Good morning. This is the Chorus Call conference operator. Welcome, and thank you for joining the Sogefi First Quarter 2022 Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Frédéric Sipahi, CEO of Sogefi. Please go ahead, sir. Thank you, madam. Good morning, ladies and gentlemen, and thank you for joining this call. I'm really sorry for Italian colleagues. I know it's a day off today in Italy. As you know, the first quarter of 2022 has been quite full of challenges for the automotive industry. The pressure on raw material prices and availability has increased with Ukraine-Russia events. Our customers are facing supply chain challenges, and now part of China is locked since second half of March. As you have seen in our results with my team, we have continued to do a lot of work for costs, pricing and cash. In the same time, we continue to have an offensive approach on the transformation of the group we started one year ago. I now propose we go to page four with the highlights of this first quarter of 2022. As you can see, page four, our revenues at constant exchange rate are increasing by 5% compared to quarter of 2021. It's mainly thanks to the price increase related to tax fit. The EBITDA is at EUR 60 million compared to EUR 54 million in 2021. Our contribution margin in absolute value is very close to Q1 2021, with EUR 108 million versus EUR 107 million last year. The EBITDA, excluding the non-recurring, is very, very close compared to last year. We have EUR 49 million versus EUR 50 million last year. We had some positive one-off last year in the first quarter. On fixed costs, as I anticipated, we have continued our approach to optimize, and we have been able to reduce by EUR 2 million to EUR 58 million versus EUR 60 million last year. At the end, our EBIT is at EUR 21 million versus EUR 25 million last year. Last year, we had a EUR 4 million non-recurring positive impact. Our net income is at EUR 11 million versus EUR 12 million last year. Free cash flow is at EUR 42 million versus EUR 32 million last year, so EUR 10 million more than last year, mainly thanks to specific actions that we have implemented on the working capital in order to balance higher inventories that we are keeping on raw material and finished products. De facto, our net debt is reducing to EUR 230 million versus EUR 260 million last year. If we go now to page five, our sales by geographical area. Basically, we are beating the markets in all geographical area at constant exchange rate. As I said, we are higher by 5% versus last year, mainly thanks to the pass-through to our customer, customers of the material increases that we had in 2021. You can see that in Asia, at constant exchange rates, we are flat versus last year when the market is higher by 5%, but it's mainly due to the fact that we already had a strong growth last year in 2021. Russia and Ukraine are very small in our portfolio. It's basically less than 1% of our turnover. I propose we go to page six to see the sales by business unit. Suspensions is benefiting of a higher price increase related to the steel pass-through. As you can see, Suspensions is growing by 9% at constant exchange rate. Filtration is growing at 9.1% at constant exchange rate. Half of it is a pass-through, and half of it is the growth of the market and our market shares. Air & Cooling is slightly below last year at -2%, mainly due to the fact that China closed last two weeks of March, and China is quite important for Air & Cooling turnover. If we go to page seven, the sales per customer. Stellantis, of course, is still our biggest customer, followed by Ford and Daimler. The big change versus last year is in Renault Nissan. As you can see, the turnover in 2022 is much lower than 2021, mainly due to the fact that Renault Nissan has been affected more than other customers by the Ukraine and Russia events, and that their first quarter was quite low from a turnover point of view. If we now go page eight, so an update on the material increase. I think you all know the market situation. After strong increases in 2021, unfortunately, with the events in Russia and Ukraine, the increase of materials such as plastic and steel have skyrocketed, if I can say like that, in Q1. If you look at steel, for example, between January and March. The increase has been very important, close to 20%. For now, the impact on PA6 were quite low, but we can see the strong pressure on these commodities in Q2, and our suppliers are pushing very hard on PA6 and PA66 since 1 April. If we go to page nine, the breakdown of our EBIT performance versus last year. As I was mentioning before, last year we had a positive impact by EUR 4 million, that's why we are normalizing the EUR 25 million EBIT last year to EUR 21 million. We had a positive impact between sales and change in PA. Sales are EUR +8 million and change in PA mediator EUR -10 million. Here, this year is so special that we have to take it together. On fixed cost, as I anticipated before, we have done our work, with a decrease close to EUR 2 million. At the end, our EBIT, 2022 adjusted is very close to EBIT adjusted last year in absolute value. We are presenting most of the items in absolute value because in percentage it doesn't make much sense due to the dilution, in our percentage, thanks to the pass through that we have done in the sales price. If we go to page 10, the P&L in detail, here you can see the percentage. As I was anticipating before, you can see a dilution, for example, in contribution margin, which is at 28% compared to 31% last year. In fact, very close in absolute value. In fact, if we normalize the 28% without the dilution effect, we would be at 30%. Fixed cost, you can see that we have decreased by EUR 2 million as I was anticipating. No big difference in restructuring and exchange differences. At the end, our EBIT excluding non-recurring is at EUR 49 million versus EUR 50 million last year. We don't have specific items in the net income from discontinued operation this year, so our net income is at EUR 11 million versus EUR 12 million last year. If we go to page 11 for the free cash flow, I was anticipating in the beginning, we have pushed very hard the working capital in order to be able to offset the inventories higher than last year due to the situation of the supply chain. At the end, we are able to generate almost EUR 10 million more in free cash flow than last year. For page 12, I will let Olivier explain our debt profile. Sure. Thanks, Fred. As announced during the last presentation, we started at the end of 2021 to renegotiate our debt which were expiring in 2022 and 2023. We finalized 1 April all the signing. We renew on the first quarter EUR 155 million of line. I'm talking about bilaterals, RCF and amortized loans. Those EUR 155 million of renewal allow us to extend our average maturity up to four years. At 1 April and the first quarter, we have EUR 160 million of line undrawn, committed, but undrawn and EUR 374 million of line drawn with a liquid cash up to EUR 161 million. A very mistake on the presentation because it is said EUR 95 million new line medium term loans signed in 2021. That's right. We should have had EUR 155 million new medium term loans signed in 2022. Sorry for the comments missing. Thank you, Olivier. If we now go to page 13, so the split by business unit, to start with Suspensions, you can see our sales are increasing by almost 10%, mainly thanks to the repricing and the pass-through to customers. Our EBITDA nevertheless is decreasing in absolute value from EUR 12 to EUR 8, and in percentage from 10% to 6%, mainly due to the fact that we are at the start of production of new programs. Our efficiency has been much lower in this quarter versus last year due to the supply chain situation, which has been very difficult to manage in some of our facilities with new start of productions. If we go to page 14, in Filtration, our turnover is growing by more than 10% versus last year, at constant exchange rate by 9%. It's mainly thanks to the good performance of the after markets in Europe and our activities in North America. The contribution margin in absolute value, you can see is growing to almost EUR 20 million versus EUR 16 million last year, and even in percentage from 13.8% to 14.6%. The fixed costs have decreased also. We have the full impact of the actions we implemented mid of last year and which is helping the contribution for Filtration. On page 15, the growth is more moderate in Air and Cooling and at constant exchange rate, it's even a slight decrease by 2%, due to China lockdown in the last two weeks of March. In absolute value nevertheless, the EBITDA is stable at EUR 21 million versus EUR 20.5 million. Olivier, can I ask you to mute your mic, please? The EBITDA is stable at 18.4% versus 18.4%, even with the dilution impact on our turnover. If we go to page 16, the business awards, we have concluded an important contract in North America for Air and Cooling on the e-mobility application. It's the biggest contract we ever signed on e-mobility. I will present you the product in a few minutes. Filtration, we are continuing the push on the air purification products and as you remember, in Suspensions, we have concluded a contract for coil spring and stabilizer bar for our Romanian plant, which will help to cover and absorb the cost of this factory in the next 24 months. I propose we now go very quickly to page 18 to remind you the transformation we started and then I will go to the presentation of the new products on which we have been awarded. As you remember, in Air & Cooling, we are pushing the e-mobility. We started five years ago, and we now have strong portfolio on shelf and a strong business awarded in Air & Cooling in the cooling of battery and electronics. Filtration, we are more and more focusing on the purification of air and suspension. You have noticed that the EBITDA is much lower than the two other business units. We are focusing on rationalizing our footprints, our product portfolio and making the operational improvements needed to sustain these business units. I propose we skip the next page and go to page 22 because you already know the others. In page 22, as I was mentioning before, you can see a new line in yellow for the award of the aluminum cold plate. So it's the first time we are awarded on this technology. You will see that in the next slide. It's a big plate that helps you to have an efficient circulation of the cooling below the battery and for the electronics. From a technological point of view, it's a strong innovation for us. Also from a process point of view, we have been able to push very far our knowledge in welding. Thanks to that, it's a contract over seven years with quite strong volumes. With the start of production very quick, basically, in this kind of application and with this kind of customers, the start of production is quite quick with prototypes to be delivered already this year. If we go to page 23, you have a picture of this product which is quite different from the legacy product we were used to have in Air and Cooling. Of course, you all know my approach. To have a good product is very important and it's key in our business. Nevertheless, at the end, it's all about the profitability, the payback and the added value we can integrate in our new product. Here I'm quite happy because from a selling price point of view and margin point of view, it's totally a different game than plastic injection and welding two injected parts. If we now go page 25, I'm very happy because we were working on this project for more than 18 months with my teams about a new e-mobility tech center. It has opened a few weeks ago. It's based in France, in the east of France, but very close to the German borders, basically 3km away from German borders. Very much appreciated by our customers for that. It's dedicated to the development of the e-mobility applications and it's equipped with the biggest 3D printer in Europe. It's a very important milestone for us because e-mobility is a totally different approach from ICE. We want to have a dedicated area with a lot of confidentiality with dedicated teams in order to be able to meet the requirement from our customers and especially the new players who have a totally different approach in the development of product for e-mobility. I now propose we go to page 26 to illustrate the push that we have on e-mobility. Currently in our portfolio you can see that we have 81% of our current quotation for e-mobility, of course with Air & Cooling being the biggest business unit, but not only. In Suspensions too, we now have a lot of quotations for e-mobility platforms. Even Filtration, we were supposed to be, let's say, smaller from a product range point of view for e-mobility applications. At the end, we have a good mix of e-mobility applications. Page 27. I don't need to remind you how much we are committed to ESG topics. You remember we decided to do it in a very pragmatic way. I'm quite happy because today this is integrated in our daily life, as quality, supply chain, or finance. All teams are very committed to meet these targets year- after- year and not just with the long-term targets. We are following that in a very careful way to be sure that we meet our targets each year and at the end of the plan. If we go to page 29, a very quick outlook of the market, even if I have to be transparent with you know it's very difficult to predict what's gonna be the activity in the coming months due to many uncertainties on the supply chain. As I was mentioning before, China, a big part of China is now in lockdown for more than 20 years. 20 days, sorry. There may be some impact here. Nevertheless, if we look at the IHS forecast, IHS is foreseeing a Q2 growing by 2% versus 2021 and a market rebound in Q3 with 20% more than last year and a Q4 at 2.7%. On our side, as usual, of course, we are taking in consideration these forecasts, but we have a conservative approach, and we continue to push our fixed costs, our CapEx management, and our working capital being ready for, let's say the market which will suffer in the next month and next quarters. Page 30, the raw material outlook. Here again it's very difficult to predict exactly what's gonna happen. There are so many macro impacts around these material increases. Nevertheless, we do believe that the inflationary trend will continue at least in Q2. As we have done for the first wave of 2021, we are continuing to implement strong actions in order to be able to reduce our raw material consumption. We are constantly looking for new suppliers, new sources. We are redesigning some of our products in Air and Cooling and Filtration. We are pushing as much as possible the usage of recycled materials, of course, without taking any risk for the quality. In the same time, we are continuing our discussions with all customers, keeping them informed about the market impact and the suppliers' request. We have, I would say, almost daily three or four meetings with each of our customers, in order to be able on the long term to have a sustainable commercial relationship which will continue, I'm sure. Nevertheless, of course, we need to address the short-term impacts. You have seen that the raw material increase in April, May, June is forcing to be very strong at 20% in three months. Obviously, for Sogefi, it's not possible to sustain this increase without the support of the customers. If we look at the market outlook in page 31, as I was anticipating, the visibility is very low. We have done it with my team in the last 12 months. We are preparing also to difficult days, continuing to push the internal actions in order to be able to face a difficult market. If we have good news on turnover or material prices, it will convert to EBIT, but we prefer to be very conservative on the market trends in the coming months. On raw material, transportation and energy, we can see strong inflation. Here again, we are pushing the internal actions and discussion with customers, taking in consideration the current know-how of the market and without taking in consideration new deterioration of the macroeconomic, we do believe that we can confirm our objective of achieving an operating margin in value in 2022, close to 2021, excluding the non-recurring charges or income that happened in 2021. I have finished the presentation. I thank you for your attention. Now we are at your disposal to answer to your questions. This is the Chorus Call conference operator. We will now begin the Question- and- Answer Session. Anyone who wishes to ask a question may press star and one on their touch tone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Monica Bosio of Intesa Sanpaolo. Please go ahead. Thank you. Good morning, Frédéric, and good morning Olivier, and thanks for taking my question. I have four questions. The first is just a check. I've seen that t he company changed a little bit the wording in the guidance. Now the group is pointing to an operating result ex non-recurring costs in line with 2021. The previous statements were referring to the operating margin. I can imagine that this change in wording is due to the fact that the visibility on the top line is quite low as of today. Just some flavor from your point. Coming back to the real questions. The first one is on the air cooling division. I know that the trend will depend also on China, but on the back of the contracts that you have been awarded, what kind of growth should we expect for the Air & Cooling Division by year-end? Can we still expect a positive growth year-on-year for the division? Second question is on the raw material price. It's difficult to quantify what could be the impact by year-end. Last year, the company recovered roughly 80% of the raw material price increases. Are you still confident in replicating this kind of performance? Very last question is on the working capital. The management in working capital has been very, very good in the first quarter. Do you expect to replicate this sound performance also over the next quarters? Thank you very much. Thank you, Monica, for your questions. To answer to your first one, in fact, we changed from percentage to absolute value guidance because this dilution impact that we had in the turnover, each time we increase the selling price to pass through the material increase, it dilutes the percentage impact of margin, even if in absolute value we have the money. That's why we prefer to give a guidance in absolute value, which means that we still somehow believe that from a volume point of view, we can reach it. Because when we give a guidance in absolute value, it means that based on our current know-how, we can generate the absolute value of EBIT that we generated last year without the non-recurring impacts. For Air & Cooling, I think the growth from year- to- year is not at risk. Basically, 2022 is a bit a special year. As you pointed out, Air & Cooling is very dependent on NAFTA and China. Right now, the Chinese situation is totally unknown. We don't know if they will continue the lockdown, they will reopen. For sure China is a big contributor of Air & Cooling. In NAFTA it's the same. You have a demand, but the customers have issue to meet the demand due to shortage of components and absentees in their factories. For 2022, I'm unfortunately not sure we will have a big growth compared to 2021. Nevertheless, with the current trend of business nomination that we have on e-mobility, and thanks to the fact that on ICE application for Air & Cooling, we are in the good engines, let's say, because as you know, customers are changing their mix of products more and more doing bigger big cars, big engines where they have the higher profitability. In fact, air and cooling has a very premium portfolio. We are number one in BMW, Daimler, and among our product with these customers, we are usually in the premium segment of the customers. I do believe that thanks to that Air & Cooling in the next years, for sure, the growth will be here. 2022 may be a bit a special year. Okay. Raw material, yeah, as you pointed out, Monica, we have been able to recover good part of the increase of 2021. When we are discussing with the customers, we can see that their defense have improved. Basically, I think they have organized very well the purchasing department. They now all have task forces in their organization to challenge you a lot. I'm confident that we will be able to pass through the increase. The question will be the timing. Basically, when the increase is very strong in one quarter like today, it's very difficult to get back the money same time as we have increased from suppliers. On Q2, I see some difficulties and challenge to be able to pass through to the customer, same time as we have the increase from suppliers, especially because the increase in Q2 of raw materials is very strong. It's 20% in three months. Basically with the customers, in three months, it's the time you need usually to start the discussion, to sit down, to provide information. Plus most of the time, in theory, you should have the increase and then start the discussion. This time we have not waited, we have started the discussion with customers. To be able to pass through the increase same quarter as we have the negative impact from our suppliers, I do believe it's gonna be a challenge. Of course, to be able to pass through that during the year is clearly our target. Okay. Working capital, no, Monica, we have been able to push it Q1. We don't expect a strong deterioration or degradation in the next quarters of the working capital because we already built the inventories. We won't have the same positive impact many times. Plus, we had some one-off impact in Q1 because we have been able to push from a commercial point of view or financial point of view. We cannot duplicate that again in Q2 and Q3. We will have to generate our free cash flow from the operation and business without pushing more the working capital. Today, the decrease of inventories, we are. I think we have to wait a bit for the stabilization of the market and the inflation. From an operational point of view, for now, I prefer to keep higher inventories than usual to be sure to be able to face potential issues on the supply chain. Okay. Thank you very much. Very clear. Thank you. You're welcome. The next question is from Martino De Ambroggi of Equita SIM. Please go ahead. Good morning, everybody. The first question is on the net working capital. First, you mentioned one of items. If you could quantify and describe what you're referring to. And the second is on the payment terms. Is there any structural change that should generate a benefit? Clearly understand it's not repeatable what you got in Q1, but just to understand if it's something structural or something that will be partially offset going ahead. The second is on the free cash flow because you guided qualitatively during the last call for the full year free cash flow. If you could update on these and considering that the strong performance you achieved in Q1. The third question is a more general question on the supply chain. I don't know if you can comment on eventual critical issues on the supply chain following the recent geopolitical evolution, or it's just a matter of raw material prices to be managed while the availability of some critical components is not an issue? Thank you. Thank you for your questions. Let me start by the last one, and then we will come back to the two others. No, we don't have a specific identified issue on our supply chain. Nevertheless, we have, I think, as everybody, daily challenges, of course, to source from China or after the events in Eastern Europe. I think for everybody it has become a challenge. Aluminum is becoming, let's say, more and more challenging to source. We don't have identified issues except, as you were mentioning, the price. Basically, if you pay the price, you can have the materials. We have also an approach to protect the price or margin and the price of the customers. We are always trying to identify new sourcing. Right now we don't have an identified supply chain specific issue, but it's very stressed. My biggest, let's say, concern would be that maybe in two, three, four, five weeks, we don't know, a customer can close factories because they are missing components, and then we will have an indirect impact on us. There is nothing specific. It's more a general situation which is very stressed everywhere, and at one point, one customer can be impacted and have to close a factory. On the working capital, yeah, I was mentioning one of the impacts. We have been able to push very hard with our customers', the payment terms, not always in a structural way. Basically, we have been able to request advanced payment from our customers in order to secure the supply chain for Q2 or Q3. These items, I don't know yet if we will have them again in Q2. You were asking the magnitude of it. I would say that the addition of all these one-off impacts are about EUR 8 million, Olivier, if I'm not wrong. You're right. The question is it repeatable or not? I don't know yet because basically we have been able to get this commercial positive effect during the last weeks of March. I don't know yet what will be the situation of June. Nevertheless, we always continue to be very careful to our working capital, both from a supplier point of view and customer point of view. We are very disciplined on the overdue payment of our customers. We chase everything. I don't anticipate a strong negative impact. I don't know if we will be able to have again such a positive impact in Q2 and Q3. It's too soon to say it. About giving a guidance about free cash flow, with all this uncertainty that we have in the current situation, it's very difficult to be very accurate on free cash flow, because it depends on one hand from the results you are generating and then all the working capital and CapEx policy. Nevertheless, I do believe that we can have at least the same approach as we have on the profitability to say that in absolute value we should be close to last year without the non-recurring items of last year and this year. Does it mean, EUR 30+ million? Olivier, Stefano. Yes, it was. Yes. Yes. Okay. Thank you. If I may just, as you mentioned in the press release, you are seeking feasible, fair agreements with customers. It's part of the questions on the ability to pass through price increases. Is it feasible with all clients or, maybe the 80% rule of thumb is still valid? The 80% is an average basically that we have achieved. On some, we have done more, some less, and even with some consumers, sometimes we have been able to pass through in one geographical area and not in another geographical area. There is a big diversity among the consumers. Powertrain and chassis are not together, so it's two different organizations among our customers, too. It's very difficult. We have so many customers everywhere that it totally depends on the negotiation that we are able to have. Of course, we have some contracts, but here, the issue is that the increases requested by suppliers are higher than the index. Each time we have a negotiation to do with our customers, I would say nevertheless, that there are some customers that are tougher than the others. Our way to approach is not the same also by customers. With some customers, we will sit down and have a very analytical approach and discussion, and in two meetings we will be able to close the deal. With others, it can last sometimes three months, four months, of many meetings, sometimes escalation at top level before finding a deal. Until today, we have been able to find a deal with almost, I would say, all customers in one way or another, and always keeping good commercial relations. Because at the end, of course, it's tough discussions, but on the long term, we are paying a lot of attention to keep good commercial relations with our customers, especially with the second wave. Lately of course, there are some rationale behind that. When you have big companies, chemical companies that are asking crazy increases, half of it will be rational, the other half is not. I have no issue going to my customers in a very fair way, explaining that a big German chemical company is asking crazy demands and asking their support with this supplier in order to be able to find a deal if needed, sometimes the three of us. My approach is this one with the customers. That's why we are speaking of a fair commercial approach. When needed, it can be a bit tough, but at the end, the idea is to find deals with our customers and suppliers, because all are linked. The customers are sometimes more pricing power than us, especially because they use also the suppliers, the big one. When needed, we do three-party meetings together in order to find an acceptable solution. The only thing that we don't accept at Sogefi is to be squeezed between giant suppliers and giant customers. I cannot sustain that. When needed, as I was mentioning before, one quarter, but then the next quarter, we need to be able to recover it. It's still my approach for this new wave of increase that is coming to be able to pass through it in a smart way to the customers. Thank you, Frédéric. You're welcome. I was pleased. The next question is from Alexandre Raverdy of Kepler Cheuvreux. Please go ahead. Good morning, everyone. Thanks for taking my questions. I have three quick questions, please. The first one regards the organic growth. Could you please state the 5.4% growth for the first quarter between the volume and the price impacts? Any comment on what we should expect for the full year? The second one is on the discussions you have with the OEMs. Beyond the raw materials, do you feel that the customers are ready to include other items such as logistics, energy or labor in the price compensations? The last one is on the scenario for global vehicle production that you use for your guidance. I mean, I understand that, the degree of visibility is extremely low, but if, for example, the 4% that IHS currently expects becomes zero, is your guidance still within reach? Thank you very much. Thank you. To ensure accurately to your first question, you will understand that for relationship with our customers and competitors will be very difficult. Nevertheless, if you look at the P&L with the calculation, I think it's possible to find it because you have seen that our contribution margin is at 28%, and we put the dilution at 13%. It's a strong guidance that I have already given. Basically, the 5% are constant exchange rate, including a strong pass-through to the customers. Stefano and Olivier, I don't know if you want to say more about that and if we can give more indication. All right. We can say that, I mean, the volumes are substantially stable. This is what we can say. The second question was about the OEM and our capacity. I just want to be sure to have understood well the question, to pass through to our customer other items such as supply chain, energy, direct labor. Yes. I haven't. Yeah. Beyond the materials. Yeah. It's why it's the most difficult, basically, because on material, I would not say it's easy, but you have some index, you have some. You know, you can prove and you can show the evolution of the material, raw material. On component, it takes much more time and much more energy. For example, when it's about electronics, you have to be able to split inside the parts of your supplier of material direct labor. And then about our internal increase in direct labor, almost impossible. Basically, the name of the game in our business is to be able to compensate internally, for example, the inflation that you will have in direct labor or inefficiencies. That's why in parallel to the discussion with customers, we have also strong actions internally to improve our operational way of working. Energy and transport, they start to become more open. Energy, especially in some country where it's not regulated, so in France, for example, it's blocked for the year. In some other countries, it is not. We have been able to pass through that to the customers, but not in a selling price with a selling price increase, but with some lump sum payments. The customers I think are betting on the fact that at one point energy will decrease. It's not integrated as a price increase but as lump sum payment. About freight, yes, we have more and more discussion with our customers, especially about cast aluminum because we purchase most of the aluminum from China, both for Europe and North America. You can imagine the impact that we had in our P&L last year with the increase of the price of a container. We have, of course, been able to discuss that with our customers and pass through that to the customers for the big flows. Here the issue could be more on the general flows and internal flows because even internally in Europe, in fact, we have increased in price. This kind of thing are not considered by customers. Our approach is to have a global approach with customers, listing all the increase that we are facing and then sharing what Sogefi can absorb via strong actions and what Sogefi cannot absorb with actions or change of model. Your point is fair. In fact, it's not just raw material, it's component, energy, freight, global inflation. Some have to be absorbed internally, some have to be passed on in discussions with customers. Then the guidance about IHS, yeah, I was mentioning before. Of course, I hope that IHS is right, but on our side we have prepared the guidance based on an approach a bit more conservative. Let's say especially for Q3, I hope we will have this 20% increase in Q3. We prepared our forecast and our estimation in a more reasonable Q3 than IHS, basically betting on higher profits rather than 20% increase if I remember well. We prefer to estimate it to 10% rather than do our own work, and if it's 20%, then it's fine. Very clear. [Foreign language] [Foreign language]. The next question is from Gabriele Gambarova of Banca Akros. Please go ahead. Yes. Thank you, everybody. Thank you for taking my questions. The first one is on the fixed costs. You cut them by a couple of million in Q1. I was wondering if this can be an even more run rate even for the rest of the year. Then, I saw on financial charges a little pick up in Q1 vis-a-vis Q4 and even Q3. I was wondering if you can share with me a target for 2022. Then, on the P4 cooling plate, I was wondering if you can basically give an indication of what could be, let's say the component cost, the component price, just to try and understand what is the size, the economic size of this big award. Thank you. Thank you for the question. On fixed cost, yeah. We continue to push when we can, the chômage partiel technique in France, basically when the activity is low, we put this kind of action. In the same time we have continued to decrease our fixed costs in a structural way. I would say that the decrease versus last year is half and half. In the current situation, we continue to push strong actions in order to reduce the fixed cost. But I would say what we have already done from a central cost point of view will be difficult to duplicate. The next impact, positive impact will be when we will be able to rationalize our footprint. You know that we have started the two projects on this topic. I think this will start to pay off from unfortunately only first quarter of 2023. Nevertheless, we will continue in Q2, Q3, Q4 to have the positive impact versus last year, but it won't be EUR 5-6 million of savings versus last year, but in time we have been able to implement the structural actions. For the second question, could you repeat? I was not sure to have totally understood the question. No, it was just on the financial charges. That's for me, I think. Okay. That's why I've not understood the reason. Okay. I get a little answer on that one. Yes. Regarding the financial charge, yes, we have an increase compared to Q4 due to the fact that all the renewal of the lines made at the end of 2021 and 2022 are at a higher rate than the previous one. We have increased our financial cost by roughly 20 bps. So you can consider that Q2, Q3, and Q4 will be in line with Q1. The third question is about the P4. So it's about 62-63% of total material components. But different from what we are used to have here, of course, as you can see in the picture, aluminum is quite big in this product. And then we have a lot of added components that we produce ourselves and we weld on this plate. It's about 62% depending on the version that we have to produce. The plate is big as a table, basically a big table. I think he was asking the selling price. What is the price of the product compared to the one previous one? I cannot give an indication very accurate because basically it's 5 times more than the usual manifold that we are used to sell. It's between EUR 150 and EUR 180 per product. It's quite big. Okay. Thank you very much. As a reminder, if you wish to register for a question, please press star and one on your telephone. For any further questions, please press star and one on your telephone. Gentlemen, there are no more questions registered at this time. Thank you very much for your attention and really sorry again for Italian colleagues. I wish you a nice day and thank you. Bye. Thank you. Bye. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.