Good morning, and welcome to the AkzoNobel Q1 Results 2024. My name is Drew, and I'll be the operator on today's call. After today's formal presentation, we will begin the Q&A. To register a question, please press star, followed by one on your telephone keypad. To withdraw your question, please press star, followed by two. At this time, I would like to turn the conference over to Kenny Chae, Head of Investor Relations. Please go ahead. Thank you. Good morning, and welcome to AkzoNobel's Investor Update for the Q1 of 2024. I'm Kenny Chae, Head of Investor Relations. Today, our CEO, Greg Poux-Guillaume, and CFO, Maarten de Vries, will take you through our results. We refer to the presentation, which you can follow by webcast or download from our website at akzonobel.com. A replay of the webcast will also be made available following the event. There will be a Q&A session after the presentation. For additional information, please contact our investor relations team. Before I hand over to Greg, a reminder of our forward-looking statements disclaimer on slide two. Please note, this also applies to both the conference call and answers to your questions. I will now hand over to Greg, who will start on slide three of the presentation. Thanks, Kenny. Good morning to everyone on the call. Our performance for Q1 demonstrated a further rebound in profitability. Our results were driven by solid volume growth and continued margin expansion across both decorative paints and coatings. Volumes were up by 2%, building on the good momentum from last year. Price mix was flat, with prices slightly up, resulting in organic sales growth of 2%. Beyond the volume growth, raw material tailwinds and resilient pricing drove the 19% increase in Adjusted EBITDA to EUR 363 million. Q1 EBITDA margin was up by 230 basis points to 13.8%. Despite the impact of seasonality on our free cash flow, net debt to EBITDA remains stable at 2.7 x. We're investing in our future growth, particularly in our powder business. These new investments will modernize and expand our production capacity, particularly in North America, and boost our R&D efforts. We also opened a new manufacturing plant in Pakistan, reaffirming our commitment to both Deco and Coatings for the region. Finally, we completed our transition to 100% renewable electricity in Latin America, something that we've already achieved in Europe and in North America. Moving to slide four. Organic volumes were up 2% in Q1, and looking at our businesses one by one, I'll give you a little bit of flavor. In Deco EMEA, volumes were stable, remaining on track for a progressive rebound back to 2019 levels. U.K. DIY and South and Eastern Europe performed notably well. In Deco Latin America, strong growth in Brazil was dampened by challenging macroeconomic backdrops in Argentina and Colombia. In Deco China, volumes were flattish, exceeding expectations, given strong Q1 2023 comps. The market isn't great, but there are signs of life. In Deco Southeast Asia, volumes rose double-digit, driven by India and Indonesia, while Vietnam continues to struggle economically as a country. Moving to Coatings. In powder, we built on our momentum from our last two quarters with mid-single-digit growth, despite a market recovery that still has ways to go. We're gaining market share, capitalizing on our market leadership and product differentiation, as shown by our recent low-cure architectural range announcement and by the penetration that we are successfully undertaking of the electric vehicle market. In Marine and Protective, we're benefiting from a dynamic market in Marine, with commercial successes in technical marine new builds, which bode well for the future. In Automotive and Specialty Coatings, Refinishes grew, Consumer Electronics showed promise, and Aerospace was flat on temporary supply constraints. In Industrial Coatings, Packaging and Coil did well, while the wood businesses continue to be depressed, and that's wood finishes and wood adhesives, held back by a soft U.S. construction market. Maarten will now take you through the financials on slide five. Maarten? Yeah, thanks, Greg, and good morning, everybody on the call. Organic sales in the Q1 were up 2%, and reported revenue was down 1%. The volumes were higher in both Deco and Coatings. Price mix was flat, with slightly positive pricing, offset by slightly negative mix. The 1% positive revenue contribution from M&A in our Deco business is primarily related to the Huarun acquisition in China, which completed in August 2023. FX remained in headwind in Q1, impacting group revenue by 3%. I'm pleased to report that our Q1 adjusted EBITDA grew by 19% to EUR 363 million, as raw materials provided a high single-digit tailwind year-on-year to our P&L. This improvement resulted in a 230 basis points expansion in EBITDA margin to 13.8%. Turning now to slide six. The increase in ROI to 13.8% in Q1 reflects the solid year-on-year improvement in profit. As a percentage of revenue, working capital improved year-on-year to 18% during a seasonally weaker Q1. We expect further progress towards below 14% by the end of 2024. The usual impact of seasonality for our Q1 trading period resulted in a negative free cash flow of EUR 211 million. Despite a stronger EBITDA performance, the higher outflow was driven by seasonal inventory builds and due to an unfavorable working day calendar at the end of March, shifting receivable collection into early April. I'll now hand over to Greg for closing comments on slide seven. Thanks, Maarten. Our Q1 results mark a solid start to the year, driven by continuing volume growth and margin expansion. While it is early in the year, with the important European painting season ahead of us, we expect our Q2 adjusted EBITDA to range between EUR 420 million and EUR 440 million. This keeps us on track to deliver our 2024 outlook, which remains unchanged. We continue to focus on the strategic priorities, which underpin our midterm ambitions, including our industrial excellence efforts, which we will accelerate in the second half of the year. I'll now hand over to Kenny to close with information about upcoming events, and then we'll start the Q&A session. Kenny? Thank you, Greg. Before we move to the Q&A session, I would like to highlight some of the upcoming events on slide eight. Our AGM will be held later this week on April 25th. Our ex-dividend date for our final 2023 dividend is April 29th, and the record date is April 30th, followed by payment on May 7th. Finally, we will update the market on our Q2 results on July 23rd, and this concludes the formal presentation. We would be happy to please, we'd be pleased to open the floor to your questions. Please state your name and company when asking a question, and limit the number of questions to two per person so that others can participate. Operator, please start the Q&A session. Thank you. We will now start today's Q&A session. If you would like to ask a question, please press star followed by one on your telephone keypad. To withdraw your question, please press star followed by two. Our first question today comes from Christian Faitz from Kepler Cheuvreux. Your line is now open, please go ahead. Yes, thank you. Good morning, Greg, Maarten, and Kenny, and team. Congrats on the results. Two questions, please. First of all, Greg, you talked about the relatively weak wood construction activities in the U.S. Do you see a turnaround at some point this year? And the second question is, do you see some early green shoots from your teams refocusing on new build and marine coatings? The first question on wood, we don't see a turnaround this year. The market is depressed. It has stabilized both in Wood Coatings and in Wood Adhesives, but for that business to rebound, you'd have to see a rebound of the U.S. home construction markets. You know, you probably have a little bit of lag there. So we think it's more of a 2025 rebound story than a 2024 rebound story. We're certainly not baking into our numbers any type of rebound in wood this year. The second question was? Marine new build. But what specifically about marine new build, Maarten? Christian, you, you're asking- Early successes, yeah. Oh, yeah. Yeah, we do, we do. And I think I probably overshared already, so I'll do it again, which is that last year, we won a couple of hundred million euros of new build business on technical ships and, you know, call it around EUR 200 million. As you know, because these are delivered over a number of years, that doesn't lead to a booking right away in terms of, we don't recognize revenue. We only recognize revenue when we deliver, and that means that it's essentially underpinning the growth that we've announced for the Marine and Protective business for the next few years. You know, we said that we'd grow mid-single digits in Marine and Protective in the next few years. If you take that EUR 200 million and you start ventilating it in across, you know, a little bit in 2024, more in 2025 and in 2026, and then you add the wins that I'm sure that we'll get this year, too, you see that the growth pipeline in terms of revenue development in Marine and Protective is growing. And contrary to the new build market in general, you know, the world has changed. There's a push towards sustainability, there's a lot of regulation in the shipping industry, and we focus on technical ships, you know, ships that have a high unit cost, and they're... Where therefore, the shipowners are willing to invest on something that's future-proof, which means that they'll go for, you know, biocide-free anti-fouling, for example, and that plays to AkzoNobel's strength. So, it's the pipeline is growing, the margins are decent, and I think it bodes well for future, future growth and also future operational leverage. Did I answer your question, Christian? Yes. Thank you very much, Greg. Thanks. Our next question comes from Matthew Yates, from Bank of America Merrill Lynch. Your line is now open, please proceed. Hey, good morning, everyone. One of the things PPG talked about on the call was the timing of Easter, and I think Maarten mentioned it in his remarks, too. Can you just elaborate a little bit more what impact that had on the volumes shifting between Q1 and Q2, but also the impact on cash flow? Because that EUR 418 million build does strike me as quite a big number when we're in an environment of raw material deflation and limited volume growth. I see you've kept the guidance for leverage target at year-end, so are you confident this is just a timing issue around seasonality? And then a somewhat related cash flow question longer term, maybe for Greg, but as part of the industrial transformation, you've mentioned trying to reduce the number of products and simplify supply chains. Is there also an opportunity here to structurally reduce the working capital needs of the business and improve the cash conversion? Because, you know, a target of 13% working capital to sales is essentially only a percentage point better than you'll be at the end of this year already. So why doesn't the industrial transformation have a more impactful sort of impact on the working capital intensity of the business model? Thank you. Thanks, Maarten. We'll take the first question, I'll take the second. Maarten? Yeah. So, you're, you're absolutely right. I mean, it's, it's much more a timing of of cash flow. What we saw that, at the end of Q1, the Friday was the, the 29th of March, so, that means that, quite some cash came in, early April. In fact, the amount was, over EUR 50 million of cash collection coming in early April, so that's much more a shift and a timing of the cash flow. By the way, just to, to, manage expectations, we see a similar effect from a cash flow perspective at the end of Q2, but of course, for the full year, it, it doesn't matter. So from a working capital perspective, we saw two effects. One is timing of receivables coming in, but also the seasonal buildup of inventories. And by the way, that also includes some higher inventories because of the longer lead times, because of the Red Sea. But overall, as I mentioned, it doesn't impact the cash flow forecast for the full year and the working capital view that we will end below 14% at the end of the year. And your second question on the industrial efficiency program that we're undertaking, you're completely correct. It has working capital benefits. These benefits are not baked into how we talk about working capital longer term. You know, as we said, we'll simplify our business in the sense that we'll rationalize our supply chains. We'll in some areas reduce the number of products. We'll certainly reduce the number of plants. And as we reduce the number of plants, you have positive working capital effects. We'll also increasingly do things like late stage differentiation, which means that instead of... I mean, it sounds very old-fashioned, but instead of carrying finished goods inventory for similar products with different—for different markets, with different labeling or different colors that are already sort of in the can, late stage differentiation is you do the common base, and then you finalize the product based on where the market demand comes from. So that's also part of our industrial transformation efforts. So if you take all of that together, the late stage differentiation, the rationalized factory footprints, and the supply chain and product measures, it will have a positive effect on working capital. We will need less working capital, but we really haven't quantified that externally. So your comment is correct. As much as we've talked about the cost aspect, we haven't talked about the working capital aspect, and the numbers that we do throw around don't reflect the efficiencies that we'll get from that program. Does that answer your question? Thank you both. Thanks. Yes, absolutely, Greg. Our next question comes from Laurent Favre, from BNP Paribas. Your line is now open. Please go ahead. Thank you, and good morning. I think Maarten just referenced the Red Sea situation, I think, in terms of inventory lead time. I was wondering if you could talk about what you're seeing on the raw material side. It looks like that Red Sea situation has helped quite a bit spot pricing for commodity chemicals. Is this something you've started to see in terms of your invoices on a year-on-year basis? And then maybe a related question for Greg. You kindly offered us a Q2 sub-guide at EUR 420-EUR 440. I was wondering if you could talk about what you're baking in there in terms of volumes and net pricing. It seems that you're only baking in marginal margin improvements year-on-year, and I'm just wondering what's driving that. Thank you. Laurent, Laurent, just to repeat, your final question is about your, the assumptions behind the- Q2 ... Q2 Q2 guidance, correct? Yeah. On volumes and on pricing. Yes, correct. Thank you. Yeah. Marteen? So maybe first on your question on the Red Sea, no, the answer is no. We've not seen impact of any spot pricing related to the Red Sea. The only thing what I flagged is that we've seen longer lead times, and that's also partly reflected in our inventory, but no impacts of spot pricing, which you mentioned. And on the other topic, on the Q2 guide, what we assume is basically a continuation of the trend we've seen in the Q1 in terms of volume. So, a low single digit volume development for Q2. And pricing, we ex-price mix, we expect to be kind of flattish. And still- Does that answer your que- Deflation, right? Excuse me? The raw material deflation hasn't changed. I mean, it's in our- No ... it's in our, on our balance sheet already, so. Yeah, so the raw material deflation for, I mean, for the full year and the assumptions we had going into the year are very, very similar. So we've said that the H2 of last year would more or less mirror the H1, and then we would see still in Q3, maybe a slight, slight benefit and probably an slight plus in Q4. So overall, H2 is more or less flat, and that then for the full year is a low to mid single digit decline from a raw material deflation perspective. So the assumptions have not changed around raw material. I think your question, Laurent, maybe I'm overinterpreting this, but it's about our Q2 guidance. Is that, you know, is there an element of cautiousness in that guidance? Because if you take the volume growth that we're announcing and you take flattish pricing, and you take the raw mat trends that we're seeing, you know, you could argue that the numbers could be higher. What we have built in there is we have some element of cautiousness on the volumes, because although we've delivered 2% volume growth in Q1, as you've seen from other industry players, the market is not really rebounding significantly. We're doing well in a market that doesn't have that much direction. And the second aspect is that there is OpEx inflation in this industry, and we're working hard to mitigate, but there is also some element of cautiousness for how fast we can mitigate that OpEx inflation, which this year is mostly wage driven. And the wage stuff, you know, kind of happens when it happens. And we've done our CLA negotiations, so we know the impact, and now we're working on the mitigation. So that's... those are the pluses and minuses. Does that help? Yes, it does. Thank you. Thanks, Ray. Our next question comes from Aron Ceccarelli from Berenberg. Your line is now open. Please proceed. Hello. Hi, good morning. Aron Ceccarelli with Berenberg. I have two questions. The first one is on price mix in Decorative Paints EMEA. Maybe it would be interesting if you can elaborate what drives this strong performance. Also, if you can split between price and mix, and how this, how you see this sustainable going into Q2? The second one is on volumes. It looks like you're seeing some green shoots from Industrial Coatings, Packaging Coatings, and also Coil Coatings. I believe in packaging you are already benefiting temporarily from some issues at one of your competitors. Just try to understand what kind of conversation you're having with customer, what kind of sustainability you see in this performance? And lastly, maybe on Aerospace Coatings. Just trying to understand what's happening there and how should we think about Aerospace Coatings volume in Q2. Thank you. All right. Price mix for Deco EMEA. We've got essentially flattish volumes in Q1, which is kind of similar to what we had in the H2 of last year. So our business has really stabilized in a market which isn't great, but is getting better. We've done well in the U.K. DIY market, which is important for us, and we've done well in South and Eastern Europe also. So, if you take pricing overall in Europe, we're not taking down pricing in Deco. We're defending pricing. There are areas where we are actually increasing pricing, but it's a market in which price increases are challenging because consumers are stretched and retailers are sensitive to this. But you have to keep in mind that a big part of our presence is actually small retailers. You know, the large scale retailers represent 15% of our sales in Europe, so 15. So that means that 85% of our sales are between the smaller retailers for DIY and the professional channels. So there is pricing power. I wouldn't overplay it this year because it's a year of consolidation more than anything in Europe. But we can defend and in some cases increase pricing in Deco Europe. And beyond that, the mix is mostly gonna be geographical. There isn't really a big shift between segments in Europe. There's no significant downtrading that we can see, even after a few years of price increases. It's more about geographical mix. Southern Europe has a tendency to be lower profitability than Northern Europe. If you have more North Africa, you'll have a lower mix. The U.K. is a positive mix effect. So, as you see from what we're flagging for Q1, we did well in the U.K.. That's a positive mix effect. We did well in South and Eastern Europe. That's overall a negative mix effect. But, you know, we'll leave it. We'll try not to split hairs too much. You know, price mix is okay, and Europe has been comparatively a bright spot for us in the sense that that level of sustained performance, you know, flat volumes and prices flat to up for a few quarters now, it bodes well for the future. Keep in mind that this is still a market that's, you know, 4% or 5% below 2019 levels from a volume perspective. So there's still some rebound to come from that market. Your second question was on packaging. It was a Sherwin-Williams question. They had a fire in the U.S. We picked up some of their volumes. Whenever that happens, we're certainly not trying to benefit from other people's issues. But whenever you scramble to help customers, you usually try to extract some sort of volume guarantees for a longer period than just the period that is necessary to fix the issue at your competitors, because scrambling to integrate that volume into our production planning does come with effort and cost. So, this is not, you know, these are not necessarily... This is not necessarily market share that we'll hang on to in the long term, but these are volumes that we have some level of visibility on for more than just the short-term period. And therefore, you know, this is something that you can extrapolate further into the year. But once again, these things come and go, and everybody has issues at some point. So, we're just happy that we were in a position to help both the customers and in some ways, Sherwin. And then the aero question. Well, actually, I said that we were flat in aero in Q1 on temporary supply constraints. I guess this is an overly cryptic way of saying the market is really good. We've got a really strong backlog. We had some production challenges, which slowed us down a little bit in Q1, but that's just our way of flagging that we have strong aspirations for our aerospace business going forward, and nothing's changed. It was just a little bit of an internal hiccup in Q1 that we feel is behind us now. Did I answer all your questions? Yes, just maybe excluding packaging. I was interested about Industrial Coatings and coil, where the performance seems a bit better probably than expected. Yeah. Yeah, coil's been okay. Coil's been okay, and then the two wood businesses have been challenging, but they flattened in terms of volumes. So, but, yeah, you're correct. I mean, packaging's been good for the reasons that you, partly for the reasons that you've mentioned, and coil's been all right, and should continue to be okay. I mean, there's nothing that's booming, let's be honest here. You know, industrial coatings is not an easy part of our business currently, but the metal side is doing okay, and the wood side is struggling. Excellent. Thank you very much. Our next question today comes from Chetan Udeshi from J.P. Morgan. Your line is now open. Please go ahead. Yeah, hi, thanks, and morning. I just wanted to explore this contingent liability that you have disclosed today, but also in the annual report. And what I was curious about and—about is, you know, I've seen some press talking about the claims against Akzo amounting to as much as AUD 2.5 billion. Can you confirm if that's the number that is being claimed? It just seems pretty, pretty high for, for, for sales, for Akzo, which might have been much, much more smaller for that project. Second, I was just curious because I went back and looked at the annual report of 2022 or 2021, and didn't seem this was flagged as a contingent liability then, and I think this lawsuit has been ongoing for two, three years. So what has changed that you are now starting to disclose this now compared to maybe, you know, back in 2022 or 2021? Thank you. Yeah, let me share a little bit of context. So first of all, this is indeed about a large LNG project from, I mean, the period of 2015. Why we have disclosed this right now is that, this is going to court, on June 17th. There was a court-mandated mediation, which was not successful. And, I mean, that's the reason why we are now, kind of disclosing this. I mean, overall, we deny liability in this case. We also challenge the, the amounts which are out there, because there is a lot of uncertainty around this, also on uncertainty in terms of future repair. And on top of that, we have significant insurance coverage, if there would be any liability on our side. So in that sense, it's more the triggering event of the fact that the mediation was not successful, and it goes to court, and the court date is in the open. But overall, this case has been public already for multiple years, and there is- there are more cases where there are large claims coming at us, which are frivolous. Recently there was a machine claim, which basically didn't relate to AkzoNobel, but to Nouryon. So this happens more often. Again, there was more of a triggering event to share this in our annual report as well as in our Q1 disclosure. Yeah. And to Marteen's point, you know, if you take the Xene example, it's a claim that relates to Nouryon, for which we have full indemnification from Nouryon. But we got a lot of questions from investors through back channels, which showed us that it's better to flag these things up front, so that you can have the discussion upfront about insurance coverage and liability, and so on. So that's what we did. But once again, we feel that we have a very strong legal case. We have also strong insurance coverage, so it's just our fulfilling our disclosure obligations. That's useful. Thank you very much. Yep. Yeah. Anything else you have? Well, I'll just wait in the queue. I'll give others the chance as well. Thank you. All right. Thanks. Yeah, no problem. Our next question comes from Peter Clark, from Bernstein Société Générale Group. Your line is now open. Please go ahead. Yes, good morning, everyone. It's a quick follow... Well, first of all, I wanna say thank you very much for the punchy presentation. Under 10 minutes, I like that. It's on the EMEA price mix question that came up earlier. I just wanna double-check. You're sort of pointing to maybe modest price ahead in selected areas and mix, 'cause obviously, when you look at the Q1 numbers, it looks like it was mid-single digits, stripping out the volume. So effectively, just on that guidance for that sort of EMEA price mix going forward. And then, a number of companies obviously talking about wage inflation. You spoke about it in London, in February. I'm just wondering what sort of number we should be looking at for this year. Is it a sort of low, mid-single digit number globally on wage inflation? Then a quick one on China. Obviously, the pricing there is exactly the opposite of EMEA. Europe, it's obviously down, looks like double-digit. Just any signs that that can stabilize going forward? You'll obviously start backing against year-on-year comp gets easier, but I know it's a very competitive market. Just some comments on that. Thank you. Yeah. Thanks. I'll take the two price mix questions for EMEA and China, and Maarten will address the wage inflation. Europe, as I explained in Deco EMEA, we have pricing power, we have channel fragmentation, we have, in a lot of countries, high market share, so we are able to fulfill our role as a market leader. It's, I wouldn't overread this, though. It... You know, it's, we're on the back of 25% price increase on a 2-year stack before that, so you're also at the point where everybody's conscious of the need to drive demand and foot traffic, and therefore, we also have to play our role in that discussion with the channels. But overall, we have pricing power in Europe, and we don't have that pricing power in China, because in China, we're the number two player in retail. Number one is Nippon, which is significantly larger than we are. We're a lot more premium than they are, so we have a slightly different positioning, but our two big competitors in China, Nippon and Sankeshu, historically have large project businesses. These project businesses are essentially selling large volumes of paint to to real estate developers, promoters. These volumes are usually, you know, mass market products or sort of lower quality products. And what happened when the real estate market ground to a halt in China is that our competitors ended up with a lot of spare capacity on their hands, and much lower volumes. And the way they countered that is that they stepped up their efforts, particularly in the mass market. You know, kind of similar products, but for retail. We're not a big player in the mass markets in China. We're leader in premium. We compete in the mid-market, but we're fairly small in mass. But the push that they're undertaking on the mass market with price decreases has pulled a little bit the rest of the market with it, and therefore, that's led us to follow in order to be competitive. Now, a lot of our measures today are more about cost competitiveness than they are about taking down pricing. We see cost optimization potential in our operations in China, and we are extracting these opportunities. I would also say that the price decreases happened mostly before Chinese New Year, and I think the market seems to have stabilized now, but we'll see. It's really a bigger play in China, which is that Nippon and Sankeshu are squeezing out the domestic competitors in the mass market. And this is how they're consolidating market share in a segment which is not an important segment for us, but still has a knock-on effect overall in the business. Long explanation on China. I think Deco EMEA I had addressed already, and, you know, it's pluses and minuses. Pricing power in Europe, pricing in China and an overall pricing for Q1 for all of Akzo, which is flat to slightly up. Maarten, wage? Yeah, on the wage bill, a few comments. So first of all, we clearly see a catch-up effect of inflation in wage bill compared to previous years, which were, I mean, where the inflation was more moderate. The overall impact is high single digits on our wage bill, and really starts to kick in specifically in the Q2. It depends, of course, on the timing of new CLA agreements, but it is also part of our normal cycle of wage increases. So that will also be visible in our Q2 numbers. So if I talk overall from an OpEx perspective, sequential OpEx in Q1 was very much flat versus Q4, and we see a sequential increase in our OpEx, driven by wage bill inflation, what Greg mentioned earlier, but also, of course, as we are investing to support our growth. So that is happening, and that is, of course, what we need to address going forward, to make sure that we have the efficiency measures to at least offset part of this. Peter, did you get what you need, or do you have a follow-up? Yeah, no, that's, that's fine. That's fine. But just, just finally, on the EMEA price mix, obviously, the mid-single-digit number in Q1 is above trend, though. You expect price, but obviously that was a one-off number. Yeah. I'm not sure I get to the same number you do in terms of what are we trying to... I'm not sure I get to the same number you do- Okay. in Q1, but I would say that, once again, I wouldn't extrapolate. I wouldn't extrapolate Q1. I think Europe, Deco, EMEA is a healthy market for us, but don't overplay the pricing power in a year of consolidation. There are market pressures. We feel that, all things being equal, we can take prices up and certainly not down, but it'll be modest because this is a year, once again, where I think everybody in Europe needs to reassure themselves that consumers are walking the floors of their shops, and as we do that, then we'll have other opportunities down the road. Okay. Thank you. Our next question today comes from Georgina Fraser from Goldman Sachs. Your line is now open. Please go ahead. Hi, good morning, Greg. Good morning, Marteen, Kenny, and team. Could we just revisit the Q2 guidance a little bit here? The typical seasonality implies something decently above the EUR 420 million-EUR 440 million. Can I just check that what you're saying is you've got very good visibility of this increase in OpEx into the Q2, and that's why we won't see the usual sequential increase? Yeah, I would say, of all the elements, the one sticking out is really the sequential OpEx increase, driven by wage inflation and driven by additional investments to support our growth trajectory. Okay. So I think from a- Yeah, but then, so what we're seeing is that sequentially better ARO, probably sequentially better China, is not going to kind of help offset that, and so the kind of 30% jump that we usually see from Q2 versus Q1 doesn't apply? What we said, and I think Greg mentioned it earlier, that we are, of course, cautious in terms of our volume trajectory. When we look at the guidance we've given in terms of the EUR 420 million-440 million. Okay, thank you very much. Our next question today comes from Geoff Haire from UBS. Your line is now open. Please proceed. Hi. Actually, all my questions have been asked, so I don't need to take up people's time. Thank you. Thanks. Thanks. Our next question comes from Jaideep Pandya from On Field Investment Research. Your line is now open. Please go ahead. Uh, thanks. ... First question really is on your plant performance slash these investments for growth. I mean, if I'm being a bit cynical, you guys, and not just Akzo, but the industry in general, is sort of in a low single-digit growth environment, and there is clearly capacity that is out there. So could you help us understand where are these investments, and what is the return on these investments when you're focusing on growth? And then, the second part of that question is, back in the day, a few years ago, you had similar supply chain issues in marine when orders were coming through. Now, it feels like you have some internal issues in aerospace. Why is it that every time there is a sort of a sharp jump in order book, you start having some production issues, especially given, Greg, your plan is to shut capacity on a three to 4-year view. I'm very curious, how are you looking at this, given you're not, I wouldn't call you an Akzo veteran, you're still fresh pair of eyes. That's my first question. The second question, and I really appreciate you guys wanna be cautious, is around your, you know, how you're guiding the market. So, because when I look through your assumptions, what you mentioned for Q1 and how Q1 panned, they were more or less in line, but you came EUR 23 million above what you were guiding. So now, when you're guiding Q2, how much conservatism are you sort of baking in into this, you know, into this Q2 guide? That's, that's my, my second question. The last question really, you know, comes back sort of on, on Marine and Protective. Where are we with the improvement plan with regards to margin improvement there? If you could just help us understand. Thanks a lot. All right. So, JD, you're not cynical, but you're generalizing a little bit, though. It's not like every time something growth, bad things happen at Akzo. That's a bit of an exaggeration here. The only thing that we did, and maybe I have to stop being so talkative, but my thoughts looking at our own results was that Q1 aerospace volumes flat would raise questions, because aerospace is a really good market, in which we're the market leader. We've got north of 40% market share. So, in the spirit of full disclosure and helping you guys understand the business, I pointed out to the fact that it's not that the market is the issue, is that we struggled a little bit with some internal issues in Q1 that don't change at all our capacity to book orders or to serve our customers. It's just that we pushed less product out the door. It's a temporary thing, as I said, and you know, what's the technical expression? You know, shit happens. Sometimes you're ramping up and you have breakdown issues. That's the nature of running a large business. It's not something that will hinder the aerospace business going forward, but flat volumes in Q1, for me, is a disappointing outcome for aerospace, and therefore, I wanted to explain why that was. Issues in the past in Marine and Protective, I couldn't really tell you, but what I can tell you is that service levels at AkzoNobel have improved very significantly over the last 18 months to the point where we are in pretty much all of our businesses, with a few exceptions, because there's always a few pressure points, at levels which are fully delivering on the expectations of our customers. So, it’s—I probably created an issue where there wasn’t one by trying to explain why volumes were flat in aerospace. I expect aerospace to be a mid-single-digit growth business in the next few years, and the next few years starts now, you know? So, you’ll see next quarter that this is a healthy business. What else? Your... The low single-digit growth in the industry versus the capacity available, and your question is, why are we investing in capacity? Well, that capacity is not spread out evenly. So, average capacity utilization is not always very high in our industry, and it’s particularly not very high at AkzoNobel. Not very high in our industry because paints and coatings is not a capital-intensive industry. If you take Akzo, which is a EUR 11 billion business in terms of turnover, a fixed manufacturing cost for a EUR 1 billion. So people have the tendency to be a little bit lazy about manufacturing capacity because there is a view that, you know, it's not costing you that much, and it's giving you flexibility. Now, I don't subscribe to that view. I think that over time, factories that are underloaded have a tendency to be underperforming, and this is why we're addressing that overcapacity in places where it exists. So if you take Deco EMEA, manufacturing capacity, I was very clear that capacity utilization is in the mid-50s. It should really be in the high 70s, and not higher than that, because it's a seasonal business, and if I start going higher in terms of capacity utilization, then I will have to compensate by inventory buildups at the beginning of the season, and that's expensive too. So think about capacity utilization for something like Deco in the high seventies, where we'd be happy with those numbers, and that's why we're gonna be closing factories, and that's why we're gonna be rationalizing. But if you take our powder business. Our powder business is operating at very high capacity utilization, and there I need additional capacity. And the way we free up that additional capacity is I don't want to be building factories, because, one, it's costly, and two, it's time-consuming. So instead, what we're doing is we're investing in debottlenecking. We're doing investment upgrades, we're doing automation, and we're essentially freeing up additional capacity in existing plants. So once again, you got to look at the businesses in a differentiated way. There are places where there's excess capacity. Deco, certainly in Europe, being a key example, but another example is wood in North America. So we have to address that, that structural overcapacity where it exists. And there are places where if we had additional capacity, the business would grow faster and would be more profitable, and that is the case in aerospace, that is the case in powder, and I could give you a few other examples. So, overall answer to your question, I hope it helps. There was a question on guidance, I think. Maarten, you want to take that one again? Yeah. You mentioned our Q2 guidance and whether we are conservative. I would say we're not conservative, we are just realistic, and looking at the pluses and the minuses, what we see in front of us, and give a realistic view of how we see Q2 shaping up. And again, if there is more volume support, it might be a little bit better, but let's see as we go forward. So for now, the guidance is EUR 420 million-EUR 440 million, and I think it's much more important to look at the full year guidance, which we reconfirm to the EUR 1.5 billion-EUR 1.65 billion adjusted EBITDA. Because for us, our focus is really to, to hit the full year guidance. You had a, you had a final question. I'm sorry, I'm taking them sequentially. I should have bundled it with your earlier Marine and Protective discussion. Marine, our marine protective improvement plan is going really well. What we said is that this is a business we were a market leader, we're, we've dropped in the rankings in large part because of, you know, self-inflicted pain. We have realigned our business in the sense that we are investing in, on the protective side, in passive fire protection to rebuild our competitiveness on the infrastructure side of the business. We're doing really well in oil and gas, but we are underrepresented in infrastructure. And in marine, we stepped up our efforts on these technical new builds that I've talked about earlier. If you take that business, which was the Marine and Protective business, which was a mid-teens profitability business, seven, seven years ago, which bottomed out as a low single-digit profitability business. I'm talking operating profitability here. Bottomed out as a low single-digit profitability business in 2022. We were... We were mid-single digits last year. We are gonna be-- My aim is to get to the teens in terms of profitability this year. I think that we're more likely to get to the high single digits than the teens, because, as we, as we ramp up, you know, some of that, some of that cost realignment and some of that operational leverage takes a little bit of time to click in. But, this is a business that we see in the midterm back in the teens in terms of profitability. And, and, a lot of that is gonna be driven by, by growth, because it's a business that has significant growth potential that was, that we didn't capitalize on in the last few years. And as I said to an earlier question, we have already won a lot of the business that will drive the growth in marine in the next few years, and we'll recognize that business in terms of, recognizing revenue as we deliver. So, think about it in terms of almost like a project business. The, the backlog is filling up, the order book looks good, and the sales will, naturally come as we execute and as we deliver. So, I'm excited about the Marine and Protective business, and there is absolutely nothing that's changed to my expectations for that business. If anything, I'd like those expectations to materialize earlier, because, because of the potential that we have. Anything else on that, or did I answer your question? That's it. No, thanks a lot. Thank you. Thanks. Our next question is a follow-up from Chetan Udeshi from J.P. Morgan. Your line is now open. Please go ahead. Yeah, hi. Thanks. Quick follow-up, Maarten. I think I heard you say or mention that the working capital at the end of Q2 will be showing a similar dynamic to what you saw in Q1, or did I, did I, miss, miss hear something? I was just trying to just understand whether this buildup that we see or saw in Q1, is that going to unwind a little bit into Q2, just given that there was this timing issue associated with the Easter holidays? Or did you actually meant that the Q2 working capital will, will be more or less same as in Q1? And if that's the comment, then why are we not seeing some of that increase from Q1 unwind in Q2? Thank you. My, Chetan, my comment was purely related to accounts receivable, so we've seen a shift in the collection to the first days in April, because of the ending of the quarter at the Friday was the 29th of March, and we see a similar collection effect at the end of June, where we have a similar case, where the end of the quarter is in the weekend. So probably I said that the collection we had in April will not be an advantage for Q2, but we see a similar shift at the end of Q2. That's the only comment I made. But we, we all have our excuse, you know, our competitors, it was like, they were taken by surprise by Easter, and we were taken by surprise by the weekend. So, you know, none of these, none of these are very good excuses, but the last, the last few days, the last two days of the quarter were on the weekend. We got a lot of cash, receivables collection, a lot of cash coming in in the first couple of days of the Q2. You know, it is what it is. We wish we'd have managed it a little bit better, but, you know, look, it's a, it's a, it's a few tens of millions EUR of cash, slipping from, a couple of days earlier, a couple of days later. It doesn't change the face of the earth. We're still fully committed to our efforts to improve working capital. We've got much better planning visibility now than we've ever had, and that should lead to our optimizing of working capital back towards that 13% of sales level that we talked about. And to one of the very good earlier questions that we received, as part of our industrial transformation, that number will still improve over time as we rationalize our footprint. Got you. Thank you. Our last question today comes from Alex Stewart from Barclays. Your line is now open. Please proceed. Hi there. Good morning, everyone. You don't give guidance anymore, as we know, but just trying to understand what the OpEx inflation is year-over-year. I guess in the Q1, it was something like EUR 40 million year-over-year. So if I look to the Q2, and I hear what you're saying about wage settlements, if we assume it's up EUR 50 million year-over-year in the Q2, that's about EUR 200 million annualized. Your employee costs at a group level are EUR 2 billion. So even if I assume that's up 8%, that's EUR 160 million for the year, but you should be able to offset a decent amount of that. I suppose the bottom line of my question is: How can you be doing EUR 50 million a quarter in OpEx inflation when your total employee salary bill is only EUR 2 billion, and you've got measures in place to offset some of that? It just seem like very big numbers. Yeah, Alex, I'm just repeating what I said earlier. So sequentially, OpEx in Q1 was flat versus Q4. We will see a tick-up of our OpEx in Q2, driven by wage inflation, but what we also investing in growth, for instance, in additional advertising and promotion in Deco EMEA, as an example. But overall, your comment is right. So if you look at the total inflation for the company this year, you're talking around about EUR 200 million. The bulk of that inflation sits indeed in wage inflation. And we have said earlier that we have programs to offset, yeah, close to half of that, and that is all in progress, obviously. Okay, so the inflation is EUR 200 million gross, maybe EUR 100 million net, so EUR 25 million a quarter. Is that the right way to think about it? Yeah, more or less, but I think it's important again to look at the sequential development from Q1 to Q2, as I flagged out. Yeah. 'Cause it's. You're roughly EUR 100 million on the year as a net number is roughly correct. But Q1, as Maarten said, was sequentially flat. You know, the wage is a big driver, and these collective labor agreement discussions usually happen in Q1 or get finalized in Q1, so you see more of the impact in Q2 that you get in Q1. So it's a bit more backloaded than that, as Maarten said, we've got measures to mitigate and to compensate, but it's the worst year in terms of wage inflation. Last year was, despite the fact that inflation was higher, we were still protected by some of the labor agreements that we had in place. I think next year you'll see people coming back to reality 'cause inflation has tapered off, and therefore there's the logic for further increases has largely disappeared. But this year is that painful catch-up effect, where everybody's trying to reclaim some of their purchasing power, and that's you're seeing it with us, you're seeing it with our competitors. But once again our job is to mitigate that, so. Very helpful. Thank you. Can I just finally ask, is the wage settlement, the wage inflation you're seeing in the P&L, is that roughly what you expected it to be for the year? It's higher. It's a bit higher because some of the CLA outcomes have been higher compared to what we originally expected in our numbers. Okay, thank you so much. That concludes the Q&A portion of today's call. I will now hand back over to Greg Poux-Guillaume for any closing remarks. I'll keep it short. As Peter earlier mentioned, we managed to keep the presentation to eight minutes. I actually timed myself, so and well, I'll try to not compensate by making the closing remarks longer than they need to be. Q1 was a good quarter for us in the sense that we delivered both volume growth and margin expansion, as we did in Q4 last year. We're on track to deliver our year as guided. We are certainly cautious about the market, but we're confident about our momentum. And we look forward to reconvening with you guys a little bit later to tell you how Q2's gone. But that's... Operator, please close the call. Thank you. That concludes today's call. You may now disconnect your line.