Arkema S.A.

Thank you very much. Good afternoon.

Welcome to the First Quarter 2019 Results Conference Call. So with me today are Marie-José Donsion, our CFO, and our team.

So I know you have a lot of results released today so we try to be as short and straight to the point. As usual, we have posted on our website, in addition to the press release, a set of slides, which detail the first quarter performance that I'm pleased to present to you today.

As you've seen from the press release this morning, the first quarter, Arkema achieved a very solid performance in a volatile and complex microeconomic context. Obviously, market conditions are more challenging than they were last year at the same period.

Geopolitical uncertainties continue to weigh on global demand and the oil prices significantly since January. In this context, our feeling is that customers remain cautious managing tightly their inventories and this environment globally wait on volumes and requires us - each of us to be agile and adapt quickly.

Having said that, Arkema reached in Q1 an EBITDA of €370 million, only slightly below the record performance of first quarter 2019 and fully in line with the guidance we communicated when we published full-year results back in February. We thus continue to demonstrate a good level of resilience as well as the quality of our portfolio of businesses with a performance which was close to the all-time high in the first quarter and following the robust end to 2018.

Before looking at this set of results in more detail, I would like to highlight a few important points. Firstly, despite soft volumes, EBITDA grew in our specialty businesses as a whole.

As a reminder, they represent today more than 70% of Arkema's total revenues. This is a result of our pricing actions and the strong focus we put on, going in the year, mix, which already bearing fruit in our business, but also in other specialties namely Advanced Materials, Thiochemicals and also acrylics.

With a higher contribution year-on-year, specialties are starting to take over from our intermediate businesses, in line with our stated ambition to further expand their share in our portfolio and earnings. Secondly, as expected, we saw clear signs of normalization in MMA/PMMA.

No surprise there. And the market condition in Fluorogases were less favorable, both compared with the very strong buys of last year.

On the other hand, our assumption of a gradual improvement in macroeconomic was confirmed. This improvement naturally supported by solid volume growth is key to us as we get ready to integrate our partner's production capacity in China as soon as we have approved production to purchase the stake.

Overall, the global performance of our intermediate businesses declined year-on-year, but the good news is that the EBITDA margin remained at a high level. In terms of cash generation, free cash flow is very positive this quarter at €73 million.

I mentioned it because it is unusual for first quarter, bearing in mind the traditional working capital seasonality. As a consequence, net debt was again under tight control and the balance sheet remains very solid.

Finally, our teams are busy on the ground implementing our long-term strategy to transform the company. They completed two significant startups since the beginning of the year.

One was in the U.S. It was a new PEKK plant, which I remind you is a new high-end engineering polymer resulting from 10 years of R&D efforts.

The second one is a new for curing resin for Sartomer, for which we expanded our capacity in China by 30% early 2Q. These two investments which support total development in electronics and 3D printing.

Lastly, we announced yesterday finally, we had many questions on this matter, the location of future mega site for the production of bio-based polymer 11 in Asia. So the plant will be built now you know in Singapore and construction is expected to be completed end of 2021.

We're very excited about this project, as you can imagine. We knew that the start of the year will be a bit challenging for most chemical company given the current macroeconomic context and the comparison base of last year.

So you have seen different result and you can see that our resilience of our overall performance is a clear positive signals in Q1. This was, as a conclusion of this introduction, supported by the growth in our specialties, a high level of profitability of intermediate despite the normalization of market condition as well as the superior cash flow generation.

All these elements together with the quite positive trend of results we have consistently achieved since 2010 a testament indeed to the success of our performance and strategy as well as balance and quality of our portfolio. I propose now to hand it over to Marie-José for more detailed look at Q1 results.

Marie-José?

Merci, Thierry. So hello, everyone.

I'll take you through some of our financial indicators for the first quarter of 2019. So sales were up 2% versus last year at €2.2 billion.

The sales bridge shows a 1.3% positive price effect, reflecting our strong pricing actions in High Performance Materials division in particular, and in downstream acrylics as well. So volumes declined 2.5% versus a strong Q1 2018.

In High Performance Materials, demand was lower relative to last year in sectors such as automotive, electronics and oil and gas. While on the other hand, Coating Solutions enjoyed solid volume growth.

Finally, we had a positive scope and ForEx impact. The positive 2.8% currency effect mainly reflecting a stronger U.S.

dollar versus the euro compared to last year. EBITDA remains at a high level at €370 million, 3% below last year's high comparison base.

This reflects the true focus on pricing and margins in specialties, the good margin levels in industrial specialties, the positive ForEx and the €30 million impact of IFRS 16. EBITDA margins stood at solid 16.7%.

Depreciation and amortization reached €123 million, the €17 million increase versus last year mainly coming from the IFRS 16 and from currency impact. So as a result, recurring operating income amounted to €247 million and REBIT margin was at 11.2%.

Nonrecurring items included a €9 million PPM amortization and €12 million nonrecurring charges corresponding mainly to restructuring expenses. Financial results stood at €27 million, so in line with Q4 2018.

It included the cost of our financial debt in euro, as you know, as well as the cost of debt that we spoke in U.S. dollars.

The tax rate, excluding exceptional items, is at 21% of recurring operating income, so it's in line with our full-year guidance. Consequently, for the first quarter, adjusted net income amounts to €165 million, which corresponds to a €2.16 per share.

Let's now go through the performance of our three business division. So I'll start with High Performance Materials, where sales amounted to €1 billion, up 1% on last year.

Prices increased by 4.7% with a positive effect across all product lines thanks to continued price actions and assets to optimize the product mix. Volumes are down 6.7%, reflecting both last year's exceptional contribution of specialty molecular sieves and faster volumes in certain end markets.

These two impacts overshadowed the success of our innovations in high-growth segments such as batteries or 3D printing. We expect the market momentum to progressively improve over the coming quarters.

The 8% or so percent that you see in the bridge corresponds to the integration of acquisitions such Nitta Gelatin industrial additives in Japan and Afinitica instant adhesives that we realized in the second half of last year. Consequently, for this division, EBITDA reached €162 million at 16.1% EBITDA margin is equal therefore to the full-year 2018 level.

A notable point of satisfaction is the EBITDA improvement in adhesives thanks to the progressive passthrough of higher raw material cost. Regarding industrial specialty, sales were down around 3% year-on-year, with volumes down 3.4% due to lower demand in the automotive sector and in China.

As expected, the minus 2.4% price effect reflects normalization in both MMA/PMMA and Fluorogases compared with a very high prices reached in 2018. At €157 million the EBITDA of the division reflects the normalization effect that I just described, and in Fluorogases, the comparison with 2018 is also impacted by some high level imports in Europe.

Yet at the same time, thiochemicals delivered an excellent performance this quarter. And as a result, the EBITDA margin of the division is flat at 24.5%.

Finally, in Coating Solutions, sales were up 10% year-on-year, mainly driven by higher volumes, up 6.9%, which benefited from a good dynamic. In downstream activities, the group continued to actively raise prices as well.

So EBITDA rose 15% to €76 million thanks to the good level of demand in acrylic monomers and the gradual passthrough of higher raw material cost in downstream activities. I'll conclude my comments with a few words on cash flow and on the net debt.

So as mentioned by Thierry, the cash flow was positive at €73 million with a significant improvement relative to last year quarter one, close to €100 million improvement actually. This stems mainly from a lower increase in working capital requirements compared to last year as the effect that's of the usual seasonality was mitigated by softer volumes and lower prices of raw materials.

At 15.1%, working capital ratio from annualized sales is comparable to Q1 2018. Capital expenditure is in line with our ambitious investment policy to support our future growth.

So for the full-year, we reconfirm our guidance of around €610 million, total capital expenditure both recurring and exceptional. Net debt reached €1.1 billion at the end of the first quarter, including the impact of the first time application of IFRS 16, which added around €160 million of assets and of financial debt to the balance sheet.

Thank you for your attention. I will now hand it over to Thierry.

Thank you, Marie-José. So we now comment on some element of the outlook that it was mentioned in the press release.

Globally, we expect the macroeconomic environment to remain with the continuity of Q1, which is not by this geopolitical uncertainties, which continue to weigh on global demand. In this context, we focus on what we control best, which is our internal momentum and the execution of our strategy long term.

In particular, we will first roll out our industrial project, which has some complementary startups, which are expected in the coming months. As you know, we have this Advanced Materials start up in Monde, South of France and also an important one in the acrylics in the U.S.

We'll also continue to work on our transformation industrial project. We have two going on at least, one is in thiochemicals in Malaysia is going pretty well.

And the other one is the one we have mentioned before, which is a specialty polymer in Singapore. Together with the acquisition of our partner's stake in Sunke as this project will contribute to our growth in the second part of the year.

We also continue to implement our initiative as part of our operational excellence forum as well as our proactive actions to raise prices selectively, in particular, as I mentioned at the beginning in context of volatile oil prices. On the full-year, our aim is - as we already mentioned in February, really to continue in this more complex challenging environment to demonstrate the group's resilience, and this is what we believe we have done so far in Q1.

In Q2, we expect to operate in an economic environment which is in the continuity of the start of the year. So the performance should, therefore, be below last year record high levels.

From the second part of the year, our feeling is that we should benefit from improved market dynamics in specialties, especially compared to the first part of the year. So the improvement of unit managing in downstream activities, which is something we have started to see in the first quarter and the startup of our new capacity as just mentioned above.

Consequently, we confirm our aim to consolidate our financial performance at high levels and to achieve in 2019 an EBITDA which is comparable to 2018 record level. So I thank you for your attention and together with Marie-José, I'm ready to answer all your questions.

Good afternoon. I just had some three quick questions.

Yes.

First of all, you mentioned the rule in the presentation that you have seen an improvement in Bostik - margins of Bostik. I was wondering if you could help by quantifying that improvement year-on-year or sequentially.

And then just I wanted to ask on thiochemicals, I believe you made an announcement last year that you're expanding capacity in thiochemicals at Beaumont, which I think you said was to supply Novus with thiochemicals for their expansions in refining. I know last week Novus announced that they would not be increasing the refining capacity to the plant 440,000 tons.

I was wondering if you could help us understand what impact that has in the thiochemicals over the next couple of years.

Okay. You said you had the third question.

No. That is two.

Sorry, miscounted.

No problem. Sorry, on Bostik because we for the time being, someday we will certainly change, but we don't split the inside of HPM.

But as we mentioned, there was an EBITDA increase in year-on-year, which was not - just 1% or 2%, and it was more than that, I think clearly. And if you look at the volumes, which were quite challenging, especially in Advanced Materials, you can see that quite solid with an improvement of unit margin for the first time since a certain time.

So I think it's quite positive in a sense because for the one, if we have some doubt, it really reflect what we have been saying all along last year. We were just trying to catch up with raw material increase.

And once they have been a bit more stabilized, we have been able to really to see the benefit back. So it's certainly a positive point in our release.

With regard on thiochemicals, as we said and we have said many times to the question which you're asking on Beaumont, we said that when our partner of this, their project, we say that whoever have to support them. If they wanted to go through what they have said as you mentioned wisely that they have decided to revisit different scenario.

So this means that the project we had with them or the reflection we had with them because there was nothing final as we said, is clearly on hold. And we follow what they want to do.

But they have said clearly that they wanted to revisit that scenario. So for us in the coming years, and it changed nothing because anyway it was a very long-term project.

So I think we're quite confident to continue. We have plenty of ideas, including the one in Malaysia, which we go through for next year.

And we are quite dynamic within thiochemicals. When I say that, we're there to support our partner when they want to grow, and it will certainly be the case when and if they want to do something else.

So Thierry, can I just confirm that you haven't spent any additional CapEx to support Novus in the plans, which they had up until last week. Is that what I'm hearing or...?

If your question is, have we - is that like we had to spend CapEx and we would - with CapEx spend for last year, the answer is, no. Not at all.

No, okay. Thank you.

Okay. So no impact on our accounts whatever, if it is your question.

Yes.

Hi, Thierry. Hi, Marie-José .

Hello, Mubasher.

Hi. Just two quick questions for me, please.

First one is on Fluorogases. Now it looks to have softened year-on-year.

Could you just tell us quantify the impact the illegal HFC imports? And then how should we think about that going forward?

And then just second question this is bit more wider on Bostik and the bolt-on acquisition. One, how are the conversations going?

And two, do you think or have you seen the turbulent macro potentially create opportunities for you from a valuation perspective? That's my two questions.

So on the Fluorogases, as we mentioned, and I think there are also a certain number of element from Chemours that you can also refer to. So it's true that there are development of really good import.

HFCs in Europe are filling is that this product, in fact came - come mainly from China by the way. So clearly, we have been reacting quickly as Arkema, but also as an industry through the trade association.

As the good news is that authorities are both available of the member state, but also as European role, address the situation, which seems for somebody discovering it completely unexpected because we just to apply to rule. So they are there to enforce the legislation.

So we're working on it actively. Basically what we say to answer your question on Fluorogases performance, you remember certainly that what we said is once this year after next one in early 2018 level, very good 2017, extraordinary 2018.

We say one or two months ago that still that our feeling is that we should be somewhere in the middle between 2017, 2018. We believe that with the expected normalization of Fluorogases, now we believe that we could end up around 2017 performance, which is still high differentiated - a bit below what we thought a couple of months ago just because of this development of really good import.

I think it's under control. But we're a bit more cautious on Fluorogases, including in Q2 because it's, as you know, a big quarter for Fluorogases, which means that because you could have then the following question, which is on the full-year guidance, which means that we have some of our elements inside Arkema that will offset what we see on Fluorogases.

Yes, on Bostik, so Bostik on acquisition, do you see because of the macro some release of - I think you have seen recently from what are the big movements. You could see the announcement with regard to the acquisition of [indiscernible] which are a niche - this is at a very high multiple.

So I don't think it showed that multiple were decreasing, so we're still, because there is a lot of money from company corporate and finance equity. Still it's from an administrative for challenging.

So I just say what we have been saying in the past year. We are selective.

So we will continue to make bolt-on acquisition, but we still believe that for our shareholders business and we are shown already at Arkema as one we have paid at reasonable prices on which you can have significant synergies. So there is room for us that we continue to be selective, but we don't see to answer precisely your question, any change in multiple levels.

Thank you very much.

Good morning, all. Two questions please, Thierry.

The first one is on HPM. Could you help us understand qualitatively the drivers on the volumes decline for Q1 between the molecular sieves comp, but also the product pruning that you highlighted and the focus on pricing?

And then just generally, what's happened to the underlying environment? Maybe is there any sense of destocking in there?

And the second question on fluoro. You mentioned the gray market in Europe.

We are reading that spot prices in the U.S. have actually gone up a lot in the past few weeks, is it something that you're seeing in your business?

Thank you.

Okay. Thank you, Laurent for the question.

With regard to the review, so clearly there is a nine identified points, which is HPM reference points that we still have partially on the Q2, but not on the rest of the year. We have a little bit of pulling, but that is not, I would say, significant in the minus 6%.

Certain HPM is about, let's say, one-third of it or something. And then the rest is really the fact - I think it's very difficult to know exactly, but because on the full-year, I think it seems we will be more rationale.

But at the beginning of the year, you've a big variance depending on which end-market we are talking about. And we have to recognize on the - for what is also material, what is oil and gas and what is consumer electronics.

We have a big discrepancy without losing any market share compared to last year. So it's fact of life.

I think this is why we say we are more optimistic for the second part of the year trying to be reserved to a certain extent, because at the end of the year, the valuation will be far more normal. But we have sort of you could call that destocking.

I think, as you know, you have a long experience of chemicals, when on certain end markets, there are some negative sales to consumer on the whole value chain, especially when you're on the chemical level, you have the destocking movements that can impact one or two quarters. So I think we're there, okay?

And this is why, but we're not losing any market share and we still believe that this market are excellent market on the long run. On Fluorogases, you're right to say that there are some spot prices in the U.S., which have gone up.

So we need to see if it is long-lasting on us. It's too early really to answer what is clearly that, as we mentioned also in Fluorogases, you have different elements of volatility for positive, negative.

Clearly, we believe that Europe will be under pressure clearly for the next quarter, but the U.S., you see some positive trends, but we still need to be conservative. So I prefer to be cautious, but support, it is true now we need to make sure that it is long lasting.

So we see we should know more in the coming months.

Okay. So when you say that you assumed offsets in the guidance for the full-year, it wasn't better U.S.

pricing in HFCs, it's something else.

No. No.

Nothing Fluorogases, we're talking about other markets, other products.

Okay, thank you.

Okay.

Yes. Thanks.

Hello, Thierry. Hello, Marie-José.

On Coating Solutions, you talk about passthrough of higher raw material prices in downstream activities, while overall prices in the segment were down by 0.5%. This implies lower prices in the upstream activities despite the fact that you mentioned good demand in acrylic monomers.

And how does that fit together? Is that the reason why last year propylene prices were quite high and this time in Q1 lower, and therefore, there was a passthrough effect?

And in connection to that is the margin increase in the segment, Coating Solutions, did that come from upstream or from downstream or from both? Thanks.

Okay. First of all, I'm sure this is what is your message underlying.

We can all be happy of the performance of Coating Solutions. It is important that we had many question last year, many challenging some of you thinking that acrylics would be quite a challenge for regular.

And we said no, we don't think that. And we're happy to see that we were right with not fantastic improvement, but gradual improvement as we have done in the past year.

So on acrylic, so this is the first thing. And I think in Q4, your question, which gives me the opportunity to state this fact.

With regard to the pricing, the difficulty, as you know, with pricing in Coating Solutions is, you've that in mind, you have upstream or downstream. And a big part of the pricing is a linked to the propylene move up in upstream, which - and this is not because pricing would be down that it has a positive or negative influence on the margin set because it is more a matter of supply-demand.

What is clear and what we see is, we see two elements, the gradual improvement of the cycle in the upstream, acrylic acid, which is confirmation of our assumption that we gave to you last year. And second thing, on the downstream, after a very two difficult challenging year in 2017, 2018, some recovery of margin.

And the combination of the two make, I think, quite good improvement in performance in the quarter in terms of EBITDA, because we have an EBITDA improvement of 15%. So at the end, you're right to look at pricing, volume, et cetera, but the EBITDA is the best indicator and it increased by 15%.

And I would say with the good momentum of the upstream, but also the satisfactory performance and rebound of the downstream, so both were contributing.

Thanks.

Two questions, if I may please. You stated in the outlook and that was not much the case before that you're looking for an improvement in the specialty markets.

You said something about when you have any indications in your order book or trends in the end markets? Or is it just an expectation that one was adjusted too low start to be real and reality has to come back?

And the second question on Sunclear and the full control you will have of this acrylic asset, upstream plan, can you update us what you will do and change at this site? And what we can expect from this site as a contribution in the second half?

Thanks.

So with regard to the dynamic specialty, I would also refer to the answer to Laurent Favre's question. And what we said in the press release of the outlook, we say that - with regard to Q2, we don't see any real change.

We said in the continuity of the context. So we don't say it will rebound, but what we say for the full-year is that the second semester should be better.

And then in fact, the similar answer as I did to Laurent to your point is when you look, and we have a good experience I think of 13 years of specialty where we are very diversified in terms of our market. And we believe it is strength.

We have never seen such a level of decrease, which is not reversing, at least to a good portion in the year. So we believe it would be for the second semester.

And certainly because there is an element of destocking, it's both my feeling and my experience. So it doesn't mean necessarily that the end market suddenly go up strongly because just softer of going back to normal, okay?

And so it's our feeling. And we believe this assumption is a solid one.

With regard to Sunclear, [indiscernible] we have to certain extent it lacks new capacity. I think we will do what is necessary to supply our customers, to deliver to our customer.

But to a certain extent, it is the same as what we will do in acrylic. Normally, we try to ramp up on three years when we have new capacities in acrylic.

So this is the case in the U.S. Sunclear also, is we try to do something like that, so okay?

Okay, thanks.

Hi, good afternoon, Thierry. Good afternoon, Marie-José.

Thanks for taking my questions. I've got two.

The first is on Coating Solutions volumes. As we saw in the fourth quarter last year, Q1 2019 has had very positive volume.

And I was just hoping you could give a little bit more color around what is driving that and how sustainable it is, so maybe by region and market? And then the second question is on your very strong cash performance in the first quarter.

How much of that is attributable to kind of year-on-year change in working capital versus better cash generation, given the strength in your upstream businesses? And how are you thinking about the outlook both of those in the latter part of the year?

It would be very helpful to get your views on that.

Okay. Georgina, Marie-José will answer the last question first, and then I'll go to Coating Solutions.

Okay. So cash generation, as you could see, the main driver is the improvement that we have compared to in terms of working capital.

Let's say, requirements for the first quarter. So we always have some seasonality impact on first quarter versus obviously the end of the year.

Volumes are high, higher than in Q1 than in Q4. Hence, let's say, the consumption of the working capital.

Now when I look at the ratio, in fact, the management of the working capital remains, I think a good asset of the Company and a clear focus point of all the business units. So in terms of ratio, working capital is actually quite comparable in terms of ratio of annualized sales of the quarter.

And we are at 15%, as I mentioned in my speech. So for me, we are in a sustainable environment where basically the work that has been done in terms of improving the management of the working capital last year remains and this is sustainable across this year, again.

Thank you, Marie-José. So Georgina, on the Coating Solutions, which to certain extent is in current evolution.

So first of all, I mentioned it was a good surprise to you. With regard to the volumes, to a certain extent, as I say for High Performance Materials, that all the other - in the other side we've agreed to grow at 7% every quarter.

If it is your question, that is clear that we have a good momentum in Asia. I think the work that we have been doing, notably in China, there is more and more focus on the very well managed very compliant.

So I think we benefit from it with our customers. Certainly, the base of comparison of last year was not so strong also, so we'll benefit from it, we certainly a second element.

And we have, I would say, correct dynamic in Downstream business. I wouldn't say incredible, but I think, quite all right.

So I would say we certainly should continue to have a good momentum in Coating Solutions for volume. I won't say really quarter-by-quarter but overall we are relatively confident, but we cannot say that we will deliver 7% of volumes every quarter.

It will not be true. But I think we're quite glad about the start of the year of Coating Solutions, which confirms our assumption on the acrylic value chain.

Yes. That's very helpful, Thierry.

So just to confirm so what you're saying is a lot of the volume strength is taking market share from the competitors that have had supply disruption in Q1. You don't seem to have kind of pointed out whether coating demand or paints or any of the other kind of end markets?

Sorry, I interrupt you because I think we have conversation on the clear answer. As earlier mentioned, any taking market share of competitors, so no what I say is that we had a good momentum in Asia, that we have a base of comparison of last year, which also add and overall, the satisfactory dynamic in downstream.

So just take what I said and not interpret. Thank you.

Okay. Thanks Thierry.

Hi, good morning. Few questions, firstly, on 2Q.

Can you give us some color on who you think Q2 year-on-year decline in EBITDA versus maybe Q1? Is it Q1 right sort of year-on-year decline to think about in terms of 2Q when you talked about weaker 2Q year-on-year?

That's number one. Number two question was on both unfortunate incident in Zhejiang province.

It seems that the provincial government is taking quite approach to safety and environmental aspect more than the past. And correct me if I'm wrong, but you do have quite a few sites in and around that province.

So is there some impact that you guys are seeing or do expect from any of your sites there? And the last question is, just a clarification when you said at the beginning of the call that you expect the Fluorogases sort of performance this year now to be somewhere close to 2017.

Is that just a comment around Fluorogases or the Industrial Specialties division as a whole? Thank you.

So last point I think I was very clear. It was a question on Fluorogases and answered on Fluorogases.

And again, I remind you that Industrial Specialties is PMMA, Fluorogases, thiochemicals, H202 with a combination of specialty business and intermediate business. So intermediate business normalizing and the other two specialty as you could see for apparent in first quarter behaving quite well.

And so on your third point, it was clear. It was an answer, which was to a question, which was asked specifically on Fluorogases.

With regard to the Zhejiang province, Accelerant Iduhntie was a Chinese company, which has very big incidents with better human consequences. I think we have no impact at all.

I think clearly what you're mentioning is true. I think there is a lot of, let's say, from Chinese local authorities on what is environmental and safety, which is I think is good for industry.

I think it's normal that we have that. And this is why we permanently invested greater fight of them to remain state of the art.

And I think we are well-positioned. That is an element to come back to the question of Georgina, of let's say, good volumes in China acrylic, maybe a little bit.

We don't know. There are plenty of delivers which come with this kind of incident.

It can be for a challenging raw material, but on the other side, maybe can help on certain end market. So we'll see, but what is clear to answer precisely your question, we had no impact from this incident.

And we are not on this platform. Even if that by definition, you have plenty of sites in Shanghai area.

So everybody to a certain extent is closed. But closing the Chinese way is still a long way.

With regard on the 2Q, maybe a way to phrase it, is to say that more or less we will find in 2Q elements of year-on-year of what you have seen in Q1 with one difference is that for the Fluorogases, the Q2 is important one. This is when the distributor have talking for the season.

And so it's - this means that in - not in percentage, but in absolute terms, the impact of really goal of important of the normalization of Fluorogases is more important in Q2 than it was in Q1. But with this exception for the rest, you are mainly element of similarities between Q1 and Q2.

And this is really the second semester that we expect from a market conditions standpoint, including this discussion we had on destocking should it really improve. This is where we will get it.

Thank you.

Hi, can you hear me.

Yes, sure.

I am sorry, it's Alex Gibbs from Barclays. This seems to have gotten lost here someplace and I don't work at Deutsche Bank.

It's so confusing so I apologize for that. Thank you for the presentation.

I've got three questions and hope that they are quite easy to answer. First one, could you run through the reason behind the strength in your Thiochemicals business?

What that means by downstream [assigning] growth or perhaps the other reasons for it. Secondly, can you just confirm or clarify your comments in the release that the Bostik EBITDA would have been above the prior year period even without IFRS 16?

And then finally, do you still have faith and belief in your 2020 revenue and EBITDA margin target, which have been deemphasized a bit over the last year or two? Thanks so much.

Okay. So on Thiochemicals, clearly the momentum in the end market including methionine, I mean in terms of volume was quite okay.

So it's certainly an element of the performance. So methionine, as you know there are some weakness in pricing, but the volume dynamic is quite okay.

And we depend on the other supplier of intermediate product we depend on the volume dynamic. And the rest of the business is for Thiochemicals was quite okay.

And as you know, we are clearly - there are some benefit from our very strong position. With regard to Bostik, yes, it's above last year, including ACFS.

And including if you do it like for like and in 2020, yes, sure, I think, but as you know, if a part of our - in terms what is your many contribution, we have there already flat year so it's really what is now missing is really the M&A, let's say, evolution that we still need to complete. So as we mentioned, and I mentioned already before, we are quite selective.

So we just not do M&A for the sake of achieving 2020 target, but we still believe it's achievable as I'm talking to you. But to be part of the M&A because if you look at the plan, you look at what we've achieved from an organic standpoint, what is remaining, and it's mostly M&A and we have the financial flexibility to deliver this M&A and to be exactly where we said we would be three years ago when we published 2020 target.

So everything is consistent from this standpoint.

That's great. Thank you so much.

And if the confusion earlier.

Okay. Maybe a last next question or - okay, so if not, so I thank you very much for your time, your question, and certainly our team is open to answer any of the questions that could come later.

Thank you very much.