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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Thank you. Good morning, everybody. Welcome to Arkema's Q2 2023 results conference call. Joining me today are Marie-José Donsion, our CFO; and the Investor Relations team. As always, supporting this conference call, we have posted a set of slides on our website.
I will now comment the quarter highlights before letting Marie-Jose go through the financials in more detail. And at the end of the presentation, as usual, we'll be available to answer your questions. So in the context of numerals, profit earning in the chemical sector over the past couple of months amidst the very challenging economic environment. Our Q2 2023 financial performance did not show any particular surprise and was relatively robust. Well, our EBITDA was, of course, lower year-on-year given the well flagged exceptional profits in upstream acrylics and PVDF. It was comparable in fact to pre-COVID levels in a significantly lower volume environment, which, if needed, is a good indicator of the increased resilience of the group over time.
Here are some key points of the quarter I'd like to highlight.
We delivered an EBITDA of €417 million, a little bit better than our expectations and consistent with our full year EBITDA guidance. This performance was achieved in difficult macroeconomic conditions marked by low visibility and weak demand, including continued destocking. This goodness was nearly all over the place with nevertheless a few exceptions like automotive, energy and batteries. In particular, destocking of the battery in China continued in the early part of the quarter, but seems to have come to an end and volumes finally turn positive on the quarter. All in all, while group volumes were lower year-on-year, our pricing remains firm for the most part in the context of general inflation, even if raw material declined. Excluding the expected normalization of PVDF and upstream acrylics I've mentioned before, we already had the opportunity to comment in the past quarters. The price effect was positive at group level, reflecting the execution of our dynamic pricing policy and also the positive impact of innovation and new business development on the product mix. A highlight of the quarter from our point of view was our EBITDA margin which stood at 17.1%, testament to the quality of our business portfolio and again supported by positive mix and pricing discipline.
Looking briefly at the performance of our Specialty Materials segments. Adhesives had a decent quarter with a stable EBITDA margin compared to last year, which was appreciated given the continued pressure on volumes. This performance of Bostik was supported by our mix to add more value-added solutions and benefits from lower raw material prices. In Advanced Materials, we had the reversal of the PVDF overrunning, but we benefited from high value-added new business developments as well as resilience in high performance polymers in the U.S. and to a certain extent also in Europe. Performance Additives again delivered a solid performance despite lower volumes with EBITDA virtually flat year-on-year and high margins. Our EBITDA margin was above 20% for the segment, which was a satisfactory performance in this context.
In Coatings, we were impacted by broad destocking and yet challenging conditions in upstream acrylics, following last year's very high comparison base. Our downstream business despite again lower volumes, was clearly more resilient with a rising share of low eco-friendly solutions and some benefits of lower input costs. Beyond the financials, we had, as you know, some exciting M&A news in the quarter which will increase our exposure to high growth markets, like electronics and electric vehicles, finalizing Polytec in high-end engineering adhesives and of course, announcing the acquisition of a majority stake in PI Advanced Materials, which is really a unique opportunity to broaden and strengthen a high performance polymer range with an amazing technology. Regarding our major CapEx, we were delayed by a couple of months [production of the plant] at Nutrien facility in the U.S. and on the bio-based polyamide 11 plant in Singapore. No important issues at all, but as you know, they are both proprietary and cutting-edge processes, many equipment. So we have to experience more minor corrections than expected.
For this reason, we now estimate EBITDA contribution from new project to be closer to €30 million than the initial forecast of above €50 million. But you will see that in our conclusion, this delay will not impact our full year guidance for the group since our first half performance was ahead of our forecast. We expected more benefit from lower raw materials as we anticipated a couple of months ago. And recently we launched a company-wide initiative which should bring on the fixed cost around €30 million benefits.
So we are quite comfortable on our guidance and we'll come back to that after handing it over to Marie-Jose for a more detailed look at the financials.
Thank you, Thierry. To start with, quarterly sales were down 23% year-on-year at €2.4 billion. So this is mostly organic since the scope and currency effects were rather limited. On the one hand, volumes were down 15% in the face of the continued destocking and low demand across a number of important markets, notably construction, coating applications and packaging. On the other hand, the global price effect came in at a negative 6.6%, impacted mainly by the expected normalization of PVDF and upstream acrylics, while most of our other businesses were in positive territory. Quarter two EBITDA came in at €417 million. Thierry already commented the details by segment.
But on a half year basis, EBITDA came to €784 million, with the 40% year-on-year decline linked mainly to the reversal of the windfall profits generated last year in PVDF and upstream acrylics. Depreciation and amortization stood at €132 million. This is stable versus last year as the polyamide 11 Singapore plant and Nutrien project have not yet started being amortized, leading to a recurring EBIT of €285 million and a REBIT margin of 11.7%.Nonrecurring items amounted to €64 million. Around half is attributable to the PPA depreciation and the other half to one-off charges, restructuring and legal expenses as well as start-up costs for our polyamide 11 plant in Singapore. Financial expenses stand at €16 million and tax charges come to €51 million. Consequently, the quarter two adjusted net income stands at €207 million, which corresponds to a €2.77 per share.
Moving on to cash flow and net debt. Quarter two free cash flow amounts to €115 million, which reflects our solid operating performance and includes a €42 million increase in working capital.
So our working capital ratio on annualized sales stands at close to 17% versus nearly 15% last year, the higher level being limited -- sorry, being linked to some restocking following the low point of year-end '22 as well as the weaker sales environment. Total capital expenditure amounted to €135 million in the quarter, which is quite comparable to last year's level. In quarter two, we had €69 million M&A outflow linked to the acquisition of Polytec in Germany. Net debt at the end of June 23, therefore, amounts to €2.6 billion, including €700 million of hybrid bonds, a little higher versus end of Q1 level given the dividend payments. Our balance sheet remains solid with the net debt to last 12-month EBITDA ratio standing at 1.7x. I thank you for your attention, and will now hand it over to Thierry for the outlook.
Thank you, Marie-Jose, for this highlighting of the financial details. So it's no surprise to you. You had the opportunity to hear it from other players in various industries. The overall macroeconomic environment remains marked by low volumes and limited visibility. Nothing new there.
This is the case both in Europe and in the U.S., while Asia is the most resilient region currently, even though they yet have to show signs of a tangible rebound. In this context, you know us, we are maintaining a strict operational discipline. Marie-Jose had the opportunity to mention our efforts still on working capital to make sure we generate significant cash flow. We are focused really on managing fixed costs, particularly as a result of this weaker-than-expected macro since the start of the year. We have recently implemented a new €30 million saving plan in fixed cost versus what we had in the first half and we initially budgeted. So we'll continue to remain attentive to the macro. We think we are now at a low point.
We don't see it when the pickup will come. But as we said earlier, we expect the benefit of the saving plan. We expect benefits also from a stronger [indiscernible] in raw materials and energy costs. We'll be a bit below, as I mentioned, on the contribution of new projects. But on the other side, we have the benefit from the saving plan. Certainly, destocking, which has come to the high point still in Q2 is getting a bit weaker on the construction part, a bit higher on the industrial market.
But all in all, we believe that it will get a little bit lower in the second part of the year. So this means that all in all we are confident to confirm our annual guidance aim to achieve in 2023 with EBITDA of around €1.5 billion to €1.6 billion. Beyond the current financial year, we continue to work on two time horizons, and we remain much focused on the longer term with our portfolio of cutting-edge technologies across three segments: sustainability-driven innovation. We believe we are really ideally positioned to capture the numerous growth opportunities in areas like batteries, electronics, 3D printing, home efficiency or the circular economy. We still strongly believe that this strategy towards specialty material is really the right one. It was really for us quite satisfactory to have a 17% EBITDA margin in the second quarter despite lower volumes. So really, the strategy is really reinforcing the profile of the company. So we'll be discussing some of those areas in greater detail at our upcoming Capital Markets Day on September 27 in Paris, where you'll also be able to meet and talk to various members of our senior management team, and really so look forward to seeing you all there. So thank you very much for your attention.
And together with Marie-José, we are now ready to answer the questions you may have.
[Operator Instructions]. Our first question comes from the line of Martin Roediger of Kepler Cheuvreux.
Two questions. The first question is on the guidance. In the past, Thierry, you specified your full year guidance at Q2 reporting. But today, you did not narrow the guidance range, although H1 is already in progress and just 6 months are left. The high end of your guidance implies a 4% EBITDA growth, while the low end implies a 9% EBITDA growth for the second half year-over-year.
What are the parameters for the high end as well as for the low end of your guidance? And in that connection, are you happy with the write-down of the consensus? That is my first question. The second question is on PFAS. In the last couple of days and weeks, we hear quite some noise about fluoride pollution to the environment at your Pierre-Benite plant in France. What is your view about the risks on this?
With regard to the first question, I'm a bit surprised by your question because really we are talking about €100 million on €1.5 billion, which is really quite narrow and as narrow as we do every year. So maybe a comment could be that our guidance at the beginning of the year was not large enough. But with regard to the semester, I think it's typical of what we do. And looking at some deviation from our peers in the second quarter. I think the deviation has been far, far beyond this kind of range.
So I think we are comfortable about this range. I think it's -- from our side, it shows a good level of confidence, but I will not qualify that the guidance is not narrow enough, Frankly speaking, it's not my feeling. So -- but as I mentioned, maybe we could have started with a larger guidance at the beginning of the year, but we try to be as precise as we can. So this is our [culture], as you know. With regard to Pierre-Benite, there are some local noise on this point. There are questions from authorities with regards on pollution which some concern past products, some concern product which has nothing to see with the site of Pierre-Benite.
So we are working, as you know, in full transparency with the administration. We have always respected on the site of Pierre-Benite all regulations, and we have the answer that we share with the authorities. After that, as any topic, you have some press coverage and some of the elements which are said in the press are right, some are wrong as often. But we don't see -- I mean, we continue to monitor this topic, but we don't see a risk, which [wouldn't] be disclosed today in our communication, including the reference document.
The next question is from Aron Ceccarelli of Berenberg.
I have three. So the first one is on Advanced Materials. It's nice to see volumes down 8% after being down 20% in Q1 despite it's fair to say slightly easier comps. So maybe can you comment a little bit on what are the moving parts here? And what should we expect going into the second half of the year?
And the other one is again on Advanced Materials. It's nice to see margins holding up well. Maybe it would be good to understand how much you should progress going forward here, especially considering that you are now talking about higher raw materials decline compared to the original expectations? The second one is on working capital. I still see that actually inventory is still quite high and receivable higher year-over-year. Should we expect working capital to remain at a similar level into H2? And the final one is on your cost, excluding raw mats.
SG&A as a percentage of sales was 9.1%. You're talking now about further cost initiatives. I would be interested to understand really what are the levers you have here for further cost cutting?
So maybe, Marie-Jose, you can start with working capital, and I will…
Okay. So as I mentioned, in fact, we clearly are at a kind of a higher point than, let's say, usual in working capital ratio on sales. We were clearly counting on the better volumes market starting the year coming out of a low point volume situation at end of '22. So there has been some restocking happening inside the organization across various businesses. So this is a point of attention that we are paying attention to.
I would not agree with you that the receivables are at a high point. We are actually pretty good at collections and the number of days of receivables in sales compared to my last 2 months turnover is actually at a low point compared to my historical trends. So I would say the main point of focus for us is the quantities in stock. We continue to enjoy some price decrease in the valuation. But definitely, quantities would be something we would expect to come back down a bit in the second half of the year.
So now on the Advanced Materials. Thank you for mentioning that the margin is quite good, and given the context and 20% on the Q2. You're right also to say that if you compare to the average of the H1, we are 1.5 points above, which means 3 points more [two quarter]. Now it's already difficult to extrapolate 1 quarter. What is clear that in terms of seasonality, the second quarter is always better than the first one.
It's one element. The second element is that we got a little bit of risk on the raw material with, I would say, a good pricing policy. I would mention -- I think we did it that the battery segment was really destocking in the first quarter. And now the demand is better, even if the pricing continue to decrease a little bit, I would say. In terms of volume, it was far better in the second quarter, especially the end of the second quarter than the first one. So for -- and overall, the Performance Additives, that may be a little bit less than the HPP, has been quite stable.
This is important. So I would like to raise again, it's important to have still a certain level. Even while being focused on Specialty Material, it's important to have some diversification because it brings more stability and the Performance Additive has been quite impressive in this stability year-on-year. So these are the -- I would say, the moving part to answer your question. I will not comment -- we gave you a guidance which is rather precise for the whole group, as we do every year. Not commenting again on the question of -- Martin. I will not guide for every segment for the second part of the year.
Clearly, if you look at the whole group, you have a certain stability between the two semesters. I could apply the -- more or less to Advanced Material with some plus and you mentioned one with a lower raw material, some minus with lower seasonality and already in H2 compared to H1. So you have a combination. But nothing significant, I would say, between the two semesters.
Now with regard to the cost initiative, I imagine you mentioned the fixed cost initiatives. I think we are -- and we are quite agile on that, as you know.
We've never launched really as some companies do big major plants suddenly. We are more ongoingly working on our costs, both variable costs and fixed costs. And with regard to fixed cost, the levers are normally quite traditional. Strict management of replacement when people take retirement and when you have some people living. We hire every year, 2,500 employees, which is more than 10% of the employees, just with a natural turnover retirement in the company.
So because of that, it gives some opportunity to streamline, so we do that. Also, there are some discretionary expenses, as you know, including travel, to give you something that everybody will understand, but it's far beyond that, where we would be rather aggressive on the second part of the year. And now when you have lower volume, especially for the -- not the continuous process, but the process in batches, for example, adhesives, even if we don't communicate externally more in a way on that. Clearly, we adjust our footprint in order to cope with the lower volumes. So these are some examples of initiatives we are taking and will take on the -- accelerate on the second semester to deliver this semester-on-semester €30 million savings on fixed cost.
The next question is from Chetan Udeshi of JPMorgan.
The first question I just wanted to follow up was on the -- maybe not follow up, but just first question on the topic on fluorogases. I know we've not talked about it for a while, but just looking at some of the anecdotal data, et cetera, it seems that prices are very high this year or going up strongly this year on the back of the planned reduction in quotas both in the U.S. and Europe, I think it's in 2024. I mean in the past, we've seen this dynamic where the prices go up into the cuts -- into quotas and then they fall post the initial buying wave. Is this something similar we should be expecting this cycle? Or is there a different pattern you think, because of maybe changes in the market structure, et cetera? And is this something a material driver to Arkema's earnings in intermediates this year? That would be the first question.
And the second question was just around -- you mentioned certain seasonality, and that seasonality -- typically, even for second quarter, you tend to see a softer -- sorry, third quarter -- softer third quarter versus Q2 just because of seasonality. Is that something you expect? Or because of the project contribution and fixed cost savings we should be not expecting that seasonal decline in Q3 versus Q2?
So on the first one, the answer is rather easy. In the old time, our profitability was really shared between Asia, Europe and the U.S. U.S. has already been very stable. Europe was, I would say, rather stable with a low performance, but with no quota implemented, except with 1 year where we have disturbance because the regulation was not applied, but it's not the case anymore because it took some time for the European Commission really to make sure that this regulation was implemented, but now it's done.
And Asia was a big contributor. Today, different. So I would say the -- most of the large -- very large majority of the contribution is between U.S. first, then Europe. In Europe now, the quota scheme is respected. And we don't have the disturbance we had in the past, and in the U.S., it's stable like it was. Now when you say that we seem to have a sort of elevation of prices and profitability for [all] this year versus last year, it's not the case now.
So we have a rather stability in fluorogas, while -- maybe a little bit better than the last year, while we decrease in intermediates on the Chinese [creators], as we mentioned. So our feeling, and it's a strong feeling, we believe that fluorogas in the coming years will be rather stable. And the mechanisms are different now than they were in the past. And the Asian part, which was really a relative one is quite small now. So we have a far more stable positioning.
With regard to seasonality, I will not comment really quarter-by-quarter. But what I say on the semester, and I say -- I think I said that last time, is that the second semester normally is a little bit softer in seasonality than the first one.
If you make the math and if you look at -- several years have passed for Arkema. This year, it's a bit different because we have still momentum -- Even if it's already a little bit below in new project contribution. This contribution will be there. Secondly, as I mentioned, we have these fixed cost savings. So it makes a difference of about €30 million. And -- because between the two quarters it's not insignificant.
Then you have the raw material dynamics. Don't forget also in raw materials that we have about six months delay between the impact of raw material decrease. So this means that a big part of the decrease of the raw material index of the first semester will be seen as the second semester. These are good elements. And I would say even if today we have no visibility, even if we have not -- if we remain quite cautious, maybe end of the year a little bit incremental, less of destocking, it can make a difference also. So if you take these four elements, it's not a pure rationale.
There are still uncertainties. But all in all, it makes, I would say, a seasonality not exactly the one we had in the past. Okay?
The next question is from Matthew Yates of Bank of America.
I wanted to take the opportunity to come back and ask a little bit more about the PIAM deal from a couple of weeks ago. And really just to understand the longer-term potential here and therefore, why you are so excited about this business? It looks very dependent on smartphones today, but perhaps that changes in time. I see they make reference to Line [nine] expansion possibly being dedicated to electric vehicles. When you did your due diligence on this deal, were you able to understand how much visibility they have on orders or design wins into that market? And then secondly, they seem to have quite a new strategy around varnish where capacity today is de minimis, but they're talking about huge numbers potentially in 5 years' time.
Can you help me better understand what the sort of applications are for [varnish] and what's changed as to why they're entering that business now that they haven't been in historically?
It's your only question, or you have another one, Matthew?
I can ask another one. On the material basket [indiscernible] sorry.
On PIAM I will give you the general answer. I think we have organized specifically for you because it would -- we thought it would take too much time in this call a specific answer to some specific questions. So you will get the answer you want on the varnishes and the smartphone, et cetera. Overall, we are very confident on this technology because it really fits two of the major areas of growth for Arkema on the long run. One is electronics, and electrical vehicle is also influencing a lot of electronic, as you know.
And also the second one is battery, which is really emerging very strongly. The technology of polyamide is absolutely important for this two business. And what we have seen even in this year, which -- this is why we wanted to value this year because it was a lower point. We see a good momentum month after month of this new business which is coming in battery and in advanced electronics. So on this, the rationale, which I explained last time, it's very clear from the standard point. We give you -- we'll take advantage of the Capital Markets Day to come back on this acquisition.
And even if we have not closed, so we are limited in what we can show you by definition because the company is not with us yet. We try to continue to explain what is behind and then all this application and they will be done by our expert. And as I mentioned, since you had a few specific questions, we have organized for you a little bit of answer with our experts. So you will get all these answers.
I appreciate the help. Just maybe a question on the adhesives business in terms of the raw material basket, which I would imagine has a lot of moving parts. We're now hearing from the coatings companies that they're seeing their basket down high single-digit, maybe even double-digit percentages year-on-year. When you look at the input for adhesives, can you give us a sense what sort of cost deflation you're seeing? I would imagine there's probably a lot more additives in that business and maybe the numbers aren't exactly the same, but just curious how you're seeing more material deflation on the adhesive side?
So we don't disclose actually our strategic information on raw material index. I would say for adhesives, they are very close to the whole group. So we don't see any specific difference. The raw materials but -- are not the same, but overall the index are comparable with the rest of the group. Maybe with our coating customer, for example, if you take the paint and if you compare a paint and adhesive, which is basically the ground of your question, if you look over a long period, you have more volatility in margin for paint companies than you have with adhesive company.
This means that the margin goes up higher with paint company in [indiscernible] and it goes down so when raw materials are decreasing. And it goes down more significantly when the raw materials are increasing, you could see that in the past couple of years. So you cannot directly compare adhesive and paint in terms of raw material influence, pricing versus raw material, et cetera. This is also one of the beauty of the adhesive, which is more stable from this standpoint.
The next question is from Jaideep Pandya of On Field Research.
A few questions. Firstly, on PVDF. Thierry, could you give us some indication of what sort of volume growth do you see in the second half versus first half, and then into '24 based on sort of your customer feedback? It seems like volumes have stabilized. So -- and then Chinese prices have, on a reference level, also stabilized.
So do you expect price stability in your portfolio as well for H2 and into 2024? That's my first question. The second question is on coatings. We've seen now a few quarters where your volumes have been down in the 20s where your customer volumes are stabilizing and customers are also upgrading raw material guidances. So do you think that in the second half this year into '24 we'll see some restock in coatings from your coatings customers? And then the third question really is on the portfolio. I mean, well done on the PI acquisition.
But do you see any meaningful opportunities in either coatings or adhesives, which are sort of in the league of Ashland, which could come your way in the next sort of 12 months or so? These are my questions.
On the first one, we already have good volume growth between Q1 and Q2, significant. So it depends if you compare us to H1 or H2 to the trend of Q2. I would say, in terms of volume we plan to have the H2 more in the order of magnitude of the Q2, which is more comparable. While, as I mentioned, the Q1 in volume was more difficult. So then in '24 versus '23, just because we had the weakness at the start of the year, will continue to grow.
And as you know, we have invested also both in France and in China for, let's say -- to make the story short, midyear. One is a bit before midyear. The other part is more a bit after midyear. So which means all in all we'll get more capacity overall in '24 than in '23. So because of that, because the market -- we have a lot of -- the business, as you know, in battery -- but not only in battery normally, '24 should be above in volume compared to '23 and even compared to the second part of '23.In terms of pricing, we see for the Chinese pricing it's clear that we were the big leader in the first part of the year, even we continue to see decrease in Q2.
I agree with you, normally, we should be more or less stable. But again, wait and see, but everything is factored in our guidance anyway. Coating volumes, yes, it's a good remark, I did it to my team. And I told them I don't understand we have some gap between what our customers are publishing and what we say. So yes, normally, if you are a rationale, we should get some restock at some point, but this means there are still some stock. But the good news is that it seems that the market is stabilizing and that will come to a point where the stocks are well optimized at our customers, and they should start to restock a little bit.
So we'll wait and see. Again, I don't want to -- I have no crystal ball. But in terms of logics, what you say should be to a certain point. But I don't want to overemphasize that. Let's wait to [come] some stabilization and then to see if there are some pickup before the end of the year. But clearly, when I mentioned the four factors that could influence the H2 compared to a normal seasonality.
This was the last one, if you remember what I just said a few minutes ago. With regard to portfolio, we had the acquisition of PIAM, which is quite attractive, we had the acquisition of Ashland, which was also attractive and I would say significant. You understand that now we are re-assessing technology for this new world for us to different profile of acquisition compared to what we did in the old years. And also I would mention Polytec, which is smaller, but exactly the same kind of -- same technology for new megatrends that we are acquiring. So now I think that with -- to make the story short, with Ashland and with PIAM, we have already in our plate a good set of acquisition to manage, develop, integrate. So there is no urgency for us to make any meaningful opportunity. We'll continue to make small bolt-on, as we have been doing in the past, particularly in adhesives.
We did 1 in Mexico in coatings recently. So this kind of acquisition, yes, we'll continue to do. But for the meaningful one, let's pause a little bit and let's focus on delivering the PIAM acquisition and the Ashland acquisition.
Well done for being the only company not to [warn] in the sector.
Thank you, Jaideep. Thank you very much. I appreciate it. We appreciate it, the whole team
The next question is from Laurent Favre of BNP.
Thierry, the first question is on the €30 million savings program. Just to be sure, are we talking about a €60 million annualized program and therefore, we have the carryover into next year of €30 million? Or is it more about phasing of fixed cost investments? That's the first question. And the second question, I guess, trying my luck. Could you talk a bit about how you're thinking about the trajectory for volume growth over the next 18 months following 15% to 20% volume declines over the last 18 months?
And I know that you don't have a crystal ball, but you do have an Investor Day in 60 days, and I'm assuming you will give us a three-year view. So you probably have to have a bit of a view on what things happen in the next 18 months?
So next 18 months is three semesters. So I will start with the savings program. So what you did, if I understand well, you took the €30 million on one semester multiplied by 2 to get to €60 million. In fact, it's not the calculation you should make. It's really short-term adjustment, not necessarily structural, working on the discretionary expenses, on the hiring, on the -- adjusting the site for lower volumes.
So they are really corresponding on the contractual -- current macroeconomic. It's clear it's quite [indiscernible] back. They will disappear. So it's not like the good thing, and this is why I wanted to mention it because, as you know, we are competitively transparent. We say we are a little bit late on some of our projects, okay? But don't worry because we have the offset with this extra savings.
This was a message. But I would say, all in all, it's a [wash]. And -- but next year is the -- I come back to your second question, if you can think that after volume decrease, we should have some pickup. To which level you don't know, I don't know, for '24.I think that these savings will disappear. But don't worry, the ramp-up of the project will be quite significant in '24 versus '23.
Other projects that we have accomplished in the recent figures, they will be really -- all having started before the end of the year, including the Sartomer, which should be at the end of the year. And we communicate to you during the Capital Markets Day how much it will bring between '24 and '23 to confirm the guidance for '24 and to project ourselves in a longer period. So I would say the savings is more -- something which is more temporary to cope with the current environment. So on the volumes, yes, I would say it's qualitatively recognized, but nobody, I think, do better in terms of precision today. I would expect the start of the second semester to be in continuity really with the first semester, maybe during somewhere the Q4 to have a little bit of pickup. Jaideep mentioned, for example, coatings with destocking, stocking and some restock a little bit could come and '24 to be better, but at which level in terms of macro, it's more a macro question for expert than for yourself and myself. But I think given the length of the destock is something you could expect even in a reasonable manner.
But when you look at the 15% to 20% volume decline, what you're telling us, I guess, is that you don't think you've lost market share or you have then voluntarily reduced volume? That's what I'm trying to know.
If it was your question, sorry, I missed it. We check market share all the time. We cannot accept to give up a little bit of market share when we consider that the products are too much commoditized and we want to maintain our pricing power, but it really is incremental. And really the value-added business, we don't do really.
Mr. Le Henaff, this was the last question. There are no more questions registered at this time. Back to you.
Okay. So thank you very much, all. Thank you for -- I know that the end of the month is quite busy. And as some of you will take a summer break, so I take the opportunity to thank you for your question all along the semester and the support, and I wish you would -- right, don't hesitate if like [Matthew] on a specific point, you want to have some deep dive, we are, as you know, already at your disposal. And we'll do it with a pleasure to finish to convince you on our very attractive projects.
So thank you very much, and looking forward with the whole team to talk to you, especially at the Capital Markets Day where we expect all of you to be present. It will be quite a nice Capital Markets Day. Thank you very much.