Good afternoon. This is your conference operator. Welcome, and thank you for joining the Sogefi first half 2022 results conference 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 bottom left side of your screen. For conference call assistance, please press star and zero on your telephone. At this time, I would like to turn the conference over to Frédéric Sipahi. Frédéric, please go ahead, sir. Thank you, madam. Thank you, ladies and gentlemen, for your attendance today at our call for first semester results. I propose we immediately go to page number 4 for the main highlights of the semester. Well, as you know, we are facing a quite crazy market scenario right now, with lot of challenges everywhere. As you will see in our results, we have been able to face this difficult market condition quite well, with all my team implementing strong actions in each line of the P&L and of the balance sheet. As you will see, our sales are up, thanks to the market outperformance in each geographical area and product line. We have been able, as you will see, to pass through in a quite efficient way to our customer, the raw material and energy prices that we have faced during the first semester. We have implemented a strong and lasting cost base and organizational adaptation to the market situation. Let's go to the financials, page 5. As I was saying, our turnover is increasing versus first semester 2021, with 9% at constant exchange rate, benefiting from the pricing effect that we have been able to implement with our customer. Also a very good performance from the aftermarket. I will be taking that later. Although it was slightly positive, outperforming the market that's going down by 2 percentage points. Our EBITDA is at almost EUR 100 million versus 108 last year. Our contribution margin, so the variable cost, we are almost in line with last year, slightly better in absolute value. The EBITDA excluding non-recurring is very much in line with last year. You have to remember that that year we have positive one-off impact during the first semester of the year. Our fixed costs are in line with last year if we exclude the exchange impact, and the ratio is improving by 2 percentage points. Thanks to that, we are able to deliver a net income in line with the first semester of 2021, at EUR 21 million, despite the crazy market situation. The free cash flow, and Olivier will mention that later, and we'll detail that later. We have been able to deliver EUR 40 million of free cash flow compared to EUR 30 million last year, thanks to specific action on the working capital management and very well management from Olivier, also on the financial tools. Thanks to that, our debt is decreasing to EUR 260 million versus almost EUR 360 million last year. If we look now at the sales by geographical area, as I was mentioning, let's look at the figures without the exchange rate impact, so it's the fourth column. You can see that we are able to beat the market in almost all geographical area. In Europe, we are increasing by 5%. In the market, going down by 8%. In North America, we are increasing by 10% when the market is increasing by 5%. In America, we have a very strong position in suspension. In Asia, so India and China together for Sogefi, we are increasing by 8% when the market is increasing by 3%. Beyond China is slightly decreasing versus last year and below the market due to the fact that last year China was already very strong in our turnover, and to the fact that there has been lockdown in Shanghai area, where we are impacted in the first half of the year. By business unit, let's start by suspension. You can see that at constant exchange rate, suspension is increasing by 13%. It's mainly thanks to the two pass-through that we have been able to manage with the customers. Air and Cooling is at 1%, mainly thanks to the pass-through to the customers, but impacted by China lockdown during two months. Filtration, we have a very positive trend at 12% at constant exchange rate. As it is for the pass-through to the customer. Another half thanks to strong market share increase in Aftermarket business units. Our portfolio by customer, for the main one, is not changing. Faurecia remains our biggest customer. Ford has increased versus last year. Daimler is the third customer with exactly the same turnover. For now, we don't see a big change in our customer portfolio, but you will see in our next slide that we are starting to work with newcomers. I think it's gonna be very interesting in the coming years. If we now move to the performance breakdown on the EBIT, comparing H1 2021 versus H1 2022. As you can see, our EBIT 2021 and our EBIT 2022 are quite similar at EUR 36.5 million. Between both, there is a little effect due to volumes, little effect on A&C. Half of it is due to exchange rate, quite nothing on D&A and almost zero on the spread. The spread is the delta between the raw material increase and the price increase. Here is our best performance for the first half of the year because this -0.4 is in fact a 60 basis pionts minus 60 basis pionts. That's really the performance of our sales team. Yeah, we have been able to pass through customers EUR 60 million in one semester. Thanks, and then at a speed of zero. If we now go to the P&L, thanks to this speed, well, we can say that we've done our homework. I will not go into the details. Just keep in mind that our ratio are completely puzzled by this operation on price increase and raw material increase. We are showing a ratio of 28.1% on the contribution margin. This ratio, without the impact of price increase, should be 30.5%, much more comparable to previous year. In 2021, we had our EBIT 2021 was sustained by positive, non-recurring and other income. Despite when we exclude those, we already see on the bridge our EBIT excluding non-recurring is in line. Regarding free cash flow. The main operation done on the working cap is the utilization of the non-recourse factoring to mitigate the impact of our inventory increase due to the price increase of the material. Nothing else to say. We are quite proud of this result, which lead our debt to EUR 216 million. Regarding our debt profile, we have been able to renegotiate a big part of our lines at the end of 2021. We renegotiate 95 million euro. First quarter of 2022, we renegotiate 165 million. Our debt is quite secure. We have an average maturity for 3.5 years, and only 55% of our gross medium-term debt is with fixed rates. So at the opposite, we are less so exposed today to the increase of the interest rates. Thank you, Olivier. If we start by Suspension, which is the business unit with the lower profitability, there are two ways to look at these figures. The first way is to say that we were at 9% EBIT last year, this semester, and that now we are at 5.4%, so a decrease. This is one of the ways to see it. There is an alternative way that I would like to comment to you, is that if we look at our profitability on the second semester of 2021, the 5.4% that we reached in Q2 semester were in fact 2.2%. Yes, we are lower in Suspension than first half of 2021, but compared to the second part of the year, we have been able to develop the EBIT margin. Suspension, as you know, we have a big challenge on the turnaround of this business unit from an industrial point of view and also the way we produce and we consume materials. We started with launching strong actions in order to totally turn around the business unit from an industrial point of view. We have already launched a lot of action on the energy efficiency action because this business unit is consuming a lot of energy compared to the two others. We have implemented already in April and May actions in order to make use of the energy to the gas transformation. For sure we will continue to improve point by point the profitability of this business unit to make it acceptable. If we look at the two other business units. Thank you, Stefano. Filtration the top line I've already commented before. We have done a tremendous job on aftermarket in order to continue to deliver to our customers the right product at the right time, at the right quality and at the right price. This quality of service helped us gain market share during the third half of the year. We have also done our job from a pricing point of view. When you look at the profitability in absolute value, we are now at EUR 40 million EBITDA versus EUR 25 million last year comparable in percentage, but the dilution impact on the 15.1% of this year compared to last year. If we don't look at R&D including, the picture on EBITDA is roughly the same. On the top line, we have an increase versus last year, despite the impact of China lockdown. China is very important in our including reserve. EBITDA in absolute value is increasing and in percentage slightly diminishing, but with the dilution impact will be at same level. When we say that we are at the same level as last year, when we are already at 80% EBITDA, it doesn't mean we have done nothing as management. It means that the management has been able to implement a lot of actions to offset the crazy market conditions, including alternative raw materials. We are using more and more recycled materials. We are totally changing the supplier base, and we are implementing new supply chain and industrial model in order to be more agile in our Air and Cooling and Filtration. The stability doesn't mean we have done nothing. It means thanks to our agility, we have been able to offset the negative impact of the market. Let's go on to our model. I defined it as a resilient model because in our Air and Cooling and Filtration are proving that our model was the right one, and is the right one. You all know the current market situation, and lots of challenges that we are facing. As I was mentioning, we implemented a lot of action in all the dimensions, both in a defensive and offensive way, to be able to continue in this market scenario that will not change in the next six months. Very kind, Juan. Stefano. I just want to spend a few minutes on Aftermarket, because unfortunately I never entered in the detail. As I said before, Aftermarket has really performed very, very well in the first semester. You all know the brands of Sogefi Aftermarket. What is interesting to look at is that the market of aftermarket is a growing market right now, because all the challenges that the OEMs are facing. It's a market where the pure aftermarket players are also growing. The age in Europe, the car park age in Europe is foreseen as growing year after year to reach an average of 13 years old in a few years. If we continue, Stefano. A few statistics about our performance in aftermarket. The first one is that we are able to continue to serve our customers with almost no backlog, even despite the current crisis from a supply chain point of view. When you see a service rate of 92%, it means that almost 100% of the orders are delivered on time, at the right quantity, right quality, and right place. Today, the 99% that you see on the bottom means that we are able to propose to the customers the coverage of the range almost at 100%, thanks to the supply chain management that we have and the warehouses that we have in Europe, and also to the plant. It's a big difference versus our competitor, that we are now producing 93% of our products that we propose to our customers. Two years ago, this 93% was 75%. We are only purchasing 7% of our range and 93% we are producing. The transformation and new logic for including, you all know everything that we are implementing. I will go to the next slide. You can go, Stefano, to concrete example. I would like to start by speaking about the new entrants in the market. Of course, we are pushing with the legacy customers, they have the volume, and it's important we have a legacy OEM. More and more in a selective way, we are working and we are being awarded on business with the new entrants on the market. Here I am calling them new entrants, but for BYD, Changan are not new entrants in the market, but are new for us. BYD, we are working with them for five years, and BYD is in more electric cars than Tesla in fact. We have also new entrants in the EV cars such as NIO, Geely, which is a big giant electronic company in China, which are starting to do EV cars. More and more we are diversifying our portfolio of customers and also working with a few Chinese OEMs because the volumes are very interesting. A few news about the biggest development that on which we have been awarded in the last six months. For Air and Cooling, as you already know, because I mentioned it last time, we have been able to sign a quite big contract in North America with a pure BEV manufacturer to produce. One of the key centers of the project for the thermal management of the battery. We also have a new contract that will be for Europe with this customer. The similar line is very important, and I will present this project in a few minutes. This is the Battery vent system. It's a brand new project that we have developed and patented and for which we have signed a big contract with one of our legacy premium German customer. Filtration, we continue to have strong development both in ICE but also in the air and water filtration management. Suspension, this is important to mention. We have signed in China a contract for 500,000 for EV player, a newcomer in the market which is coming from the electronics business. As I was mentioning, we had a very positive commercial activity in the first half. Of course, with customers as you have seen in the figures, we are deficient about pricing, so this is what I will call the short and medium term. We have never stopped, and we continue to push very hard on the long-term development of Sogefi in EV application. As you can see on the picture, it is a bit technical, but we have been able to be awarded on many applications that are now in development or already in production for some of them. One example is including this. For the people who know our legacy products, from a manifold produced in plastic and so on to this kind of product, you can imagine that we have to invest R&D both on the product and the process. I'm quite happy because now we are able to propose this kind of solution to our customers with a much higher selling price and higher added value than the legacy product of Air and Cooling Sogefi. With this solution, and that's why our customers are really enjoying this technical proposal that we have done as innovation. They can save 95% more energy than versus another process, which is available. The battery vent I was mentioning this project before, so the development both between Filtration and Air and Cooling team, and it's really a very important device for the EV cars because you will have something like four engine, and it helps to regulate the pressure of the battery pack for EV car and avoid internal overpressure. This is key for the battery range and for the OEM. We have developed that for a German premium brand, and now we are duplicating and proposing this product to all our customers. Suspension I'm quite happy because as I said, we have been able to sign a quite important contract with a giant electric company starting by X. It's not an innovation for the battery or whatever, but it shows that even if Suspension now we are able to then switch from legacy ICE cars to EV cars and to work with a newcomer so strong from a financial and technical point of view is very important for Sogefi because it is creating also opportunities for Air and Cooling and Filtration. If we look now at the picture of our current business quotations, and I have to admit that we have a lot on the pipeline right now. Almost 83% of our quotations are presently for e-mobility solutions. At the same time we are taking our time because our aftermarket business is going very well, thanks to the ICE application and also Air and Cooling. At the same time, most of our quotations are now for e-mobility, so we are balancing short, medium, and long-term for Sogefi. A topic which is very important, and I will not enter too much into detail because I think you all know this topic, but we continue to really improve and have a higher level month after month on all ESG activities. I mentioned many times, we are not doing it just to please the banks, the market or because it's trendy to do it. We do it at Sogefi because we believe it's key and it's really part of our management activity as quality, finance, validity. ESG is becoming more and more important each day for us, and we always apply it in a pragmatic way at Sogefi. As an example, to be able to promote the green energy is, as you know, becoming key and become more and more important. We are investing in solar panels in most of our plants, and we push very hard the waste valorization in each of our plants because finance and ESG have a common goal on these topics. We are doing it in a very pragmatic way. To be sure that you reach the target that you define, it's important to have figures in front of it. Here I presented figures between 2021 and 2025. Of course, to track the evolution with my teams, we follow that almost on a quarterly basis. One example of KPIs that we are following is our ability to totally switch our product portfolio from ICE to e-mobility products. The target that we have is that by 2025, 45% of the revenue will be generated by e-mobility products. The order demand I already mentioned, so our target was 65% for innovation. We are already overperforming. To be able to reach that, you need to invest in R&D. By 2025, we will at least have half of our R&D spending focused on innovation. The market outlook. Right. Here, in this slide, you have the forecast of IHS, which is now called S&P. You know how much I was cautious and we were cautious with Olivier on IHS prediction when we built our budget last year. We have been much more conservative than IHS, and we have done well because first semester was not as expected by IHS. Right now, IHS is forecasting a very, very strong second part of the year, so strong that I'm gonna be very honest, we have not considered a rebound of 21% in the next six months due to the market condition. I always prefer to be more conservative on the future of the market, and then do our own work from a cost point of view, rather than believing that the market will strongly rebound in the next six months. I prefer to consider right now that basically the second part of the year will be in line with the first semester from a volume point of view, and then if there is good news on the top line, we'll have good news on the P&L. The raw material outlook. Right. You all know the situation. We are facing quite challenging days, sometimes rational and sometimes irrational. Suppliers are, of course, pushing very hard to increase the prices on steel, on plastic, on metal, on packaging. We continue to be very proactive in defending this price increase with our suppliers. I think we are implementing strong actions internally in order to be also able to compensate part of this increase internally. I will continue, and we will continue with my team and with Olivier, to do exactly as we have done in first semester, to have fair discussion, to reach fair agreements with our customers in case of inflation on raw material or energy. As you have seen, and I've already mentioned, we have been able to do it in a successful way in the first six months, and we will continue to have the same discipline during the second part of the year. The new thing that is happening now is on the energy. Of course, energy prices are increasing almost everywhere. I do believe that the market in a global way may be affected in the second part of the year. That's why it will be so important to continue the discussion with the customers to seek for fair compensation from them for part of the increase of energy and the other part being able to compensate it by ourselves. Well, the outlook, I actually think it's quite challenging for a CEO to be able to give a very accurate outlook of the market. That's why as I have a very low understanding of financial markets, I will have much difficulty to keep on going. Now, to be clear with you, of course, we are lacking visibility on the volumes, on the energy prices, on the raw material. Nevertheless, what I believe in is that we have a strong management team. We have been able in the last six months to do things that honestly were not easy to do. We have a strong financial discipline. Now we will have to continue in this way the second part of the year. That's why I'm keeping the guidance that we gave during the first quarter to say that if there is no big drama in the second part of the year, we should be able to deliver the level that we delivered in 2021, excluding the non-recurring cost, of course, that we have collected last year for the year. This was our presentation. We are now at your disposal to answer to all your questions. Excuse me. This is the conference call 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 Hand button. Please 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 and one on your keypad. The first question is from Martino De Ambroggi of Equita. Please go ahead. Good afternoon, everybody. My first question is on the last part of your presentation concerning the guidance. If I understand in your flat operating profit ex non-recurring, you are assuming a market similar to the first half, so down roughly 2%. Yes. It's correct. Okay. Could you provide a rule of thumb of what is? Sensitivity or incremental margin every 1 percentage point of higher or lower volumes. Just a very rough rule of thumb, just to understand what could be the upside or the downside in case of a different market environment. Yeah. The contribution margin is something like 30%. For each EUR 1 million of additional turnover that we may have, it depends on where it will come, to be honest. I hope we may have good news on aftermarket, for example, where the contribution margin is higher, but I will see, or maybe it will be incremental by 6%-6%, basically. 15%. That's why I assume that the market is really flat. And then if we have good news, in theory, it should help us to do better. Okay. In terms of free cash flow, you guided for at least EUR 32 million. If I exclude the factoring, the higher factor in the first half, you already generated EUR 27 million in the first half, roughly. I was wondering if there is a second half, down 2% in similar volumes, but probably 32 could be updated. Yeah. We are facing some big challenge from a supply chain point of view, which is under pressure on the balance sheet. Inventory is becoming very key to be able to serve our customers. We may have some inventory challenges. We also need to get back the money from our customers, because you can imagine that in the current situation, it's becoming challenging to get repaid on time. In the end of the day, I will say that we run a global risk to not deliver what we are seeing. Very global risk. Okay. CapEx in your guidance are always EUR 110 million, roughly? A bit less, to be honest. We are optimized as a team, closer to EUR 100 million. Okay. The last, on slide number 31. You are providing the percentage of sales for e-mobility, which was 15% last year. You have a target of 45%. Can you provide what was this figure in the first half this year and what you expect for the full year 2022? No, I can't because this is something very detailed to be done. Right now we are doing it once per year for the indicator number one. It's also because it's figures that I need to have the validation from the leaders that are working with us. We have not been that in detail, the figures for the first semester. I'm sorry. With that said, I would have provided them this year, but I don't have them. Okay. Can we assume- Yeah. I can assume that it's higher than 21% for sure. I don't have an accurate figure on that one. Okay. If I assume this e-mobility business has higher profitability than the rest of the business. Am I right or, probably it's more like the same? For the current period, absolutely, even if it's difficult to say exactly what it will be in four or five years, you can assume, except Aftermarket or Filtration, that it's a higher profitability than OEM or Suspension, OEM or Air and Cooling or even OEM or Filtration. Yes, it's true. It's correct. Okay. Thank you, everybody. Thank you. The next question is from Monica Bosio of Intesa Sanpaolo. Please go ahead. Monica? Excuse me, we cannot hear you. We will try to read on your lips. Is your microphone on mute? We cannot hear. No. The next question is from Alexandre Geai of Kepler Cheuvreux. Please go ahead. Thank you. Good afternoon. I'm on the phone because I had troubles connecting with the video. Sorry for that. I have a first question on this squeeze. So the great achievement in H1, I would say. What should we expect for the second half, please? Just in order of magnitude, given probably that we would see some higher energy costs, for instance. The second question. I would like to come back to the guidance, because you are basically assuming global light vehicle production around 10 points below 2019. I can understand that you want to be cautious, but why are you so cautious? Because one other European supplier, for example, reported today, and is assuming a 2%-5% growth in global light vehicle production. I just wanted to understand why you are so cautious here. The final question I would have is on natural gas, whether you would be directly or indirectly exposed to any disruption in the supply. Thank you. Yeah. Just on the first question, IHS. On IHS, each time I'm discussing with you, I am more conscious on IHS, and each time you are right and IHS is wrong. I'm doing that for almost five quarters now, and unfortunately they are always more accurate. I'm gonna be honest, in the second half of the year, why people should buy more cars in the first half of the year? I don't see. You still have a technological uncertainty. In Europe, I would say we have some political and social challenges to take. It's not the right time to buy a car. Second, the production of cars. We don't know what's gonna be the energy shortage or not in the second part of the year. That's why these two factors, I still plan and apply a discount factor on IHS, saying maybe the market is supposed to rebound, but due to potential shortage of energy at the OEMs, due maybe to supply chain challenges with the small supplier that may stop a giant OEM. Also due to the fact that I don't think, except a big incentive from government on VAT or something like that people are ready to buy a lot of car in the second part of the year. I hope I'm wrong, and I hope IHS is right, which will mean for us that we will do a good year, but I really prefer to be conservative. I can understand that it looks like a strong discount, but there are a lot of uncertainties. Second, on the squeeze, to make it synthetic, I would say it's basically the same magnitude between semester two and semester one. Not the same component, but at the end, the global figures may be very close. Energy now are increasing a lot. We're in the winter time. My feeling is that it is the same magnitude to cover in the second part of the year than the first half. I've already started the discussion with the customers. No, we know what to do. We have been very proactive, and also thanks to the great job done by Olivier and his team at finance to provide the right figures to the sales team. We have anticipated the discussion with the customers in order to be sure that we don't have a big lag between the increase of material and energy and the productivity impact on the P&L. First, it was a gas exposure, right? Yes. Gas disruption. The only business unit that really uses gas is Suspension, including Filtration. It's more electricity. The situation is not the same country per country. You have some countries where the price has dropped. You have other countries where unfortunately the prices have not dropped, and we are buying gas, I would say, almost on the spot market for the last six weeks. My purchasing teams there are doing a great job in order to secure the quantity at the right price when it's possible. You have some countries where it's becoming almost impossible to secure the gas for the second part of the year, of which Germany is a big challenge, for sure. Italy and U.K. are challenging. In theory, I don't see a direct exposure, but if the government decide to prioritize the heating of homes rather than the industry, of course I will be affected exactly the same as all the industry. I think it's something we cannot exclude in some countries where you may get a letter from the government saying, "You have to stop the production next week because we don't have enough gas." Of course, we are not forecasting that, but it's something that I'm trying to prepare in case that it happens. You know me, I always prefer to be prepared for the worst so I'm a bit surprised. We already started to see how we can switch part of our process from gas consumption in heating to electricity, because at least we will be ready if it happens. Nevertheless, as everybody, I think there is an indirect exposure. Our suppliers, the steel suppliers are consuming a lot of gas, so they are exposed. When they are exposed, we are exposed. It can be from a price point of view or delivery point of view. Our customers are exposed. They consume a lot of gas for the painting lines of the cars. When the customers are suffering, usually, you know, it makes more difficult our life too. Then we are trying to book as much as it is possible, the unique quantity for the last part of the year when it's possible. It's a never known. The gas is really for everybody right now. We are all discovering the challenges we got to reach. Understood. Okay. Thank you very much for today. Thank you. The next question is from Monica Bosio of Intesa Sanpaolo. Please go ahead. Thank you everyone. I'm just wondering if you can comment on the pricing power, that it was much better than expected. Even considering a second half with volumes at -2%, if we project the same pricing impact that you had in the second quarter, would you see as achievable a total turnover by year-end in the region of EUR 1.5 billion, or my math is too aggressive? I remember that in the last conference call, Frédéric, you said that the company is confident to recover 80% of the price of the raw material price increases. It seems to me that things are going much better. I was wondering if you think to change this indication. As a more general stance, let's take apart 2022. If you look at 2023, and if we assume a potential slowdown in the demand, in the final demand, do you believe that Sogefi has room to keep this kind of sound pricing, maybe thanks to the higher penetration in EV, or do you expect a slowdown in the pricing going forward? Thank you very much. Thank you, Monica. Yeah, about the pricing power, that I understood was expected lower, I have to admit my teams have done a crazy job in each phase of the strong distribution with the customer. The customers are also improving their defense. To be honest, we are seeing that between the first negotiation from October, November last year and the last discussion that we had in July, we can see that the customers are becoming very strong, you know, in their defense. It will require from me and my team new way of negotiating, new way of convincing the customers and always in good relationship, of course. I would prefer to continue to keep 80% of recovery, which is not my target. My target is to recover 100%. I prefer to say that 80% is more reasonable, and it's not 80% in basis point. It's 80% as a P&L impact, mainly due to the lag. Because customers, what I have seen, they are becoming better and better. They are becoming very good in managing time. Between the time you start the negotiation and you finalize them, you have to call them 20 times, go to meet them 20 times, and it takes two months, three months. If you are not able to have a retroactive impact, it hurts your P&L. That's why for seventy percent of the year, I prefer to sit at 80% as a guideline and then try to beat that and also try to recover 20% internally by doing our own work. If I'm able to recover 100% and this 20% internally, it should help the P&L. About the 1.5 billion beyond you say for the full year, it seems to me a bit aggressive, Monica, to be honest with you. Mm-hmm. I will shoot for something a bit lower, but it's not so much as you rightly. You are not too far. I will be very happy if we reach this figure. Okay. I will push for EUR 20 million, EUR 30 million less. If I have to give a figure, it will be EUR 30 million less. Okay, thank you. Which is in line with pretty line to say the market will remain flat this year, I think. Okay. What do you think for the next year? Monica No, basically my concern is on the ability of the company to keep this kind of pricing going forward, this demand flow that is going to be ongoing. It's a good point. You know, everything we are implementing in 2022, it's worth nothing if it's not recurring for 2023, 2024. Each time the game is becoming more difficult. I have been lucky during my first year as CEO because the challenges improve each time and increase each time. Each time my team and Sogefi has been able to also increase the level of our game. We have been successful each time. Now, the big question is, more than Sogefi, what's next for the automotive industry. You all know that the OEMs have the policy in order to maximize their profit to only push the high selling price car, the car in which we are doing high profit. It has been a good strategy for the first 12 months, 18 months, but the issue is that volume are dropping and may drop because here we are comparing the market versus 2021, but the reality of European markets in 2022 is that it's 30% below 2019. I mean. 30%. It's crazy for an industry like automotive. We have investment. The OEM have investment. We have investment. In fact, we don't speak of the crisis, but to reduce by one- third the volume in a business like that, it's impressive. I'm not sure that we immediately have room on the volume. We continue to do our own work from a cost point of view and a footprint point of view, if it's required. Also taking into consideration the new energy prices. This is a new parameter that is coming up that we didn't have in mind three years ago, you know. Where energy will be more affordable, in which country, based on that, what do we do from an industrial point of view? Do we keep high consuming machines everywhere or do we totally change our industrial strategy? It's clear points that I need to address from September with my team when we reveal the 2023-2025. Because there are many new parameters in our life and in our business that I need to take into consideration for next year. On our strategy, long-term strategy will be changing nothing. We continue to push aftermarket penetration. On Air and Cooling, thanks to the market, we are now, we have a very dominant position on ICE application. The competitors are slowly but surely exiting or reducing their presence in our product range. We continue to deliver this on Air and Cooling. On Suspension, we do the turnaround, sorry. Maybe the turnaround may need to be more aggressive in 2022-2024 on Suspension due to the energy prices. No other yet to give a clear deadline on that. I need to address that, once the options and the assumptions will be more stable for next year. Okay, I understand. Just, thank you. Just a final question, just for our keeping. Can you give us a rough indication of the expected restructuring charges for the current year? Sorry, I am not able to capture what you said, Monica. Can you repeat? The restructuring charge for 2022. The restructuring. Yeah. Ten. Okay, thank you very much. Thank you. Always integrated in the forecast I give for the end year. When I give our expectation of profitability for end year, it's already taking into consideration the restructuring. No further comment. The next question is from Roland Könen of Value Holdings. Please go ahead. Yes, good afternoon from my side. Can you hear me? Yes. Yes, thank you. Thanks a lot. Only a few questions open. First of all, congratulations to the really great result in this very difficult circumstances. First one is really easy. I didn't catch the figures on your factoring, you know, and how the factoring figures developed in quarter-over-quarter and year-over-year. Maybe you could give me there a number. My second question would be on order intake and order placements of your customers. Did you see any slowdowns in order placements from your customers because of all the difficult circumstances, inflation, geopolitical issues and so on? Are they hesitant to give you new orders or what is the behavior there? Thanks a lot. You want me to start on business nominations? Yeah, in Europe we can see clearly that the customers are almost no more looking on the market using that for ICE. I think for ICE they are really a few, and when they are, it's not new engines or new cars, it's directly because they want to outsource to the competitor. So yes, in Europe you can feel it. On the e-mobility, no. On e-mobility in Europe I don't feel right now a slowdown. I would say it continues the same pace as we had last year. In China it has been a bit strange. There has been one month and a half where nothing happened, as if you want to close. Now it is impressive. The pipeline of potential business and the business on markets with Chinese customer is very, very high. In North America, I would say it's stable. They continue to have the same proportion on ICE application. You continue to have a robust for ICE application. I would say multiplied maybe also the last generation with high volumes. In North America I have not seen a decrease on the business pipeline, no. Not yet. There has not been also a lot of cancellation. I was a bit afraid that due to the current situation, there may be a lot of cancellation of programs or engines, and currently, no, we don't see a lot of cancellations. With regard to factoring, at the end of June, the amount of factoring without the cost is EUR 112 million. We were last year at EUR 98.8 million. An increase compared to last year, end of June of roughly EUR 14 million. Okay, great. Thanks a lot. You're welcome. Thank you. The next question is from Gabriele Gambarova of Banca Akros. Please go ahead. Yes, sir. Thank you for taking my question, a couple. The first one is on your guidance. I was wondering if this guidance is consistent with gross margin around 28% as the one you recorded in the first half of the year. Basically, the question is are you assume that you will able to protect margins from energy and further raw material cost increase? The second one is more specifically on suspensions. Because if my calculations are right, in Q2 the revenue of the business went up by 19% year-over-year. While the EBITDA margin was almost, let's say, I mean, was down to 5.2% from 8% in Q2 2021. Am I right in thinking that there was a stronger price increase probably for the steel cost, but it was almost entirely even more than offset by rising energy costs at the margin because revenues were up 19%, margins were down from 8% to 5% in Q2. I will start with your first question. Yes, our guidance is based on the fact that if you keep the 28% of first semester in the second semester, with different challenges, because in second semester we will have mainly the energy impact. But yes, the guidance is based on 28% stable, in the second part of the year. On your second question, I will leave you to- I think that the company did 19% growth in Q2. We have in the appendix, Q2 19% is the whole company, 19% growth Q2. It's substantial, even more, because it's the division where we are increasing price more. The question was on margin, EBITDA margin, that in Q2, if I'm not wrong, that was around 5%, Q2 2022, and instead it was 8% in Q2 2021. There was a stronger top line growth, but apparently margin was down year over year. Yeah. For Suspension, you are absolutely right. That is mainly linked to the fact that we are comparing here semester one versus semester two or Q2 versus Q2. You are totally right. You have to remember that in Suspension, we suffered already increases in Q3 last year, Q4, then Q1 this year, and Q2. We have been able to pass through the increases of Q1 this year and Q2 this year. Nevertheless when you compare the first quarter of last year or the second quarter of last year, there was not yet the price increases. This explains the gap. That is because in the figures of Q1 and Q2 of this year and Q2 this year, we are already impacted by the Q3 and Q4 of last year. It's mainly due to the energy, as you said, which has been in our scenario at double the cost for Suspension. Okay. My last question, again, on Suspension. I mean, what can you materially do to improve profitability? I mean, is there room on price mix, since you got this interesting new contract with the Chinese. Just before the answer of Frédéric, remember that in first half, Romania has a negative impact on Suspension of EUR 4 million. Sooner or later, next couple of year, the Romania should go break even. This is one room for improvement. Absolutely. Thank you, Stefano. You are totally right. Yeah. We are still in rapid phase for Romania plan, which is EUR 4 million in 2Q. Then does that have room for improvement? For sure, like if you, this business cannot stay at this level. So we have to do the job from an industrial point of view to change the process in some plant to make the process more agile. In fact, most of our process was done to be profitable or to not lose money with the 100% load. In the meantime, the market has dropped by 30%. We are working with the team, not by investing EUR millions, but by changing the footprint and the layouts of our machines and our plant to have some form of profitability there. We are doing our job from a footprint point of view, as you know. In the current figures, we don't have yet the positive impact of the closure of Germany, which will be closed end of September this year, right, Gabriele Gambarova? The U.K. factory will be closed next year, as agreed. We are starting the processes for these two factories. One will be closed in a few months, so we will have in the last half of the year the positive impact of the closure of the U.K. Next year we have to close the U.K. facility. All this already includes the reduction. The changes are included. The costs are included, but we don't have the positive impact of the savings in, you know, previous currency. If we start to pay Germany last quarter and for U.K. from next year. Okay. Sorry, just a reminder. Can you remind me what would be the positive impact of the two plant closures in Germany and in the U.K. more or less? Difficult question. No, no, it's not difficult. I try to remember. I have it in mind. Per year in the past when we have done the assumption was something like EUR 7 million, okay, per year. It depends your reference, because if you are comparing with today's figures, now with the energy increase in Germany and U.K., these figures are closer to ten. So it depends the reference point, but it's a good improvement. Also with the cost of energy that we suffered in this figure and that will continue to suffer. Once you close two factories in Germany and U.K., we will have a strong benefit in our profitability. As Stefano said, the restructuring costs are already booked. Just one last one on these EUR 4 million of impact of Romania in the first half. Where do you see this number in the second half and possibly in 2023? Second part of the year, I'm gonna be very honest, there won't be any miracles because it's different programs that we are starting. You have to remember that we have created and launched this factory during the COVID. Unfortunately our processes were not totally ready to be able to meet the volume. We have to work in manual way. I will say that the trend in second part of the year will not change. Here you have to address it changing. From 2023, our ambition is to reduce CapEx in Romania and to divide it by two in 2023, again by two in 2024, and then 2025 arrive at something in the neutral area or slightly positive area. Next year is also in the third part of the question of Monica. We will have the benefit of the closure in Germany that we learned from the second part of this year in the U.K., and the improvement of Romania. Unfortunately, we are not in a stable world because everything is really unstable, the prices, the energy and so on. I will be able to implement my action and arrive in a positive area. In the meantime, the energy prices increase also. We have also a lot of work to do from an energy price point of view. It's part of the new challenge for Suspension for 2022 and 2023. Okay. Thank you very much, and congratulations for the results. Thank you. Thank you very much, Emilio. Thank you. As a reminder, if you wish to register for a question, please press the Q&A on the left bar and raise your hand or press star and one on your telephone. For any further questions, please press Q&A on the left bar or star one on your telephone. Well, I think we are done. Thank you very much for your attendance and your questions. We wish you a nice summer break and let's see each other at the beginning of October for another one. Thank you. Thank you very much. Thank you. Bye-bye. Bye. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your devices.