Befesa S.A. (BFSA) Earnings Call Transcript

Good morning. My name is Lydia, and I will be your conference operator today. At this time, I would like to welcome everyone to the Befesa Preliminary Full Year 2019 Earnings Presentation. [Operator Instructions] I would now like to turn the call over to Rafael Perez, Director of Investor Relations and Strategy. Please, sir, go ahead.

Good morning, and welcome to the Full Year 2019 Preliminary Results Conference Call of Befesa. I am Rafael Perez, Head of Strategy and Investor Relations of Befesa. And today, as usual, we have with us Javier Molina, CEO of Befesa; and Wolf Lehmann, CFO of Befesa. Javier will start with an overview of the current market environment and will present full year key highlights as well as main consolidated financials, then Wolf will review the financials of our steel dust and aluminum salt slags business services in more detail as well as cash flow, net debt and capital structure. Javier will close this presentation providing a preliminary view for 2020 as well as an overview of our midterm growth road map. Finally, we will open the lines for the Q&A session. Before getting started, let me remind you that this conference call is being webcasted live. You can find a link to the webcast and of the full year 2019 results presentation in our website, www.Befesa.com. Now let me turn this call over to our CEO, Javier, please.

Good morning, and thank you for attending this conference call. 2019 has been a good year for Befesa. Despite the unfavorable price environment that has affected the earnings of the company, Befesa has delivered a strong operating performance and has continued to deliver solid [ expertise ] results setting the foundation for organic growth in the coming years across all the markets we currently operate. In 2019, we have deployed capital around EUR 60 million dedicated to growth initiatives, representing a record level in the history of Befesa. We have executed growth investment in every single geography where we have operations: Europe, Turkey, South Korea as well as China. During this year, we continued to run our recycling plants at a high-capacity utilization and the level of deliveries from our customers across all the markets where we operate has been high and similar to the previous year. Befesa's business, based on the circular economy, has a bright future, and the company is in a strong situation from the operating, strategic and financial point of view. From a macroeconomic point of view, despite the global economy being affected by several uncertainties, like the tariff war between China and U.S., Brexit, weakness in the car industry, et cetera, the market where we operate have remained stable during 2019. EAF steel production shows robust fundamentals and stability. Additionally, Befesa's business models enjoys high barriers to entry, driving mainly by the location of our plants in close proximity to our steel-producing customers. From the metal prices point of view, 2019 has been a challenging year for Befesa. The unfavorable price environment with treatment charge increase of 65% and zinc and aluminum price decrease has affected the level of earnings that Befesa has generated in the year. This impact has been partially offset by better zinc price hedge compared to 2018. We have recycled 666,000 tonnes of steel dust, which represents a lower volume than in 2018, driven by the temporary shutdown of our plant in Turkey to expand its recycling capacity. In the aluminum segment, we recycled 493,000 tonnes of aluminum salt slags and SPLs and produced 177,000 tonnes of secondary aluminum alloys at similar levels than the previous year. During the period, we achieved EUR 648 million of revenue, EUR 160 million of EBITDA and EUR 83 million of net profit. Our EBITDA margin has remained very strong at 24.6%, which is slightly better than the previous year and the second highest level in the history of our company. Our earnings per share was at EUR 2.43. The operating cash flow has been strong, and we have been able to fund Befesa's total CapEx, pay an attractive dividend and maintain the leverage ratio at 2.6. We want to maintain our strong commitment to pay an attractive annual dividend to shareholders even during this high investment period. Based on this, Befesa aims to distribute a dividend equal to EUR 1.32 per share representing a flat amount year-on-year and a 3.5% dividend yield based on the grossing share price of 2019. Although earnings have been lower in 2019, we have continued to deliver our growth plan as expected, and have set the path for volume and earning growth in the coming years. At Befesa, we are going through a heavy investment period. And during 2019, we have executed 5 growth projects in Europe, Turkey, South Korea and China. With the majority of our organic growth projects completed, Befesa's strategy is focused now on expansion into new geographies. China is the largest steel market in the world. A transition towards more EAF steel production and the growing concerns about environmental protections is creating the business opportunity for our company. Befesa is building a strong local team that we are training across our European recycling plants. We are dedicating time and resources to the development of this business opportunity and confirm the potential that China represents for the recycling business of Befesa. According to our expectation, China will become the single biggest market of Befesa in the coming years. The management of the volatility of through steel price hedging continues being a cornerstone of Befesa's strategy. Currently, we have hedged in place until October 2021, and we continue to monitor the market to lock in further volume beyond that date. Originally, in 2019, we have seen how Befesa's former main shareholder, Triton, has fully exited the shareholding of the company. In June 2019, Triton sold its remaining stake in Befesa. Since then, we are a public company with a free float of 100% and a strong shareholding structure for institutional investors who mainly have a long-term view. 2019 has been a year in which the world has seen an increased concern around sustainability and climate change. Waste management is one of the most critical problems we face. A global growing population, together with increased life standard, especially in emerging markets, will drive an increase in the volume of waste generated across the globe. According to the World Bank, by 2050, the population of the planet will increase by 25% and the volume of waste generated will increase by 70%. This enormous challenge has to be managed properly, and it is essential to invest in companies with a green proving technology and the right business model. Befesa business model based on the circular economy is a good example of how a company can have a positive impact by running a sustainable business model, and at the same time, create economic value to its shareholders. Befesa's recycling services provides sustainable hazardous waste management solutions that solve important environmental problems in the steel and the aluminum industry. Equally important, Befesa's business reduced destruction of natural resources from the ground. Today, Befesa managed and recycles more than 1.5 million tonnes of hazardous waste a year, avoiding landfill. Furthermore, we extract and produce more than 1.2 million tonnes of new materials that we've introduced in the economy, reducing the consumption of natural resources. In summary, in 2019, Befesa delivered a strong operating results and solid and strategic progress, while earnings were affected by lower metal prices. Our healthy cash flow generation allow us to finance all the investments with our own resources, pay an attractive dividend and yet maintain the leverage at a moderate level, while we continue to execute on our strategy in order to secure future volume and earning growth. Now let me pass the presentation to Wolf Lehmann.

Thank you, and good morning. Going now to Page 6. The results of our Steel Dust Recycling Services segment are as anticipated in our last third quarter call and our latest guidance. Full year 2019 revenue decreased by 5% to EUR 360 million, primarily driven by lower electric arc furnace steel dust throughput of 7% year-on-year, mainly due to the 7 months downtime in Turkey. Secondly, the unfavorable treatment charges of $245 per tonne in 2019 versus $147 per tonne in 2018. The thirdly, the 8% lower LME zinc average price year-on-year, but partially, these headwinds were offset. A, thanks to the hedges in place, the blended zinc prices were up 5% year-on-year, that is EUR 2,280 per tonne in 2019 versus EUR 2,168 per tonne in 2018; and B, the continued improvement and recovery in the stainless operations. Full year EBITDA year-on-year decreased by 8.8% or EUR 12.1 million to EUR 125.3 million. The main drivers of the approximately EUR 12 million year-on-year EBITDA decrease are approximately as follows: a decrease of EUR 21 million from the impact of the year-on-year unfavorable treatment charges of $245 per tonne in 2019 versus $147 per tonne in 2018. Secondly, a decrease of EUR 10 million from volume, electric arc furnace steel dust throughput decreased primarily driven by Turkey. EUR 9 million decrease from the lower LME zinc prices, down 8% year-on-year to EUR 2,247 per tonne in 2019. This was partially offset by a positive EUR 24 million impact year-on-year from the better zinc hedges; and secondly, a positive EUR 5 million year-on-year from our recovered stainless operations. In summary, net-net to EBITDA decrease in the Steel Dust Recycling Services segment was primarily driven by Turkey as the better zinc hedges and improved stainless operations offset most of the remaining headwind year-on-year from treatment charges and lower LME zinc market prices. EBITDA margin as percent of sales was a solid 35% in the year. On the right-hand side of Slide 6, we show details on plant utilizations and prices. On capacity utilization, normalizing for the explained Turkey downtime, we continue to run at high utilization levels of 90% in 2019. With regards to zinc prices, LME zinc market prices have decreased during the year 2019 to an average of EUR 2,274 per tonne, down 8% year-on-year. Nevertheless, reviewing our zinc blended prices, which take our approximately 70% hedged and 30% at LME spot volume into consideration as well as actual volume weighted per month. On average, the full year prices were up 5% year-on-year to EUR 2,280 per tonne. Our hedging approach works. As mentioned by Javier, most importantly, in the Steel Dust Recycling Services Segment, both the Turkey plant upgrade as well as the new Waelz oxide washing plant in South Korea, were successfully completed on budget and time and are expected to drive volume and excellent utilization levels and earnings growth in 2020. The focus in 2020 will be on China growth, as explained later by Javier. Turning now to Slide 7. The results of our Aluminum Salt Slags Recycling Services segment. Full year revenues were down roughly EUR 50.5 million or 14.7% to EUR 292.4 million. This was mainly driven by 19% decrease year-on-year from lower aluminum alloy average market prices. This was partially offset by a volume increase in the secondary aluminum alloys of plus 7,400 tonnes to 177,000 tonnes in 2019. Full year EBITDA was down EUR 4.2 million year-on-year to EUR 32.9 million. Main dynamics behind the variance were secondary aluminum represented as gray bars in the chart, being approximately flat year-on-year at EUR 12 million. The high-efficiency furnaces installed in Bilbao during the second half of 2018 delivered results and offset the negative impact from the scheduled downtime at the Barcelona plant during part of the second half of 2019 to implement the same high-efficiency furnace. Salt slags represented as orange bars in the chart being down year-on-year by EUR 3.8 million to EUR 21 million, mainly explained by approximately EUR 6 million due to the 19% lower aluminum alloy average prices then slightly reduced salt slags volumes being partially offset by improved efficiencies. Overall, resulting consolidated EBITDA of the Aluminum Salt Slags Recycling Services segment decreased by EUR 4.2 million year-on-year to EUR 33 million. On the right-hand side of Page 7, we show details on plant utilization on prices. Salt slags and spent pot lining volume and utilization levels continued at high, close to 95%/93% utilization levels in 2019. Also, in the secondary aluminum, we are very pleased with the operational performance and achieved production levels. Normalized for the downturn to implement a high-efficiency furnace plant utilization levels are at above 90%. Market prices, on the other hand, have still not recovered, actually decreased further in the fourth quarter of 2019 and were on average during the year at very low levels. Full year averaged at EUR 1,397 per tonne of aluminum alloy free metal bulletin, down 19% year-on-year compared to EUR 1,715 per tonne in 2018. Taking the market and price environment into consideration, overall, in 2019 for the Aluminum Salt Slags Recycling Services segment, the efficiency improvements help to partially offset the pressure from the very low aluminum alloy prices and the negative impact from the scheduled downtime in the second half to upgrade Barcelona. Turning to Page 8 with an overview of our results referring to net debt, cash, leverage, cash flow and capital structure. On the left-hand side, net debt. We closed 2019 as expected, with EUR 542 million of gross debt, EUR 126 million of cash on hand, resulting in a net debt of EUR 417 million and a moderate leverage of 2.6x, in line with the latest guidance provided in our third quarter earnings call. Leverage increased on the one side due to the reduced full year EBITDA run rate of EUR 160 million. On the other side, net debt increased by EUR 40 million compared to year-end 2018 to EUR 417 million at year-end 2019. This increase was mainly driven by the cash position development as well as the EUR 14.5 million impact from the implementation of IFRS 16 amendment, which affects accounting for renting and leasing from the 1st of January 2019 onwards. For 2020, we are targeting an approximately stable leverage at current levels. With regards to our capital structure, on the 17th of February 2020, Befesa successfully repriced its Term Loan B. The new interest rate decreased by 50 basis points to Euribor plus 200 basis points with a floor of 0%. This reduction will result in financial cost savings of around EUR 2.6 million per annum. After a fixed period of 9 months, the interest rate could be reduced further alongside certain leverage ratchets down to a rate of Euribor plus 125 basis points in case Befesa's leverage is lower than 1.75x. The remaining 6.5 years tenor remains unchanged, maturing in July 2026 and including loan baskets to accommodate the China growth expansion. The repricing is yet another measure to continue to improve Befesa's long-term capital structure and financial efficiency. Furthermore, we continued, during 2019, with our EUR 75 million revolving credit line, entirely undrawn and fully available as well as our EUR 35 million guarantee line. Again, this efficient capital structure sets us up very well for the long term and provides the required flexibility to execute our growth road map, especially in China. With regards to credit ratings, both rating agencies maintained their credit ratings unchanged, Ba2 for Moody's and BB for Standard & Poor's, both with stable outlook. On the right-hand side of Page 8, the total cash flow after funding working capital, taxes, interest, dividend and record CapEx investment was a negative EUR 25 million from year-end 2018, resulting in cash in the bank of EUR 126 million, in line with the latest guidance provided in our third quarter earnings call. As expected, working capital was temporarily impacted by higher inventories required to manage the ramp-up of the Korea washing and the aluminum furnace project. These are not expected to occur in 2020 as these initiatives are completed. Secondly, accounting for hedges impacted working capital as year-on-year, the balance move from a liability at year-end 2018 to an asset position at year-end 2019, as hedges on the books are in the money. The operating cash flow in 2019 remained solid at EUR 103 million, approximately flat year-over-year, allowing Befesa to fund EUR 80 million of record CapEx for our growth initiatives and distributing a EUR 45 million dividend. Normalizing for onetime temporary impacts, the run rate operating cash flow remains at approximately EUR 120 million. For 2020, we are planning for pretty much balanced cash flow at approximately current levels of leverage. Turning to Page 9. Our hedging approach and hedging book are the same as during our last update. We are hedged up to and including October 2021, thus for the next 1.5 years. What we have added is in the left lower table, the full year 2019 view on effective zinc average price to Befesa. In example, the monthly blended rate between hedged volume and non-hedged volume which amounted to EUR 2,280 per tonne in 2019 is approximately in line with the October view estimate we provided to you in our third quarter earnings call. This zinc blended price represents an increase of EUR 112 per tonne compared to 2018. Zinc volumes hedged in 2019 remained flat year-on-year as usual -- at the usual 92,400 tonnes per annum rate. Therefore, the improvement in the zinc -- in the effective zinc average price was thanks to the higher hedging prices in place during 2019, which more than offset the 8% lower spot LME average prices that impact the unhedged volume portion. Our hedging strategy is unchanged based on 4 pillars. We like to be approximately 1 to 3 to 4 years out hedged. We hedge around 60% to 75% of the zinc equivalent payable volumes. We continue to hedge the majority denominated in euro. And the hedge prices we show on net prices after credit line forward and currency forward discount. At Befesa, we do not provide any collateral for these hedges. This is priced in by our hedging partners. As always, we continuously review the market for further hedging opportunities at attractive prices and are pleased with our hedging book up to October 2021. Overall, our hedging book continues to provide a much reduced variability of earnings and cash flow and greatly improves the predictability of our earnings and cash flow. Back to Javier now on our growth road map and 2020 preliminary view.

Thanks, Wolf. Although a more detailed guidance for 2020 earnings will be provided once the treatment charge for zinc has been settled, I would like to finish providing a few comments on the outlook for 2020. 2020 is expected to be a year of a strong operating performance benefiting from the executed projects of 2019 as well as further strategic expansion contributing beyond 2020. This would be reflected in significant volume increase in steel dust as well as the completion of the first steel dust recycling plant in China. The strong operating performance will drive earnings growth. On the other hand, the earnings for 2020 will depend on the level of zinc treatment charge as well as the average LME zinc price for the year that affects approximately 30% of the volume of zinc that is not covered by hedge, as Wolf has explained. As I said, we expect to provide more detailed guidance with the release of the first Q earnings at the end of April of this year. In our steel dust business, we expect to run our plants at high capacity utilization across all the markets we operate. And similarly, in our aluminum salt slags business, we expect to continue our high plant utilization levels. In 2019, we invested strongly and successfully executed the majority of the organic growth projects that form one of the vital building blocks of our midterm growth road map. For 2020, we expect this project to deliver positive earnings contributing. In the Steel Dust segment, the upgraded plant in Turkey has an annual recycling capacity of 110,000 tonnes of steel dust. For 2020, we expect to increase the total volume of the steel dust recycled by approximately 10% year-on-year, mainly driven by higher volume in Turkey as well as some additional incremental volume in other geographies. Based on this, we expect to achieve record levels of steel dust throughput and planned utilization well above 90% in 2020. In South Korea, the new washing plant for WOX will increase the level of earnings and margins of the South Korean operations by providing to our zinc smelter [ customing ], a high rate of WOX. Although the full level of earning contribution will not be achieved until 2021 for commercial reasons. In the Aluminum Salt Slags segment, the furnace upgrades at the Spanish plant of Erandio and Barcelona will continue to improve the efficiencies of the secondary aluminum operations contributing to earnings growth in 2020. The other key building block of our midterm growth road map is the expansion in China, driving volume and earning growth for 2021 and beyond. The construction of the first steel dust recycling plant in Jiangsu with a recycling capacity of 110,000 tonnes is expected to be completed by the end of 2020. The second plant under development is in the province of Henan, is scheduled for completion by the middle of 2021, in the third quarter of 2021. Regarding our development in China, as we all know, the coronavirus is causing disruptions in China. At this stage, there is still uncertainty about the impact on Befesa. In the short term, we expect for -- to have some delay in the construction of our plant that cannot be totally quantified at this stage. But in many cases, in the midterm, our expectation about the business opportunity for Befesa in China remains unchanged. Environmental protection as well as electric arc furnace and steel market share are increasing in China, creating the need for the recycling services solutions that Befesa provides. So for 2020, we expect to generate a strong cash flow that will allow us to continue to fund another high investment year, focusing mostly on developing the 2 steel dust recycling plants in China, maintain an attractive annual dividend distribution to our shareholders and manage the leverage ratio around approximately current levels. Finally, in 2020, Befesa will continue to improve its communication regarding sustainability on ESG with its investors and other stakeholders to ensure that the contribution of Befesa to the circular economy and to a more sustainable world are clearly understood. Thank you very much.

Thank you, Javier. We will now open the line for your questions.

[Operator Instructions] The first question comes from Charlie Mortimer from Citigroup.

The -- just 2 questions for me. And to confirm what you're just saying regarding the WOX washing plant, which, as you say, came online in December. Are you sticking with the guidance that it could be, I think you said before EUR 5 million in terms of EBITDA? And did you -- just to confirm that you said that benefit, the EUR 5 million or whatever it is, will be FY '21 rather than necessarily FY '20? And second question regarding utilization for this year. You expecting 90% utilization of the current total -- or the new total capacity in FY '20?

Thanks, Charlie. Regarding the first question, the washing plant of South Korea, yes, the total contribution of the plant at full operation will be depending on the zinc prices between EUR 4 million to EUR 5 million. But as you know, that will happen in 2021. For 2020, we expect half of that figure or even 40% of that figure for a commercial reason. We have some contracts in place signed that we need to honor, and so we will have -- we will be in a position to feed totally the plant in 2021. And the second question was?

Regarding the utilization for this year, I think you were just saying that you can get back to 90%.

Yes. The utilization rates in -- on average, in the steel dust business will be above 90%. And the same will happen in salt slags and secondary aluminum. So we don't expect any problems in feeding the plant. So we expect to have high utilization rates.

The next question comes from Ingo Schachel from Commerzbank.

I have 2 questions. The first one on your China expansion, I think you've explained quite well that the construction time line is more or less confirmed. Regarding the commercial negotiations with your customers, I would think that it's now -- time is approaching where you should actually strike first contracts with your customers. I mean, is there any additional insights or feedback that you're getting from potential clients there? Are you seeing any signs that there's a willingness to pay a collection fee? And are you also seeing commercial interest from, let's say, the same client base that you anticipated a year ago? Or is it that you're probably sourcing material from slightly bigger distances away from your plans or any other surprises in the first commercial discussions with clients?

Thanks, Ingo. Well, initially, or we have -- in the 2 plants -- the 2 projects in China, as I told during the presentation, regarding the project in Jiangsu, before the coronavirus, we expect to finish the construction at the end of 2020. Now the coronavirus crisis could create some delay in the project. Today is really difficult for us to say exactly how big is going to be the delay. Today, our people is still out of the sites, of the work. So -- and we don't know exactly when they will come back to the branch. So as I said, for the coronavirus issue, the time line -- we maintain the same time line, but probably the coronavirus is going to produce some delays that could be, I don't know, 1 month, 2 months or, let's see, it depends how evolve is the coronavirus situation. And regarding the negotiations, well, we have a detailed plan to start talking with all of our potential customers in the -- especially in Jiangsu this year. Starting right now after the new -- the Chinese New Year, we have, again, some delay because of the coronavirus, but we don't expect any surprise -- anything different from the first -- in conversations we have with all our potential customer. We have maintained with all of them permanent contacts, permanent conversations. So we know that they are waiting for us to finish our plant as soon as possible. And we're doing -- the next step is to start real negotiations once we can show them that our plant is progressing on time, okay?

Okay. And the second question would be on your available capacity in aluminum salt slags recycling services. I think, during the last 2 years, you always had a slightly lower available capacity in secondary aluminum because of the upgrades in Bilbao, Barcelona. How should we think about that going forward? Is that similar that you always, let's say, have 5% of capacity that is not available because of upgrades? Or is it less this year and also on salt slags should we expect any big impact on available capacity from the Hannover upgrade?

Okay. Let me start with the salt slags business. In salt slags, we expect a strong year. We suffered some small decrease last year, but it was more -- but it was not counted by any raw material supply problems because there was technical issues in different plants. And we expect the same strong situation for this year. So the low factor should be or will be above 90% clearly, as we face some technical issue that is not something that we cannot forecast, no. Regarding the capacity expansion of Hannover, well, we are today in the first step in getting the final permits to do the capacity increase over the plant. And -- but on the other hand, we will be get to -- analyzing the European automotive industry before to start this construction works. Today, we have -- we are in a position to feed 100% our plants. The market is in a very stable situation. And the last thing we would like to do is to create our capacity in the market. So let's -- it's a decision that probably we are going to take more next year than this year, okay?

Okay. That does it. Maybe just a quick housekeeping question on the revenues because I think in both segments, the revenue decrease was a bit stronger than the, let's say, stable volumes and slightly higher blended thing for us would have suggested, is there anything we should know with regards to revenue recognition or that would help us understand why revenues were a bit low, I guess, there's also obviously, some volatility in recognition of some of the other revenues? Or is it just quarterly volatility?

It's a -- it's only volatility. The main reason to explain the revenue decrease is price and treatment charge. And then the rest -- the small difference could be explained by volume, but nothing special. I don't know, Wolf, if you want to highlight something more, no?

No, nothing special. And no other impact in this.

The next question comes from Oscar Val Mas from JPMorgan.

It's Oscar from JPMorgan. Yes. So my question is on throughput. So it seems like Q4 throughput was down 2% year-on-year. My understanding was that Turkey was fully ramped up in Q4. So the question is, was there any impact from Turkey in that Q4? And why have you adjusted the Q4 utilization from kind of 90% from 85% to 95%? And then the second question is just more housekeeping. Do we expect another benefit in stainless steel next year? Or do we expect flat year-on-year in stainless steel?

Thank you, Oscar. Regarding Turkey, well, the initial idea was to -- or we started the ramp-up in Turkey on time at the end of August of last year. But at the end, we faced some troubles in the ramp-up, basically, because the layout of the Turkish plant is very difficult in the new geographies like Turkey or like South Korea or China, we have a very well-defined plant, perfect rectangle, et cetera. The layout of our old plant in Turkey has been very complicated. And based on that, we have some ramp-up problems that -- and based on that, at the end, the utilization, the rate of the plant in the last quarter of last year was not at full capacity. That's why we have this less production in Turkey, okay?

Okay. So that 95% is ex Turkey? So kind of Befesa ex Turkey?

[indiscernible] .

Okay, perfect.

And then regarding stainless steel. Well, last year, we saw a good recovery in our stainless steel operation. And I think we have in front of us some more -- a small recovery. We cannot see in big figures, but perhaps this year, we can try to achieve another EUR 1 million or EUR 2 million additional in the stainless steel business.

The next question comes from Benjamin Pfannes-Varrow from Berenberg.

Just following up on that same question on -- in terms of the volumes. So I mean there was a shock shortfall in Q4. Is that only because of Turkey? Or was there also some issues that you faced in South Korea and Europe? Because I think on the Q3 earnings call, you mentioned that both were running at high utilization. Was that still the case in Q4? And do you also expect the same heading into Q1 of this year?

Yes. I think, Benjamin. As Javier mentioned, the plant construction in Turkey was completed on budget, on time at the end of August. And then we took the rest of the year for the ramp-up. Now since January, we're very pleased with the performance of the Turkish plant. And as such, that will contribute to earnings growth and we're pleased with that. In terms of the fourth quarter, the remaining regions were as expected and at very high utilization levels.

Okay. So you're seeing no issues from weakness in a broader ...

Not really. Not really, Benjamin. Let me say, in -- I have explained several times that it's something interesting for us. And one, we cannot forecast exactly how long will be the maintenance shutdown of each plant. The maintenance shutdown could be between 2 to 4 weeks, depending on how we are going to find in the repairs, et cetera, et cetera, 1 week of additional shutdown means 2% of utilization rate. So it's something which is, for us, extremely difficult to forecast. That's why we like to say that we will be above 90%, and that will be 90%, 94%, 92%, and that will depend more in our case, in the extent of the maintenance shutdown than an annual thing. What we can confirm is that during last year, we didn't have any problem of supply in neither in our European plants nor in our South Korean plants, okay? And this is the same situation we expect for this year.

Okay. And so for 2020, do you think volumes will gradually ramp up over the year? Or do you expect Turkey to come on full as of Q1?