Good day ladies and gentlemen and welcome to the Q2 2013 Tenaris SA Earnings Conference Call. My name is [Julianne] (ph) and I will be your operator for today. At this time, all participants are in a listen-only mode. (Operator Instructions) As a reminder this call is being recorded for replay purposes. I would now like to turn the call over to Giovanni Sardagna, Investor Relations Director of Tenaris. Please go ahead.

Thanks [Julianne] (ph) and welcome to Tenaris’ 2013 second quarter results conference call. Before we start, I would like to remind you as usual that we will be discussing forward-looking information in the call, and that our actual results may vary from those expressed or implied during the call. Factors that could affect those results include those mentioned in the Company’s 20-F and other documents filed with the SEC. With me on the call today are Paolo Rocca, our Chairman and CEO; Guillermo Vogel, Vice President of Finance and Member of our Board of Directors; Edgardo Carlos, our Chief Financial Officer; German Cura, the Managing Director of our North American Operations; and Gabriel Podskubka, our Managing Director of our Eastern Hemisphere Operation. I would like to start by mentioning that we will also have an investor presentation in London on October 4 and we will look forward to seeing many of you there. Before passing over the call to Paolo for his opening remarks, I would like to briefly comment our results. During the second quarter of 2013, sales increased 1% to $2.8 billion compared to the second quarter of last year and 6% sequentially. The sequential increase was driven by higher sales of premium or strategic product in the Middle East and Far East which offset a strong seasonal effect in Canada and lower sales of line pipe products in Europe. Our EBITDA reached $730 million which was 4% lower than the corresponding quarter of last year but 4% higher sequentially. Our EBITDA margin of 26% continues to maintain a good level but was impacted by higher SG&A expenses mainly due to higher freight and commission expenses driven by the lower share of shipments to our local market. Average selling prices were up 4% compared to the corresponding quarter of last year and 3% sequentially supported by a good product mix. During the quarter, cash flow from operations remained strong at $611 million and we ended the quarter with a net cash position of $214 billion after the payment of $354 million in dividends paid in May. Now I will ask Paolo to say a few words before opening the call to questions.

Thank you, Giovanni, and good morning to all of you. Our second quarter results reflect the different market dynamics that we are facing around the world. Whiles sales in the Eastern Hemisphere region rose strongly, they were largely offset by decline of sales in North America where our sales was affected by an unusually wet spring in Canada and halting by Pemex of operations in Northern Mexico. Our sales in the Middle East and Africa reached a quarterly record of $626 million dollars. Sequentially, we increased the shipments not only to Saudi Arabia but also to Iraq, to the Emirates and Nigeria. Nigeria we also had a good contribution from our local pipe coating subsidiaries which provides insulation and other coating for line pipe products. In the Far East, we increased the shipment to Australia and Indonesia. It was a good quarter in terms of product mix. Sales of premium connections rose 9% sequentially and in the first half are up 17% over the same period of last year. We have been expanding our portfolio products to meet new operator requirements for the most complex deepwater and [HPSD] (ph) operation. On our last call, we mentioned our new integral Wedge 623 connection. This connection is successfully passed a series of testing requirements set for it for the [indiscernible] shale project in the Gulf of Mexico. Now we are introducing a new premium connection specially designed for complex high pressure high temperature application. Our [BlueMax] (ph) connection has been selected by Maersk Oil for its forthcoming HPSD offshore well drilling campaign in Norway. In July, our BlueDock connector was successfully run in a rig trial by Petrobras in Brazil. Sales of our Dopeless connection also reached a quarterly high and we are seeing considerable interest from customer in the Angolan [indiscernible]…

(Operator Instructions) Your first question comes from Ole Slorer from Morgan Stanley. Please go ahead.

Congratulations on a pretty good execution here at what looks to be close to the trough of the cycle. My question is as we look towards the fourth quarter, you highlighted a recovery in North America EBITDA based on the latest well efficiency versus rig count data, but the recovery in North America I wouldn't think would be driven by premium yet you are suggesting that the mix will improve as we go into the fourth quarter despite a pickup in the North America, could you help us kind of explain the forces that contributes to that?

Thank you for your appreciation and for your question. I will leave German to give you a view on how we expect the North American market to pick up but as a general comment, as we said that we expect the mix to improve for the entire operation of Tenaris. We see that the most dynamic segment in the Eastern Hemisphere and worldwide are basically requiring premium connection for different operation. North American specifically I will think will remain more balanced but anyway German please comment on this.

Thank you and good morning. I think I would agree the view we have is that demand in North America has and will remain healthy. The issue in North America, volumes in North America that we see under pressure is a lot more associated to the level of imports and this is particularly true for the low end component of the demand. Now there is an efficiency particularly the notion of WTI closing the gap to blend is somehow bringing in an additional cash flow to most of the customers in then to translate to potentially increased level of activity. But from a mix perspective, I think North America will remain balanced. In the mix, there is by and large aiming at oil

Yes so therefore I think it is interesting that you highlight that despite I mean Canada will see a very strong recovery in the second half of the year and again [indiscernible] the most high premium given it's onshore but yes you mentioned that the entire corporation will be on a role of swing towards premium despite this strong recovery in North America land which isn't exactly the highest end and also if you assume that something comes out of trade case that would reduce the import of welded pipe you still think that you can increase the mix for the corporation as a whole towards more premium in the fourth quarter, I mean that suggest a very strong ramp in other parts of the world but I'm just trying to understand how that plays out?

We [indiscernible] expect the premium demand on a worldwide level to be the push that we are mentioning in our statement. Let me tell you on premium, the Eastern Hemisphere product for [HPSD] (ph) for deep offshore for some shale in complex environment is driving increased demand in premium and in this environment, I think that a prevailing trend will be set by this increased demand in premium in this hemisphere. I think this will be the driver of activity and in this moment, we will also see some recovery in price and power in premium during next year.

Thank you very much, this suggests a strong close to the year. Thanks for that.

Your next question comes from Bill Sanchez from Howard Weil. Please go ahead.

I guess as a follow up for you on North America specifically I guess the second half guidance but I wanted to just talk about the third quarter, I guess I'm a bit surprised given that you do expect to see Canada snapping back in 3Q relative to 2Q but that we wouldn't still be expecting to see sales perhaps up in 3Q relative to 2Q, it sounds like as the press release is saying, 3Q should be flat with 2Q, I'm just wondering if U.S. continue to improve a bit, is Mexico creating still a headwind for you guys, I know the northern region slowdown was called out in the press release but my understanding is the south is going very well for Tenaris, it’s a very high-margin work for the company, could you just talk a little bit about the progression 2Q to 3Q in North America sales?

I will ask German to go at it and then I'll get back for some comment on the third quarter.

Very generically, I think starting with Canada, I think what we see in 3Q that will be naturally a little higher, we're coming out of Q2 which has been particularly slow, particularly wet level of activity here up about 20% less comparing Q2 to Q2 last year. Now the States as I said already, the level of demand continues to be healthy, even probably more than that. We don't really believe that we have a demand issue in the states and I tell you the view we have is that the notion of as I said WTI improving would only contribute to that level of demand. The point though is that we continue to have levels of imports at levels of above 50%, we continue to see some pricing pressure in the low end, [indiscernible] just came down 0.7% [20 days ago] (ph), and we don't believe that will change anytime soon. Now as for Mexico and the situation in Mexico, probably Paolo I will turn it back to you for the comment there.

First of all a brief comment on the impact on the third quarter in general for the company, we are mentioning in our statements that we will have a particular weak third quarter. This is basically driven by the combination of stoppages in a manner that is beyond what is usual to in the summer in the northern hemisphere. This year we will have stoppages from [indiscernible] to Mexico to Canada to Japan to Romania for maintenance, I mean nothing extraordinary but there will be a concentration of stoppages in seamless especially. And second, we will have weakness to clear almost all stoppages shipment of line pipe project in Brazil, this is something temporary, we will be shipping important product [indiscernible] in hopefully during the beginning of 2014, but for this semester, July to December, we'll have a particularly lower level of shipment in line pipe. And the third effect, in Argentina we are in the process of signing a long-term agreement with [YPS] (ph). In this agreement we will deliver just in time for the [indiscernible] and will pick up the stock of YPS. This will imply that the upper end demand for us will be reduced particularly in the third quarter and maybe to some extent also in the fourth quarter. It is also a temporary thing in the context of the very good level or increasing level of activity in the region. In Mexico, I will ask Gabriel to give us a view how we see the evolution of demand in the region, in the country.

Thank you and good morning. In Mexico as was mentioned by Paolo and as we mentioned in the last conference call, we experienced a reduction in almost the whole of northern region. When you see our shipments to Pemex second quarter versus the first quarter, we lost like 10% of the volume and we see this more or less at this level that we are experiencing in the second quarter to stay the same in the third quarter. The halt in the northern region was offset partially by more activity in the southern region and in the sea region and then we see, we are going to experience an increase again in the fourth quarter. We think that Northern region we're going to start to see more activity when we go deeper into the third quarter and then again a little bit increasing in the fourth quarter. And what we expect in Mexico as we mentioned also last conference call is that probably next week we're going to have the presentation of the Energy Reform by the President of Congress, so we are going to have a much more color and much more light within the next two weeks on how the reform is coming. I think the reform is going to be good news for us. We won't see an immediate effect, we think we're going to start to see an effect on that on the activity by the fourth quarter of next year and we are going to see the full effect in 2015, but so we see a partial increase and more dynamics in the fourth quarter and from then on, we're going to start to see a gradual increase in Pemex.

Thank you for that. If I could ask one follow-up just on housekeeping side perhaps just around the G&A and also tax rate here how should we think about the second half of the year because when I look at the gross margin performance, it was actually pretty commendable in 2Q yet we saw a big spike in the percentage of G&A based on revenues here, can you give us a sense on that and tax rate here for the back half of the year please?

Yes, Edgardo could you expand on that SG&A and tax for the period?

In this quarter, basically we have reflected an increasing logistic cost, very much associated to our sales in Middle East and Asia, and to some extent, the impact of delay in payments that we have in our business in Venezuela. Looking forward as a percentage of sales, we will see some deterioration probably of this ratio in the third quarter as the fixed component basically will remain unchanged in a lower [indiscernible] environment. However in 2013, we would expect to have it basically in the range of 18.5%. Coming to the tax rate, we will expect to finish probably this year in the range of 25%.

Your next question comes from Michael LaMotte from Guggenheim Securities. Please go ahead.

This is actually [indiscernible] for Michael today. Just had a couple of questions, I guess kind of following up on the accounting side. The depreciation cost jumps after being flat for about three quarters in a row. Just wondering is $152 million the new baseline or what's kind of the cause of that increase, I don't think of 2013 as a year in which fixed capital is coming online, so if you could just expand on that a little bit?

Yes Edgardo could you comment on these?

Yes, we have some increase due to the fact that we have the CapEx coming into our financials in this quarter, so we had expecting for the rest of the year basically in line with the second quarter, so in the range of $400 million in total for the year for the position of fixed assets.

That's helpful. Just one more, hot rolled coil prices which we use as a property for modeling your steel cost have been falling since May but a spike back after the December level, kind of over the last couple of months, which quarter do you think this is going to reflect in your P&L and where we are going to see your lowest realized steel cost and just if you could speak a little bit about that kind of going forward?

I think in general terms we saw a reduction in the price of hot rolled coils and then last month some pickup particularly in North America, but we will see the reduction in hot rolled coils to be reflected to some extent in the third quarter in our accounting. Maybe Edgardo you can expand on this.

Sure. Basically the reduction in the cost of coils that we purchased for in the first quarter of this year has been fully reflected in the third quarter while the pickup of the last increase in June will be reflected from early in the fourth quarter.

Okay, great, so about six months lag there. Great, that's all for me. I turn it back now.

Your next question comes from Stephen Gengaro from Sterne Agee. Please go ahead.

A question on this pending trade case, as you start to think about history, these OCTG trade cases generally come out pretty positively and while we don't have the details like when before you acquired Maverick for example, it's my understanding that part of the issue behind getting these things approved is to approve some type of injury or harm to the North American producers, so how are you thinking about this trade case and the potential outcomes and then ultimately the potential impact on you if it comes out favorably?

Let me first very briefly talk about the process and the injury aspect of it. The case was filed July 2, we had preliminary hearing July 23 at the International Trade Commission in Washington when we fundamentally explained the argument as industry, we had a direct and active participation in it. We are expecting a preliminary determination by almost the 16th where fundamentally the ITC will determine whether the basics are there for the case to proceed or not. Now from an injury perspective, I'll go back to what I said before, we continue to see demand at here at the levels, demand through drilling efficiency increases despite a very fairly stable rig count, level of imports which have reached 50%, Korea in particular just so you know has brought to the States about 420,000 tons in the first six months, Korea during 2012 brought about 1 million tons. When we did the case back then based on your comments, their participation in the market was about 200,000 tons. And this is naturally translated on a variety of different things, but normally despite a healthy demand situation [indiscernible] coming down 11% over the course of the last 12 months. Now the case proceeds on, I wouldn't really still speculate on the results. We are seeing the need to conduct the process, all is going well as we all know, is something where we don't expect any results at least till March next year. And I think at this point, I wouldn't really speculate on what the final outcome would be. Hopefully that answers your question.

That's helpful. And the other part of the question would be and maybe you can help us understand that a little bit more, to the extent the case is won and imports drop off, is there any concern that those imports find another home and disrupt your business somewhere else or they have the quality level which is too low to have any impact in other markets?

Given the nature of the welded OCTG production, we believe this may catch very few markets other than the States. The States continues to be the single biggest low demanding pipe applications market in the world and this is by and large what the Koreans and the Vietnamese are the others are producing. So the short answer is, the view is that they will have serious difficulties to reallocate the volumes that we have seen in the States in the international market given the nature of what they produce.

I would summarize by saying that we have I think a very strong case on injury if you look at the level of operation and profitability of the industry operating in the U.S. in the same segment. As far as let's say the transfer or the movement or the repositioning of these exports, there is no other market other than States in which you have a strong rate of distribution and the size of the demand for land , it's higher than in any other market. So there is a limited scope for expansion. Also as we stated back, in this segment worldwide, there is overcapacity, there is overcapacity in low end because of the excess capacity in China and in other countries in this low-end segment. So that would be let's say even more excess capacity, capability and aggressiveness in this segment worldwide.

Great, that's very helpful color. Thank you.

Our next question comes from Raphael Veverka from Exane. Please go ahead.

I have two questions in fact. First one on North America, so we have the markets realizing, are you considering that the prices have bottomed out even in low end projects or could we expect a little bit more pressure by year end? And my second question is on the Middle East where once again your sales administration is strong and you mentioned further improvements in the next quarter. In your view, is there a strong restocking component in this sort of trend especially as Aramco go up and do you feel whether it is just slowdown by maybe early next year or you see that [indiscernible]?

I will ask German again to give additional light on how we foresee the pricing environment in the different segments and then I would ask Gabriel to expand on the situation in the Middle East and Southeast.

I think on the low-end component in North America and the States in particular, I would say that I don't think we've seen the end of it. We've seen [indiscernible] only a couple of days ago with minus 0.7%, so I don't believe that we are going to see major reductions going forward but demand for so many at this point, we've seen this minus 0.5%, minus 0.3, minus 0.7, and I think that it may continue to be so. Now the position at the high end I think is quite different. We've seen renewed requirements of high-end items for both the shales and [indiscernible] operations where we have seen pricing dynamics behaving in a much different way.

To answer the question on Saudi dynamics and stocks, we believe that the level of tendering that we are seeing from d Aramco is driven by an increase in demand. The rigs are being increasing and we continue to increase. Aramco started this year with 140 rigs and we are confident they will reach the 170 rigs that they are planning to have by the end of this year. This is driven mainly by the [indiscernible] efforts to offset oilfield decline, depletion that is in the rate of 8%, and in addition to this, there is an increase in the domestic gas demand in the rate of 7% that is also driving part of this increase. The buildup of the rigs that we are seeing is targeted also partly for offshore and part in the gas which is also playing to our benefit since it will signify more demanding applications. So this is in a nutshell there is a true increase in demand, logically there is also an adjustment of this top level to a new increase of demand but this is what we see today.

Okay, that is very helpful. Thank you very much.

Your next question comes from Paula Kovarsky from Itau Securities. Please go ahead.

I'd like to ask a bit of perhaps a longer-term question thinking about '14, '15 and the slight demand equation in North America for [CTG] (ph) and [indiscernible] in particular, what we see is that there is another 3 million tons of CTG capacity coming on stream within the next three to four years and some of the capacity that came on stream this year would be already enough to replace part of the reduction in import. So I would like to hear from you what's the view on this supply demand, I mean it looks a bit lose and how do you see that affecting prices going forward and perhaps if you could also place the impact of a more successful reform in the Mexico, how would that affect that dynamics in your view?

I think that clearly it is difficult to have let's say a clear view on the scenario for the energy development in the United States in the long run but there is in fact gas price and gas resources in U.S. are a structural issue for all of the U.S. economy and U.S. industrial development. So there is a competitive advantage that is there to stay for very long period of time. We see project that could increase demand for gas in North America in the medium-term and if you consider an increase in the building forecast, combined with the increased drilling for oil and shales, you may have different scenario that could imply substantial increase in volume and demand in the States in the long-term. The imports used to also contribute to the demand in the region. On the capacity side, I think you've figured out very high. One consideration is the plant do not ramp up easily to the maximum capacity or they may not even reach maximum capacity, it's marginal cost at this point is very high. So the capacity will be used within a rational level not at full level. Second, there is capacity for high quality types and there is also for differentiated product and there is capacity for low end product. So the market in that condition in the medium run will be segmented in a different way that will be different segmented. We do not have one segment covering all in this product. I think when I look at it, I am very confident on Canada and U.S. and also Mexico in the long run in terms of additional activity in the oil and gas. There will be some export from Canada, there will be some export of gas from the U.S. usually combined with increased demand, so in the long run, I am very confident on the need and the opportunity that the energy sector will offer. In Mexico, it will depend on the terms of the Energy Reform, but I think German if you look at the medium-term or long-term, how do you see the evolution of the energy sector in Mexico.

When you see what has happened up till now, what you see is that Pemex has been captive in terms of how much they can invest because of the fiscal requirements that the accounting imposes on [indiscernible], and when you see, you see that there are specific segments, high potential segments that have been unattended because of these lack of resources. And you have three examples which are very clear, you have deep waters, where deepwater last year there were only six wells drilled and this year there is expectation of another six wells, you have the shales with a very similar dynamics, and you have [indiscernible] where this quarter we had lower production than last quarter. So, these three big segments we are doing the reform, my expectation is that while [indiscernible] they are going to be open for drilling. That probably is going to have – there's going to be a [indiscernible] where the country is going to continue to the require the income coming from payment but there is going to be the opening of these three segments for foreign investment or foreign participation or private participation and so what I see is that I see an increasing of doing activity for as I mentioned before probably we're going to see up to fourth quarter next year 2015, but I see that this three segments are going to be active and that is going to be good for our business in Mexico in the northern region.

Okay, but would you agree that that all depends on the private investments, meaning it's kind of common understanding that the fiscal reform will not be enough to provide money to Pemex, perhaps most of the money goes more into investments and infrastructure, so would you agree with that, I mean is it something that really relies on private investments slowing into Mexico?

I think that the fiscal revenue that is obtained from Pemex are going to be maintained on probably a period of maybe 10 years in terms of maintaining Pemex its actual activities and that all these three segments that I was mentioning before in order to be active, they're going to for sure require foreign or private participation and I think that's the whole aim of the reform that is going to state one way or the other. I see an aggressive reform, I think we are going to see some constitutional changes and so I think that we are going to start to see that and that has to be the end result of the reform that is going to be proposed hopefully next week.

Okay, thank you. And quickly about Brazil, when do you expect Petrobras to resume the orders on line pipes?

We expect to start shipping again in the first quarter of 2014 for big projects, for [indiscernible], and then we think that the development of offshore will be recovering the normal days. In this moment, we have a good activity in the drilling of CTG but delay in project.

Your next question comes from Geoffroy Stern from Cheuvreux. Please go ahead.

First of all, I would like to come back on the [indiscernible] U.S. if I understood you correctly earlier in the call, you said that you were not expecting any major implications before March next year with if I'm not mistaken the case [indiscernible] to July 2, so if by mid August the ITC decides to go on in this case, why should we not see a [indiscernible] in the results fairly quickly and in terms of potentially a pickup in prices, that is my first question?

German, could you summarize the timing of these.

Before going into it probably I wasn't clear, I apologize for that, but what I tried to say was that whatever the end result the case would not be formerly completed as a process until March. Now, the preliminary determination would come August, and as we know, the cases have been established times for both the DOC and the ITC to conduct the investigation and process. Now, I also said and we don't really want to speculate that at this point as to what the result may be and the potential implications of the result, and I think we would like to leave it at that point to that.

And second question with regards to your volume for the upcoming two quarters, could you be a bit more specific for Q3, Q4, basically do you expect overall your volumes in H2 to be comparable to H1?

As we said in the opening remarks, we expected the next semester we expect to maintain our margin in line with what we have immediately on the present level, but with an imbalance in the third quarter for the reason that I mentioned, additional stoppages, and Brazil, some stock reduction in Argentina so lower shipments in that, will be well below what is normal and customary for our seasonal seasonality, but we think we will recover in the fourth quarter.

But you're not sure yet to quantify that potential in Q3 in terms of volumes?

For the semester, as I mentioned, we plan to be right in line. Now I wouldn't give the precise, because really some of this factor and shipment could vary between now and the end of the third quarter.

Okay and just a final one if I may, looking at your backlog with a return [indiscernible] but in terms of your [indiscernible] so do you see outside of the U.S., what did you see compared to what you delivered in Q2, do you see especially when you look at the [indiscernible] for let's say Q4 and Q1 next year, do you see an improvement there through Q2 on that [indiscernible] or do see continue a bit more flattish?

So we see as we mentioned, we see strong demand inquiries negotiation for differentiated product, line pipeline in different areas from the deepwater West Africa, Gulf of Mexico, Northern Europe, I mean there are segments in which we have a very strong position are very dynamic, deepwater is one of this, high-pressure high-temperature project very demanding and in-line complex line pipe offshore we are discussing and specifying technically some of this. So we feel that on the high end there is strong backlog. I would say that the industry is managing product with a scenario in which the price fall will stay in the range between 100 to 110 or wide and especially at this level also the WTI. So this is also driving more pressure, more movement in some of the complex projects in North America. So when we look at this segment, the dynamic backlog for 2014 in the high-end we consider let's say a very solid situation.

Thank you and your next question comes from [indiscernible] from Raymond James. Please go ahead.

All my questions have already been answered, so I'm sorry.

The next question comes from Caio Carvalhal from JPMorgan. Please go ahead.

Also my questions have been already partially addressed so I think it's some very specific data points that I want to discuss with you. The first one is on volumes, we saw a sharp decrease in volumes in North America, reasons were pretty well explained over the call and over the release, I just wanted to know, when we look at the third quarter and the first quarter, if we should look for volumes close to the level we are in the second quarter, means below let's say, basically with overall sales below $1 billion? And second question is level of sales in North America in the second and the third quarter compared to the second quarter? And also slightly connected to that, it's related to the trading case you have against the Asian importers, when we had a similar situation with the Chinese a couple of years ago, before we had the conclusion, we saw a second increase in prices just on the back of the expectation that the result could be favorable for the [indiscernible], so I was expecting basically to see price as a little [indiscernible] in the third quarter and what I want to check with you guys is that there something changed so we are likely to see price to feel pressure in the third quarter for this situation is what is going to happen now, or no actually prices are likely to look a little better in third quarter already? These are basically just two questions I have?

On the first question on volume in North America and how do see the next two quarters, German.

I think it is correct observation, we will see Canada affect particularly improving on a Q2 which was particularly low, therefore it is likely that we will not be probably seeing overall volumes below or more equal to Q1 than not. This of course are all moving parts both in the States [indiscernible] comment on [indiscernible] as well but the Canada reduction during Q2 has been substantial, we'll see an important recovery from that perspective. Now on the trade case and the potential implications, I would caution you the notion that while we filed the case in July, number one, inventories remain at a very high level. I said that during the first semester, we've seen only foreign imports in the level of about north of 400,000 metric tons and then also we look not only at the existence on the ground but the import licenses and import licenses are also fairly big. So we don't really see any major movement in the short run in the third quarter as you indicated, and beyond that as I said before, we don't really want to speculate at this point as to how things would move.

As far as prices are concerned [indiscernible] there is clearly a different situation between low-end and high-end on the product. In the case of low-end, there is a lot of excess capacity and this will even get bigger to worst because of any antidumping in the United States. In the case of high-end in the coming what you're doing from now to next year, we think that it will be more pressure and then more pricing power more demand. So, in an environment in which capacity is not really expanding and on the contrary the demand of the product is posting additional requirement on product and on capacity for this more let's say high end segment of that.

(Operator Instructions) The next question comes from Julien Laurent from Natixis. Please go ahead. Julien Laurent – Natixis: Three questions from my side. The first one about the new meaning in the U.S. what is the next expected [indiscernible] regarding this new festive year, when do you think that you will have to order the equipment to run the facility in 2016? The other question is about Canadian market, if I remember well for the trading case against the Chinese, the Canadian market where the [indiscernible] the Chinese, would that be case also against the [indiscernible] before? And the last question, could you just clarify for depreciation in 2013 is it 600 million?

On the first question, we are well in the process of the final definition of some of the let's say the take with different vendor, we expect by October to be in the commission to define and to place the order for the key [indiscernible]. German, on the trade case.

On Canada, you had an interesting point. While the U.S. continues to be by far the single biggest low-end market in the world, Canada happens to be the second one, and it is likely that as it happens by the way, in this case it were to be successful in the States, than it is likely again that some Korean production may be diverted to Canada but I think that many will wouldn't reach as speculated at this point as to what may or may not happen. I'll turn it back to you. Julien Laurent – Natixis: Just my last question on depreciation please, just my last question about the depreciation portfolio for the next, could you just?

Depreciation as I said in terms of fixed assets depreciation will be in the range of $400 million flat, the depreciation on intangibles $200 million, but overall it will be in the range of $600 million a year.

I'd now like to turn the call over to Giovanni for closing remarks.

Okay thanks a lot for taking part in this conference call, and we are off to see you in London, October 4 for our investor presentation, and thanks a lot.

Thank you very much.

Thank you for your participation in today's conference. That concludes the presentation. You may now disconnect and have a great day.