Ladies and gentlemen, welcome to Pirelli's conference call in which Pirelli top management will present company's first quarter 2024 financial results. A live webcast of the event and the presentation slides are available in the investor relations section of the Pirelli website. I remind you that the Q&A session will follow after the presentation. For operator assistance via web call, please press the headset icon on the bottom left side of your screen. For conference call assistance, please press star zero on your telephone. Now I would like to introduce Mr. Marco Tronchetti Provera. Please go ahead, sir.. Thank you. Good evening, ladies and gentlemen. The results of the first quarter 2024 confirmed the soundness of our business model with improving performance year-on-year and among the best in the industry. Quarter one closed with a sound price mix, +2.3% versus the PS average of -1% as a result of our strengthening in High Value. Profitability at 15.5% versus the PS average of 9.57% excluding Nokian and 7% including Nokian, in line with the full year targets. A cash trend improvement versus quarter one 2023 due to the careful management of the working capital. Scenario expected for 2024 remains uncertain due to the persisting geopolitical tensions. We expect a moderate economic growth impacted by high interest rates and the volatility of exchange rates. By various segments, our reference market confirms its resilience with a growth rate higher than the Standard. In this scenario, the deployment of our strategic programs allow us to confirm the targets we set on March 6th. So, Mr. Casaluci, the floor is yours. Thank you, Mr. Tronchetti, and good evening to you all. Pirelli closed the first quarter of 2024 with a sound performance in line with our targets. The top line, excluding the impact of exchange rates, increased by 4.6%. We increased market share in High Value, which now accounts for 77% of the group's revenues. EBIT adjusted amounted to EUR 263 million, plus 6% year-over-year, with a 15.5% profitability posting a one percentage point improvement. Net income was EUR 100 million. It discounts the non-monetary impacts linked to hyperinflation, accounting for approximately EUR 49 million. Net financial position is negative for EUR 2.9 billion, down by around EUR 300 million compared with the end of March 2023. In the first quarter of 2024, in line with the usual business seasonality, net cash absorption amounted to EUR 673 million, including Hevea-Tec acquisition of around EUR 23 million. Let's now discuss the operating performance. The commercial program allowed us to strengthen our positioning in the High Value segment, particularly in the Specialties that account for 60% of group sales and 75% of Pirelli High Value sales. As for innovation, we expanded our homologation portfolio, mainly driven by the higher rims, Specialties, and EV. We launched two new products, one for the all-season segment in the CAB business and the other for the enduro sport touring segment of motorbikes. As regards the operations program, we achieved EUR 32 million benefits in line with expectations and the project development, and took measures to mitigate the impact of the Red Sea crisis. Let's deep dive into the single programs. In Q1, we recorded a 2.7% increase in CAB volumes against a +2.1% growth of the overall market. This result was driven by our overperformance in High Value. As a result of the pull-through effect and the renewal of product ranges, we recorded a double-digit growth in the replacement channel 18 inches up, +11.4% against a +1.1% of the overall market, gaining share in the main regions. In original equipment, +0.9% Pirelli volumes and +1.5% the market, we continued to focus on higher rims. The weight of 19 inches up volumes grew by 3 percentage points, equal to approximately 85% of OE 18 inches up volumes. We increased it by 1 percentage point specialties weight, now equal to 82% of OE 18 inches up volumes. Exposure to standard is decreasing. Pirelli CAB volumes 17 inches and below are at -3.8% compared to a +0.8% of the market. In the first quarter, we increased the number of homologations in those products with a higher technological content. We achieved 80 new technical homologations in CAB 18 inches up, approximately 26% of the annual target. Mainly in the 19 inches up, 85% of the homologations in the quarter, now counting around 2,700 homologations. In the specialties, 65%, like the Pirelli Noise Cancelling System, RunForward and Seal Inside. In the electric vehicles, despite the temporary market slowdown, we continued to homologate our products with the main premium and prestige CAB makers. For instance, new homologations for the Porsche Taycan, Audi Q4 e-tron, and Volkswagen ID.4. New Chinese premium EV producers, for instance, Polestar, Hongqi, Zeekr, and Geely. In addition, we enriched our product range with 2 new launches: Cinturato All-Season SF3 for the CAB business, which consolidates our positioning in the European all-season segment. The new product has already been awarded by Auto Bild as the best all-season tire in the market due to its top safety in all weather conditions. For motorbikes, we launched Pirelli Scorpion Trail III, combining sportiness and spirit of adventure, with a wet performance matching a sport touring and an excellent acoustic comfort. The efficiency program produced EUR 32 million that fully offset inflation. Approximately 56% of the efficiencies achieved in the quarter came from the product cost project and mainly virtualization. A fourth contribution came from SG&A, where we optimized logistics and supply chain and organization with digitization of internal processes and the upskilling of employees. Finally, the manufacturing project is to produce benefits in the second half of the year, as anticipated, with implementation of plant automation, electrification of the curing stage, and the lower energy consumption. Finally, a quick update on the deployment of the sustainability plan announced on March 6th. We started major projects in four macro areas with challenging targets. Climate: we aim at decarbonizing the value chain and be the first company in the industry to achieve the net zero in 2040. Products: our objective is to reduce environmental impact by increasing the use of bio-based and recycled materials. Nature: we are committed to decreasing water withdrawal and protecting biodiversity. Finally, people: our priorities are health and safety. In the first quarter of 2024, Pirelli's sustainability achieved once again excellent scores in the major indices. We are the only company in the global auto components industry ranking in the top 1% category, the highest in Sustainability Yearbook 2024 published by S&P Global. Finally, our commitment to fight climate change was rewarded by confirming us in the Climate A List of CDP, the nonprofit international organization that collects and disseminates information on environmental issues. I hand over to Mr. Bocchio. Thank you, Mr. Casaluci, and good evening to all. Let's now review our first quarter performance in detail. Sales amounted to EUR 1.69 billion, basically in line with last year -0.2%, but with a +4.6% organic growth, consistent with the full year target. This performance was supported by the positive trend of volumes, +2.3% at groups level, reflecting the solid commercial performance already outlined by Mr. Casaluci. The price/mix improvement, +2.3% due to the continued development of the product mix as a result of our strategy of focusing on the High Value segment. The positive channel mix, while the price component remained basically stable despite the impact of indexation closes on original equipment. Forex impact was negative for -4.8%, although improving compared with the previous quarter that was -10.6%. It discounts the weakening of the US dollar, renminbi, and currencies of emerging countries against the euro. In the first quarter of 2024, the adjusted EBIT reached EUR 263 million, with a 6% increase year-on-year and a 15.5% margin, growing approximately one percentage point against Q1 2023, thanks to internal levers. In more detail, the impact of commercial performance was positive: volumes + EUR 15 million, price/mix + EUR 27 million. Efficiencies equal to + EUR 32 million, fully offsetting inflation equal to - EUR 29 million. Whereas the lower costs of raw materials, + EUR 29 million, contributed to compensate for the forex impact, - EUR 39 million, which keeps on discounting the revaluation of the Mexican peso. Finally, the impact of amortizations was negative for EUR 7 million, as well as the other cost, - EUR 14 million, mainly linked to marketing, R&D, and inventory reduction. Let's review now the net income dynamics against Q1 of 2023. The operating performance has improved by EUR 14 million, as I just described. Equity participations improved their results. The increase of net financial charges for EUR 58 million mainly discounts the non-cash impact of around EUR 49 million linked to the temporary misalignment between inflation rates and forex in high inflation countries. Based on the latest estimates, such impact is expected to realign with our expectations during the course of the year. Finally, the reduction of taxes for EUR 24 million reflects the lower income before taxes, the benefits from the patent box, which were not included in Q1 of 2023, and the positive settlement of tax litigations, as expected. The first quarter, the net cash flow before dividends was negative for EUR 673 million, in line with the business seasonality. It posts a EUR 40 million improvement compared with the EUR 691 million of Q1 2023, where we excluded the impact of Hevea-Tec acquisition for a value of around EUR 23 million. The net operating cash flow was equal to minus EUR 538 million, reflects: the operating performance, which posted an improvement compared to Q1 2023, investments of EUR 53 million, in line with the value of Q1 2023, and mainly allocated to high value activities, the ongoing mix improvement, the quality of all plants, and to support the sustainability plan. In addition, the working capital trend discounts: a careful inventory management with a 21.4% incidence on sales, and the usual seasonality of trade receivables, 14.1% their weight on revenues, and trade payables, 22% their weight on revenues. The group gross debt, as of December 2023, amounted to slightly less than EUR 4.2 billion. Considering financial assets worth approximately EUR 1.24 billion, the net financial position is equal to around EUR 2.9 billion. In the first quarter of 2024, Pirelli subscribed a new EUR 600 million term loan, with maturity in October 2028. This was widely used to repay in advance debts with maturities spread over the next two years. The new facility, in line with the ESG finance objectives communicated to the market, is indexed to the new decarbonization targets of the group, disclosed in March with the update of 2024-2025 industrial plan. Following the publication of the new ESG objectives, Pirelli has also indexed the EUR 500 million revolving credit facility subscribed in December of last year to the same decarbonization targets. Sustainable finance now accounts for around 68% of the group's gross debt. As of March 2024, our liquidity margin amounts to approximately EUR 2.5 billion, of which EUR 1.5 billion in undrawn committed credit lines. The liquidity margin covers the financial debt maturities for the next three years, that is, until first quarter of 2027. The cost of debt of the last 12 months is at 5.18%, basically in line with the value recorded at the end of last year. Finally, our fixed floating mix remains balanced with around 50% of our debt at fixed rate. I give the floor back to Mr. Casaluci. Thank you. Thank you, Mr. Bocchio. Let's now discuss the market outlook in 2024. We confirm our forecast for the car tire market, with demand rising by approximately 1%. The high value segment is confirmed as the most resilient, with a mid-single digit growth rate. In particular, in the CAB 18 inches and above, we expect: an improvement in the replacement trend, mid to high single digit in the mature regions; and a mid-single digit growth in original equipment, especially in North America with a +8.5 and Asia-Pacific with a +5.6. Standard demand appears basically flat. Based on the results achieved in the first quarter of 2024 and of the scenario described, we confirm all targets for 2024: revenues between EUR 6.6 billion and EUR 6.8 billion, with an organic growth rate from 3.5% and 4.5%. Volumes on the rise between 1.5% and 2.5%, with a mid-single digit growth in High Value, whereas our exposure to the Standard segment keeps on decreasing. Price mix at 2%, mainly driven by the ongoing improvement of the product mix. Forex in decline between 4% and 3%. Profitability, adjusted EBIT margin, between higher than 15% and around 15.5%, supported by internal levers. Investments of about EUR 400 million, roughly 6% of revenues, for a technological upgrade of plants, mix improvement, and sustainability. Net cash generation before dividends between about EUR 500 million and EUR 520 million, thanks to the operating performance and an efficient management of the working capital. Net financial position equal to approximately -EUR 1.95 billion. I now leave the floor to Mr. Tronchetti for the final remarks. Thank you. Thank you, Mr. Casaluci. On the basis of what we have just discussed, we expect the tire industry to show its resilience in 2024, in an external context which is still going to be tough and characterized by geopolitical tensions, persistent inflation, and volatile exchange rates. Our business model and the de-risking actions on the value chain are there to allow us to deal with this scenario and make sure that our performance is in line with expectations and better than Tier 1 peers in terms of both profitability and cash generation. We expect to deleverage progressively and bring indebtedness to approximately 1.3x the adjusted EBITDA at the end of the year. This ends our presentation, and so we may open the Q&A session. Thank you. 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 your webcam on in the pop-up window. If you are on the phone instead, please press star one on your keypad. The first question is from Monica Bosio with Intesa Sanpaolo. Please go ahead. Yes. Good evening, and thanks for taking my questions. The first one is on your shorter-term view on the overall replacement market in the second quarter, if you have any details or color to give us. I'm particularly interested in the High Value tire market in the replacement channel, and if there is a difference, and if you see a difference between the North American side and the European side. I'm particularly interested in your growing opportunities in North America. And my second question is on the price/mix. I can imagine that 2.3% was mostly mix. Do you confirm a drop-through effect for the full year between 60% and 65%? Thank you very much. Mr. Casaluci. Yes. Thank you for the questions. As far as market is concerned in the Q2, we see a market, I would say, similar to the first quarter, with a high value performing around 6%-7% positive, mainly driven by replacement that we do expect to be more in the range of 8% and an original equipment performing better than the Q2, but anyhow around 4%-5% positive. I'm always talking about the high value market, following your questions. Yes. Europe has been relatively weak in terms of performance in the Q1 OE, in the original equipment, and we don't expect a recovery in the second quarter. While staying in the original equipment, we saw North America performing a bit better with a single-digit growth in the High Value in the first quarter. We do expect to be confirmed also in the second quarter. If we move to replacement, the performance has been in the range of the double-digit growth, around 10%, both in Europe and in North America in the first quarter, so quite positive. And we also expect a similar performance in the second quarter. I have to say that April started with this trend confirmed. Price/mix, you are right. The performance of the first quarter, around 2.3% positive, has been mainly driven by mix performance. We expect the same trend for the following quarter, so a flattish price environment with a slightly negative in the first quarter, slightly negative coming from the original equipment, and because of the cost matrix approach, and slightly positive in the replacement in the first quarter. All in all, the price mix has been mainly driven by mix. You can consider a drop-through of around 60%, as you mentioned, for the full year. Thank you. Okay. Thank you. If I may follow up, what kind of opportunities do you see for the year in your growing presence in North America? Because you are underexposed to that market, if I'm not wrong. Yes. North America remains the biggest high value market in the world, and Pirelli has a market share that is below the average we have in the high value in the other main regions like Europe or Asia. So it's in North America that we have the highest opportunities, and it's where we are accelerating our growth, and we are gaining share more than in other regions. The strategy is based by the enlargement of our product portfolio, developing a replacement product dedicated to the U.S. customers, enlarging our customer base in the original equipment, fitting, since a couple of years, iconic North American vehicles like the F-150 or the Dodge Ram, but also the Tesla product portfolio, growing in production capacity, of course, enlarging the customer base. I would like also to mention the healthiness of our brand in North America, supported also by the growing popularity of the Formula One. But the awareness and also the consideration of the Pirelli brand in the last years grew quite significantly in North America. Thank you. Thank you. The next question is from Martino De Ambrogio with Equita. Please go ahead. Thank you. Good evening, everybody. Two questions on the if it's possible an update on the BEV penetration, and if it's progressing as you expected, and standard return on sales in Q1, and if you can remind us what is the target for the full year. The third and last question is on the market share gains, if you could elaborate on where you gain shares in terms of regions, segments, or what else, just to have an idea how you can replicate it going forward. Okay. I will start from the last questions, the market share. We gained market share basically in all the high value regions, I would say mainly North America and United States, but also in Europe and in China. We were able to outperform the market. The electric vehicle penetration, it goes without saying we are facing a slowdown in EV penetration compared to the previous expectation and forecast, but we do consider this is a temporary slowdown. We don't see this as a structural. In our view, the electric vehicle penetration will continue and will restart in the following months. We do confirm our target of EV penetration in 2025, around 40% of new car registration in premium and prestige segment, and around 80% within 2030. So this is also demonstrated by the new homologation that we presented before, and also the acceleration driven both by the traditional incumbent car makers in Europe, but also the Chinese premium car makers. And the homologation portfolio on EV that we were able to obtain in the first quarter is half and half, half of the premium Chinese car makers and half on the European ones. Anyhow, the slowdown of 2024 is already included in our numbers, so it's fully reflected in our numbers. But just to give you the sense of this slowdown, at worldwide level, the BEV, the electric vehicle car registration, has been, in the first quarter, +34%, while the non-BEV, the non-electric, has been 3%. And more or less the same trend is reflected in Europe. At the full-year base, electric vehicle car registration is expected to be +32%, and the non-electric car around zero. So as you can see, even if we are in a slowdown, the car registration on the EV is anyhow increasing its penetration. Moving to the standard performance, our profitability in the standard, as we explained it during the presentation of the industrial plan, we maintain our target to reach the double-digit ROS. Anyhow, we have a couple of years of delay, mainly driven by the non-saturation of the standard capacity in Russia and the high inflation of South America. Because of these two effects, today we target in 2024 a profitability in the range of the high single-digit, so around 7%, 7%-8%. But we maintain the target to arrive in a couple of years at the 10% that we previously announced. Thank you. Thank you. The next question is from Sanjay Bhagwani with Citi. Please go ahead. Hello, and thank you very much for taking my question also. I have got two questions as well. The first one is a follow-up on the Q2. I understand you provided some good comments at the market level, but could you please also provide some comments for the Pirelli Group, mainly on the Q2? How are you seeing the trends on volume, price mix, and margin? That is my first question. And my second question is on the raw material inflation. As we are starting to see some of the key raw material prices have started to go up from their lows, can you please provide some color as per your purchasing contracts with your suppliers for how long the existing prices are locked in? Do we start to see, let's say, these new natural rubber prices already in your cost space in Q4 this year, or this is probably more H1 or 25 story? Those are my two questions. Okay. The market for the second quarter is expected to be, as I said before, more or less in line with the performance of the Q1. All in all, we expected totally a global market performing around +1% +2%. And the High Value market, which is our main focus, around a + positive 7% 8%. If we split by channel, what we expect for the Original Equipment is a +3% in the total market and a +5% in the High Value, while in the Replacement, we expect around 2% in the total market and around 7% 8% in the Replacement. So as you can see, quite similar to the first quarter. If we move to our performance, again, we see a volume performance in the range of 2%, which is quite similar to the first quarter. Also the price mix is stable, expected in the range of 2%-2.5%, reflecting the full year guidance, mainly driven by mix. I now leave the word to Mr. Bocchio to discuss about the raw material question. Thank you. Yeah. I would take the one on the raw materials. So first of all, recapping a little bit, in quarter one, we had a positive variation of EUR 29 million, where we benefited mainly from the favorable comparable view on both Brent and Butadiene. For quarter two, we expect a roughly flattish or neutral impact, with commodity impact still on the positive side but lower compared to the first quarter due to the increase of natural rubber and Butadiene that we had in the past few weeks and months. And there will be a negative impact for the Forex. So overall, Q2, we are expecting to be with raw material impact about zero. For quarter three and quarter four, instead, for the second half of the year, we are expecting that being the commodities at the level that we are seeing nowadays, probably the driver will be negative for the second half of the year. We have to consider that from the commodity quotation that we see on the market to the impact on our COGS, cost of goods sold, we have a delay in time, which is between 3 to 4 months, depending on the family of the raw materials. The next question is from Michael Jacks with Bank of America. Please go ahead. Hi. Good evening. Thank you for the presentation and for the detail on raw materials. My first question is on volume drop-through. In Q1, it was a touch lower than the normal 43% we've become accustomed to. How should we think about this development for Q2 and the remainder of the year? And then my second question is on production inflation and depreciation and amortization. We had headwinds of around EUR 50 million there in combination for Q1. Should we expect a similar development in Q2, given that there was already quite a high cost base there in Q2 2023? And what is now your full year expectation for that bucket? Thank you very much. I will start from the second one, from the inflation. Yes, for the first quarter, we had an inflation which was about negative EUR 29 million compared to the first quarter of 2023, out of which the two main drivers are the ones that we highlighted during our update of the industrial plan. The most important headwind is coming from the labor inflation, and the second one is related to the logistic inflation. This is the trend that, for the time being, we foresee even for the next quarters of the year. The value is expected to stay roughly aligned with the impact that we had in Q1, but it's important to underline that we expect each single quarter to be this negative impact from inflation to be compensated by the efficiency program that we have in place. So we confirm the target of generating efficiencies for about EUR 140 million for the full year, and we expect that this should be sufficient to compensate at least the impact from the inflation, being, again, the two major points of inflation: the labor contract renegotiation that has taken place in the second part of 2023 and at the beginning of 2024, and the local logistics, specifically mainly in Europe. The next question is from Ross MacDonald with Morgan Stanley. Please go ahead. Hi there. Yes, thank you for taking amy questions. I have two, please. Sorry to come back to the second quarter volume question, but I'm just curious why you're not expecting second quarter volumes to be even stronger than the first quarter, just given the calendar day effects that many of your peers are calling out during this set of results. And then secondly, on capacity utilization, this looks very high for the high value segment, I think 97% factory situation as usual. Just curious how quickly you can increase capacity on the high value side if demand starts moving in that direction. Thank you. Well, the performance in terms of volume for the first quarter is expected positive. As I said before, around 2%-2.5% positive, targeting to overperform the market in the High Value and gaining market shares we did in the first quarter, and to decrease the exposure on the Standard. But all in all, the volume performance is expected to be positive, around 2%. The saturation, the utilization rate of our capacity is also expected to be confirmed around 90%, which has been also the utilization rate of the first quarter, with a higher utilization rate on the High Value capacity, more than 95%. But all in all, it is expected to remain stable on 90%. Thank you. Okay. Thank you. Can I just follow up very quickly on the point around working day effects? Because what I'm trying to say is the first quarter here looks very strong, actually, because of the timing of Easter. For you to be growing against that tricky comp is impressive. My point is more that surely with the easy calendar day effect in the second quarter now, there is some sequential step-up. I'm just curious if you agree with that. But the positive effect of the working days has been mainly in April compared to March. But all in all, in the second quarter, there are no major; maybe it's one day, one working day difference is not a major impact all in all. What we did in the first quarter has been to overperform the market, and we on the high value, of course, and we target to make the same in the second quarter, overperforming the average of the market in the high value. That's the target, around 2% growth. That's clear. Thanks. The next question is from Thomas Besson with Kepler Cheuvreux. Please go ahead. Thank you very much. I have three questions, please. The first one is coming back to some of your P&L items below your operating level. I mean, your financial charges were way higher than expected for the year, and taxes were much lower. Can you confirm what we should build in for the full year and remind us why Q1 was so different? The second question is about factoring. You are not disclosing a lot of details about factoring. Could you just confirm that factoring was stable or down in Q1 2024 versus Q1 2023, please? And lastly, could you also confirm I think this is what you've said before, but I'd like to have that clear, that you anticipate price mix for the year to fully offset inflation or a bit more with your EUR 140 million savings on top? Thank you. Okay. We had some issue. I will answer to the second and third question, and I leave Fabio for the first question. Hopefully, we understood properly because the connection was not that good. So utilization rate of our factories, as I said before, is around 90%. That is more or less in line with a bit better, I would say, than last year. But there are no major differences. We have a saturation rate around 95%-96% on the High Value and 90% on the overall capacity. In terms of. So you might. As Mr. Bocchio said before, we have a full year expectation of inflation in our cost. Maybe we can give you a bit more of color of around EUR 140 million negative impact on the full year base, while we have an internal efficiency plan, gross efficiencies, of course, for the same amount of money. So we do expect to fully compensate the inflationary impact of EUR 142 million with EUR 140 million, EUR 143 million to be exact, of gross efficiency. So we fully compensate. The mixed performance goes on top and is expected to remain stable also in the full year following the result of the first quarter, 2%-2.5% of mixed performance. Hopefully, I understood properly your question. Otherwise, please repeat. But in the meanwhile, I leave Bocchio the word for the first question. Thank you. If we understood correctly your first question, it was related to factoring, maybe. So I'm just saying that we use factoring as a leverage to mitigate the risk of the company and balancing the opportunities for the cash flow. I have to say that the policy for the group has not changed, and the level of factoring at the end of quarter one 2024 was very similar to the end of Q1 2023. So no major differences compared to the activation of factoring initiatives, if this was the right question that we understood. Yeah, that was a great question. Thank you. The only one that you did not understand correctly, and I apologize for the connection, was the first one, which was about financial expenses and tax expenses. So financial expenses were a lot higher than the trend for the full year, while taxes were way lower. So I was asking if you could confirm what we should build in for the full year for both net financial expenses and the tax rates. Thank you. Yeah. Thank you very much. Now much clearer the question. So yes, you're right. In quarter one, financial charges were higher than expected, than the average, and this is because they are discounting an accounting effect with no cash impact due to the hyperinflation connected to the temporary misalignment between inflation and exchange rate in high-inflation countries, meaning in Argentina and Turkey. But based upon the latest available estimates, this misalignment we expect to normalize during the remaining part of the year. This impact is not going to affect at all our cash flow guidance. So we state and we confirm our guidance for cash flow generation in the range between EUR 500 million and EUR 520 million for the full year. Regarding the profit and loss, specifically, following the higher effects and hyperinflation impact of the first quarter, financial charges should be in the ballpark between EUR 200 million and EUR 230 million, so a touch higher than what we were forecasting in March indication, partially compensated by a tax rate which is expected to be in the low end of the range that we gave around one month ago during the update of our industrial plan. Thank you. Thank you Thank you very much, and sorry for that quality of my connection. The next question is from Christoph Laskawi with Deutsche Bank. Please go ahead. Good evening. Thank you for taking my question. There will be one on the indexation pricing for OE. Should we expect that to be negative again in Q2, and should it then, because of the raw mat development, turn positive in H2? If you could comment on that. And not sure if you can, in the current environment, also comment on the replacement pricing, if in the current market situation, you would see scope to marginally move higher in the second half if the raw mats continue to move up. Thank you. Well, in the original equipment, it is expected to remain positive in the range of mid-single digit growth in North America and Asia, even better in the High Value, while we expect it will remain slightly negative in Europe. There is a slowdown of the car registration in Q1, and that we do expect will be reflected also in the second quarter. The second question, no, we see. Sorry. Negative. Yes, please. Sorry. I probably have to repeat my first one. Sorry if the connection is bad as well. There was just on the pricing on the OE side, which is indexed and linked to the raw material development, which was negative in Q1. Should it be negative in Q2 as well, and can it turn positive in the second half? That was the question. Yes. It is expected to become positive in the second half following the initialization of the raw material, the second part of the year, slightly positive. Thank you. And on the replacement side, can you comment on that as well? Should that be just flat, about flat, or can that move slightly higher when the raw mats are moving higher as well? We don't see major differences. The price environment will depend on the trend of the market and the development of the demand. So far, we don't see major differences and impact to the actual environment. Thank you very much. The next question is from Michael Jacks with Bank of America. Please go ahead. Hi. I'm just circling back on my previous questions. I think you forgot to answer the first one on volume drop-through. In Q1, it looks like volume drop-through was around 39%, which is lower than the normal sort of 43% range that we've become used to. How should we think about this developing for the remainder of the year? And then if I may just add one more question on the guidance range, and if perhaps you'll just indulge me on some bridge math. You mentioned earlier that efficiencies fully neutralize cost inflation, and based on your guidance, it would appear that volume growth would at least offset Forex, which means that price mix provides a kind of a pure upside to EBIT for this year. And if that's correct, I struggle to get as low as the 15.5% ceiling for your guidance range for the year. Are there any headwinds that I should be thinking about or that you're currently thinking about that keeps you within that 15% to 15.5% guide range? Thank you. I would take the question on the first one. I understand now, I'm sorry, it is related to the flow-through of the volume in quarter one, which was slightly lower than the usual. And that's because the performance of the business moto was a little bit weaker than the performance of the business car, so changing a little bit the mix of performance between the two business units. But what we are expecting is for the remainder of the year, for the next three quarters, to normalize the impact, let me say, usual average of about 40% to 42%. Thank you. Then just on my second question around the various sort of buckets for the EBIT bridge, you mentioned that efficiencies will fully neutralize cost inflation. And if I just take your guidance, it looks like the volume effect in EBIT will fully offset Forex, if not maybe more than offset, which means that price mix is kind of a pure upside to EBIT for the year. Is that the right way to think about it, or are there any other headwinds that I should be thinking about? Thank you. No, the only point that you should take into consideration is related to the trend of the raw materials because, as I was saying previously, we are expecting for the second quarter still raw material to have an impact which is flattish compared to previous year, while we are expecting a negative impact for the second part of the year if commodities stay at values that are similar to what we see on the market as of today in these weeks. So you're right. Efficiency and deflations will be compensating, roughly compensating, so we don't have any major variation coming from this net impact. But the raw materials on the second part of the year, we expect to have a negative impact compared to previous year. Thank you. And then just perhaps your current view on raw materials. So should we expect then raw materials to have a neutral impact for the full year at current prices or a slightly negative impact? No, on the full year, you should be expecting a balance, a flattish impact for the full year, but again, with different seasonality between quarters. But overall, no major impact on the full year. That's very helpful. Thank you very much. The next question is from Tristan Gresser with Allianz GI. Please go ahead. Hello. It seemed that for high-value tires, your plants are very close to being fully used, fully saturated. Do you plan to increase CapEx on these plants to follow the growth in this segment? Yes. We always have a utilization rate of the High Value capacity higher than the average because we use around 10 million of the High Value capacity to produce Standard tires. So this is allowing us to catch any further opportunity we may catch from the market on the High Value. And so in the short term, we don't need to accelerate on the growth. As per today, around 20% of our total CapEx is dedicated to the capacity growth only in High Value, and this is enough to balance the expected growth of our demand. Thank you. Thanks. 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 Michael Aspinall with Jefferies. Please go ahead. Yeah. Thank you. Good afternoon, guys. One quick one from me. Margins, we're at the high end of the guidance range for the year at 15.5%. Can you share if you expect margins to remain at the high end in the second quarter? Yes. Okay. Great. That would be kind of right at the high end towards 15.5% or 15.3% to 15.5%? 4.49. No. No. It's, yeah, difficult to write, but the expectation is very similar to Q1. Perfect. Thank you. Mr. Tronchetti Provera. Gentlemen, there are no more questions registered at this time. Thank you. Thank you to everybody, and have a good evening. 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