Hello, and welcome to the Solvay Half Year 2025 Results Conference. My name is George, I'll be coordinator for today's event. Please note, this conference is being recorded. [Operator Instructions] I would like to hand the call over to your host today, Mr. Geoffroy d'Oultremont, Head of Investor Relations, to begin today's conference. Please go ahead, sir.

Thank you, George. Good afternoon, everyone, and welcome to Solvay's Second Quarter and First Half 2025 Earnings Call. I'm Geoffroy d'Oultremont, Head of Investor Relations, and I'm joined here today on the call by our CEO, Philippe Kehren; and our CFO, Alexandre Blum. This call is being recorded and will be accessible for replay on the Investor Relations section of Solvay's website later today. I would like to remind you that the presentation includes forward-looking statements that are subject to risks and uncertainties. The slides presented in today's call are available on our website. We will first discuss the second quarter earnings and then the outlook for 2025, and then we will take your questions. Philippe, the floor is yours.

Thank you, Geoffroy, and hello, everyone. As usual, we will start with a word on safety. We continue to work hard on the transformation of the safety culture. The task force that we put in place last year, supported by external advisers is visiting our sites and taking actions to improve the safety of our people. The number of reportables is stable, but the number of high potential incidents is decreasing, and that's encouraging. So let's continue our efforts be disciplined and work on our mindsets and behaviors and it will pay off. Safety will always be our #1 priority. Slide 6, please. As usual, Alex will go through the earnings in detail, but I will first comment on the environment over the last few months. As indicated in our communication 2 weeks ago when we updated our 2025 guidance, we continued to see a soft market environment in the second quarter, impacted by the ongoing global tariff discussions, the foreign exchange movements and the heightened geopolitical tensions. All of this led to a progressive reduction of demand and a slowdown in order books. That's particularly visible in some soda ash end markets and in the Coatis business unit. In soda ash, more particularly, we continue to see different and volatile market conditions. In Europe and in the U.S., the market demand has been soft for the past 2 years already. In the seaborne market and more specifically in Southeast Asia, we have seen a decrease in demand in second half of last year. And as this continued in the first and second quarter of this year, the pricing pressure has naturally increased. Coatis, our Brazilian business unit active in phenol and solvent is producing and generating most of its sales in Latin America. The second quarter was difficult for Coatis, impacted by increased competition in the region, in particular, from Asia. And the renewed tensions around tariffs are adding pressure on the business and on our customers there. We are monitoring the situation closely and taking measures to improve the business. Aside from Coatis and soda ash, it's important to keep in mind that our other businesses are delivering in line with our expectations even if they feel some pressure from the current environment. One example is rare earth, where Chinese rare earth export control is putting pressure on the whole value chain. This situation reinforces the need for rare earth production capacity outside of China, and we can confirm that we have seen growing interest from customers in our newly opened La Rochelle production line dedicated to rare earth production for permanent magnets in France. The capacity we have now is very limited, but if we can embark all stakeholders in this project, we could grow our capacity further and quickly. Clearly, this is not what we expected at the beginning of the year. But we are taking all the necessary actions to navigate this environment and to make sure that we deliver on our commitments. I will come back to that when I will discuss the outlook. Now Alex, can you please walk us through the Q2 results?

Sure. Thank you, Philippe, and good morning, good afternoon, everyone. Moving to the financials. I'll remind you that my comments are based on organic evolution, meaning a constant scope and currency unless otherwise stated. Moving to Slide 8. Underlying net sales in Q2 2025 reached EUR 1.1 billion or minus 4% versus Q2 2024. On volumes, we benefited from a one- off revenue of around EUR 20 million related to the termination of a customer contract in special care. Excluding this impact, we observed a year-on-year decline of minus 4%, primarily driven by the weaker performance in the Coatis business and in the soda ash seaborne market. Volumes for bicarb and peroxide were steady and special care suffered from a strong comparison base in Q2 2024. Prices were overall resilient but we saw a decrease in the soda ash seaborne market, while the price remains stable in the other businesses. Moving to Slide 9. Underlying EBITDA amounted to EUR 230 million in Q2 2025, down minus 12% compared to Q2, which was the strongest quarter of last year. Overall, the EBITDA margin remains healthy, close to 21%. Volume and mix impact was slightly down when excluding the one-off, as already explained in the third bridge. Net pricing, which reflects the evolution of our unit margins decreased year-on-year, primarily driven by soda ash and Coatis. This decline was due to pricing pressure, but also to higher variable costs resulting from the inefficiencies of our low production rate. As far as fixed costs are concerned, selling programs continue to exceed inflation, but year-on-year variation this quarter was negatively impacted by 2 elements. First one, temporaries credit costs, which really started in Q2 of this year as Syensqo progressively exited most of the transition service agreement. And also higher fixed cost in our basic chemical plants from operational issues. Finally, the other bucket of the bridge reflects the non-repeat of the Q2 2024 accrual of minus EUR 18 million for the Dombasle Energie transition project. Moving to an update on our cost saving programs. Structural cost-saving initiatives delivered EUR 29 million in the second quarter, bringing the 2025 savings to EUR 55 million and EUR 165 million in total since the beginning of 2024. We continue to accelerate savings where we can and we expect to exceed our intermediary target of EUR 200 million by the end of 2025. One of the key drivers remain the digitalization of our plant. We are leveraging the use of devices such as IoT captures or drone in our site, supporting savings, both in variable and fixed costs. For example, by reducing the time for maintenance inspection by extending the life of equipment or by optimizing our energy concerns. Moving to the segment review and starting with Basic Chemicals. Let me start on with the peroxide business. With sales year-on-year down 2%, volumes remained resilient. Mining and water treatment end markets were more robust, which compensated for lower demand from the chemical applications. The electronic grade saw higher demand in semiconductors, which have offset lower volumes of the solar panel industry. Now let me elaborate on the soda ash and Derivatives business unit, where sales were down minus 4%. Bicarbonate demand continue to be robust, driven by food and feed and flu gas treatment. As a reminder, and based on 2024 figure, this business now represents more than 30% of the GDU sales and 12% of the sales at group level. Soda ash volumes were lower year-on-year due to the continued sluggish demand in our domestic market in Europe and North America as well as from an increasing pricing pressure on the seaborne market, especially in Southeast Asia. During the quarter, the business unit also had higher unit variable cost resulting from less efficient low production rate. The soda ash unit also faced some operational issues, which negatively impacted fixed cost this quarter and which we are currently addressing. Consequently, the segment EBITDA was minus 25% compared to Q2 2024. Overall, the EBITDA margin rate decreased to 21% this quarter. Moving to Performance Chemicals on Slide 12. Silica sales continue to be very resilient with volumes only slightly down compared to a rather strong Q2 2024. Coatis saw the largest decline with minus 19%. Volumes and pricing were negatively impacting by strong competition from Asian players on the whole value chain, while at the same time, high tension around tariffs are impacting demand. In Special Chem, sales were up plus 6%. This includes the positive one-off of circa EUR 20 million highlighted previously, and this is linked to the termination of a customer's contract. Volume in rare earths auto catalysis business were lower compared to the strong performance of Q2 2024 when we had opportunistic sales captured in Asia. Chinese rare earths control, export control implemented in April also explained to a lesser extent, the lower volume in auto cat. While there are alternative sources for the light rare earths, heavy rare earths oxide are still mainly sourced from China. So far, the impact on Solvay has been quite limited as we have been able to get licenses to export most of our products or as we have found other solutions for our customers, such as alternative supplies, reformulation or some inventories abroad. All in all, in Q2 2025, thanks to the one-off gain, the Performance Chemicals segment EBITDA was up 9% compared to an already strong Q2 2024, and the EBITDA margin increased year-on-year to 24%. Slide 13, corporate segment results. Solvay has been delivering support and function -- support function and IT services to Syensqo since the spin-off. A large majority of these services were terminated progressively during Q2 2025. We consequently started to adjust our cost base, but a full offset will take some time, and hence, we started to see temporary stranded costs this quarter. The corporate segment EBITDA for the quarter ended at minus EUR 15 million, sequentially lower than in Q1 due to these temporary stranded costs. Regarding the full year, we expect corporate costs to be between EUR 80 million and minus EUR 90 million with the peak of the stranded costs being obviously H2 2025. Regarding the upcoming years, our projection remains consistent with what we presented during last year Q3 earnings. In 2026, our corporate net costs are anticipated to temporarily increase from the loss of CSA revenue and from operational expenditure associated with our ERP implementation. Then we anticipate the full offset of the temporary stranded costs and the delivery of the structural savings from the targeting operating model in year 2027 and '25, along with the ERP rollout. Overall, this will bring the corporate segment to a normalized level around this year. This brings us to the free cash flow to shareholders from continuing operation, which amounted to EUR 54 million in Q2 2025, reaching EUR 97 million for H1 2025. This is in line with our previous indication to generate approximately 1/3 of the annual free cash flow in the first half of the year and 2/3 in the second half. You will note the working capital seasonal cash out for H1 of EUR 56 million. All of it can be attributable to the variable remuneration cash out we are doing in Q2. For the full year, we are committed to reach our free cash flow target of around EUR 300 million. We will come back to this in the outlook section. I will end this financial review with a word on net debt. As indicated during our previous earnings call, net debt increased in H1, primarily due to the dividend payment and to additional lease on our balance sheet in relation to the launch of the wastefed boiler in Rheinberg, Germany. We expect net debt to come back to a level of approximately EUR 1.7 billion by the end of the year. Our leverage ratio remained healthy at 1.9 at the end of this quarter. Philippe, back to you for the outlook.

Thank you, Alex. So moving to the outlook now. As you know, we revised our outlook for 2025 2 weeks ago to adapt it to the new reality of our markets. I will not repeat what I said at the beginning of this call, but we are currently facing very unique circumstances. There's limited visibility. But one element is clear, the second half of the year will continue to present significant challenges. While we recognize the current macroeconomic and geopolitical environment is not supportive, we are taking the necessary measures to deliver on our commitments, and we stay firm on our strategic priorities. More specifically, we continue and accelerate where and whenever possible, the transformation of Solvay to make it stronger for the future. Now let me repeat the guidance for 2025. We expect the underlying EBITDA to be between EUR 880 million and EUR 930 million, assuming current foreign exchange levels for the second half of the year. I can also confirm the third quarter is expected to be sequentially down versus the second quarter. Our underlying demand continues to be negatively impacted by the tariffs latest announcements, especially for our Coatis customers in Brazil. As said, our cost savings initiatives are well on track, and we now expect to exceed the indication of EUR 200 million cumulated savings by the end of 2025. Finally, on cash, we confirm that the free cash flow from continuing operations to Solvay shareholders will be around EUR 300 million. This is really the way we operate. And to anticipate some of your questions, Alex will now give you some additional elements on how we can reach EUR 300 million of free cash flow in this new context.

Sure. On Slide 18, we provide you with a schematic bridge for 2025 going from EBITDA to free cash flow. You know the EBITDA range already. Considering the evolution of the business context, we have decided to limit CapEx to a maximum of EUR 300 million in 2025. Cash out for provision is expected to be around EUR 250 million this year, and that includes approximately EUR 100 million for pension and environmental liabilities together as well as EUR 60 million related to the energy transition project in Dombasle. The rest is mostly for restructuring and some litigation. 2025 is exceptionally high on cash out for provision, and we see our baseline cash out to be around EUR 130 million per year, so about half of what we're going to see in 2025. Financing expenses should be around EUR 80 million and tax and other probably around the same amount. This leaves us with the working capital, which is where we expect a positive contribution in 2025. I will mention 3 elements. The first relate to the TSA exit we discussed before. All in all, we will have less working capital at the end of the year, which should contribute for a good EUR 25 million. Second element, in such a lower demand environment, we will see some natural improvement from our working capital. And thirdly, and more generally, we are looking at each component of the working capital, be it in inventory, receivable or payable, and we will look at what we can do in such a depressed environment.

Thank you, Alex. So now maybe let me conclude this first part. So we're navigating a period where our focus is very much on the short term. This is essential, particularly as we anticipate a lower EBITDA in 2025. However, we have the organization, the model and the flexibility to meet our cash commitment. Cash is the key enabler of our capital allocation and our dividend policy, and it will remain at the forefront of my attention. This short- term focus doesn't mean that we're losing sight of our long-term strategic priorities. We continue to engage closely with our customers and leverage our local footprint to support them in this challenging environment. We are actively involved in the transformation of our industry. For example, I'm personally engaging with many stakeholders on the EU chemicals industry action plan to sustain the competitiveness of the European industry for which decarbonization is an imperative. At our level, the energy transition continues to be well underway and will enable us to further reduce our greenhouse gas emissions by 10% in 2025 versus 2024. Finally, we accelerate the transformation of Solvay, and we will stay agile and disciplined in the future, ready to seize new opportunities or adapt our footprint depending on the evolutions of the market. Thank you. Back to you, Geoffroy.

Thank you, Philippe and Alex. This closes our prepared remarks, and we will now take your questions. George, now you may open the line.

[Operator Instructions] Our very first question is coming from Katie Richards of Barclays.

Two, please, one on soda ash and then one on Coatis. So on soda ash, can you give us some more color, please? In the pre-release, you mentioned a progressive reduction of demand in soda ash market. But in the release today, you said volumes have improved sequentially versus Q1. So it sounded like a little bit of a shift in tone. Can you help reconcile this? And in Coatis, sales were obviously down quite significantly this quarter. Can you elaborate on the factors behind this and specifically to what extent the competition from Asian producers intensified and which product chains are mostly affected by this and if you see potential for further deterioration?

Okay. Thank you. So maybe I will start with Coatis. I think the situation there is probably where -- I mean, the changes are the most important during Q2 for different reasons, and I think mainly two, and they are not completely unrelated. There is today a strong pressure coming from the potential future tariffs between Brazil and the U.S. We're talking about 50%. And this is supposed to be implemented as of 1st of August. And this changes completely the behavior and the strategy of the Brazilian -- our Brazilian customers that are exporting some of their products to the U.S. And so they clearly reduced their orders based on this uncertainty. The second element, which is an indirect effect of the tariffs between China and the U.S. is that there is a lot of very aggressive competition in Latin America coming from China on the products manufactured by Coatis. So the situation really changed very much between Q1 and Q2 for Coatis. So again, Coatis is not the biggest of our businesses, but the impact is quite significant. What will be the future of evolution? It's very difficult to say. We're getting organized to face any potential scenario, including adjusting the way we operate our assets and reduce our cost basis. But we will see. I mean it will also very much depend on what Brazil will do versus those new tariffs and so on. So it's very difficult to say at this point. Regarding soda ash, maybe Alex, you want to address the question?

Sure. I can give you an element and you feel free to complement. But I think you're -- what you were mentioning is that it's true the volumes in tons are slightly higher in Q2 versus Q1, but still below last year. I think fundamentally, nothing has changed between Q1 and Q2, even we could say the tariff are progressively increasing the pressure. But what happened in Q1 is that volumes were particularly low. As you may remember or maybe I don't know if you joined the call at the time, but in Q4 last year, we have seen quite strong volume as some people were probably anticipating some purchase and some production in Q4 before the tariff, before the churn, and that has impacted temporarily Q1. So I would say fundamental trend, if you look on the kind of rolling average, no change. And in Q2, we saw a little bit of catchup.

We'll now move to Thomas Wrigglesworth of Morgan Stanley.

Thomas P. Wrigglesworth: My question is just kind of a bit of a follow-on, on the soda ash because the margin is down 300 basis points quarter-on-quarter. Normally, I mean from my outside-in type of model, it looks like you've managed to lose price in base chemicals at the same time has experienced a cost increase which is normally quite unusual. So is it that you've lost really high-value tonnes in -- or there's something else or that there's -- you've got some high-cost inventory I didn't quite catch in your pre-prepared comments what you were saying around fixed cost absorption. And if it is fixed cost absorption, how temporary is that I mean, obviously, your guidance suggests it's going to -- it's not. So something seems to have more meaningfully changed in margins in base chemicals in 2Q? And I guess the question is, is that resetting the base for '26 now? Or is there a basis to think that, that might normalize back up. That's my first question. My second question is just as a follow-up on Coatis. I mean, obviously, you built this plant originally because Brazil is a net importer do you think that's now structurally changed? And or do you think that this is just because of those tariffs and once tariffs abate, we'll see that material redirect, i.e., is there a strong disincentive for the Chinese logistically to sell to Brazil versus ship to the U.S.

Okay. So first, on soda ash margins, you're right. I mean it's not -- I mean there is a decrease in price, not in Europe, not in North America, but in Southeast Asia because we've seen between Q1 and Q2 additional pressure in Southeast Asia, and we continue to see -- even though the volume exported from China are relatively stable and probably close to their maximum already. We see some players selling really at extremely low prices and most probably not even covering their variable costs. But the big impact comes from our costs and not from prices. And you are right, we had in Q2, several elements A lot of them are nonstructural. We had unplanned maintenance and also scheduled maintenance but that were phased in and that you don't see when you compare to Q2 last year or to the previous quarter, very clearly. So we have additional costs that will not repeat. And we also have additional costs that are a little bit more structural because we run at lower rates, right? So our plans are optimized to run let's say, at 80%, 85% utilization rate. Today, we are slightly below that. We've been running like that for a few quarters already. And so we see a little bit the effect of this lower rate on our specific consumptions and yields. So I would say this will reset somehow at some point. I'm not talking about the market at this point because we don't see any recovery in our order book visible at this point. But there are a certain number of elements in our costs that will not repeat. So this should not be completed the basis for '26 in terms of costs, at least. And so of course, in terms of impact on the margins. Regarding your question on Coatis, I mean this is intrinsically a good business. It's -- we have the only phenol production unit in Latin America. We have two value chains that are important on polyamide and on solvent. And I would even say on solvent, we are exporting from Brazil. So I think now we have a nonstructural pressure coming from a lot of uncertainties as long as there is no clear visibility on what will be the tariffs between Brazil and the U.S. And until we are in a more stable situation, I would say. As long as we will be in this uncertain environment, it will be very difficult for all the players in the value chain to get organized once this stabilizes, I'm pretty convinced that the business will find its balance and it's a way to upgrade because it's legitimate, it has competitiveness, and it has a market.

We will now move to Wim Hoste of KBCS.

I also have a couple of questions. The first one is on the tariff impact. I think you mentioned clearly the impact or the uncertainty around Brazil. But can you maybe elaborate on the other regions, the 15%, for example, that has been agreed recently between Europe and the U.S., what kind of impacts that might create for some of your businesses? . Second question is on the outlook for the peroxides business, and specifically, I'm interested in the semiconductors and solar panels market segments. Is there some restocking in semicon, for example, that has helped you is the solid panel weakness temporary? Or is it also tied to tariff impacts? If you can just elaborate a little bit on that, that would also be helpful. And then the third and last question would be on the rare earth business of Special Chem. Can you maybe elaborate on how close are you or what is the current thinking about potential timing of expansion projects in that business? You said you see some interest -- does that mean that, yes, expansion in Europe of that business might come rapidly a bit of clarification on that would also be helpful.

Thank you, Win, for your questions. So first, tariffs. So indeed, what we said is that we are not so much directly impacted by tariffs because we are -- we have a lot of close that are local to local, but we are always, of course, indirectly impacted because those tariffs had an impact on the inflation and so on demand. That's the same for the new tariffs announced between EU and the U.S. We don't have flows between EU and U.S., very limited flows on rare earth, for example, but that's really small and nonsubstitutable. So it's -- those taxes will have to pay anyway by the customers. So it can have an impact on demand, of course, but not on our margins. So we won't be impacted directly. But indirectly, today, it's very difficult. It's too probably too early to say what will be the impact of those new tariffs. A lot of people say it's good. Some people say it's not good. So I mean, who knows, right, how this will evolve, where we see the highest level of impact today is really in Brazil, to be clear, because of 2 elements. I mean there is a lot of business -- I mean, Brazil is selling a lot to the U.S. And so all our customers, all the Brazilian industry is currently potentially impacted if it's confirmed that the U.S. will put 50% of our tariff on these flows. And also because Asia is redirecting some of its flows from the U.S. to Latin America. So Brazil is very much potentially impacted I have absolutely no doubt that they will take measures. They will take measures to protect their markets. I'm pretty sure on that. This is what they did in the past. It was already in place and they can do it to a larger extent. Peroxide. Peroxide, so electronic grade electronic markets doing good. Of course, there's high level of volatility, I would say, in this market right now. But all in all, a good level of demand and good performance of the business. When we talk about the other grids that are for the solar panels here, the market is still down, I would say, but it will recover. I mean, we will need solar panels in the future to do the transition. But for the time being, we still see a level of demand that is set. I don't know if you wanted to complement Alex?

Sure, I think the a little bit an adjustment. I mean if you look again beyond 1 quarter and are conducting market are it shows the fundamental demand in electronic in the Electronics segment, especially sustained by artificial intelligence, where there is a need for a lot of chips where our productivity is largely outperforming the photovoltaic. So even if you ask you flattish for anti- the demand will be positive for our acuity grade.

Thank you, Alex. And then you had a question on rare earth. So clearly, there's an interest in this business that is bigger and bigger. We see our customers coming to us and asking for new options. In particular, with what's happening in terms of export control from China on some heavy rare earth materials. And so we started producing light rare earth oxides for carbon and magnets in arose earlier this year. For the time being, as we said, the volumes are relatively small. Today, we have not yet decided to go further and we're waiting for our customers and for the policymakers to give us the right level of comfort to invest again. As I said earlier, we are extremely strict on cash management in these circumstances, probably even more than we are normally and we are normally already very, very strict. So we will not invest if we are not secured on the revenues that we will get from this unit. We will wait to secure our sales before investing, and that's even more true in the current circumstance. Did I miss something?

Next question will be coming from Hannah Harms of BNP Paribas Exxane.

I just wanted to have a little bit of clarification on the corporate costs as possible. My understanding was effort it was suggested we'd have a range of EUR 70 million to EUR 90 million and now we're obviously at the upper end of that. I was just wondering what the reason for that was or whether it's a pull forward from next year? And secondly, just going back to soda ash, if I may. I know that Tata Chemicals mentioned that there's increased inventory levels in soda ash across the board at the moment, which kind of implies that you might see more pricing pressure -- is that something that you think you might see for the rest of this year and indeed into 2026.

Thank you very much, Hannah. And I will take your -- maybe your question on soda ash but first, I will give the floor to Alex on the corporate costs.

Sure. And yes, you pointed to the corporate cost. Indeed, we had about EUR 10 million more than what we indicated in Q3 last year. The main driver here is the fact that Syensqo exited the TSA very quickly, and that makes sense. At the end, that does not change fundamentally anything. I mean we can address the cost the cost earlier. But just to give you an order of magnitude, I mean, every day in the TSA, we were invoicing EUR 1 million. So just 1 or 2 weeks of TSA duration can create this difference. So no fundamental difference. It's just the difference between what we thought would be the average exit date and what was the actual exiting. But sure, we confirm. I mean nothing changed for 2027, '28 we will get back to a normalized -- to a normalized level.

Thank you, Alex. Regarding soda ash, what we see is a high level of inventory in China, not in the other regions, nothing unusual. But in China, we are at a high level. I think it's 1.5 million tonnes of soda ash currently. This has been seen in the past, but probably not for such a long period of time. So this is obviously creating some pressure at least in the Southeast Asian region and might have a little bit of ripple effect on some of other seaborne markets. So this is something that, obviously, we're monitoring. The level of export is at a run rate of around, I think, 2 million tonnes per year. So again, high points, not unheard of. We've seen that in the past as well. But the combination of this export and inventory for a longer period of time, usually is a little bit unusual. So we still think that the Chinese soda ash industry will restructure and I think we're comforted by also the latest announcements made by the Chinese government in what they call the anti-involution low where they're looking at assets that are more than 20 year old. And if they are more than 20 years old, they need to check if it can be -- they can be upgraded or otherwise, they will be shut down. And I think there's also a reference to more than 30-year-old assets that would most probably be shut down. So that represents a significant portion of the soda ash assets in China. So this could be the start of the process that we expected. But let's see. I mean this is obviously something that will not happen overnight either.

We'll now move to Sebastian Bray of Berenberg.

I have 2, please. The first is on environmental adjustments and provisions. I think that Solvay previously has indicated that annual cash out should be around EUR 60 million or so to service environmental provisions. If I add up what has been booked in adjustments under the litigation stroke remediation line over the last 3 quarters, it's pretty close to EUR 100 million already. And the current adjustment in Q2 of about EUR 60 million seems to refer to a single project -- what is going on with the adjustments? Because at some stage, one would assume that the provisions and the cash effective amounts normalized to the level of each have they should equal over but it seems what's running through the P&L at the moment is higher than cash. Is there one project that is particularly occupying your thoughts? My second question is on Performance Chemicals even allowing for the one-off tailwind of EUR 20 million EBITDA in Special Chem. Actually, the underlying margins in this business ex Coatis seem to have held up quite well. what is going right there? Is it something elsewhere in special chem, hybrid vehicles, something happening in silica? Any color is welcome.

Thank you very much. So I will give the floor to Alex for the question on the cash out from provisions.

Yes. Thank you for the question, Sebastian. Indeed, we would some additional provision -- environmental provision in Q2, and we indicated in our financial report that this was mostly linked to 1 remediation activity. Overall, as you know, this kind of provision are based on the cash flow estimated for at least 2 decades. So the cash impact of this specific provision we had to book is quite back-ended. So it doesn't change our estimate for the normalized cash out from provision. And as I was explaining to give you the vision for 2025. We estimate about EUR 100 million for pension and environment, that number is still the same we've been giving for 1 year and even changed by these recent positions. Performance Chemical you want me to comment?

Yes, sure. Go ahead. Sorry.

Okay. Yes, Performance Chemical indeed, there are very different dynamics between the business. Definitely, Coatis, it's not a large business, which have seen a complete change in the dynamic. The rest of the business are quite resilient and silica in particular, and you probably saw the announcement of the big tire manufacturer, which have been quite resilient. So we are seeing that, and it's one -- it's the largest business between -- within Performance Chemicals. And even if last year was quite good. We saw last year some destocking in the good start of the year. This year is still quite good. And in Performance Chemicals, I mean, there is electronic activities there, both in rare earths and in fluorine. And this type of business has also been quite resilient. Generally, the electronic application continue to see a sustained sustainment. So that explains -- you're right, beyond the one time we wanted to make a clarity on quite a resilient -- the beauty of the [indiscernible]

Next question will be coming from James Hooper of Bernstein.

The first question is about working capital in the bridge as you're trying to manage that down. What do you think the sustainable level of working capital is without affecting service levels for the business in either percentage of sales or DIOs how big is the opportunity here? Because will this be management in 2025? And then what will change in 2026. And then my second question is about Green River. Has the plans to ramp this up for later in the year or early 2026 change given the demand environment in soda ash.

James. So I will give the first question to Alex and I will probably take the second one on soda ash.

Sure. As we indicated, clearly, the part which is linked to the TSA, it's here to say it's represented EUR 25 million. Generally, I don't have the exact number in mind, but I think our working capital sale, if you look on the moving average is around 13%, which is quite good in the industry. But again, as the sales have been going down, there will be a mechanical effect. And we think within the EUR 100 million that they are probably few tens of million euros, we can structurally gain in our working capital? So that's Again, that's what makes us confident in our ability to reach the EUR 300 million of free cash flow this year despite the lower [indiscernible].

And for '26.

Yes, '26. Yes, we are 12% today, 12%, 13% at the total working capital on sales is the right order of magnitude, and that puts us again in the probably first quartile of the chemical industry.

But we will continue to work on. We will continue to work reducing cost again, the overdues, the terms, this is really...

Yes, typically inventories, okay, in a context like it is now, you can probably be a little bit more aggressive on inventories, then you could be more tight in a more price environment.

Thank you. Second question. So on soda ash expansion in Green River, 2 elements. And the first one is we will complete the project -- so as we said earlier on that we are going to strictly monitor our CapEx and be extremely mindful about launching new discretionary CapEx. This one is almost complete, right? So we will complete it. It's almost done. We will start up in the second part of this year and ramp up this new capacity until the end of the year. Number two, if those tons are not needed by the market, we will use this capacity because it's the most competitive, and we will reduce the production in another asset. That's what we will do. And just by doing this, we will generate better margins, right? But as long as the capacity is not needed, we will not increase the global level of production of our industrial footprint very.

We'll now move to Chetan Udeshi of JPMorgan.

I just wanted to clarify your third quarter comment. When you said Philippe, that Q3 will be below Q2, is that including the one-off in Q2 or even without the one-off you expect Q2 -- sorry, Q3 to be below Q2?

Well, that -- Frankly speaking, we don't see today any improvement in terms of market. So it's clear that we have the one-off in Q2 that will not repeat in Q3. I would say both the positives and negatives. Now we said also that we had a little bit of negative one-off coming from soda ash in terms of cost. But all in all, I think it's -- you need to neutralize the positive one-offs that we had in to take your new reference. We also have a little bit of higher stranded costs in Q3 versus Q2. I would say why Q3 will probably be a soft, a low point.

So below EUR 200 million, basically slightly perhaps?

That's not what we're saying. We don't give numbers. I mean, I thought No, we don't give numbers. Just take the reference, taking out the one-offs, and this is basically where you are.

Okay, fine. Okay. The second question was, I saw MP Materials, which is in the rare earth value chain. They've got a huge sort of check from the U.S. government. I'm just curious, is MP Materials a competitor to Solvay? Is that a partner because I think at some point, you were the only ones or Solvay was the only one who had the capability to separate out the rare earths from the concentrates. So how is the dynamics? Where are you now in that value chain on the rare earths outside China? I know you talked about the magnet, but -- to get to the magnet, you perhaps first need to do the separation of the rare earth concentrates. And I'm just curious how does that MP Materials deal, which was quite big -- does that have any implications on Solvay?

Yes. Thanks, Chetan. The -- we're still the only one to have at this point to have one plant that is able indeed to take any source of material and produce any type of rare earth elements. MP Materials has a project at this point, and which is linked to a mine. So it's a little bit different I mean, our assets in La Rochelle can take any product from any type of mine or even recycled material and so on and adjust its process to produce all sorts of rare earth elements. What I understand, again, but of course, you will have to ask to -- directly to MP Material is that their project is really linked to a mine. And at this point, it's a project. However, what I've seen -- so it doesn't change really the landscape and the value chain. But what I saw that is very interesting is a mechanism in which, in fact, they would have a sort of guaranteed price because you know that today, in the rare earth segment, there are a lot of different projects. but none of them is profitable because the rare earth that are set by China are too low, right? And so I think the Department of Defense or the U.S. administration is proposing to set a floor price and to compensate the operator, if the market price is below the floor price. I think this is probably something that we should look at as well in other regions, and in particular, in Europe, if we want to develop new projects in La Rochelle. This is what is missing...

Will you be adopting the same strategy that you would require an upfront deposit from your customers and these guaranteed minimum prices for you to invest if you have to invest a lot of money in setting up this capacity?

Yes. We need to have a sort of security if we want to invest, absolutely. So I don't know if it's upfront payment in detail, it's possible to adjust. But yes, I think we need to have a certain level of commitment, both in terms of volume and prices. Absolutely. So either directly from the customers. or like in the U.S., but again, let's see, I would work just for the time being, I think, an indication, but sort of mechanism that will compensate if the market price is too low. It's a little bit like the development of renewable energies when it was -- when the electricity price was too low, people that developed solar panels or wind mills, they were compensated in order to have a decent return.

Next question will be coming from Tristan Lamotte of Deutsche Bank.

I've got three questions, please. The first is I was wondering if you could comment on roughly what proportion of your soda ash prices you currently sell at are above the spot price in the relevant region due to lags in your contracts? The second one is there are some capacities that I think are expected to come back online in China in soda ash in H2. . To what extent do you see impact from that? And also to what extent is Baron's production getting out to the market now? And then the third one, I'm just interested in the kind of monthly sequential trends that you saw through the quarter and the visibility you have now in August and September.

Sorry, your first question, can Tristan...

The share of spot price.

The share of spot price. Good question. I think do we have this information? 20% more.

Mostly seaborne.

So yes I mean the -- it's not really spot price, it's more quarterly prices and quarterly prices, let's say, short-term prices are mostly in seaborne, mostly in Southeast Asia, and it's around 20%. Is that correct, 20%? 20%, Tristan. For the capacity in China, I think Baron is in the market already. I don't know if they have an additional -- I mean, there are new capacities coming online in the future, but I think the capacity of the one is more or less in the market today. And again, as I said, we are in a situation where I think inventories are up 1.7 million tonnes and the export at 2 million tonnes, so high levels, but nothing beyond the historical records.

And I would say one of the reasons we provided the updated outlook on EBITDA is because we think that we don't see find that it could recover in H2. And so we think that they're only there. They are high inventories, the fundamental, and I think the new law we saw in China is going in the right direction. But for the moment, we need to we need to take. We consider that the environment will not improve. And we need to work on our site, on our cost,to make sure we adjust to this reality.

Ladies and gentlemen, due to time constraints, we have time for only one more question, and this question will be coming from Mr. Martin Roediger of Kepler Cheuvreux.

Okay. First is on Special Chem. I understood that one customer has dissolved the contract. So you were compensated by gaining EUR 20 million EBITDA. This means this customer will be missing as of Q3 and beyond, which means sequentially lower demand, is the effect for upcoming absence in sales and earnings in Special Chem meaningful? And the second one is on -- in the context of Coatis, you talked about the redirection of Chinese products to Brazil instead of the U.S. on the back of the upcoming tariffs. Is there any risk that the problems you have in Coatis in Brazil i.e., this massive increase by Chinese competition, that this could happen in Europe as well, i.e., in other activities such as for some silica or in the fluorine business in Special Chem.

To your first question, indeed, we had a customer that terminated in a contract, and this is the reason why we have this one-off element, Obviously, this means that we will have lower revenues in the future. And this has been clearly taken into account into the guidance and outlook that we've given for the '25 very clearly.

And it shows also that we try when we have a significant customer to have good contracts. So that -- I mean, when market dynamics are changing, we can get a compensation. So no sizable impact in 2025, and we are looking at what is necessary for the future.

Then your question on what we see in Brazil, can it happen in other places? In theory, yes, of course. But if you take soda ash or even silica, those are bulky products that cost much less to produce than what Coatis is producing -- and so we don't see today and we don't expect to see in the future Chinese soda ash lending in Europe, obviously, this would not be competitive. Now that being said, we've discussed extensively about the situation in China where the inventory level is high and they are exporting to Southeast Asia. This has not a direct impact on Europe, but it has a global effect that is creating this sort of trough today in the soda ash market.

But I think on Coatis, it was -- the situation is particular -- it's quite particular where you have this supply 50% tariff, nobody was expecting. Brazil is a net importer from U.S. So suddenly, the activity in Brazil is reduced. You have very low transport cost, freight cost from Asia to Latin America and suddenly some Chinese product, which had to find a place to be sourced. So somehow, I don't say it's the perfect storm, but almost -- so what is happening in Latin America. And as Philippe said, I mean, we know we are quite a large player there. We know the authorities are working on putting some limitation to avoid product dumping. The transport costs are increasing. So okay, we are analyzing, we are adjusting, we are taking measures, but it was and it will be at least for the coming few weeks and months, quite a complex situation to be very specific, I would say... .

Thank you very much for your participation today. If you have any questions, please feel free to reach out to the theme preferably by using the investor.relations@solvay.com email address, given the summer break in the coming weeks. In September, we'll be present in a few events and cities, and the calendar is available on our financial calendar page on our website. Q3 will be published on November 6. Thank you very much.

Thank you.

Thank you.

Thank you very much, sir. Ladies and gentlemen, that will conclude today's conference. Thank you for your attendance. You may now disconnect. Have a good day, and goodbye.