Dear ladies and gentlemen, welcome to the Q1 2023 results call of Brenntag SE. At our customer's 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 line. I now hand you over to Thomas Altmann. Please go ahead. Thank you, Annika. Good afternoon, ladies and gentlemen. On behalf of Brenntag, I would like to welcome you to the earnings call for the first quarter of 2023. On the call with me today are our CEO, Dr. Christian Kohlpaintner, and our CFO, Dr. Kristin Neumann. They will walk you through today's presentation, which is followed by a Q&A session. All relevant documents have been published this morning on our website and can be found at brenntag.com in the investor relations section. In the same area, you will also find the recording of this call later today. Before we begin, allow me to point you to our safe harbor statement, which you will find at the end of the slide deck. With that, I'll hand over to our CEO, Dr. Christian Kohlpaintner. Christian, over to you. Thank you, Thomas. Good afternoon also from my side, and thanks for joining us today. I will start with the highlights of the first quarter 2023, and Kristin will then walk you through the details of our financial performance. As usual, we are both happy to answer your questions following the presentation. Brenntag recorded a solid start into the year and achieved results in line with our expectations in the first quarter of 2023. As anticipated, the group showed a sequentially stronger performance relative to Q4 2022. In addition, we observed a gradual monthly progression in demand, with early indications for a slightly positive Q2 volume development. Compared to an exceptionally strong first quarter last year, sales and operating gross profit could be kept stable, with sales of around EUR 4.5 billion and operating gross profit of around EUR 1 billion. In an environment of normalizing global supply chains, as well as prolonged inventory control measures at our customer base, we experienced volume pressure, but continued to benefit from good margin management, which led to a high gross profit per unit. Our operating EBITDA came in at EUR 420 million, which is a decline of 10% compared to the exceptional Q1 2022 performance. Operating EBITA amounted to EUR 345 million, a decline of 30% versus the first quarter of last year. This development of EBITDA and EBITA level is according to our expectations and guidance, as communicated with our full year results. Earnings per share stood at EUR 1.40, which marks the second-best first quarter result in Brenntag's history, compared to EUR 1.61 in Q1 2022. Our solid operational performance supported our very strong cash flow development, and additionally, we saw a strong cash inflow from working capital compared to the prior year. This led to a record first quarter free cash flow of EUR 449 million, which is more than nine times the prior year level, and once again demonstrates the strong cash generation capability of our business. Besides our solid operational performance, we made good progress on our strategic initiatives. As already indicated at our capital markets day in November last year, we successfully initiated our share buyback program in March, which aims to return EUR 750 million to our shareholders. The buyback is well on track and we regularly report on the progress made on our Brenntag Investor Relations website. As communicated previously, we also proposed a dividend of EUR 2 per share to the annual general meeting in June. This underpins our strong focus to create shareholder value and to let our shareholders participate in the strong performance of Brenntag. When it comes to our transformation journey and our Horizon 2 Strategy to Win, we are in full execution mode, and I will share a few milestones on our progress later on. Finally, on the outlook, we confirm our full year guidance presented in March 2023. We expect our operating EBITA to stay in a range of EUR 1.3 billion-EUR 1.5 billion, which is equivalent to an operating EBITDA of EUR 1.6 billion-EUR 1.8 billion. Ladies and gentlemen, let us now take a closer look at the environment Brenntag was facing in the first quarter. The macroeconomic environment continued to be challenging in the first quarter. We experienced ongoing geopolitical uncertainties and strong inflationary trends. In addition, normalizing global supply chains paired with expectations for future lower prices prolonged inventory control measures at our customer base. This impacted supply and demand globally and the markets we operate in. We are observing that the destocking dynamic is gradually phasing out, and we expect a sequential return to more normal order patterns in the further course of the second quarter. This slightly positive momentum is visible in improvements of top and bottom line results compared to the end of last year. As the markets continue to normalize, Brenntag will focus on its foundational strength to seize market opportunities both in Brenntag Specialties and in Brenntag Essentials. Let me now provide some details on our Horizon 2 execution. In November 2022, we presented our Strategy to Win, which is the second phase of our transformation journey. Since the announcement in November last year, we have been working relentlessly and are fully focusing on the execution of our strategy. Let me briefly summarize the key elements of this strategy. Our Horizon 2 strategy aims at fostering the increasing independence of our company's two global divisions, Brenntag Essentials and Brenntag Specialties, and is guided by the conviction that both of our divisions require differentiated steering and dedicated strategies tailored to the respective markets they are operating in. We aim to accelerate sustainable growth above industry average and to further expand their respective leading market positions. With our Digital.Data.Excellence growth driver, DiDEX, Brenntag will enhance efficiency, growth, and excellence across the organization and transform the company from its core to become a data and tech-driven enterprise and industry leader. From DiDEX, we expect a EUR 200 million net annual EBITDA uplift by 2026 on a structural basis. We continue to drive the sustainability agenda in our industry and aim to lead the creation of a sustainable distribution ecosystem. Lastly, we focus on M&A as a key driver of Brenntag's growth trajectory with an increased average annual M&A guidance of EUR 400 million-EUR 500 million annually, which we aim to spend according to our defined focus areas. Let us look at some of the strategic achievements we made in the first quarter. Brenntag Specialties executed several steps to implement the divisional Strategy to Win, including the acquisition of a new water treatment facility in South Africa and the openings of two new innovation and application centers, one for pharma in Singapore and one for material sciences in Mumbai. Brenntag Essentials made an important step forward with the acquisition of Eikmo Group, expanding its industrial chemicals and value-added service footprint in Southeast Asia. We opened a new facility in Zhangjiagang in China, about 150 kilometers from Shanghai. Including this new site, Brenntag now operates 4 distribution facilities in the country, which form an excellent foundation for Brenntag to further grow its business in China. As part of our DiDEX program, we already rolled out Salesforce applications for several pilot regions, including Great Lakes in the United States only 6 months after project kickoff. With respect to M&A, we have signed one and closed two further transactions in APAC and EMEA. The signing of the acquisition of Eikmo Group in Brenntag Essentials, which I already mentioned. The closing of the acquisition of Al Asaf Chemicals, which was the market entry for Brenntag Specialties into Saudi Arabia. The closing of the acquisition of a new water treatment facility in South Africa. Ladies and gentlemen, in November last year, we described decisive steps to move Brenntag further into incrementally independent operating divisions, which differentiate themselves wherever differentiation is meaningful and with one clear purpose: to address the needs of our suppliers and customers most effectively, while at the same time building the specific capabilities required in both divisions. We will continue our path of capability building and structural adjustments with the adequate speed and the consequent decision-making required to secure successful strategy execution in both divisions and for Brenntag as a whole, while defining and then implementing the required changes in our operating model. We are very pleased with the strong Q1 performance of our Essentials business, delivering double-digit EBITDA growth in both our core regions, North America and EMEA, we fully recognize the current performance gap of Brenntag Specialties relative to our pure-play competitors. Let me name some key reasons why this pronounced gap currently exists in our field. The actual quality of our product portfolio, which has, for instance, a strong exposure to non-branded ingredients like citric acid, a significantly lower exposure to pharma, and also including lower margin industry segments like finished lubricants. Secondly, a less strategically developed supplier base related to our pre-Project Brenntag decentral and local decision-making. Thirdly, our actual cost structure, including the required investments to modernize the company and to provide the basis for the execution of our Horizon 2 strategy. Fourthly, a partial lack of required skills and capabilities to drive Brenntag Specialties, including the required mindset. Ladies and gentlemen, as outlined in our capital markets day last November, Horizon 2 has been exactly designed to address these issues. We work with strong focus on the relevant topics, including the decision on our new leadership in Brenntag Specialties with Michael Friede now having joined at the beginning of this second quarter. Let me also emphasize being a proven and prudent management team, it goes without saying that we actively explore the relevant operating model and portfolio choices to create the future strategic optionalities for both businesses of Brenntag, according to the guiding principles outlined already in our Horizon 2 strategy last year. As always, we will provide updates on our progress within our regular capital markets communication framework. Now I would like to hand over to Kristin, who will talk about the financial performance in Q2 in more detail. Kristin. Thank you, Christian. Also from my side, a warm welcome to everyone on this call. I will now talk about our key financial figures for the first quarter 2023. I will start with the development of our operating EBITA. As a reminder, when talking about growth rates, we generally talk about FX adjusted rates. Please have a look at the bridge on the left-hand side of slide 7. The first quarter 2022, we reported an operating EBITA of EUR 394 million. The translational foreign exchange effect in Q1 this year had an impact of EUR 3 million. Our acquisitions contributed EUR 2 million to the operating EBITA growth. Overall, we reported an operating EBITA of EUR 345 million for the whole group. Compared to the very strong prior year performance, this represents a decrease of -13%, which was in line with our expectations. On the right-hand side, you'll find a more detailed view by divisions and all other segments. Brenntag Essentials continued its growth path and delivered strong results in Q1, 2023, despite the ongoing challenging market conditions. Brenntag Specialties reported weaker results, according to our expectations and as reflected in our guidance for full year, 2023. The business results of Brenntag Specialties were affected by negative volume development and compared to exceptionally strong prior year earnings in some focus industries which could not be repeated. Operating EBITA growth for Brenntag Specialties was negative at -26%. For Brenntag Essentials, the growth rate was +3% year-over-year. In absolute terms, Brenntag Specialties reported an operating EBITA decline of minus EUR 55 million, whereas Brenntag Essentials grew by EUR 10 million compared to Q1, 2022. The positive translational FX effect of EUR 3 million on group level was entirely driven by Brenntag Essentials. Acquisitions contributed EUR 1 million in Brenntag Specialties and EUR 1 million in Brenntag Essentials. The group EBITA conversion ratio came in at 33%, which is 500 basis points below the very strong prior year quarter. Our good sides were overall characterized by the continued destocking trends, coupled with demand weaknesses in certain end markets, which put pressure on our volumes. At the same time, gross profit per unit was strong on an ongoing high level, which led to a stable operating gross profit development year-over-year. The weaker bottom line results on group level are therefore mainly driven by an increased expense base compared to the prior year period. The OpEx increase is driven by various factors, which I would like to comment in more detail. Around 30% of the total cost increase is related to our acquisitions. Therefore, we need to exclude this and look at the organic cost development. Here I would like to mention three effects in particular. First of all, IT and supporting consulting costs increased significantly in the context of our strategy execution and our direct initiatives. This accounts for more than half of the organic cost increase in Q1. The second-largest driver is our personnel expenses. Here, the increase is partly driven by an increased number of FTEs in the context of building new knowledge and competencies on central level and within our division, and by doubling certain functions for a limited period in the context of the establishment of our shared service centers. The increase in personnel expenses is driven by general wage inflation, partly offset by lower variable compensation. The remaining part is related to our cost of operations, which increased due to general inflationary trends. This includes transportation, fuel and energy, rent, as well as repair and maintenance costs. I would like to add one more dimension to the numbers. The prior year's cost base did not include Project Brenntag related costs because we reported them as special items below operating EBITDA and operating EBITA. This is now different for all our strategic initiatives, including DiDEX. These costs are fully reflected in our general OpEx line. Against the background of the ongoing economic challenges and uncertainties, we prudently review the necessity to adjust our cost base according to our business expectations, and we will update you in due course on our conclusions in this respect. Coming to page 8. Brenntag Specialties reported an operating gross profit decline of minus 9% to EUR 388 million in the first quarter. Operating EBITA declined by minus 26% and reached EUR 153 million. As already mentioned, this is according to our expectations and already reflected in our full year 2023 guidance for the group. The EBITA conversion ratio for Brenntag Specialties was around 39%, below the exceptional prior year level of 49%. The results of Brenntag Specialties were affected by negative volume developments. However, from a pricing perspective, average gross profit per unit slightly increased compared to the prior year period. Our focus industries, water treatment and lubricants, performed well. Our pharma business developed very positively and showed an encouraging strong performance. However, due to its comparatively small size within our life science end markets, this did not fully compensate for lower demand in the other life science industries where customers reduced previously built up inventories. As a consequence, nutrition and personal care, HI&I, showed negative operating gross profit growth, also in light of exceptionally strong prior year earnings, which could not be repeated in the actual year. That strong prior year performance was, to a large degree, driven by non-branded ingredients such as citric acid, which saw weaker volume development and price declines compared to the prior year. The performance of the material science sector continues to be negatively impacted by muted construction activity in light of the higher interest rate environment. In addition, an overall weaker performance in the APAC region impacts our Specialties results in Q1 2023. From a cost perspective, our results reflect the general inflationary pressure compared to the prior year period. Investments related to our strategic initiatives led to an increased cost base compared to Q1 2022. However, we do see positive developments when looking at the performance compared to the fourth quarter last year. Let us take a closer look at Brenntag Essentials. Brenntag Essentials took a strong performance and achieved encouraging growth rates in Q1. Operating gross profits grew by 6% year-over-year to EUR 648 million, with operating EBITA reaching EUR 224 million. This is 3% above previous year. The EBITA conversion ratio for the division came in at around 35%. This is 90 basis points below the prior year period. EMEA and North America showed a particularly strong operating EBITA development with double digits growth rates, which was almost entirely driven by organic growth and mainly related to strong gross profit per unit. The decline in the APAC segment was caused by lower demand in all APAC regions, particularly in China, the Latin America segment was impacted by a sharp drop in demand in Brazil. On the cost side, our Essentials division had to deal with general inflationary pressure, particularly higher repair and maintenance expenses, as well as higher fuel and energy costs compared to the prior year period. Investments related to our strategic initiatives increased our cost base. However, also for Brenntag Essentials, I would like to mention the positive development we observed compared to Q4 last year. Compared to the last quarter, we saw higher volumes combined with a relatively stable gross profit per unit. At the same time, operating expenses were lower compared to the fourth quarter last year. Let me briefly address the development in all other segments. In all other segments, which mainly include the holding companies, we recorded a negative operating EBITA contribution of minus EUR 32 million. As expected and indicated in previous earnings calls, this is driven by the general inflationary environment, but also related to higher advisory expenses in connection with our transformation program and higher IT expenses. As a reminder, all costs related to IT investments and our DiDEX program are reported in our operating expenses and therefore are fully reflected in operating EBITDA. Summary, the results are in line with our expectations in a continuously challenging market environment. Moving to slide 10, where we look at the income statement in more detail compared to Q1 last year. We generated stable sales of around EUR 4.5 billion. Our operating gross profit was also more or less stable at around EUR 1 billion. Operating expenses, excluding special items, increased by 7%, as already mentioned, in light of the general inflationary environment, but also due to our ongoing strategic investments and M&A activities. Special items below operating EBITDA had a positive effect of around EUR 5 million. This is mainly driven by a reversal of provisions of EUR 7 million for excise duties in relation to lower than expected tax decision notices for energy tax payments. Depreciation increased by 9% to EUR 75 million. Amortization remained stable at around EUR 18 million. Net finance costs increased to EUR 35 million compared to EUR 24 million in Q1 2022. This is mainly related to higher net interest expenses due to the change in general interest rate levels and the classification of Turkey as a hyperinflationary economy. Our financial performance translated into a profit after tax of EUR 217 million and earnings per share of EUR 1.40. Let me emphasize that this is the second highest EPS Brenntag has ever achieved in the first quarter. Coming to page 11 and the free cash flow. In Q1 2023, we reported a record first quarter free cash flow of EUR 449 million, which is more than 9 times the prior year level. The significant increase in free cash flow generation is due to the cash inflow from working capital, where else we reported a significant outflow for investments in our working capital in the prior year quarter. On page 12, you can see more details on our working capital development. Working capital amounted to around EUR 2.5 billion at the end of the first quarter. This is a decline of around EUR 136 million compared to the end of 2022. Our working capital turnover was lower compared to the average working capital turn of last year and stood at 7.2 times, but is sequentially improving recently. Looking at our balance sheet, our net financial liabilities amounted to EUR 2.3 billion at the end of Q1. Our leverage ratio, which is net debt to operating EBITDA, remains on low levels and stood at 1.3 times. Please note that the first tranche of our share buyback program is already accounted for in these numbers with an amount of around EUR 500 million. The right-hand side of the slide, you can see our current maturity profile, which visualizes our strong financing structure. With this, I would like to hand back to Christian. Well, thank you, Kristin. Ladies and gentlemen, let me briefly talk about the outlook for 2023 now. We confirm our guidance, which we provided with our full year results in March. We expect Brenntag's group operating EBITDA for the financial year 2023 to stay between EUR 1.3 billion and EUR 1.5 billion, which is equivalent to operating EBITDA of EUR 1.6 billion and EUR 1.8 billion. For 2023, we expect a continuously tough operating environment characterized by geopolitical concerns, macroeconomic challenges, but also a sequentially recovering demand. We already experienced a slightly positive volume momentum since the beginning of the year, and expect the destocking dynamics to phase out in the course of the second quarter, which should provide for a more positive demand environment in the second half of 2023. Nevertheless, please keep in mind that the second quarter last year was exceptionally strong and creates a very tough comparable basis. Let me conclude with two final statements. Firstly, being a proven and a prudent management team, it goes without saying that we actively explore the relevant operating model and portfolio choices to create the future strategic opportunities for both businesses of Brenntag, according to the guiding principles outlined already in our Horizon 2 strategy last November. Secondly, while balancing out the fundamental requirements for our strategic execution with the cost framework of our regular business activities, we carefully steer the rate of our resources to be built up and prudently review the necessity to adjust our cost base according to our business expectations. We will update you in due course on our conclusions. With this, I would like to close the presentation now and thank all of you for participating in today's call. We are looking forward now to your questions. Thank you. Thank you. We will now begin our question and answer session. If you have a question for our speakers, please dial star one one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask your question. If you find your question is answered before it is your turn to speak, you can dial again star one one to cancel your question. One moment please for the first question. The first question comes from the line of Suhasini Varanasi from Goldman Sachs. Please go ahead. Hi. Good afternoon. Thank you for taking my questions. I have three, please. At the time of the full year results in March, you very helpfully gave some color on how you see sequential trends on profits. Can you help us out again for your Q2 expectations, please? Under normal seasonality patterns, Q2 profits are usually sequentially better versus 1 Q. Given the macro risks, given the normalization of supply chain, do you see any risks to the sequential pattern? That's the first question. The second one is on volumes, please. You've indicated on slide 4 that you have seen some gradual volume improvements at the group level and some slight positive momentum towards the end of the first quarter. Is it possible to give some color on how the trends have been Essentials versus Specialties? Then the third one, please. In the Essentials business, you've indicated that you benefited from higher GP per unit contribution in EMEA and North America. Can you please elaborate on what drove this trend, please, despite the normalizing supply chains and your expectations for the next quarter? Thank you. Thanks, thanks for your questions. I might take the first three, all of them, and then ask Christine to jump in if she wants to add. Let me start maybe with your second question because that's determining the rest of it. The volume improvements we have seen sequentially is strongly focused on Essentials. We don't see this yet on Specialties. We see it a little bit, but not to the extent we saw it on Specialties. When we talk about a gradual volume recovery for the group, I would say it's still strongly driven by the volume recovery we see in Essentials, and it's also more pronounced in North America than it is in Europe at this moment. Latin America, you know, it's a totally different game, in Asia as well. The volumes, momentum we see continuing into the Q2. This is why I said, clearly that we expect a more positive volume and demand, picture in Q2 relative to the previous, quarters. That does not necessarily mean that the sequential profits go in the same direction. This is now at the end, the question about, pricing, your basically third question you asked and how question, and how pricing will impact, those results. For the time being, we still are able to hold on to good pricing schemes and applying our commercial capability and our commercial, excellence to maintain, higher margins. You don't know how that in the second quarter will play out. We only can see from a demand and volume side, encouraging sides. Now we need to see how the pricing sensitivity and elasticity will come. That's, you know, also related to your third question about, I know the margins cost profit per unit, how we see that this is still driven strongly by the Essentials capability to play really that game of supplying material, if it is even short in a region with our global reach. Underlying, I would say, the largely underappreciated story around Essentials that we can really play out and balance out global reach with local execution. That will be the three question, the answer to your question. If that's okay with you. Thank you. Okay. The next question comes from the line of Markus Mayer from Baader Bank. Please go ahead. Good afternoon, Tristan, Christina, and Thomas. Two questions from my side. Also going more or less in the same direction. This very strong Essential business had this also to do with the change in trade flow? And if so, as the energy costs came down in Europe and several chemical value chains will be quite affordable in Europe, should we expect the good Essential level to worsen over the 2023? It's my first question. Second question is again on the guidance. If you take Q1 as a run rate for the full year to bring us to the middle of your guidance range, Q1 had the destocking effects and also, as I understood, a lot of, one, of course, for our Strategy to Win, but no savings from this program. The lower end of the guidance range looks rather conservative. Is this the right right through or are there any kind of moving parts I forgot to take into consideration? That's all. Thank you. Well, thanks, Markus, for those two questions. I will take both of them. On the Essentials side, of course, there are still the impact felt strongly about the energy scenario which we saw in Q1 in Europe very strongly. I mean, that was undeniable. Still, our energy prices were very high. We had shutdowns of large manufacturing assets in Europe and then shortages of key materials which we could bring from different parts of the world into Europe very successfully. Again, underlying that capability on the Essentials side. We still believe that going forward, there will be disparities between the competitiveness of the various industries in the various continents, but still out of U.S. into Europe, but also more and more out of China into Europe, which again, LANXESS is well-positioned to draw on that imbalances and is offering those opportunities. Overall, that means that Essentials is performing quite robust in this environment. We see also a good trend into the second quarter with this robustness maintaining. At the end, it all will be decided how, you know, what the price elasticity will be and the price movements will be going forward. Currently, we don't see any dramatic fundamental shifts in the pricing pattern as we go forward to more gradual normalization than really a falling off the cliff. That still is the big question about impacting also our guidance and saying, okay, we have, I would say, a really little bit opaqueness on the pricing side. We have slight encouraging slides on the volume side. Balancing that out, you know, brings us to the point that we believe we are in a good spot with our guidance, and this is why we reconfirm it at this time. Okay. Thank you. Welcome. The next question comes from the line of Chetan Udeshi from J.P. Morgan. Please go ahead. Yeah. Hi, thanks. You know, I just had a question or actually I have a few questions. I'll start with the first one, which was, you know, you mentioned you referenced citric acid, and I'm sorry to say, but I personally would not consider citric acid to be a very specialty product. I'm just curious on that basis, within your specialty portfolio, how many of these monomeric products would you have, like, you know, citric acid? I don't know if you classify the vitamins as specialty 'cause, you know, we've also seen the prices collapsing for some of them, you know, displaying more commodity type behavior. I'm just curious, you know, in your classification of your specialty and, you know, essentials, like what sort of elastic have you used? Clearly I was a bit surprised to see citric acid being called out as one of the products impacting the profits for specialties. The second related question, Christian, if I hear you, it feels to me like clearly the quality of the specialty chemicals business is not to the level where you feel confident or comfortable, you know, spinning it off as an independent business at this point. Is that a right impression, or am I interpreting that too much? The last question was just going to the, you know, the essentials GP per unit. You know, you were referring to, you know, in one of the examples in the previous quarter of how, you know, caustic soda prices have gone up dramatically in Europe and, you know, you were sort of sourcing from other regions of the world, et cetera. I mean, clearly that dynamic has completely changed in Europe. Now, we've seen the industry has restarted production. The caustic prices have collapsed. I'm still surprised that the Essentials GP per unit is not coming under pressure because I would have thought, given the dynamic that we see now, you know, where caustic soda might have been in tight supply previously, now it seems the inventory of caustic soda is at historically high in Europe. Why is that not showing up in GP per unit in Essentials as we speak? Thank you. Well, Chetan, thanks a lot for, I would say, this very good questions. Let me start with citric acid, and I think we just used this example to describe to you what we call a non-branded ingredient. A non-branded ingredient is an ingredient which is still applied, of course, in many Specialties applications. The way we have defined our product baskets for Specialties and for Essentials, and I know this now two years ago when we explained this to the market, it was guided by the principle of each industry segment observing the certain products, but only those products who really end up in the final product of that industry. Let's say, citric acid ending up in the foods application is counted as a Specialties sale. If, let's say, a caustic soda is sold to cleaning machinery in a food ingredients manufacturer, this is an essential sale. It is defined where the product is applied and is it ending up in the final product or is it just a process chemical in cleanup machinery? It's just one example. That was a very clear definition we took. We see the pros and cons of those definitions. You saw, for instance, excellent results in our Specialties business last year in Q1 and Q2. That makes the comparables extremely tough, where we had a good run on our citric acid capabilities and delivering them and sourcing them globally. You asked about vitamins. Yes, again, you need to differentiate between water-soluble vitamins and fat-soluble vitamins. Totally different game. I think there is always a mix in our portfolio, but it is for us very clear that, you know, portfolio and the composition of that portfolio of Specialties is something which we need to work on and improve. It's what we have clearly said on the capital market day in November, where we said a more stronger shift to lifestyles and a stronger shift to value-added services and an end. I think this is all predefined by recognizing that structural, I would say weaknesses we have in our portfolio at this moment. When it comes to the quality of the Specialties business. No, I mean, it's very clear. I'm not happy where we are performing. I'm not happy with the performance gap we are seeing. I believe, you know, the rationale is, we need on one hand, fix the fundamental topics in that business, and I made four examples of how I see it. You know, we are working full-time and full speed on that topic as we have outlined in the capital market day. Michael Friede now taking over the helm will clearly address those issues. That needs to be, for me, clearly separated from, you know, what kind of optionalities we see for the business going forward as being either, you know, within Brenntag or without Brenntag. This is, you know, the current debate. It requires for us as a management team to carefully assess all those optionalities and seeing, okay, what is the most value-creating step for us going forward, and what is really in the interest of our suppliers and customers, and also at the end for you, as our investors. This is, you know, what we have indicated. We have clearly announced the capital market day later this year, where we will lead you through our conclusions here, but now we just need also the time to work it through and really figure all these optionalities out. On the Essentials question, when you look at the gross profit by unit. Well, I would not say that, you know, prices have collapsed. There are still, you know, quite the price differentials. You know, it might be, you know, that caustic soda is normalizing, but then you have other materials, this is not the case across the whole portfolio. Still there are disparities. Still there are, you know, arbitrage opportunities. When you look at the three regions, North America, Europe and Asia, which again, Essentials, after having created the new operating model, is now for the first time, really able to play that to play that game. That is maybe also reflected in this performance of our Essentials, which, you know, if you would compare it with some numbers which have been floating around recently from other parties, quite remarkable performance underlying that capability only Brenntag has in the Essentials business. I hope that answers the question, Chetan. Thank you. Yes. The next question comes from the line of Alex Stewart from Barclays. Please go ahead. Hello. Good afternoon. Can you hear me? Yes, we can hear you. Hi there. Hi there. Thank you for taking my questions. Hopefully two simple questions. The first one, you talked a lot about operating costs in the first quarter: salaries, inflation, IT expense, strategy expenses. Historically, you suggested that, well, certainly operating costs that were predictable would be managed into pricing. Brenntag was able to largely offset those costs. It appears not to be the case at the moment. Could you tell us whether these are unusual, whether it's more difficult to pass them through to customers, particularly the employee expenses, which I guess you have a reasonable amount of visibility into. The second one, just a point of clarification. Can you confirm that you said your average gross profit per ton was higher year-over-year in Specialties? Did I hear that right? Thank you so much. Alex, thanks for your question. I will hand it over to Kristin. She will answer both questions. Okay. Thank you, Christian. First of all, inflation passed through to our customers. I think that went quite well also in the first quarter. However, we had those investments into our future. I think here it's not possible to all pass it through to our customers. If it comes to inflation for the employees, that is more or less really what we did also in the first quarter. I'm quite confident here that this is also still happening. The GP per unit in the Specialties business is also higher compared to what we saw last year all in all. However, there are differences in some of the product lines, as Christian already explained. Also the increase is not that high compared to what we saw in Essentials. I hope that this answers your question. If I could just pick up that point again. You had, I think, a contraction in EBITDA currency neutral of about 25%. If GP per unit or GP per ton was slightly higher, then you're saying that the, that 25% contraction was all down to volumes and non sort of investment in the future costs, if you like, that you can't pass through. I just wanted to understand the moving parts between Q1 2022 and Q1 2023. Thank you. That is right. Can confirm that. Thanks so much. The next question comes from the line of Dominic Edridge from Deutsche Bank. Please go ahead. Hello, Dominic, your line is open. Hi there. Apologies. Yes, two questions from myself. Just firstly, on Essentials, I know you've been adding some new sites into the network. Can you just maybe discuss what the current plan is in terms of adding further new sites into the network and where your targets are in that respect? I think you've added some in Argentina, in North America, and in China. Are there any sort of other regions that you see as being particularly interesting at the moment? The second question was just on the Specialties side of things. Obviously, just taking into account your comments, Christian, I suppose the question is: When you look at some of your competitors, obviously they make a lot of money it feels out of being exclusive distribution agreements with producers. Is that an area you feel that you are currently weak in? Is that something that can be resolved through organic means, or is that something really you're gonna have to do some M&A on to sort of to improve the things there? Thank you very much. Okay, Dominic, thanks for the questions. On the current sites, topic, yes, we show where we're adding new sites and why we have also executed the shutdowns of the first wave of Project BrandTech. Going forward, you should expect us having less and less sites, not more. Why? Because we are also investing into the mega sites we have already indicated. We will make larger investments to make really the future of chemical distribution locations in the future, while at the same time shutting down pretty little smaller sites and consolidating them into one of those mega sites. At the end, you will see less sites for us going forward than more, with the exception that if new acquisitions should bring a large number of sites, then the number changes. That's not really the case. We always have a clear plan to get and have less sites than more. Again, we will also update you on that development going forward. On Specialties, I'm not not 100% sure that it is an issue about exclusivity, because we have also numerous exclusive relationships with our suppliers. What I mentioned in my call is actually that historically, the decision whether to work together with a certain supplier was a local decision, sometimes a legal entity decision. Italy, for instance, decided which is my right supplier for a certain product group. This has changed in Project Brenntag, where we're saying now let's come from the market, define what industry segments we need to have and how we address them successfully, what are the best suppliers which we need to have in place with us to provide us the right product portfolio and be successful in the market. That is something which we need to change because that strategic supplier choices, as again, I have said, has not been, you know, one of the strengths of Brenntag in the past, coming from a full line distributor model. Now we've been more and more differentiating with Brenntag Specialties and Brenntag Essentials. There are more, I would say, deliberate choices which supplier to team up in what region for which product group. That's for me, more decisive than, let's say, an exclusive supplier relationship, which again, we consider ourselves not too far away from also our peers. Thank you very much. You're welcome. The next question comes from the line of Thomas Swoboda from Societe Generale. Please go ahead. Yes, good afternoon, everybody. I have three questions, please. Firstly, can you comment if you have seen any inventory devaluation measures in your business during Q1? Do you expect anything going into this direction in Q2? My second question is on the working capital reduction. Could you talk around how that has developed for the two different segments, please? Thirdly, I'm just wondering, I mean, about these potential price reductions going forward. Is there anything you can do to prepare yourself to manage the impact if that should materialize? Thank you. Hey, Thomas. Thanks a lot. I will ask Kristin for the first two questions. I will talk about the price reductions. Thomas, we have not seen any extraordinary devaluating impact in our inventories in Q1. That was partly different in the last quarters, where we saw some prices really declining. In Q1 that was not visible. Of course, depending on the price development, we also do not foresee that to take place in Q2. If it comes to the working capital reduction, we have not fully separated the working capital for the two divisions. Therefore, we also do not disclose that per division. What we can see is quite similar trends that we see, first of all, a slight reduction which comes out of the revenues, and also in a gradually improvement in the working capital term. That is also what we said in the last call, that we are working on improving the terms again. Because of the destocking everywhere also with us, we can also see that the working capital term. I hope that this answers your question. I hand over to Christian. Yeah. Thomas, for your question on the price reduction, I think this comes back to the commercial capability of our organization, which again, I have to say it's remarkable to manage price volatility up and down quite successfully and playing, so to speak, demand, supply pricing questions quite well. As I've said, we have been positively again surprised and convinced by our people that they even in times where prices have normalized, and we talk about many normalized prices already, when Chetan has mentioned it, that, you know, we still are able to manage our commercial margins quite well. I think you can rely on the capability of this organization that we can minimize margin squeeze out of price volatility down to the maximum extent. This is helpful. Thank you very much. Welcome, Thomas. Once again, ladies and gentlemen, it's star one one on your telephone keypad to register for questions. There seem to be no further questions. I hand the conference back to you, Thomas. Thank you, Annika. Ladies and gentlemen, this brings us to the end of the conference call. Thank you very much for your interest in BrandTech and joining us today. If you have any further questions, please don't hesitate to contact the IR team. Our Q2 2023 results will be published on August nine, 2023. We are looking forward for further discussions with you. That's it for today. I wish you all a good day and a great week. Thank you and goodbye. Thank you. Ladies and gentlemen, thank you for your attendance. This conference has been concluded. You may disconnect.