Good morning, welcome to the Cabka N.V. half year 2023 result presentation. My name is David Brilleslijper, and I will be your Moderator for this morning's session. With me here are presenting Cabka CEO, Tim Litjens, and CFO, Frank Roerink. Before we start, a few practical notes. After the presentation, there will be a Q&A session with Tim Litjens and Frank Roerink. You can post your questions using the Ask a Question button at the bottom right of your screen anytime during the presentation or Q&A. A recording of this webcast will be posted on the investor section of our website tomorrow. Finally, we encourage you to fill in a short survey on this webcast after the session. Enough technicalities for now. Tim, may I invite you to start your presentation? Thank you, David. First of all, warm welcome to all of you joining us today, where Frank and myself will give you further insights on the key developments in the first half of the year, as well as elaborate on the financials. Starting with the first overview. Highlights for 2023, first half. We posted a growth of 2% in the first half compared to the first half of last year. A total of EUR 104.3 million in sales. That's against the very strong growth that we posted last year of 25.5%, as well as in a market that is giving us some challenges, on which I will elaborate a little bit more later on. In the first half of the year, we've processed in total 75 kilotons of plastic, of which this time 88% is recycled content. That's a little bit up from the 86% that we reported last year. Overall, all these activities led to an EBITDA of 13%, or EUR 13.4 million over the first half of the year, an improvement compared to last year, with a net working capital of 18%, EUR 37 million, and a net operating income of EUR 3 million, so thereby returning to healthy net income. If we look at the main events in the first half of 2023, a couple of things I would like to take you through. First of all, the market. As mentioned, we see as a result of the increasing interest both in Europe as well as in the US, we see a deceleration of the economy, basically across all the industries in which we are active. This has resulted in our customers destocking to a certain extent, as well as putting on budget constraints in relation to their capital capital spend. We've seen that especially in the second quarter of this year, thereby sales slowing down to a certain extent. At the same time, we've been able to acquire new customers, but we've been also diligently working on the launch of new new products. That provided us with the ability to swim a little bit against this, this economic current and still post a growth for the first first half, with especially Southern Europe doing quite quite well as as as in the US. More on that later. With regards to profitability, as just mentioned, profitability has improved. We're posting a 13% EBITDA over sales. Last year, as you know, we were troubled, especially by very volatile and also high energy prices, as well as materials. We see in the first half of this year that energy has obviously come down and has also become much less volatile, and the same actually goes for the materials. Both virgin as well as recycled plastics have become substantially cheaper, which also translates to higher margins. Also happy to report that we've concluded our Eco restructuring. You see that also back later where the total output has reached its its plant new capacity, an increase of 12%, leading to an overall increase of sales by 16%. On the U.S., last year, right around this time, we suffered from a rather catastrophic flood in St. Louis, Missouri. We've been working, of course, very hard on recovering the operations. In the beginning of this year, the cleanup activities were concluded. In the first six months of the year, we've been bringing the machines one by one back into operation. Just before summer, we celebrated with all our customers, the reopening of the plant in the US, and we're happy to report that the US facility is back in full operations since the beginning of the third quarter. Flood protection measures are being put in place as we speak. We also hosted our first Capital Markets Day. We did this in our innovation center in Valencia. Together with the investors, we introduced them into the greater detail of especially the innovation activities that we undertake with regards to materials, but also product design. We also spoke about market trends that we, that we see and that are underpinning our strategy, as well as had some customers on stage to explain how products are being developed in joint cooperation between the customer and Cabka. As some of you may be new to this webcast and also Cabka, I would still like to take the opportunity to walk you through the unique business model that Cabka operates. It's an integrated value chain from waste to the ultimate product that we put in the market. If I start on the far, far left side with the feedstock, what is it that we essentially do? We take post-consumer waste, post-industrial plastic waste, and buyback materials, which is product that we put into the market that comes to end of life. We take that as our feedstock, we recycle this, this waste into a new raw material. Through our innovations, focused on both material engineering as well as product design and processing technology, we then by applying different technologies in injection molding, we work this into products that are then launched into the, into the market. If we zoom in on the first two parts of this value chain, so the feedstock and recycling, how did we perform in the first half of this year? As already mentioned, we processed a total of 75,000 tons of plastic, of which 88% is recycled content. Roughly half of that is recycled in-house, and the other part is procured in the market. All this material is focused towards products that are intended to be reused, which is an essential part of our innovation and product strategy. Speaking a little bit more about that, that's at the essence of what we do. We aim to bring circularity to our customers, and we do that on the back of the... what we call the circularity drivers, built around the concept of reduce, reuse, and recycle. All the products that we design are designed for recycled content, unless there's regulatory requirements that would force us or the customer to use to use virgin material. We design the product for an optimum between weight and durability. The lower the weight, the, the higher the, the savings and transportation from a CO2 perspective. We also design the product to be as efficient as possible during transport, hence the nestability concept of many of our pallets, as well as the foldability of our containers. Essential in any design that we, that we do, and any product that we launch, is the concept of reusability. Ultimately, the more often the product can be used, the greater the dilution effect of both the cost of ownership as well as the CO2 footprint. Ultimately, when the product comes to end of life, the product is designed to be 100% recyclable, meaning that we are also thereby able to give a positive residual value back to the customer. Overall, that leads to a financial benefit to the customer of roughly 50% cost reduction and cost of ownership, and a 35% reduction of CO2. Applying these principles of circularity in our product design, we've. I'm happy to actually report that we are launching now 5 new products, material, material contracts in the second half of this year. The first one is BMW. This is a foldable container for the automotive industry. It's targeted to replace the so-called metal gitterbox. There is a product that we're launching for Continental. This is a pallet for the transportation of tires. A new product for CHEP, which we've also elaborated more on during the Capital Markets Day. This is a foldable container, produced fully out of recycled plastics for a dedicated pool that CHEP is placing in the market. IFCO Systems is another pooling company that you may be familiar with. For IFCO Systems, we developed a nestable pallet for the retail space. IFCO Systems is building up next to their crate business, now also a plastic plastic pool business for for retail. Last but not least, a pallet that's been developed for Xella especially for the building and construction sector, where we see that initiatives for reuse and also pooling are coming up more and more. That for the second half of the year. If we look a little bit closer on the sales in the first half of the year, as just mentioned, we've posted a growth of 2% against the first half of last year. However, if we were to look at what we call our strategic segments, the actual underlying growth is 6%. If I zoom in a little bit closer, then what do we see? We see in Europe that we've posted a very strong growth despite the market in which we operate, in the portfolio business, growing 11% compared to last year, especially through the acquisition of new new customers. Where the the growth in customized solutions and contract manufacturing has been, has been lacking. There, we see especially the effect of destocking and also budget constraints putting somewhat of a brake on our on our growth. If we switch from Europe to the US, the growth is 35%. This is especially fueled by the materialization of the Target contract. We've launched a product in the course of the second half of last last year, which then also rolled over into production and sales in the first half of this year. Obviously, now with the operations also recovering, recovering, we're also in a better position to adequately service the market. Last but not least, our ECO business, as mentioned, we concluded the restructuring. This has led to our overall capacity to grow by 25%, translated in the first half to a growth of sales by 16%. Basically on, on track against the investment, the investment case there. I would like to take this opportunity to also walk you through our ESG objectives. As mentioned, we started in the course of last year to define our ESG roadmap or strategy, if you like, this was an exercise that we concluded in close cooperation with PwC. It started off by defining the spear points of ESG within the Cabka roadmap. These spear points, they revolve around circular economy, climate change and energy, innovation, health and safety, business ethics, diversity and inclusion, and sustainable procurement. We've been working diligently to underpin these spear points now also with the necessary performance indicators, and obviously working on a roadmap on how to execute against these performance indicators or targets. More will be reported in the beginning of next year, when our annual report will also be matched with a more elaborate ESG report. That brings me to the midterm guidance and the outlook. We reiterate our midterm guidance. The 2% growth, as posted in the first half of the year, is a snapshot. It should be seen against the background of a very strong growth last year, as already explained, 25%, and it should also be seen in the context of today's markets. We therefore strongly believe that when the markets start to recover, but also when our new product developments are coming to market now, that higher growth will be foreseen. The EBITDA margin comes in at 13%. Also here, we reiterate the guidance of 20%. We see many levers actually to further improve the EBITDA over time. This is related, on the one hand, to utilizing the capacity that we that we have on the ground, and also have been putting on the ground, with the intention to expand, especially in the US, as well as various initiatives and operations to drive higher efficiency, obviously, the launch of some of these higher value-add products that should also lead to an improved margin. CapEx came in at 3.5%, that's well within the guidance of 4%. Frank will elaborate a little bit more on our, on our CapEx later on. Net working capital within the guidance, at the end of this week, the distribution of EUR 0.15 per share will be executed. Finally, to our outlook. Based on our strong fundamentals, we iterate this, reiterate this midterm guidance. That said, based on the current challenging market conditions, we expect for the 2023 revenues to come in between EUR 200 million-EUR 210 million, with a recovery of the EBITDA margin towards 13%-15%. With that, I would like to hand it over to Frank, to walk you through some more details on the financials. Thank you, Tim. Let me take the opportunity to zoom straight into the detailed financials, where we recorded sales of EUR 104 million, which is record sales for the company for the first half in 2023. I think the key point here to point out is the gross profit improvement that we have shown of EUR 3.5 million. We are able to increase our gross margin from 46% last year, now to 49% this first half of the year. The key drivers there are clearly the lower raw materials and lower energy costs that helped us substantially to make these improvements. You do see an increase in our operating expense of 9%, predominantly driven by the inflation. Half of our operating costs are driven by salaries and personal expenses. There we followed in all our sites, the inflationary adjustments with the indexes for each country. Of course, being a listed company also has certain costs. The predominant driver was the inflationary adjustments in our operating expenses. That delivered an operational EBITDA of EUR 13.4, which is a 13% of our sales, which is in line with the target that we've communicated to the marketplace. The element that I'd like to take a little bit in, in, in, in, view is the non-operational item. We hope this is the last one that we will be showing as a non-operational item. It's the remainder of the flooding, which has a net impact of EUR 2.2 million. It's a EUR 3.1 million before taxes. That impact is only the first half this year, and we don't foresee this to come back after the first half. Overall, that delivered a net income from regular operations of EUR 3 million, which was an improvement from last year's EUR 0.7 million. Including the non-operational item, we've been able to turn a loss, making net result last year of EUR 1.9 million, now to a profitable result this year of EUR 800,000. To zoom in a little bit further into the CapEx, as Tim posted, we've invested EUR 12.9 million total in CapEx, of which EUR 3.6 million has been used for the regular maintenance and replacement investments. We also took the opportunity in the U.S., to invest there after the flooding, which was a very unfortunate event, but it also allowed us to basically take some additional steps to improve the electricity, electricity setup that we have, the building infrastructure. We invested out of the EUR 4.6, we invested EUR 2.6 in those infrastructure setups, and another EUR 2 million in growth, expanding the capacity of the operation in the U.S., making us ready for the next growth step there. In total, you also see another EUR 2 million that we've invested in growth in Europe, in total bringing us EUR 12 million-EUR 12.9 million of CapEx in the first half of the year. The other element of cash is the net working capital. We have made good strides in controlling our net working capital by effectively reducing our trade receivable positions, which is good. We have also seen a higher investment from our customers. That has increased from EUR 2.2 million last year now to EUR 4 million. These are the contributions from our customers in investing in the joint development programs that Tim talked about before. That's another good sign and strong sign of the customers are willing to commit to the developments that we bring to the market together with our customers. Clearly, there is still room for improvement. In our inventory position, we've been able to keep it the same as the last year, but we do see further improvements possible going forward. If I look at the net debt developments, EUR 43.5 was a starting point for this year. In total, the business has been able to contribute EUR 8.5 million positive to a net debt reduction. In line with our strategy, we have invested EUR 12.9 million in CapEx and EUR 2.4 million in leases to further grow and maintain the business in both in quality and in quantity terms, that we're able to be ready for the next growth of our business. This relates to tools, this relates to machinery, so all in all, that's an investment for the future. Combine that with the one-off EUR 2.2 million net impact of the tolling expense that we had in the years, that brought our cash position to EUR 52.6 million for the first half of this year. The last slide for me on the calendars, what can you expect? As Tim already explained, we will have the payment of the dividends of EUR 0.15 per ordinary share as a capital distribution by the end of this week. We will then have the on the 19th of October, the trading update on the Q3. We plan to publish our preliminary results 2023 on the 20th of March, 2024. Of course, if there's any material events that will happen in the meantime, we will, of course, reach out to you immediately. That brings me to the end of my presentation. I'd like to hand it back to you, David. Thank you, Tim. Thank you, Frank. If we go back one, I think. This is the disclaimer already. We see the first questions coming in. If you still want to ask a question, please do so by using the Ask a Question button on the bottom right side of your screen. Let's go to the first question. Tim, something which was not in this presentation, but was, I think in the press release on Orbis, you communicated that your commercial agreement with Orbis has been extended without providing any further details. What does this mean for Cabka? Why is this an important new agreement that you put in your press release? Yeah. Well, Orbis has been a partner of ours for I think roughly the last 10 years. We have a manufacturing agreement with them here in Europe. This manufacturing agreement was coming to an end by the end of this year, so the end of December 2023. In anticipation of that, we've been working together closely with Orbis to give follow-up to the successful relation as it stands, and thereby we've extended that contract for the next three years. Okay. Good, clear. Maybe remaining with the commercial part where before we go a bit more into figures with Frank. Yeah. CHEP, also there, the agreement is coming into fruition in the coming half year. Can you also elaborate a bit on that collaboration? We've mentioned it already on the Capital Markets Day. Yeah Not everyone attending here has been on the Capital Markets Day. CHEP is a, is a, is a contract that we that we closed a few months, a few months ago, but it's it's a, it's a, let's say, a project that we've been working on over the last the last year or a little bit more than that, even. It's resulting in 2 new products being launched for CHEP. The reason why we've come to this, this position actually with CHEP is that CHEP is looking for a box, a large foldable container, that they already have in the market today, but they were looking for an alternative which not only is more, let's say, efficient and gives them certain cost savings, because as elaborated during the Capital Markets Day, by CHEP themselves, they have a 20% savings in cost on bringing the Cabka box as an alternative to the market. They also insisted on having a box made out of 100% recycled content. With our expertise on materials, and especially recycled materials, that was one of the reasons why they came to us. To your point, this development is now coming to fruition. We're launching the product in the course of the second half of the year. Okay. Thank you. Frank, let's dive a little bit into the figures. EBITDA, to start with, first question is: Does your EBITDA margin guidance adjust for the non-operational items? Yes, it does. We do assume that some like the flooding is a really good example. Floodings are not part of our normal business. They distort the operational business, we want to provide as much transparency as we can on what the real underlying business is. Our guidance is also built around the operational parts of the ongoing business, that we have. The 13%-15% is on operational EBITDA? Correct. Okay, thank you. On volume growth in the first half of 2023, was there still volume growth or was it more due to pricing? ... The splits was, there was still a small component of price, and volume was roughly flat. Okay. Yeah, that's clear. We see that you're rather cautious on the growth in the next half year or this half year. Tim mentioned 5 new large contracts. You mentioned you have a strong portfolio. Why the cautiousness? Well, I wish I would know exactly what the future holds. I think what we, what Tim alluded to was clearly those are the projects that we are controlling ourselves, so where we have got good cooperation with the customers to bring these new products to the marketplace. Still, a significant part of our portfolio is driven by customer demands, and that's driven also by quite some macroeconomic circumstances. There, we see that uncertainty is not helping at the moment for customers to commit. We see that there's a, as Tim alluded to, a large de-stocking effect, where people are just holding their cash, and waiting to get more clarity on where the market is going. That is, not saying that we don't see the growth coming, but you see currently there's a... The volatility in the market is currently leaning towards the more cautious sides of the equation. Okay. Yeah. We continue a bit more on revenues. You mentioned non-core products, phasing out. Can you elaborate a bit on that, and what is the expectation on that for the next half year, or for this half year? Yeah Going further? It's a, it's a, it's an important point to, to stress, and I, I apologize if I didn't do that properly enough in our presentation. We made a quite a deliberate choice last year in our strategy to divest the PVC business, and in our results, you did see still some sales of PVC. When we talk about the strategic portfolio, it excludes those PVC sales because that business will be divested, and the divestment is completed before the year ends. The other element is in contract manufacturing, where we have taken a deliberate choice to free up capacity for these new customer projects at the expense of contract manufacturing. Contract manufacturing is an important part of our portfolio, but at certain parts, we have just made a deliberate choice to reduce the contract manufacturing part to the advantage of the of the customized solution products. Resulting in lower revenues? Yeah, and that, that unfortunately results in a lower revenue for the contract manufacturing. We, in order to make sure that we show the market what the where we believe that the markets, our sales will grow towards, we basically call that part of the that part of the contract manufacturing to be non-strategic. Let me also emphasize, the Orbis contract that Tim mentioned before is part of the the contract manufacturing, which is relevant to our portfolio. That's RTP is yeah, contract manufacturing is relevant, the others are less? Correct. Okay, good. Thank you. A final question on this, but, maybe better for Tim. The increased cost focus of prospects affect their willingness to switch to plastic pallets. How. Sorry, how does the increased cost focus of prospects affect their willingness to switch to plastic pallets? Do you see the. You mentioned something on that. Do you either focus more on total cost of ownership or payback periods? Do you anything? Well, I think total cost of ownership and payback periods of, of any investment a customer would do has always been relevant and is as relevant today as it was ever before. That being said, though, you do see that customers are somewhat more cautious or maybe putting some investments off for the time, pushing the timelines out a little bit. That's what we also see. Okay. Maybe on potential strategic partnerships, do you see any concrete partnerships to more rapidly scale up the business? You promised in the past to grow quickly. We now see that's going a bit slower. What do you see? Do you see any opportunities there? Well, the, what we've been always indicating is that we're, we're planning to grow, both on the back of, of organic growth, as well as growth through acquisition. With all the dynamics in the market last year, especially, and also some of the, the internal topics we had to deal with, like the flooding in the US, acquisition or acquisitions have not been, let's say, at the top of our priority list. We've, we've definitely remained closely in touch with the, with the market, and with the different potential potential targets. That acquisition agenda is, is definitely there. Also to be fair and straight, we are not in a hurry. We are looking for the right opportunity, an opportunity that gives us the, the synergies that we that we are looking for. I've elaborated in the past on what these synergies should be. We should especially see that it fits from a geographical perspective, so it should give us better physical coverage of the, of the market, as well as also be complementary to our product portfolio. It should help us to especially accelerate, for example, the growth in some of the strategic segments, like the large foldable containers could be, could be an example. In that sense, we're, we're doing our work, we're doing it diligently, but we're not putting ourselves under time pressure. Okay. From maybe future growth to today, you noted a divergence in demand trends in Northern versus Southern Europe. Do you expect Southern Europe to remain strong, or do you also expect they are slowing down in the, in this half year? If we come to that, is there a significant difference in customer industries and product lines in Southern Europe versus Northern Europe, or it's just regional, the difference? ... Southern, Southern Europe has, has, has shown a somewhat better performance than, than, than Northern Europe. It's essentially, as we can see, actually, attributable to, to 2 effects. One is simply the acquisition of some new customers, which has driven up the, the overall sales in the south. As well as a strong recovery of the tourist sector. You see that, we do especially well in, in retail in, in Southern, in Southern Europe. Which we've not seen so much or, or maybe even the contrary effect in, in Northern Europe. It's mainly retail. Yeah that what makes the difference between Northern and Southern Europe? Yeah. plus the acquisition of some of the new- Plus acquisition of the some of new clients. Yeah. Okay. Feedstock. Has the feedstock buying position been improved or deteriorated due to the lower economy, economic growth? Our buying position has definitely improved, and it's also what you see translated to the to the gross margin. Right now, very much contrary to where we were exactly a year ago. The market is long. The market is long for both virgin as well as for recycled. These typically tend to be rather closely connected, so in that sense, from both a pricing perspective as well as an availability perspective, the markets are relatively comfortable for us, let me put it that way. Okay. If I may add. Of course. ... I think the key driver for our strategy is not we don't want to. Volatility is not in our interest. What we've done in our business to make sure that we reduce the volatility. We've put a clear hedging strategy in place and improved our hedging strategy when it comes to energy. Our vertical in and our backward integration helps us to be much more stable in our raw materials. It allows us more switching for our own chain versus buying in the marketplace. That optionality, that has helped us to provide more stability and benefit from market movements rather than being too much exposed to the volatility. Okay, maybe that's already answer a bit of the next question. We can look at that. The next question is continuing on the feedstock position. You said, is stating that the in-house feedstock position at this moment is quite high. Could you explain why, and can the number be improved by, with more efficient internal processes, or is it more about managing the volatility issues? Yeah, I think that it, it's, it's two elements. Inventory clearly is a reflection of our raw material position and our finished products position. Let me start with the latter one first. Finished product, we believe very much about customer satisfaction and making sure that when the customer calls, that we've got the product available for them to deliver. In that sense, we want to avoid any missed sales, and that's, of course, always a fine balance to strike, right? Which product is the customer going to ask for in the period to come? That, of course, once in a while you hit it perfectly, and once in a while you produce product one, where the customer is actually looking product two. That's, of course, a learning cycle, so that has to do with process and being very well connected with your customers to make sure that the inventory that you have, you can tune more to the customers. That is what I see going forward, where we'll be able to improve further. The second element is the raw materials. There we have deliberately taken a strategy whereby we benefit from raw materials that we are unique in, so the mixed plastics that we have a better position, that's been very favorable to us. In some raw materials, we do see that we can lower the inventory in absolute terms, but more importantly, we will benefit going forward from the lower prices that Tim already explained in the markets, which will help us to reduce the value component of the raw material side. Those two elements, both in finished products as in raw materials, will help us and give us comfort to reduce working capital going forward. We have another question related to this, which states approximately 50% of recycling is done in-house. What is the cost advantage versus outside recycling? Is there room to increase that advantage? I assume not the cost. For you or for you? Yeah, I think. Let me answer the financial part. And, uh, ... it is, yes, it is partly about financials, because it allows us to use materials that no one else can use, and that always has a certain cost advantage. Yes, in that sense, it is crucial for us that we are able to use that capability that we have. That having said, I think it's also important that we can offer our customers a pallet and box of their choice. Some customers have very specific requirements, and we, with our strategy, we can supply each customer with their specific requirements in terms of the material that they want to have in the pallet or in the box. Yeah. Nothing to add, Tim. Good. Nothing to add. we come to the next question again, for you, Frank. The press release mentions efforts to mitigate the effect of volatile material and energy pricing. Could you elaborate on these efforts, and how they did they contribute to the improved EBITDA margin? I think indeed, the, the most significant one is the hedging strategy that we've updated on energy, where we're doing two things. One, we are switching more towards sustainable sources of energy supply, via wind or solar, so where we have more longer term contracts, but more importantly, we have now, for the remainder volume, have secured and implemented a clear hedging strategy, whereby we reduce the near-term and mid-term exposure that we had in the past to energy price movements. That has helped us substantially in order to reduce the volatility there. As I said before, on raw materials, we are basically building strong relationship with our raw material suppliers, where in the past this was more, I wouldn't call it a spot market, but it was a much more short-term market. Now we see the opportunity to be able to build a little bit more longer-term relationship with our suppliers, and combining that with our backward integration, it allows us the flexibility to tap into the right source of raw material at the right price for our operation. Okay. Thank you, Frank. We've been going through the questions rather speedy. If there are any more questions in the audience, please post them still in the by the Ask Your Question button, button in the bottom right side of the screen. Tongue breaker for you. Yeah, that, the button at bottom, that's a bit of a difficulty for me, but that's a personal thing, I think. We still have some questions. On the flooding, what is the expected investment in flood protection, and well, when will this be realized to prevent for further risks, or is it already all done? And how much did you spend approximately? Well, the, as, as mentioned in my update, the, the flood protection measures are being executed as we speak. We basically split this in two phases. There's an initiative right now ongoing, which is actually deployed last week, to protect against any flooding that may come in short term, and then the rest of the year will be used to implement more structural measures, which is to be concluded by the end of the year. This has been done in close alignment with one of the world's leading water management companies, so we've completely mapped out this, this risk, and understanding also how… Yeah, what, what are the chances of this happening again? If it were to happen again, what would be the consequences, and how can we make sure that we adequately protect ourselves against, against that? Yeah, from that regard, that's, that's right now well, well within focus. Okay. Good. A bit different, can you... There's quite a detailed question. I don't know if you can answer that, or whether you have to come back on that later, but can you provide some quantification of the impact cost pass-through on the first half-year revenues? To what extent did low or zero margin cost pass-through contribute to these revenues? Shall I repeat that once more? No, no, no, I, I think I understand the question, so let me try to answer it as good as I can. In the past, we have communicated and collaborated with our customers quite extensively to align when prices were going up in raw materials and energy, to make sure that we as a company would not only be the only ones carrying the burden of these increased prices. The reverse also happens, when prices go down in raw materials or in energy, we also lower our prices in our products, and also in close collaboration. Let me point out that in a certain part of our portfolio, prices in, of raw materials are not the leading effort, especially I think, especially in customized solutions, we work closely together with our customers not to deliver a cost product, but we deliver a value product. What do I mean with that? Our customers don't look only at what does it cost, the example that Tim gave before on CHEP is a really good example on a customer looking well outside its cost prerogative, where we were able to deliver a box which has a 20% higher capacity, and therefore a 20% lower cost component. That is something that CHEP has looked quite carefully at. It's not only about what do the raw materials cost, and what does the energy cost, and what does it cost to produce? Now, what do you bring as value to us as a customer? I think that our strategy is clearly towards that part of the business, where customized solutions, where we understand the customer's requirements, where we understand what the customer is looking for, how can we help to improve their supply chain from a cost point of view, whilst delivering a product which has sustainability advantages that no one else can offer? I think that combination is much more important than only focusing on cost, and clearly there are there are players in the market that only focus on cost, which is also good, but for us, it's the combination of bringing value to the customer, bringing a product that no one else can bring, and making sure that the solution that we bring ties exactly to what the customer is looking for at a cost-effective way. To to Tim's earlier slides, when we offer a product which has a 50% cost saving, I don't think that anyone is looking, is, is too concerned at when prices move slightly up or down. Okay. Now, for me, it is clear. Okay. I hope for- For the- ... also for the one who asked the question. If it's not, always feel free to- Three ... contact me after this presentation. Of course. another pillar, we go back to customized solutions. I see here, revenue's down 12% year-over-year in the customized solutions segment. What can you tell us about this segment for the coming years? Is this a temporary blip or a structural issue? How do you look at co- Yeah, first of all, to be, to be clear, in this particular case, we speak about custom solutions within Europe. We don't speak about our total customized solutions portfolio, including the US. If you were to include the customized solutions performance in, in the US, you see an overall very significant growth from the top of my head, but Frank, you correct me, I think that's right around 40%. Correct. The customized solutions segment as a whole is, is showing significant growth. That being said, we see, and then we, we elaborated just on that a little bit when we spoke about the markets in south and north. In, in our European customized solutions sales, we have a big position for retail-... so pooling, pooling pallets and the retail business in Northern Europe has been slow, in the sense that, that they have applied significant budget constraints, which has led to somewhat, somewhat lower, lower sales into that segment. Fair enough, also against the back of a very, very strong market a year ago, hmm? I think that we always need to put into context. moderate growth to expect from this... Well, actually, like, with, like with any industry, we expect, also, also that sales to pick up simply from an intrinsic demand coming from the, from the market. At the same time, I've just alluded on a few more customized solutions that are that are coming up, and, and there's actually a few more behind this as well. That will continue to fuel the growth of this segment and, and our sales as a whole. Okay. A bit detailed question on gross margin here. Frank, according to the half-year report, in the gross margin in the US was 37%, versus almost 50% in Europe. Is this already, already including the tolling cost, or are these excluded here? Taking the bottom line, if so, what are the margin differences in the US versus Europe long term? Yeah, there is clearly a difference between Europe and the U.S. The market dynamics in Europe and the U.S. differ, no surprise. In the U.S., we have put in a lot of activities and a lot of projects that will help us to improve that margin going forward. One of them is our own capability of processing raw materials, as we are able to do already in Europe. That will come to the full front by the second half. Up to now, unfortunately, we didn't have the capacity available due to the flooding, and we were forced to work with our external tolling partners. That, of course, was not the perfect cost structure. The question of the underlying cost structure of 37%, that is, excluding the tolling fee, but it does include a higher raw material charge that we had than what we foresee going forward. Hence, our view on margin developments is a positive outlook there because we do believe that what we can do ourselves, using our own capacity, our own operations, we can produce much more effectively. Linking back to an earlier statement made, in the end, this industry benefits substantially from asset utilization, and asset utilization is the core focus in our strategy. If you run your assets at a very high capacity utilization, it can be a very profitable business to run, and that's what we're aiming for in the US. Okay, clear to me. On the share price question, always difficult to comment on share price, but this one is a bit more concrete. Share price is stated, is still very low, with also very modest daily tradings, as it says in the question: Do you consider starting a stock buying program, since the balance sheet would allow this? According to the question. Frank, No, we have not communicated a stock buyback program. We have clearly communicated where do we want to invest our money. We want to invest our money in growth. That has been the strategy from the start in the, in the shareholder circular, and it has been the focus of the business, as you've seen in our slides so far. Investing in growth is the key ambition. To the statement from Tim before, we will be looking to expand where we can, either through organic growth or through appropriate and accretive M&A transactions, that's where we believe, we believe we can deliver the most value. In the end, it's about execution of our strategy. We are convinced and confident that when we can show the shareholders and we can show investors in a very transparent way, that we are executing to what we said and what we do, we'll deliver, and actually we deliver, that the value creation will be there. We are not here to run the company on a very short-term basis. We're here on a long-term strategy and, and long-term to deliver value to our shareholders. That's, I think, also what the Dutch Star shareholders signed up for in this company. They understood that this is not a day-trading business that we are in. We are in for the long run to make, to build a really sustainable business, not only in products, but also from a financial point of view. No buyback? No buyback. No buyback. That's, that's the short version. Okay. Thank you. Let's go to the market again. Maybe for you, Tim, can you give some insight on the total market? We've talked about Cabka and in the first half, can you tell a little bit about the overall growth of the pallet market and plastic market, and also maybe compared to wood? Yeah, we've addressed this before to a certain extent. The market in which we operate, and to be precise, the reusable transport packaging market. In this market, wood is still the dominant material. The penetration of plastic alternatives is limited to anywhere around, let's say between 6- 8%. In that sense, there is a huge market to conquer. And we see also that against the back of sustainability, but also efficiencies in logistics that we have a lot of tailwind, concretely demonstrated by some of these customized solutions that we're adding, whereas Frank also mentioned, customers really also put skin in the game in the sense of investing with us in the development itself, as well as the product. We see a market that continues to be very favorable to us. Yeah, as a market as a whole, the wooden pallet market is also under pressure. Prices of wood have come down also compared to last year. Where last year we may have had or enjoyed, especially in the beginning of the year, some, some tailwind from, from higher wood prices, that is not the case today. Demand in the overall market is, yeah, is, is being impacted to a similar extent as what we are seeing. Okay, no direct impact from the woods condition? There is, there is, there is no direct impact. Other than that we, we don't have this tailwind anymore, if you could speak of that even, as we, we had that in the beginning of last year. Okay. Tim, you announced five new product launches or co-developments... Yeah ... during the, in your presentation. When will these products convert into revenues? What is the annualized revenue potential of these launches, if you can go into that specific details? In which product launch are we going to see the revenues coming back in the P&L? Yeah. We will see that these, these products are scheduled to be launched gradually over the course of the second half of the year. They're all running on their own individual time plans. For example, the Continental one is a good example that has commercially launched last week. It's in manufacturing right now. As we, as we go, we see that over the next couple of months, all these projects will see the light of day. Okay. The impact in the P&L? That will ultimately drive, of course, top, top line, and especially growth in the customized solutions segment. That being said, we focus a lot on the customized solutions segment. It's, it's also within the core of our strategy. We've also spent quite some time over the last couple of months reviewing our portfolio, products, identifying where the gaps are within our, let's say, our portfolio, compared to where the opportunities are in the market. You will also see that we continue to invest in that, in that area, because we've posted nice growth in the first half, and portfolio in Europe up 11%. With its, its total size, it's definitely also a, a segment that continues to be interesting to, to look at closely and invest in. Okay, thank you. We're almost coming to the end of the hour, so if people still have a last question to post, you can still do that with the button in your screen. Before we come to that, we have still a few questions left. The one is Come to the input costs comparative between recycled raw material and virgin raw material. What is the input cost comparative? I can take that question. Yeah. Okay. The, the exact, the exact relationship, of course, depends very much on where the markets, markets are. It depends very much on the type of quality material, when we speak of recycled content that you take in. Let me put it this way, if, in a market like today, if, if, HDPE or PP is anywhere around a price point of EUR 1,200 per ton, you could source recycled materials, and I'm not talking about what we do with our backward integration. I'm really talking about sourcing within the market. You can source materials that could vary anywhere between, let's say, EUR 500 up to EUR 1,000, depending on the quality that you're, that you're after, and of course, the performance characteristics of the material itself. That's also why our material engineering is so critical. We're always aiming for an optimum between the cost of the material that we, that we put in and the performance that is required by the end product in the end. Yeah. Not all products need to need to have a maximum durability. Some, some products may more easily get lost within within their their value chains. Then it makes more sense to focus on somewhat cheaper input material. That gives you roughly, yeah, an indication of the, of the, the relationship. Maybe also a final question for you, Tim, also regarding to the outlook. Could you provide more insight into the factors contributing to the 2% year-on-year growth in sales during the first half? Considering the current challenging market conditions, how confident are you in achieving the projected revenues of EUR 200 million-EUR 210 million for this year? First, Can you give a bit more insight on the factors of the current growth and then going further for the further this year? Yeah, I think, I think we've elaborated quite a bit on, on the growth within the first half year itself. We are operating in a, in a market that is that is somewhat under a break. We see the destocking effects, we see some of the budget constraints by customers that are having their effects. That being said, we see still healthy growth within within Europe portfolio. We see also healthy growth within the US as a whole, but especially the customized solutions segment- Yeah ... they're performing, performing well. It's the contract manufacturing and customized solutions, notably in retail, that are lagging in Europe. I think that sums up where we are in the first half. Looking at our outlook statement, the range of EUR 200 million-EUR 210 million is a range that results from obviously a close, a close study of the markets and the different products and projects that we have within the market, and gives us, that study gives us the comfort that the revenue is going to land within that bracket. Okay. I think with that, these words on the outlook, we come to the end of the questions. I don't see anything coming in anymore. I would like to close the session with still a note that the recording of this webcast will be posted on the investor section of our website tomorrow. The address is in your screen here, and we encourage you still to fill in the short survey of the webcast after the sessions, after this session. Thank you for joining us this morning, and have a very good day. Goodbye, and see you next time.