Solvay S.A.

Jean-Pierre Clamadieu - Chief Executive Officer Karim Hajjar - Chief Financial Officer

Peter Clark - Societe Generale Martin Roediger - Kepler Cheuvreux Geoffrey Haire - UBS Chetan Udeshi - JPMorgan Nathalie Debruyne - Degroof Petercam Thomas Wrigglesworth - Citi Patrick Lambert - Raymond James

Thank you very much. Hello, everyone.

Thanks for joining us today. I'm here in Brussels with our CFO, Karim; and the Head of IR, Kimberly.

And together, we will provide an overview of our first quarter of 2018 results. Just a few other introductions and then I will turn to Karim.

I would say that this first quarter was very much in line with our expectation. Strong volume growth continued, driven by the Advanced Materials and Advanced Formulation clusters.

As you know much of our Advanced Materials cluster provides lightweighting solutions to our customers in markets like automotive, aerospace and a few others. We've benefited from the strength in automotive and also the fact that our product gained market share, replacing metals with high-performance polymer in a number of applications.

So overall, a very good run in the automotive segment. Aerospace, composite continued in its growth trajectory, both for the military programs and the commercial ones, generating significant volume growth.

Formulation performed well too. We are focusing there to serve our customers' needs in terms of resource efficiency.

Growth was especially notable in oil and gas. We serve mostly the nonconventional oil and gas markets in North America and we have seen a very strong trends there.

The only point of attention during this quarter was -- in this cluster was our mining chemical business, which was flat compared to last year, but in our view it's a temporary situation and we expect a good run for the full year and this segment too. On an organic basis, our EBITDA grew 9% in the first quarter, very much in line with our midterm objective [fall], and this was also unfortunately something expected.

The combination of scope, we had a couple of small transaction but which weighed on our EBITDA because we have not restated for these transactions. And especially for an exchange headwinds, reduced EBITDA by 3% to €533 million.

In this context, we are able to maintain a strong EBITDA margin of 21%. In an inflationary environment, as far as raw material and energy input are concerned, well this is a good sign that indeed we benefit from significant pricing power in the various markets where we play.

With that, Karim, could you provide us with additional insights in our financial performance and I will come back with some closing remarks regarding the -- how we see the year in front of us.

Thank you, Jean-Pierre. Before I get into the key aspect of our performance, maybe just highlight the fact that we have been listening and I hope you appreciate the fact that we've tried to distill the key points in a more strategic press release.

Well, of course, we supplement that with a comprehensive financial report available on our website. As usual, I will refer to slides that you can access on our website and the figures that I refer to are on an underlying basis, and also reflect the fact that we show the polymer activities as being discontinued.

Let's start with sales and perhaps, if we can refer to Slide number 8. The fact of the matter is net sales have declined 3% in the quarter, but when you exclude the scope and the anticipated foreign exchange impact, sales increased by 6% year-on-year.

Volumes were up 5%, driven by strong growth in Advanced Materials and Advanced Formulations. Volumes grew 6% in Advanced Materials, as we continue to benefit from the lightweighting trend, which really raise a sustainable mobility.

If we look at our high-performance polymers, especially in automotive, we see a strong demand, fueled by the drive for fuel efficiency, for electrification of vehicles. But we also saw good demand in other markets, including healthcare, food packaging, electronics to name but a few.

On the composite side of our business, sales volumes grew double digit on the back of increased production of commercial aircraft, including, by way of example, the Boeing 787 Dreamliner, the 737 MAX, and would be continued, an anticipated ramp-up of the F-35 military program. We've also seen improved demand in helicopter and in the business jets sectors.

These are developments which we really welcome. The industrial side of the business also showed improvements in the quarter, and that's mainly linked to high-performance auto programs.

If I turn to our Special Chem business, we delivered robust demand growth in the electronic sector and that's supported by our recent capacity expansions. And that helped us set a reduction in the demand for rare earth oxides in automotive, linked to the shift away from diesel to gasoline engines.

Overall, that resulted in a stable volume for that business. Turning to Advanced Formulations.

Volumes were up 8%, driven by the need for greater resource efficiency, by which I mean that the solutions we developed helped our customers to optimize the cost, the yield and the environmental impact of the resources that they're working on. That growth was complemented by higher pricing overall.

The continued strength of the North American shale oil and gas market did lead to significant growth versus Q1 last year, when we saw the oil and gas market begin its recovery. That strength was further supported by positive product mix with greater use of advanced friction reducers by our customers.

Turning to our Technology Solutions business. We saw strong demand for our phosphine specialties, most notably for the electronics industry, which really propelled us forward.

In mining, market conditions are stable, with good demand for metal extractants, but our volumes at the start of the year were flat, mainly related to order patterns. Turning to Performance Chemicals.

Volumes were stable overall. We saw solid demand in soda ash and derivatives, but our progress was held back by logistical supply chain constraints, which are linked to a lack of railcar availability in the U.S, which meant that our sales were 4% lower, whereas the margins were very much as planned at beginning of the year, as anticipated.

Bicarbonate volumes were stable but also benefited from product mix. On the other side of the equation, we saw a very strong growth in our Coatis business, both in terms of pricing and volumes, as both the domestic and the export markets improved for both solvents and phenols.

Back to top line. If I turn to Slide 9 and look at the bottom line on the EBITDA, in the bridge, you see that the strong volumes I refer to contributed strongly to our performance but were insufficient to overcome the adverse impact of Forex in scope.

I'll say a few words on foreign exchange, where you see 43 million of negative impact. It won't escape your attention that last year's averaged dollar euro exchange rate was 1.065.

The equivalent for the quarter, Q1 2018, was 1.229. That $0.16 decline alone using the sensitivity that you're very familiar with, accounts for €30 million out of €43 million.

There is a basket of other currencies that individually are pretty minor or modest, but collectively adds about €13 million difference or adverse impact, and I'm taking here about the Chinese RNB, Brazilian real, the Canadian dollar and even the Saudi Arabian riyal, for example, where we have the peroxide plant. That is part of the headwind that held back our progress.

Now if I leave those two aspects aside into the scope of foreign exchange, as Jean-Pierre mentioned, our underlying EBITDA grew by nearly 9%, organically. We've managed to maintain positive pricing power in this inflationary environment and that more than offset clearly the raw materials.

And that's again due to our ongoing focus on pricing and excellence. In Performance Chemicals, this effect was partly offset by the anticipated pricing environment in the context of new capacity that we anticipated for a while now.

Operational excellence did have a very significant impact and a very positive impact on the bottom line. And it helped to feed strong demand at our -- some of our saturated plants, de-bottlenecking and increasing yields helping us reduce variable cost.

I'd like to give you one example, where with our Specialty Polymers site in Tavaux in France, we managed to achieve de-bottlenecking by the deployment of digital advanced analytics that gave us insights into operating more optimally than before, and that helped to contribute to double-digit increase in our production in the quarter in a market with very, very strong demand. These are the kind of examples that are contributing strongly to our bottom line.

As Jean-Pierre said, we've managed to sustain our EBITDA margin at 21%, which, as you know, remains in the top quartile for our sector. Short word on earnings PS, our earnings per share on a continuing basis was €2 per share, up 10% year-on-year.

This reflects a reduction in our financing charges and on our tax rate as well. And you would've noticed that our underlying tax rate was 25% in this quarter, compared to 26% this time last year.

Clearly there's more to performance than just profits and EPS. Cash is key.

And before I say a few words on cash, you will have noticed that we've now extended our normal analysis on our free cash flow by extending it for financial charges, and also for minority dividend, minority with dividend, really trying to target the fact that our free cash for that really matters to many of you as the cash flow available to fund our own dividend to our own shareholders. I hope that is a welcome development.

It's not new information; it's always been disclosed. We've just taken one or two steps to make it even easier for you to understand our performance.

Turning to our performance. We are remaining totally focused on free cash.

It actually is critical. Our free cash flow was 108 -- €105 million from our continuing businesses.

And it was lower than last year, and that really reflects working capital bills and phasing from one quarter to the next. Our CapEx discipline is there, very much there.

We're, I think, €2 million lower than last year, totally in line with our expectations. And may be just worth noting that two, three years ago, you will have seen historically Solvay's net debt increased in the first quarter.

Last year we were flat, this year we're flat. In other words, the free cash flow we generate to our Solvay shareholders was adequate to pay for the dividend, interim dividend that we pay in Q1 as well.

As a result, our net debt is stable at €5.3 billion, and that includes €2.2 billion of the perpetual hybrid bonds. Clearly we will continue to focus on our cash and fully expect to deliver the free cash flow from continuing operations.

And with that, I hand it back to Jean-Pierre.

Thank you very much, Karim. So just a few comments to conclude this introduction.

But first I want to underline that we have announced, at the end of March, our transformation plan. We have a very simple objective, make sure that we are getting all of Solvay's organization focused on delivering our solutions to our customers, and we are achieving that for a significant simplification of our organization and key processes.

For me, it was an absolute necessity of Solvay, very significant confirmation of the portfolio to make sure that we can benefit indeed from the very strong portfolio that we've built overtime. So we've promised that we would give you a -- we'd issue a result on some guidance on what this will represent.

We expect this transformation in organization to generate a recurrent annual EBITDA contribution of €150 million. We think it will take us three years to achieve that.

Half of these gains are on headcount reductions and the other 50% are lean proficiency improvements. We have booked, with this quarter result, a onetime restructuring cost of €134 million to account for the restructuring cost of this organizational transformation.

And clearly, for us, the key objective of this improvement is to strengthen our ability to deliver continued growth. We've been quite successful in past years to create an outstanding customer experience for our limited number of our customers.

What we want to do is to make sure that, across-the-board, know that customers that we serve throughout our various cluster, we have visibility of a differentiated customer experience. Turning to the outlook for the rest of 2018, maybe just on a personal note, you will know that I will transition out of my current responsibility by the end of the year.

I can just tell you that the board is very much on track as far as the succession process is concerned. We are currently reviewing candidates, both external and internal, with the objective to have completed the transition process by the end of 2018.

And I can tell you that in the meantime, I stay fully committed to make sure that we deliver on the various priorities that we have for 2018, which means that myself and my colleagues from the [Indiscernible] are indeed focused on driving growth in 2018. And we can only confirm our previous guidance of growing full year organically -- growing our EBITDA, I should say, organically by between 5% and 7%.

By the way, we started with 9% organic growth in the first quarter. Foreign exchange will continue to weighs on the results in the second quarter.

But -- and it's very important that you realize that leaving aside the foreign exchange, organic growth is likely to be weighed towards the second half of 2018. And with that, we are now with Karim in a position to take your questions.

I'll restrict myself to two. The first one is around the composites.

You say the sales volumes were very strong, but if I try to adjust for FX the best I can, it looks like the underlying sales were up more modestly. So I'm just wondering with price and mix, what's happening there?

Is there some recovery in some lower-margin business? And the trend going forward on that, obviously, because a recovery in composites is something you're pointing out some point this year.

And then in Advanced Formulations, again, using my numbers anyway, I get the ex oil and gas business down sharply on margin. And I'm trying to wonder how much that might be the raw material squeeze, although you said you have positive year-on-year pricing power, I think, and how much potentially is the drag on the Ag side, and I know guar gum is quite important in that businesses as well.

And then tied with that, I guess, the guar on the oil and gas, whether we're actually seeing this coming through as expected on a gentle recovery path.

Well on composite, the -- on composite, if you look on the impact of sale, the impacts of real volume and mix on sales, it's a plus €16 million which covers stronger volume improvement that we are seeing in various trends. I mean, the project like the F-35 or some of the ramp-up of the single-aisle large commercial F plane is indeed generating this increase in volumes.

Karim mentioned also that other markets like helicopter are going well. Regarding the price impact, prices are pretty stable in local currency in this business, but obviously, as you can imagine, a significant part of this business is U.S.

dollar driven. But overall again, the good news as we enter into 2018 is the fact that we have very good volume behavior.

And obviously, the foreign exchange impact that I was mentioning, it was transactional impact on prices. Advanced Formulation, I think the market, which is going very well, is, as you can imagine, the oil and gas in North America where we see indeed a very strong dynamic, mostly driven by friction reducers.

While we see people showing more interest, but it's too early to mention big return of guar base formulation in this segment. I mentioned that the Technology Solutions business, especially mining, was a bit soft during the quarter, but Forex is more phasing, a subject that we should clearly worry about.

On the non oil and gas businesses at Novecare, frankly speaking, not much to comment. We've seen, as usual, a mix of pluses and minuses there, but no specific plan.

I think the -- I think in Novecare, we're probably at a point of stem where our focus should be on margin, and yes, we expect to be able to benefit from a very dynamic market in some of our segment to be able to improve our margins. I hope I covered most of your questions.

I have also two questions. First question is on your change in the organization, why you expect 150 million annual savings over a period of three years?

Normally, that is related with onetime cost with a factor of one to two, which would normally mean 150 million to 300 million onetime cost. You booked 134 million in Q1.

Is it fair to say that additional restructuring costs will be booked in the course of 2018 and eventually in 2019? And if so, can you provide more insights on what is your best guess about the final restructuring costs?

And also your best guess about the related cash-outs in total for 2018? You expect some 18 million cash-outs from that restructuring, but certainly that's not the final figure.

And related to that, regarding the savings, I would like to know what is your guess about the retention rate, so I mean how much can you keep and how much you have to share with your customers? The second question is on, especially for Karim, on free cash flow from continuing operations.

And in your quarterly report, you show that this figure drops by 37% year-over-year from 168 million to 105 million. In your presentation, on Slide 11, you show the free cash flow from continuing operations and attributable to shareholders was basically flat, from 102 million to 99 million.

I would like to understand the delta in the last year's figure between this 168 million and the 102 million.

Just a comment before leaving the floor to Karim. I'm always very skeptical on the question about retention rate.

I think you have two phenomena which are completely unrelated. On one hand, you have the need to drive improvement in your organization for simplification, better processes and so on.

And on the other hand, you have your pricing power, and it's not because you are doing the first type of activity that your pricing power will decrease. So pricing power, I'm pretty confident now of the question and I will let Karim advise that, is what we can achieve in terms of organizational efficiency gains.

Very good, thanks. Martin, on the organizational impact, 150 million, maybe just to give you a bit of more clarity, more insight to, 50% of that is to do with role suppression, call it, headcount reduction over time, and the other 50% from really deploying different discipline and much more surgical, targeted approach around site purchasing and various elements of that nature.

So if I go back to a broad ballpark benchmark and I expect 1 to 2 times, if you take half of 150 million and say 75 million is going to be role suppression related, a provision of 130 odd million compared to that is very much within what I think is a reasonable ballpark benchmark that you use. So no surprise there.

Perhaps maybe that extra clarity gives you that confidence. What I would say as well though is that we still had anticipated a certain element of that in our guidance this year before we gave the guidance beginning of the year.

So you shouldn't expect anything significant in terms of cash or profits a result of our announcements. More generally speaking, the provision we made is non-cash at this stage, as you'd expect.

I fully expect that the cash-out in any restructuring cost will be matched by the incremental cash savings. So it's going to be broadly cash neutral in all material terms.

That is our expectation. And at the end of this, we expect €150 million to be generated and released into the profitability.

To your other point, on free cash flow, €168 million contrasting with €105 million, the simplest answer is this: When you have €4.5 billion of gross working capital, a shift of €20 million, €30 million, €50 million, €70 million from one month to another is not at all exceptional, very much within the realms of expectations. So if you have high sales in February, slightly softer in March last year and reverse this year, that can have a pretty big impact.

When you're selling at nearly €800 million in any one month, it can really boost that. So I'd say it's purely phasing, which is what we've said.

And if I look at the underline metric and the focus on cash and its working capital discipline, I look at day sales outstanding, it's that. I look at overdues.

It's very much in the green zone, so I'd say the discipline of we generating and delivering rough news is continuing. So the short answer to your question is that, maybe assigning more color to that is less EBITDA has been offset by certainly less cash tax payments, and it really is working capital, that really is the thing, and that clearly is timing.

But as Jean-Pierre said, we've reaffirmed our cash guidance and that tells you how confident we are. And you know we did it within every time we've said it.

Hope that helps.

Just first of all on the cash flow. I was interested to understand why you have only €5 million of interest payment on the cash flow when you have €34 million on the P&L.

Just what you have explained differences, it's phasing, or is there some other reason behind that? And also, could you just give a little bit more detail on the expansion of receivables.

I appreciate the answers you've given to the previous questions, but where in the business are you seeing receivables expanding? And then the final question is, what do you think needs to happen to see guar gum oil and gas products being bought by customers?

Because obviously it's been something we've been talking about for some time.

I will take the last one and Karim will come back on the financial. No, what you take is probably more visibility on the oil price or ability for our customers to hedge their position regarding oil.

The wet guar base formulation brings in unconventional oil and gas, as the ability to produce longer after a given fracking job. I'm trying to simplifying the pretty complex issue.

But high level, this is the reason why people would use guar, the [indiscernible] user. So we, clearly, the ability to hedge their position in terms of oil exposure, is something which will help with development of guar-based solution.

So again, we've seen activity increasing to prepare for new -- for larger use of these types of formulation, but it's not yet a significant part of our activities.

To your other two points, starting with the question on financing charges, couple of things. One is, the timing at which we pay our interest on our senior bonds and our hybrid is biannual and they start in Q1.

Last year, we had swap costs that you may recall we alluded to, which had a cash-out of 55 million as well. So I hope that gives you an indication why the cash is much smaller than the P&L impact.

As far as the other part of your question, on receivables, there's nothing that particularly that stands out as an outlier. What I would say is the strong performance you've seen in Advanced Formulations with 10% advancement was pretty much back ended in the quarter.

And I think that, to my mind, says it's grown but that's not at all part of our overdue or anything we announced. It's purely the timing of the sales.

I welcome that. We certainly have the ability to withstand and finance that kind of very modest-looking capital build.

As I said, I fully expect Q2 to be equally strong, et cetera. So not at all a point of alarm.

There's no other business. I'm just thinking aloud if I'm here, but there's no other business we're interested in being in if a particular re-increase in receivables, to answer your point.

First one is on your mining chemicals business. A particular refinery in north Brazil, it's one of the biggest for alumina mine, it's probably running at 50% of capacity or utilization and I think Cytec had a big exposure to this particular mine in Brazil.

Can you give us any indication if you see any material impacts from this event, which seems to have happened only very recently in terms of production cut? And the second question I had was, again, sorry to come back to the €150 million cost savings, can you give us details on where you're actually cutting cost?

Because if I look at your SG&A for 2017, €150 million is almost 9% of that number, which seems pretty high. So would be interested to hear what are the key drivers of €150 million?

And how much of that is already reflected in your 2018 guidance in terms of benefit?

Well, yes, or maybe not. Yes, it's better.

Maybe situation has changed in Cytec because what we see today is some exposure but nothing really significant. By the way, what has happened is one element which explains the phasing that I was mentioning in [Indiscernible] so there is some impact but nothing really material.

And the oil dynamic of the market is pretty good so that's nothing to worry about. On your calculation, again, 150 million savings, we've said half of it is head count reduction, half of it are efficiencies.

So probably you should take note of -- if you don't take 150 million but 75 million, you'll end up with something which is pretty much in line with the numbers you are mentioning. So the other are efficiencies without subtracting costs associated.

Maybe just add to that, on the role suppressions, which is where the cost reduction is happening, it would be in functional costs, in corporate and shared services as we're really trying to make us leaner and more agile, and we put the accountability and the resources in our global business units. And as Jean-Pierre said, it's a much, much modest percentage than the 9% you've alluded to, because you've taken 150 million, you should take at least no more than half of that.

The first one is pretty simple. If I look at just a simple number on corporate cost, I see only €50 million in Q1.

I would assume that there you have seen a positive effect of the currency evolution. What can we expect for the full year?

I assume that €200 million is a bit too low. So how do we have to look at the timing and phasing in this regard?

And the second one is basically on your organic growth guidance, because despite the nearly 9% organic growth in EBITDA for the first quarter end, an assumption that actually it will be back-ended this year, so more directed towards the second half of the year, I wonder why you stick to the 5% to 7% organic growth in EBITDA?

Karim, I will give you over these two questions.

I would like you to come back, maybe clarify the second part of your question. I'll start with corporate cost though, Nathalie.

You're right, foreign exchange did have a positive impact, relatively modest compared to the synergies and the cost discipline. There is absolutely no element of phasing there.

I'd say looking to an annual run rate, I think you can take last year as a fair indication. From memory, it's about €245, €250 million.

That's still very much the right kind of ballpark to anticipate, no major changes there at all. Clearly, you know we continue to look for opportunities to be leaner.

And I'd say this, fair to say that as we embark over the next two years on this transformation, clearly I'd expect the bottom line to be improved, and part of that improvement will be visible in the corporate cost line as well. The second part of you question, can you just maybe repeat and clarify a bit for me?

Yes, so I see organic EBITDA growth in the first quarter of close to 9%, and your guidance for the full year remains 5% to 7%, while given the pattern that we have seen last year, we were rather expecting the growth to be back-ended, especially when we look at the ramp-up of production rates in commercial aircraft and all of that. So I was wondering if you could help me understand a bit how you see the moving for the remaining three quarters of the year.

It's a very important question. Thank you for clarifying, it's helpful.

Couple of things. One is, you recall last year had a very strong second quarter, both on an organic, let's say strong momentum basis.

So it's a very tough comp to go with. Things were going very, very well in many areas.

So I think we are being more cautious around there at likely evolution, and I agree with you that the growth, as Jean-Pierre was saying, it's a beginning, would likely be more back-end weighted this year. So I would hold onto that expectation.

It is consistent with our expectation as well. There is also one specific factor, which is -- and we've mentioned it both last year and in our guidance for this year, which is medical retiree benefits last year.

It helped us in second quarter. We do expect a repeat benefit but of a much more modest magnitude that will impact the second quarter evolution and growth this year.

But all in all, we started very much in line with what we were expecting, and don't see any cause for a long -- for any significant revision at this stage. Does that help?

So I guess the summary is we're considering for the full year but be careful [indiscernible] in Q2.

A couple of questions, if I may. The first one is, you report net pricing but I'm quite interested to know how much the raw materials went up and therefore, how much kind of top line pricing was moving?

And to give me if I should just be looking the sales number to get that. But I guess overall I'd expect -- well sales pricing to have moved a bit faster, noting the raw material pressures.

I guess, I'm keen to know how much price increases you are actually pushing through the business? The second one is, again, coming back to the composites.

I think we were trying to address this in other calls, so forgive me for pushing it again. If we think about the production schedule, are your materials ordered, kind of, two quarters before like a delivery would be announced on one of the major producer's planes?

Or is it one quarter? Could you give a some kind of understanding as to how, just so we get a feeling obviously as -- we can obviously look at the public releases about ramp-up schedules, but it's about when that might pull through some of that order book in the composite business?

Well on the second question, the average lead time is six to nine months, but we are very different situations with different project customers on supply chain. Our products are very high-value products, which means that in some cases people could build inventory, hence they're probably not as focused as we're being [indiscernible] in the supply chain as we've seen in other businesses like automotive.

But six to nine months lead time is a good proxy to try to figure out the relationship between end demand and our own delivery to customer. On the pricing impact, Karim?

On the pricing impact, it's probably fair to say that the impact into the pricing was relatively modest, but was also offset by a reduction on raw material cost as well. So net-net, we've got a relatively small -- sorry, an increase, we've an increase in our net pricing.

But nothing significant, otherwise I would've highlighted it as well. So I don't want to start giving minute themes of detailed information.

Maybe just pick up on one other point that Jean-Pierre mentioned earlier, which is this progress is despite the negative transactional FX impacts that we've overcome in this quarter as well, which would've been the case, historically. So that's why our net pricing is progressing.

And again this is a picture at the group level. We're specific businesses.

We've pointed to soda ash where we have indeed not been able to fully compensate by pricing the increase in energy cost. But when we look at the group level, the impact between price increase and raw material and the transactional currency on both sides is almost balanced.

A few questions, actually very specific to again composites and epoxy resins prices, which have come through and it doesn't seem to affect you dramatically. Can you comment a bit on how you're pricing composite systems and how you take care of the epoxy resins prices moves?

That's question number one. And question number two, linked to that, I think it's minus 1.1 pricing in Advanced Materials.

If you could comment a bit more on which sector, I guess, Silica and maybe some of in your specialty chemicals have suffered a bit more than and Advanced Materials specialty polymers. If you could comment on where prices were down significantly in Advanced Materials?

On your last point, and this is really mostly the foreign-exchange impact on the transactional foreign exchange impact, which explains via the slides, the negative pricing impact that you see on the top line for Advanced Materials, we don't have any pressure on prices there. We just have situation where we export from the U.S.

mostly to other regions of the world, and we've seen the impact of the -- this is the impact of this phenomena. On composite, yes, we've seen some pressure on raw material and energy cost.

You've mentioned epoxy resin, but something, which was easily offset by price increases or who we -- we tend to have long-term pricing in composite, but the trajectory of this pricing evolution was favorable and we continue to focus very much on excellence initiatives in composites. By the way, this is not the end of the game and I still see a number of opportunities for us to continue to increase our excellence initiatives within the composite material to make sure that we generate further upsides in our results.

So that's an area where we continue to make reform, but it's a business where we've been able to offset without any specific difficulties or material increase you're mentioning. Is there any more questions?

Well, as we have no other questions, I just want to thank you very much for having attended this call. Again, all what we've said demonstrate that indeed we are very much in the trajectory we expected for 2018.

With Karim, we're looking forward to see many of you during coming roadshows or conferences. We will also be at AGM next week on May 8th in Brussels and we will publish our second quarter results on the last day of July, July 31st.

So thank you very much for your time and looking forward to continue this interaction with you. All the best.

Thank you.