Q3 2025 Compagnie Generale des Etablissements Michelin SCA Sales Call

Speaker #1: Good afternoon and good evening. As CEO, I wanted to introduce this conference and stand in front of you at this challenging moment for Michelin.

Florent Menegaux: Good afternoon and good evening. As CEO, I wanted to introduce this conference and stand in front of you at this challenging moment for Michelin. On Monday last week, we issued a profit warning. It came late in the year and with unexpected magnitude. I fully recognize it. I owe you clarity to help you understand what led us to warn this way. I won't elaborate much on the highly uncertain business context; you're fully aware of it. My purpose today is to share more of what is specific to us. First thing, until we got September financial results, we were in line with our expectations. September business took a hit and forced us to drastically adjust the year-end forecast. What hit us had mostly to do with our North American business, which represents around 40% of our group's sales. Two major causes.

Speaker #1: On Monday last week, we issued a profit warning. It came late in the year and with unexpected magnitude. I fully recognize it.

Speaker #1: I owe you clarity to help you understand what led us to warn this way. I won't elaborate much on the highly uncertain business context.

Speaker #1: You're fully aware of it . My purpose today is to share more of what is specific to us . First thing , until we got September financial results , we were in line with with our expectations .

Speaker #1: But September business took a hit and forced us to drastically adjust the year-end forecast. What hit us had mostly to do with our North American business, which represents around 40% of our group sales.

Speaker #1: Two major causes. The first one is that we decided to stop our operations with the largest tire wholesaler in the U.S. as of July 1st.

Florent Menegaux: The first one, we decided to stop our operations with the largest tire wholesaler in the U.S. as of July 1. This decision led to important volumes missing in Q3 versus last year, as we have been redirecting sales flows to other wholesalers. This one-off transition period should be behind us by year-end. Second, we lost market share due to the positioning of our offerings. We passed price increases at OE to restructure our margin and on replacement markets to offset cost inflators, starting with raw materials first, then EUDR, and then tariffs. This resulted in a decrease of our market share over Q3. For the replacement market, we took the lessons and we have already taken steps to regain these lost shares.

Speaker #1: This decision led to important volumes missing in Q3 versus last year . As we have been redirecting sales flows to other wholesalers . This one off transition period should be behind us by year end .

Speaker #1: Second, we lost market share due to the positioning of our offerings. We passed price increases at OE to restructure our margin and on replacement markets to offset cost inflators, starting with raw materials.

Speaker #1: First, then ud.cr and then tariffs. This resulted in a decrease in our market share over Q3 for the replacement market. We took the lessons we have learned and have already taken steps to regain these lost shares.

Speaker #1: Now , if we consider the current situation from a broader perspective , it results from a combination of our strategy being implemented and the context in which we operate .

Florent Menegaux: Now, if we consider the current situation from a broader perspective, it results from a combination of our strategy being implemented and the context in which we operate. Our MICHELIN Emotion 2030 strategy is being deployed, and I have no doubt that it will lead to substantial value creation for the company and for our shareholders. Deploying a strategy leads to resolute decisions and actions, and I take full accountability for these decisions, even though some of them conflict with the current context. Let me give you a few examples. We exited several value-destroying market segments, which logically led to negative volume impact. In parallel, we restructured our pricing conditions with OEMs to reach a better balance. We have done it over the past two and a half years. Margin got restored and volumes got rebalanced as well.

Speaker #1: Our Michelin 2030 strategy is being deployed, and I have no doubt that it will lead to substantial value creation for the company and for our shareholders.

Speaker #1: Deploying our strategy leads to resolute decisions and actions, and I take full accountability for these decisions. Even though some of them conflicted with the current context.

Speaker #1: Let me give you a few examples . We exited several value destroying market segments , which led to negative volume impact in parallel , we restructured our pricing conditions with OEMs to reach a better balance .

Speaker #1: We have done it over the past two and a half years . Margin got restored and volumes got rebalanced as well . Context wise , these two key measures came at an unfortunate time because they are negative volume impact , cumulated with the widespread drop of oil demand across industries .

Florent Menegaux: Context-wise, these two key measures came at an unfortunate time because their negative volume impact cumulated with a widespread drop of OE demand across industries: passenger car, truck, agriculture, and construction. This resulted in low utilization rates for our plants and low absorption of our fixed costs, which negatively impacted our segment operating income. Another example, we restructured and we are still restructuring our manufacturing footprint and global capacity to adjust to a transformed competitive environment and to prepare for the future. We announced 12 activity closures in the past two years. This is a lot in a very short time, and it penalized our financials before we will get the benefits from now onwards. Last example, we were resolute on passing through cost inflators to the market to properly value our technologies.

Speaker #1: Passenger car , truck , agriculture and construction . This resulted in low utilization rates for our plants and low absorption of our fixed costs , which negatively impacted our segment operating income .

Speaker #1: Another example: we restructured, and we are still restructuring our manufacturing footprint and global capacity to adjust to a transformed competitive environment and to prepare for the future.

Speaker #1: We announced 12 activity closures in the past two years. This is a lot in a very short time, and it penalized our financials before we will get the benefits from now onwards.

Speaker #1: Last example , we were resolute on passing through cost inflators to the market to properly value our technologies in a market disturbed by overcapacity and low overall demand .

Florent Menegaux: In a market disturbed by overcapacity and low overall demand, this was detrimental to the competitiveness of our offers on the replacement market. These examples show how some strategy-led decisions have interfered with context. Let's be clear, I have no regret in driving those changes as they are making MICHELIN stronger and prepare it for the upcoming demand when OE markets rebound and vehicle fees are renewed. On the operational fronts, our teams are reacting and fighting in this context with numerous successes to name just a couple. In Q3, specifically besides North America, group tire sales have posted growth in volume. In China, we have been able to tune our positioning last year, and we will deliver double-digit growth in 2025. Our group has solid fundamentals, remains highly profitable, and generates significant cash flow. Our balance sheet is strong and provides us with independence and room for maneuver.

Speaker #1: This was detrimental to the competitiveness of our offers on the replacement market. These examples show how some strategy-led decisions have interfered with context.

Speaker #1: Let's be clear: I have no regrets in driving those changes, as they are making Michelin stronger and preparing it for the upcoming demand.

Speaker #1: When OE markets rebound and vehicle fleets are renewed . On the operational front , our teams are reacting and fighting in this context with numerous successes to name just a couple .

Speaker #1: In Q3 , specifically , besides North America , group tire sales have posted growth in volume in China . We have been able to tune our positioning last year , and we will deliver double digit growth in 2025 .

Speaker #1: Our group has solid fundamentals , remains highly profitable and generates significant cash flow . Our balance sheet is strong and provides us with independence and room for manoeuvre .

Speaker #1: Our cash generation in 2025 is sufficient and will will allow us to complete our share buyback program . As a conclusion , Michelin is emerging stronger from the current turmoil .

Florent Menegaux: Our cash generation in 2025 is sufficient and will allow us to complete our share buyback program. As a conclusion, MICHELIN is emerging stronger from the current turmoil. We are looking ahead to 2026 with confidence. Thank you for your attention and your long-lasting support. I now hand over to Yves for details on our sales development and our outlook for the near term.

Speaker #1: We are looking ahead to 2026 with confidence . Thank you for your attention and your long lasting support . I now hand over to Yves for details on our sales , development and our outlook for the near term .

Speaker #1: Thank you, Florent. Good evening, ladies.

Yves Chapot: Thank you, Florent. Good evening, ladies and gentlemen. I will drive you through our sales of the third quarter and, of course, the bridges related to our new full-year guidance. Regarding first the context, if we look at the selling market at the end of September, they posted a slight growth in the segment one, plus 2% in OE, plus 1% in replacement. We have already commented in the past that the replacement market was mostly driven by the flow of imports before the implementation of tariffs, as well as the flow of imports in Europe before the implementation of duties for anti-dumping that the European Commission is expecting to officialize by the end of the year. During Q3, we have seen more or less the same trend, a little bit more dynamic original equipment market.

Speaker #2: And gentlemen . So I will drive you through our sales of the third quarter . And of course , the bridges related to our new full year guidance .

Speaker #2: So regarding first , the context , the if we look at the selling market , at the end of September , they posted a slight growth in the segment .

Speaker #2: One plus 2% in OE, plus 1% in replacement. We have already commented in the past that the replacement market was mostly driven by the flow of imports before the implementation of tariffs, as well as the flow of imports in Europe.

Speaker #2: Before the implementation of an duties for anti-dumping that the European Commission is expecting to officialize by the end of the year . During the Q3 , we have seen more or less the same trend , a little bit more dynamic , original equipment market .

Speaker #2: And regarding the replacement market , the selling was probably better in Europe and it's clearly the import from China because it has been expected that the tariff following the anti-dumping measures will be implemented , probably with a retroactive effect from 1st of October .

Yves Chapot: Regarding the replacement market, the selling was probably better in Europe, and it's clearly the import from China because it has been expected that the tariff following the anti-dumping measures will be implemented probably with a retroactive effect from October 1. The negative minus 4% replacement market in the U.S., probably the consequence of the implementation of tariffs from the third quarter. On the truck side, the market is still very negative in original equipment, minus 4%. You note that the European market is nearly flat. We record a slight recovery in Q3 when the North American market is still very negative at minus 20%. It was minus 24% for Q3, and even worse if we look at the class 8 segment. On the replacement side, the market is at plus 4%. Here also, probably triggered by the growth of imported brands both in Europe and North America.

Speaker #2: And the negative minus 4% replacement market in the US , probably the consequence no . Of the implementation of tariffs from the third quarter on the truck side , the market is still very negative in original equipment , minus four .

Speaker #2: You note that now the European market is nearly flat . We record a slight recovery in in the Q3 when the North American market is still very negative at -20 , it was -24 for Q3 .

Speaker #2: And even worse, if we look at the Class Eight segment on the replacement side, the market is at plus four. Here.

Speaker #2: Also probably triggered by the growth of imported brands, both in Europe and North America. As far as the specialties are concerned, the mining business is steady.

Yves Chapot: As far as the specialties are concerned, the mining business is steady. The beer and roll continue to show a negative trend in OE, particularly driven by agro, and the North American agro market is partially impacted by the implementation of tariffs for the import of soy in China from the U.S. The replacement market posts a slight growth, and the other markets such as aircraft and polymer composite solutions are growing slightly as well. That translates in an overall decrease of our volume by 4.4% at the end of the nine months, 2.3% coming from the currency and 2.1% from our activity. Meaningless scope effect, volume minus 5.5%, price mix plus 3.2%, and equally share between price and mix, and non-tire business which contributes positively to our sales at the end of the nine months.

Speaker #2: The Beyond Road continued to show a negative trend in OE, particularly driven by agro, and the North American agro market is partially impacted by the implementation of tariffs for the import of soya in China from U.S. replacement market posts.

Speaker #2: A slight growth and the other markets such as aircraft and polymer composite solutions are growing slightly as well . So that's in an overall decrease of our volume by 4.4% at the end of the nine months , 2.3 coming from the currency and 2.1 from our activity .

Speaker #2: Meaningless scope effect: Volume minus 5.5; price mix plus 3.2, and equally share between price and mix. And the entire business, which contributes positively to ourselves.

Speaker #2: At the end of the nine months , zooming now on the third quarter . So you observe that beside the the the currency , the the trend is very similar with the with the 9.6 previous month , the currency effect is huge minus 4% mostly driven by the USD .

Yves Chapot: Zooming now on the third quarter, you observe that beside the currency, the trend is very similar with the six previous months. The currency effect is huge, -4%, mostly driven by the USD. As far as the other elements are concerned, meaningless scope effect, -4.5% of volume, and Florent has commented it. It's in fact nearly -10% in North America and slightly growing volume in the rest of the world. Price mix is less favorable, +1% in mix, +0.5% in price. The mix effect is exacerbated by the regional mix effect as traditionally our North American business posted a higher margin than the average of the group. Non-tire business contributes by 0.3% to the group growth in the third quarter. Now zooming on the volume, here you have the picture of the first six months on the left and the third quarter on the right of that slide.

Speaker #2: And as far as the other elements are concerned, the meaningless scope effect is -4.5% of volume, and Florence has commented on it. It's, in fact, nearly -10% in North America.

Speaker #2: And a slightly growing volume in the rest of the world. Price mix is less favorable, plus 1% in mix, plus 0.5 in price.

Speaker #2: The mix effect is exacerbated by the regional mix effect, as traditionally our North American business posted a higher margin than the average of the group, and the entire business contributed by a 0.3.

Speaker #2: At to the group: growth in the third quarter. Now, zooming in on the volume here, you have the picture of the first six months on the left and on the third quarter on the right of that slide.

Speaker #2: As you can see , our volume dropped during Q3 , mostly in North America . So it's represents nearly five point of our volume lost during the the quarter , mostly triggered in SR one by the wholesale shift that was explained by Florence .

Yves Chapot: As you can see, our volume dropped during Q3 mostly in North America, so it represents nearly 5% of our volume lost during the quarter, mostly triggered in SR1 by the wholesale shift that was explained by Florent and in SR2 by the original equipment drop. We are seeing as well a negative trend or negative outlook of fleets in the U.S. with the level of freight, and we are included in the deck in the annexes slide with the trend of the freight. We are seeing the freight at a very low level in North America for the third quarter.

Speaker #2: And in SR two by the original equipment drop . We are seeing as well a negative trend or negative outlook of the fleets in the US with the level of freight , and we are included in the in the deck in the annexes slide with the with the trend of the freight .

Speaker #2: We are seeing the freight at a very low level in North America for for the third quarter , if I look at the rest of the world , so oe outside North America is at minus , slightly minus one for for the group here , mostly driven by the on road activities .

Yves Chapot: If I look at the rest of the world, OE outside North America is at slightly -1 for the group, here mostly driven by the beer and roll activities and replacement post positive without North America, positive volume thanks to our mining business, our aircraft business, two wheels, and the China region. Now zooming on the guidance for segment operating income for the full year. Versus our previous guidance, which was issued at the end of July, we drop the guidance from above €3.4 billion to in between €2.6 billion and €3 billion. Basically, we provide here some range which helps you to understand why we have communicated on such a wide range at this stage of the year. We are still the unknown of what is going to happen in North America and on the truck original equipment, which is not only North America, it's Europe as well.

Speaker #2: And replacement post-positive, without North America, positive volume thanks to our mining business, our aircraft business, two wheels, and the China region.

Speaker #2: So, no zooming on the guidance for segment operating income for the full year. So, versus our previous guidance, which was issued at the end of July.

Speaker #2: So we we drop the guidance from above 3.4 . To in between 2.6 and €3 billion . Basically . And we provide here some range which help you to to understand why we have communicated on such a wide range at this stage of the year .

Speaker #2: We are still in the unknown of what is going to happen in North America. And on the truck, original equipment, which is not only North America, it's Europe as well.

Speaker #2: The Brazilian market has been heavily impacted by the 50% tariff implemented by by US , and it's weighed down on the on the overall economy and the and the volume of freight .

Yves Chapot: The Brazilian market has been heavily impacted by the 50% tariff implemented by the U.S., and it's weighed down on the overall economy and the volume of freight. Regarding the mix, price mix, we expect price to be slightly positive during Q4, but the mix is impacted by the geographical mix as well as by the implementation of the tariff and of the EUDR. Raw materials should have a positive effect, but we have less unknown regarding the raw material. It's pretty consistent with the hypothesis we had at the end of July. Regarding operating performance, it will be impacted from the tariff, from the raw material cost of goods sold, as well as operating efficiency because our factories are running with quite a low level of activity. Year to date, we were at around 74% for SR1, 72% for SR2.

Speaker #2: Regarding the , the the mix price mix . So we expect price to be slightly positive during the Q4 . But the mix is impacted by the geographical mix as well .

Speaker #2: By the implementation of of the tariff . Sorry . And of the UDR raw materials should have a positive effect , but we have we have less .

Speaker #2: I mean, we have fewer unknowns regarding the raw material. It's pretty consistent with the hypothesis we had at the end of July.

Speaker #2: And regarding operating performance , it will be impacted from the tariff from raw material cost of goods sold and as well as operating efficiency , because our factories are running with a quite a low level of activity year to date , we were at around 70% , 74% for SR one , 72% for SR two .

Speaker #2: Our agriculture tire factory is running below 50%, and our construction and earthmover sectors are around 73%. So, it's impacting us as well. The efficiency of the factory affects not only fixed cost absorption, but there might be some upside on the Asian side.

Yves Chapot: Our agriculture tire factory is running below 50%, and our construction and earth mover around 73%. It impacts as well the efficiency of the factory, not only the fixed cost absorption. There might be some upside on the SG&A side. That's why we have put a range between $0 and $100 million. Now looking at the bridge, what should be the bridge at the end of the year versus 2024? Most of the loss will come from the volume, and in the volume we have, let's say, two-thirds of volumes and one-third of fixed cost absorptions. Price mix should partially but not totally compensate the volume effect. In the raw material, which is pretty consistent again with our previous expectations, we have around close to $100 million of EUDR effect. In the operational performance, in our supply logistics and manufacturing cost, we have the impact of tariff.

Speaker #2: That's why we have put a range between zero and 100 million . Now , looking at the the bridge , what should be the the bridge at the end of the year versus 2024 .

Speaker #2: So most of the loss will come from the volume . And in the volume we have , let's say two thirds of volumes in one third of fixed cost assumptions , price mix should partially but not totally compensated .

Speaker #2: The volume effect in the room material . We have , which is pretty consistent . Again , with our previous expectations , we have around one close to 100 million of EU effect in the operational performance .

Speaker #2: So in the in our supply , logistics and manufacturing cost , we have the impact of tariff . We assume that for the let's say , since first quarter of 2025 till the end of the first half of 2026 , we will have around €500 million of additional tariffs , cash out , 300 million should impacted our PNL in 2025 and around 200 million at the beginning .

Yves Chapot: We assume that since the first quarter of 2025 till the end of the first half of 2026, we will have around $500 million of additional tariffs cash out. $300 million should impact our P&L in 2025 and around $200 million at the beginning in the first half of 2026. We expect the currency effect to be in the range of minus $180 million, minus $200 million at the end of the year with an average euro-dollar parity at 1.13. Here again, to explain the range of the SOI landing, we try to help you to clarify this landing. On the volume side, our expectation today is to be at minus 3% during the fourth quarter, but depending on the evolution of the contractor, it can move between minus 1% and minus 5%.

Speaker #2: In the first half of 2026 and we expect the currency effect to be in the range of -180 , -200 million . At the end of the year , with an average euro dollar parity at one point 13 .

Speaker #2: And here again, to explain the range of the soy landing, we try to help you clarify this landing on the value and volume side.

Speaker #2: Our our expectation today is to be at minus three during the fourth , fourth quarter . But depending on the evolution of the conjuncture , it can move between minus one and minus five .

Speaker #2: There is, as well, some volatility in the mix and a little bit on the prices. We consider, as well, that there is some uncertainty on the operational performance and others.

Yves Chapot: There is as well some volatility in the mix and a little bit on the prices, and we consider as well that there is some uncertainty on the operational performance and others. Clearly, there are some opportunities. Our product plan, we have renewed a large part of our offer in truck tire this year. We have launched a few new iconic range in passenger car tires, the Primacy 5, a new CrossClimate 3, the CrossClimate Sport. It's clearly an opportunity. Our dynamic in China is as well an opportunity, and we believe that we have room for improvement in the management of our SG&A as well. On the other hand, tariffs are still an uncertainty. Till yesterday, we were not clear about the 25% duty on the truck that has been decided from November 1 by the U.S.

Speaker #2: So clearly there are some opportunities. Our product plan has renewed a large part of our offer in Truck Tire this year.

Speaker #2: We have launched a few new iconic range in passenger car tires . The primacy five , the new Cross Climate three , the Cross Climate Sport .

Speaker #2: So it's clearly an opportunity. Our dynamic in China, as well as the opportunity, is something we believe has room for improvement in the management of our agenda as well.

Speaker #2: On the other hand, tariffs are still an uncertainty. Until yesterday, we were not clear about the 25% duty on the truck.

Speaker #2: That has been decided from November 1st by the U.S. We did not know if it's included or not, the parts, and if it was included or not.

Yves Chapot: We did not know if it included or not the parts and if it was included or not the USMCA product. In fact, we have learned yesterday that it does not include a USMCA product. We have as well the trend of the original equipment market, which is still an uncertainty. We have the question mark on the risk side about the GDP evolution and the consumer behavior in North America and the pace of recovery of the OE truck market in Europe, which is in Q4 slower than in Q3. All of that gives you this $400 million range uncertainty. If I look at the market on the Q4, here you have for each market the nine first months and our Q4 expectations. On SR1, we notice on our side a little late start of the winter season in Europe.

Speaker #2: USMCA product in fact, we have learned yesterday that it does not include a USMCA product. We have as well the trend of the original equipment package, which is still an uncertainty.

Speaker #2: And we have the question mark on the risk side about the GDP evolution and the consumer behavior in North America, and the pace of recovery of the truck market in Europe, which is in Q4, slower than in Q3.

Speaker #2: So all of that gives you this 400 million range uncertainty . If I look at the at the market on the Q4 here , you have for each market .

Speaker #2: In the first nine months and our Q4 expectations on SR1, we notice on our side a slight late start to the winter season in Europe and probably on the original equipment side.

Yves Chapot: Probably on the original equipment side, we will have a basis of comparison in China, which will be less favorable as the Chinese government started to implement incentives for acquisition of BEV and hybrid in the end of the third quarter of 2025. On the truck side, OE should still be very negative, particularly driven by North and South America. The replacement side should be negative as the market, the selling market, after the tariff implementation and potentially the implementation of, yeah, after the tariff implementation in North America. On the specialty side, we don't notice a huge change in the market evolution versus the nine first months. As mentioned, we updated our guidance for our segment operating income one week ago.

Speaker #2: We will have a basis of comparison in China, which will be less favorable as the Chinese government started to implement incentives for the acquisition of BEV and hybrid vehicles in the end of the third quarter of 2025.

Speaker #2: On the truck side , OE should still be very negative , particularly driven by a north and South America and the replacement side should be negative as the market , the selling market after the tariff implementation and potentially the implementation of after the tariff implementation in North America on the specialty side , we don't notice huge change in the market evolution versus the nine first month .

Speaker #2: So as as mentioned , we updated our guidance for our segment operating income . One week ago with probably a less or less pessimistic on the free cash flow than on the segment operating income .

Yves Chapot: We are less pessimistic on the free cash flow than on the segment operating income because we are managing our CapEx in the lower range, in the lower part of our range of CapEx for the year, which means around €2 billion. We are going to as well record a positive contribution from our working capital, particularly on the inventory side, and the positive contribution of our joint venture. It was already the case during the first half of the year. Now looking for 2026. Of course, we will tune our guidance in February with the full 2025 full-year disclosure, but we already know that we will not be able to achieve our 2026 ambition that was shared during the Capital Market Day to reach €4.2 billion at 2023 forex and 14% operating margin.

Speaker #2: Because we are managing our CapEx in the lower range . In the lower part of our range of of CapEx for the year , which means around €2 billion .

Speaker #2: And we are going to as well record a positive contribution from our working capital , particularly on inventory side , and the positive contribution of our joint venture , as it was already the case , during the first half of the year .

Speaker #2: Now , looking for 2026 . So of course we will tune our guidance in February with the full 25 full year disclosure . But we already know that we will not be able to achieve our 26 ambition that was shared during the capital Market day to reach €4.2 billion at 2023 .

Speaker #2: Forex and 14% . Operating margin . What we already know regarding 2026 , probably two two negative impact . The tariff that I mentioned , we should have an additional 200 million and a negative impact on the price side coming from the raw material costs adjustments .

Yves Chapot: What we already know regarding 2026, probably two negative impacts: the tariffs that I mentioned, we should have an additional €200 million, and a negative impact on the price side coming from the raw material cost adjustments. On the other hand, we'll have some tailwinds, the raw material whose prices are further declining. Most of the restructuring savings should be achieved by the end of 2026. At the time we are speaking, most of the announcements made have been concretely achieved. I mean that the factories have stopped operations except the two last ones that we announced during the first half of this year. We should see a further SG&A improvement and hopefully a slight volume improvement at ISO market condition.

Speaker #2: But on the other hand , we'll have some tailwinds . The raw material that will price at our further declining the most of the restriction saving should be achieved by the end of 2026 .

Speaker #2: As of the time we are speaking, most of the announcements made have been concretely achieved. I mean that the factories have stopped operations, except for the two last ones that we announced during the first half of this year.

Speaker #2: We should see a further improvement and hopefully a slight volume improvement at ISO market conditions on the free cash flow front. We maintain our ambition to deliver €5.5 billion of free cash flow over three years before acquisition, thanks to some efforts on our CapEx, the continuous improvement of our inventory, and our working capital.

Yves Chapot: On the free cash flow front, we maintain our ambition to deliver €5.5 billion of free cash flow over three years before acquisition, thanks to some effort on our CapEx, the continuous improvement of our inventory, and our working capital. In this context, and following Florent's comments, confident in our cash generation, we'll speed up our share buyback program with an additional €400 million that we are going to implement by the end of this year. That's all for the presentation, and I think we can now open the Q&A session.

Speaker #2: So, in this context, and following Florence's comments, we are confident in our cash generation, which will speed up our share buyback program with an additional €400 million that we are going to implement by the end of this year.

Speaker #2: So, basically, that's all for the presentation. I think we can now open the Q&A session.

Speaker #3: If you wish to ask a question, please press star one on your phone keypad. Please ask your question in English.

Operator: If you wish to ask a question, please press star one on your phone keypad. Please ask your question in English. The first question is from Thomas Besson of Kepler Cheuvreux. Please go ahead.

Speaker #3: The first question is from Thomas Busson of Kepler. Please go ahead.

Speaker #4: Thank you very much . For taking my question . Good evening . Thomas from Kepler . I have a couple of questions with I mean , you have just said that you're going to implement a 400 million incremental buyback .

[Analyst 1]: Thank you very much for taking my question. Good evening, it's Thomas from Kepler Cheuvreux. I have a couple of questions. You have just said that you're going to implement a $400 million incremental buyback. Could you update us on where you were? I think you had launched a plan last February for $1 billion from $500 million last year, and you were supposed to do $250 million this year. Do you therefore mean that you're going to do $250 million plus $400 million or $400 million on top of the $250 million you had in mind? Could you indicate whether we may assume as well that you will maintain dividend given the strengths, the confirmed strengths of your cash generation and also confirmed asset disposal? That's the first question on capital returns.

Speaker #4: Could you update us on where are you , where I think you had launched a plan last February for a billion , 500 million last year , and you were supposed to do two , 50 million this year .

Speaker #4: Do you therefore mean you're going to do $250 million plus $400 million, or $400 million on top of the $250 million you had in mind? And could you indicate whether we may assume as well that you will maintain dividends, given the strength, the confirmed strength of your cash generation and also confirmed asset disposal? So that's the first question on capital returns.

Speaker #4: The second question really is about the relative lack of feasibility. You still seem to have insight, which allows us to better understand what drives your relative performance versus the markets, compared with some of your peers.

[Analyst 1]: The second question really is about the relative lack of visibility you still seem to have in allowing us to better understand what drives your relative performance versus end market compared with some of your peers. You give us a very wide range at the end of October for Q4, and we have seen Michelin over the last two, three years showing almost consistently a decent underperformance versus the end markets. In the SR1, for instance, in 2025, you seem to largely underperform in SR2. We've seen Continental issue a reverse warning while you were issuing a warning, with them having as well some exposure to the truck market you mentioned as a key reason for your warning.

Speaker #4: So , I mean , you give us a very wide range at the end of October for Q4 , and we have seen Michelin over the last two , three years showing almost consistently a decent underperformance versus the markets in the SL1 .

Speaker #4: For instance , in 2025 , you seem to largely underperform in SR2 . We've seen continental issue a reverse warning while you were issuing a warning with them having as well some exposure to to the truck market .

Speaker #4: You mentioned, as a key reason for your warning. So my second question is basically: why don't you have more visibility? And could you help us understand when we should expect Michelin to be closer to its end markets in its various segments?

[Analyst 1]: My second question is basically, why don't you have more visibility and could you help us understanding when we should expect Michelin to be closer to its end markets in its various segments? Thank you very much.

Speaker #4: Thank you very much .

Speaker #1: So I will give you some elements to answer . And then if we will , will complement . So as far as the dividend for the for the end of this year , the we have a dividend policy and we have no reason to change that dividend policy .

Yves Chapot: I will give you some elements to answer, and then Yves will complement. As far as the dividend for the end of this year, we have a dividend policy and we have no reason to change that dividend policy. Of course, this is a discussion we will have with our board and we will discuss the details early next year. As far as the buyback, it's on top of what we have done already, and we had done around a little bit in excess of $750 million, and the $400 million comes on top of that. Now, the underperformance of our competition, and you mentioned Continental, we have several leads to that. As I was explaining, we have been undertaking a heavy restructuring of our plants.

Speaker #1: And of course this is a discussion we will have with our board . And we will discuss the details early next year . As far as the the the buyback , it's on top of what we have done already .

Speaker #1: And we had done around a little bit in excess of $750 million. And the $400 million comes on top of that. Now, the underperformance of our competition, and you mentioned Continental.

Speaker #1: We have several leads to that . As I was explaining , we have been undertaking a heavy restructuring of our plants that has weighed a lot in our results in 2025 , especially in the segment two on the truck operations , had to ramp down and ramp up some activities .

Yves Chapot: That has weighed a lot in our results in 2025, especially in segment two on the truck operations because we had to run down and ramp up some activities. Our competition didn't have to do the same thing. The second restructuring we have done is our structural pricing at OE, and especially in North America, where we were over-indexed in market share with OEMs in North America, and our prices were not at the adequate level. We have done what we had to do on price, but in a market that has reversed sharply, suddenly it has created some issue and we've lost share with those OEMs. Half of those share losses were expected and not wanted, but we were anticipating those. Half were not expected.

Speaker #1: Our competition didn't have to do the same thing . The second restructuring we have done is our structural pricing at OE , and especially in North because we America , where we were overindexed in market share at or with OEMs in North America .

Speaker #1: And our prices were not at the adequate level. So we have done what we had to do on price. But.

Speaker #1: In a market that has reversed sharply, it has suddenly created some issues, and we've lost share with those OEMs. Half of that share loss was expected and not wanted.

Speaker #1: But we were anticipating those. Half were not expected. I think we have adequate margins now at OE, and we just have to wait for the market to get back to a more normal level.

Yves Chapot: I think we have adequate margins now at OE, and we just have to wait for the market to get back to a more normal level. The market share loss has been opportunities for our competition. Now, the wet conditions that took them is down to them. We are also, in terms of business, we have a big activity in beer and roll. Beer and roll, especially in agricultural, agricultural in North America, is heavily depressed. We have two activities now. We have trucks, systems, and trucks, and we have high performing for high power tractors in North America. Right now, this business is heavily depressed. I don't think our competition has the same exposure to that business. For us, it is still an area of focus to restructure our go-to market and what we do with this business. Especially the OE portion in ag is heavily depressed.

Speaker #1: And of course , the market share loss has been opportunities for our competition . Of course , now the under what conditions they take , they took them is down to them .

Speaker #1: Now we are also in terms of business , we have a big activity in Beyond Road . Beyond road , especially in agricultural , agricultural , in North America is heavily depressed and we have two activities now .

Speaker #1: We have trucks , systems and tracks , and we have hi performing for high power tractors in North America right now . This business is heavily depressed .

Speaker #1: I don't think our competition has the same exposure to that business . And for us it is still an area of focus to restructure the our go to market and what we do with this business , and especially the OE portion in AG , is heavily depressed .

Speaker #1: So these are some elements to help you understand why we have seen these differences in performance versus our competition. And maybe if you want to add.

Yves Chapot: These are some elements to help you understand why we have seen this difference in performance versus our competition. Maybe if you want to add one more thing.

Speaker #2: No , nothing okay .

Speaker #1: Thank you .

Speaker #4: Thank you very much for your input on the visibility. Why is it not higher at the end of October for Q4?

[Analyst 1]: Thank you very much, Florent. Maybe on the visibility, why is it not higher at the end of October for Q4?

Speaker #1: I mean , we have we have had so many surprises since the beginning of this year . So . So , so I prefer that we we , we stay cautious on what we can expect .

Yves Chapot: I mean, we have had so many surprises since the beginning of this year. I prefer that we stay cautious on what we can expect. Maybe we'll have good news, maybe we'll have bad news. I don't know. This year has been really intense in terms of surprises. Just an illustration, the South American operations were trending very well during the first, let's say, eight months. The decision of 50% implementation of tariff from the U.S. has completely turned the market upside down.

Speaker #1: Maybe we'll have good news , maybe we'll have bad news . I don't know , I mean , really this year has been really intense in terms of surprises .

Speaker #2: Yeah, just an illustration. I was off. American operations were trending very well during the first, I would say, eight months, and then the decision of 50% implementation of tariffs from the U.S. has completely turned the market upside down.

Speaker #1: Down , upside down . Yeah . So , so really . Yeah . So I wish I would have the clever glasses from others that are able to predict what will happen in the Q3 , Q4 .

[Analyst 1]: Upside down, yeah.

Yves Chapot: I wish I would have the clever glasses from others that are able to predict what will happen in the Q4.

Speaker #4: Thank you .

[Analyst 1]: Thank you.

Speaker #3: The next question is from Harry Martin of Bernstein. Please go ahead.

Operator: The next question is from Harry Martin of Bernstein. Please go ahead.

Speaker #5: Thank you . And good evening . I'll start with a question on the US . On the volume side . I mean , can you can you help us understand what the immediate production actions that you're taking in some of the the plants , like the truck and bus segment in the US where original equipment production is set to be down double digits for many more months before getting better .

[Analyst 2]: Thank you and good evening. I'll start with a question on the U.S. on the volume side. Can you help us understand what the immediate production actions that you're taking in some of the plants like the truck and bus segment in the U.S. where original equipment production is set to be down double digits for many more months before getting better? A related question to this is, should we expect that the SOI drops through on volumes this year to be slightly better than normal, given that the declines in 2025 are focused in North America where cost flexibility is usually higher than somewhere like Europe? The second question is just about the pricing in the U.S. You have a long track record of pricing cost inflation and so on, as you mentioned, the ability to earn a price for your technology.

Speaker #5: And then a related question to this is should we expect that the soy drops through on volumes ? This year should be slightly better than normal , given that the the declines in 2025 are focused in North America , where cost flexibility is usually higher than somewhere like Europe .

Speaker #5: And then the the second question , just about the pricing in the US , I mean , you have a long track record of pricing , cost inflation and so on as you as you mentioned , the ability to to earn a price for your technology .

Speaker #5: So it's been surprising from the outside that it's been pricing stepping backwards in Q3. How much of this environment do you think is transitory, around dealers buying those cheaper tires ahead of the tariffs coming in overcapacity?

[Analyst 2]: It's been surprising from the outside that it's been pricing stepping backwards in Q3. How much of this environment do you think is transitory around dealers buying those cheaper tires ahead of the tariffs coming in over capacity? Should we expect a full price pass-through of that sort of roughly $300 million of tariff cost in the medium term?

Speaker #5: And should we expect a full price pass-through of that sort of roughly $300 million of tariff costs in the medium term?

Speaker #1: So, some elements of answers and I will leave the rest to Eve. On the US volume, we are a net importer of truck tires in the US from various parts of the world.

Yves Chapot: Some element of answers, and I will leave the rest to Yves. On the U.S. volume, we are a net importer of truck tires in the U.S. from various parts of the world. In the low level of markets, what we are doing is we are loading better our plants in the U.S. It takes a while to adjust the global flows so that we reduce the imports from other countries to load better our plants. We will have this effect. We have a better effect of this happening in the fourth quarter and going on in 2026. The U.S. volumes are heavily depressed, but we consider that as temporary because we think the OE truck producers have built inventories in preparation of a new legislation, a new regulation on engines in the U.S. That regulation has been postponed.

Speaker #1: So in a low level of markets , what we are doing is we are loading better . Our plants in the US , but it takes some a while to adjust the global flows so that we reduce the imports from other countries to load better .

Speaker #1: Our plants. We will have this effect. We have a better effect of this happening in the fourth quarter and going on in 2026.

Speaker #1: So the U.S. volumes are heavily depressed because. But we consider that as temporary because we think the only truck production producers have built inventories in preparation of a new legislation, a new regulation on engines in the U.S. that regulation has been postponed.

Speaker #1: So, it means that the truck OEMs have excess inventories of trucks on the yard, and they have to purge that.

Yves Chapot: It means that the truck OEMs have excess inventories of trucks on the yard, and they have to purge that. That is temporary. This is depressing further the volume, but we think it's not structural to the market. Now, when you assess the pricing environment and when you look at what is happening also in the market, when we look at how the market is assessed, it's based on selling activities. The selling has been mainly driven by cheap imports from Asia into North America in anticipation of tariffs. The market has been artificially inflated by this phenomenon. The same thing happened also in Europe and in other parts of the world. As far as the pricing environment, our price premium continues to be what it used to be. In the long run, either the entire industry accepts to drop their margins or that will go into the market.

Speaker #1: But that is temporary . So that's the this is depressing . Further , the volume . But we think it's not structural to the market .

Speaker #1: Now when you assess the pricing environment and when you look at what is happening also in the market , when we look at how the market is assessed , it's based on saline activities and the saline has been mainly driven by cheap imports from Asia into North America .

Speaker #1: In anticipation of tariffs . So the market has been artificially . Inflated by these phenomena . It happened the same thing happened also in in Europe .

Speaker #1: And in other parts of the world, as far as the pricing environment, our price premium continues to be what it used to be in the long run.

Speaker #1: Either the the entire industry accepts to drop the margins or that will go into the market when it will happen . I don't know , we've tried our bit and then on the drop through and .

Yves Chapot: When it will happen, I don't know. We've tried our bit. On the drop-through, Harry, you clearly see it very well. Our North American operation has been much more impacted in Q3 than during the first six months. Accordingly, we have lowered the capacity utilization in the U.S. where we have the higher, probably the higher fixed costs, so the less fixed cost absorption. That's why we have recorded a higher drop-through this year. Conversely, when the market will rebound and we'll be able to reload our U.S. factory, it will have a positive effect on the drop-through.

Speaker #2: Maybe on the drop through . So Harry , you clearly see it very well . The our North American operation has been much more impacted in Q3 than during the first six months .

Speaker #2: Accordingly, we have lowered the capacity utilization in the U.S., where we have the higher, probably the higher fixed cost. So, the less cost absorption.

Speaker #2: So that's why we are probably we have recorded a higher drop through in this year . Conversely , when the market will rebound and will be able to reload our US factory , it will have a positive effect on the drop through .

Speaker #5: Thank you very much .

[Analyst 2]: Thank you very much.

Speaker #3: The next question is from Akshat Kakar of J.P. Morgan. Please go ahead.

Operator: The next question is from Akshat Kaker of JP Morgan. Please go ahead.

Speaker #6: Thank you for taking my questions. Akshat from JP Morgan. I have three quick ones, please. The first one is on the overall inventory situation in passenger cars and trucks.

[Analyst 2]: Thank you for taking my questions, Akshat from JP Morgan. I have three quick ones, please. The first one on the overall inventory situation in passenger car and trucks. I think you have frequently highlighted the high inventories of budget tires in anticipation of those anti-dumping or import duties in different regions. Could you just talk about how those overall inventory levels look like in these different markets? How long do you think it could take to normalize that based on current sellout trends? If you still expect continued low fixed cost absorption and low capacity utilization going into the first half of next year, just trying to understand the overall inventory situation for your business. The second question is on the underlying profitability in the second half of this year. Thanks for explaining all the negative surprises that you've had in the last month specifically.

Speaker #6: I think you have frequently highlighted the high inventories of budget tires and the anticipation of those anti-dumping or import duties in different regions. Could you just talk about how those overall inventory levels look in these different markets, and how long do you think it could take to normalize that based on current sell-out trends?

Speaker #6: And if you still expect continued low fixed cost absorption and low capacity utilization going into the first half of next year, just trying to understand the overall inventory situation for your business.

Speaker #6: The second question is on the underlying profitability in the second half of this year. And thanks for explaining all the negative surprises that you've had in the last month, specifically.

Speaker #6: So, when I think about all the actions that you mentioned, you've talked about inventory management, you've talked about sequential price actions, and you've talked about low fixed cost absorption.

[Analyst 2]: When I think about all the actions that you mentioned, you've talked about inventory management, you've talked about sequential price actions, you've talked about low fixed cost absorption. I know it's very difficult to answer, but can you quantify the extent of one-offs that you are seeing in the second half of this year, which should not carry into 2026, please? Those are the two questions. Thank you.

Speaker #6: And I know it's very difficult to answer , but can you quantify the extent of one offs that that you are seeing in the second half of this year , which should not carry into 2026 ?

Speaker #6: Please , those those are the two questions . Thank you .

Speaker #1: As far as the quantification, I have my personal calculator on my left. So I will leave it to answer on this.

Yves Chapot: As far as the quantification, I have my personal calculator on my left, so I will leave Yves to answer on this. As far as inventory levels, if we look at our inventory level, it is adequate at Michelin brand, adequate to low level. We are well placed. Unfortunately, inventory levels at the dealerships are at a high level almost everywhere, especially in the Americas and Europe, because of this phenomenon of the flow of budget tires in every category. Now, how long it will take to purge? Several months. We don't know. It depends on the level of activity overall. Back to what Yves was mentioning, for example, if I look at the U.S., right now, the tons to be hauled in the U.S. are decreasing. This is not helping to purge excess inventory.

Speaker #1: So as far as inventory levels, if we look at our inventory level, it is adequate at Michelin brand, adequate to low level. So we are well placed.

Speaker #1: Unfortunately, inventory levels at the dealerships are at a high level almost everywhere, especially in the Americas and Europe. This is due to the phenomenon of the flow of budget tires in every category.

Speaker #1: So now, how long will it take to purge? Several months. How? We don't know. It depends on the level of activity overall.

Speaker #1: So back to what Yves was mentioning . For example , if I look at the US right now , the the turns to behold in the US is decreasing .

Speaker #1: So this is not helping to purge excess inventory. So, we just have to wait for the economy to stabilize further and to be at a higher level.

Yves Chapot: We just have to wait for the economy to stabilize further and to be at a higher level. If we look at South America, you mentioned it very well, the economy was growing nicely up until, and our business as well was growing nicely up until the 1st of July. Suddenly in July, a change in the tariff, and suddenly the economy in South America is having more difficulties. Of course, it has a rippling effect on the truck activity. In passenger car, what we see is the overall mileage driven is steady on the world, slightly growing but steady. The real phenomenon on passenger car is the aging of the vehicle park. That is aging very fast. How long those phenomenons are going to last, I don't know because we consider that what is happening right now is not normal. These are not normal market conditions.

Speaker #1: If we look at South America for you've mentioned it very well . It was the economy was growing nicely up until and our business as well was growing nicely up until the 1st of July .

Speaker #1: And then suddenly in July, a change in the tariff occurred, and suddenly the economy in South America is facing more difficulties. So, of course, it has a rippling effect on the truck activity in passenger cars.

Speaker #1: What we see is the the overall mileage driven is steady on the on the world , slightly growing , but steady . What what is the real phenomena on passenger car ?

Speaker #1: Is the the aging of the vehicle park that is aging very fast . So how long this phenomenon those are going to last ?

Speaker #1: I don't know , because we consider that what is happening right now is not normal . This is these are not normal . Market conditions .

Speaker #1: And then on the the underlying earnings and the and the quantification is pretty tricky .

Yves Chapot: On the underlying earnings and the quantification, it's pretty tricky. It's very difficult to quantify what we can call one-offs because we are more facing a very volatile environment. As you have seen during the presentation, every element of the bridge has some, of course, the volume wider and the cogs because of the tariff as well, wider. Every element of the bridge has some element of uncertainties. We are more trying to build up our forecast on risk and opportunities based on a central scenario. It's very difficult today to decipher what will have. We know, for example, that there will be some elements that will have positive effects in 2026. I was mentioning the raw material cost. On the other hand, we know that the tariff started during Q2 and Q3, implemented mostly starting from Q3. It will have a ripple effect over the first half of 2026.

Speaker #2: Yeah . It's very difficult to quantify what we can call one offs . Because it's we are facing a very volatile environment . And as you have seen during the presentation , every element of the bridge have some of course , the volume wider and the cogs , because of the tariff as well wider .

Speaker #2: But every element of the bridge has some element of uncertainty. So we are more trying to build up our forecast on risks and opportunities based on a central scenario.

Speaker #2: And then . It's very difficult today to decipher what what will , will have . We know , for example , that there will be some element will have positive effect in 2026 .

Speaker #2: I was mentioning the raw material cost. On the other hand, we know that the tariff started during Q2, and Q3 was implemented mostly starting from Q3.

Speaker #2: And so it will have a ripple effect over the first half of 2026 . And hopefully at one stage , it will start to normalize , providing there will not be a renegotiation of the Usmca agreement .

Yves Chapot: Hopefully, at one stage, it will start to normalize, providing there will not be a renegotiation of the USMCA agreement. That is the world we are living in as of today. Just as I was listening to Yves, something came to my mind. For example, if I look at truck, in 2025, especially in the first semester, we had to, in the first nine months, we had additional costs due to the restructuring of our plants. We had to ramp down and ramp up. This could be considered as one-off. Since this summer, we know that we have to reshuffle some of our flows because of what is happening in the U.S. and in other parts of the world. Suddenly, those one-offs are going to be offset. The positive one-off, the benefit of restructuring, is going to be offset by additional costs just to reshuffle our flows.

Speaker #2: So that's the world we are living in as of today.

Speaker #1: But just as I was listening to Yves , something came to my mind is that , for example , if I look at truck in 2025 , especially in the first semester , we had to and the first nine months we had additional costs due to the restructuring of of our plants , which had ramped down and ramping up .

Speaker #1: So this could be considered as one off . But . Since the this summer , we know that we have to reshuffle some of our flows because of what is happening in the US and in other parts of the world .

Speaker #1: So, suddenly those one-offs are going to be offset. Those positive ones. One of the benefits of restructuring is going to be offset by additional costs just to reshuffle our flows.

Speaker #1: So that's why it's tricky to answer more precisely on this.

Yves Chapot: That is why it is tricky to answer more precisely on this. What we can say is on the truck side, we have right-sized our manufacturing setup, and it is now in condition to be able to better react to an uplift in volume, particularly when the original equipment market will start to rebound.

Speaker #2: And what we can say on the particularly on the truck side , we have right size , our manufacturing setup , and it is knowing condition to be able to better react to an uplift in volume , particularly when the when the original content market will , will start to rebound .

Speaker #6: Thank you. Just one quick clarification: have you built in any bonus provision release in the second half of the year within your guidance?

[Analyst 2]: Thank you. Just one quick clarification. Have you built in any bonus provision relief in the second half of the year within your guidance, please? Thank you.

Speaker #6: Please ? Thank you .

Speaker #1: Yes . Yes .

Yves Chapot: Yes.

Speaker #7: Thank you .

Speaker #3: The next question is from Monica Bosio of Intesa Sanpaolo. Please go ahead.

[Analyst 2]: Yes.

Yves Chapot: Thank you.

Operator: The next question is from Monica Bosio of Intesa Sanpaolo. Please go ahead.

Speaker #8: Hey good evening everyone , and thanks for taking my questions . I have three , if I may , in the first one is on SR two .

[Analyst 3]: Good evening, everyone, and thanks for taking my questions. I have three, if I may. The first one is for on SR2. In the first half, the margins for SR2 set at 5.5%. We know that the company does not guide at the divisional level. On the back of the fixed cost absorption, which I can imagine is very low, in H2, can we imagine an operating loss for the SR2 division in the second half of 2025, or are you still confident on the back of the restructuring that the division could achieve the break-even? The second question is on the potential savings from restructuring. We should see another batch in the fourth quarter. Can you also provide us any indication for 2026? Thank you. The very last is on the beyond the road tires. I know it's difficult to answer. The visibility is very poor.

Speaker #8: In the first half the margins for SR two set at set at 5.5% . We know that the company does not guide at the divisional level , but on the back of the fixed cost absorption , which I can imagine is a very low in in H2 .

Speaker #8: Can we imagine an operating loss for the SR two division in the second half of 2025 , or are you still confident on the back of the restructuring that the the could achieve the breakeven ?

Speaker #8: The second question is on the potential savings from restructuring. We should see another batch in the fourth quarter. But can you also provide us with any indication for 2026?

Speaker #8: Thank you. And a very last question is on the Beyond Road tires. I know it's difficult to answer; the visibility is very poor, but what is your outlook for 2026 across the quarters?

[Analyst 3]: What is your outlook for 2026 across the quarters? For example, could we expect a positive volume strength for beyond the road tires already in the second quarter, or do you see volumes turning positive only from the second part of 2026? Just your flavor. Thank you very much.

Speaker #8: For example, could we expect a positive volume trend for Beyond Tire, beyond the road tires, already in the second quarter? Or do you see volumes turning positive?

Speaker #8: Only from the second part of 2026? Just your flavor. Thank you very much.

Speaker #1: So we do not anticipate, at this stage, operating losses in the second half of 2025 for SR2. We had, in the first semester, some restructuring costs plus low volume, but we don't anticipate that.

Yves Chapot: Yeah. We do not anticipate at this stage operating losses in the second half of 2025 for SR2. We had in the first semester some restructuring costs plus low volume, but we don't anticipate that. Restructuring, of course, has helped. As Yves mentioned, we have speeded up some restructuring. We will have the benefit sooner in our bottom line. Seen from today, we don't anticipate operating losses in SR2. Now, I will answer on the beyond the road. Beyond the road, typically, looking at this very interesting environment we are in, because of a sudden change in the tariffs between the U.S. and China, China has started to stop buying American soybeans. Unfortunately, American soybeans, they are very large farms and using very heavy tractors, and they consume a lot of truck systems. Now, will it last? I don't know. Will those farmers find other markets than China?

Speaker #1: And and restructuring , of course , has helped . And has Eve mentioned we have speed up some of structuring . So we'll have the benefit sooner in our bottom line .

Speaker #1: So seen from today , we don't anticipate operating losses in SR two . Now I will answer on the Beyond road , beyond road typically .

Speaker #1: So, looking at this very interesting environment we are in because of certain changes in the tariffs between us and China, China has started to stop buying American soybeans.

Speaker #1: Unfortunately, American soybeans are grown on very large farms, which utilize heavy tractors. These tractors consume a lot of track systems.

Speaker #1: So now will it last ? I don't know , will those farmers find other markets than China ? I don't know , it depends on the relationship between us and China .

Yves Chapot: I don't know. It depends on the relationship between the U.S. and China. Unless something changes there, we don't foresee a rebound in the agricultural activities in the near term. Really, we are over-indexed in truck systems. We have a very high market share in truck systems, and the truck systems only work on heavy tractors, especially in the U.S. The same for some of our technical tires in agriculture. So far, our discussions with our specialized teams on this tell us maybe in H2 2026, maybe. Things are moving very fast, and we don't know. It's difficult to have a good visibility. You're right, for beyond the road, these are very important markets and very, very lucrative markets. That's for beyond the road.

Speaker #1: Now , unless something changes , there , we don't foresee rebound in the agricultural activity activities in the near term . So really and we are overindexed in track systems , we have a very high market share in track systems .

Speaker #1: And the track systems only work on heavy tractors, especially in the U.S. And the same applies to some of our technical tires in agriculture.

Speaker #1: So, so far our discussions with our specialized teams on this tell us maybe in H2 2026, maybe. But really, you see, things are moving very fast and we don't know.

Speaker #1: It's difficult to have a good visibility . But you're right . The for Beyond Road this is these are very important markets . And very very lucrative markets .

Speaker #2: Yeah, that's for being on the road for the overall SR three. Taking into account the growth in aircraft and in mining, we should be at a flat volume very soon.

Yves Chapot: For the overall SR3, taking into account the growth in aircraft and in mining, we should be at a flat volume very soon and growing volume probably in the first half of 2026 because of the other activities. As far as regarding your question about restructuring, we expect a full saving of $200 million over 2025, of which at the end of September, we have already recorded $120 million, $130 million. We should have a further $70 million in Q4 and a little bit, probably a little bit more than $100 million for the full year 2026.

Speaker #2: And a growing volume, probably in the first half of 2026 because of the other activities. As regarding your question about restructuring, we expect full savings of $200 million over 2025, of which at the end of September, we have already recorded $120 million to $130 million.

Speaker #2: So we should have a further $70 million in Q4 and a little bit, probably a little bit more than $100 million for the full year 2026.

Speaker #8: Thank you very much . If I may , just a quick follow up on the North American activities on the back of the scenario , are you planning any further restructuring in this case , in Beyond Road Tires , or are you just waiting and see what what's going to happen ?

[Analyst 3]: Thank you very much. If I may, just a quick follow-up on the North American ag activities. On the back of the scenario, are you planning any further restructuring, in this case, in beyond the road tires, or are you just waiting and seeing what's going to happen?

Speaker #1: We are re-engineering heavily our business activities in Beyond Road in general, and we will let you know when we have made a decision.

Yves Chapot: We are re-engineering heavily our business activities in the beyond road in general, and we will let you know when we have made a decision. We completed during the quarter the sales of our bias tires and small trucks activity to the SEAT group.

Speaker #2: During the quarter, we completed the sale of our bias tires and small trucks activity to the Seat Group.

Speaker #7: Perfect .

Speaker #8: Thank you very much .

[Analyst 3]: Perfect. Thank you very much.

Speaker #3: The next question is from Martino de Ambrogio of Equita. Please go ahead.

Operator: The next question is from Martino De Ambroggi of Equita. Please go ahead.

Speaker #9: Thank you . And thank you very much . Three questions focusing on free cash flow . You mentioned if CapEx will go down , could you remind us what is the your best estimate for 25 and 26 ?

[Analyst 1]: Thank you. Thank you very much. Three questions focusing on free cash flow. You mentioned if CapEx will go down. Could you remind us what is your best estimate for 2025 and 2026? This is the first. The second, always on free cash flow, is the cash out for restructuring. If I remember correctly, you mentioned $400 million in the previous call for 2025. What could be your assumption for 2026? The last question is on the pricing. I know very well you don't make any more specific comment on prices, but could you elaborate a general comment on what is the pricing at sector level considering the low volume environment? Is there any big change that you see in the landscape, or everything is similar to what used to be in the past?

Speaker #9: This is the first and the second always on free cash flow is the cash out for restructuring. If I remember correctly, you mentioned $400 million in the previous call for Q3.

Speaker #9: What could be your assumptions for 26 and the last question is on the pricing . So I know very well you don't make any more specific comment on prices , but could you elaborate a general comment on what is the pricing at sector level , considering the low volume environment ?

Speaker #9: Is there any big change that you see in the landscape, or is everything similar to what it used to be in the past?

Speaker #1: Thank you . On pricing , we will make a no comment on the even on the landscape or we we have said what we have to say on prices , maybe for for the CapEx and .

Yves Chapot: On pricing, we will make no comment on the landscape, or we have said what we had to say on prices. Maybe for the CapEx.

Speaker #2: For the free cash flow . So the CapEx , we will land probably a slightly above 2 billion . You know , that we have a range between two and 2.4 .

[Analyst 1]: For the free cash flow. The CapEx, we will land probably slightly above $2 billion. You know that we have a range between $2 billion and $2.4 billion. We were nearly between $2.1 billion and $2.2 billion last year. We are piloting at the lower part of the range, and it should be similar in 2026 given the context we are operating in. On the restructuring side, we are expecting the figure has not changed. The $400 million for 2025 is still relevant. For 2026, it should be lower, probably around $300 million.

Speaker #2: We we . Were nearly between 2.1 and 2.2 last year . So we are piloting at the low part of the range . And it should be similar in 2026 , given the context we are operating in on the restructuring side , we are expecting the figure has not changed .

Speaker #2: The $400 million for 2025 is still relevant, and for 2026 it should be lower—probably around $300 million.

Speaker #9: Okay . Thank you Eva and networking capital . Is there any specific trend we should be we should be aware of ?

[Analyst 2]: Thank you, Yves. Is there any specific trend we should be aware of regarding networking capital?

Speaker #2: No . Net capital . We we have two I will comment on two aggregates aggregates . First on the receivable we have a slight negative effect of our mix in the US because of the change of wholesaler and that impacts slightly negatively our term of payment .

Yves Chapot: Networking capital, we have two. I will comment on two aggregates. First, on the receivable, we have a slight negative effect of our mix in the U.S. because of the change of wholesaler, and that impacts slightly negatively our term of payment. Overall, if I look at the overall working capital, our inventory is going down because it was something that we shared during the CMD last year. We have a plan to better manage our inventory, looking at the full process from the forecast from the sales team up to the way we are managing our inventory in our warehouse as well as the way we deploy our inventory over a given territory. Having said that, the only downside we can have on the inventory side is the impact of the tariff in the cost in the inventory level, in the price, which is slightly negative.

Speaker #2: But overall , if I look at the overall working capital , our inventory are going down because we it was something that we shared during the the CMD last year .

Speaker #2: We have a plan to better manage our inventory . Looking at the full process from the the forecast from the the sales team up to the way we are managing our inventory in in our warehouse as well as in the way we we deploy our inventory over a given territory .

Speaker #2: Having said that , the only downside we can have on inventory side is the impact of the tariff in the cost in the in the inventory level , in the price , which is slightly negative , but on the other hand , there is currently a decrease in raw material prices , which should lend to a decrease of inventory price as well .

Yves Chapot: On the other end, there is currently a decrease in raw material prices, which should lend to a decrease of inventory price as well.

Speaker #7: Thank you .

[Analyst 2]: Thank you.

Speaker #3: The next question is from Michael Aspinall of Jefferies. Please go ahead.

Operator: The next question is from Michael Aspinall of Jefferies. Please go ahead.

Speaker #10: Thanks . Good evening . Florian , can I get back to QR1 ? You mentioned the competition you saw in C1 in the report that that it mainly affected tier two tire brands .

[Analyst 2]: Thanks. Good evening, Florent and Yves. Can I just go back to SR1? You mentioned the competition you saw in SR1 in the report that it mainly affected Tier 2 tire brands. Can you just remind us what your split is to the Michelin and non-Michelin brands? Did you see the same types of competition at the Michelin brand, or was it mostly in Tier 2?

Speaker #10: Can you just remind us what your split is to the Michelin and non Michelin brands ? And did you see the kind of same types of competition in at the Michelin brand , or was it mostly in tier two ?

Speaker #1: With in terms of volume , 85% of what we sell is Michelin brand in terms of volumes . The rest is mainly tier two and a little bit of tier three .

Yves Chapot: In terms of volume, 85% of what we sell is Michelin brand in terms of volumes. The rest is mainly Tier 2 and a little bit of Tier 3. Tier 3 really has very intense competition. Right now, for example, our Union Royal brand that plays in the bottom of Tier 2 and the top of Tier 3 is imported from Indonesia, or we export from Indonesia to the U.S. We are looking at how we can adapt the flows. For example, that brand was sold through the wholesaler, mainly through the wholesaler, but we have decided to cancel. Of course, we have to re-channel that brand into other wholesale channels. The competition in Tier 2 is intense. In Tier 1, it's less.

Speaker #1: Tier three is really very intense competition. So right now, for example, our Uniroyal brand, which plays in the bottom of tier two and the top of tier three, is important from Indonesia.

Speaker #1: And or we export from Indonesia to to the US . So we are looking at how we can adapt the flows and and and add that , for example , that brand was sold through the wholesaler mainly through the wholesaler that we have decided to cancel .

Speaker #1: So of course we have to rechannel that brand into other wholesale channels and the , the competition in tier two is intense . In tier one , it's less the tier one market is more stable , even though now there is a big push from tier four , tier three , especially in the US .

Yves Chapot: The Tier 1 market is more stable, even though now there is a big push from the Tier 4, Tier 3, especially in the U.S., that is weighing a little bit on the Tier 1 proportion. I think it's more short-term things than structural. Long-term, I don't foresee a major change in that. However, in Europe, Europe had more Tier 1 proportion than Tier 2 and Tier 3. Now it's getting more into levels of what we see in other parts of the world.

Speaker #1: That is weighing a little bit on the Tier One proportion. But I think it's more short-term things that are structurally long-term.

Speaker #1: I don't foresee a major change in that , however , in Europe , Europe had more tier one proportion than tier two and tier three , and now it's getting more into levels of what we see in in other parts of the world .

Speaker #10: Okay , that's useful . And this is the second one on the distribution model . It sounds like I mean , I think there was a question earlier as to how much or what kind of things we could think about as being one off the change in distribution sounds like something you probably won't do every year , kind of going forward .

[Analyst 2]: Okay. That's useful. This is the second one on the distribution model. It sounds like, I mean, I think there was a question earlier as to how much or what kind of things we could think about as being one-offs. The change in distribution sounds like something you probably won't do every year going forward. Maybe you could help us with how much the change in distribution impacted volumes in Q3 or Q4 or the year.

Speaker #10: Maybe you could kind of help us with how much the change in distribution impacted volumes in Q3 or Q4 of the year.

Speaker #10: .

Speaker #2: It's it's a main it's the main driver of the volume loss in SR1 in North America . And it's it's a one off because we are not changing wholesaler every year .

Yves Chapot: It's the main driver of the volume loss in SR1 in North America. It's a one-off because we are not changing wholesaler every year.

Speaker #2: It's .

Speaker #1: It's every 20 years .

Speaker #2: It's every year, every 20 years. Yes. So.

[Analyst 2]: It's every 20 years.

Yves Chapot: It's every year, every 20 years.

Speaker #7: Thank you .

[Analyst 2]: Thank you.

Speaker #3: The next question is from Michael Kiedis of Adobe. Please go ahead.

Operator: The next question is from Michael Funduchidis of Oddo Securities. Please go ahead.

Speaker #9: Yes .

Speaker #1: Good evening . A few . questions left on .

[Analyst 1]: Yes. Good evening. A few questions left on my side. First, to come back on ATD, it was a move that was planned by you probably since at least a few quarters. Could you give us more color on what exactly went wrong? Was it more challenging to get dealers to switch from ATD to NTW? Is it something like that? That's the first question. Second question, sorry to insist on Q4, but this uncertainty you're mentioning and you're referring to is probably affecting a lot of companies, especially in autos. We could have expected tires to be somewhat less impacted, even considering trucks or ag exposure. I know it's a bit of an oversimplification, but based on full year guidance or even the implied H2, your SOI runs at around $200 million per month. We have only two months left, and you're talking about $400 million uncertainty over Q4.

Speaker #11: My side. First to come back on ATD. I mean, it was a move that was planned by you probably since at least a few quarters.

Speaker #11: So could you give us more color on what exactly went wrong? Was it more challenging to get dealers to switch from ATD to NDT?

Speaker #11: Is it something like that ? So that's the first question . Second question , and sorry to insist on Q4 , but this uncertainty you're mentioning and you're referring to is , is probably affecting a lot of companies , especially in autos .

Speaker #11: We could have expected tires to be somewhat less impacted , even considering trucks or exposure . So I know it's a bit of an oversimplification , but based on full year guidance or even the implied H2 , your soy runs at around , let's say 200 million per month , we have only two months left , and you're talking about 400 million uncertainty over Q4 .

Speaker #11: So what does it mean for the last two months? Maybe a view on October, which is almost done? That's the second question.

[Analyst 1]: What does it mean for the last two months? Maybe a view on October, which is almost done. That's the second question. Maybe last, could you clarify your views on M&A in this context? Any change in terms of mindset or not at all? Thank you.

Speaker #11: And maybe last . Could you could you clarify your views on M&A in this context ? Any change in terms of mindset or not at all ?

Speaker #11: Thank you .

Speaker #1: Okay, so on the first question on ATD, the decision has not been planned several quarters before the situation with ATD has deteriorated.

Yves Chapot: Okay. On the first question on American Tire Distributors (ATD), the decision has not been planned several quarters before. The situation with ATD has deteriorated when they went Chapter 11, and they didn't notify us in advance on this. After that, we have reassessed our relationship with ATD, and we came to the conclusion that we could not continue with this type of wholesale channel to promote our Michelin brand. Yes, we have decided then, but it was really a decision that was made late in the first semester. We discussed it was made by our U.S. teams that they said we don't foresee how we could improve the situation with ATD. We said, "Okay, if you want to make the decision, we will follow you." They've made the decision. Of course, that business has to be re-channeled through two other wholesalers, mainly. It's NTW and US Venture.

Speaker #1: When they went chapter 11 and they did not notified us in advance on this . And after that we have reassessed our relationship with ATD , and we came to the conclusion that we could not continue with this type of wholesale channel for to promote our Michelin brand .

Speaker #1: So yes , we have decided then , but it was really a decision that was made late in the first semester . And then we we we discussed it was made by our US teams that they said we don't foresee how we could improve the situation with ATD .

Speaker #1: So we said , okay , if you if you want to make the decision , we will follow you . And they made the decision .

Speaker #1: Then, of course, that business has to be rechanneled through two other wholesalers, mainly its NCW and US venture with US Venture.

Speaker #1: It's going according to NCW. It's slower than what we were anticipating and expecting. But of course, it's a big flow to rechannel, so that's why.

Yves Chapot: With US Venture, it's going according. With NTW, it's slower than what we were anticipating and expecting. Of course, it's a big flow to re-channel. That's why. We think that movement will be over by the end of the year. Now, if I look at the M&A ambitions in this context, our strategy is clear. There is an M&A portion in our strategy. As I always say, to succeed in an M&A transaction, we have to have a buyer. We are clearly a buyer. We have to have a seller, and you have to agree on the price. So far, we have not been able to have the three according to what I just said. Number two, and then Yves will complement, we have been surprised by September. What we have seen happening in our September results, we had started to see the tariff effect.

Speaker #1: But we think that movement will be over by the end of the year . Now , if I look at the M&A ambitions in this context , our our strategy is clear .

Speaker #1: We there is an portion in our strategy . But as I always say , to succeed on an M&A , an M&A transaction is we have to have a buyer .

Speaker #1: We are clearly a buyer . We have to have a seller and and you have to agree on the price and so far , we have not been able to have the three .

Speaker #1: According to what I just said . Now . And the to number two . And then if we will complement , we have been surprised by September and what we have seen happening in our September results .

Speaker #1: We have started to see the tariff effect. We are seeing a lot of input costs increasing, plus the pricing environment where we know we cannot pass those input costs.

Yves Chapot: We started to see a lot of input cost happening, plus the pricing environment where we know we cannot pass the input cost. We said, "Okay, now." That was a surprise we had in the September results. That's why for the remainder of the year, we have said we just have to relook at what we should expect. Yeah. Maybe to give a little bit more color on that question, Michael, I refer to the slide number eight of the presentation. Don't forget that October and November are among the four best months in terms of operating margin for the group with March and September. We have this seasonality effect. You know that traditionally, we have a far better segment operating income in H2 than in H1 because we have September,

Speaker #1: So we said , okay , now that was the surprise we had in September . Results . That's why for the remainder of the year , we have said we we just have to re look at what we should expect .

Speaker #2: And maybe to give a little bit more color on that question, Mikhail. So, I refer to slide number eight of the presentation.

Speaker #2: Don't forget that October and November are among the four best months in terms of operating margin for the group, along with March and September.

Speaker #2: So we have this seasonality effect . You know , that traditionally we have a far better segment operating income in H2 than in H1 , because we have September , October , November that are very critical months .

Florent Menegaux: October, November, that are very critical months. The September sales in themselves were not too bad versus what we expected and versus last year, but it comes with a margin deterioration explained by mostly North America, only North America, with the consequence in terms of fixed cost absorptions and the mix that we have been describing.

Speaker #2: The September sales in themselves were not too bad versus what we expected and versus last year . But it comes with with a margin deterioration explained by mostly North America and only North America , with with the consequence in terms of fixed cost absorption and mix that we we have been describing .

Speaker #11: Thank you . Very helpful . Maybe just one last one I could sneak in on the share buy back program . Could you just clarify very precisely what is new from the , let's say , 750 million that you have done already and the 1 billion program that that you had , if I'm not wrong , could you clarify if there's something new on that ?

Yves Chapot: Thank you. Very helpful. Maybe just one last one I could sneak in on the share buyback program. Could you just clarify very precisely what is new from the, let's say, $750 million that you have done already and the $1 billion program that you had, if I'm not wrong? Could you clarify if there's something new on that?

Speaker #2: So we have announced in February 2020 a $4.1 billion program over three years. We completed $500 million last year. We completed $265 million by early October.

Florent Menegaux: We announced in February 2024 a $1 billion program over three years. We completed $500 million last year. We completed $265 million by early October. It's the one that we announced at the end of July, and we will complete it with an additional $400 million by the end of the year.

Speaker #2: It's a one that we announced in at the end of July . And we will complete it with an additional 400 million by the end of the of the year .

Speaker #11: So that's $150 million incremental versus the $1 billion. Or it's $250 million plus $400 million still remaining.

Yves Chapot: that $150 million incremental versus the $1 billion? Or it's $250 million plus $400 million still remaining?

Speaker #2: Incremental versus the $1 billion. And within two years, instead of three years.

Florent Menegaux: Incremental versus the $1 billion, within two years instead of three years.

Speaker #11: Okay . Thanks .

Yves Chapot: Okay. Thanks.

Speaker #3: The next question is from Christophe Laskawi of Deutsche Bank. Please go ahead.

Operator: The next question is from Christoph Laskawi of Deutsche Bank. Please go ahead.

Speaker #7: Good evening . Thank you for taking my questions . The first one , sorry to come back to that market shares . You commented that you are basically trying to get market shares back .

[Analyst 1]: Good evening. Thank you for taking my questions. The first one, sorry, to come back to that market shares, you commented that you are basically trying to get market shares back. Could you just remind us on the main levers for that? Is it just a normalization of distribution or are you planning to use the raw material tailwind next year to reposition brands versus competition? When could we expect that to materialize? The second one just on the winter tires, you commented relatively slow start to the winter tire season. Now, PSF commented that they actually saw quite a decent start. Is that basically due to brand-specific inventory levels at Siemens or any other points that you would highlight? Sorry for a clarification question also on the share buyback program because my line was bad.

Speaker #7: Could you just remind us on the main levels for that? Is it just the normalization of distribution, or are you planning to use the one material tailwind next year to reposition brands versus competition? And then when could we expect that to materialize?

Speaker #7: The second one, just on the winter tires, you commented on a relatively slow start to the winter season. Now we have commented that they actually saw quite a decent start.

Speaker #7: Is that basically due to brand-specific inventory levels at dealers, or are there any other points that you would highlight? And then, sorry for a clarification question.

Speaker #7: Also on the Cherbourg, because my line was bad when you just answered it, did you say $400 million incremental to the $1 billion or just $165 million incremental?

[Analyst 1]: When you just answered it, did you say $400 million incremental to the $1 billion or just $165 million incremental? Thank you.

Speaker #7: Thank you .

Speaker #1: We just said, okay, so I'll leave. I'll leave the math to we.

Florent Menegaux: We just said okay. I leave the mark to—we will do $400 million on top of what has been done, on top of what we have done already. We have done $500 million last year and $265 million this year.

Speaker #2: Yeah. So we will do $400 million.

Speaker #1: On top of what has been.

Speaker #2: Done on top of what we have done already . And we have done 500 next last year and 265 this year . This year .

Speaker #1: So you add 400 to that 500 plus two , 65 plus 100 . Now on the winter and continental . Continental has had smart hosts in the pre winter stocking season .

[Analyst 1]: You add 400 to that, 500 plus 265 plus 400.

Florent Menegaux: Now, on the winter and Continental. Continental has had smart cost in the pre-winter stocking season, and they've taken the remaining available space from the huge influx of cheap imports from Asia. The winter is not over, and we are very well positioned because we have very good product. The winter is not over yet, but they have been better than us in the pre-season of winter. Long-term regaining shares, we have launched really excellent products. Primacy 5 mentioned by Yves. CrossClimate 3 is excellent. CrossClimate Sport. CrossClimate 3 Sport is really defining a new category. All of that will contribute to regaining some position in terms of shares. Those launches have just happened, so we just have to wait. CrossClimate is already showing very good signs in terms of sales.

Speaker #1: And they took they've taken the remaining available space from the huge influx of cheap imports from Asia . So so we the winter is not over and we are very well positioned because we have very good product and so the winter , the winter is not over yet , but they have been better than us in the pre-season of winter .

Speaker #1: So now long term regaining shares , we have launched really excellent products . Primacy five mentioned by Yves Cross . Climate three is an excellent cross climate sport .

Speaker #1: Cross climate three sport is really defining a new category, so all of that will contribute to regaining some position in terms of shares, and those launches have just happened.

Speaker #1: So we just have to wait and cross. Climate is already showing very good signs in terms of sales. Now, of course, the pricing on replacement has been very clear, and we had to reposition our prices because we became less competitive in the market.

Florent Menegaux: Of course, the pricing on replacement has been very clear, and we had to reposition our prices because we became less competitive in the market. We have started to do it, and it will have the effect that our price premium really doesn't change in the market. We look at our competitiveness all the time, and I'm confident we will get back to normal levels. We have a very strong signal happening in China where we have done this, and it had paid a very strong dividend. We are back to growth in China.

Speaker #1: We have started to do it, and it will have the effect that our price premium really doesn't change in the market.

Speaker #1: So, we look at our competitiveness all the time, and I'm confident we will get back to normal levels. We have a very strong signal happening in China where we have done this.

Speaker #1: And it has paid a very strong dividend, and we are back to growth in China.

Speaker #7: Thank you. As a follow-up to that, maybe through your highlighted pricing, it will still be slightly positive in Q4, I think.

Yves Chapot: Thank you. As a follow-up to that, maybe you highlighted pricing to be still slightly positive in Q4, I think. Since you now started to implement those repositioning measures, that obviously would see a fading into 2026 then, right? Also, considering the comp base in 2025.

Speaker #7: But since you now started to implement those repositioning measures, that obviously would see a fading into Q2 2026, then, right? Also, considering the comp base in Q1 2025.

Speaker #1: The thing is moving so fast that you cannot say what will happen in 2026 at this stage. We'll see. And even in 2025, we'll.

Florent Menegaux: The thing is moving so fast that you cannot say what will happen in 2026 at this stage. We'll see. Even in 2025, we'll see.

Speaker #2: See. And we don't comment further. Future price decisions. Yeah.

Yves Chapot: We do not comment further for future price decisions.

Speaker #1: I think this was the last question. So, thank you very much for attending, and thank you for your commitment.

Florent Menegaux: I think this was the last question. Thank you very much for attending, and thank you for your commitment.

Yves Chapot: Thank you very much. Have a nice evening.