Good morning, everyone. Welcome to BASF's conference call for analysts and investors on the second quarter results. Today's presentation is being recorded. All participants will be in listen-only mode throughout. The presentation will be followed by a question and answer session. Today's presentation contains forward-looking statements. These statements are based on current estimates and projections of the Board of Executive Directors and currently available information. Forward-looking statements are not guarantees of the future developments and results outlined therein. These are dependent on a number of factors. They involve various risks and uncertainties, and they are based on assumptions that may not prove to be accurate. BASF does not assume any obligation to update the forward-looking statements contained in this presentation above and beyond the legal requirements. With me on the call today are CEO Markus Kamieth and CFO Dirk Elvermann. Now, please be aware that we have already posted the speech on our website at basf.com/q22026. I would like to hand over to Markus. Thanks, Stefanie, and good morning, everyone. Happy that Dirk and I can welcome you today to our Q2 conference call. We pre-released the second quarter results already as our EBITDA before special items considerably exceeded consensus expectations. Stronger prices and higher volumes, as well as lower cash fixed costs drove earnings growth in all but one segment. We strengthened our position in the market and advanced our restructuring as well as portfolio measures. You may recall our priorities for 2026, which I presented during the full-year conference call in February. Today, I am pleased to share that we have achieved major progress in all three areas. We are successfully implementing our Winning Ways strategy. In the following, we will show you how we delivered on our priorities and created value in the first half of this year. As we already held a dedicated virtual deep dive on the Zhanjiang Verbund site in June, we will not address this achievement in detail today. Let's take a closer look at the factors that drove BASF sales development. In light of the geopolitical developments, we present monthly figures compared with the corresponding months of the prior year and excluding the impact of metals. At the beginning of the year, declining prices for key raw materials such as naphtha and natural gas resulted in lower sales prices. This trend reversed in the second quarter of 2026 following the escalation of the conflict in the Middle East and the blockade of the Strait of Hormuz. In response, we successfully implemented significant price increases, particularly in our upstream businesses. From a volume perspective, we captured considerable growth throughout the first half of 2026. This was supported by the startup of our new Verbund site in China and our ability to maintain uninterrupted supply by leveraging our local for local production footprint, flex feed steam crackers, and dedicated trading operations to source key feedstocks. Our unique setup provided a clear competitive advantage. Volume growth accelerated significantly in March. The high uncertainty led customers to secure supply through some advanced purchases. In the second quarter, volumes continued to grow considerably compared with the prior year months, particularly in the core businesses. Currency headwinds eased over the recent months. Portfolio effects were minor and were mainly caused by the sale of the decorative paints business as well as the Food and Health Performance Ingredients business in the second half of 2025. A slightly positive portfolio effect resulted from the acquisition of AgBiTech, a company specializing in biological insect control solutions completed in March this year. Let's now take a brief look at regional volume and price developments compared with the prior year quarter excluding metals. Following the strong momentum in the first quarter, we continued to deliver considerable volume growth in Greater China, supported by the successful ramp-up of our new Verbund site in Zhanjiang. As a result of the Middle East conflict, prices rose significantly in Greater China as well as in almost all other regions, particularly in the upstream businesses. In Asia-Pacific, excluding Greater China, we also recorded considerable volume growth, mainly driven by the chemical segment. In this region, prices rose considerably too, especially in the materials and chemical segments. In Europe, all core businesses contributed to volume growth. Prices in Europe increased strongly, especially in the chemicals and material segments. In North America, we recorded slightly lower volumes, mainly on account of a scheduled turnaround of the steam cracker in Port Arthur, while prices increased considerably. In South America, Africa, Middle East, volumes increased significantly, mainly because of the Agricultural Solutions, chemicals, and Industrial Solutions segments. Prices declined slightly, particularly on account of the Ag solution segment. Moving on to the earnings bridge. EBITDA before special items rose significantly by 54% to EUR 2.4 billion. The increase was primarily driven by continued volume growth and higher specific margins. Earnings grew in all segments except Surface Technologies. The strongest contributors were the core businesses, particularly the materials, chemicals, and Industrial Solutions segments. Other also contributed to the considerable earnings increase, mainly due to commodity derivatives used for hedging. In the material segment, higher contribution margins and lower fixed costs in both divisions led to a considerable increase in EBITDA before special items. The polyurethane and ammonia value chains contributed most strongly. The chemical segment recorded a considerable increase in earnings, mainly driven by petrochemicals due to higher contribution margins. Scheduled maintenance turnarounds in Ludwigshafen and of the cracker at the Port Arthur site were a drag on earnings growth. Industrial Solutions also delivered strong results. The significant earnings improvement was driven by lower fixed costs in the Performance Chemicals division and higher contribution margins in the Dispersions & Resins division. In the Nutrition & Care segment, earnings came in slightly above the level of the prior year quarter, mainly due to lower fixed costs in the Care Chemicals division. By contrast, EBITDA before special items in the Surface Technologies segment fell considerably compared with the prior year quarter. Earnings in the ECMS division declined mainly because of lower earnings in Precious Metal Services. This could partly be offset by higher earnings in the emission catalyst business. In the Battery Materials division, earnings declined due to the expiry of subsidies, which led to higher fixed costs compared with the prior year quarter. Now let's turn to Agricultural Solutions in a bit more detail. The next key milestone for our largest and most profitable standalone business is reaching IPO readiness by mid-2027, and we are well on track to achieve this. Agricultural Solutions delivered a very robust performance in the first half of this year. While sales declined slightly on account of currency headwinds and slightly lower prices, we captured volume growth in all regions. Volumes rose particularly in fungicides, herbicides, and seed treatment. Thanks to the earnings increase in the second quarter, EBITDA before special items almost matched the strong level of the prior year first half. In the current market environment, this is a strong achievement by the team. Let me add that the second quarter growth in South America benefited to some extent from volumes brought forward ahead of the ERP system conversion in this region. At 29%, the EBITDA margin before special items remained almost at the level of the first half of last year. This brings me to our efforts to further enhance BASF's competitiveness. We are successfully accelerating the streamlining of our global organization. This chart shows that in the first half of 2026, we already reduced more positions than in the prior two years combined. I would like to emphasize two figures that further illustrate the momentum behind our efforts. From January 2024 until the end of June 2026, we reduced the number of employees by around 7,000. Please note that this figure excludes both the reductions resulting from divestitures and the workforce buildup associated with our Zhanjiang Verbund site. On the left-hand side, we highlight another milestone. In May 2026, the number of full-time equivalents at BASF SE in Ludwigshafen was brought below 30,000 for the first time since 1954. This is an important and necessary step toward restoring the site's competitiveness. Let me continue with some further updates on the structural improvements at our Ludwigshafen site. We are well advanced with the necessary asset restructuring. Since 2024, the share of highly competitive production units at the site increased from 78% to 88%. With its broad and diversified portfolio of upstream and downstream chemicals, Ludwigshafen is by far the largest site in BASF Group and has a very high degree of integration. Over the past few years, the site has increasingly focused on supplying the European market. This is in line with our local for local approach, which we apply globally. More recently, plant utilization rates improved amid the supply disruptions caused by the Middle East conflict. We will continue to review and adjust our asset portfolio as needed to be a reliable and best-in-class supplier for our customers from various industries. In this context, I will provide a brief update on the progress of BASF's cost savings programs. We are confident of achieving our annual cost savings target of around EUR 2.3 billion by the end of this year. At the end of June, we already have achieved a total annual run rate of EUR 2 billion. We continue to expect total one-time costs of at least EUR 1.9 billion by year-end 2026. We have also made progress on our portfolio measures. As you are aware, we successfully closed the Coatings transaction with Carlyle on June 30th. The enterprise value of the transaction amounted to EUR 7.7 billion, and the cash consideration received was around EUR 5.8 billion on a pre-tax basis. The disposal gain after taxes of EUR 3.5 billion is reflected in net income and earnings per share of BASF Group in the second quarter. We now hold a 40% equity share in Surventis. Through this equity stake, we will continue to participate in the future value creation of the Coatings business while sharpening BASF's strategic focus. This successful closing marks a key milestone in the swift execution of our Winning Ways strategy to unlock the value of BASF's standalone businesses. I would also like to mention that we have accelerated the sell-down of our participation in Harbour Energy and generated cash proceeds of more than EUR 800 million since March 2026. We have reduced our stake in Harbour Energy to under 25% of the voting shares. The reduction reflects the successful sale of 80 million shares via an accelerated book building in March 2026, the agreed block sale of 150 million shares in May 2026, and a number of smaller share sales into the market. Our remaining share in the company is currently worth roughly EUR 1 billion. As communicated on various occasions, it is our strategy to exit the financial investment in Harbour Energy over time while being mindful of value. With the standalone businesses on their own successful paths, our core has become more focused and coherent. This creates new opportunities to unlock synergies and to work more effectively across BASF's core businesses. As announced in May, we aim to operate the core businesses at up to 20% lower net cash fixed cost by 2029 compared with the 2024 baseline. In the first half of 2026, our ongoing measures to improve competitiveness already led to a 4% reduction in net cash fixed costs in the core compared with the prior year period, and there was a strong positive momentum in the second quarter. This figure relates to BASF's core businesses and other, and is adjusted for currency, portfolio and one-time effects, making it comparable. Since the baseline for CoreShift is 2024, part of the cost savings measures already initiated contribute to the program. However, CoreShift will go significantly further. We will create a new tailor-made operating model for our core and leverage synergies across the core businesses, R&D, service units, and corporate units. We focus our activities on what truly matters. We harmonize our processes across the core and expand the use of AI. We standardize our systems and tools to create even more synergies, reducing variety, enforcing common solutions, and focusing on what works best overall. We increase flexibility in task location and organizational design to realize cost advantages and benefit from synergies through bundling. In a nutshell, we change what holds us back and boost what makes us strong. This will position us to win in our markets and create the financial flexibility we need to keep strengthening and growing our core businesses. I am convinced that our core has the scale to lead, the focus to compete, and the power to perform, and most importantly, the people to win. With that, I hand over to Dirk. Thanks, Markus. Good morning, everyone. Let's now take a look at the key financial figures in the first half of 2026 compared with the prior year period. At EUR 4.8 billion, EBITDA before special items improved significantly by EUR 715 million compared with the prior year period. Especially the Materials, Industrial Solutions, Chemicals, and Surface Technologies segments contributed to this increase. Cash fixed costs of BASF Group declined by around 4% to EUR 7.9 billion. This is the result of the ongoing restructuring efforts, particularly in our core businesses and the favorable FX development. Net income improved by EUR 4.2 billion and came in at EUR 5.1 billion. This includes the disposal gain of EUR 3.5 billion after tax from the Coatings transaction with Carlyle. Free cash flow decreased and came in at EUR -1.6 billion. Lower payments made for property, plant and equipment and intangible assets partly offset the decline in cash flows from operating activities. Turning to the cash flow development in the second quarter of 2026, let's have a look at more details. Cash flow from operating activities declined to EUR 524 million, mainly due to a higher cash tied up in the net working capital. This resulted primarily from two effects. On the one hand, higher sales led to higher trade accounts receivable. On the other hand, capital tied up in inventories increased as a result of higher raw material prices. In addition, the cash flow from operating activities was burdened by spending of around EUR 200 million related to the transformation of BASF Group. In particular, this was for cash effective restructuring measures and the introduction of the new ERP system needed in Agricultural Solutions and the core businesses. Payments made for property, plant and equipment and intangible assets decreased to EUR 713 million. Free cash flow thus came in at EUR -189 million compared with EUR +533 million in Q2 2025. We still expect to achieve our full-year free cash flow forecast. In the second half, our operating divisions are expected to collect even higher receivables than last year. The level of inventory reduction will largely depend on price levels. Payments made for property, plant and equipment and intangible assets are likely to come in below the EUR 3.4 billion forecasted for the full year. Let us now turn to our capital allocation framework. On the left-hand side, you can see the cash contributions, which Markus has already largely covered. I will now focus on the use of cash on the right-hand side. We are committed to attractive shareholder distributions and paid a dividend of EUR 2.25 per share for the business year 2025 at the beginning of May. We are also making swift progress with the second pillar of shareholder distributions, the share buybacks. I will provide more information on the next slide. As previously communicated, we are using a significant share of the cash proceeds from portfolio measures to strengthen our balance sheet through deleveraging. We will continue to do so in order to support our single A credit rating. Compared with the prior planning period, we will reduce capital expenditures in the next four years by 20%. We expect CapEx to consistently stay below depreciation until 2028. We will also consider value accretive M&A as a potential lever to strengthen and grow BASF's core businesses. In the current market environment, the relative attractiveness of inorganic versus organic growth opportunities has increased. We have just announced a EUR 1 billion program to be executed between August 2026 and April 2027. This is part of the total buyback volume of at least EUR 4 billion by the end of 2028, announced in September 2024. Between November 2025 and June 2026, we have already bought back around 3.5% of the outstanding shares for around EUR 1.5 billion. Given our strong cash position, we are now continuing the successful program with the next tranche. Furthermore, we focus on deleveraging, supported by the maturity profile of outstanding bonds and loans. In the first half of 2026, we repaid a bond with a nominal value of EUR 1 billion and a loan of EUR 250 million. In the second half of 2026, we will repay maturing bonds and loans with a total value of EUR 900 million. In addition, we will redeem bonds and loans with a combined nominal value of around EUR 1.6 billion in 2026 ahead of their maturities, which extend through 2029. This includes bonds with a nominal value of EUR 1.25 billion that will already be redeemed in August. Let's now briefly touch on our balance sheet at the end of the second quarter, compared with the end of June 2025. At around EUR 84 billion, total assets increased by 8%, mainly on account of higher current assets. The main reason is the considerable increase in cash due to the closing of the Coatings transaction and the related purchase price payment by Carlyle. BASF's equity ratio improved by 1.5 percentage points to 44.6% and remained very solid despite our ongoing share buyback program. Net debt declined by EUR 4.2 billion to EUR 17 billion. We continue to have a single A credit rating, which ensures unrestricted access to financial markets and favorable financing conditions. With that, back to you, Markus. Thanks, Dirk. In light of the better-than-expected business development, we have increased our earnings forecast for the full year 2026. We now anticipate EBITDA before special items of between EUR 6.9 billion and EUR 7.7 billion in 2026. We keep the range between the lower and the upper end of our forecast unchanged at EUR 800 million due to the continuing geopolitical uncertainties. For free cash flow, we continue to expect between EUR 1.5 billion and EUR 2.3 billion in 2026. We anticipate higher earnings and lower capital expenditures to offset the higher working capital buildup. The forecast for CO2 emissions also remains unchanged. BASF's outlook is based on the adjusted assumptions regarding the global economic environment shown on this chart. Now Dirk and I are glad to answer your questions. I would like to open the call for your questions. If you wish to ask a question, please press star and then enter eleven on your telephone. For the best sound quality, we kindly ask you to be sure to unmute your phone and use your headset when asking your questions. Since we have quite some analysts in the line that already indicated that they want to ask a question, please limit your questions to only two at a time. We will now start with Alex Vigil. We will then have Christian Faitz and then Katie Richards. Now Alex Vigil at Santander, please go ahead. Good morning. Thank you for taking my questions, Markus, Dirk. My first question is about the M&A, the comment you made about the opportunities and to be countercyclical, probably in this context. If you can elaborate in which divisions you think could be more interesting for BASF to be active in M&A. The second question is about the more general, the supply chain. We are seeing in Europe all these problems in terms of the Rhine River and in general, in terms of supply and connectivity. What are the implications for your activity in Europe of this situation? Thank you. Thanks, Alex. A couple of comments maybe on the second question first on the current, because I'm sure this is on top of everybody's mind. It's in the media a lot. The current weather situations put a strain on especially rainwater levels. As you know, we have quite a history at BASF as of rainwater-related impacts. I have to say, even under today's stress scenario with the rainwater levels now reaching again very low levels, the work of the last years that the BASF team has done is really paying off. We are in a much better prepared position than we were, for example, in 2018, where we had a big impact of low rainwater levels over an extended period of time. Through the deployment of specialized ships that can really still carry goods, feedstocks, but as well products through the Rhine at very low water levels, and also due to various other contingency measures of shifting the mode of transport, we are in a very good shape right now. However, the rainwater levels are at a record low level already this week, and we expect this also to continue to be like this for a few weeks. Nothing that makes us overall concerned, but certainly will cause the one or the other disruption in value chains in Europe. As I said, from a potential impact on BASF, much lower our expectation than it was in the past. I give big credit to the team here in Ludwigshafen in particular of preparing us so much better. M&A, as you said, we made a comment on this. I think it's fair to say that the M&A market in the chemical industry is certainly accelerating. There's more activity out there. From our perspective, what we wanted to guide you on is really that we are also looking at opportunities in a market where value chains markets in all our verticals, but also regionally, stay in tendency longer. Growth and strengthening our core through organic investments is in tendency getting more challenging. On the other hand, the anticipated restructuring and consolidation of the chemical industry is going on. It's accelerating as we have already anticipated when we discussed the strategy. We're looking at this, and I would say M&A in tendency becomes more competitive against other capital allocation measures like organic investments into large capacity expansions. We are observing this. We keep a close eye on the market. However, we will not move away from our lens that we communicated in the strategy of being extremely focused on value creation and strengthening the core is our key mission. I will leave it there. We are an active observer. We are observing the consolidation of the industry, and we continue to see this as a potential opportunity for BASF. Danke. We move on to Christian Faitz, Kepler Cheuvreux. Please go ahead. Yes, thanks. Good morning, Markus, Dirk, and Stefanie, and team. Two questions, please. Also, one weather-related, one on crop protection. You already alluded to weather-related volume declines in Europe for Q2 in your Ag business, i.e., crop protection. With the continued severe drought situation in Europe, what does this mean for Q3? I'm fully aware that Q3 is a low season quarter, but the question is really how low low can be in such an environment, or can you so far tackle the higher channel inventories with buying back volumes? My second question is, thanks for Chart Four, very helpful. Can you elucidate this a bit in terms of underlying volume trends in your bigger operational pockets, namely in your traditional chemical activities, and also, if possible, adjusted for the successful Zhanjiang ramp? In this context, again, I'm fully aware we are in seasonal lows at present, yet would you see any signs of demand destruction as the consumer is facing more and more inflationary trends going into H2? Thanks very much. Yeah. Thanks, Christian. I take the latter two questions and maybe I look at Dirk, looking at the Ag comment, maybe give you some color there. Europe has been certainly a strong volume driver. Overall, I think European volume growth across the portfolio has been very strong, almost 6% in Q2 if I remember correctly. This is actually across the board, I have to say. Across all our core businesses, we see very strong volume development, or I would say stronger than expected for sure volume development in Europe. Be mindful that also in the second quarter, we have some significant turnaround activities in Europe, especially in our petrochemicals division. You can see in front of that performance in Europe, the markets have been quite solid. We have seen, as I've also mentioned in my speech, we have seen some, I would say, pre-buying or safety buying activities earlier in the quarter when the volatility and the perceived insecurity was still very high due to the Middle East conflict. That, of course, has phased a little bit, but I cannot rule out that some of that is still connected to this. It certainly also has been positively influenced by some anxiety around supply from Asian suppliers. Overall, across the board, a strong volume growth, and I couldn't think of a segment maybe apart from the automotive-related businesses who seem to be a little bit weaker. No surprise in Europe as you look at the production numbers. Apart from this, we see volume strength across the board. The latter point that you mentioned, of course, is a concern. We see, in general, inflationary trends and also consumer confidence not picking up and rather being quite shaky across major markets. We have not seen any demand destruction, I have to say, and also the momentum going into the third quarter is not surprising to us. We don't see anything dropping off the table. As far as I can see, July numbers come in as expected. Trends that we've seen in Q2 are holding up. Of course, there is a risk that inflation, further disruptions that undermine the confidence of consumers, et cetera, are going to have a negative drag on industrial growth, economic growth, and consumer spend in the second half. Hence why we are also a bit cautious on narrowing down our confidence level on the outlook. I think all these things are still hanging out there as potential downside risks, but nothing observed so far. Dirk? Morning, Christian. On your Ag question. First of all, I think you spotted rightly, Q3 is the low quarter for ag, and to say it upfront, this is expecting that our earnings in Q3 will be meeting or exceeding what we saw last year in Q3. You rightfully spotted the headwinds that we currently have. This is the weather across all regions. It is also the farmer income. It's also the commodity prices, which remain on a relatively low level despite the recent increases that we saw here, and they are so challenging market environment. The team is confident and is doing a good job also to deliver on Q3. One thing I would like to mention, in Q2, we had a certain preponement of sales in South America. Why did we do that? We had the big wave in the Agricultural Solutions business for the transformation of the ERP system. This has been successfully implemented right now, but required that we take some sales in South America upfront. These sales, they are missing in the third quarter. Please keep this in mind. Apart from that, Q3, we stay on track. Thanks both. Very helpful. We will now move on to Katie Richards, Barclays. In the following, we will then have Matthew Yates and then Laurent Favre. Now Katie Richards, please. Hi. Good morning. Thank you for taking my question. Just two on the Middle East, please. I guess, my first is just have you seen any sort of structural changes in the last quarter? I guess the hope was that some companies were hoping they'd win sort of European contracts longer term. Then also just quite interested in the current pricing dynamics we're seeing in the petrochemicals, given the re-escalation in the Middle East. It seems to be that oil prices have risen, following the tensions, but the pet chem prices, like ethylene, haven't reacted as quickly, versus the spike we saw in March. What's explaining the weaker pass-through, this time, if it is applicable, and if you could guide us for the developments in the chemicals and materials divisions for Q3, that would be useful. Thanks, Katie. Your last request was a big one. We will not now go through single line commentary for the third quarter on segments. This would be a bit too premature, let me comment on your first two questions. First of all, the Middle East. I think, of course, we are seeing some, I would not consider them structural, but I would say more long-lasting changes because we know that certain capacities in the Middle East will be out of the market for a longer period of time. So I would say supply chains are still in the course of readjusting, dealing with it. You also see with the normalization of some markets at least, pretty transparent before the very recent re-escalation of the conflict. You can see that also global supply chains and chemical markets have, so to say, coped with the new normal of a Middle East, let's say disruptive change that will go on for quite some time. Overall, the underlying currents of most chemical and feedstocks market, I would say, have not significantly changed. Which is why I also would caution that, let's say the very positive in aspects that we have seen in the second quarter in the entire chemical industry, hey, you have to always look at it, what actually will stick longer term. I think that's why I mentioned also that for us at least, we feel that some of the things we benefited from in the second quarter are more structural for BASF because of our local for local setup in the regions, our capability to adjust to various different raw material scenarios and also raw material slates. This is for us something that we feel was a pressure test that BASF passed with flying colors, and that's why for us it is a positive. We are confident in our outlook also in a more volatile scenario. I would say structurally, I would not consider any significant changes already structural from the Middle East situation. Maybe this helps. We have seen markets, especially in Asia, have normalized rather quickly. Pricing dynamics, that's an interesting question because of course, in March, the situation in the Middle East was very difficult to gauge for everybody. I mean, what would that mean? There was a huge amount of insecurity in there. Today, I think everybody has, and markets have more or less accepted the level of underlying volatility and insecurity around the Middle East crisis. That's why I would say there's a certain lower nervousness, overall, and we have also seen that demand, especially if you look at it in a global way, has also not tremendously, fundamentally changed. Overall the appetite to actually take risk on securing future supplies, for example, is lower than it was in March. This is why I would expect that with the recent escalation of oil prices, we will not see across the board commodities react in a similar fast way unless there are real physical constraints, which today are not so prevalent because as I said, supply chains have more or less adjusted to the new normal. Thank you. That's really useful. Now we move on to Matthew Yates, Bank of America. Please go ahead. Hey, good morning, everyone. Thanks very much for taking the questions. Two perhaps more longer-term questions, relates to, I think it's slide 13 in your deck about the core business and the cost base. I was wondering if you could just help me out here. You're talking about EUR 2.3 billion of cost reduction by the end of 2026. What is the incremental therefore through 2027 through 2029 associated with that 20% reduction in cash fixed costs? If you could put a number on that. What is the associated restructuring cost that we should be thinking about over the next couple of years? The second question is around the recent news out of Brussels around the carbon or ETS reforms. Would just love to get your take on what that means for BASF and its competitiveness. Thank you. Matthew, hello. Steve speaking. I can take the first one. For the EUR 2.3 billion, this is the run rate savings of our ongoing restructuring efforts. As you know, we will complete the program by the end of the year. Will we achieve the EUR 2.3 billion for sure? Can this even be a little bit higher? Yes, it can be. This is then a sustainable run rate. With that, we are addressing by and large, I would say 10% of our fixed costs of the BASF Group. When we are now talking about 20% on the core cost, then you can square the math. It is not doubling it, but you can imagine that the second step that we are now taking, is even bigger than the first one. Let me add one thing, Matthew. I know this maybe announcement of 20% lower cash fixed costs is still difficult to put this in maybe a financial model, but let me point out one difference, also how we communicate and how we steer the new CoreShift ambition or program, if you want to call it, versus the classical past restructuring programs. In the past, we've looked at the savings in a gross way, so to say. This was pre-inflation savings. As you know, and as we've discussed many times, a lot of these savings that are real and as real as they can be, but they're eaten up by inflation, and at the end of the day, the question is always what ends up in the P&L? This is always difficult to predict and in hindsight difficult to postmortem this. Going forward, we are really focusing on net cash fixed cost savings. That means we are really looking at the endpoint where we want to be, and we are agnostic around inflationary effects because these inflationary effects will have to be absorbed along the way. It's really a change of mindset, also how we steer cost management in the company. We are really looking at now the endpoint, where we want to sit and not so much focus on the gross savings part. Your second question, of course, an interesting one. We have recently seen the EU has published, let's say its path forward for the European ETS system. I think there's a lot of good elements in there that indicate to me that they have also heard the voices of the industry that the current ETS system with its very ambitious ramp down of free allocations, is going to lead to a substantial increase in carbon pricing in Europe. With this, to higher cost for European industry, in particular, high emitting industries like the chemical industry. We've seen a lot of good elements that try to address this. For example, increasing the volumes of free allocations and, let's say changing the slope of the decline of overall the carbon credits in Europe and so forth. This should all lead to an easing of the carbon pricing pressure on European producers. However, the one element that I think is critical, and I've also commented on this publicly, is that the European Union now moves away from the original idea of having ETS as a market-based price to steer carbon emissions and is attaching or is changing this now towards an instrument, trying to stimulate and steer investments. This, of course, is something that cannot stay like this. We are at least trying to find a dialogue with the European Commission because, if you can only avoid increasing CO2 costs by being forced to invest into measures or projects that at the end of the day have no business case themselves, that also is not an element to strengthen the industry. Quite some good things in there, I would say, in the latest EU ETS revision proposal, but overlaid by this new element of making this conditional on investment commitments that still needs to be worked out. It's nothing final. There's a lengthy process now that has to go on consultation with the member states and with the parliament. In this context, we are going to be an active partner, hopefully advising that some things need to be changed to improve competitiveness for European industries. Thank you both. Now it's Laurent Favre, BNP Paribas. We will then have Chetan Udeshi and then Sebastian Bray. Laurent Favre, your turn. Thanks, Stefanie. Morning all. Going back to the full year EBITDA guidance upgrade, I was wondering if you could give us a little bit of, I guess, granularity around the divisions, or some comments around the original divisional guidance, wondering if it's only really in materials that we are seeing an uplift. The second question, probably for Dirk on Ag Solutions IPO readiness. On the build-up of costs in terms of ERP, investor relations fees, essentially building a corporate center, is this all booked as exceptional items for Ag? Is it booked as exceptional items for the corporate center? Is it all in the BASF group corporate center or is it all staying in the Ag divisional EBITDA? Thank you. Good morning, Laurent. Let me take your questions. First on the guidance. You saw the guidance uplift, which I would say means for the second half of the year that we are confident and cautious at the same point in time. What makes us confident for the second half of the year? Certainly the business momentum that we still see when we are talking to our businesses. You've also heard us talking about the macro backdrop, which is still a mixed one, and therefore, we think that with the current guidance update, we are sitting in a good place. For sure, what I can say, Surface Technologies also in the second half of the year will be challenged. You remember last year, in the second half, we had a tailwind also from 45X credits in the catalyst business, which will not recur by far, not by the same extent this year. There is some headwind. You also heard us talking about preponement for the Agricultural Solutions business now in June. There are a couple of elements which make us cautious. On the other hand side, as we said, the underlying business, and the feedback that we are getting from our business heads, is quite confidence building and this is why we take it as such. We are not currently updating the outlook on the segment levels, but rather take it from the group perspective with the comments that I've made. Second question, if I understood it correctly, was on the transformation costs and how we are handling them. Yes, indeed, they are special items in the earnings. The transformation cost we are talking about is on the one hand side, ERP transition is restructuring predominantly due to severance payments, et cetera, but also cost related to plant restructuring, et cetera. On the earning side, they are certainly special items. On the cash side, there's nothing like a special item. As we are also getting questions about cash flow performance, we thought it is really now the right time to make clear that we do have transformation costs because we are rebuilding the core of our company, and for that, there is a certain amount of cash that needs to be invested. I would call it good cost, but they are certainly a cash out, and this is why we highlighted them as transformation cost, also in our press release and in our explanations. Sorry, my question was more specific on the Agricultural Solutions IPO or the carve-out and an IPO. The cost related to the carve-out, the ERP, the building the corporate center for the Agricultural Solutions IPO, is that part of the segment EBITDA? Are you separating that within the special items for Agricultural Solutions, or is it in the corporate center, the BASF group corporate center? I would say, Laurent, we follow, of course, in this carve-out exercise, clear accounting rules, so we cannot do whatever we want. There are elements that are booked as special items in Ag Solutions. For example, all transformation costs that are similar to what we do also in other segments when we do, for example, the ERP costs that are booked as special items in Ag. There are costs of building up structures in Agricultural Solutions to become a standalone company. I'm looking across the table here, you mentioned investor relations, for example. In the future, our Ag Solutions business will have an investor relations group, so they're building up a team. This is, of course, ongoing costs in the normal cost. We are trying to seek a way to set up a standalone Agricultural Solutions company that is IPO ready in the least cost increasing way, using, of course, also here, smart ways to do this. This is fully on the bill, so to say, of Ag Solutions. I would say, Dirk, there's only very few things that we would really handle outside of the Ag Solutions business, if at all, that would then move in others or something like this. We keep it in the Ag Solutions segment, we separate between transformational cost restructuring that can be booked as special items, and everything else is handled as a normal P&L, EBITDA before special items relevant for Ag Solutions. I can confirm that. Thank you. Now we move on to Chetan Udeshi, JP Morgan. Yeah. Hi. Morning. Thanks for taking my questions. I had two, one, just a clarification in terms of the sale of the Coatings business, can you please help us or clarify how much of the cash out on tax was already paid in second quarter, or how much is left to be paid in H2? That would be the first question. The second question was, it seems going into third quarter, there are a number of moving parts. It's not unusual in this industry, but just, it seems you've got some pre-buying in Ag. We had one-off in Battery business last year from subsidies. You're talking about some margin normalization, but also a good underlying momentum. Do you have a sense of how we should think about or how we should model third quarter earnings for BASF? Consensus is just over EUR 1.5 billion. How do you think about that? Any comment on third quarter earnings to the extent you can would be helpful. Thank you. Chetan, I'll start with the tax payment. The tax payment predominantly will happen in the next year. We have received the full purchase price, EUR 5.8 billion, and the roughly EUR 500 million, a little bit less than EUR 500 million of tax payments will happen largely in the next year. Third quarter, Markus, or? No, you can. I can maybe give it a start. I think we made already some comments. Third quarter, compared to last year, I think we will, from everything that we hear, at least meet the third quarter of 2025. There is potential for more, depends all on the macro development that we will see for the next couple of weeks. Thank you. Now we move on to Sebastian Bray. We will have James Hooper and Jaideep Pandya. Now, please go ahead, Sebastian Bray, Berenberg. Hello, good morning, thank you for taking my questions. I'd have one on the other segment and one on the level of inventories in bulk chemicals. It's quite rare to see a reference to big hedging effects. I think the press release makes reference to commodity hedging effects having a positive impact on the other segment. Could you elucidate what has gone on there that has driven the result into positive territory for Q2? My second question is on industry inventory. I think it was mentioned previously that the chemicals prices went up, then they went back down, now input costs might be re-inflating, the chemicals prices are often a little sluggish. Do you have any idea of what industry inventory is? There's been some market commentators who have suggested that there's been a rundown in China that might come to an end in October if the Iran crisis continues, but how much chemicals inventory on the upstream side do you think is there to absorb price shocks? Thank you. Sebastian, I start with the second question, then I hand it over to Dirk on the other comment. I don't know. It's very difficult to make those statements for the chemical industry in terms of inventories and how a supply-demand situation looking like, because it's often value chain dependent, it's product dependent, it's country dependent, and so forth. I give it a shot. When I said that things have already normalized to some extent when it comes to supply chain disruptions and maybe also anxiety, I look at particularly China, for example. If you look at margins in China, in the upstream business, they have, in most, let's say, commodity value chains already normalized to pre-war levels. That is partly due to higher input costs, because imported feedstocks in China are certainly still at an inflated level, like naphtha, for example, but it also is because most products in China are well supplied. This is why I don't see a significant change of now inventory or, let's say, supply chain impacts compared to what we have seen up to February. It's still an inflated overall world, of course, because feedstock prices, oil prices are inflated. In general, the demand picture has not significantly changed. That's why you see this normalization effect. Also for me, China is a proxy because China is by far the biggest market for upstream chemicals, so that, of course, radiates then to the rest of the world. I would not anticipate that we have any kind of special inventory situation, rather particularly high or particularly low at this point in the more upstream chemical arena. This might be the case if you talk to companies who have a very specific value chain in mind or very specific product line in mind, that they give you this kind of indication. I would say across the board, that's not my picture. We're sitting at rather normal inventory levels. That's, by the way, also the case for BASF. We have inflated inventory in values, of course, because of the higher prices. If you look, for example, at our inventory reach, we are at rather normal levels, maybe slightly below because our sales growth has been quite good, but also nothing out of the ordinary. That would be my attempt to give you a flavor on this topic. Without going into details, it's very hard to make a super intelligent comment on this. Sebastian, on your first question, quite a technical explanation. You can imagine that our hedging teams have been very active, more than usual, during the exciting second quarter, we hedge inventories in transit predominantly against dropping prices. In the course of the second quarter, prices indeed were dropping, so hedging results came in. Positive hedging results have also been locked in and realized, this is one part of the strong result in other. The other is obviously the trading result, which was also elevated compared to, I would say, normal quarters. I tried to mention this in the beginning, I want to make a plug because here, I think it's a bit of an unsung hero story also. I mean, these capabilities that we have in our teams that deal in these upstream markets every day, that also, of course, with the trading skill set that we have and the trading desk we have on feedstocks, that in volatile times is, of course, they are playing out their strengths. This is why I think on this leg, we have had a very successful quarter, we benefit from volatility, that's not normal for a chemical company, but BASF has this capability. A bit of an unsung hero story. We're very proud of the team, how they have not only kept our P&L stable, so to say, because we certainly locked in some pricing, but they also gained on some very smart business decisions. A pretty good story for us. Thank you. Now it's James Hooper, Bernstein, then we will have a final question by Jaideep Pandya. Now James Hooper, please. Morning. Thank you very much for taking my questions. I have two, please. The first is on FCF. You've taken the EBITDA guide, but not the FCF guide. I was wondering if you could just take us through a little bit more of the moving parts around that. I mean, in reading the release this morning, it says there's a EUR 300 million cash impact from hedging, and I wonder whether there was an inventory build related to the Ludwigshafen turnaround that might correct later in the year. My second question is around pricing in Agricultural Solutions. I was interested to see that was down. Is this to do with kind of farmer economics, generic competition? Alongside that, with crop futures up for 2027, do you see that pricing development changing later in the year or early next? Thank you. Yeah, James, on the derivatives question, the way we were doing it, this was tying cash. It was important for us also to mention it, because alongside the more cash tied in accounts receivable and inventory, this was one of the bigger items. We wanted you to acknowledge and understand that it is very technical. It is a cash-tying position. I think this is more or less it. What we are not having here is an offset against the secured inventories. Inventories are measured at cost, the derivatives taken alone. Just one additional comment on inventories, because I think, James, you asked specifically on inventory buildups for turnarounds and so on. This is, if at all, these are transitionary effects within, let's say, a couple of months or so. I don't think they play a big role because as I said, the inventory reach or the inventory levels overall for BASF are rather lower than what we have seen in the past. There's no volume effect on inventories going into the cash flow thing. It's entirely value and pricing effects, both on the feedstock side, of course, on inventories, but as well as Dirk said, also in the accounts receivable side. This is kind of a natural element of our operating model, so to say, in chemicals, that if feedstock prices increase and you are successful in increasing prices like we have been in the second quarter, very much so, that you are of course absorbing a lot of cash into your current assets. That's why I was a little bit surprised that there were some questioning comments, if EBITDA increases in such an inflationary environment, why is free cash flow not increasing? I can tell you it's a pretty uphill battle to maintain free cash flow on a high level in times where inflation is so high. This is just due to the fact that we have, of course, a current asset-intensive business model in the chemical industry. Maybe, James, just to add, second half of the year is certainly cash collection time for us. The opportunity to collect more cash than the last year is obviously a higher one. We will grasp this opportunity. Ag pricing? Say again? Ag pricing? Ag pricing. You saw volumes for Ag going up. You saw the prices for Ag going in the other direction. I think I mentioned earlier that the prices stay under pressure, and this will also be the case for the remainder of the year. Okay, now one or two final questions from Jaideep Pandya on On Field Research. Please go ahead. Thank you. My question is mainly around slide nine, which thank you very much for providing this. Curious to know, in this slide, what 10% has become competitive since the cost-saving action started? The follow-up of that is the other, like the current 12% that you allude to, which is still at a competitive risk. What are all those business lines? The last question along your European asset base, upstream, which is Ludwigshafen and Antwerp, how much of exports are you still making from Europe to Asia or to the U.S. in this regard? Yeah, thanks. To the second question, I do not have specific numbers on what is the share of exports from Ludwigshafen and Antwerp to, let's say, our European sites to the rest of the world. I don't have that here available. I would say a guiding answer would be, it's much less than it was in the past, of course, because of our strong buildup of capacities, in particular in Asia, but also in North America to some extent. I would say real substantial and structural exports from European sites to the rest of the world are predominantly in the downstream areas, where you typically then have, let's say, only one or two production sites for the world. Think in an extreme case, for example, agricultural active ingredients. We don't have an active site in every part of the world. We have them in Ludwigshafen or in Europe, and we supply the world from there. We have a number of other specialty chemicals where this is the predominant supply model. For the large part, in the more commoditized price-sensitive categories, we use Ludwigshafen and Antwerp mostly as sites in Europe for Europe. It is a lower share than it was in the past, but I cannot give you a specific number. With regards to the competitiveness slide, one thing, it's always my disclaimer that this is a more strategic assessment of the, let's say, it's a fitness check for our production plants that we have here. The base number here is roughly between 850 and 900 different production lines that we have here in Ludwigshafen, and we do a fitness check and test them how competitive are the cost compared to the best possible importer that we would see landed cost Europe. As you have seen, we have increased the share, and this has a number of reasons. First of all, we have, of course, the last two years, taken a lot of very plant-specific measures to reduce the risk of losing competitiveness, and that has to do a lot with operational excellence. It has to do with reducing the costs to serve these plants, for example, with maintenance and technical support costs. We have also closed quite a number of production lines. The total number has come down by 5% or 6%, I think, of the number of production lines here in Ludwigshafen. All of these effects come together. It's a continuous fitness program because we would like to have the majority of the plants we operate here in a competitive window. Only then we are, of course, willing to allocate also capital to these plants because we know they will be long-term cost competitiveness for landed cost Europe. However, I also have to say as a disclaimer, that does not mean that 90% of all our plants are already today profitable here in Europe, because profitability and competitiveness are slightly different angle. Of course, price pressure, you're always exposed to price pressure, and in certain times, profitability is not where you want it to be. On a cost for cost basis, Ludwigshafen is becoming stronger, and our measures are paying off, and that's what we wanted to say here, that the core of our Ludwigshafen assets is really competitive. I will not disclose now what are the 12% that are not competitive. You can understand this is not something we would like to openly disclose because it is also a competitive element, of course. We are constantly observing these 12% with a simple question: Can we bring them into competitive territory or are they plants that eventually we have to prepare down the road also for restructuring or closing? Thank you so much. We are now at the end of today's conference call. We will present our third quarter results on October 28th. Around one month later, BASF will host a Capital Markets Day in Ludwigshafen on November 24, with a dinner with management on the prior evening. A significant portion of the event will be dedicated to our Agricultural Solutions business. The session will provide a strategic and operational overview of the business as a standalone entity, including its market opportunities, competitive positioning, and innovation strength. All four members of the Agricultural Solutions Management Board will present, providing an opportunity to get to know the team and hear directly from the executives leading the business. Further details on the agenda will be shared closer to the event. Should you have any further questions today, please do not hesitate to contact a member of the BASF IR team. Thank you for joining us today, and goodbye for now.