Solvay S.A.

Good afternoon, everyone, and welcome to Solvay's Third Quarter and First 9 Months of 2025 earnings call. I'm Geoffroy d'Oultremont, Head of Investor Relations, and I'm joined here today on the call by our CEO, Philippe Kehren; our CFO, Alex Blum; and our COO, Lanny Duvall.

This call is being recorded and will be accessible for replay on the Investor Relations section of Solvay's website later today. I would like to remind you that the presentation includes forward-looking statements that are subject to risks and uncertainties.

The slides presented in today's call are also available on our website. We'll further discuss our third quarter earnings, then give an update on the operational excellence program and come back also on some recent developments at Solvay before taking your questions.

Philippe, please go ahead.

Thank you very much, Geoffroy and hello, everyone. As usual, I will start with a word on safety.

While the number of injuries is stabilizing at lower rates since the beginning of the year, the few accidents we saw in our operations remind us that we need to continue to work hard on the transformation of our safety culture. Changing the mindset and the behaviors is our main focus.

Safety will always remain our #1 priority. .

Slide 6, please. So Alex will go through the earnings in detail, but I would like to give you a few messages first.

So first, the overall environment remains difficult. We didn't see any improvement in the general macroeconomic indicators and the geopolitical and trade environment remains volatile.

Our Coatis business continues to see very difficult market conditions related to the direct and indirect impact of the increased tariffs for Brazilian imports to the U.S. Our soda business also continues to be under pressure, specifically in our seaborne export markets due to Chinese overcapacity.

Our analysis of the situation is confirmed by the recent anti involution regulation announced by the Chinese government and its intention to restructure industries where there is overcapacity. If and when they will target the older synthetic soda ash industry in China, we estimate that the market will rebalance and rapidly improve.

But as long as demand remains subdued and supply remains as such, we expect to see continued price pressure in the Southeast Asian region. We continue to think that this situation is unsustainable for the region with many players seemingly selling below their cash costs.

In this context, we have reduced the quantities produced in our European soda ash exporting plants. The upside to this downside is we were able to save some CO2 emission rights consumption.

And since we've been building our CO2 emission rights portfolio for quite some time at Solvay and as how coal phaseout is more and more secured, we decided to sell part of our CO2 emission rights inventory in Q3, and that generated EUR 40 million EBITDA and EUR 50 million cash gain. So allow me to be very clear about this.

This is definitely not a one-off, but it is a business decision that we may repeat in the future should these market conditions persist. Now before we move to financial, I would also like to spend a few minutes on the good work that we've done related to our transformation.

Slide 8, please. So earlier this year, we shared with you our essential for generation strategy to establish Solvay as the leader in essential chemistry.

Operational excellence is the first lever of the strategy and will allow us to accelerate the transformation of the company. We've been updating you regularly on the progress of our cost savings program with the commitment to generate EUR 350 million of cost savings by 2028.

Today, we have invited Lanny Duvall, our Chief Operations Officer; to this call to give you a deeper understanding of what we do and how we achieve real results on the ground. Lanny, the floor is yours.

Thank you very much, Philippe. My job is to translate this strategic commitment into hard numbers across the company.

Today, I will zoom in on our industrial sites and describe how we approach the sustained improvements. Our savings targets are the results of 2 main programs.

First, we may be a 163-year-old company, but we are becoming a digital-first company. Over the last 18 months, we've invested significantly in both infrastructure and in capability.

We've created a world-class data structure where all key operational data resides, and we can leverage our scale to quickly deploy across the organization. Second, we're implementing what we call our Star factory program, where all plants have a road map for improvement in really all dimensions needed to operate our plants.

All the examples that we are going to discuss are or will be implemented across all regions and all clients. Slide 10, please.

Our maintenance strategy is important for our fixed cost and the reliability of our assets. This transformation in our operational performance comes from moving away from a time-based maintenance to condition-based monitoring or what we call CBM.

We utilize real-time data analysis to predict equipment failure and determine the optimal moment for intervention. By utilizing sensors to major and asset status, CBM enables the collection of critical data such as temperature, vibration or sound.

This data allows us to spot trends predict potential failures and determine the remaining lifetime of the equipment. This allows us to reduce the cost of the repair and plan for the interventions.

This shifts our entire operation from being reactive to being proactive. This isn't a hypothetical pilot.

We've deployed this on a global scale. We've gone from a couple of hundred sensors in 2023 to over 4,500 sensors today and 9,000 by 2027.

Creating a more resilient, reliable and cost-effective industrial footprint. This is a good example of the value we are creating with our digital and data strategy, and demonstrates our ability to quickly scale across the company in all regions.

Vibration monitoring is not new or novel. But the deployment strategy at scale is a best-in-class practice.

As an example, at the Dombasle site helped to detect abnormal vibration on a fan and a malfunctioning of a lubrication valve. Thanks to the alerts generated by the IoT sensors, this could be quickly corrected, and we saved a potential EUR 100,000 repair cost.

These highlights -- these examples highlight the effectiveness of the CBM in preventing failures before they escalate into more serious and costly issues. Again, the secret is how we have invested in our data platform, and we are now perfectly set up for using advanced AI tools to further our impact.

Another example, we are redefining how we manage material and energy performance across our industrial operations. This isn't just about efficiency.

It's about unlocking EUR 37 million of potential plant variable costs by 2027, which represents roughly 2% reduction compared to 2023. It's about building a smarter, safer and more sustainable future.

At the heart of this transformation is digitization. We are rolling out standard real-time dashboards giving operations and engineers instant access to the metrics that they need.

The helicopter view, as we call it, which is the standard in all of our control room includes everything our employees need, such as safety indicators to ensure our people and processes are protected, real-time production levels to track throughput and performance or material and energy consumption metrics to drive efficiency. This is not a technical upgrade.

This is a cultural shift. It's about embedding performance thinking into every layer of the organization, starting with the shop floor.

It's about making sustainability and efficiency inseparable from operational excellence. Next slide, please.

Continuously optimizing our industrial footprint is a core part of our strategy to enhance performance. Let me give you 3 examples.

First, we've aligned our regional footprint with demand. In our peroxide business, we've taken decisive action in Povoa, in Portugal and Warrington in the U.K.

and reduced our capacity in the European merchant markets. Second, we recently announced different measures in our Special Chem operations in Germany to secure our long-term competitiveness.

In practice, this means we will consolidate our Special Chem German production sites to improve efficiency by relocating the NOCOLOK Tech Center and production operations from Garbsen to Bad Wimpfen. We will consolidate expertise into one location.

We will establish Bad Wimpfen as a global hub for production, innovation and customer applications, reinforcing Solvay's position as a worldwide leader in automotive brazing. Third, our energy transition, which is key to our long-term competitiveness.

At our Torrelavega soda ash plant in Spain, we could not ensure competitive production costs after a full coal phase out. Hence, we will supply Latin American customers from our Green River plant with a very cost-efficient alternative.

We decided to decrease the Torrelavega production by 1/3. We will allow -- this will allow for reduced fixed cost and CapEx at the site while making the energy transition project possible for the remaining capacity.

Indeed, earlier this year, we announced moving forward with the biomass co-generation unit that will reduce the CO2 emissions by half in 2027. These actions are taken to ensure our operations are lean, competitive and ready for the future.

The last example, our spin review challenge. This is a 5-step process that brings together a multidisciplinary team to challenge traditional ways of working and create value.

The team analyzes spending at a site level and covers all of the site-related purchasing categories, operations, procurement and leadership all need to work closely together to create value for each site. This is an ongoing process.

We started with the industrial categories, and we've expanded to include facilities, R&D services and goods, on-site logistics and packaging. The SRC has the potential to return EUR 15 million to EUR 20 million annually, primarily in fixed costs.

In 2025, we have challenged EUR 330 million in spending across 21 sites and identified EUR 11.3 million in savings opportunities, but we're not stopping there. We plan to complete 9 additional sites until the end of the year, aiming for a 5% savings on the addressable spend.

An interesting case from our Qingdao site in China, where we redesigned the plastic pallets to reduce the rate by 18% and allowing for EUR 230,000 in annual savings. So this change is better for our bottom line, more efficient for us and our customers' operations and better for the environment.

We are currently investigating how to scale this initiative to other sites. Slide 12, please.

We feel confident we will deliver the EUR 350 million in gross annual savings by 2028. Because we have invested in our digital transformation, have an execution at scale strategy, all while improving safety performance and providing a platform that is future-proof.

The early results are speaking for themselves. We achieved EUR 110 million in 2024 and are on our way to exceed EUR 200 million by the end of 2025.

At the core of our transformation is digitization, by embedding digital tools and building a common data infrastructure, we are ensuring that our operations are future-proof and AI ready. We are already rolling out machine learning and exploring options for GenAI and Agentic AI in operations.

To conclude, I want to leave this -- I want to leave you with this, we are not just cutting costs. We are fundamentally improving how Solvay operates for the next generation.

And this is how we contribute to the long-term financial resilience of Solvay. With that, I'll hand it over to Alex to walk us through the Q3 results.

Thank you, Lanny, and good morning, good afternoon, everyone. Moving to the financial I'll remind you that my comments are based on organic evolution, meaning at constant scope and currency, unless otherwise stated.

Moving to Slide 14. In the context of subdued demand underlying net sales in Q3 2025 reached EUR 1.040 billion, down minus 7% versus Q3 2024.

Volumes, were down minus 4% year-on-year, mainly driven by weaker performance in the Coatis business and in the soda ash seaborne market, while volumes for peroxide, Bicar, Silica and Special Chem were steady year-on-year. Pricing was overall resilient, although we continue to see strong pressure on seaborne soda ash market and in our Coatis business.

As already highlighted by Philippe. Slide 15, please.

Underlying EBITDA amounted to EUR 232 million in Q3 2025, down minus 7% compared to last year. However, EBITDA margin remained solid, up 22%.

Volume [indiscernible] mix was up thanks to the positive impact of the optimization of our portfolio of CO2 addition rights. Excluding this one-off, of course, the volume and mix was down mainly due to soda ash export volumes.

Net pricing decreased year-on-year, again, primarily driven by the seaborne soda ash market in Coatis. Net pricing in the other businesses remained very resilient.

With regard to fixed costs, the year-on-year variation this quarter was negative EUR 9 million. But this is exclusively coming from the EUR 10 million temporary stranded costs related to the separation from SYENSQO as our selling program continued to exceed inflation.

Looking sequentially, we have stabilized our manufacturing cost base and despite still low production, we have been able to keep our maintenance cost below Q2 level. Moving to the segment review, starting with Basic Chemicals.

Sales in the soda ash and derivatives business unit were lower for the quarter by 8% soda ash volumes were down mostly from the seaborne market, where unsustainable pricing pressure persist due to the overcapacities built in China. On the other hand, the bicarbonate volumes are steady year-on-year.

Peroxide remains resilient with stable volumes in the merchant market. benefiting from the growing demand in the electronic grade H2O2 for the semiconductor industry.

The segment was down minus 15% compared to Q3 2024, while the EBITDA margin remained slightly -- only slightly decrease of 23%, still a very healthy figure in such a challenging environment. Performance Chemical, moving to Slide 17.

Silica sales remained more or less stable with some slight volume slowdown in the entire market. In line with last quarter, Coatis saw the largest decline with sales of minus 26%.

Volumes were down in all end markets impacted by strong competition from Asian players. And the overall weak demand further aggravated by the U.S.

tariff from Brazilian imports currently reaching 50% or more. Special Chem for the quarter, sorry, Special Chem net sales for the quarter were flat with slightly higher volumes in autocat in rare earth and electronics.

Offsetting lower fluorine demand . As explained earlier by Lanny, this drove us to take strategic decisions in Germany to ensure the long-term competitiveness of the fluorine business line.

The segment EBITDA was down minus 21% due to the negative volume of the different business units and negative net pricing of Coatis. The EBITDA margin decreased year-on-year to 15%.

Slide 18, Corporate segment results. The EBITDA contribution of the Corporate segment in this -- the third quarter was a positive contribution of EUR 22 million.

As explained by Philippe, this includes a EUR 40 million gain from optimizing our portfolio of CO2 emission rights. Generally speaking, to manage our EUA deficit we use a mix of CO2 emission rights, free allowances, EUA, inventory, energy transition projects and financial hedging instruments.

Thanks to the progress made on the energy transition project and given the current low production level in Europe we've decided to optimize our portfolio of CO2 emission rights in Q3. I said in part of our inventory without changing our overall risk profile.

As a consequence, the full year EBITDA for the corporate segment is now expected to be between minus EUR 40 million and minus EUR 50 million which is in regard to the previous guidance of minus EUR 80 million to EUR 90 million, excluding the positive EUR 40 million I just mentioned. This brings us to the free cash flow to shareholders from continuing operations.

We generated EUR 117 million of free cash flow in the third quarter. Bringing the total for the first 9 months to EUR 214 million.

This result was supported by a contribution of EUR 50 million from the optimization of the portfolio of CO2 emission rates. CapEx reached EUR 81 million for the quarter and EUR 214 million for the first 9 months of the year.

This is well in line with our objective to stay within EUR 300 million. The cash flow -- the cash outflow year-to-date from provision are in line with expectation and include EUR 37 million related to the energy transition project in.

So to wrap up the financial, I would like to end with a word on net debt. Net debt has come down a bit since the end of June.

And this is in line with our expectation of approximately EUR 1.7 billion at the end of the year. Our leverage ratio remained healthy at 1.8x.

And with that, Philippe, back to you for the recent development in the outlook.

Absolutely. Thank you very much, Alex.

But before we move to the outlook, I'd like to remind you of some recent developments at Solvay. You might have seen the expansion of capacity of our electronic grade H2O2 in China.

The announcement and our willingness to accelerate the development of circular Silica. And the changes we announced in Germany, as explained earlier by Lanny.

While we stay focused on the transformation of the company through structural adjustments, we were also able to ensure the future long-term value creation of our businesses through disciplined investments in high-growth areas. Rare earth is another example.

Earlier in the year, we inaugurated our rare use production line for permanent magnets at's La Rochelle in France. And given the recent developments around this industry, we will take the opportunity of this call to provide a bit more details about Solvay's current activities and the future prospects in the rare earth industry.

At Solvay, we've been rare earth experts for quite some time. Our La Rochelle site has been processing them since its opening in 1948, right after World War II.

Today, our position in value chain is focused on separation, purification and formulation. High-value chemical rare earth oxides are formulated in 3 industrial units.

So in addition La Rochelle in France, we have one site in Japan and another site in China, and they're all serving several advanced applications such as emission-controlling cars, chemical polishing for semiconductors and precision optics, green energy or medical contrast agents in MRI procedures or Scintillators for PET scans. This global footprint and the modularity of our 3 plants allow us to ensure business continuity for our customers in these different industries, even at times of supply chain disruptions as it has happened earlier this year.

So let's now have a look at our projects in La Rochelle and the new high potential opportunities in rare earth separation and purification that we want to capture. Next slide, please.

So we proudly inaugurated our new production line in La Rochelle in April this year. And since April, we've been producing Nd-Pr oxide, that's neodymium-praseodymium oxides for the permanent magnets end markets.

This is what we call the light rares for permanent magnets. And I'm excited to share that we've made the decision to start separation and purification of 3 more rare earth elements.

Samarium has already started in the second half of 2025. And Dy-Tb or dysprosium and terbium which we call the halves, this will be done by 2026 and they are all essential for permanent magnets as well.

And Solvay will be the first in Europe to do that. Moving forward, we have the ambition to grow this capacity as the demand for permanent magnets is expected to increase significantly in the next few years especially thanks to growing needs related to energy transition, as you can see on the slide.

When looking at the production of magnets in Europe, today, it's very limited. But it could represent up to 40,000 tonnes by 2030, which is equivalent to 15,000 tons of light and heavy rare earth oxide needs.

And we can capture up to 30% of that European market with our existing assets in La Rochelle quite easily. We will need to invest to reach that level, and we can do this in different stages.

And thanks to our process innovation and our operational leadership, our team is continuously improving the product cost and value creation. And the total investment to bring these assets at full capacity is now expected to be between EUR 50 million and EUR 100 million versus the more than EUR 100 million we announced earlier.

But to do this, we are first aligning all stakeholders of the value chain. We are discussing with potential partners and customers in Europe, but also in other regions, including North America.

Regarding sourcing, we are partnering with recyclers and miners for the development of a secure and sustainable supply chain that would not lead to rely solely on Chinese materials. This is concrete.

This is happening now. Additionally, and beyond permanent magnet, we're considering also supplying other essential rare earths like gadolinium or yttrium, which are critical for aeronautics, medical and other high-end applications.

To conclude on this, we can say that our solution offers the greatest potential within the rare earth value chain. We already operate as Europe's largest rare earth producer of or if automotive, catalysts and electronics industry, and our strength lies in our proven ability and unique expertise to separate, purify and formulate every main rare earth element.

I'm confident that based on the current geopolitical situation that these supply chains will be developed and we're the obvious partner to do it. Now moving to the outlook now.

As shared at the beginning of this call, the environment remains difficult, and we do not see any short-term improvement. However, the overall stabilization of activity levels that we've seen in Q3 and the positive impact in the actions that we've taken support our results.

This is why we confirm our full year guidance for 2025. We expect the underlying EBITDA to be between EUR 880 million and EUR 930 million.

And we confirm that the free cash flow from continuing operations to Solvay shareholders is expected to be around EUR 300 million with CapEx at maximum EUR 300 million. And this will more than cover the dividend payment.

This, I think, concludes our introduction. Which was quite extensive.

And thank you very much, and back to you, for the Q&A session.

Thank you, Philippe, Lanny and Alex. We move now to the Q&A session.

We have until 2:55 so that you can join the next call after. And Gaya, please you can now open the line for questions.

Wim Hoste KBC Securities. I have a couple of questions around soda ash, if I can.

Can you maybe elaborate on the production footprints? How fast do you intend to ramp up the Green River capacity expansion?

And to what extent will that then reduce the European capacities I think there was an example from the Spanish plant, but I would like to have a bit more guarantee on the whole European footprint in soda ash. And then also, can you maybe elaborate on how much of the clearance European production is exported outside of Europe to give an idea of that?

And then any thoughts on, the last question, any thoughts on the pricing for 2026 contracts given the state of the soda ash market, that would also be interesting.

Thank you very much for your questions. So first, the production footprint.

Clearly, today, as we said, there is enough capacity. So we don't plan to, in the very short term, obviously, to increase our production.

So what we will do is, as you said, arbitrate in order to use the most competitive assets to supply in the different markets. And this is also one of the reasons why we can adjust our portfolio of Q2 instruments because indeed -- and we mentioned several times, Latin America.

It is today more competitive to supply Latin America from the U.S. than from Europe.

And this is freeing up a little bit of CO2 quota's that we can valorize on the market. So you see that this is really very much related to the business, you see when we say the sale of CO2 is not a one-off.

This is the perfect illustration. It's the way we manage our industrial footprint.

Then how much of the production is still exported? We are still exporting soda ash from Europe to the seaborne market and in particular, to the Southeast Asian market.

And this is also where -- and that's done mainly from Bulgaria. So we use our asset in Bulgaria to export to Middle East, to Africa and to Southeast Asia.

And today, given the situation on the Southeast Asian market and the volumes that are sold and the level of the margins in this area, we decided to reduce our production in Bulgaria. And this is also why we can revisit our portfolio strategy on our CO2 instruments.

2026, I think it's too early to say very clearly, the dynamic is still the same. Keep in mind that we see a certain good resilience in Europe and in North America.

And more volatility on the seaborne market still and in Latin America and Southeast Asia, volatility and low level of margins.

I was wondering more broadly, if you're expecting any improvement in the underlying trend through 2026. And if not, what additional levers can you pull to ensure that you're able to cover the dividend for next year as well?

So I think, again, I think it's early to talk about 2026 from a business standpoint. We don't see any big changes, but we continue to work on what we control.

We will continue to deliver the cost savings. We will continue to have the payback of the different restructuring actions that we take both on our industrial footprint and on the operating model of the group.

And beyond that, we will also have, I think, a lower level of cash out next year from the provisions because this year, we had a high level. This is, I would say what we can say at this one.

I think my question would just be why now? My understanding is that the CO2 certificates have the potential to rise sharply going forward.

So why have you chosen to monetize these certificates now? Was it purely just the cash optimization or are you confident that your future needs will be structurally lower?

And also just a question on your priorities on sort of growth CapEx versus protecting the dividend. So you mentioned that La Rochelle needs another potentially EUR 100 million CapEx to scale up further.

Would you be willing to sell more CO2 certificates, for example, in order to fund further expansion of this site?

Thank you. I mean if we sell CO2 credit, it's not to fund anything, it's because it is the result of the assessment of our portfolio at this moment.

Maybe I will let Alex explain a little bit one now. And that's, I think, a good question.

And then I would probably give you the answer regarding the CapEx priorities in terms of capital allocation.

Yes. Thank you, Philippe.

Yes, it's a good question what you have to keep in mind is because, as we said, we have several projects, we have the energy transition project. We have the EUA forward, we have the EUA stock and so on.

And there are plenty of parameters. You have the regulation and you have the level of production.

So why now is also because we are the consumption of 2 things. We are derisking and are progressing on our coal phaseout in Europe.

We have mentioned that we have not exceeded coal in Germany, which was -- it's a quite large plant of soda ash and we've talked several times about our Dombasle project for which we had to record, as you may remember, a provision last year, but we are no less than 1 year from start-up. So this part is quite derisked so it means we are confident to be able to exceed coal from France next year.

So when you have the consumption of less demand for EUAs and at the same time, a production level, which is slightly more, yes, we are to take the positive part of the negative the business contract. So that's why we decided.

But again, we will do that only if we think we are fairly covered until 2030.

And on your question regarding the prioritization of CapEx, I mean, let me just first remind you how we see the capital allocation main principles. First, we will dedicate between EUR 250 million and EUR 300 million for our essential CapEx.

This is, I would say, #1, obviously. And we're working, Lanny can testify, as hard as we can to optimize this bucket, right?

And this year, even if we have also a little bit of discretionary CapEx, we will be at a maximum of EUR 300 million. Number two, payment of the dividend.

So that's EUR 250 million, EUR 260 million, more or less -- that's the #2 allocation of capital. Number three, it's discretionary allocation of capital to create additional value.

First comment is obviously, in the current market environment. We don't need big investments in a new soda ash plant, in a new Dombasle plant and so on.

So this question is addressed. But we want to continue to invest in small targeted investments in order -- in markets that are growing fast.

And I mentioned that it's electronic grade H2O2 because artificial intelligence requires a lot of processors, and this requires more EG, electronic grade H2O2. I mentioned circular Silica and we also talked a little bit about rare earth.

Those are investments that are, I think, important because we have a real differentiation in these different businesses, but there are a lot of big ticket items, right? So -- and we will do these investments only if we have secured offtake of the products that will be produced through these investments.

So we will do them. We will do them if the conditions are here to get the right level of comfort on the profitability.

I had a question relating to the carbon trading you did in the quarter. I acknowledge this trading is possible to the extent you've got excess permits relative to the lower rates of production.

And so Philippe it was pretty clear in the introduction there, that is definitely not a one-off, but it is made incredibly difficult for us from the outside to understand the size and recurring nature of this and the level of disclosure from the company is so limited around this carbon position. So maybe for Alex.

Alex, what can you tell us today to help us better understand what that CO2 position of the group looks like as it stands. And in light of sort of the proposed changes in regulatory phase outs, your decarbonization projects and your potential production shutdowns.

How do you think that evolves over the coming years so we can think a bit more intelligently about such trading opportunities going forward?

Okay. I think what we meant by saying I think it's not a one-off.

I mean it's significant. We will not get 40 million every quarter, and that's key.

What we meant is that it cannot be looked in isolation from the rest of the business situation. That's really what we mean.

If the plant were saturated, everything was running high, we wouldn't have this flexibility. There, okay, from disclosure, I cannot give you a lot of detail.

What I can tell you gather many parameters that will be the benchmark, what will be the volume of action. But I mean, when we look at the overall picture, even if we do this transaction, we consider we are fairly hedged, we are fairly covered until 2030.

So it means whatever we are no longer exposed to variation of the price of the CO2 in Europe. That's the main element I can give you.

And it should -- the quicker we do our -- the best protection we have are our energy transition project because when you move to -- from coal to biomass or to recycled waste, then I mean you significantly reduce your exposure and you have the opportunity to release some CO2.

Okay. But when I think about your level of disclosure compared to other carbon-intensive businesses, whether that's a are in fertilizers or a utility company it still seems to be on the rather limited side.

So why are you not able to be more forthcoming in quantifying the position of the group?

Well, I think we can probably check this, but we have -- we provisioned our annual report a certain number of elements, I guess, such as the inventory and hedges and so on. Our energy transition projects are public.

I will communicate on them. And every time I think we say how many thousands of tons of CO2 emission reduction we expect.

So I think there is nothing hidden in what we say our level of production, our level of emissions, our energy transition projects, what we have in inventory, what we take in terms of forward hedges everything is more or less defined. And as Alex said, the guiding, the guiding principle for us is really to be covered until 2030.

I mean obviously, we are currently discussing what could be post 2030, but it's really to be covered by 2030.

Yes, we can follow up with the Investor Relations if there are certain questions that you think we could answer better. Overall, we don't think until 2030, you will have a big change in regulation or we consider ETS will still apply the benchmark, the allowance will progressively reduce.

This is why we need to have this stock and forward, and this is why we need also to do the energy transition project. But we don't foresee by 2030 a big change.

Is that clear Matthew?

Yes, yes, we can follow up offline.

I did have a question on the carbon credits, but I -- I think we're kind of getting there. I mean, it just looks like a very big number, right?

Because ultimately, EUR 40 million of profit on selling carbon credits I mean, if I assume that you bought at [ EUR 30 ] and you sold at [ EUR 70, ] which kind of stacks up with the kind of communication you've made in the past, that's 1 million tonnes of CO2, which is equivalent to 1 million tonnes of soda ash exports when the Europe exports 2 million tonnes a year. So in soda ash export equivalent, you've sold half a year's worth of all the European exports.

And that's, I think, why we're getting a bit stuck on the order of magnitude of the size of the credit sale. So any -- but I think what you're saying is that there's energy savings as well, not just soda ash production savings that are going on top of that.

So anything to clarify that kind of thought process would be helpful. Second question is just clarification.

So if I understood correctly, the -- previously, you've been thinking on the rare earth business that I think you said, and forgive me if my understanding is wrong, that you wouldn't do this project of itself, the economics didn't stack up to compete with China and you needed to have customers provide long-term offtake agreements to deliver to approve the project. Have you now got those long-term offtake agreements if that's what's changed between the first half and now such that you're now willing to commit the capital?

Okay. So first question on the order magnitude.

So clearly, I mean, as Alex said, we will not have this type of impact every quarter. This represents, I would say, more or less to give you [indiscernible] a yearly impact, right?

And I think the numbers that you mentioned are wave overestimated because if you look at the CO2 price that we have today on the market, you don't come with this type of quantities. Now that being said, I mean, we are the only sodas ash exporter in Europe, I think, today.

So it's true that we are impacting significantly. If we decide to cut the exports from Europe to the Southeast Asia, it has a significant impact because we are the only ones to do it, right?

So that's, I think, the element. I don't know if I missed anything, Alex?

No, no, Philippe you're right. It's the combination of ETP, again, we are releasing also some quantity from [indiscernible] project.

Production, you're right, that is one element of the equation that we take into account when we set our portfolio. And then the other important element is the progress that we make on the coal phaseout in Europe.

Now on rear earth, just to avoid any misunderstanding, we don't say that we will invest today between EUR 50 million and EUR 100 million, what we're saying is that what we did this year, investing a few millions to start production of Nd-Pr, so the light rare earths of permanent magnets, we will do the same for the hedges. So we're talking about a few million of investment.

It's nothing big. It's just to show, we don't have to do it.

We can do it super fast, and we want to work with the customers to check that it works. Now if you ask me today, do you have offtake contracts to move to the real stuff, so the big investment of EUR 50 million to EUR 100 million.

I say not yet. We are progressing.

It's true that the current context is supporting this type of discussions, but we are not ready today to move to the big investment. The -- what has changed, I would say, over the past days and weeks is that it seems to move forward in the U.S.

There is -- there are some potential mechanisms that are implemented with floor prices. And we could envisage to contribute to this mechanism.

Even from La Rochelle, we know we can produce, so this is the only thing that has changed. But we are -- we continue to discuss to the -- with the different potential customers and with the policymakers, both in Europe and in North America.

Just a follow-up on that, Philippe. What do you think the hesitation?

Is it that customers are trying to figure out if this is a 1-year problem or a 10-year problem you kind of need, let's say, a multiyear offtake agreement and they're trying to figure out, well, do I want to commit to your multiyear offtake and commit to this whereas on the other hand, we don't -- it's very difficult to understand any of this trade development and how it's going [ pan ] out and therefore, we don't know if rare is a 1-year problem or a 10-year problem, right, in terms of supply chains? Is that -- do you think that's what the customers are struggling with?

Well, it's true that when you have a problem and then it's sold, you have a tendency to think that you don't need any more to move into long-term agreements. But I think fundamentally, fundamentally, both in Europe and in North America.

Customers, they want to derisk their sourcing. So they're just trying to figure out what is the best -- how is the best way to do it.

And they're probably also waiting for some indications from the policies. Gara, we will take 2 more questions, please.

The first one was a bit weird one. I recently -- or actually, it was this week, Element Solutions brought fluorocarbon gases company, ESC for 12x EBITDA.

And I think you are the ones who are supplying to them the fluorine-based gases and chemicals used in the semiconductor market. I'm just curious if somebody is buying a distributor of your business for 12x EBITDA.

Why would you not consider monetizing this business within Solvay? Doesn't seem most of us care about this business anyway.

So what is stopping you from monetizing this business? And the second question is, in your Performance Chemicals business, what exactly happened in Q3?

Because your EBITDA seems to have collapsed from EUR 100 million to EUR 60 million, I understand there was a EUR 20 million one-off, but even then, it seems like a big collapse even when the sales aren't really that different from Q2 to Q3. So can you help us understand what happened in that business?

Thank you very much, Chetan. I will probably let Alex comment on the evolution of the Performance Chemicals between Q2 and Q3, I think that's your question.

On fluorine, very clearly, you noticed that we're in a process of really restructuring this business and making sure that we concentrate our resources, efforts, capital on what will make the future of this business. So this is why basically we stopped our production in France.

We also stopped our production of HF and organic fluorine in Germany. And we will concentrate on the aluminum bracing business.

And also, we'll continue to produce some fluorine gas as this is indeed still a good business today. Then, I mean, again, there is absolutely no -- nothing is excluded at this point, but we're really focused on making sure that we have a sound and profitable business, and then we'll see.

Alex, I don't know if we -- if you wanted to take the bridge on Performance Chemicals?

Would love to. Yes.

So nothing major in Q3, just to remind that what we've mentioned in the past, we have mentioned that in Q1, we have successfully added litigation with one company that helped us to get paid and invoice some royalties for the past. We had the termination close of the contract in Q2, and we think, in general, this segment is probably the one which has the less -- the more -- the variability from quarter, there was nothing really special in Q3.

It's true that all business has to be a little bit soft. I mean, you see the tire market, what we said about Coatis and in term of fluorine, I mean we are taking measures to improve the profitability of the business, but you don't see it yet.

So nothing major to signal, and we are taking measure to improve sequentially.

Just one last, please. I was just wondering in the existing rare earth business, was the actual rare earth you're using in that?

And how does that differ to the new ones that you'll be using with the new business if you develop that?

Well, today, on the auto catalysis business, on the electronics business and medical applications, we're not using the Nd-Pr and Dy-Tb. So the Neodymium, Praseodymium, dysprosium, terbium are really specific from the permanent magnet business.

So we're not using them in our current businesses. It's more based on samarium and all this type of material that we're working.

And on tandem as well.

Thank you, Tristan. Thank you, Gaya, and thank you all for your participation today.

So if you have any further questions, please feel free to reach out to the Investor Relations team. We have a few events planned in November and December.

They are available in the financial calendar on our website. And we'll publish our Q4 and full year earnings on February 24.

Thank you very much.