Welcome and thank you for standing by. At this time, all participants are on a listen-only mode. Questions will be taken after the presentation. To ask a question, you may press star followed by the number 1. This call is being recorded. If you have any objections, you may disconnect at this point. I'll hand it over to host Mr. Kenny Chae, Head of Investor Relations. Please go ahead. Thank you. Hello, and welcome to AkzoNobel's Investor Update for the first quarter of 2022. I'm Kenny Chae, Head of Investor Relations. Today, our CEO, Thierry Vanlancker, and CFO, Maarten de Vries, will guide you through our results. We'll refer to the presentation, which you can follow on screen and download from our website at akzonobel.com. A replay of this webcast will also be available. There will be an opportunity to ask questions after the presentation. For additional information, please contact our investor relations team. Before we start, I would like to remind you about the disclaimer at the back of this presentation. Please note this also applies to the conference call and answers to your questions. I will now hand over to Thierry, who will start on Slide three of the presentation. Thank you very much, Kenny. Hello to everybody and a very warm welcome to the call. Before we dive into the key highlights of the first quarter, we would like to, first of all, cover the impact from the ongoing conflict in the Ukraine and Russia. Our highest priority continues to be obviously the safety and well-being of our employees. We are in daily contact with our people and offering as much support as possible to all those affected in order to keep them and their families safe. We have launched a company-wide donation matching campaign where the company adds three times the amount donated by employees. EUR 250,000 has already been raised in this first month that way, and the money has been already handed over to our partner, the Disasters Emergency Committee, providing humanitarian aid for the Ukraine. This comes up on top of the EUR 140 thousand that we've donated already through other parts of the organization. We're about EUR 400 thousand so far and counting. Based on 2021 reporting, our business in the Ukraine and Russia is rather limited. The 2021 revenue in the Ukraine was approximately EUR 14 million, and we had no operations there. During Q1, we have suspended all business activities in the Ukraine. The business in Russia represented about 2% of our total revenue in 2021. During the first quarter, the Aerospace Coatings activities, along with all new investment and all marketing activities, have been suspended in Russia. The Q1 financial negative impact of the Ukraine-Russia conflict was approximately EUR 5 million on our operating income. Going forward and in line, and as a result of the latest EU sanctions, the majority of our coatings business in Russia is being suspended, and the residual business will be locally operated, which we expect to decrease by approximately 70% compared to 2021. As you might suspect, we're evaluating the situation daily and also adjust it to the different waves of sanctions, and it may be that more of the remaining business in Russia could come to a halt in the next months, mainly due to the increasing practical difficulties around supply of raw materials into Russia. With that, let's turn to Slide five. We continued to make strong progress in the first quarter with double-digit revenue growth and pricing up by 17%, more than offsetting raw material and freight inflation for the quarter for both our paints and coatings businesses. Revenue was up 12% and up 10% in constant currencies, with strong revenue growth for both paints and coatings. In fact, this is the highest revenue first quarter for both paints and coatings on the record that we at least remember. Adjusted operating income was down 25% to EUR 230 million due to the continued industry-wide supply constraints, the impact from the conflict in the Ukraine, and the COVID restrictions in China. Total raw material and freight cost headwind of EUR 334 million for Q1 was more than offset by our pricing of a total of EUR 372 million. This resulted in a positive EUR 38 million of net pricing versus raw material and freight inflation for the quarter. This is the first time since Q1 2021 that our pricing outpaced inflation. We also initiated a new EUR 500 million share buyback program and have already purchased EUR 64 million worth of shares in March, and we announced a successful EUR 1.2 billion dual tranche bond at favorable terms. Now turning to Slide eight. We continue to make great progress in line with our Grow & Deliver strategy. Delivering growth for the seventh consecutive quarter with strong pricing of 17% offsetting raw material and freight inflation for the quarter. As said, it is one of the strongest, if not the strongest revenue Q1 on record for both paints and for coatings. Most of our regions and segments delivered strong revenue growth despite the ongoing industry-wide supply constraints. The past quarter marks the fifth consecutive quarter of delivering on our internal pricing and inflation forecasts. It's a good proof point for us of the maturity of our business planning and margin management processes that have been the key enabler in delivering the positive net pricing versus inflation for the quarter, despite remaining very challenging external environment. We kept our focus on creating an efficient high performance company through all of this, having completed our planned PRISM SAP rollout in Asia. We continue to receive recognition for our efforts in the field of sustainability, being awarded platinum status by EcoVadis, maintaining the highest rating for 8 years. We were also recognized as a European Top Employer. Finally, we held our second Global Paint the Future Startup Challenge in further driving our innovation pipeline. Let's now turn to Slide seven, which summarizes how we view current demand trends in the markets where we operate. As we have communicated in early 2022, we saw strong sequential recovery for all businesses in Southeast Asia due to the easing of the COVID restrictions, especially at the latter part of the first quarter. China, however, was impacted towards the end of the quarter as COVID restrictions led to approximately EUR 5 million OPI impact in Q1. We do expect a strong recovery in China once the restrictions are lifted in our paints retail business. Supply constraints continue to persist in the first quarter, with our total backlog increasing to around EUR 120 million, which is higher sequentially versus Q1 2021, where we had about EUR 100 million as a backlog. North America especially continued to be the most constrained, while EMEA continued to see further signs of easing. The underlying demand for paints continues to be strong in all regions. Paints EMEA delivered higher revenue than what was a stellar Q1 2021, and volumes remain higher than the pre-pandemic levels. We continue to see robust demand despite the recent geopolitical headwinds. For our coatings businesses, demand for Industrial Coatings and Powder Coatings remains strong, although also here supply constraints continue to impact these businesses in the first quarter. Within Automotive and Specialty Coatings, both Vehicle Refinishes and Aerospace Coatings continue to show sequential recovery. For Marine and Protective Coatings, given the state of the energy and shipping industries, continued investments into relevant end markets are expected to drive further sequential recovery, albeit that the Russian sanctions may continue to have an offsetting negative impact. Slide eight shows the volume progression for our paints and coatings businesses. Our global paints sales volumes continue to develop as we had expected, with lower Q1 sales volumes due to the normalized amount of do it yourself segment in EMEA, especially, as compared to the first quarter of 2021. Compared to pre-pandemic level of the Q1 2019, paints volumes were up strong due to robust market demand and share gains. The year-on-year do it yourself volume distortion that we saw in EMEA that was still with us in the first quarter of 2021 is expected to be a much less relevant factor moving forward with do it yourself demand having normalized as of Q1 2021 and now being about a year at mid-single digits above the first quarter of 2019 or the run rates of 2019 in general. Our coatings sales volumes were down in Q1 versus prior year, but higher than Q1 of 2019. Volumes were strong prior year mainly due to increased demand from restocking as many economies started to reopen. Sequentially, coatings volumes were slightly down from Q1 2021, but that was mainly due to supply constraints along with the impact from COVID restrictions in China and the Russian sanctions as underlying market demand was strong in general. As has become our habit, we will zoom in on two of our business units in a bit more detail, starting with Powder Coatings on Slide nine. The growth in this segment, as you all know, is driven by several factors. Powder Coatings provide clear sustainability advantages compared to liquid coatings because it's completely solvent-free and very highly efficient in reuse. By lowering the curing temperatures for our products, we have been able to open up new markets, including coating wood substrates. Despite continued supply constraints, our Powder Coatings business recorded its sixth consecutive quarter of year-on-year revenue growth in Q1. During this quarter, we opened our new powder factory in Hanoi, Vietnam, which is our thirteenth powder factory in Asia. This investment and added capacity is part of our multi-year investment program to support Powder Coatings growth and our leadership in this industry. AkzoNobel continues to lead the industry's liquid to powder conversion, and during the quarter, we helped convert application for chassis to powder at a well-known manufacturer in China. We also launched our Interpon Redox one coat solution for the general industrial market, along with gaining three additional approvals at major electric vehicle OEMs and battery manufacturers. Powder Coatings is one of our crown jewels in our growth portfolio, and with increased investments, improvements in our product range, and the lower curing temperature technology, we expect to maintain our clear leadership position in this growing segment. Turning to Slide 10 for our Decorative Paints business in China. Growth for this business is supported by our sustainability offering, our geographic expansion within the country, and our increased and improved digital ecosystem. We are the number one player in the premium retail segment and delivered another double-digit revenue growth this past quarter despite COVID restrictions. We continue to innovate and introduce leading products, including the successful launch of our solvent-free asthma and allergy-friendly paints. Our geographic expansion into tier three to tier five cities made further progress in Q1, where we expanded to 66 new cities and increased our reach by around 700 stores. As a result of the market reset that we did in 2018 to get out non-value adding volume, our project market exposure in our China paints business is less than 20%. Since then, we've been very selective with regards to what projects we participate in over the past years, taking into account the historically high risks on receivables in the segment for the industry and our doubts back then and justified about the longevity of some of the practices. Within the project segment, our direct exposure to nationwide property developers is immaterial. That means less than 2%. We've been sheltered from what's been going on in the real estate market there. With that, I will now hand it over to Maarten, who will share more about our financial results from Slide 12 onwards. Maarten? Yeah. Thank you, Thierry, and hello, everybody on the call. During the first quarter, reported revenue was up 12% versus prior year and up 10% in constant currencies. We delivered strong pricing of 17%, which was sufficient to offset the impact of raw material cost and freight inflation for the quarter. Mix was -1% in the quarter, mainly due to relatively strong, stronger paint sales in South Europe. Volumes were 7% lower as a result of continued supply constraints, normalized DIY demand for paints in EMEA, and COVID resurgence in China. Adjusted operating income decreased 25% to EUR 230 million as a result of positive net pricing versus raw material inflation, offset by lower volume, along with approximately EUR 10 million negative impact from the conflict in Ukraine and the resurgence of COVID in China. This resulted in a result on sales of 9.1% versus 13.6% in the first quarter of last year. Adjusted operating income excludes the impact of identified items, which had a net positive impact of EUR 2 million for the first quarter. Adjusted EBITDA was 19% lower at EUR 317 million. Moving over to Slide 13. I'm pleased to report that we achieved positive net pricing versus raw material inflation for both paints and coatings businesses in the quarter. Pricing of EUR 372 million was enough to offset EUR 334 million raw material and freight inflation, marking the first positive quarter since Q1 2021. Lower volumes resulted in a negative EUR 50 million impact, mainly due to continued industry-wide supply constraints and normalized end market demand in paints EMEA. Currencies had a minor effect of positive EUR 3 million, while mix was minus EUR 20 million, mainly due to stronger sales growth in our South European paints business. Operating expenses and other one-offs were EUR 48 million higher than the first quarter of 2021. This includes higher supply chain costs driven by the ongoing supply and logistic challenges, higher IT investments, and the impact from the conflict in Ukraine, along with some positive one-offs in the first quarter of 2021. As expected, the industry-wide raw material cost inflation continued in the first quarter. For Q1, raw material and freight inflation was EUR 334 million versus same period prior year. Combined with the EUR 38 million inflation in the first quarter of 2021, the total inflationary impact over the two-year period is EUR 372 million. For the second quarter, we expect further inflationary pressure with an adverse impact from raw material and freight inflation between EUR 290 million and EUR 320 million versus the second quarter of 2021. This is a lower value sequentially versus Q1. However, combined with the EUR 128 million inflation in the second quarter of 2021, the impact over the two-year period is expected to be greater than EUR 420 million. As indicated in our outlook statement, we expect raw material cost inflation and supply constraints to gradually ease during the second half of this year. At the same time, we delivered 17% pricing in the first quarter, higher than previously expected. As a reminder, Q4 pricing was 12.5%, with December at a 14% run rate. We expect the second quarter pricing to land between 14%-16% when comparing to the second quarter of 2021. In the previous cycle, after pricing was driven to offset raw material cost inflation, we saw margin expansion with pricing holding up when raw material costs started to ease. In the current cycle, we have responded with stronger and faster price initiatives in light of the magnitude of the raw material cost inflation. Having been negatively impacted for all of 2021, we have now reached the inflection point with a positive net price and mix versus raw material cost and freight in the first quarter of 2022. As indicated in our outlook statement, we aim to continue to offset raw material and other variable cost inflation, including freight, with pricing initiatives. Now moving to the next slide with the results for Decorative Paints. Reported revenue for paints was 8% higher versus the first quarter of last year, with pricing of 13% more than offsetting lower volumes of 7%. For EMEA, revenue was up 1% and flat in constant currencies. Pricing initiatives were enough to offset lower volumes as a result of normalizing market demand and in the DIY segment. Mix was negative in EMEA, with relatively stronger revenue from South Europe. Revenue for South America was up 23% and 17% in constant currencies. Revenue growth were driven by strong pricing initiatives. In Southeast Asia, strong pricing initiatives offset lower volumes, partly due to the impact from COVID-19, with India and Vietnam showing strong revenue growth in the retail segment. China showed significant revenue growth supported by both pricing and volume growth in retail, partly offset by lower volumes for the project segment. Overall, pricing for paints stayed ahead of raw material and freight inflation for the quarter. Despite the strong revenue and pricing performance and underlying demand being reduced, the combination of lower volume, supply constraints, and COVID restrictions in China resulted in adjusted operating income 27% lower at EUR 105 million and a return on sales of 10.4% versus 15.5% for the same period last year. Now over to the results of Performance Coatings. Reported revenue for coatings was up 14% year-on-year and up 12% in constant currencies. Volume for coatings was 7% lower, mainly due to supply constraints along with COVID restrictions in China, impacting all businesses at varying degrees. Revenue growth was driven by pricing initiatives at 19%, while mix was flat. For Powder Coatings, revenue growth was driven by strong pricing. Underlying demand for Powder Coatings remained strong but was impacted by supply constraints, especially in North America. Marine and Protective Coatings showed double-digit revenue growth driven by strong pricing. Marine and Protective Coatings was also materially impacted by supply constraints. Revenue for Automotive and Specialty Coatings was 12% higher, mainly due to pricing initiatives despite slightly lower volumes. Vehicle Refinishes and Aerospace continues to show strong recovery while automotive is still impacted by supply constraints. The growth in Industrial Coatings was driven by pricing initiatives with revenue growth in all segments, especially in packaging and wood, even though Industrial Coatings was also impacted by supply constraints during the quarter. Overall, pricing for coatings was up 19%, which offset the raw material and freight inflation for the quarter. Adjusted operating income was 21% lower at EUR 149 million and return on sales at 9.8%, mainly due to lower volumes and supply constraints, along with the impact from the conflict in Ukraine and Russia and COVID restrictions in China. Now turning to Slide 18. Operating working capital for the first quarter continued to be impacted by higher raw material costs and supply constraints. Physical inventories value increased due to raw material cost inflation and supply constraints. This resulted in operating working capital as a percentage of revenue at 16.5% versus 13.4% for the same period of last year. Normalized for raw material cost inflation, working capital would have been 2% lower around 14% of revenue. Free cash flow was negative EUR 159 million for the quarter due to the increase in working capital along with lower EBITDA for the quarter. Capital expenditures for the quarter were EUR 57 million. We are investing in growth, the optimization of our asset footprint and ongoing integration of our ERP systems. Going forward, we expect CapEx at approximately 3% of revenue. The net debt/EBITDA leverage ratio was 1.9 times at the end of the first quarter, in line with our target leverage ratio of net debt/EBITDA of 1-2 times. We remain committed to retain a strong investment grade credit rating. Moving now to Slide 19. Adjusted EBITDA was 19% lower for the first quarter, mainly due to lower volume despite delivering positive net pricing versus raw material and freight inflation. The first quarter adjusted earnings per share was down to EUR 0.86 per share. Delivering on our capital allocation priorities, we initiated our new EUR 500 million share buyback program in March with a share count reduction of approximately 11 million shares versus the same period prior year. Now overall, over to our capital allocation priorities. We are executing consistently on our capital allocation priorities. We are investing in organic profitable growth with roughly 3% CapEx, and we have a stable-to-rising dividend policy. We are executing on our bolt-on acquisition strategy and making sure that they are value accretive. We continue to do modular share buybacks. This is all in the framework of a leverage ratio between 1-2 while retaining a strong investment credit rating. Now back to Thierry Vanlancker for the concluding remarks. Thank you very much, Maarten. To summarize, we feel pretty good by delivering 12% higher revenues in the first quarter, driven by strong pricing of 17%. We feel even better with the fact that it's fully offset the impact of raw material and freight cost inflation for the quarter. With our Grow & Deliver strategy, we target to grow at or above our relevant markets and continue to build on our strong foundation. Trends differ widely per region and segment with raw material and freight inflation and supply chain constraints expected to gradually ease during the second half of 2020. Going forward, we aim to stay ahead of the raw material and freight inflation with pricing. Currently, market uncertainties have increased due to the sanctions on Russia and the resurgence of COVID-19 in China. Assuming there are no further significant market disruptions, we aim to deliver 2 billion adjusted EBITDA for 2023. I'm now handing it over to Kenny for information about upcoming events and the Q&A session on Slide 23. Thank you, Thierry Vanlancker. Before we start the Q&A session, I would like to draw your attention to some of the upcoming events shown on Slide 23. Tomorrow, on April 22, we will be holding our annual general meeting of shareholders, which will be held virtually. The ex-dividend date of our 2021 final dividend is on April 26. The record date is on April 27, followed by the payment on May 4. We will publish our second quarter report on July 20. This concludes the formal presentation, and we will be happy to address your questions. Please state your name and company when asking a question and limit the number of questions to two per person so others can participate. Operator, please start the Q&A session. Thank you. We will now begin our question- and- answer session. To our participants, if you would like to ask a question, please press star followed by the number 1. Please mute your phones and record your names and company names when prompted. To cancel, please press star followed by the number 2. Once again, please press star 1 to ask question, record your names and company names, and star 2 to cancel your question. One moment while we request and secure you up on the line. Our first question is from Mr. Mubasher Chaudhry from Citi. Your line is open. You may begin. Hi. Thank you for taking my questions. I just wanted to focus a little bit on the volume decline. Can you talk a little bit more about the split between supply chain and COVID-related and normalization-related, and that makes it 7% for the first quarter? Related to that, I think in the slide deck on Slide eight, you've talked about some paints volumes. Do you expect the paints to continue to normalize towards the 2019 levels as we progress through the year or do you expect to kind of normalize at a higher level? Because previously you did talk about kind of a new segment of DIYers and decorators getting involved and redecorating and therefore creating a higher level of demand. I just wanted to get your updated thoughts on that. The second question is more around the COVID restrictions in China, if you could provide an update there and what the potential EBIT impact could be, should the lockdown last for the whole of second quarter. Thank you. Yeah, Mubasher, thank you for your questions. In fact, on the volume, we are pretty positive about the volume that we achieved because the underlying demand in all the segments continues to be quite strong. If you look at what we delivered, you have to take into account that in fact our backlog of material we could not supply in fact went up. If you talk about the 7% volume, there is at least 30-40% of that is stuff that we had orders for but could not supply. That's an important thing to note. Now, let me then go back between paints and coatings. There's two impacts in fact on volume that we had and in fact they will disappear or have disappeared or were disappearing by March in the quarter. One was Southeast Asia was a bit off on volume, but that was mainly through quite a slow start in January, February because of the cases of Omicron in that region. Now when that was released, sales came back very strongly in March. That was actually more a Q1 effect. For what EMEA is concerned for deco and paints, it is more a question of the exorbitant quarter we had in Q1 2021. People came out of COVID and there was a restocking across a number of segments, but very visible in do it yourself in EMEA. By the way, that then returned into the second quarter, a correction on that because it was a bit over enthusiastic that specifically in do it yourself in EMEA, that was the restocking. Just to answer your question around the normalization, do it yourself in EMEA has not normalized in the first quarter. It has normalized as of the second quarter of 2021. It continues to be 4-5% above 2019 numbers. Frankly, we see no signs of down trading because of pricing. On the contrary, we have the impression that actually it works somewhat in our favor with the young do it yourself people showing up that they wanna have quality products to work with. High confidence on the paint section. Again, that is more the comparison, which was a completely counter-seasonal abnormal first quarter in 2021 at that moment of time. If you ask me to split up between the differences, I would say supply chain, COVID in China and the normalization. I haven't done exactly the split on it, but it's probably out of that 7%, and I'm looking at you, Kenny, here because you probably did the math. The normalization is probably 1-2% in do it yourself on the total volume for the company, but you can probably confirm that afterwards. Then the rest of it is actually split by frankly not being able to ship, whereby the COVID in China is actually in the same category. It is there, I would say 50/50 on whatever the remaining part on that. It is important to note, however, that the backlog for our products has increased. The demand is definitely there. It's a question of getting either raw materials in, but increasingly getting it shipped to our customers from our plants. The COVID-19 China impact, let me do an introduction and then, Maarten, you can probably put the numbers around it. The COVID situation in China, of course, started to escalate in the end of the first quarter and then through April. What we do see, however, is that it's mostly in the north and northeast in the Jilin and in Shenyang that is normalizing as we speak, which is pretty important. In Shanghai, for example, in our own case, we have three sites in the Shanghai area. Three of them have been released this week for production, albeit at a reduced capacity and people have to stay on the site and have to stay in the bubble, et cetera. Our team locally is expecting that this would be getting back to normal by the mid of the second quarter, so in effect, that is around now, and that would then probably recover. That is the mental picture that they have recovering even in the second quarter. Maybe, Maarten, you can then put more numbers around it on what we have taken as a view there. Yeah. First of all, as mentioned, Q1 impact was EUR 5 million on the Adjusted operating income line, and it was really the impact of the latter part of Q1. The question now in Q2 is really yes, we see an impact in the first half of the second quarter, but the question is how does the rebound looks like for the latter part of the second quarter and how it will compensate. I would say that the impact what we've seen in Q1, and if you kind of forward it into Q2, I would say that it would be probably double or maybe a little bit higher than what we've seen in the first quarter. Again, I want to stress that in the context that it may take longer to recover, but we see the first signs at least that it may maybe somewhere in the next 1 or 2 weeks actually gets to a more normal situation. Now, Mubasher, did you have a third question? No, no. That was it. I'll stick to the two. Thank you very much. All right. Thank you very much. Thank you. Our next question is from Mr. Matthew Yates from Bank of America. Your line is open. Sir, you may begin. Hey, good morning, everyone. Couple of questions. Maybe just to go on Slide 13 with your profit bridge. You called out the EUR 48 million of extra OpEx there. Can you just comment a little bit more about how much of that is what I would call cost inflation, versus the more kind of deliberate structural investments you're making in the business, in keeping with your kind of pivot to more of a growth mantra? The second question would just be generally around raw materials. I mean, last year you highlighted a vast number of force majeure that forced you to scramble in the spot market for material. If I'm understanding your comments around backlog, it suggests that supply chains have perhaps got worse, not better. I'm sure that's not AkzoNobel specific, but can you share any thoughts on how and when you think we may get more reliable supply chains to, firstly, fulfill those pent-up volumes, and secondly, hopefully get some relief from the cost inflation side? Thank you. Yeah. Thank you, Matthew. Let me handle the second question, and then for the first one, I mean, then maybe, Maarten, you can definitely chime in on that. On the force majeure. In fact, the force majeure were definitely improving during the first parts of the first months of the year. There was an ongoing trend. I will talk probably more around raw materials. We do see on the production side an improvement. What has happened is in the last month, and mainly driven by the China lockdowns, is that created a number of force majeure within China, and then with shipping situations, creating some force majeure of those waiting for the raw materials, mostly at our supplier level, I have to say. They were waiting for an input to make that product, and then we would take from them. It was a bit of a resurgence. All in all, I would say if you look at the situation, it is at this moment of time, it's about similar as what we discussed when we had our year-end results call. But it's more of an uptick based on the COVID resurgence in China, whereas for the rest, it was in fact on a normalizing pathway. We do see it more as a temporary flare-up again and getting more normalized. Overall, the whole other parts of it, maintenance and all sorts of other stuff, that has normalized. I would say around the world, the availability of raw materials, we do see that normalizing. It is in fact getting more, the shipping at some point from A to B. That specifically with the China situation became more of a temporary situation. We are guardedly optimistic on where things are going. That leads in, I think, Matthew, in your question around the OpEx. Part of it indeed was an intended OpEx increase, but in fact, part of the explanation sits indeed in the wild raw material environment. Maarten, you can probably put some numbers around it. If you look at the EUR 48 million in the bridge, because that's where you're referring to, I think there are a couple of elements to mention. First of all, it is indeed the supply chain in both manufacturing and warehousing. We've seen in the first quarter quite a number of inefficiencies given the volatility and all the constraints in the supply chain. You were talking about inflation, where we normally offset inflation with all our efficiency initiatives. That was certainly not the case in Q1. In fact, we've seen negative productivity with higher overtime and constant changes in the schedules in manufacturing, which led to quite some extra cost, but similarly in our warehousing operations. That is an important bucket, which of course, given normalization of raw materials and the constraints, should also normalize, again, from a cost perspective. That's one. Secondly, we are investing more in OpEx from an IT perspective. That is, first of all, because we drive more software as a service initiatives versus CapEx. That sits not only in our ERP rollout but also in our advanced planning initiative. In fact, Karen Marie has talked about it when she talked about one of the deliver initiatives. That's a whole demand planning and supply chain planning initiative. Third one is also in IT, a procurement where we drive a digital procurement suite initiative. We are by design investing more in IT to support our deliver initiatives. The third element is Ukraine. You've seen that we had impact of Ukraine. That sits also mainly in the OpEx as well as the some positive one-offs, which we had in Q1 last year, which then of course this time is a negative impact. But these are the main buckets. Again, the most important messages here from a manufacturing, warehousing, and the integral supply chain cost that should normalize, and we should go back to the normal rhythm. I hope that gives some better picture. Matthew, just to finish it off, I mean, the integrated supply chain team is all over that. If they're not over it, then Maarten and I are all over it. We also wanna make sure that I would say, the chaos management on the raw material side, that doesn't become an ongoing justification for a cost structure. We are all over that collectively to drive that back now that we see some normalization arriving at the horizon to drive that back to the target numbers we had in mind, ASAP. Thank you. Great stuff. Thanks, guys. Thank you. Our next question is from Mr. Charlie Webb from Morgan Stanley. Your line is open. You may begin. Morning, everyone. Thank you for taking the questions. Maybe first just on the volume picture, you know, -7% in Q1. As we think about Q2, and you think about those kind of various factors of, you know, perhaps slightly easier comps than what we had in Q1 on the DIY side in Q2. Obviously, kind of the ongoing lockdown restrictions may be weighing a bit more in China. You know, how do we think about volumes for the second quarter? I mean, are we talking, you know, it should be less negative than what we see here in the first quarter year-on-year? You know, as in we should see somewhat of an improvement, whether that's just easier comps or whether that's on the DIY side or just even perhaps raw material availability improving. Just first question on that. Second question, just on the raw material kind of price dynamic. You know, obviously very positive now that you're kind of running ahead or over recovering raw materials. How do we think about that through the year when you look at the raw material basket? Is it a case that we're kind of just continuing to kind of offset or a little bit more for the time being until a point in time when raw materials kind of fall away? Is it a case that, you know, we'll continue to put price measures through so that we recover the lost, I guess, inflation that we saw in 2021? Just to kind of reconfirmation of that would be helpful. Yeah. Charlie, let me try to answer both questions. On the volume for the second quarter, now I wanna come back on the volume for the first quarter. It is a case of standing like if you take pictures of standing next to the most good-looking person in the group, then you always don't look too good. It is the first quarter of 2021 that was a complete outlier. If you compare the volumes of what we did in the first quarter of 2020, which was just before COVID, by the way, if you compare it to the first quarter of 2019, and that's what we tried to put into our deck, it is in fact a very strong quarter for all of the businesses that we have here. In fact, if you look at the first quarter, seasonality in paints makes it difficult to do something sequentially, but the first quarter for coatings was totally in line with the fourth quarter of 2021. In that sense, I think it is a normal strong quarter. Also earnings-wise, by the way, the first quarter of 2022 is, if you take exclusion of the first quarter of 2021, it is our strongest bottom line quarter that we had in a long time. Just on that. On the second quarter, again, the quarter one 2021 was the outlier. For the second quarter of 2022, you might expect a much lower delta versus what the second quarter was in 2021, because that was a quarter that actually was very much normalized already. I think we'll see something there in line, and then it is dependent on how quickly does China come back online, et cetera, et cetera. But it should actually be relatively in line volume-wise with what the second quarter of 2021 was. On the raw material pricing dynamics, as Martin explained in his chart, we still see raw materials edging up, but we are ahead of the curve, so we are, in fact, on the mountain. We now basically are ahead of what the slope is doing. Definitely in the second quarter, we wanna continue that lead. In fact, answering your question, we are still putting prices up here and there. In certain segments, we have significantly surpassed our raw material inflation or our raw variable cost inflation. In other segments, we still have to catch up, and we still see the raws going, so there is still a dynamic element of putting our prices up. Now, what do we expect for the raw materials? Now, every time we talk about it, something happens in the world that actually throws it off a little bit. Unless there is another biblical plague coming in somewhere, what we do expect, and we do see the signs for that, in the second half of the year, you would see an easing of availability. Also to some extent, because the macroeconomic activity may be less exuberant than people have found. At the same time, you do see here and there some inventories being built. Actually, in fact, also for Chinese suppliers, there is inventory in Europe and in Latin America that actually alleviates some of the bigger swings. Yes, we do get here and there the first suppliers showing up to can we have a deal for supply, et cetera, et cetera, towards us. That shows that this the dynamic we had in mind is actually evolving in the right direction. We will definitely be there, Charlie, to answer your question. It is not only to stay ahead of where we are, but we have all hands on deck to have the margin expansion that has been part of the industry, but also we think we deserve to have that happening in the second half of 2022 and then into 2023. Does that answer your question, Charlie? When we think about that raw material recovery of actually, you know, what you lost in 2021, should we be thinking about that in over the next 12 months, being the kind of period that you think is appropriate to from today, perhaps, so through to Q2 of 2023? Is that the right kind of time frame that you would look to recover the raw materials you lost or the inflation you lost? I would love to say yes. Yeah, I would love to say yes, and then probably Maarten would kick me under the table, say, "Be careful what you say." To be very honest, there's so many things that are happening. I mean, the COVID resurgence in China, the whole Russia situation, et cetera, that it's not on you to predict. What we do believe, and it's I think collectively here are very convinced about, that the margin will start widening up as of the second half of the year. We have all the systems in place, the ones that we had to get our pricing ahead of what the curve is. We have all the systems in place to really have the margin expansion be as fast and as wide as it's possible. There we are fully convinced on that. I would refrain to put a specific scenario around that, but let me put it this way, that we are more than guardedly optimistic for what the trend would be in the second half of the year. Now, we've also been saying that in the distribution type of businesses, we do expect to hold on to most of the pricing work that we've done, if not all of it. You have in the other 40% more the B2B, and sometimes big B to big B there. I mean, it'll become to maintain the margins as we have them right now, et cetera, in line with what the raw materials do. I would say, Maarten, there's a guarded optimism on what the trend line would be on the margin expansion as of the second half of the year. I think there is a certain proudness on our side on how we have executed this, and that we are now at the situation to truly offset raw material as well as freight inflation. The machine is really running very well in terms of margin management. Does that answer your question, Charlie? Yep. Thank you. Thank you. Thank you. Our next question is from Miss Georgina Fraser of Goldman Sachs. Ma'am, your line is open. You may begin. Hi, good morning, and thanks for taking my questions. The first one is just kind of looking for a big picture, on what's been going on in raw materials. I was thinking, you know, if I was an alien arriving from another planet, how would you explain what's been going on in paints and coatings raw materials over the last two years? Is it fair to think that during 2020 and 2021, it was pandemic supply constraints that were driving chemical prices well ahead of the oil price, and now that the oil price is catching up? Are the risks going forward from here inflation from the oil price, but more likely deflation from the supply chains easing? And then my second question is more medium-term, on Performance Coatings. We're starting to see green shoots of investment, so lots of CapEx spend coming through across European industrial sectors, especially in oil and gas. What would a pickup mean for Akzo's Performance Coatings business from a better European industrial CapEx cycle? Yeah. Thank you, Georgina. Thanks for the questions. On the big picture, if you were an alien and you came to the planet, to be honest, at this moment of time, you'd probably get back in the capsule and leave in a hurry, I would say. That's another story. On the raw material situation, I would say you're indeed correct. In 2020, I think all of our suppliers have winded down their capacity, and then were somewhat surprised on the—as we all were, probably, on the rebound of the markets and the restocking, and therefore then getting into force majeure, etc. You are right, Georgina. There's two opposing trends, I would say, in the raw material costs. One has been. And that's gonna be in the second half of the year. One, I think we're now at about, what is it, 35, 37% increase in raw material. I mean, somewhere between that. We are probably 40. Oh, yeah. We're even closer to 40%. Let's say the 40% for the sake of the argument. The 40% of increase in the raw materials has been scarcity-based because there was not enough and people were desperate to get it, either because it wasn't produced or they couldn't get on time through to logistics to the buyers, in this case, the paints and coatings industry. That is the 40%. There you really see, and I've said it before, the availability of the products at the producer is getting much better. It's now more the shipping and the inertia to get it to where it is. At the same time, you will have an offset for us then as a negative sense because the energy cost may be higher. But frankly, even in wild cases, that would be in the high single digits to maybe low double digits impact. That's why it actually doesn't change in our mind, the downward slope of the raw material cost curve. It does change the degree of the slope to some extent, depending on how wild oil would be doing. But the overwhelming scarcity cost in raw materials is so big that it has to normalize. Again, as I've indicated, we do see the first suppliers actually reaching out on in that spirit on what they see happening for the second half of the year. Does that answer your first question, Georgina? Yes, that's brilliantly helpful. Thank you. Yep. Thank you. On the capital investment, not sure if I can give you an exact number on that because there is these pluses and minuses. Of course, capital investment would have more of a bigger impact first of all, in coatings. It would probably have an over-dimensional impact in our protective coatings business, the way that you phrased your question, and there are pluses and minuses on that. We think it's gonna be a plus indeed on the investment cycle, plus, the disentangling of some of these flows to bring it back much more into Europe. That's definitely the case, not only on fixed assets, but also on floating assets to bring liquid LNG, et cetera, to Europe, which, by the way, is 40% of our business. At the same time, that will also be balanced with projects in Russia that simply are not happening anymore and where we are, either we can't, or we don't want to participate anymore in those projects. That's gonna be counterbalanced. I think overall, that would be a positive. I think I owe it to you, Georgina, through Kenny, to probably come up with more of a quantification, because I would be making up a number at this moment of time. Yep. Okay, great. Thank you. There's also, I think one of the elements I would like to say that the fact that at the same time, the European Green Deal, don't underestimate the positive impact on that, both on our deco business. Again, all the improvements end up by somebody taking a brush or a roller to put it back into shape. You see that happening specifically in places in Southern Europe right now. In Italy is a very constrained market for deco because there is a real ongoing strength because of the European Green Deal. Secondly, in what is electric vehicles, the consumption of powder coatings in batteries, the wind turbines, et cetera, are businesses that continue to do extremely well in our portfolio. Does that answer your question, Georgina? It does. Thank you. Yep. Thank you. Thank you. Our next question from Mr. Chetan Udeshi from JPMorgan. Your line is open. You may begin. Yeah. Hi, Chetan Udeshi here. A couple of questions. If I go back to the point Maarten de Vries made about the general OpEx inflation outside of raw materials and freight cost, can you give us some idea of how we should think about that for second quarter as well, and possibly for full year 2021? How should we think about that number incremental investments versus the EUR 200 million of net cost savings that you guys flagged during the recent investor update earlier this year by 2023, I think it was. That would be useful. The second question, do you have any visibility at the moment on how the mix might look for second quarter in general? Thank you. Chetan, thanks for your question. On the first one of the OpEx, I think Maarten can put the numbers around it, but I want to stress that the largest part of the OpEx. By the way, in our targets for 2022, we had an increased OpEx coming out of the period we had, and part of it is what Maarten explained. Secondly, the run-up in OpEx was very much in our supply chain and our manufacturing network to be able to get to some sort of service levels to our customers. Now, in the second quarter, and that's what I'm working towards, in the second quarter, we definitely want to start making a dent in it, but in the second quarter, things are actually not very stable yet. You have to do certain things or certain agreements with your customers before you can do that. I think the biggest impact of the resetting it back to something that resembles normal is actually gonna be more in the second half of the year. Now, Martin, maybe you can put some brackets around that, but. No. Exactly what Thierry says. I think you still see an impact in the second quarter, and certainly in the second half, we get more to a normalized situation. In the meantime, of course, we are executing on all our delivery initiatives, which also, going forward, should start to bring the required savings in. That's partly in this year, and mostly also visible in 2023. To your point on the second quarter, we will still see some dynamics in OpEx given the situation we're in. Yeah. Mix-wise, Chetan, I think the mix will be for the second quarter, which is always a gamble between different businesses, different geographies, and different distribution channels with all the uncertainties that are in. We do expect the mix to be somewhat similar to what it was or largely similar to what it was in the second quarter of last year. Thank you. Yep. Thank you. Thank you. Our next question is from Mr. Alex Stewart from Barclays. The line is open. You may begin. Hi there. Good morning. Thank you for the call. As always, very interesting. Your slide on the volumes relative to 2019, Slide eight in your presentation pack. It looks like if I just add up the last two years, it's roughly 8% higher in Decorative Paints compared to 1Q 2019. The equivalent figure in 4Q 2021 was roughly 3%. At the end of last year, you were running volume 3% higher than 2019, and in the first quarter, it was 8% higher than 2019. Can you talk about what the incremental step-up was between the fourth quarter of last year and the first quarter of 2022 that would result in that? Because that was quite a meaningful improvement given Southeast Asia was still sort of down year-on-year. Any comments on that would be interesting. Then also, I know it's a very crude calculation, but if I take your volume chunk in the EBIT bridge and divide it by the volume chunk in the revenue bridge, it looks like the drop through was a little over 30%, which is considerably lower than what you've talked about in the past. I'd be interested to know if there's any specific factors driving that and whether you expect that to continue would be very insightful. Thank you. On the second question, maybe let's, because it was not easy to understand, but the second question I think is just the margin. Is that good? Yeah. On the second question, nothing special to mention here, to be honest. Yep. Again. Well, I think it's also because of the pressure, of course, the margin pressure there, of course, where the drop-through then gets. Correct ... lower than that because the quality of the business, given the raw material situation, is just lower. I think that explains it, I would say. 'Cause if you compare to last year, Q1, we are comparing to a quarter which had a number of dynamics, but the pricing versus raw material was still pretty normal. Now in this quarter, we have a completely different situation, of course, in terms of pricing versus raw material, but also from a volume perspective, specifically in deco, as we mentioned earlier. Yeah. Now your first question, was that referring to paints? Sorry, the Decorative Paints. If I look at Slide eight in your deck. Yeah ... you've given volumes versus 2019. If I just compare the Q4 2021 and the Q1 2022, it looks like there was a big step up in volumes relative to 2019. I'm trying to understand what's behind that. Yes, just in paints I'm talking about. Okay, so first of all, the paints is indeed on a roll. In fact, we're trying desperately to indicate that no, after the COVID, we were not gonna fall off a cliff because of the dynamics. I think we take that when COVID was gonna be over, you should not underestimate that the rest of the world, excluding do it yourself in Western Europe, was significantly down because of COVID. If I go around the world, China is on a complete roll. I mean, that's. We saw that in the charts that we have. In fact, that business, if I look at where we are, our premium business there, so the Dulux business up 55% in the first quarter versus 2022 versus the first quarter of 2021. By the way, volume-wise, we're getting very close to where we were in 2018, but it's not anymore with fillers and with non-value adding products. It's actually at high margin products. That team is on a roll. Can't say enough on what they do there in growing Dulux. China is a big factor on it. The same as in Southeast Asia. India, in fact, we also. It's kind of a little bit in the shadow, but it is, I would say, the geographic expansion number two, so significantly up. If I now then go back, Brazil and Argentina have been doing well, but that's probably more a pricing margin and I would say a more gradual increase versus 2019 in volumes. They've gained market share, but that market has been ups and downs as is typical in those segments. If you go to Europe, and I think we put the line in there, our EMEA business, if you go back to 2019, has been constantly growing, and has been gaining market share in key markets. I think we've commented on that before, be it the U.K., be it Benelux, be it Southern Europe, we've been gaining market share. It's step by step because it's a distribution business, but it's actually been doing quite well. The other element in there, which is minor if you look at a global scale and you know that is a slight impact of M&A, but that's probably more on a 1% level globally more than anything else. Does that answer your question, Alex Stewart? Yes. Thank you, Thierry. That's really helpful. Yep. Thank you. Thank you. Our next question is from Mr. Peter Clark from Société Générale. Your line is open. You may begin. Yes. Good morning, everyone. It's a question for you, Thierry, the first one. You seem very confident on demand if I look at European Deco, no down trading on DIY. Just wondering on the trade business as well, I presume you're still pretty confident with the momentum you're seeing in markets like U.K., where clearly there's an inflation bomb going off basically. The trade paint business there. You're mentioning China a lot, obviously. The strategy seems to be more focused, obviously, around these 37,000 outlets you now have through independents, et cetera. Just wondering on the Dulux stores you used to have there. You used to have a handful of stores that were sort of prestige Dulux stores in key locations. Just wondering if you still have those and the number of those and the sort of strategy around that as well? Thank you. Yeah. Peter. Okay. On the inflation and the impact of the market, we don't see that, and we don't. If we talk to our channel partners, they don't expect, in fact, a significant. Well, first of all, we don't see any down trade. We also see not it reducing. In fact, the trade business is doing quite well, and that was the one where there was pent-up demand, by the way, because that had been in COVID was actually at a slow burner on there. So all of the partners we have in there, all of the projects that are ongoing, and you probably specifically here talk about Europe, that seems to be ongoing. I would like to point out, though, that in the investor update, when referred to the market growth, it was one of the reasons why we took a haircut on the Orr & Boss numbers. In fact, interestingly enough, that consultant has reduced their numbers. They're still above where we had our basis for our review because you just could see things happening. That is very I mean, I would say the forecasting and the understanding of the market, I think was there to see that it was and could be a potential issue in that. Now, on the inflation, we don't see that. In fact, we went back. This is a bit of a weird situation with inflation. By the way, the inflation bomb is not only in the U.K., I'm afraid. It's across many regions. That has had very little to no impact, to be honest, on the deco business in the past. We'll see if this is also happening. We have, as you might suspect, we think very close on that, but we don't really necessarily expect it to have an impact. Secondly, on China, we do have the flagship stores. The problem I think in the past was that the flagship stores 5, 6 years ago were the ones that the business was catering towards, but that was only a minor part in the cities. We still have those, and they actually act very well. I would say more as an image builder and as a PR or positioning of the products as a premium European product, especially because the team in China has done an extremely good job to position it as a well-being brand, the one you can trust for indoor qualities, et cetera. They have a whole range of products that are doing extremely well in the market on that. We've done so that we kept. They're doing as before, I would say. The business has kept up pretty well. But of course, the big changes that we've shown there, the 55% I'm talking about. By the way, if you go back to 2019, our Dulux brand is up almost 35% versus where it was in 2019. We have mid-tier brands. They are up about close to 20% versus 2019. That has come much more from the geographic spread that is still ongoing. Here, this is Peter, to summarize it, this is now growing the business with the margins that we deserve. It's actually a very invigorating story. Unfortunately, our colleagues are now sitting at home in China because of the lockdown, but I'm sure that once they get released, literally, they will continue the path on it. It's a combination. In the tier one, tier two cities, it's still more flagship stores, et cetera, and then outside it's really getting the distribution geographically expanded. Does that answer your question, Peter? Yeah, it does. Thank you. All this is closing in the next week or so, I think. Is that right, Grupo Orbis with this, the deal? I would say any day now, Peter. Okay. Thank you. Yeah. Thank you. Our next question is from Mr. Jaideep Pandya from On Field Investment Research. Your line is open. You may begin. Thank you. The first question is on 2023, actually, Thierry on a 2 billion EBITDA number. And I wanna focus really on marine and protective. Could you just tell us, like, you know, what is happening, you know, when you think about your order book in marine and protective, with regards to the recovery, given pretty much all of your customers, you know, be it LNG carriers or dry bulk carriers or, you know, what have you, are making ridiculous free cash flow yields. Dry docking has been postponed in every part possible because of shortages. You know, what is with related to the pent-up demand on the maintenance side, and then what is related with the new build deliveries in 2023? Just want to understand what you see in terms of your outlook for marine and protective in 2023. That's my first question. The second question is just to really understand the raw material shortages that you were describing. Firstly, on what materials are still short. I mean, we heard a lot about the silicone chain, PVDF, for instance. So, you know, I know, you know, you and your peers like to talk about these knick-knack raw materials which we can't track. But could you just help us at least name some of these raw materials so for us to really understand when will the situation, you know, improve? 'Cause you obviously speak to us only four times a year. The second related point to that question really is, you know, in your full-year update for Q1 guide, you gave a raw material range which was significantly higher than what you ended up with, which is interesting given oil prices have gone up quite materially since then. What is it that why raw materials actually came in lower than what you originally thought at your full-year results for your Q1 guide? Thanks a lot. Let me try to get to the question, Jaideep. On Marine and Protective, the guarded optimism is there definitely for 2023. But that business has been affected. I mean, if you talk Russia, that's a full frontal hit on the business that was in Russia. But on the pipeline for new shipbuilding, for dry docking, et cetera, that's definitely there. Again, I would say the financially more attractive businesses, the dry docking and then the Protective business as such. So there, all the arrows are upwards. As we said before, there's probably more in the second half of the year, et cetera, and then you have to subtract part of the Russian business. There is a significant positive. It's also, by the way, the business that has been the most impacted with raw material issues because it is the business that has the most specialized products that often can only be made in one or two plants around the world. Therefore, if you have a total logistics situation, getting raw materials in or getting the final product out has been a real ordeal in the first quarter. There are all these offsetting things, but directionally, there is optimism for it. On the raw materials that are impacted, I will have to disappoint you, Jaideep, because it is mostly in the knick-knack materials. But having said that, it is. Yes, you have like the ones you mentioned, the PVDF, et cetera. The silicone cycle hits us a bit less, to be honest, because that's less of a direct impact. It's less and less an availability situation than a getting it from A to B situation. There is probably better to talk about products that have to come from Asia into Europe. It's improving, but it's still a struggle to get it on time in the place that we are. It's not so much that we don't get it could be weeks delayed. Having said that, Chinese suppliers are putting some inventory in place to try to alleviate that. Secondly, I would say North America, and that's across the board, independent of the chemistry, is actually a real ordeal to get either our suppliers to get the raw materials or getting the raw materials to us. That continues to be the most constrained situation. It's difficult probably to mention one chemistry because it's frankly whack-a-mole, as they say in the U.S. It's now you have it, and then there is another shipping thing that happens, and now you don't get it. Now it's a disappointing answer, I would say on the. Your third question is more for Maarten de Vries or that? Yeah. Your third question is on what we projected early on for Q1 on the raw material impact versus where we landed. Indeed, we landed below the kind of the bottom of the range. I think there are two elements here. One element is basically volumes, because we've seen more supply constraints in the first quarter, and we've been talking about that. On top of that, we had, of course, the Russia-Ukraine situation as well as the COVID situation in China. That volume elements, of course, also translates in the absolute amount from a raw material perspective, as well as a slightly different mix. That landed the number, the absolute number of raw material impact just below the bottom end of the range which we mentioned. Does that answer your question, Jaideep? Sorry, apologies for zooming in so much on Marine and Protective, but I just want to understand, like, you've been guardedly optimistic for a few years now. Like, you know, if we go back to the peak of the previous cycle, which was, I guess, 2015, 2016, do we think that the market dynamics today warrant that we will see another peak in the next, you know, sort of 18-24 months in your vision? Or will we remain guardedly optimistic forever? You mean, do we turn it into a religious program, you mean? No, that's not the plan. To be honest, the peak in 15, 16 was artificial, and in fact, then it came crashing down because there were too many ships that were in there. There's a catching up. I would be surprised if it goes back to 15, 16 levels. Jaideep, I think your comments are totally justified. Just like you, I think we would want to see a significant trajectory change as of the second half of this year. I think, yes, 2023 should be the best year since 2016, let me put it this way. I think it's still gonna be somewhat intermittent then. Now to be fair to the Marine and Protective business, COVID has kept ships out of harbors two years in a row. Russia comes in, there's the raw material situation. That is the business that has had a blow on the head, in the bottom, and on the chin in addition to that. But we do expect to see a significant trajectory change as of the second half of this year, so that it doesn't become a religious program where but it doesn't happen. Right. Thank you. Thanks a lot. Thank you. Our next question is from Mr. Gunther Zechmann from Bernstein. Your line is open. You may begin. Hi. Good morning, everyone. Just a quick one following on from the raw material cost discussion, please. Thanks for giving the disclosure on pricing and the exit run rate out of Q1. Could you also share the exit run rate out of Q1 for the cost side of things, please? Thank you. You mean for the raw material costs? Yes. If you'd like to include freight costs in that as well, or if you can split it, either way. Thank you. Yeah. No, we normally split it, but for raw material, we're sitting approximately at a 40% increase, but that is versus 2020. I think on freight, that's a good question that you asked, the freight inflation we are looking at the moment is a 10% freight inflation. Yeah. Given the increase in inflation in freight, that is why we have in the discussions with the commercial teams, really included this in pricing and making sure that we offset the total basket. Yeah, Gunther, maybe Can you just remind us? Yeah, maybe one additional comment on the graph on the left-hand side on chart 14 that gives you the increase of raw material costs, et cetera. It's not a pictogram, it's actually an actual graph. That probably gives you a bit of an idea of what exit rates are and what expectations are for the second quarter, because I think that was your question also around how is it going in and how is it going out. Hopefully that gives you a bit of a picture. What you see if you go back to that one, you see indeed that the oil and gas situation, energy costs, that gave this little increase in the first quarter, and that is now more or less absorbed. You That gives you probably a good view on how the trend is. Yes. Does that help? Of course, the right-hand chart is an average, and the left-hand chart gives you an idea of the exit run rate. Maarten, could you just remind us what freight cost as% of your cost of goods sold is nowadays, please? We've not disclosed this, and I don't wanna go in all these details. But again, the materiality of the freight inflation and the impact makes it as such that we have included this now to make sure that we offset also this piece. Okay. Thank you both. Yep. Thank you, Gunther. Thank you. Our next question is from Mr. Laurent Favre from BNP Paribas Exane. Your line is open. You may begin. Thanks. Good morning, and thanks for squeezing me in. Two questions, please. The first one on pricing. Given all that has been said around freight, for instance, are you now looking to add surcharges to pricing? Was that part of, I guess Q1 already? Then the second question is on Orbis, you know, closing any day now. Should we assume a significant margin dilution from that deal? In particular, should we assume that you have a lot of work to do on pricing if the Orbis team have been less proactive than AkzoNobel over the last year to offset inflation? Thank you. Yeah. Laurent, good question. By the way, it's always a bit of a guess when you guys announce who it is, because your name seems to be a pretty forgiving, like all sorts of cause for creativity. On the surcharges, we have not implemented surcharges, so what you see is price. There's always a choice how you do this, so we chose to do price because we thought that was a better route. I would assume that what we will be doing this quarter will be all price and not surcharges, just to make that clear. Secondly, on Orbis, yes, it's imminent to close the asset. In fact, that's also what they actually publish their numbers, so it's a listed company in Colombia. We do not expect there to be a dilution of any significance in our Latin American market. 'Cause they've been pretty apparently, from what we've seen. Thank you. They've been pretty active and pretty disciplined on their pricing too. Excellent. Thank you. All right. Thank you, Laurent. Thank you. Once again, for those who would like to ask a question on the phone, please press star followed by the number one. Please record your names and company names. And to cancel, please press star followed by the number two. I think we're almost out of time. If there are no more calls, anyone who does have a question can reach out to the investor relations team, so please do so. With that, I think we can conclude the call. Thank you. That concludes today's conference call. Thank you all for joining. You may now disconnect from the call, and thank you very much.