume trend for carpet yarns. The company demonstrated its ability to protect and expand margins during the period, thanks to ongoing cost rationalization measures and the excellent performance of ECONYL-branded products. These results were achieved in a global macroeconomic context, still marked by strong instability and impacted by ongoing geopolitical conflicts. This situation continues to drive cost increases for raw materials and transportation, which are largely being recovered in the third quarter and will be further absorbed in the fourth quarter. Our commitment to reducing net debt continues. Strict financial discipline and targeted investments in efficiency will continue to support solid cash generation. Persistent market uncertainty leaves global demand difficult to predict. However, rigorous cost control and working capital allows us to face the second half of the year with confidence, confirming our goals for 2026. I am now available for answering to all your questions. Thank you. If you wish to ask a question, you may do so by clicking on the green hand button on the player to ask your question orally. Or if you are connected by conference call, please dial pound key five to speak. If you wish to withdraw your question, please dial pound key six on your telephone keypad. We have a first question from [Robert Blum] from [Nathan Partner]. Please go ahead. Great. Can you guys hear me? Yes, we can, sir. Okay, wonderful. Yeah, thanks so much for the opportunity to ask a question here. Could you provide more detail on the raw material pass-through mechanisms? What is the typical lag between sort of the increase in input costs and the corresponding selling price adjustment? How much of the business is covered by those mechanisms? Then as a follow-up to that, can you quantify the unrecovered input cost headwind in Q2? How much has already been recaptured in Q3 pricing, and maybe what additional recovery or cost benefit you expect to see in Q4? Thank you. Thank you, Robert. Aquafil normally has a lag of three months, so our price adjustment mechanism is based on the average of the increase or decrease of the average of the previous quarter versus the second previous one. It means that if we have got an increase in raw material prices during the second quarter of 2026, starting from the third quarter, we will apply price increases that are set to recover those cost increases of the raw materials. Depending on, let's say, when these price increases have taken place during the quarter, it can be that the price increase, for example, in this case of 1st of July, covers entirely the second quarter cost increase in raw materials, or there will still be a tail to be recovered in the fourth quarter. This is for the bulk of our business. There is also a small business, particularly connected with the nylon textile filament business, yarns, where there are contracts, long-term contracts, that are set to be recovered in a six month period. Why this difference between carpet and textile? This is because normally, textile yarn going into the fashion business, it is following a two-season rule. So there is spring, summer, and autumn, winter collections. Normally, our customers are asking us not to change the price for, let's say, contractual volumes within the semester. That's why we have said that we will have still a tail of raw material prices to be recovered, or where we will see the recovery during the last quarter of 2026. Let's say, during the first quarter and second quarter of 2026, now I'm trying to answer, even if I will not tell you full detail of your question, we have suffered very high price increases in raw materials as all the chemical and petrochemical businesses have seen, particularly in Europe, but not only because of the crisis in the Middle East and the Gulf. When I speak big price increases, I'm speaking in, let's say, measurements of millions of euros or U.S. dollars. So not one or two, but even a little bit more. That's why we say that even if apparently our result may seem a little lower than the expectations, in reality, the financial performance has been even higher than the original performance. Starting from the third quarter, we should see a further increase in the marginality with a recovery between the third and the fourth quarter of the margins loss that we have lost during the first semester of 2026. If, of course, prices should decline, for example, in the third quarter, we should have, on the other side, a positive effect in the following one. All right. Very good. Thank you for that. One additional follow-up, if I may. How much additional fixed cost reduction remains, and can those additional savings be achieved without limiting operating leverage or production capacity when demand continues to improve? Let's say that during 2023 until 2025, our main focus was on readjusting production capacity according to the market demand, which of course, let's say, brought what? A reduction of variable labor cost, which is, don't want to say automatic, but of course, if you are cutting down production capacity, the first labor cost that you are going to decrease is what? Direct labor, because of course, you have less machinery which is working. This was particularly strong during 2024. Last year, in 2025, our focus was on reducing what? Indirect and fixed labor cost. For us, labor and fixed labor costs are two different concepts, particularly in Europe, because of the local labor market, which is allowing, in case of lower market demand, to recover, let's say, with automatic systems, the less working hours that you have performed during the period. Last year, as you know, we have got a very strong action in containing and reducing fixed labor, so indirect personnel. We gave a number of reduction of more than 100 person, which, as you can understand, it's a lot of money. This is what we are seeing during 2026, that this recovery is giving us what? Even in presence of volumes that are not growing as expected or, let's say, not growing, we have, of course, a margin that has returned this action. How much we can still work? What we are currently doing is now pursuing more investments on automation and energy saving. These are two very important cost factors that we are targeting as it was also in the original business plan. Plus, of course, some new technologies that we are going to implement, particularly within the ECONYL perimeter. As I said, during 2026 and 2027, the target, of course, without considering inflation, is to reduce another EUR 8 million to EUR 10 million on a yearly basis. All right. Very good. Thank you very much for the opportunity to ask a question. Welcome. Now we have a question from Dave Storms from Stonegate. Please go ahead. Hello, and thank you for taking my questions. I wanted to ask my first one around the North American market. Can you give us any more commentary on maybe what the pricing outlook is for there, and if there's any nuances into the price rationalization initiatives they have in North America versus maybe the markets? Sorry, Dave, but your voice was not clear to me. If you can repeat your question. Of course. Mostly around the North American markets, and what the outlook is there, and maybe layering in price rationalization initiatives in North America for some of your other markets, if there's any nuances. No. Well, in North America, I would say that the price adjustments are even faster than what normally happens in Europe or markets like Japan. Japan, as you can imagine, knowing Japanese people, they are very resilient and they are trying, of course, to resist the two price increases. But in the case of Japan, you have two factors, which is not only raw materials, but also exchange rates that are impacting our marginality over there. So, there is a continuous ongoing work with our Japanese customers to explain to them that unfortunately, we have to increase prices. In North America, price adjustments are normally accepted by the customers and by the market. Of course, the dynamics may be faster or slower in terms of raw material price increases in that market, depending upon the local demand. I must say that U.S.A. market is a little bit less affected by import dynamics in comparison, for example, of the European one, mainly because Chinese tariffs are impeding to Chinese players to operate, for example, selling nylon polymers to United States. In Europe, the story is completely different. No, let's say, major issues. We have a major customer in U.S., which goes and is managed by long-term contractual pricing. In this case, the price adjustment has taken place within July. So in the month of July, we have recovered, let's say, half of the price increase, because if during the month you are recovering it, you're not fully recovering during the month of July. But let's say from August, for this very important American customer, all the raw material price increases will be incorporated in the new pricing. Understood. Thank you. To turn my second question to ECONYL. With volumes remaining fairly stable year-over-year, but margins increasing, how should we think about the interaction of those margin increases between the cost takeouts that you've implemented over the last year, compared to maybe the increase in ECONYL as a percent of revenue year-over-year? Well, last year, we have got a very strong performance with regard to ECONYL, even a little bit stronger than we expected. That is why maybe during the first semester of this year, we have not seen, let's say, a significant increase in our sales. But we have a lot of new projects that are coming and that are ongoing. For example, today there has been an announcement by Arc'teryx brand, okay, for textile nylon, but also other projects within the carpet and polymer business that are making us very confident to continue our trajectory of growing our ECONYL in percentage of our total revenues. A lot of actions, of course, reduction that we are implementing between this year and the next one, are directed to continuously reducing ECONYL cost within our framework. For the lucky ones of you who are following my LinkedIn social, I have just made, let's say, an announcement about, let's say, the new research and development project that we are going to implement with our team during the next 24 months. So I am encouraging you. I know that you have a lot of things to do, but if you follow us on LinkedIn and on social media, you can have also many more daily or, let's say, more frequent information than a quarterly declaration. That is very helpful. For example, the big energy savings that we are targeting in Slovenia next year, okay, they are going for reducing largely natural gas consumption for the production and consumption of steam within ECONYL. When I say large, I am talking of a lot of opportunities. That's very helpful. Thank you. My understanding, too, is that as gas prices and oil prices in the world go up, that just makes ECONYL more competitive. You mentioned that you are working to make ECONYL more cost competitive with some of the cost takeouts through the R&D. With the cost takeouts overall, how should we think about the application of those between ECONYL and the NFP and maybe any other ideas that you would earmark those savings for? Well, of course, the ultimate target is to make ECONYL as cost competitive or less expensive or less costly than petrochemical nylon. You don't need me to tell you this. I must say that recently this, let's say, dream or this target has become even a little more challenging because the benchmark is changing from European caprolactam production supply. European prices that European suppliers are disappearing, in fact. The new benchmark is to make ECONYL competitive vis-a-vis with Chinese caprolactam production cost, which as you can understand, is setting the bar even higher. But we have good feelings, we have good possibilities with automation, with better yields on waste, with lower emissions, with lower energy consumption. We have a lot of things that are boiling in the pot that are making us quite confident to continue this trend of cost reduction which has been quite important during the last 18 to 24 months. This is very helpful. Thank you for taking my questions, and good luck in the next quarter. My pleasure. Now we have a question from Vincenzo Antonio Di Buono from Banca Akros. Please go ahead. Hi. Good evening. Can you hear me? Yes, we can. Okay. First question is about volume. Could you provide some color on the volume trends you are currently seeing across different geography, in particular regarding North America? Second question is about ECONYL. You speak before, but given the recent increase in caprolactam prices, have you noticed an increase in customer demand for ECONYL products or an improvement in their competitive positioning compared with conventional nylon? Thank you. Volumes by geography, let's say that what we are seeing currently also during the third quarter is, let's say, a stability of the first semester with regard to North America and to Asia Pacific. The volumes over there and the market demand seems to be quite resilient. We are not seeing any, let's say, particular problem over there. In Europe, it is more a roller coaster, which it has also happened during the second quarter of 2026. On top of that, they are all on holidays. It is still we need a couple of weeks to have a, how can I say, a more serious feeling about the market demand. Of course, there is a big uncertainty. This is no doubt, and you don't need me to tell you. I believe that in every business, we are experiencing this kind of problem. Nevertheless, the third quarter is still pretty in line with our forecast. We are not seeing anything particularly strange or different. What is going to happen from September, and when I say September, I speak about order intake. September, we know more or less what is going to be. Of course, what is going to be in October and November and December will depend by the order entry of September and October. This is something that is very important we feel, particularly for the European market. Demand of ECONYL. The demand of ECONYL has been resilient and still there is a lot of interest by the market for developing ECONYL products. Today, we have available capacity, so we are very, how can I say, active in promoting new product development for ECONYL in the different business applications where Aquafil is acting. Carpet, textile, and polymer and engineering polymer business. Of course, we are still seeing a lot of interest by the market. We have still a lot of confidence that with ECONYL and particularly, of course, if you are making it more cost competitive, the possibility of growing this business area is still quite big for us. Okay. Thank you. You are welcome, Vincenzo. The next question comes from Pietro Nargi from Intermonte SIM. Please go ahead. Hello. Could you hear me? Yes, we can. Okay. Thank you. Good afternoon. Just a quick question on the net debt. Net debt has been trending in the right direction, and the leverage appears to be moving back towards a more sustainable level. Assuming the deleveraging plan continues as expected during H2, how should we think about capital allocation in 2027? Could this create room for CapEx to return to a more normalized level? Thank you. Thank you for this question, which is quite interesting, and it deserves a little bit of more color if I may. Last year, the debt reduction has been a little lower than what we were expecting, mainly because we have gone through two major changes. One change was change of European supplier for caprolactam from, let's say, more traditional historical one to a newer one which was more competitive, but on the other side, with shorter payment terms. This has created a cash absorption, particularly during the first semester of 2025. Then, because of the, how can you say, infrastructural prices of the chemical business in Europe, we have, during the second semester of last year and during the first semester of this year, increased largely the purchasing of raw material from import. Import means from overseas, which means, of course, longer transit times. So again, cash absorption that is impacting our net financial position. Last but not least, ECONYL growth. Also, when we are growing our ECONYL product lines, the, let's say, cash necessity for developing ECONYL products, since we start from purchasing of waste, again, which comes from overseas, it is higher than the one that was historically for Aquafil, depending upon local caprolactam suppliers with longer payment terms. That being said, I will stop with this historical explanation. This trend has been almost finished in the sense that now we have full flexibility for even living, and living well, without any European supplier. The European purchasing of raw material is now quite limited, so the eventual higher cash absorption for transformation of purchasing from local to overseas, it is not significant. It means that from now on, you can finally, or you should finally, seeing a better correlation between EBITDA cash flow and reduction of the NFP. Good news. Second good news, of course, if the trend continues, it will open possibilities either for increasing CapEx, but of course, if we have no significant growth, eventually we can dedicate more CapEx to improving and having a faster cost reduction. Like, for example, anticipating automation projects, okay, which is still part of our business plan, or eventually, in the near future, to look for external growth like acquisitions or consolidation of our industry. These are, of course, possibilities that are opening up, maybe not during 2026, but from 2027, that are, of course, interesting for returning to see the company growing, which is the last piece of the puzzle that we are targeting. Of course, better margins, lower debt, growth. Okay. Thank you. As a reminder, if you wish to ask a question, you may do so by clicking on the green hand button on the player to ask your question orally. Or if you are connected by conference call, please dial pound key five to speak. We have a question from Tommaso Nieddu from Kepler Cheuvreux. Please go ahead. Hi. Thank you a lot for taking my question. I have just one, and the question is on the demand visibility. As you described, difficult to predict given geopolitical instability, yet you are confirming full-year targets. My question is guidance confidence really a cost pricing execution call rather than a demand call at this point? Or better, could volumes surprise negatively and guidance still be met on cost and price alone? Thank you. Well, of course, cost reduction activity, which has taken place and still taking place, is giving us confidence to keep our margins healthy. This, of course, gives us confidence to continue the trend and trajectory which we have started from 2024 to 2025 and the first semester of 2026. I would be surprised if there were big negative, let's say, news from the market demand. We are a little cautious in forecasting growth. We are more considering a scenario of stability. Okay. Of course, we don't see why the overseas markets should enter into problems. I repeat that the uncertainty is more for the European market, which is now having a lot of negative influences from the war between Russia and Ukraine. The crisis of the Middle East, which is also creating a lack of certain raw materials other than traditional ones for our industry and, of course, let's say inflation, which is still a factor which we can't forget. For example, if you have to buy something which has electronics inside, as you very well know, because of the incredible growth of the investments in the data centers and artificial intelligence, all the costs are on the rise. I would be surprised, honestly speaking, I'm not expecting big or tragical problems from the market demand. Of course, we are a little bit cautious because here, I must say, we are seeing one month super strong and the second one super weak. So the average is still there, but of course, it is something which is unprecedented or that we have never seen so far. Okay. Thank you a lot. Most welcome. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments. As always, I thank you for attending our first semester of 2026. I thank you also for all the questions that you have asked, and I wish you a good rest of the day. If you have any questions, please contact Giulia Rossi and she will come back to you with all the explanations that you are looking for. Thank you.