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Good day, and welcome to the Vallourec Q1 2018 Conference Call. Today's conference is being recorded.At this time, I would like to turn the conference over to Alex Fichelson. Please go ahead, madam.
Thank you, Simone. Thank you for joining us for Vallourec's first quarter 2018 results presentation.With me today to present these results are Philippe Crouzet, Chairman of the Management Board; Olivier Mallet, CFO; Didier Hornet, SVP, Development and Innovation; and Nicolas de Coignac, SVP, North America.The slides that would be commented by the management during this presentation are available for download on our website.Before I hand over to Philippe, I must warn you that today's conference call contains forward-looking statements and that future results may differ materially from statements or predictions made on today's call.For your convenience, the forward-looking statements and risk factors that could affect the statements are referenced at the beginning of our slide presentation and are included in our annual registration document filed with the AMF.This presentation will be followed by a Q&A.Now I would like to leave the floor to Philippe Crouzet.
Thank you, Alexandra, and good evening, everyone. I'm pleased to present this quarter's result. They confirm that the recovery trend we have seen these past quarters is on its way.I will start by giving you general introduction before handing over to Olivier. So let me start on Page 4. Compared to Q1 last year, we have recorded significant increase in revenue over the quarter and an improvement in our EBITDA. This is notably the result of higher oil and gas activity in the U.S. And we expect the positive trend to -- in North America to gain international markets as well, as we observe higher tendering activity there, which should result for Vallourec in higher deliveries as from the end of 2018.Overall, although this is not fully reflected in this quarter results due to ForEx and raw material prices staying high, the fundamentals of our oil and gas markets are definitely improving, both volume wise and price wise. This is evidenced by the growing global tendering activity, notably in India and Indonesia, Pakistan, China, Qatar, North Africa, et cetera. This is obviously supported by the worldwide rebalancing of oil supply and demand, thanks to the strong demand for oil and thanks as well to the high discipline maintained by the countries which had committed to cut their production. And I see no reason why those factors may change in the coming quarters.In that context, we have continued to build on our strength, as in Brazil, where we renewed and extended our partnership with Petrobras to more added-value services, as well as in Africa and in the Middle East, where we participated, during this quarter, in large tenders, which should benefit our deliveries later this year and next.We also continue, obviously, to deliver further savings on our transformation plan, with further adjustments in Europe, such as the announced closure of our Bollore finishing line in France, still subject to prior consultation of workers' council and the divestiture of our drilling operations to NOV.Lastly, we remain focused on our liquidity as we issued bonds for an amount of EUR 400 million at the end of the quarter.Now moving to the key figures on the next page. You can note revenue and EBITDA improvement, despite negative ForEx and raw material prices year-on-year being still pretty negative.Olivier will comment on the improvement of the cash flow from operating activities. The free cash flow is down by EUR 34 million, and this is the result of higher change in working capital year-on-year, due both to improving activity and to our usual seasonality. We are confident to decrease that level from Q1 by the end of the year, as usual.All in all, the market trends that I shared with you in February remain broadly similar, with probably a stronger North American market, due to better prospective for the oil price and a slight delay in the offshore recovery, due to the ongoing cautiousness of the key players, namely the international oil companies.Of course, those results of first quarter do not reflect any impact from the Section 232 measures announced by the U.S. Administration, but we are obviously preparing to benefit from them and adapt to their final outcome.I now leave the floor to Olivier, who will present you more in detail the financial results for the first quarter.
Thank you, Philippe, and good evening, everyone.So let's start with our revenue evolution on Slide 7. As you can see, this revenue increased quite significantly compared to Q1 last year, and this on each of our markets. This growth reached 22% at constant exchange rates, the strengthening of the euro versus dollar and riyal led to a growth of 10% at current rates.On our largest market, oil and gas, the revenue was up 1.2%, or 15% at constant rate. It was led by the U.S., with a stronger euro recovery and the impact of the price increase we passed in H2 last year.We started recently further price increases that will, for most of it, take place in H2.Revenue in the EAMEA region for oil and gas was relatively stable, with negative ForEx effects being offset by positive price.In Brazil, our revenue was down due to high comparison basis. As you remember, we delivered exceptional tube for oil and gas exploration in Libra field last year, and as well due to the weakening of the riyal.The oil and gas recovery in the U.S. also benefited our Petrochemicals operations, which revenue almost doubled.Moving to the non-Oil & Gas segment. One word on power generation first, which -- this represent 11% of our revenue, and which grew by 17%, as it benefited from slightly higher volumes and better price mix for current general power plant projects.This is due to orders recorded in H1 '17, and that has reflected yet the current trend of a reduction in the wealth of projects for conventional power plants. We maintained a good momentum in Industry & Other with a growth of 8.4% or 17% at constant rate, thanks to higher prices in Europe for Automotive and Mechanical products, with a broadly stable revenue in Brazil.On the next slide, you see first the bridge of our revenue evolution, where the biggest driver is a 13.7% price mix effect, followed by an 8.4% volume effect, all this being partly offset by FX.I think it's important to insist on the fact that after a year of 2017, which saw the start of recovery in volumes, we see now a positive price effect as well.Moving to the EBITDA evolution. Our industrial margin was broadly stable. Higher activity and the savings generated by our transformation plan were largely offset by the increase in the prices of raw materials and by ForEx.More specifically, we recorded a significant increase in the U.S. industrial margin and some decrease in Brazil, due to these exceptional deliveries for the Libra field that took place a year ago.We decreased again our SG&A costs, and as a percentage of sales, they went down from 14.4% last year to 11.7%. As a result, our EBITDA improved by EUR 16 million year-on-year to minus EUR 5 million. Maybe one word there on the EBITDA evolution compared to Q4 '17, to remind you that this Q4 has benefited from EUR 45 million of net reversals of provisions to be compared with only EUR 8 million in Q1. If we exclude these changes in provisions, and despite the usual low seasonality of Q1 versus Q4, the improvement is notable.On the next Slide 9, one comment about the rest of the P&L below EBITDA to realize the fact that we recorded EUR 46 million of nonrecurring charges related to impairment asset disposal and restructuring as a consequence of the action restructuring measures we decided in Europe in Q1. The net loss group share amounted to EUR 170 million in Q1.Free cash flow then on Slide 10. Our cash flow from operating activities was stable compared to last year at minus EUR 84 million, with the improvement in EBITDA being offset by higher financial interest charges, cash out and taxes paid.Improvement of EBITDA was offset -- I'm sorry, compared to Q4 2017, our cash flow from operating activities improved by EUR 41 million.The working capital increased by EUR 152 million in Q1, reflecting the seasonality we see at the beginning of each year. We target to decrease our working capital from this level until the end of the year. It is important to note that again in this quarter Q1, the working capital in days of sales was significantly reduced year-on-year.And finally on CapEx. Following our continued effort on CapEx efficiency, they amounted to only EUR 19 million for the quarter.Next slide, our net debt at the end of March reached EUR 1,783,000,000, up EUR 241 million compared to the end of December '17, this resulting essentially from the free cash flow evolution I just detailed.And finally on liquidity on Slide 12. We had strong liquidity at the end of Q1, made of slightly more than EUR 800 million in cash plus EUR 2 billion of undrawn mid- and long-term committed bank facilities.As you know, this liquidity has been, again, reinforced in April, when we successfully issued EUR 400 million of bonds to refinance, in anticipation, the bond repayment that will take place in 2019.And I will now hand over back to Philippe, who will tell you more about the outlook.
Thank you, Olivier. We're moving to Slide 14 now, where we summarized the key elements for the rest of the year. It's basically in the continuity with what we experienced, in fact, during the beginning of the year. As I commented during my introduction that we do see Oil & Gas market fundamentals improving overall.Firstly, we expect the high drilling activity to continue in the U.S. And obviously, it should help to pass on further price increases in the second half of the year in addition to the ones we successfully implemented last year.And volume wise, still in North America, we are also preparing to benefit and adapt, if necessary, to the final outcome of the Section 232 measures. And as you know, they aim at favoring domestic steel manufacturers, which we are notably in North America.As far as Brazil is concerned, the contract we signed with Petrobras will take effect starting H2 of this year, and the drilling activity is expected to broadly remain stable compared to the beginning of the year.In the rest of the world, we anticipate higher bookings in Oil & Gas as the tendering activity for a project is increasing. And we should see positive impacts on deliveries in second half of the year, and specifically Q4.Lastly, our Industry & Other operations should continue benefiting from a favorable context in Europe and in Brazil, both volume wise and price wise. Whereas our Power Generation business should be impacted negatively by the decreasing number of conventional power plant projects in Asia.In this overall context, we will obviously continue to execute our transformation plan and we expect to generate, again, significant savings and to continue improving our competitiveness. So when we combine all these various trends, and despite unfavorable ForEx and raw material prices, we do confirm our positive outlook for the whole year and our target to improve our EBITDA in 2018 compared to last year, with a significant improvement in EBITDA in H2 compared to H1.Thank you for attention. We are now available to take your questions.
[Operator Instructions] And we will take the first question from Amy Wong with UBS.
I have 2 questions, please. The first one relates to just your outlook comment about targeting 2018 EBITDA to improve versus 2017, with H2 significantly higher than H1. Can you help us frame that full year comment about '18 improvement versus 2017, order of magnitude there? And secondly, what's driving the major up seasonality effect between the -- weighting between H1 and H2?
In terms of seasonality, there are 2 major elements that will drive H2 to be significantly higher than H1. The first one being the significant price increases we want to pass to our big customers in the U.S. Here we are very much in the same scheme, I would say, as last year, where we started to pass some price increases with a small spot customers in H2. But the big wave for price increase will take place at the beginning of H2 with our major customers. And of course, this does not really take into account, at least, a full year impact of Section 232 as of today, since the measures aren't finalized, so that the impact of the market is difficult to assess by the participants.The second significant driver of EBITDA improved margin H2 compared to H1 will be, these orders that we are very confident will come very soon now. And that will allow start of deliveries in the latter part of 2018 and then, of course, in 2019.On top of that, keep in mind that we are continuing to generate significant savings quarter after quarter that will play a role as well in H2 compared to H1. So these are the major elements.As last quarter, we prefer not to give a quantitative guidance, because in our market, there are always elements of volatility that we should be aware of. I would mention one of them, which are the currencies. You know that we are exposed to several currencies evolutions, euro/dollar, euro/riyal, riyal/dollar. For some of that, it's quite stabilized as of today, because we hedged when we take contracts. So that there is no big move to be expected in terms of the transaction exposure. But in terms of translation one, translating the positive results relating to U.S. or in Brazil or into euros. All this will depend on the evolution of these currencies, vis-à-vis, as the euro be by the end of the year. And as you will see, there is a lot of volatility on these currency markets as of today.
Okay. Can I just ask a follow-up question? In your outlook statement, you talk about further adjustments in Europe. Can you clarify what you mean by further adjustments? Are you reacting to further -- a deterioration in your business and that's why you have to make further cost reductions in Europe? Or what's the thrust of those adjustments you're talking about?
It's 2 things, Amy. One is clearly adjusting to the -- what we can anticipate as a deep [ fall ] in our Power Generation market. And clearly, the announcement we made recently regarding 1 million in France is directly related to that. And we will have to adjust as well in Germany. So this is directly related to the Powergen market situation. The rest is the ongoing transformation program as we implemented in France and Germany as well. As you know, in those countries, it takes more time and more -- due to labor environment than elsewhere in the world. So we keep on doing that as well. So it's a combination of the 2.
The next question will come from Tom Zhang with Crédit Suisse.
I have 3, if that's okay. Firstly, just it's been reported recently you've had a $300 per ton increases for your U.S., your orders from Q3? Can you just give us an idea of what the customer reaction has been like to that? Whether or not there is further potential improvement for pricing going forward? And just remind us when those hikes are going to hit the P&L?Secondly, cash flow for the first quarter was somewhat disappointing. But clearly, there is some net working capital build. And as you said, earnings should be improving into H2. Do you think it's beyond the realm of possibility for operating cash flow to be breakeven in the second half?And very finally, if you can just talk a bit about the debottlenecking and hiring in the U.S., which I think you were discussing in the last conference call. How close are you to running full out? And have you been able to divert any products from other regions, such as Brazil, into the U.S. to take advantage of the pricing environment?
Okay. Maybe, Nicolas, you could answer the 2 questions related to North America.
Yes. Sure, Philippe. So Tom, concerning your first question on the announcement on the $300 per ton in the U.S., so this is, yes, what we are currently discussing with our customers. We're still early in the process. We will try to get the most of it. But we're still early, as I said already. So what we see though is that other are pushing the same kind of increases. And we expect to have this impacting our P&L as of July in some extent of this, of course. And again, this is specifically for our OCTG product. So the first contact, of course, you can expect some pushback from customers. But we have had already some significant customers that have accepted some price -- significant price increase for the second half of this year.Concerning your second question on debottlenecking, we are on track with what I described in the previous call. So we still expect to have 100% of our action plan delivered before end of Q4. So we will, by then, be able to run all of our operations, meaning the rolling mills at their full initial capacity. Again, we're trying to expedite this to make this happen as quickly as possible. But we are still very confident we have this happening in Q4 this year.
On the cash flow evolution, as you rightly pointed out, there is always a strong seasonality in terms of our working capital evolution that tends to increase in Q1. What matters is at the end of last year, in terms of days of sales, our performance for working capital was much better than the year before. And same story at the end of Q1, our working capital in days of sales is much better that at the end of Q1 '17. So we are pursuing a good improvement in terms of managing our working capital. And following this typical seasonality, after the usual strong increase in Q1, it will be reduced before what we have at the end of Q1 and what we expect at the end of the year.So your second question is a very good one. What about your cash flow from operating activities? So before change of working capital and CapEx, can it be a breakeven H2? Too early to answer this question, because we don't give quantitative guidance. I would just say that it's a valid question.
Okay. So, if I could just ask 1 quick follow-up or just add-on with respect to cash flow. Has there been any updates on that potential land sale in Brazil? It's just gone a bit quiet on that front.
No. Again, a pure confirmation about what we said during our last conference call. These assets are no longer core assets. There is no emergency to divest them. It's a big chunk of price, 220,000 hectare. So we are waiting for someone to come with a project that would provide him and us with the opportunity to give big value to these assets. But it's not yet the case.
So we would be opportunistic on that one. Clearly, what we are focusing upon is, of course, getting to positive free cash flow from operating activities. This is the most important thing. Whatever asset we can sell at a nice price, we'll do. But this is not, let's say, the core of our focus at the moment.
The next question will come from David Farrell with Macquarie.
Two quick questions for me. Firstly, surprised to see such a big drop off in revenue in North America quarter-on-quarter. So I was just hoping you could speak to that a little bit more, what's going on in that -- in terms of dynamics in that market? And then the second question. I just wanted to ask around CapEx for the year. Very low in the first quarter. I think it's already, you said, EUR 300 million is the normal run rate. What kind of pickups you expect over the remainder of this year?
The overall figure we are targeting for the whole year is more in the range of EUR 170 million, EUR 180 million. It happens that over the first quarter, 2 projects were cashed out. But others will come in, in the rest of the year. As far as the first quarter of sales in North America, Nicolas, can you answer the question?
Yes. David, 2, 3 elements there. First of all, there are -- there is mechanically lower number of days in Q1 compared to Q4. So this induces automatically a reduction. So this is one. The second one is linked to the fact that we have very often a high invoicing at the end of the year and a lower invoicing in Q1, linked to the fact that our distribution are closing their fiscal year at end of Q1. So there are some always adjustments there. So when you compare Q1 to Q4, it's biased by this element. And the third point is that we have had some issues with our freight for orders in the U.S., meaning that some of the orders that should have been invoiced at the end of Q1 were not delivered to our customers. So we had a shortfall at the end of Q1.
And Nicolas, these orders are directly related to what's familiar to, I guess, most of you, which is kind of overheating activity in Texas. There are lots of logistics issues. And it created some trouble in the Houston area, the train used in the Houston area.
Yes. So this was...
Can I just ask, has that been remediated by the season in Texas or...
Yes. Correct. This is now back. Yes. It lasted what, a couple of weeks, Nicolas?
Yes, it lasted 2 or 3 weeks. And now all those trains are working perfectly according to plan. So no problem anymore there.
We now move to Nick Green with Bernstein.
I'm afraid it's a bit of a mean one. Q1 '18, so you -- based on your operating cash flow before working capital, based on your tons sold, you consumed about EUR 161,000 of cash per ton sold, obviously, before working capital, before CapEx. This is a business which is obviously selling a very high tonnage now compared to the downturn. You've seen about a 17% reduction in your people and overhead cost since 2014, the transformation plan has worked. And you've had a change of perimeter. You moved manufacturing locations to a cheaper area. And yet, this is the 12th consecutive quarter where you've consumed operating cash flow per ton on these kind of levels. How is it that a manufacturing company can continue to sell products at a cash cost below 0? Isn't this telling us and investors that something is broken inside the company? How can we reconcile what we're seeing here?
Nick, there are different aspects and different ways of answering. So I won't enter into too many details. But obviously, we have different geographies where the situation is very different. Obviously, we are generating positive cash flow and not only operating free cash flow. In South America, North America, we are in a good position and improving step-by-step the -- thanks to the integration of our Chinese acquisition, Tianda, the situation in the Middle East and Southeast Asia as well. So the core of the issue is still Europe, where, as you mentioned, we are actively cutting cost. But as you as well know, the time to implement and then see the benefit in the financials of any restructuring, especially massive ones in Europe is long time. And there is no doubt that what we are doing, what we've done already and we -- what we are in the process of doing, we'll deliver, is delivering, will deliver improvements for Europe, but it is not yet in the situation where this part of our operation is positive. So we are working on that. But this is an issue which we are tackling strongly. And it is not contaminating our other businesses.
Maybe I could add, Nick, that you rightly say that volumes have improved compared to the downturn. But 2 comments about that: first, if you exclude the local sales in China, which are of different nature due to the Tianda acquisition, we are not yet back at the precrisis volumes level. But I think, even more importantly than that, after volume restarts, you need to wait a little bit for prices to follow. As you remember, in 2017, we had, at group level, a positive volume impact. We didn't have any positive price impact because the price increase in the U.S. was offset by the low prices of the backlog in Middle East, Africa. The very interesting news for 2018 is that prices continue to grow up significantly in the U.S. It will take place in the second part of the year. Still being at a level at the end of the year, which is not back to the 2014 level. There is still room for price improvement in the U.S., and we can logically hope that the incremental attention of the North American market linked to the 232 Section will provide some further momentum price wise. But we still have to see that other measures stabilize. And in the rest of the world, we are just starting to see a positive price impact already in 2018. So that globally, this second level in our results improvement, market related on top of the savings is starting to show up.Of course, we have some negative in raw materials and ForEx this year. But as far as the global prices are concerned, this is about still some volume to gain and steel prices continuing to go up in the U.S. and starting to work in the rest of the world.
Maybe I could just follow up there. I mean, it's clear that as volumes come back, obviously, your cost base rises again. Your -- I mean, my understanding is your people and overhead cost will be at trough level this year or last year. It'll actually be higher next year. Equally, as you just mentioned, your raw material cost go up as well as the selling price. So maybe if I could ask it slightly differently as to say, it's good that you feel comfortable. There isn't something sort of fundamentally broken inside. Can you help us try to understand 3 things? One, when does the operating cash flow per ton, prior to working capital, when can you see that getting to 0 again? Then secondly, when is it that we can think of a free cash flow number, so obviously, CapEx and working capital included, getting to 0? And ultimately then, how high is your net debt going to go before it starts going down again?
On the first part, just 1 comment when you say that, of course, our fixed cost will go down. It's not the case. When you look at our headcount evolution, first, we consider blue collars not as being fixed but as variable cost. And since rebound in our volumes, these blue collar headcounts do increase but much less than our activity. And in terms of what we call fixed cost, either in our mills or SG&As, we continue to cut fixed cost, despite the rebound in activity. You can see that, for instance, in Q1 number for SG&As, which are down 10% compared to a year ago, despite the rebound in activity. In terms of cash flow, it's hard to answer you, because we don't give quantitative guidance. But we can say that we hope being now pretty close to the point where cash flow from operating activities will turn back to breakeven or positive. Free cash flow will have to wait a little bit longer, and it's not possible to give an exact time frame.
And just an add-on on raw materials. We do not see them going much further. We see them, generally speaking, stabilizing. So this, combined with the downward trends on 2 fixed costs, will definitely contribute to bringing the cash flow from operating activities back to the black. Let me just give you an order of magnitude regarding France to give a sense of the dynamics. We -- not so long ago, few years ago, we were about 5,500 employees in France. We'll end up this year at less than 3,000. And this year, only 2018, we'll see a diminishing of our permanent headcount by 600 people. So this is ongoing. This is adding to the continuous cost-cutting initiative that will bring us back to where we should be, at least, from a positive free cash flow.
And we will move to Guillaume Delaby with Societe Generale.
Just would like to try to have a little bit more color about your comments, Philippe, on the first page. And basically, when I look at your comments today and the comments you made at the end of 2017 regarding the 2018 outlook, it's a little bit difficult for me to see if there is -- if there has been a qualitative change in the environment? Are you more optimistic today on the environment globally, yes or no? I understood that you might be a little bit less optimistic about the timing regarding the offshore recovery. Maybe can you -- if you can give some further color, please.
Yes. I would say, as often, it's a combination of pluses and minuses. Overall, I'm really confirming the trend that we anticipated. There is no significant change. We are in the same, say, quantitative kind of trend. Qualitatively, it's true that we perceive more opportunities maybe than a few months ago in North America. And this is partly, obviously, related to the price of the barrel being higher than what everybody had anticipated in North America. And it might be -- it's probably too soon to say, but it might be as well supported by the 232 measures which obviously will favor domestic producers. But on the other hand, I think the overall feeling regarding offshore -- and last week was -- or week before was the OTC in Houston. The overall feeling is that things are moving in the right direction but more slowly than what was anticipated. And where, I would say, the EPCs were anticipating a clear rebound in the course of 2018, now they would probably say that projects will come to fruition probably -- rather beginning or in the course of 2019. So it's where I stand. Some markets are probably and likely better than what we anticipated, but others are a bit delayed. The overall trend is in the right direction, then it's a matter of balance. So overall, I would say not that different from where we stood a quarter ago.
Yes. Maybe in addition to that, Guillaume, in terms of confirmation in the rest of the world, which -- except the U.S., which is not on the deep offshore but as well on the NOCs and other clients on onshore, what we are seeing 3 months ago is that we are anticipating some significant tenders to come with realistic hopes that we will be successful. Now it's getting more concrete. We got some of these tenders, and we are starting to get commercial successes. So it's moving from anticipation to reality. And this is one of the elements that are paving the way for this improved H2 EBITDA compared to H1.
And we move to Jean-Luc Romain with CMCA (sic) [ CM-CIC ].
I have a question relating to -- it's Brazil. When do you expect the contribution of international operators like Total, Statoil, Shell to be more material in terms of drilling? It seems you are looking for the drilling rigs for IR? And I was wondering, when do you see them contributing more to drilling activity in Brazil?
Well, it depends a bit on whether you're referring to operators acquiring existing operations from Petrobras. Petrobras is in a selling mode for some of their assets. So there, we immediately see the foreign companies starting to invest and increase their capacities. But when it comes to complete greenfield, it might take a couple of years. Didier, any comments on that?
Yes. The fact for sure is that international oil companies identify the usual opportunity that offshore Brazil represents in today's markets. In term of, let's say, breakeven and opportunity to access large reservoirs, so they are here. The uncertainty, as Philippe was mentioning, is how long they will take to develop these greenfields. Our experience there is that they typically should operate in a faster pace than Petrobras used to develop the unconventional Brazil. So well, definitely not 2021, but potentially '22, '23.
The next question will come from Jean-Francois Granjon with ODDO.
Just 1 question relating to the evolution of the EBITDA for the first quarter. Could you give us a bridge for the evolution compared to the last quarter as impact on the volume, the price -- mix price? And more specifically, could you give us the impact on the depreciation of the ForEx on the EBITDA for the first quarter?
We typically don't do a detailed bridge sequentially. What I can tell you, and I think Nicolas already mentioned that, is that Q1 is usually relatively a low quarter, because there are less billing days. Because in China, you've got Chinese New Year, Carnaval in Brazil. So reduced level of activity in these countries on top of what Nicolas said about the U.S. A part of that globally [indiscernible] due to change, of course, in terms of ForEx for translation, because the values currencies did change quite significantly between Q4 and Q1 in a bad direction in terms of translating into euros, the result we make in the U.S. and in Brazil. This being said, probably an increase in some raw materials, some continuing savings generated by our operations, but no big change there. And overall, once again, the schemes -- the global scheme is more about some moderate improvement in Q1 and marginally in H1. And then, a large improvement in H2 for the reasons we have already mentioned.
Okay. But taking into conduct, what do you think with those -- the consensus for the full year, do you expect that this is the right level or too high, taking into account the low level for the first quarter and probably for the H1?
We -- as you know, we never comment about the consensus. But as a result of Q1 and what we see would have led us to believe that the consensus was way different from what we have in mind in one direction or the other. Of course, we have done what necessary to adjust it.
I would now like to hand the call back over to the speakers for any additional or closing remarks.
Well, I want to thank you for the questions. I'm fully conscious that many of you raised a point of, is Q1 reflective of the whole performance of the year, the answer, I'm sure, you've got is no. We confirmed our comments and our vision for the whole year. The seasonality is pretty usual. In our case, it was enhanced, of course, by ForEx, by raw materials and by a number of small elements together creating that sense. But be sure that for the rest of the year, we are fully confident on not only our transformation plan, but as well on the favorable trend regarding our top line and our operating performance. Thank you.
Thank you. That will conclude today's conference call. Thank you for your participation, ladies and gentlemen, and you may now disconnect.