Q2 2024 Constellium SE Earnings Call
During the presentation you cannot just thought to ask a question by pressing star followed by one on your telephone keypad.
Speaker Change: You changed your mind. Please press star followed by T. I would now like to hand, you over to your host Jason Hershiser director of Investor Relations for <unk> to begin. Please go ahead.
Jason Hershiser: Thank you Angela I would like to welcome everyone to our second quarter 2024 earnings call on the call today, we have our Chief Executive Officer, Jean Marc Germain and our Chief Financial Officer, Jack <unk>.
Speaker Change: After the presentation, we will have a Q&A session.
Speaker Change: A copy of the slide presentation for today's call is available on our website that can sell M Dot com and today's call is being recorded.
Speaker Change: Before we begin I'd like to encourage everyone to visit the company's website and take a look at our recent filings.
Speaker Change: Today's call May include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1095.
Speaker Change: Such statements include statements regarding the company's anticipated financial and operating performance future events and expectations and may involve known and unknown risks and uncertainties.
Speaker Change: A summary of specific risk factors that could cause results to differ materially from those expressed in the forward looking statements.
Speaker Change: Please refer to the factors presented under the heading risk factors in our annual report on form 20-F.
Speaker Change: All information in this presentation is as of the date of the presentation.
Speaker Change: We undertake no obligation to update or revise any forward looking statement as a result of new information future events or otherwise except as required by law.
Speaker Change: In addition, today's presentation includes information regarding certain non-GAAP financial measures. Please see the reconciliations of non-GAAP financial measures attached in today's slide presentation, which supplement our <unk>.
Speaker Change: <unk> disclosures.
John Mark: Before turning the call over to John Mark I wanted to remind everyone that beginning last quarter, we revised the definition of adjusted EBITDA at the consolidated level based on prior discussions with the SEC.
John Mark: The new definition will no longer exclude the noncash impact of metal price lag, we will continue to provide investors and other stakeholders with a noncash metal price lag impact as it is necessary to get a true assessment of the economic performance of the business.
John Mark: Our segment adjusted EBITDA will continue to exclude the impact and any guidance. We provide for adjusted EBITDA will also exclude the impact.
And with that I would now like to hand, the call over to Jean Marc.
Jean Marc: Thank you Jason Good morning, Good afternoon, everyone and thank you for your interest income stadium.
Jean Marc: I'll begin on slide five and discuss the highlights from our second quarter results I would like to start with safety. Our number one priority. Our recordable case rate was lower in the second quarter, leading to a rate of $2 one per million hours worked for the first half of the year. While these safety performance puts us among the best in manufacturing.
Jean Marc: The rate is higher than where we wanted to be and we have done better in the past. This is a humbling reminder, that while we always strive to deliver best in class safety performance, we all need to constantly maintain our focus on safety to achieve the ambitious target we have set which is a never ending task.
Jean Marc: For our company and one we take very seriously.
Jean Marc: Turning to our financial results shipments were 378000 tons down 5% compared to the second quarter of 2023, mainly due to lower shipments of bulk and <unk>.
Jean Marc: The lower shipments in the F&I were largely a result of the German extrusion business, we sold last year.
Jean Marc: Revenue of $1 8 billion euros decreased 8% compared to last year, primarily due to lower shipments and unfavorable price and mix, partially offset by higher metal prices remember what our revenues are affected by changes in metal prices, we operate to bust through business model, which minimizes our.
Jean Marc: Our exposure to metal price risk.
Jean Marc: Net income of 71 million euros in the quarter compares to net income of 32 million euros in the second quarter last year.
Jean Marc: Adjusted EBITDA was 214 million euros in the quarter, though this includes a positive non cash impact from metal price lag of 42 million euros.
Jean Marc: If you will to exclude this impact of metal price lag, which you should ask Jason Jason mentioned earlier, the real economy performance of the business reflects adjusted EBITDA of 172 million euros in the <unk>.
Jean Marc: Compared to the record 209 million euros, we achieved last year.
Jean Marc: As we mentioned in April.
Jean Marc: Third quarter results. This year reflect the impact of two large planned maintenance outages during the quarter.
Jean Marc: In addition, we saw slowing in certain end markets as we move through the second quarter, which we expect to persist in the second half of the year.
Jean Marc: Looking across our end markets aerospace demand remains strong in the quarter and packaging demand continued to improve automotive.
Jean Marc: Automotive demand remained healthy in North America, the demand continued to weaken in Europe.
Jacquie: Demand in most industrial and other specialty markets remained weak in both regions during the quarter Jacquie.
Jacquie: Jack will go through our detailed segment performance in a few moments.
Speaker Change: Moving now to free cash flow, our free cash flow in the quarter was strong at 75 million euros I am pleased to report that we increased our share buyback activities in the quarter during the quarter, we repurchased nearly one 6 million shares for around 33 million U S dollars our leverage at the end of the second quarter was two five times.
Speaker Change: And remains within our target leverage range.
Speaker Change: While it did not have a significant impact on our second quarter results in late June we experienced an unprecedented flooding event at our operations in the valley region of Switzerland.
I wanted to take a moment to thank our entire team in the valley for their incredible results encouraged curious in these very difficult times.
Speaker Change: We'll give you a full update on the current situation in value a little a little later on.
Speaker Change: With that I will now hand, the call over to Jack for further details on our financial performance deck.
Jack: Thank you Jean Marc and thank you everyone for joining the call today.
Jack: Please turn now to slide seven and let's focus on <unk> segment performance.
Jack: In the second quarter of 2020 for PARP generated segment adjusted EBITDA of 64 million euros, which was down 19% compared to the second quarter last year.
Jack: Volume was a headwind of 5 million euros with lower shipments of packaging and automotive.
Jack: Packaging shipments decreased 4% in the quarter versus last year, though demand in packaging continues to improve.
Jack: Automotive shipments decreased 3% in the quarter with stable demand in North America more than offset by softness in Europe.
Jack: Price and mix was a headwind of 3 million euros, mainly as a result of weaker with exiting the quarter.
Costs were a headwind of 8 million euros as a result of unfavorable metal costs.
Jack: <unk> results in the second quarter were also impacted by a large planned maintenance outage at our muscle Shoals facility that Mark mentioned.
Jack: As well as continued operating challenges at that facility during the quarter.
Speaker Change: Now, let's turn to slide eight and let's focus on the A&D segment.
Speaker Change: Adjusted EBITDA of 83 million euros decreased 14% compared to the record second quarter last year.
Jack: <unk>.
Jack: <unk> were stable versus the same quarter last year.
Jack: Aerospace demand remained strong during the quarter, while weakness persisted in tid.
Jack: Price and mix was a headwind of 23 million euros, mainly as a result of weaker aerospace mix due to the planned maintenance outage at Ravenswood as previously discussed.
Jack: Costs were a tailwind of 10 million euros, primarily as a result of lower operating costs.
Jack: Now I'll turn to slide nine let's focus on the <unk> segment.
Jack: Adjusted EBITDA of 32 million euros decreased 19% compared to the second quarter last year.
Aerospace demand remained strong during the quarter, while weakness persisted in tid.
Jack: Volume was a 6 million euro headwind as a result of lower shipments in automotive and industry extruded products.
Price and mix was a headwind of 23 million euros, mainly as a result of weaker aerospace mix due to the planned maintenance outage at Ravenswood as previously discussed.
Jack: Automotive shipments were down 13% in the quarter versus last year as a result of softness in Europe, and the timing impact between certain programs switches.
Costs were a tailwind of 10 million euros, primarily as a result of lower operating costs.
Jack: Industry shipments were down 20% in the quarter versus last year, primarily as a result of the sale of our German extrusion business.
Now I'll turn to slide nine.
Let's focus on the F&I segment.
Adjust EBITDA of 32 million euros decreased 19% compared to the second quarter last year.
Jack: Price and mix was a $7 million euro headwind, primarily due to a softer pricing environment in industry and weaker mix in the quarter.
Volume was a $6 million euro headwind as a result of lower shipments and automotive and industry extruded products.
Jack: Costs were a tailwind of 8 million euros, a lower operating costs.
Automotive shipments were down 13% in the quarter versus last year as a result of softness in Europe, and the timing impact between certain programs switches.
Jack: FX and other was a headwind of 2 million euros in the quarter.
Jack: It is not on the slide here, but I wanted to summarize the current cost environment, we're facing.
Industry shipments were down 20% in the quarter versus last year, primarily as a result of the sale of our German extrusion business.
As you know we operate a pass through business model. So we're not materially exposed to changes in the market price of aluminum our largest cost input.
Price and mix was a $7 million euro headwind, primarily due to a softer pricing environment in industry and weaker mix in the quarter.
Jack: Throughout 2022, and most of 2023, we were faced with broad based on significant inflationary pressures, although the pressure began to ease in some categories in the fourth quarter last year and have continued to ease as we move through this year.
Costs were a tailwind of 8 million euros, a lower operating cost.
FX and other was a headwind of 2 million euros in the quarter.
Jack: Labor and other nonmetal costs continue to be higher this year.
It is not on the slide here, but I wanted to summarize the current cost environment, we're facing.
Jack: As for energy, our 2024 costs are secured at moderately more favorable levels compared to 2023, although energy prices remain well above historical averages.
As you know we operate a pass through business model. So we're not materially exposed to changes in the market price of aluminum our largest cost input.
Throughout 2022, and most of 2023, we were faced with broad based on significant inflationary pressures, although the pressure began to ease in some categories in the fourth quarter last year and have continued to ease as we move through this year.
Jack: We remain confident in our ability to control costs in any environment with topline actions and our relentless focus on cost control as we have demonstrated in the past.
Jack: Now, let's turn to slide 10, and discuss our free cash flow.
Labor and other nonmetal costs continue to be higher this year.
Jack: We generated 75 million euros of free cash flow in the second quarter, bringing our year to date total to 67 million euros.
As for energy, our 2024 costs are secured at moderately more favorable levels compared to 2023, although energy prices remain well above historical averages.
Jack: The year over year increase in the first half as a result of less cash used for working capital and lower cash interest, partially offset by lower segment, adjusted EBITDA higher cash taxes and higher capital expenditures.
We remain confident in our ability to control costs in any environment with topline actions and our relentless focus on cost control as we have demonstrated in the past.
Jack: Looking at the full year in 2024, as we noted last quarter.
Now, let's turn to slide 10, and discuss our free cash flow.
Jack: We expect capex to be around 370 million euros. This year, which includes higher spending on return seeking projects such as our recycling and casting center zac.
We generated 75 million euros of free cash flow in the second quarter, bringing our year to date total to 67 million euros.
Jack: The facility is expected to start up on time and on budget around the end of this quarter.
The year over year increase in the first half as a result of less cash used for working capital and lower cash interest, partially offset by lower segment, adjusted EBITDA higher cash taxes and higher capital expenditures.
Jack: We expect cash interest of approximately 125 million euros, which includes the impact from higher interest rates.
We expect cash taxes of approximately 55 million euros, and we expect working capital and other to be a modest use of cash for the full year.
Looking at the full year in 2024, as we noted last quarter we.
We expect capex to be around 370 million euros. This year, which includes higher spending on return seeking projects such as our recycling and casting center in the upper back.
Jack: For 2024, we now expect to generate free cash flow of over $100 million euros, excluding the impact of flood in valet.
The facility is expected to start up on time and on budget around the end of this quarter.
Jack: We plan to continue executing our share repurchase program.
We expect cash interest of approximately 125 million euros, which includes the impact from higher interest rates.
Jack: And we intend to use a large portion of the free cash flow this year for the program.
Jack: As Joe Mark mentioned previously.
We expect our cash taxes of approximately 55 million euros, and we expect working capital and other to be a modest use of cash for the full year.
Joe Mark: We increased our share buyback activities in the quarter.
During the quarter, we repurchased nearly one 6 million shares for around $33 million, bringing our year to date total to roughly one 9 million shares for just over $39 million U S dollars.
For 2024, we now expect to generate free cash flow of over $100 million euros, excluding the impact of flood in ballet.
Speaker Change: Now, let's turn to slide 11, and discuss our balance sheet and liquidity position.
We plan to continue executing our share repurchase program.
Speaker Change: At the end of the second quarter, our net debt of $1 7 billion euros increased slightly compared to the end of 2023.
We intend to use a large portion of the free cash flow this year for the program.
As Joe Mark mentioned previously we increased our share buyback activities in the quarter.
Speaker Change: <unk> was driven primarily by our strong free cash flow of 67 million euros in the first half of this year slightly more than offset by 37 million euros of share buybacks and an unfavorable noncash FX translation impact of 32 million euros with the strengthening of the U.
Joe Mark: During the quarter, we repurchased nearly one 6 million shares for around $33 million, bringing our year to date total to roughly one 9 million shares for just over $39 million U S dollars.
Speaker Change: Now, let's turn to slide 11, and discuss our balance sheet and liquidity position.
Speaker Change: S dollar.
Speaker Change: Our leverage was two five times at the end of the quarter were down two times versus the end of the second quarter of 2023 and with thing our target leverage range.
Speaker Change: At the end of the second quarter, our net debt of $1 7 billion euros increased slightly compared to the end of 2023.
Speaker Change: We remain committed to maintaining our target leverage range of one 5% to two five times.
Speaker Change: The change was driven primarily by our strong free cash flow of 67 million euros in the first half of this year slightly more than offset by 37 million euros of share buybacks and an unfavorable noncash FX translation impact of 32 million euros with the strengthening.
Speaker Change: As you can see our debt summary, we have no bond maturities until 2026 our.
Speaker Change: Our liquidity remains strong at 869 million euros as at the end of the second quarter, which is the highest level in two years.
Speaker Change: The U S dollar.
Mark: We're extremely proud of the progress we have made on our capital structure and have the financial flexibility, we're building, including the ability to continue returning capital to our shareholders with that I'll now hand, the call back to you Mark.
Speaker Change: Our leverage was two five times at the end of the quarter were down two times versus the end of the second quarter of 2023 and within our target leverage range.
Speaker Change: We remain committed to maintaining our target leverage range of one 5% to two five times.
Mark: Thank you Jack let's turn to slide 13, and discuss our current market outlook.
Speaker Change: As you can see our debt summary, we have no bond maturities until 2026.
Speaker Change: The majority of our portfolio today. So the end markets currently benefiting from durables sustainability driven circular.
Speaker Change: Our liquidity remains strong at 869 million euros as of the end of the second quarter, which is the highest level in two years.
Speaker Change: Which aluminum light and infinitely recyclable material plays a critical role.
Mark: Turning first to the aerospace market the post Covid recovery in aerospace continues and demand in these markets remains strong commercial aircraft backlogs are robust today, and we remain confident that the long term fundamentals driving aerospace demand remain intact, including growing passenger traffic and <unk>.
Speaker Change: We're extremely proud of the progress we have made on our capital structure and have the financial flexibility. We are building, including the ability to continue returning capital to our shareholders with that I'll now hand, the call back to you Mark.
Mark: Thank you Jack let's turn to slide 13, and discuss our current market outlook.
Mark: Greater demand for new more fuel efficient aircraft.
Speaker Change: The majority of our portfolio today, serving end markets currently benefiting from durables sustainability driven circular.
Mark: Major Aero Oems remained focused on increasing build rates for both narrow and wide body aircraft. Those supply chain challenges are again slowing deliveries of completed aircraft for some Oems dimmed.
Speaker Change: Which illumina enlightening.
Speaker Change: The blue material plays a critical role.
Mark: Turning first to the aerospace market the.
Mark: The post Covid recovery in aerospace continues and demand in these markets remains strong.
Demand also remains strong in the business and regional jet markets and the defense and space markets. In addition, we continue to experience strong demand for <unk> family of products.
Mark: <unk> aircraft backlogs are robust today, and we remain confident that the long term fundamentals driving aerospace demand remain intact, including growing passenger traffic and greater demand for new more fuel efficient aircraft.
Speaker Change: Turning now to automotive.
Speaker Change: Automotive OEM production of light vehicles in North America is near pre Covid levels, while production in Europe remains well below pre COVID-19 levels.
Mark: Major Aero Oems remained focused on increasing build rates for both narrow and wide body aircraft.
Speaker Change: Demand remains stable in North America today was demand has further weakened in Europe, which we now no longer expect to recover in the second half of this year.
Mark: Those supply chain challenges are again slowing deliveries of completed aircraft for some Oems.
Mark: Demand also remains strong in the business and regional jet markets and a defense and space markets. In addition, we continue to experience strong demand for <unk> family of products.
Speaker Change: Demand for Evs is continuing to grow, albeit at a slower pace than expected and the best consumer demand for luxury calls light trucks, and Suvs remained steady North America, though demand for luxury vehicles in Europe as often.
Speaker Change: Turning now to automotive.
Speaker Change: Automotive OEM production of light vehicles in North America is near pre Covid levels, while production in Europe remains well below pre COVID-19 levels.
Speaker Change: And the long term vehicle electrification and sustainability trends will continue to drive the demand for light weighting and use of aluminum products. As a result, we remain positive on this market over the longer term in both regions. Despite the weakness we're seeing in Europe to date.
Speaker Change: Demand remains stable in North America today was demand has further weakened in Europe, which we now no longer expect to recover in the second half of this year.
Speaker Change: Let's turn now to packaging.
Speaker Change: Demand for Evs is continuing to grow, albeit at a slower pace than expected and the best consumer demand for luxury call light trucks, and Suvs remained steady North America, though demand for luxury vehicles in Europe as often.
Speaker Change: Inventory adjustments in <unk> behind Us and demand continues to improve in both North America and Europe through promotional activity at the retail level remains below historical levels.
Speaker Change: The long term outlook for this end market continues to be favorable as evidenced by the growing consumer preference for the sustainable aluminum beverage can capacity growth plans from Kevin makers in both regions and the Greenfield investments ongoing here in North America.
Speaker Change: In the long term vehicle electrification and sustainability trends will continue to drive the demand for light weighting and use of aluminum products. As a result, we remain positive in these markets over the longer term in both regions. Despite the weakness we are seeing in Europe to date.
Speaker Change: We're expecting growth in <unk> in 2024, including some improvement in the second half compared to the first half and longer term. We continue to expect packaging markets to grow low to mid single digits in both North America and Europe.
Speaker Change: Let's turn now to packaging.
Speaker Change: Inventory adjustments in <unk> behind Us and demand continues to improve in both North America and Europe through promotional activity at the retail level remains below historical levels.
Speaker Change: As Jack mentioned, the recycling and testing center, we are building hotels <unk> facility is well underway and both on time and on budget. The project is still expected to start up as we approach the end of the third quarter of this year and ramp up quickly.
Speaker Change: Long term outlook for this end market continues to be favorable as evidenced by the growing consumer preference for the sustainable aluminum beverage can capacity growth plans from Kevin makers in both regions and the Greenfield investments ongoing here in North America.
Speaker Change: That is just a few weeks away.
Speaker Change: As we have discussed before muscle Shoals continues to face ongoing operational challenges. We're encouraged by the improved performance. We have seen there recently and following the planned maintenance outage, we had there in the second quarter and we expect operations to continue to improve as the year progresses.
Speaker Change: We're expecting growth in <unk> 2024, including some improvement in the second half compared to the first half and longer term. We continue to expect packaging markets to grow low to mid single digits in both North America and Europe.
Speaker Change: As Jack mentioned, the recycling and testing center, we are building at El <unk> facility is well underway and both on time and on budget.
Speaker Change: As you can see on the page. These three core end markets represent just over 80% of our last 12 months revenue.
Speaker Change: Turning lastly to other specialties.
Jack: <unk> do you still expected to start up as we approach the end of the third quarter this year and ramp up quickly.
Speaker Change: We have experienced weakness across most specialties markets for round two yields now these markets are typically dependent upon the health of the industrial economies in each region.
Speaker Change: That is just a few weeks away.
Mr shows: As we have discussed before Mr shows continues to face ongoing operational challenges. We're encouraged by the improved performance. We have seen there recently and following the planned maintenance outage. We had there in the second bolster and we expect operations to continue to improve as the year progresses.
Speaker Change: While the U S economy remains stable today the economy in Europe is weaker than our prior expectations. Many of our other specialties markets also impacted by the higher interest rate environment across most regions.
Mr shows: As you can see on the page three core end markets represent just over 80% of our last 12 months' revenue.
Speaker Change: To conclude on the end markets, we like the fundamentals in each of the markets. We serve and we strongly believe that the diversification of our end markets as an asset for the company over the longer term.
Mr shows: Turning lastly to other specialties we.
Mr shows: We have experienced weakness across most specialties markets for RNG to yields now these markets are typically dependent upon the health of the industrial economies in each region.
Speaker Change: Let's turn now to slide 14, I want to spend a few minutes on two exciting investments, we are making our pulp segment to strengthen the business for the future.
Mr shows: While the U S economy remains stable to date the <unk>.
Speaker Change: I'm excited to announce today that our facility in muscle Shoals, Alabama was recently selected by the U S Department of defense to receive a grant of $23 million to increase our internal casting capacity.
I mean, Europe is weaker than our prior expectations. Many of our other specialties markets also impacted by the higher interest rate environment across both regions.
Speaker Change: Total size of the project is expected to be around $65 million inclusive of the U S Department of Defense Grant in terms of project details we plan to install state of the <unk> equipment in an existing building is muscle shoals. Once completed the new testing centre will increase internal casting capacity by us.
Mr shows: To conclude on the end markets, we like the fundamentals in each of the markets. We serve and we strongly believe that the diversification of our end markets is an asset for the company over the longer term.
Mr shows: Let's turn now to slide 14, I want to spend a few minutes on two exciting investments we are making in our pulp segment to strengthen the business for the future.
Speaker Change: 300 million pounds or over 130000 metric tons.
Mr shows: I am excited to announce today that our facility in muscle Shoals, Alabama was recently selected by the U S Department of defense to receive a grant of $23 million to increase our internal casting capacity.
Speaker Change: In addition to reducing our reliance on external metal supply in.
Speaker Change: Investment is expected to increase our use of recycled inputs and reduce the use of primary metal.
Mr shows: The total size of the project is expected to be around $65 million inclusive of the U S Department of Defense Grant.
Speaker Change: The investment will also provide the U S industrial base with an additional self reliant domestic source of supply for aluminum rolling ingot.
Mr shows: In terms of project details, we plan to install state of the <unk> cutting equipment in an existing building at muscle Shoals. Once completed the new testing centre will increase internal casting capacity by up to 300 million pounds or over 130000 metric tons in.
Speaker Change: Flat rolled aluminum products, including sheet and plate are critical material inputs for the defense aerospace automotive packaging and transportation industries.
Speaker Change: In terms of timing, we expect the casting center to ramp up in the second half of 2026.
Mr shows: In addition to reducing our reliance on external metal supply. The investment is expected to increase our use of recycled inputs and reduce the use of primary metal.
Speaker Change: We are extremely honored and proud to have been selected for these grant and express our gratitude to the department of defense or <unk> and the aluminum industry.
Mr shows: The investments will also provide the U S industrial base with an additional self reliant domestic source of supply for aluminum rolling ingot flat.
Speaker Change: Moving onto the second investment I'm also excited to announce today that we have signed a long term agreement with slaughter in fossil in Europe.
Mr shows: Flat rolled aluminum products, including sheet and plate are critical material inputs for the defense aerospace automotive packaging and transportation industries.
Speaker Change: And for our series a subsidiary of let's say aluminum and Boto Flotek operation, which is one of the largest tables in South Korea with global operations.
Mr shows: In terms of timing, we expect the casting center to ramp up in the second half of 2026.
Speaker Change: We are thrilled to collaborate with slaughter and supply the European operations with high quality folks took from our Xiamen facility in Germany.
Speaker Change: We are extremely honored and proud to have been selected for these grant and express our gratitude to the department of defense <unk> and the aluminum industry.
Speaker Change: <unk> will be used in electric vehicle battery applications to support future growth in the electric vehicle market.
The total investment is around 17 million euros with the contractual support of Flotek and will include new finishing lines at Zynga and facility to enhance production capacity.
Mr shows: Moving onto the second investment.
Speaker Change: So excited to announce today that we have signed a long term agreement with slaughter in fossil in Europe look to infra series, a subsidiary of let's say aluminum and Boto Flotek operation, which is one of the largest tables in South Korea with global operations, we are thrilled to collaborate with Flotek and supply the European operations.
Speaker Change: The project is expected to be completed by the end of 2025 with scheduled ramp up in 2026.
Speaker Change: These strategic investments is expected to further cement <unk> position as a key player in the aluminum <unk> specialties market and to diversify the customer base of our specialty foam stuck with.
Speaker Change: <unk> high quality photos from our Xiamen facility in Germany.
Mr shows: The full scope will be used in electric vehicle battery applications to support future growth in the electric vehicle markets.
Speaker Change: We expect both projects to well exceed our target IRR of 15% and we expect those projects to be funded within the existing return seeking capex levels.
Mr shows: The total investment is around <unk> million euros with the contractual support of Flotek and will include new finishing lines at our <unk> facility to enhance production capacity.
Speaker Change: Please turn to slide 15, now and I want to give you an update on the situation we are facing in the valley.
Mr shows: The project is expected to be completed by the end of 2025 with scheduled ramp up in 2026.
Speaker Change: In late June we experienced unprecedented flooding in the <unk> region of Switzerland, which divestiture the region, including industrial activities at <unk> and elsewhere.
Mr shows: These strategic investments is expected to further cement <unk> position as a key player in the aluminum automotive specialties market and to diversify the customer base of our specialty photo book.
Speaker Change: Plate and extrusion Sharps, you share and cast house and shippers were severely flooded and operations have remained suspended since the flawed.
Mr shows: We expect both projects to well exceed our target IRR of 15% and we expect both projects to be funded within the existing return seeking capex levels.
Speaker Change: Cash dosing stake was not directly impacted and has returned to normal operations.
Speaker Change: I am pleased to report that all of our employees in the region has been confirmed safe, which is obviously the most important thing, but there is significant damage to the equipment and facilities in Sierra and <unk>.
Speaker Change: Please turn to slide 15, now and I want to give you an update on the situation we are facing in the valley.
Speaker Change: In late June we experienced unprecedented flooding in the <unk> region of Switzerland, which divestiture the region, including industrial activities at <unk> and elsewhere.
Speaker Change: Leaning in drawing operations as well as a testing and maintenance phase are all underway.
Speaker Change: To put a value operations into perspective, we employ around 700 employees in the region out of approximately 12002 <unk> employees.
Speaker Change: Plate and extrusion Sharps, you share and guesthouse and ship is where CBOE flooded and operations have remained suspended seems to flood our cash dosing stake was not directly impacted and has returned to normal operations.
Speaker Change: Total fish, finishing capacity of CRE, 70% to 75000 metric tons or less than 5% of our tools.
Speaker Change: I am pleased to report that all of our employees in the region have been confirmed safe, which is obviously the most important thing.
Speaker Change: Capacity and shipments and an even lower percentage of our total manufacturing capacity.
Speaker Change: Given the fact that <unk>, primarily serves the tid and industry extrusion markets in Europe, the capacity utilization pre flowed was lower when compared to a more normal demand environment.
Speaker Change: Because there is a significant damage to the equipment and facilities in Sierra and <unk>.
Speaker Change: Cleaning and driving operations as well as a testing and maintenance phase are all underway.
Speaker Change: To put our value operations into perspective, we employ around 700 employees in the region out of approximately 12002 constituent employees.
Speaker Change: At this stage, we are committed to limiting the impact to our customers. So from these facilities I cannot say enough how proud I am of our team on the ground there and the incredible progress made in a very short period of time against very significant Cogs.
Speaker Change: The total fishing machine capacity of CRE, 70% to 75000 metric tons or less than 5% of our tools.
Speaker Change: Turning now to slide 16, we detail our outlook and the impact we are currently expecting as a result of the float.
Speaker Change: Capacity and shipments and an even lower percentage of our total manufacturing capacity.
Speaker Change: Given the fact that <unk>, primarily serves the tid and industry extrusion markets in Europe, the capacity utilization pre flowed was lower compared to a more normal demand environment.
Speaker Change: First on the impact of the float we are working closely with our insurance company and the latest insurance estimates of gross damage assessments of approximately 135 million euros.
Speaker Change: At this stage, we are committed to limiting the impact to our customers served from these facilities.
Speaker Change: Figure includes estimated damages cleaning costs and business interruption expenses.
Speaker Change: I don't see enough how proud I am of our team on the ground there and the incredible progress we have made in a very short period of time against very significantly dogs.
The gross damage assessment is before consideration of our insurance claim of up to 50 million euros, which we expect to get in and have already received approximately 10 million euros as of today the.
Speaker Change: Turning now to slide 16, we detail our outlook and the impact we are currently expecting as a result of the float.
Speaker Change: The gross figure also does not take into account the impact of mitigation plans, which are currently underway and potential government assistance as a result of the event will switch certain benefits have already been approved.
Speaker Change: First on the impact of the float we are working closely with our insurance company and the latest insurance estimates of gross damage assessments of approximately 135 million euros.
Speaker Change: Given the uncertainty around the impact from severe flooding at our facilities in Switzerland, including the extent of the damage the timing to restart production and the accounting treatment of the event. We are pausing our guidance at this time for 2024, we will continue to update all stakeholders as this situation unfolds and we plan.
Speaker Change: This figure includes estimated damages cleaning costs and business interruption expenses.
Speaker Change: The gross damage assessments is before consideration of our insurance claim of up to 50 million euros, which we expect to get in and have already received approximately 10 million euros as of today the.
Speaker Change: To reinstate guidance once we have a clear picture of the overall impact.
Speaker Change: The gross figure also does not take into account the impact of mitigation plans, which are currently underway and potential government assistance as a result of the event of which certain benefits have already been approved.
Speaker Change: Excluding the impacts from the flood of 2024, adjusted EBITDA guidance would have been reduced by approximately 5% primarily as a result of the weaker market conditions, we described compared to prior expectations.
Speaker Change: Given the uncertainty around the impact from severe flooding at our facilities in Switzerland, including the extent of the damage the timing to restart production and the accounting treatment of the event. We are pausing our guidance at this time for 2024, we will continue to update all stakeholders as this situation unfolds and we plan.
Speaker Change: Most specifically our expectations of recovery of tempered so theyre in European automotive industrial and other specialties market.
Speaker Change: Southern North American markets, where demand has been impacted by higher interest rates, we are seeing little improvement in economic indicators in these markets and we expect these weak conditions to persist at least through the end of this year.
Speaker Change: To reinstate guidance once we have a clear picture of the overall impact.
Speaker Change: Excluding the impact from the flood of 2024, adjusted EBITDA guidance would have been reduced by approximately 5% primarily as a result of the weaker market conditions, we described compared to prior expectations.
Speaker Change: Also excluding the impact from the flood, we expect to generate solid free cash flow in 2020 for over 100 million euros. We're confident that this time the impacts from the floating digestible this year and at this stage. We are prioritizing. The result based on the criticality of equipment and customer needs.
Speaker Change: Most specifically our expectations of recovery out tempered further in European automotive industrial and other specialties market.
Speaker Change: Finally, we remain confident in our ability to deliver on our adjusted EBITDA target of over 800 million euros in 2025.
Speaker Change: Some north American markets, where demand has been impacted by higher interest rates.
Speaker Change: We are seeing little improvement in economic indicators in these markets and we expect these weak conditions to persist at least through the end of this year.
Speaker Change: Turning lastly to slide 17, we detail our key messages our team delivered solid performance in the second quarter of 2020 full despite the mixed end market demand environment, we continue to face and two large planned maintenance outages during the quarter.
Speaker Change: Also excluding the impact from the flood, we expect to generate solid free cash flow in 2020 for over 100 million euros. We're confident that this time the impact from the flow of these digestible this year and at this stage. We are prioritizing. The result based on the criticality of equipment and customer needs.
Speaker Change: Delivered strong free cash flow and we increased our share buyback activities in the quarter.
Speaker Change: To conclude let me say again that I am proud of our results and our teams and very excited about our future.
Speaker Change: Finally, we remain confident in our ability to deliver on our adjusted EBITDA target of over 800 million euros in 2025.
Speaker Change: Who has demonstrated over and over again that we have the right strategy the right teams and the right products in the right markets and that we know how to overcome prices a.
Speaker Change: Turning lastly to slide 17, we detail our key messages our team delivered solid performance in the second quarter of 2020 full despite the mixed end market demand environment, we continue to face and two large planned maintenance outages during the quarter.
Speaker Change: Our business model is flexible and resilient our diversified portfolio allows us to always have options is very different market conditions. We have built the balance sheet, we need to both whether prices and seasonal treaties and a high value recyclable and sustainable products respond to the growing needs of our customers and such.
Speaker Change: We delivered strong free cash flow and we increased our share buyback activities in the quarter.
Speaker Change: <unk>.
Speaker Change: To conclude let me say again that I am proud of our results and our teams and very excited about our future.
Speaker Change: We are extremely well positioned for long term success and remain focused on executing our strategy and creating value for our shareholders.
Speaker Change: We have demonstrated over and over again that we have the right strategy the right teams and the right products in the right markets and that we know how to overcome prices a.
Speaker Change: With that engine up we will now open the Q&A session.
Speaker Change: Thank you very much Joe and Mike and everyone. If you would like to ask a question. Please press star followed by one on your telephone keypad.
Speaker Change: Our business model is flexible and resilient our diversified portfolio allows us to always have options in very different market conditions. We.
Speaker Change: Change your mind. Please press star followed by one preparing to asking a question. Please ensure your devices and mute locally.
Speaker Change: We have built the balance sheet, we need to both weather crisis, and seasonal treaties and a high value recyclable and sustainable products respond to the growing needs of our customers and society.
Speaker Change: Well pause for you Bruce to ask a question at this time.
Speaker Change: We're extremely well positioned for long term success and remain focused on executing our strategy and creating value for our shareholders.
Speaker Change: We have the first question from John Zink with BMO capital markets. Your line is now open.
With that engine up we will now open the Q&A section.
John Zink: Hi, Thank you for taking my question maybe.
Speaker Change: Thank you very much Joe and Mike and everyone.
John Zink: Maybe starting off on the 25 outlook, where you're still expecting to reach over 800 million EBITDA can you maybe talk a little bit about the specifics of what's going to drive how much of that is dependent on market recovering or what or just the major buckets.
Speaker Change: If you would like to ask a question. Please press star followed by one on your telephone keypad.
Speaker Change: Have you changed your mind. Please press star followed by tier one preparing to asking a question. Please ensure your devices and mute locally.
I'll pause here Bruce to ask a question at this time.
Speaker Change: Growth there.
Speaker Change: Yes. Good morning. Thank you for your question so far.
John Zink: First.
Speaker Change: We have the first question from Keith.
Speaker Change: Let's say this is.
Keith Johnson: Johnson with BMO capital markets. Your line is now open.
Speaker Change: 90% to 100 million Euro.
Speaker Change: We need to go from the revised implicit guidance, we're giving we have posted on the basis of continued operations.
Keith Johnson: Hi, Thank you for taking my question maybe.
Keith Johnson: Maybe starting off on the 25 outlook, where you're still expecting to reach our 800 million EBITDA can you maybe talk a little bit about the specifics of what's going to drive how much of that is dependent on market recovery. What are just the major buckets.
Speaker Change: Two.
Speaker Change: <unk> more than 800 million euro in 2025.
Speaker Change: So if you think of these buckets as a number of things first of all the shelf situation will be behind us largely and.
Speaker Change: And we will be.
Speaker Change: Ah graph there.
Speaker Change: Back to you.
Speaker Change: Yes. Good morning. Thank you for your question so far.
Speaker Change: Normal operations.
Speaker Change: The second aspect, obviously, the muscle Shoals weather event, we suffered from January February of this year, which we do not plan to happen again.
Speaker Change: First.
Speaker Change: Let's say this is a.
Speaker Change: 90 to 100 million Euro.
Speaker Change: Up we need to go from the revised implicit guidance, we're giving we have posted it on the basis of continued operations.
Speaker Change: The big driver is going to be the <unk> recycling center.
Speaker Change: Starting in just a few.
Speaker Change: Two.
Speaker Change: Few weeks from now and will ramp up quite aggressively in this.
Speaker Change: <unk> more than 800 million euro in 2025.
Speaker Change: So if you think of these buckets as a number of things first of all the shelf situation will be behind us largely and.
Speaker Change: Last quarter of this year and we'll be very close to full capacity as early as 2025.
Speaker Change: We then have in aerospace.
Speaker Change: And we will be.
Speaker Change: Back to you.
Speaker Change: Normal operations.
Speaker Change: Some better contractual terms on some large contracts that we know are going to materialize as well as we know that.
Speaker Change: The second aspect.
Speaker Change: Do you see the muscle Shoals weather event, we suffered from January February of this year, which we do not plan to happen again.
Speaker Change: Little bit of slowdown there is this year.
Speaker Change: The big driver is going to be the <unk> recycling center.
Speaker Change: Those planes need to be built needs to be delivered that would be good for the volumes next year and in addition, our volumes will be higher next year as well.
Speaker Change: Starting in just a few weeks from now and will ramp up quite aggressively in this.
Speaker Change: And finally, we got the vision 25 cost.
Speaker Change: Last quarter of this year and we'll be very close to full capacity as early as 2025.
Jack: <unk> so to Jack had mentioned on several prior calls so these elements, which are very much under our control.
Speaker Change: We then have in aerospace.
Jack: Except for the weather.
Speaker Change: Some better contractual terms on some large contracts that we know are going to materialize as well as we know that.
Jack: Yeah.
Jack: Strophic events don't happen several times in a row.
Will give us more than that $100 million.
Speaker Change: Whatever little bit of slowdown there is this year.
Jack: Now in addition.
Jack: As we know.
Speaker Change: Those planes need to be build need to be delivered that will be good for the volumes next year and in addition, our volumes will be higher next year as well.
Speaker Change: We've got some operational challenges in muscle shoals as well working through maybe it's useful then I'll give it a little bit more detail on those.
Speaker Change: And finally, we got the vision 2005.
Speaker Change: Really where in the context of a growing can sheet market and a growing auto markets in the U S. We've been able to satisfy the growth of the auto markets, we're running behind in terms of can sheet.
Jack: <unk> reductions that Jack had mentioned on several prior calls so these elements, which are very much under our control.
Speaker Change: As we.
Speaker Change: Except for the weather.
Speaker Change: As you know we had issues post COVID-19 with recruitment and stabilization of these issues are largely behind us, but at the same time, we need to increase our capacity in muscle Shoals.
Speaker Change: Get us perfect events don't happen several times in a row.
Speaker Change: Will give us more than that $100 million.
Speaker Change: Now in addition.
Speaker Change: As we know.
Speaker Change: We've committed significant capital expenditures to build the plant and improve.
Speaker Change: We've got some operational challenges in muscle shoals as well working through maybe it's useful then I'll give it a little bit more detail knows.
Speaker Change: The efficiencies and the productivity of the plant. This is taking a bit more time than we have than we have planned but this.
Speaker Change: Really we're in the context of a growing can sheet market and a growing auto markets in the U S. We've been able to satisfy the growth of the auto markets, we're running behind in terms of can sheet.
Speaker Change: It should be we're making some progress nothing the same rate as what we would like to do so this should contribute to further improvements in 2025 and then finally.
Speaker Change: As we.
Speaker Change: As you know we had issues.
Speaker Change: Colby with recruitment and stabilization of these issues are largely behind us, but at the same time, we need to increase our capacity in muscle Shoals.
Speaker Change: We do hope that there will be some European come back with the mood seasoned.
In specialties with most of the specialties market, 30% down compared to the pre COVID-19 levels automotive. If you look at the build in Europe, Youll still at least 10% down this year compared to 2019 and every year since <unk> has been well below 2019 levels. So these will pickup as well, but it wasn't.
Speaker Change: We've committed significant capital expenditures to build the plant and improve.
Speaker Change: The efficiencies and the productivity of the plant. This is taking a bit more time than we have than we had planned but.
Speaker Change: Should be we're making some progress nothing the same rate as what we would like to do so this should contribute to further improvements in 2025 and then finally.
Speaker Change: Nuts counting on these for reaching our 2025 targets. So as you see we got.
Speaker Change: Since you have arrows in our quiver and Thats why we feel comfortable despite the odds in a difficult situation. We're in to overcome the challenges. We're currently facing to deliver on our 2025 guidance.
Speaker Change: We do hope that there will be some European come back with the mood seasoned.
Speaker Change: And specialties with most of the specialties market, 30% down compared to the pre COVID-19 levels automotive if you look at the build in Europe, you'll still at least 10% down this year compared to 2019 and every year since has been well below 2019 levels. So these will pick up as well, but it wasn't.
Speaker Change: If I may add another one can you just remind us how much is the new recycling facility expected to add to EBITDA.
Speaker Change: Yes, we we had said it's 135 million.
Speaker Change: I'll then.
Speaker Change: The other 20% roughly IRR it took three years to build so by and large.
Speaker Change: Nuts counting on these for reaching our 2025 targets. So as you see we got plenty of arrows in our quiver and Thats why we feel comfortable despite the odds and the difficult situation. We're in to overcome the challenges. We're currently facing to deliver on our 2025 guidance.
Speaker Change: $40 million is the number.
Speaker Change: Yes got you and if I can just add if I can just add here. We said the Capex is 130 135 million euros, plus working capital right.
Speaker Change: If I may add another one can you just remind us how much is the new recycling facility expected to add to EBITDA.
Speaker Change: Thank you.
Speaker Change: Next question is from Timna Tanners with Wolfe Research Your line is open.
Speaker Change: Yes, we we have said it's $135 million.
Speaker Change: Malden.
Speaker Change: The other 20% roughly IRR. It took three years to build so by and large say $40 million is a number.
Timna Tanners: Yeah, Hey, good morning.
I wanted to make sure I don't ask anything that you already touched on but at the same time and just on that.
Timna Tanners: Flooding situation given that it's a relatively small part of your total shipments and a weaker part of the market.
Speaker Change: Yes got you and if I can just.
Speaker Change: If I can just add here, we said the Capex is 130 to 135 million euros, plus working capital right.
Speaker Change: First of all to produce some of those products at other facilities and kind of drag out the restart or are there reasons why you want to ramp back up maybe government support or something I might be missing and then also along those same specific company questions is there something structurally wrong at muscle Shoals or is all that behind in terms of that challenges.
Speaker Change: Thank you.
Next question is from Timna Tanners with Wolfe Research Your line is open.
Timna Beth Tanners: Hey, good morning.
Speaker Change: Yes, thanks, good morning, Timna and thank you.
Timna Beth Tanners: I wanted to make sure I don't ask anything that you already touched on but at the same time and just on that.
Speaker Change: <unk> new questions, yes, so under that situation.
Timna Beth Tanners: The flooding situation given that it's a relatively small part of your total shipments and a weaker part of the market.
Speaker Change: Definitely.
Speaker Change: We mentioned 135 million approximately an impact to the operations that include business interruption.
Speaker Change: First of all to produce some of those products at other facilities and kind of drag out the restart or are there reasons why you want to ramp back up maybe government support or something I might be missing and then also along those same specific company questions is there something structurally wrong at muscle Shoals or is all that behind in terms of their challenges.
Speaker Change: But the.
Speaker Change: Obviously, then we wouldn't need to work on mitigation part of the mitigation is producing these products that we used to produce out of that region in other plants.
Speaker Change: So we're doing just that prioritizing for the customers that are the most in need and there is some volume studies being shifted to Zynga in Germany, and some volumes that are shifted to a swath, France. Obviously this is creating a bit of a scramble.
Speaker Change: Yes. Thanks, good morning, Timna and thank you I know that you are asking new questions.
Speaker Change: On the <unk> situation.
Speaker Change: Definitely we mentioned and 135 million approximately an impact to the operations that includes business interruption.
Speaker Change: Throughout the organization, but.
Speaker Change: That's not our first rodeo.
Speaker Change: And we're doing just that these are not long term solutions. There is a need for this plant and share.
Speaker Change: Obviously, then we wouldn't need to work on mitigation part of the mitigation.
Speaker Change: And that's why we plan to restart, but we may not restart every piece of equipment.
Speaker Change: Producing these products that are used to produce out of that region in other plants. So.
Speaker Change: Run it exactly as we did in the past and this is certainly the opportunity to sell.
Speaker Change: So we're doing just that prioritizing for the customers that are the most in need and there is some volume studies being shifted to Zynga in Germany, and some volumes that are shifted to a suave brands. Obviously this is creating a bit of a scramble.
Speaker Change: Sadly.
Speaker Change: To make sure we really focus on the critical equipment and to rebuild a plan that as that's our cost space than the plant we had before the divestiture floods. So that would be my answer to the <unk> situation.
Throughout the organization, but.
Speaker Change: That's not our first rodeo.
Speaker Change: And we're doing just that.
Speaker Change: On a common stack.
Speaker Change: These are not long term solutions there is a need for these plants.
Speaker Change: Yes, again mitigation.
Speaker Change: Broadly yet so I think.
Speaker Change: Sure.
There are number of medications, which you alluded to NGL Mark alluded too so, but I think in terms of the impact that timna. So the 135 million euros just to be.
Speaker Change: And Thats why we plan to restart, but we may not restart every piece of equipment.
Speaker Change: Run it exactly as we did in the past and this is certainly the opportunity to sadly.
Speaker Change: Abundantly clear if you will.
It's based on our work with our insurance company and Thats really the latest kind of insurance estimate based on industry methodology.
Speaker Change: To make sure we really focus on the critical equipment and to rebuild a plant that has a better cost base in the plant we had before the divestiture floods. So that would be my answer to the <unk> situation.
Speaker Change: Which came up with a gross damage assessment of approximately 135 million euros before mitigation.
Other common stack.
Speaker Change: Yes, again mitigation.
Speaker Change: That way, we could have right. So just to be clear on that point and then if you were to look at that figure.
Speaker Change: Broadly yet so I think.
Mark: There are number of medications, which you alluded to NGL Mark alluded too so, but I think in terms of the impact that timna. So the 135 million euros just to be.
Speaker Change: We're very confident at this time the impact.
Speaker Change: The <unk> can be easily kind of digested given our strong liquidity position of close to 870 million euros, which by the way the highest level in two years as.
Mark: Abundantly clear if you will.
Speaker Change: It's based on our work with our insurance company and Thats really the latest kind of insurance estimate based on industry methodology.
As well as the mitigation plans that we have in place.
Speaker Change: And regarding your second question about Mr. Shortly there anything structurally wrong with the plan no. There isn't there is a lot of work to do to <unk>.
Speaker Change: Which came up with a gross damage assessment of approximately 135 million euros before mitigation.
Speaker Change: That way, we could have right. So just to be clear on that point and then if you were to look at that figure.
Speaker Change: Bring it bring the capacity up to the opportunities we have it's a constant work its lot of work on the team that we got the right team because the right tools and.
Speaker Change: We're very confident at this time the intact.
Speaker Change: Spending a lot of money to get it there.
Speaker Change: The slides can be easily kind of digested given our strong liquidity position of close to 870 million euros, which by the way the highest level in two years as.
Speaker Change: Okay. Thank you.
Speaker Change: Another one there is a lot of tuck into this upcoming election about potential further tariffs.
Speaker Change: Also our new no thats ramping up production in 2025, making a lot of noise at least on that impact. So just wondering if you could update us on any thoughts around the new competition starting up in the U S is it going to displace import tariffs.
Speaker Change: As well as the mitigation plans that we have in place.
Speaker Change: And regarding your second question about Mr. Shortly there anything structurally wrong with the plan no. There isn't there is a lot of work to do to.
Mr. Shortly: Bring it bring the capacity up to the opportunities we have it's a constant work its lot of work on the team that we've got the right team because the right tools and spending a lot of money to get it there.
Speaker Change: Tariffs on imports have much meaningful impact for your operations.
Speaker Change: Yes, so on the.
Speaker Change: The supply demand balance.
Speaker Change: The expected ramp up of the mill next year, we've said all along that more capacity was needed. We are of the same view and actually.
Speaker Change: Yes.
Speaker Change: Okay. Thank you if I could another one there is a lot of tuck into this upcoming election about potential further tariff.
Speaker Change: Also a new no that's ramping up production in 2025, making a lot of noise at least on that impact. So just wondering if you could.
Speaker Change: Recent developments in the market the strength of the two.
Speaker Change: To come back of the strength of the can is really.
Speaker Change: The Testament to the fact that more capacity is needed. There are there's a lot of imports coming into the U S.
Speaker Change: Date us on any thoughts around the new competition, starting up in the U S is it going to displace imports.
The equivalent essentially of Greenfield.
Speaker Change: Tariffs on imports have much meaningful impact for your operation.
Tony: And the ramp up will take some time as well right, it's not like Tony Zone, and all of a sudden it produces a rated capacity so we.
Speaker Change: So.
Tony: We actually welcome these development our customers certainly welcome it and if anything and I think I'd be quite open about it repeatedly.
Speaker Change: Judy.
Tony: We could sell more if we could produce more and that's a statement both in the short term this quarter the next quarter.
Speaker Change: The recent developments in the market the strength of the user to.
Judy: Come back of the strength of the can is really.
Speaker Change: The Testament to the fact that more capacity is needed. There are there is a lot of import coming into the U S.
Tony: Well as a new medium and long term so I.
Pink.
Tony: We're in a good place regarding tariffs.
Speaker Change: The equivalent essentially a greenfield.
Tony: Impossible to predict what's going to happen.
Speaker Change: And the ramp up will take some time is slow right. It's not like you know you Tony done and all of a sudden it produces a rated capacity so we.
Tony: As I think I've mentioned during the past antidumping, which is directed at specific customers that don't play by the rules you can sustain with the impacts of the tariffs will be the carpet bomb being blank has approached retirees, that's very complicated too.
Speaker Change: We actually welcome these developments our customers certainly welcome it and if anything and I think I'd be quite open about it repeatedly.
Speaker Change: We could sell more if we could produce more and that's a statement both in the short term this quarter the next quarter.
<unk>, what the impact would be because typically those are circumventing the opportunity to use exemptions and all of that so it's very very difficult to tell so we will wait and see.
Speaker Change: As well as a new medium and long term so.
Speaker Change: Pink.
Speaker Change: We're in we're in a good place regarding tariffs.
Tony: And we will react and adapt.
Speaker Change: It's impossible to predict what's going to happen and.
So if I could just go ahead.
Speaker Change: As I think I've mentioned during the past antidumping, which is directed at specific customers that don't play by the rules.
Speaker Change: Sorry, excuse me if I could just come back to the valet topic real quick and recognizing maybe I didn't ask some of the details I could have added so just relative to the approximately 135 million euros.
Speaker Change: Can sustain but the impact of the tariffs will be the carpet bombing blanket approach to tariffs that's very complicated too.
Speaker Change: Estimate we do have insurance claim that's.
Our sustained when the impact would be because typically those are circumventing the opportunity to use exemptions and all that so it's very very difficult to tell so we will wait and see.
Speaker Change: Cap that up to 50 million euros for this event and we have gotten approval from FERC.
Speaker Change: For some governmental assistance and that work potentially there is room for more.
Speaker Change: And we'll we'll react and adapt.
Speaker Change: Okay.
Speaker Change: No I got that I'm, sorry, just wanted to follow up on that.
Tim: If I could Tim go ahead.
Tim: Sorry, excuse me if I could just come back to the valet topic real quick and recognizing maybe I didn't ask some of the details I could've added so just relative to the approximately 135 million euros of estimate we do have insurance claim that's.
Speaker Change: Tactically speaking when would you expect to revisit our.
Speaker Change: Sure.
Speaker Change: Your guidance for EBITDA that you suspended and.
Speaker Change: That is just for clarification that disconnect.
Speaker Change: The impact of metal price changes, if we just mark to market related to aluminum price you'd see some of that windfall number or at least the headline number come out in Q3, I just wanted to make sure that makes sense or if that's reasonable to assume.
Tim: Cap that up to 50 million euros for this event and we have gotten approval from for.
Tim: Some governmental assistance and that work called potentially there is room for more.
Speaker Change: Yes, Jack will will help me to answer your question, but I'll say the big driver is really.
Speaker Change: No I got that I'm, sorry, just wanted to follow up on that.
Speaker Change: And so to do but when we sell the operations in share.
Speaker Change: Tactically speaking when would you expect to revisit you are.
Speaker Change: And.
Speaker Change:
Speaker Change: And Thats why we wanted to be clear about if we added that the flawed, we would have guided down by about 5%.
Speaker Change: With your guidance for EBITDA that you suspended and.
Speaker Change: And that is just for clarification that is going to exclude the impact of metal price changes. If we just mark to market. The latest aluminum price you'd see some of that windfall number or at least the headline number kind of come out in Q3, I just want to make sure that makes sense or if that's reasonable to assume.
Speaker Change: So.
Speaker Change: When we restart operations is really about making sure we have a good spending of all the damages that have happened. That's why we've got these provisions because we think it's going to be less could be more but most likely is going to be less but when we restart is really going to make a difference to the EBITDA, we'll be able to tell you.
Speaker Change: Yes.
Speaker Change: With me to answer your question, but I'll say the big driver is really.
And so to do but when we resolved the operations in share.
Speaker Change: Some time in October I think by by the time, we publish Q3, we'll have a good very good idea of when we were resolved.
And.
Speaker Change: That's why we wanted to be clear about if we added that the flawed, we would have guided down by about 5%.
Speaker Change: And just to give you a kind of a mental leave may try to imagine.
Speaker Change: Acres and acres of finance under roof under five feet of water for a couple of days and then when the waters recede everything caked in mud and silt.
Speaker Change: So.
Speaker Change: When we will restart operations is really about making sure we have a good spending of all of the damages that have happened that's why we got.
Speaker Change: And cheese sick.
Speaker Change: Provisional figure, we think it's going to be less could.
Speaker Change: What are we going to deal with.
Speaker Change: Could be more but most likely it's going to be less but when we restart is really going to make a difference to the EBITDA, we'll be able to tell you.
Speaker Change: Power as it been restored yet to the site.
Speaker Change: The damages under Transformers in the grid. So there is a lot of work to cleanup.
Speaker Change: Sometime in October I think by by the time, we publish Q3, we'll have a grew very good idea of when we were resolved.
Speaker Change: Make sure that.
Speaker Change: Every motor every electrical cabinet every.
Speaker Change: Just to give you a kind of mentally may try to imagine.
Speaker Change: Varying is working properly and then we'll we can restart so that's why it takes time, we have an idea of the magnitude of the damage, but time is needed to properly restock safety of our operations.
Speaker Change: Acres and acres of land under roof under five feet of water for a couple of days and then when the waters recede everything caked in mud and silt.
Speaker Change: <unk> cheese thick fast what are we going to deal with power as it has been restored yet to the sites.
Speaker Change: Yeah.
Speaker Change: Okay, great. Thank you.
Speaker Change: Thank you. The next question is from Jill Nelson with J P. Morgan Your line is open.
Speaker Change: The damages under the Transformers and the grid. So there is a lot of work to cleanup.
Bill Peterson: Yeah, Hi, this is bill Peterson, thanks for taking the questions and thanks for all the insights of share on the call.
Speaker Change: Make sure that.
Speaker Change: Every motor every electrical cabinet every.
Jill Nelson: On the on the Switzerland sites, you talked about Youre accounting for 5% of shipments and then less in terms of revenue, but I guess just to be clear what is the sort of.
Speaker Change: Bearing is working properly and then we will we can restart so that's why it takes time, we have an idea of the magnitude of the damage, but time is needed to properly restock safety our operations.
Speaker Change: I don't know last 12 months' or some way to think about the EBITDA contribution.
Speaker Change: Yeah.
The site.
Speaker Change: Yeah.
Speaker Change: Okay, great. Thank you.
Speaker Change: So bill we won't be precise here, but I think.
Speaker Change: Thank you. The next question is from Bill <unk> with Jpmorgan. Your line is open.
Speaker Change: We did put out there.
Speaker Change: The finished capacity just to give you a rough idea right and.
Speaker Change: Yeah, Hi, this is bill Peterson, thanks for taking the questions and thanks for all the insights to share on the call.
Speaker Change: And as we've said.
In the script the activities or.
William Chapman Peterson: On the Switzerland sites, you talked about Youre accounting for 5% of shipments and then less in terms of revenue, but I guess just to be clear what is the sort of last 12 months' or some way to think about the EBITDA contribution of.
Speaker Change: For those end markets were lower.
Speaker Change: Given some of the weaknesses in those end markets.
Speaker Change: I think you can get to sort of a rough ballpark, but it's not it's not a significant contributor to our overall earnings by any means.
Speaker Change: Of the site.
Bill Peterson: And bill the other thing I will see that.
Speaker Change: So bill we won't be precise here, but I think.
Speaker Change: Yes, the other thing I will say that.
Speaker Change: Under all likely scenario most of that will be restored in 2025.
Speaker Change: We did put out there the.
Speaker Change: The finished capacity just to give you a rough idea right and.
So think of it as a big one it's one time hit.
Speaker Change: And as we've said.
Speaker Change: In the script the activities or for.
Speaker Change: We essentially have the cost of the plants and.
Speaker Change: Yes, we have some of the systems, but we have the cost of the plant.
Speaker Change: For those end markets were lower.
Speaker Change: Given some of the weaknesses in those end markets.
Producing anything for a few months that's what the impact is this year and obviously you've got some inventory that has been damaged some equipment that will need to repair. So that's all in the 135 million Macs number.
Speaker Change: So I think you can get to a sort of a rough ballpark, it's not it's not a significant contributor to our overall earnings by any means.
Speaker Change: And bill the other thing I will say that.
Speaker Change: But then once that's behind US which is by the end of this year, we're back to from a financial standpoint back to normal.
William Chapman Peterson: Yeah. The other thing I will say that.
William Chapman Peterson: They're all likely scenario most of that will be restored in 2025.
Speaker Change: Yes, okay. Thanks for that and then I guess, how should we think about the net debt target given the cut to free cash flow guidance and you're already kind of pushing up against the higher end I guess do you have an appetite to exceed this.
William Chapman Peterson: So think of it as a big one it's one time hit as we essentially as the cost of the plant.
William Chapman Peterson: Yes, we have some of the systems, but we have the cost of the plant.
William Chapman Peterson: It's not producing anything for a few months that's what the impact is this year and obviously, we've got some inventory that has been damaged some equipment that will need to repair so that sold in the 135 million Macs number.
Speaker Change: Target or buybacks be on hold how should we think about.
Buckingham: Net leverage as well as by Buckingham.
Speaker Change: Yes, so it's a really good question. So look I mean, we're comfortable with our capital structure our leverages.
William Chapman Peterson: But then once that's behind US which is by the end of this year.
At a comfortable level so.
William Chapman Peterson: We're back to from a financial standpoint back to normal.
Speaker Change: We won't be too bothered by intra year fluctuations in leverage by Oracle, we still aim to maintain.
Speaker Change: Yes, okay.
Speaker Change: Okay. Thanks for that and then I guess, how should we think about the net debt target given the cut to free cash flow guidance and you're already kind of pushing up against the higher end I guess do you have an appetite to exceed this.
Speaker Change: Paying a leverage between one half to two five times.
Speaker Change: And now if we're talking about.
Speaker Change: Cash generation versus buyback and.
Speaker Change: Target or buybacks be on hold.
Speaker Change: With the corresponding.
Speaker Change: The revised guidance and.
Speaker Change: Should we think about.
Speaker Change: The valet situations. So I think the way we're looking at it Bill is.
Speaker Change: Net leverage as well as buybacks from here.
Speaker Change: Yes, so it's a really good question. So look I mean, we're comfortable with our capital structure, our leverages at at a comfortable level. So.
Speaker Change: The valet slightly then it's really sort of a one time in nature right and we're still on track to generate significant free cash flow over 100 million euros, excluding that impact. So our liquidity is very strong as I mentioned close to 870 million euros. So we can't easily digest it.
Speaker Change: We won't be too bothered by intra year fluctuations in leverage by Oracle, we still.
Speaker Change: Aim to maintain our leverage between one half to two five times.
Speaker Change: The impact from the flooding thing it doesn't really change how we look at shareholder returns. So we're still aiming to return a large portion of our free cash flow this year to share buybacks and we're committed to that three year program.
Speaker Change: And now we're talking about.
Speaker Change: Cash generation versus buyback and.
Speaker Change: With the corresponding our revised guidance.
Speaker Change: And the valet situations. So I think the way we're looking at it on Bell is.
Jeff: Thanks, Jeff Thanks, Mark.
Speaker Change: The valet a flood event, it's really sort of a one time in nature right and we're still on track to generate significant free cash flow over 100 million euros, excluding that impact. So our liquidity is very strong as I mentioned close to 870 million euros. So we can't easily digest it the impact.
Bill Peterson: Thank you Bill.
Speaker Change: Thank you.
Speaker Change: Question is from Corinne luncheon with Deutsche Bank. Your line is open.
Corinne luncheon: Hey, good morning, everyone.
Corinne luncheon: The first question can you try to help US bridge. The 2025 EBITDA. So you maintain the 800 to median EBITDA just trying to understand what would be the key.
Speaker Change: From the flooding event it doesn't really change how we look at shareholder returns. So we're still aiming to return a large portion of our free cash flow this year to share buybacks and we're committed to that three year program.
Speaker Change: Buckhead Ochiai.
Speaker Change: Takeda is from whatever you were doing 24, and a range of about 800 million for next year.
Speaker Change: Okay.
Speaker Change: Thanks, Chuck Thanks, Thanks Shlomo.
Speaker Change: Good morning, Corey so ill rephrase, what I said.
William Chapman Peterson: Thank you Bill.
Speaker Change: Thank you. The next question is from Corinne luncheon with Deutsche Bank. Your line is open.
Speaker Change: In the first question so according to 90 to 100 million bridge.
Bridge to more than $800 million next year.
Corinne Jeannine Blanchard: Hey, good morning, everyone.
Speaker Change: Just to give us a little bit of flexibility and latitude. So number one as I mentioned the CRE event is digested behind us and we go back to operations that are essentially normal there we do not anticipate another ice storm and a snow storm.
Corinne Jeannine Blanchard: The first question can you try to help US bridge. The 2025 EBITDA. So you maintain the 800 median of EBITDA just trying to understand what would be the key.
Speaker Change: Buckeye they'll key items today, that's from whatever you were doing 24, and a range of about 800 million for Nexgen.
Social that puts us down for nearly two weeks.
Speaker Change: Then you've got the <unk> recycle center thats going to be up and running it's going to be starting just in a few weeks from now so we feel very comfortable about our ability to deliver on this one.
Corey: Good morning Corey.
Speaker Change: Rephrase, what I said.
In the first question so could.
Speaker Change: According to 90 to 100 million.
Speaker Change: Bridge to more than $800 million next year.
Speaker Change: And in Aerospace we've got two factors one is there's going to be more volume next year. That's contractual and then there is also a better contractual terms. That's also contractual by definition.
Speaker Change: Just to give us a little bit of flexibility and latitude. So number one as I mentioned to CRE event is digested behind us and we go back to operations that are essentially normal there we do not anticipate another ice storm and a snow storm.
Speaker Change: Finally, we've got a vision 25 cost savings as Jack has alluded to a number of times on past calls that we will have a full year impact next year. So. The addition of these were in excess of $100 million.
Speaker Change: Social that puts us down for two weeks.
Speaker Change: Then you've got the <unk> recycle center, that's going to be up and running it's going to be starting just in a few weeks from now so we feel very comfortable about our ability to deliver on this one.
Speaker Change: <unk> is around $100 million and in addition.
Speaker Change: We're going to have a better performance in muscle Shoals is sold with capital expenditure spending there to improve the productivity of the plant is paying out.
Speaker Change: In aerospace we got two factors one is theres going to be more volume next year, that's contractual and then Theres also better contractual terms. That's also contractual by definition.
Speaker Change: We also have.
Speaker Change: Most likely some European come back so that's the one we can have different views about but as we mentioned has been.
Speaker Change: And finally, we've got a vision 25 cost savings as Jack has alluded to.
Speaker Change: It's been five years now that the for instance, the automotive markets in Europe have been below pre COVID-19 levels and at some point Europeans will need to change that calls so that's going to be also some kind of a bounce back.
Jack: A number of times on past calls that will have a full year impact next year. So. The addition of these well in excess of 100 million sorry is around $100 million I'd say and in addition.
Speaker Change: Would you at some point, which will benefit us.
Jack: We're going to have a better performance in muscle Shoals is sold with capital expenditure spending there to improve the productivity of the plant is paying out.
Speaker Change #101: Alright, Thank you and sorry, if I I jumped on the.
Speaker Change: Call anytime became so let's take one question that's okay.
Speaker Change: Yes.
Jack: We also have.
Speaker Change:
Jack: Most likely some European come back. So that's the one we can have different views about but as we mentioned has been it's.
Speaker Change: This is actually Michael Bilerman.
Neal: Well Neal.
Speaker Change: And at some point you maybe did those markets and move your capacity to US also and maybe Zane is again.
Jack: It's been five years now that the for instance, the automotive markets in Europe have been below pre COVID-19 levels and at some point Europeans will need to change that calls so that's going to be also some kind of a bounce back.
Speaker Change: Would you remain in those market.
Speaker Change #100: No. We don't think of exiting we view the diversification as an asset but at times, obviously when youll diversified into many markets you always have one market that is suffering a bit.
Jack: At some point, which will benefit us.
Speaker Change: Alright, Thank you and sorry, if I call it a little bit Tonight, but so the second question if that's okay.
Speaker Change #100: There is actually a subtle shift into more automotives, that's taking place.
Yeah.
Speaker Change #103: In Europe now that the timing is not very fortunate but over time, we think that's a good thing, but fundamentally we believe that the specialty markets. We have can be good markets for us and we have work to do to improve our product mix and focus on niches that are more remunerative and Thats why for instance, we communicate.
Speaker Change: Almost to a young market will remain weak.
Speaker Change: Yeah.
Tom Kwangju: Tom Kwangju, maybe exited those markets and move your capacity towards auto and maybe Jamie If you can do it all would you remain in golf market.
Jamie: No. We don't think of exiting we view the diversification as an asset but at times, we're going to see when youll diversified into many markets. You always have one market that is suffering a bit.
Speaker Change #100: Good.
Speaker Change #100: Just today around the investments, we're making with <unk> to provide.
Speaker Change #100: <unk> four.
Battery electric battery material, that's one way to use our assets towards more contributive markets. So that's a constant work we do that all the time every year and over time grow shaping of better specialty portfolio.
Speaker Change: There is actually a subtle shift into more automotives, that's taking place.
In Europe now that the timing is up very fortunate but over time, we think that's a good thing, but fundamentally we believe that the specialties markets. We have can be good markets for us and we have work to do to improve our product mix and focus on niches that are more remunerative and thats why for instance, we can communicate.
So no we don't plan to exit further but that said I mean, that's a very legitimate question last year, we exited the extrusion market in Germany.
Speaker Change #100: And then sold to three plants because these will not.
Speaker Change: Good.
Just today around the investments, we're making with low T to provide.
Speaker Change #100: Satisfactory, but at the moment everything we have we like and we just try to make it stronger.
Speaker Change: <unk> four.
Speaker Change: Battery electric battery material, that's one way to use our assets towards more contributive markets. So that's a constant work we do that all the time every year and overtime will shaping a better specialty portfolio.
Speaker Change #104: Alright, thank you.
Speaker Change #104: Yeah.
Speaker Change #104: Thank you.
Speaker Change #105: As a reminder, if you would like to ask a question you May Press Star followed by one on your telephone keypad now.
Speaker Change #106: The next question is from Josh Sullivan with the Benchmark Company. Your line is open.
Speaker Change: So no we don't plan to.
Speaker Change: It further but that said I mean, that's a very legitimate question last year, we exited the extrusion market in Germany.
Josh Sullivan: Hey, good morning.
Josh Sullivan: Good morning, Josh.
Speaker Change: And then sold to three plants because these will not.
Josh Sullivan: Mark you mentioned earlier in the call I think you said whatever slowdown there is this year for aerospace how are you thinking about the new <unk> hundred 20 build rate long term assumption it.
Speaker Change: Satisfactory, but at the moment everything we have we like and we just try to make it stronger.
Speaker Change #103: Alright, thank you.
Speaker Change: Yeah.
It sounds like it's still working its way through the system, maybe what scenarios are you.
Speaker Change #102: Thank you as a reminder, if you would like to ask a question you May Press Star followed by one on your telephone keypad now.
Speaker Change #108: Leaning towards for aerospace pool, this year and next.
Speaker Change #109: Yes, so we.
Speaker Change #102: The next question is from Josh Sullivan with the Benchmark Company. Your line is open.
Speaker Change #110: We're a little bit more cautious.
Speaker Change #111: Then what the Oems, who are publishing I guess.
Joshua Ward Sullivan: Hey, good morning.
Speaker Change #111: And we continue to be a little bit more cautious realizing that takes many many parts and many many suppliers to villa to build an aircraft and given the fact that they are still in ramp up mode here.
Josh: Good morning, Josh.
Josh: Mark you mentioned earlier in the call I think you said whatever slowdown there is this year for aerospace.
Speaker Change #111: Are you thinking about the new <unk> hundred 20 build rate long term assumption.
Speaker Change #111: Hero there there would be some growing pains. So I would look at it is.
Sounds like it's still working its way through the system, maybe what scenarios are you leaning towards for aerospace Paul This year and next.
Speaker Change #112: More upside.
Speaker Change #112: <unk> is more likely or possible than downside in terms of how we look at it.
Speaker Change #100: Yes, so we.
Speaker Change: <unk>.
Speaker Change #112: Yeah.
Speaker Change #112: But we all know that.
Paul: We're a little bit more cautious.
Speaker Change #112: Limiting factor into in the supply chain right I, just want to make that very clear.
Speaker Change #104: Then what the Oems, who are publishing I guess.
Speaker Change #113: Very dependable supplier unable to ramp up.
Speaker Change #104: And we continue to be a little bit more cautious realizing that takes many many thoughts in many many suppliers could be left to build on aircrafts and given the fact that they are still in ramp up mode.
Speaker Change #114: Yes, I mean, I guess, there's a perspective that dependable suppliers like yourself might.
Speaker Change #115: It might be paced as the less discernible dependable suppliers are.
Speaker Change #104: There there will be some growing pains.
Speaker Change #116: So more effort is put towards that.
Speaker Change #104: So I would look at it is.
Speaker Change #117: <unk> seen that dynamic.
Speaker Change #104: More upside.
Speaker Change #118: I guess a little bit yes.
Speaker Change #104: Upside is more likely or possible than downside in terms of how we look at it.
Speaker Change #119: Our growth is.
Speaker Change #119: Constrained by.
Speaker Change #119: The weakest link in the supply chain I guess.
Speaker Change #104: Okay, but we are not limiting factor in terms of in the supply chain right. Tony I will just want to make that very clear.
Speaker Change #119: Okay.
Speaker Change #120: And then kind of looking ahead whats your perspective on when wide bodies really start to have more of a poll on the market versus narrow body.
Tony: Dependable supplier unable to ramp up.
Tony: Yes, I guess, there's a perspective that dependable suppliers like yourself.
Speaker Change #120: It seems like they will start to come back.
Speaker Change #106: B paste as the less discernible dependable suppliers are.
Speaker Change #121: It seems like they're starting to come back.
Speaker Change #122: And we're seeing that in the perspectives that are shared with us with the Oems. So thats good news to us.
Tony: Some more accounts put towards that.
Speaker Change #107: I mean have you seen that dynamic.
Speaker Change #108: I guess a little bit yes.
Speaker Change #122: The narrow bodies, we're the ones coming back with a vengeance post COVID-19 into wide bodies were lagging in that is that gap is closing now.
Speaker Change #109: Our growth is constrained.
Speaker Change #110: Constrained by.
Speaker Change #110: The weakest link in the supply chain I guess.
Speaker Change #110: Okay.
Speaker Change #113: And then kind of looking ahead, what's your perspective on when wide bodies really start to happen.
Speaker Change #123: Got it.
And then within <unk>.
Speaker Change #124: What is the demand for defense products look like and then is there any impact to that market from the flood.
Speaker Change #113: More of a poll on the market versus narrow body.
Speaker Change #113: It seems like they will start to come back.
Speaker Change #125: Okay. So on defence.
Speaker Change #114: Yes, it seems like they're starting to come back.
Speaker Change #126: We produce quite a bit of defense in the U S.
Speaker Change #115: And we're seeing that in the perspectives that are shared with us with the Oems. So thats good news to us.
Speaker Change #127: Ravenswood, so that's not impacted.
Speaker Change #127: We have some production out of share for defense markets quite a bit of that has a backup.
Scott: Scott the narrow bodies, we're the ones coming back with a vengeance post COVID-19 into wide bodies were lagging in that is that gap is closing now.
Speaker Change #127: And given the fact that we've got a little bit of a open.
Speaker Change #127: <unk> because we all know the constraining factor in the supply chain that is allowing us the ability to produce some of these spots that are producing scale to produce I mean east.
Scott: Got it.
Scott: And then within <unk>.
Speaker Change #117: What is the demand for defense products look like and then is there any impact to that market from the flood.
Speaker Change #127: <unk>. So that's part of the mitigation that we bring that 175 million Euro down for instance.
Speaker Change #117: Okay. So on defence.
Speaker Change #118: We produce quite a bit of defense in the U S.
Speaker Change #118: Of Ravenswood, so that's not impacted.
Speaker Change #127: So we do know we do not expect.
Speaker Change #118: Some production out of <unk>.
Speaker Change #128: We very much have in mind continue each year to our customers and we do everything we can to make sure that they are not impacted and at the moment, even though the situation extensively with some customers we have been able to.
Speaker Change #118: The defense market quite a bit of that.
Speaker Change #118: As a backup.
Speaker Change #118: <unk>.
Speaker Change #118: And given the fact that we've got a little bit of a open capacity was <unk> because we are not the constraining factor in the supply chain.
Speaker Change #128: David on what they need and we think we will be able to do that for most of.
Speaker Change #118: That is allowing us the ability to produce some of these pops that are producing shale to produce I mean.
David: Most of this year, so through the painful event.
Speaker Change #118: <unk>. So that's part of the mitigation that we would bring that $135 million euro down for indices.
David: In Nevada.
David: Yeah.
Speaker Change #130: Got it I jumped the gun there, but thank you for the time.
Speaker Change #118: Yeah.
Josh Sullivan: Thanks, Josh.
Speaker Change #119: Got it.
Speaker Change #119: We do not we do not expect I mean, we.
Thank you.
Josh Sullivan: We have no further questions. So I'll hand back to John Locke for closing remarks.
Speaker Change #119: We very much have in mind continue each year to our customers and we do everything we can to make sure that they are not impacted and at the moment and in those situations.
John Locke: Well, thank you very much for being on the call today as you can see we are going through a little bit of a rough patch. The teams are fully capable of overcoming them I'm actually very proud of them I was visiting the valley last week and I come back from these visit energized. So thank you very much and I look forward to updating.
Speaker Change #119: With some customers we have been able to.
Speaker Change #119: David on what they need and we think we will be able to do that for most of.
David: Most of this year, so through the painful event.
David: In Nevada.
John Locke: You on our progress as soon as possible. Thank you goodbye.
David: Yeah.
Speaker Change #121: Got it I jumped the gun there, but thank you for the time.
John Locke: Okay.
Joshua Ward Sullivan: Thanks, Josh.
John: Thank you John.
Speaker Change #133: This concludes today's call. Thank you all for joining you may now disconnect your lines.
Speaker Change #122: Thank you we currently have no further questions.
Speaker Change #122: Vaccines, John Locke for closing remarks.
John Clark: Well, thank you very much for being on the call today as you can see we're going through a little bit of a rough patch with the teams are fully capable of overcoming them I'm actually very proud of them I was visiting the very last weekend I come back from these visit energized so.
John Clark: Thank you very much and I look forward to updating you on our progress as soon as possible. Thank you goodbye.
John: Thank you John.
Speaker Change #125: This concludes today's call. Thank you all for joining you may now disconnect your lines.
Speaker Change #125: Okay.