Dear ladies and gentlemen, welcome to the full year 2020 results call of Brenntag SE. At our customers' request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions via the telephone lines. If any participant has difficulties hearing the conference, please press star key followed by zero on your telephone for operator assistance. May I now hand you over to Brenntag's CEO, Mr. Christian Kohlpaintner. Please go ahead. Welcome, ladies and gentlemen, to the results call for the full year 2020 of Brenntag SE. My name is Christian Kohlpaintner, and I'm here together with our CFO, Georg Müller. Together, we will walk you through our business development in the past year. I would like to start with a review of 2020, and Georg will provide further details on the financials. As always, Georg and I are both happy to answer any questions you might have after our presentation. 2020 was an extraordinary year for Brenntag. Among different topics, the COVID-19 pandemic and our comprehensive transformation program, Project Brenntag, played an important part. At the beginning of 2020, COVID-19 started to impact our business and private lives significantly. Brenntag very early implemented a global crisis management and the measures to counteract the impacts of the pandemic and to protect the health and safety of our employees and business partners paid off. Throughout the year, we managed to maintain our supply chains uninterrupted and deliver products to our customers. This was greatly appreciated by the market. This crisis management is still in place and continues its work as we speak. 2020 was also an extraordinary year for me personally as I started as the CEO of Brenntag. At the same time, we initiated a holistic analysis with a focus on the long-term positioning of our company. In course of last year, this analysis was transferred into what we call Project Brenntag today. Project Brenntag is one of the most comprehensive global transformation programs of our company, with the objective to strengthen and to expand our position as the global market leader. With this, we have identified various efficiency measures that are expected to deliver an additional operating EBITDA of EUR 220 million in total in the full year 2023, ramping up year by year. We implemented two global divisions, Brenntag Essentials and Brenntag Specialties, and the go live of this new setup took place on January 1st, 2021. The two divisions are headed by our chief operating officers, Steven Terwindt for Brenntag Essentials and Henri Nejade for Brenntag Specialties. Also, since January, the new composition of the management board has been completed. We are delighted to welcome our new Chief Transformation Officer, Ewout van Jarwaarde, who will, amongst others, be responsible for the implementation of Project Brenntag and the overall transformation process, the development of our digital transformation, as well as functional excellence. Ladies and gentlemen, the financial performance for the full year 2020 has been strong, despite the very challenging macroeconomic and operational conditions caused by the pandemic. Our high diversification by countries and by industry segments helped us mitigating the risks caused by the pandemic. Our excellent, stable, and reliable supplier base, as well as our long-standing customer relationships, were decisive to navigate well through 2020. Brenntag once again proved the resilience of its business model. The group generated an operating gross profit of EUR 2.85 billion, which is an increase of 3.3% compared to previous year on a constant currency basis. Operating EBITDA grew even more and reached EUR 1.058 billion. On a constant currency basis, this is an increase of 8.3% compared to 2019. The development of the free cash flow was once again particularly strong. Free cash flow amounted to EUR 1.055 billion compared to the already strong EUR 837 million in 2019. Our earnings per share amounted to EUR 3.02 for the full year 2020. With this performance, Brenntag once again proved the resilience of its business model, particularly in times of crisis. I will talk about the status of Project Brenntag in more detail later. The management board, together with the supervisory board, are going to propose a dividend of EUR 1.35 to the general shareholders meeting mid of June this year. In 2020, we have acquired three companies located in the United States, in Thailand, and in Taiwan, with a total enterprise value of EUR 46 million. Here, we only talk about targets that have been closed in 2020. Further targets have been signed, but closing takes place within the next couple of months. Although the amount spent is lower than in previous years, there are no major changes in our M&A approach going forward. We continue to allocate some EUR 200 million-EUR 250 million for acquisitions per year. We also continue to sharpen our focus towards emerging markets and Asia, in particular, China. We want to grow in selected industry segments and strive to identify targets, delivering a more sizable operating EBITDA contribution. In 2021, we already started executing this approach. Our recent acquisition of Zhongbai Xingye Food Technology in Mainland China was a first important step in this direction. Zhongbai Xingye Food Technology distributes a variety of specialty food ingredients, including dairy products and proteins. With the first stake, we acquired two-third of the company for an enterprise value of EUR 90 million. The second tranche to gain a 100% ownership is intended for 2024. Closing of the first tranche of this acquisition is expected in the first half of this year. Dear ladies and gentlemen, overall, 2020 was a successful year for us. We showed excellent financial results. We worked intensively on Project Brenntag and continued on our M&A path. With this, I will now hand over to Georg, who will lead you through our financials in more detail. Thanks, Christian. Good afternoon. I will speak about the key financial figures for the full year 2020, starting with the development of operating EBITDA from the full year 2019 into the full year 2020. You might remember operating EBITDA amounted to EUR 1,002 million for 2019. The translational foreign exchange effect amounted to a negative EUR 25 million. Our acquisitions contributed EUR 80 million to the EBITDA growth. Europe, Middle East, Africa, Latin America, and Asia Pacific showed very strong organic operating EBITDA growth rates. EMEA reported +17%. Latin America and Asia Pacific showed 25% and 20% respectively. Our region North America declined by 7% organically. That is mainly driven by the continued weak demand in the oil and gas and lubricants industries. On group level, we reported operating EBITDA growth of 6% organically, which we deem a strong achievement. The overall market has seen a volume decline in 2020 due to the COVID-19 pandemic, but we were able to offset the volume decline by higher gross profit per unit. On the next page, let me provide some more details on the business development in each of our regions. Overall, the performance was supported by several industries. Personal care, cleaning, pharma developed particularly well. In EMEA, we saw strong results throughout the year. We benefited from strong margin management and were able to overcompensate the declines in volume by higher operating gross profit per unit. Operating EBITDA in EMEA increased by 19% on an FX-adjusted basis, and the growth is almost entirely related to organic business development. North America faced several headwinds in 2020 that led to overall weak and somewhat unsatisfying results. The main headwind in the region was related to the weakness in the oil and gas and lubricants industries. Last year, we suffered a reduction of around EUR 74 million gross profit in the oil and gas industry. That is a decline of 24% compared to 2019. Within the oil and gas value chain, the upstream business was weakest with a decline of around 60%. From the figures, you can notice the relevance of the oil and gas decline on our overall North American results. Many other parts of our North American business actually developed positively. To counteract, we applied very stringent cost management and decreased operating expenses by 5% on an FX-adjusted basis. Operating gross profit declined by 5.6% and also operating EBITDA declined by 6.6%, both FX-adjusted. If I look at the organic level, operating EBITDA in North America decreased by 7% organically. Latin America reported strong results in 2020. We all know the continent was hit hard by the COVID-19 pandemic, but we were clearly able to demonstrate the resiliency of our business model in the region. On a constant currency, operating gross profit grew by around 17% and operating EBITDA increased significantly by around 27%. Organically, that represents 25%. Finally, on Asia Pacific, a very successful year. While the region was hit early by the pandemic, we saw a clear sequential recovery. Particularly China recovered quickly and sustainably. In this environment, the region reported an increase of operating gross profit of around 9%. Operating EBITDA increased by around 26%, and organically, the EBITDA increase represents 20%. Across the region and in many industries, we managed to achieve a highly positive performance. Let me summarize. 2020 was an extraordinary year. The pandemic forced us to even more focus on maintaining our supply chains and on tight cost management, and we managed that well. In these very specific economic conditions, we were again able to grow our earnings and report very good results for 2020. I'll skip page nine, which gives you more details on the segment reporting, and I move to page 10, that focuses on the fourth quarter. The EBITDA bridge for Q4 2020 shows very similar trends as the full year 2020. We report a negative FX translation effect of EUR 15 million. EMEA and Asia Pacific both grew strongly on an organic basis with 19% and 13% respectively. The group's operating EBITDA grew nicely by 14% organically. In our income statement on slide 11, I particularly want to focus on the lines below operating EBITDA. We report special items amounting to an expense of EUR 47 million. These items are mainly related to cost of Project Brenntag. Depreciation amounted to EUR 252 million, slightly higher than 2019. Financial result amounted to a net expense of around EUR 80 million. The earnings per share stood at EUR 3.02. That is stable compared to 2019. That figure is after digesting the special items. The cash flow has developed very positively in 2020. We report a free cash flow of more than EUR 1 billion. This is the highest free cash flow the company has ever achieved. Compared to previous year, this represents a very significant increase of more than EUR 200 million. The increase in free cash flow can be attributed to several factors. First of all, we were able to grow our operating EBITDA. CapEx spending stood at EUR 202 million for the full year. Finally, we saw significant cash inflows from the reductions of working capital. This is an area we have put increased focus on from the beginning of 2020. We expect a strong cash flow also for this year. However, not at the same level as for 2020. The high cash in from working capital reductions is highly unlikely to be repeatable. How did we make use of the free cash flow? We paid EUR 251 million for interest and taxes. Payments for M&A amounted to EUR 46 million. Finally, in June last year, we paid a dividend for the fiscal year 2019 in an amount of EUR 193 million. On page 13, you can see our gross financial liabilities amount to EUR 1.6 billion. The difference to 2019 is mainly related to a repayment of a revolving credit facility of EUR 340 million in the fourth quarter last year. Part of our strong free cash flow was used to repay this revolving credit facility. Due to the significant decrease of net debt and the very good operating EBITDA, our leverage now stands at 1.3x. You do know that we frequently point to a leverage target of two times. We will monitor cash flow performance going forward and examine how we maintain an efficient capital structure. I'm coming to working capital. Working capital amounted to EUR 1.3 billion at the end of last year, compared to EUR 1.7 billion end of 2019. The balance sheet decrease is more than EUR 400 million. More importantly, we turned the working capital 7.3x, which is a good improvement compared to the 7x in 2019. For the full year, we put higher focus on working capital turns, which now continuously pays off. We deem these developments a strong success in our working capital as well as cash flow management, and in summary, we are very satisfied with the financial results 2020. We delivered healthy earnings growth and an outstanding free cash flow and continue to have a balanced and sound financial profile. Before I hand the presentation back, let me come to our dividend payments. The management board and supervisory board will propose a dividend of EUR 1.35 per share for the 2020 financial year to the general shareholders meeting mid of June. Since our IPO, now more than 10 years ago, we have pursued a consistent dividend policy and managed to increase the dividend payments for our shareholders each and every year. In terms of net income, the proposed dividend represents a payout ratio of 45%. In total, we will pay more than EUR 200 million to our shareholders. This concludes my introductory remarks on the financials, and I'll hand it over back to Christian. Well, thank you, Georg. I would now like to talk in a bit more detail on the current status of Project Brenntag and the progress we have made so far. Project Brenntag addresses the different needs of our various stakeholder groups. After providing a comprehensive information on the program at the capital markets update end of last year, Brenntag received very positive feedback from the different stakeholders, including suppliers, customers, and investors. The transformation program was implemented to form a strong basis to drive our organic earnings growth. We see a multitude of benefits for our business partners and our people. Our new operating model will service our customers with a distinct approach even better and faster. Secondly, our initiatives within the go-to-market approach will promote a more focused client interaction. Thirdly, our improved site network will increase customer proximity. Finally, a more performance-oriented culture will enable our leaders and employees to unfold their full potential and provide opportunities for personal development and growth. Currently, we are consequently working on the step-by-step implementation of our Project Brenntag initiatives to achieve an additional operating EBITDA of EUR 200 million in total for the full year 2023, ramping up year by year. Today, we would also like to provide further details on the timeline of our transformation program. Beginning of 2020, we started phase 1 of Project Brenntag, which was a comprehensive diagnosis of our company. The second half of 2020 was characterized by defining our targets and the deliverables, as well as initiating the quick win measures. Here, we also focused on the preparation of the go-live of our two global divisions, Brenntag Essentials and Brenntag Specialties. Currently, we are in phase 3 of Project Brenntag, focusing on execution planning and implementation. We have established our new operating model and are now about to create line management responsibility for the implementation of all measures with the maximum degree of granularity. We started tracking our performance and are executing the improvement levers. phase 4 will then start in the second half of this year, where our focus lies on the continuous ramp-up of the operating EBITDA uplift through Project Brenntag by fine-tuning the target organization and especially focusing on functional excellence. The go live of our new business divisions took place in January this year. Internally, we have been working on the business reporting according to our new setup. We will start to report according to our new structure in the first quarter this year. We saw first positive impacts from our short-term initiatives, the so-called quick wins, already. With regards to cost development for Project Brenntag, we reported around EUR 47 million one-off costs in 2020. This is more than 10% of the total costs of EUR 370 million allocated to Project Brenntag. We have set up the customer segmentation we announced at our capital markets update in November, and accordingly, have reallocated our sales organization. With regards to our site network optimization, we are on track with the optimization of our route planning and also with the consolidation of some sites. In Q4 last year, we have also finalized the new composition of our leadership team below the management board. For this new global leadership team, we have set up a new incentive scheme, both for short-term and long-term incentives, which is fully aligned with our annual operating EBITDA growth ambitions, the full 2023 impact expected from Project Brenntag, and our medium-term growth targets. Coming to the results we have achieved with Project Brenntag so far. Our pricing and indirect procurement initiatives are well underway. We were able to improve our working capital turns from 7 - 7.3 year-over-year. We reduced our headcount structurally by almost 200 people. We have closed 30 sites globally already. As Phase Two is completely completed with full year 2020, we can report an operating EBITDA contribution of the Project Brenntag measures to our full year results in an amount of approximately EUR 15 million. Ladies and gentlemen, now let's come to the outlook for 2021. We all know that COVID-19 will stay with us well into this year. Therefore, we still have to cope with the impacts of the pandemic around the globe, and we expect a continued high level of uncertainty regarding the macroeconomic development, in particular for the first half of this year. We managed this difficult situation well, and are convinced that we are also well-prepared for the challenges to come in 2021. We are on track with the implementation of the measures and initiatives of Project Brenntag. Against the background of the changes we have implemented already and the details we continue to work on, 2021 will be a year of transformation for Brenntag. Since January, we steer our company in the new organizational setup. In line with this, we will change our external reporting and publish our results for the group and for our new two divisions, Brenntag Essentials and Brenntag Specialties, starting with our first quarter 2021 reporting. In addition, we will stick to our proven M&A approach and will now increase our focus on more sizable targets and dedicated geographies. What do we expect with regards to our financial performance this year? As mentioned earlier, 2021 will again be characterized by a high level of uncertainty. The virus will continue to impact macroeconomics around the globe, at least in the first half of 2021. In addition, 2021 will be a year of transformation for us. For the first time, we would like to provide guidance for our operating EBITDA development quite early in the year. For the full year 2021, Brenntag expects an operating EBITDA between EUR 1.08 billion and EUR 1.18 billion. This range includes organic growth expectations, benefits from Project Brenntag, as well as the M&A contributions from our already closed deals. It assumes FX rates that remain stable on current levels. With this, I would like to conclude the presentation, and now Georg and I are more than happy to answer your questions. Thank you. Thank you. We will now begin the question and answer session. If you want to ask questions, to our speakers. Please dial zero one on your telephone keypad now to enter the queue. Once your name has been announced. You can ask a question, if you find your question is answered before and you do not want to to speak. You can dial zero two to cancel your question, if you're using speaker equipment today. Please lift your handset before making your selection. One moment please for the first question. The first question is coming in from Rory McKenzie from UBS. Please go ahead. Good afternoon, everyone. Yes. It's Rory here. Three from me, please. Firstly, can you give more detail on the gross profit drivers by volume and gross profit per ton? Q4 constant currency gross profit was +7% year-over-year compared to -0.2% in Q3. What drove that change? Secondly, within your guidance, what are you assuming for gross profit per ton this year, given we're now seeing product prices are rising and last year was quite an abnormal environment? Finally, could you comment on where you expect leverage to end the year excluding potential M&A? I know you had a great year for cash flow, and so leverage is starting at a low level, but obviously working capital will somewhat reverse and Project Brenntag should see a big increase in cash restructuring costs and CapEx spend. Those three, please. Well, thank you, Rory. I think, all those three questions I will ask Georg. Yeah provide insights. Rory, hi. Good afternoon. Good speaking to you. When it comes to the volume versus gross profit dynamic in the year and in Q4 has kind of a similarity, I would say, to Q2. Volumes have been, in Q4, relatively flattish, gross profit are marginally down, gross profit per unit has been strong, as strong as we have seen it earlier in the year. That leads to the high growth rate in gross profit in Q4. What do we expect for this year? Not that easy to say because it's not untypical in chemical distribution that volumes and gross profit per unit kind of breathe against each other. If we were to see a nice volume rebound, I would not be surprised if we see some mixed driven, some gross profit per ton compression. If the volumes stay on the benign levels which they currently are on, I would fully expect us to go through the year with the high gross profit per ton rates that we have seen before. I know there is still the leverage question outstanding, but did I so far answer the first two questions? Yes, that's very helpful. Maybe just on that gross profit per ton outlook, because I guess through the worst of the pandemic, through the first lockdowns, there was a huge uncertainty in the market. Product prices fell. There was a big channel shift in some areas. Does that not set a very abnormal level of gross profit per ton? Or are you confident that in this volume environment, you could sustain that high level? It's an uncertain world. In that sense, I can only make an uncertain statement. We do feel that the gross profit per ton on the business mix we are currently having is on reasonable levels. I would not say that we are currently operating on abnormal levels. Okay. Thank you. When it comes to leverage, or let me more answer the question in cash flow terms, maybe. You have seen the free cash flow of EUR 1.055 billion for last year, and that's supported by EUR 300 million release of liquidity from working capital. Those EUR 300 million will, in all likelihood, not be repeated. In absence of any further measures, I would expect the leverage to go down a little from where we are currently, but not with the huge big step that you have seen from 2019 to 2020. I know I'm evading an answer to a degree, but there are so many moving parts, working capital development, Project Brenntag cost, M&A. It's difficult to be more precise. Understood. No, that's all really helpful background. Thank you very much. The next question is coming from Mutlu Gundogan from ABN AMRO. Please go ahead. Yes, good afternoon, everyone. Thank you for taking the questions. First, on the guidance. The midpoint of the range is EUR 1.13 billion. Assuming currencies is a -EUR 30 million and M&A is a +EUR 10 million, that would imply organic growth of some EUR 90 million in your guidance, i.e., 8% year-on-year. Can you tell us how you see the various components of that EUR 90 million, i.e., what have you assumed for volume growth or change in gross profit margins? I understand this comes back to the previous questions, but also what are the net cost savings you have from Project Brenntag? That would be very helpful. Secondly, on EMEA specific, you already alluded to also here a very strong gross profit margin. Difficult to make any forecast, but how has it developed throughout the first quarter of this year? What are you seeing so far? Thirdly, on North America, can you tell us what the headwind on gross profit and EBITDA was in Q4 from the weak oil and gas business and lubricant markets? I'll keep it at those three. Thank you. Mutlu. Hi. Georg, maybe I take the questions. On the guidance, first of all, I would point out that this is the first time in our publicly listed history that we give a specific EBITDA range this early in the year, and we think at reasonable rights of EUR 100 million. We are more specific than we have been in earlier years already. How would I look at it structurally? We ended last year at EUR 1.058 billion, obviously. In all likelihood, FX, as you pointed out, will be a negative translation this year. If USD-EUR trade around USD 120, USD 121, which we have seen most of January and February, then I would actually say it's more negative EUR 40 million than a negative EUR 30 million. That takes the fair starting point down to, say, EUR 1,020 million. That EUR 1,020 million already includes, as we laid out, EUR 15 million Project Brenntag benefits that we already generated last year. If you take the EUR 1,020 million up to the lower end of the guidance range, not the midpoint, the lower end of the guidance range, it is an additional EUR 60 million, which we feel is a strong commitment in this uncertain world. That does include mostly Project Brenntag benefits. We tell you and the market there is a clear upside on top of that. That upside would be underlying organic growth of the business or even higher benefits of Project Brenntag. That is how we suggest to think about it structurally. Apologies, I haven't responded to the M&A point. The guidance range includes the M&A that was closed at the time of publishing the report. That would be below EUR 10 million. If you included the Chinese acquisition already, that would indeed come on top. That's how we would suggest to think structurally about the guidance. I beg your pardon. I can't really be more specific with respect to lower end midpoint, upper end, or split into more components. I understand. That is very helpful. When it comes to the question, EMEA situation and how did we move from Q4 into Q1 this year, I would generally say for the group, and that includes EMEA or specifically EMEA, the positive trajectory continues so far. Last year, the market changed significantly in March, April, and May last year, and we had extremely good results in March, April, May last year. There is a hill to climb now, but so far we are seeing a very good trajectory. The last question was about oil and gas headwind in Q4. I would have to look up the exact number, but we have not seen much of a relief in Q4. We are still in oil and gas in North America, about roughly 25% down against previous year. That's very helpful. Thank you very much. You're welcome, Mutlu. The next question is coming in from Simona Sarli from Bank of America. Please go ahead. Yes. Hi. Thank you very much for taking my questions. You already disclosed how much was the positive contribution from Project Brenntag in 2020. Could you give a rough indication on the phasing of the remaining EUR 205 million in 2021, 2022, and 2023? Second question, on working capital, you said that improvement was a combination of the benefits from Project Brenntag as well as obviously the contraction in volumes. Can you give an idea of what is sustainable as a working capital as a percentage of revenues going forward? How much of this improvement was related to Project Brenntag? Third question, how should we think about Q1, especially in North America, considering the bad weather impacting Texas and other southern states in February? Thank you. Simona. Hi, it's Georg. I'm hesitating to split out the EUR 220 million benefit from Project Brenntag exactly to the financial years. We said in the capital market update, and we stand behind it's a somewhat front-loaded ramp up. We have seen some steps already, probably a little bit earlier than we expected ourselves. Some benefit already in 2020, and we'll see another meaningful amount this year. The exact split will ultimately depend on how fast we are with the site network optimization, which is where the timing is not fully in our hands, and on the acceleration of the headcount reduction. There, as you know, we seek an alignment with all the different workers representatives in the different countries, and we highly strive for a solution that is agreeable to everybody. I can't give you an exact split, but the statement that it will be a front-loaded ramp up does stand. The working capital reduction that led to a cash in of a little bit more than EUR 300 million last year, I would have to go back to the exact details, but order of magnitude, I would say half of it is sales driven, so volume and price driven. In that sense, that half, kind of depends on future market and business development. The other half, so the other EUR 150 million, EUR 160 million, are a clear improvement in working capital turn in course of 2020, and we would expect that to be sustainable. I'll give it over to Christian for the weather in North American question. Yeah. Simona, thanks for bringing this topic up because it is indeed an interesting and quite challenging topic because out of various reasons. Two major points. First of all, our direct impact. That means that our locations being shut down due to the severe weather conditions, that actually happened in February, are not insignificant. We had regional operating companies who couldn't deliver products for four or five days, roughly, because we just simply couldn't get the material on the road and delivered to our customers. Secondly, more severe is, of course, the strains this event has put on the already tight supply chains in the United States. I think, I'm quoting Chemical Week numbers here. When you look at the U.S. ethylene supply, 78% was shut down. When you look on the C3 value chain, which is probably the most critical one, 60%-65% of U.S. propylene capacity was shut down. It tells you that also the whole value chain, even into vinyl chloride, into chlorine, into caustic soda, all are currently severely under stress. We have more than 30 force majeure on now globally announced by large chemical manufacturers. Currently, supply and maintaining supply to our customers is the biggest challenge we are facing right now. Okay. Thank you. If I may, sorry, just one last one. You mentioned at the beginning of your presentation that consistently with the implementation of Project Brenntag, you are now introducing a new incentive scheme also for mid-level management. Could you maybe provide a little bit more color on how that has changed? Thank you. Yeah. Again, we talk about the global leadership team. This is level one, level two below the Board of Brenntag. Basically the top 100 leaders of this company, roughly. The changes we have made are in both areas, in the short-term incentive and in the long-term incentive. Now this whole group has a uniform incentive scheme, independent whether they are in a business or whether they are in a business service function. They are heavily centered around financial KPIs. About 70% of the short-term incentive is leaning towards financial performance targets. This is number one, the organic EBITDA growth, which is almost half of that financial performance indicators, which we are incentivizing. Working capital turns as the second lever. We have basically made sure that actually, those measures are also tightly knitted to the Project Brenntag deliverables. There are also clearly expectations on the individual Project Brenntag measures and how they are implemented. The line responsibility of that individual is also reflected in that KPI, which we are using here on the short-term incentive. More importantly, on the long-term incentive, we have created a long-term incentive, which is clearly directed towards the EUR 220 million EBITDA upside, and here we are very digital. If the EUR 220 million are reached, there will be a target achievement of 100% in the long-term incentive plan. If it falls EUR 1 below, the payout is zero. This is a clear incentivation for delivering the EUR 220 million, which we have promised to the market. Thank you. That's very helpful. The next questions are coming from Rajesh Kumar from HSBC. Please go ahead. Hi. Good afternoon. Thanks for taking the questions. Could you give us some color on how much expense have you budgeted, cash expense have you budgeted for Project Brenntag in the current year? Just that would give us some handle on the cash flow modeling aspect of it. Second question. Obviously, your medium term objective is to reduce the working capital. We had a big unwind last year. No one expects that to repeat, especially if you get back in the growth mode. Over the next two or three years, what are the various levers you could pull on the working capital side? That would be very helpful to understand. Finally, as you're going in the release, you mentioned that you had very positive comments from customers and suppliers. Could you give us some flavor of what sort of discussions you've had with the suppliers and customers? Can you identify new opportunities out of it, or are they just supportive of the transition? What do you mean by positive? Could you qualify that a bit better, please? I will hand over the first two questions to Georg, and then I will take it up on the customer discussion. Rajesh, hi. Good afternoon. Cash out for Project Brenntag. As a reminder for the group, maybe the EUR 370 million total one-off cash out that we called out in November last year is roughly one-third CapEx. Say EUR 120 million CapEx and EUR 250 million expenses, where the EUR 250 million expenses will be reported below operating EBITDA. Out of the budget, if you want to call it that, of EUR 250 million expenses, we had EUR 47 million already last year, so a fair degree is already digested. How much we will spend this year kind of depends on the speed of the negotiation with the workers' representatives, on FTE reduction and on the speed of our site network optimization. Our best guess for this year is that it will be a number that comes close to EUR 100 million, maybe a little less than EUR 100 million. The timing is a little difficult to predict. Either way, we are only talking about shift between periods. The CapEx part of it is mostly related to major projects in the site network optimization, and that will be more back-end loaded, so I wouldn't expect much of an additional CapEx this year, actually. When it comes to the question on future working capital management, I don't want to beat the same bush over again, but I think we had a strong trajectory in course of last year already. The first step we have to ensure this year is ensuring that the levels are sustainable, that we reached by now through increased focus and management attention and what have you. There are further steps to come mid-term down the road, but these need more analytical tools, I would say. For example, in the area of inventory management. So far, we mostly rely today on the experience of inventory managers, but we will for sure implement more analytical tools, going forward. I would also expect more benefits from the much improved customer segmentation, where we can and will take much more analytical decisions on payment terms given to customers based on potential profitability, credit risk, what have you. That would be my two, and I'll pass it over to Christian. Yeah. I spent significant time with our large suppliers and large customers. Sometimes they're the same, because being the role Brenntag plays in the chemical industry, most of our large suppliers are also, of course, large customers of ours for different products. Overall, when you talk to our key suppliers, the recurring theme which comes up is actually that they show a very high interest of whether we are really able to replicate the strategies to make them successful in their markets. Here, clearly the creation of the two divisions, Brenntag Essentials and Brenntag Specialties, is really intriguing to those key suppliers, in particular in the Specialties field, because they see that actually, we're not only talking about being the largest specialty chemicals distributor in the world, we are also acting and putting our organization in line with that role which we have and that position that we have. Here, there are, I would say from a character and from a quality of discussion, there are now totally different discussions possible because we have added this credibility of that we not only talk, but we actually put the organization in place to do it. There are, out of that movement, interesting opportunities coming up. Typically, people understand much more and much better, and also in the Specialties field, what we can do for them. We show much stronger and much clearer and transparently our technological capabilities, our application know-how, our labs we have globally. This is quite convincing, and we have now, I must say, quite intensive talks of how can we leverage, let's say, what we do for a certain customer, for a certain supplier in a certain country or a region, how can we actually leverage this globally? Secondly, also we have discussions because we have now capabilities, as one example, in sensitive areas like in pharma, that we can offer now also global quality agreements, which allows to our suppliers and our customers that we can replicate their needs everywhere in the world. That's, I think, getting more transparent and more clear to those customers and suppliers, and this is why the feedback overall is very positive. Understood. That's really helpful color. Just one dimension, perhaps, if you could clarify. I know for certain a lot of people were surprised to see how large your specialty chemical unit was when you disclosed it. Did you find that level of surprise from your customers as well, or were they aware of your scale? I think on the surface, probably yes. Even we remember we were talking about our Specialties business being a certain percentage or being roughly a third of our business. Now we have the transparency and now we show really what it is. The same, I must say, is true also for customers and suppliers. They know that we are big, they know that we have a strong position, but they have not really felt yet what are really our capabilities. With this more focused sales approach we are taking and focusing only on our capabilities we have in the Specialties, it comes for many of them as a surprise, as I just mentioned, being able to have global quality agreements in place. That's actually a competitive advantage Brenntag has and we'll work on and develop further of being the largest player and being represented in 77 countries in the world. I believe we sharpen that approach, we make it more clear, we make it more visible, and thus we are positive that this will also show a positive impact going forward. Understood. Thank you very much. The next question is coming from Peter Olofsen from Kepler Cheuvreux. Please go ahead. Yes, good afternoon. First of all, a follow-up question on the guidance. In the annual report, you indicate that you expect the Specialties business to outgrow the Essentials business. Is that purely a reflection of the Specialties markets growing faster? Is it also because you need a bit more time for your performance and execution in the Essentials business to improve? My second question is on the oil and gas business in North America, where you gave an indication of the declines that you have seen there. Is it fair to say now that this business has stabilized? If so, what do you think is the recovery potential for this business? Yeah. I'll take those. Maybe Christian wants to add. Peter, good afternoon. The difference in growth rate that we expect for Essentials and Specialties is mostly, if not completely, underlying market. We fully trust in the capabilities and in the potential of our Essentials business. As we all know, the underlying market is growing somewhat slower than the Specialties market that drives our statement. Oil and gas, sequentially, the business has stabilized since several months already. If you look into the trajectory of comparables, then I would have to go back to my data. Basically, the business came down, if I remember correctly, mostly March and April last year. That is why you still see in Q4 and probably also beginning of this year, negative year-over-year growth rates. Sequentially, the business has stabilized, and I would not expect the negative growth rates year-over-year to continue for much longer. I'll ask Christian for help on the recovery potential. No, I see it quite similar. I would say, the oil and gas downturn, in my point of view, will bottom out now. We see oil prices stabilizing. You see a huge constraint on supply chains, which typically supports pricing. OPEC is very disciplined to our surprise. That the oil price actually is going up quite nicely since, I would say three, four months. Now, of course, everything depends on, is drilling activity and other activities in the U.S. coming back. Certainly, the harsh winter shock in February didn't help in that respect. One needs to see. I believe, the oil and gas business is on a trajectory of being stabilized and then gradually recovering. How quick and how fast, nobody knows at this time. Okay. Thank you. The next question is coming from Markus Mayer from Baader. Please go ahead, sir. Good afternoon, gentlemen. I have three questions as well. First question or the first two question are more circling around the competitive environment. Coming back to this supply chain disruptions. As you are the largest chemical distribution company on Earth, I guess you should have better supply security than smaller competitors. Therefore, my question is, do you think that you can further gain market share not only in the U.S., but also as these disruptions are also in Europe and elsewhere in Asia, that you basically can gain market share globally? That would be my first question. My second question would be more on the overall effect of this, and also potential consolidation out of that. Do you think that the pandemic effect and also the stricter EU REACH regulations or what kind of strict regulations, but also digitalization together with pandemic have or will accelerate consolidation? That's my second question. The last question would be, on the COVID vaccines, and if potentially, the delivery by Brenntag of this COVID vaccine could be a extra business for Brenntag, or is it a kind of extra business that you're serving pharma customers with fine chemicals during this vaccine time? Thank you. Markus, thank you very much for those three questions. Yeah. On the supply chain side, we see these constraints and there are many customers knocking on our door for product, to be very clear. I think we try now to navigate carefully through this tight situation and making sure that we are supplying the markets responsibly and in an appropriate manner. I think you see the constraint on a day-to-day business, of course. Whether this leads at the end to market share gains, I think for me, it's too early to tell. Currently, we're just trying to navigate through this tight situation, I must say, particularly in North America. On EU REACH regulation and digitization, all the regulatory aspects of it, yes, I believe, Brenntag is in a strong position to utilize those kind of developments. We clearly need to play our role here as the world market leader and clearly also defining what that means for us and whether consolidation is accelerating out of those two aspects. I'm not 100% sure. At least what it will do is that the competitive pressure goes up for those who are fast movers, and for those who are actually playing the digital platforms. I've said it with many calls previously. The COVID pandemic has changed the interface to customers significantly. This is something where we need to know much more, move also smaller customers and those who want actually to also digital platforms. We see a nice trajectory in our digital sales month by month now. As we move forward, I will talk about this more in the coming quarters and give you more transparency here. On the COVID vaccines, no, this is not a business where we are particularly strong in distributing this extremely small quantities, extremely small lots. That's not our core business and that's not where we are really strong. We do have efforts in Asia, in particular in Singapore, because there we have GMP warehouses which allow us to store pharmaceuticals and store intermediates. Here, we have here and there requests, but that's a very local and regional aspect, and cannot be generalized globally. Okay. Thank you so much. The next question is coming from Isha Sharma from Stifel. Please go ahead. Good afternoon, gentlemen. Thank you for taking my questions. The first one would be on whether you could tell us what you see at your customers in terms of order patterns, given that most chemical companies seem to have seen a very strong volume trend in Q4 and Q1, and how do you compare to them since you talk about volumes remaining rather muted? The second one would be for Asia. Your strategy in the past has been on increasing market share, which meant volatile conversion ratio and at rather low level. Now that you focus more on the EBITDA contribution within the region as well, does that mean that the above 40% conversion ratio is sustainable? Okay. Those two questions. Isha, hello. With our order book being rather thin and rather short noticed, and the average order size is EUR 3,000 and very fast changing business. It's really not totally predictable of how the customer order pattern is, going forward and how far we can see. We have seen gradually from Q2, Q3, Q4, a trajectory of recovering demand globally. Again, different by industry segment to industry segment, also different region by region. Nevertheless, we saw the trajectory and we believe from what we see in current trading, that this trajectory continues also well into Q1. Again, we need to face also some uncertainties and also the constrained supply chains, which is not only U.S., but it's also out of China, which you certainly have also maybe heard from other players in the chemical industry, is a severe topic right now. One needs to see how that volume trends really are developing in Q1. Also what Georg already said, we had last year in March, a pretty good volume development. I think we need to see how the Q1 volume-wise will play out. On Asia, I believe you can grow in Asia also with decent conversion margins. Growing in Asia is for me, not a question of margin versus volume to some extent it always is. On the other hand, I believe the opportunities we have in Asia are also plentiful and so broad, that I see for us great opportunity strengthening our presence there, also creating decent returns while doing that. I only always repeat, we are considered as one of the largest players already in China. The chemical industry in China, we have less than 1% of market share. That shows you what kind of opportunities we also have in that particular market. Overall, I am very positive on Asia, and we will continue to push and drive growth in Asia. You saw already, I would say, in the 2020 numbers, that this recipe has worked quite well. Thank you. Maybe I can squeeze just one more in. On the pricing, you have always mentioned that as a distributor, you benefit from volatility. Is that something that is also helping you with the gross profit return, in terms of going into Q1 as well? Is that something which is on a constantly increasing basis and we don't see it anymore? I think I've mentioned it several times. Volatility is actually a strength Brenntag has. Its commercial force is very agile, very quick in adapting to different pricing scenarios in the market. This is also what I learned by coming from manufacturers to distribution. Due to this fast-turning business we have, we are more flexible and more agile in price management and adaptations. Volatility is actually, in our case, our friend. Right. Thank you. Thanks a lot. The next question is coming from Daniel Hobden from Credit Suisse. Please go ahead. Cheers, guys. Just one left from me, if I may. It's around the leverage, which is clearly below the 2x. You've spoken about the M&A. I was wondering, what is the capital allocation policy if leverage stays below 2x for quite some time? I suppose building on that question, how do you see the M&A marketplace at the moment? I think you've pulled out bigger transactions, you've pulled out Asia Pacific. How is the competitive bidding process over there? I think there's a few players that are looking to grow in that region as well, and just some thoughts around that dynamic would be interesting, please. Dan, hi. Georg. How to respond to the leverage question. We are currently reviewing all the alternatives and options, and we are reviewing and reviewing again our cash flow plans for this year, under business perspectives, M&A working capital considerations. I think the only thing I can say at this stage with respect to leverage is there is no idea to run the business permanently on a 1.3x or even lower leverage. Apologies, I can't say more than that currently. I think there was a second part of the question about, help me again, about the M&A landscape in Asia. Yeah, just around the competitive bidding around the sort of transactions and how you're seeing the pipeline in that region, if that's okay? I think, hi Daniel. The M&A pipeline is healthy. There are good opportunities out there. Competitive processes are, of course, also out there and sometimes quite strong competition, I must say, for an interesting target. We stay disciplined. We stay very clear in what we want to do and what we do not want to do. From that perspective, I would say the pipeline is filled well. There are good opportunities for us fulfilling those three dimensions I meant earlier with the increased focus. I think it's just for us at the end of the day to make one or the other target really successful. The competitiveness is quite high right now for good assets. Perfect. Thanks, both. The next question is coming from Chetan Udeshi from JPMorgan. Please go ahead. Yeah, hi. Just a couple of questions. First one was, there is this concern in the market today that, Brenntag has over-earned in 2020, especially during second quarter when the things were tighter to source and prices put up by Brenntag and other distributors. It feels like, you already mentioned Q4, the gross profit per ton was still relatively strong. Is that a function of pricing going up? Is that a function of mix? Is it both? The crux of the question is, do we think that is something which is one-off in nature, which will normalize and create a headwind in 2021? That's the first part. Second part was, comment on M&A focusing on sort of bigger size or bigger EBITDA contribution targets. Is this some sort of a change in strategy to now focus on sort of bigger consolidation opportunities rather than just going after smaller targets? Am I reading too much into that statement? Yeah. Chetan, hi. Georg. I don't think we over-earn. Actually, I think we under-earn. Customers and suppliers should value our services even better. No, just joking. Obviously, 2020 was an extraordinary year in many aspects. Pricing volatility, supply chain challenges, pandemic challenges. It's very difficult to sort out analytically all the tiny bits and pieces and how they added up to our results. I would not say that we over-earned. Yes, we had specific circumstances that were difficult on the one end, lack of demand in certain customer industries, lack of demand generally, and we had other circumstances that helped our business. Our strong ability to manage supply chains and to have product availability, to be a very reliable, high-quality source to our customers, but also pricing volatility in the market that gave us some margin opportunities. It's more difficult than in earlier years to build a plan for 2021 based on 2020 results because of the extraordinary situation. We are pretty confident about the earnings range that we laid out in our guidance for this year. Chetan, on the M&A, I think Brenntag has acquired since 2007 more than 100 companies, and many of them being rather small and creating an enormous amount of complexity while integrating them and while adding sites and these kind of things. When I'm saying we are sharpening our focus towards more meaningful or sizable targets, it just means that we are really looking into targets specifically which are to some extent moving the needle on the EBITDA for Brenntag a bit. That's naturally more targets which are in the three-digit million range when we acquire them as an EV. From that perspective, this is how you should interpret that. That does not exclude, of course, that if there's a really interesting topic of a smaller company where a certain technology comes, for instance, with it, or where we are able to close a certain wide spot in our product portfolio is one example that we don't do it because dogmatically we have said we don't do it. I think, the focus is shifting towards what I have described. Got it. Thank you. You're welcome. The next question again is coming in from Mutlu Gundogan. Please go ahead. Yes, thanks. I had a few follow-ups. First on Project Brenntag, the EUR 15 million contribution in Q4, would you be able to split that over the segments? That is the first. Secondly, on your operating gross profit margin, yes, we've seen an uplift in Q2 and now again in Q4. Would you be able to split that over Essentials and Specialties? Is one of those two driving that increase? Finally, to come back to M&A, I hear you saying that you're looking for EVs of triple digits, but you also said more dedicated regions. Could you explain the latter? Is part of certain countries you're looking for? Also, will the large acquisition go against Project Brenntag as it would make your site footprint more complex while at the same time you're trying to simplify it? Thanks. See, help me with your first question, Mutlu Gundogan. That was looking for a split of the EUR 15 million into what? Yes. Over the regions, i.e., segments. How much in EMEA, how much in North America, that would be very helpful. Oh, that's difficult, and it becomes very granular. We try to help with the EUR 15 million to give you an idea of the order of magnitude achieved with Project Brenntag already. We think it becomes too granular if we go to the regions. Apologies for that. The second one, the split in Essentials and Specialties, kind of likewise. We start reporting on Specialties and Essentials Q1 this year, and you'll get full transparency on the two divisions for this year. We don't have figures to disclose on Specialties and Essentials for last year. The M&A point is for Christian, probably. On M&A on regions, I'm always saying we sharpening the focus in three dimensions. One is actually the size we already talked about, the other one is the regions, and the third is the industry segments we want to grow. With the regions, I mean that we have large growing chemical markets like in China, where Brenntag is currently underrepresented given its global position. I think for me, it's absolutely clear that not only by M&A but also by our organic efforts, we need to foster and we need to basically harvest the growth opportunities which are out there. The chemical industry market or the chemicals market in China is twice the size of the European market and twice the size of the American market. It's growing, still 5%, 6% and higher even. We need to be present in that growth pocket. This is why I'm saying we need to strengthen and focus our approach towards emerging markets. Look on our performance in Latin America. It was a stellar performance in 2020 when it comes to growth. Also interesting opportunities for us as well. That does not, and I specifically say that, exclude that we are not acquiring anymore in North America and Europe. I think it still is depending on what industry segment we are talking or what deal size we are talking. If it's the right one, we certainly would also continue to acquire in Europe and in North America to act as a consolidator in the market. The site topic is an important topic of course. We're trying now to reduce the complexity by going from 700 sites to 600 sites. Every acquisition, of course, typically adds sites. We are, I must say, also in our negotiations with certain targets, very firm now on what kind of sites we take on and others which we consolidate before we even acquire the company. I think this is not running against Project Brenntag, but it's under much more scrutiny what kind of complexity do we bring with a certain deal into Project Brenntag or into Brenntag overall, not only in the project but overall in Brenntag. Thank you very much. As a reminder, if you have a question for our speakers, please dial zero one on your telephone keypad now. There seem to be no further questions. For closing remarks, I'll get back to the speakers. Thanks a lot for dialing in and following our earnings call for full year. As I've said, I believe we have shown a strong performance in 2020. We have continued to work with high speed on our Project Brenntag implementation. Also our M&A effort still is following our guidance, which we have been given in the markets quite for some time now. I think we are on a good trajectory and are now in full swing to deliver what we have promised to you and to the markets. Looking forward to further interactions with you going forward. Thank you very much. Ladies and gentlemen, thank you for your attendance. This conference has been concluded. You can now disconnect. Thank you. Thanks.