Good day, and welcome to the Evonik Industries AG second quarter 2022 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Tim Lange. Please go ahead, sir. Thank you very much, and good morning here from the Evonik side to our Q2 earnings conference call. This time, one of the last in the reporting season, with that, I hand over directly to Christian for the presentation. Thanks a lot, Tim. Ladies and gentlemen, warm welcome from my side, and thanks a lot for joining our call today. It is another strange reporting season for us. We're once again reporting a record quarter. Actually, a record first half. The best first half in the history of Evonik Industries. At the same time, challenges around us are increasing quarter by quarter. The oppressive war in Ukraine and the human tragedy for the people there continues. China is going through COVID lockdowns, supply chains and logistics remain stressed, and we're facing an energy crisis in Germany and in Europe too. As you know me, and I guess you know me very well, this is not the time to bury the head in the sand. The strength of Evonik and as a chemicals industry in Germany has always been our employees. We have outstanding know-how and unmatched innovation power, and a competitive advantage in sustainable solutions. Our recent efforts to cut Evonik's gas consumption in Germany by 40% is another proof of what makes us strong. The relentless efforts and creativity of our employees to deal with any kind of crisis and to make Evonik better every day, today and tomorrow. So far in my short, and please forgive me, passionate introduction. Let's turn now to the facts and figures. Before Ute dives into the numbers a bit more, I would like to start with some strategic remarks. At our Capital Markets Day a few weeks ago, we embarked on our journey towards next generation Evonik. The biggest change is that we've fully integrated sustainability into every strategic pillar. The current developments in the world are just another proof point that we are setting the right priorities here. Also during this time, it is crucial to execute our strategy. Let me give two examples how we manage further progress towards next generation Evonik. In our business line Care Solutions, the management team has done an excellent job in transforming the portfolio and establishing ourselves as a leader in active ingredients. After several very successful bolt-on acquisitions over the last few years, we are now divesting our Betaine business with sales of $50 million, which does not fit to our portfolio criteria anymore. The transformation in Care Solutions has resulted in clearly accelerated growth and EBITDA CAGR of 15% and a higher margin of 400 basis points over the last 5 years. We are not done yet. There are more steps to come in portfolio management and not only in Care Solutions. In healthcare, we're building a new, highly flexible global scale production facility for pharmaceutical lipids in the United States. The new plant at Evonik's Tippecanoe site will position us for future growth in novel mRNA-based therapies beyond COVID-19 vaccines. Construction will begin in early 2023, and the plant is scheduled to go on stream in 2025. This is timed for the expected acceleration in growth in new mRNA-based drugs. Total investment amounts to $220 million. The U.S. government is funding the facility with up to $150 million, making this a highly attractive investment, both strategically and financially. With that, ladies and gentlemen, let us turn to the dominant topic of the last month, the gas situation in Europe and Germany. You have for sure read our press release earlier this week, so I will keep it short here. With the measures we are implementing at our German sites, we will substitute 40% of our gas consumption in Germany and make our energy production at our main sites effectively independent from Russian gas. Our site in Antwerp is benefiting from favorable infrastructure setup with good access to LNG terminals. Marl will replace natural gas for energy production by liquefied petroleum gas. At current gas price levels, the price differential between LPG, natural gas, and naphtha makes this step also financially sensible for us. As an additional benefit, the levy we have to pay for gas consumption in Germany will be 30% lower. This will be a mid-double-digit million EUR benefit for next year. This, combined with the extended runtime of our coal power plant, will allow us to maintain energy supply for our Marl site, regardless of any further gas cuts in German emergency plans or levels. To put it differently, we are convinced that we will not be affected anymore from a potential gas rationing under Alarm Level 3, given the already significant savings we are executing now and proactively. Ute will shed some more light on our energy costs now. Thank you, Christian, and good day from my side as well. Since the beginning of 2020, we had to cope with more than EUR 3 billion of higher raw material costs. We have been quite successful in passing them on over the last 2 years and are continuing to do so. In contrast to this big number, the expected increase in energy costs for 2023 will be much smaller. We expect to limit the increase to around EUR 300 million, even assuming today's elevated gas price levels. This is below this year's increase of our energy bill and supported by the measures we have already put in place. Our hedging rate of around 70% for next year, both via physical forward buying and direct pass on to our customers, as well as our substitution of natural gas by LPG and fuel oil. We will continue to pass on the remaining higher costs to our customers. Of course, I hear you say that we'll be facing a different economic environment than over the last 2 years. We proved to be resilient in the crisis, and we are confident to manage this smaller number as well. This brings me to the second quarter performance. Sales again moved materially higher, driven by the mentioned further acceleration in price increases. A + 24% in Q2 is a clear sign that pricing power is intact. As we negotiate prices directly with our customers, price increases typically come with a time lag. This effect should support sales and earnings also in the next quarters. Volumes on the other hand, were slightly down on group level. Specialty Additives continues to face logistical difficulties, which is limiting volumes. Nutrition & Care experienced the impact of lockdowns in China in their animal nutrition business. Smart Materials had a plant maintenance in our Polyamide 12 plant in June. Performance Materials could have sold even more, but was limited by raw material availability. You have already seen all the other financial KPIs, so maybe worth mentioning is our debt level. On top of that, driven by a higher discount rate, pension provisions almost halved to EUR 1.8 billion at the end of June, bringing down our leverage to 2.1x. Jumping a few slides ahead to free cash flow. As already experienced in Q4 2021 and Q1 of this year, the high net working capital outflows, both for inventories and receivables, have a temporarily negative impact. The outflow was more than EUR 900 million in the first half of 2022. That resulted in a negative free cash flow of EUR 106 million for the first 6 months of 2022. We are working on all levers to reduce net working capital in the second half, and the first effects are already visible for the start into Q3. More details from Christian on that in the outlook part. With that, Christian, back to you. Thanks a lot, Ute. As you have seen, we have a strong first 6 months in the books. Nevertheless, and even if we do not see it broad-based across our businesses today, the economic environment around us is not getting easier. Macroeconomic indicators are facing downwards. As of today, we see a continued solid demand for the start into the third quarter. Order books remain well filled, and there are still quite some backlog in our systems. However, first signs of slowdown in growth and increasing customer cautiousness are visible here and there across our businesses, but it's still a very mixed picture as of today. It makes sense to apply a certain level of caution in our outlook statement and assume a gradually slowing performance in the next two quarters. Quite a bit more pronounced than the usual seasonal pattern in those two quarters. In terms of gas supply and energy costs, we have assumed the current high spot price levels. Given our implemented measures, we should see only very limited direct impact on our production, even in case of complete gas stop from Russia. We have also factored in the levy for the additional sourcing and storage costs of German gas importers. Based on the latest comments from the German government, we estimate that for Evonik, it would result in a low double-digit EUR million burden on EBITDA in the fourth quarter. As you can see, we have considered everything we know today for our outlook statement, both on the macro as well as on the energy side. Still, we see EUR 2.6 billion of adjusted EBITDA as well underpinned. Of course, what we cannot assess is the indirect effect of further gas cut on our raw material suppliers, on our customers, on customers' behavior, and it goes without saying, on the overall economy. Already discussed the challenges around the free cash flow. Part of the EUR 900 million net working capital outflow in the first half of this year will be reversed already in the second half of this year. With an expected inflow of EUR 400 million-EUR 500 million in the third and fourth quarter combined, we will deliver a cash conversion rate of around 30% this year. This lower cash conversion rate is temporary. For next year, we aim to return to our target of 40% that we have been delivering over the last 2 years. The only partial reversal of net working capital outflow in the second half of this year leaves further net working capital potential and free cash flow support for the next year. To sum it up, we keep on delivering on our promises, both in the long term with continued strategy execution and in the short term with strong financial results. At the same time, we are preparing our business as well as we can against challenges around us and feel well prepared for a potentially choppier environment ahead. With that, ladies and gentlemen, thank you very much for your interest and your time so far, and we are now ready and happy to take your questions. Thank you. If you would like to ask a telephone question, please signal by pressing star one on your telephone keypad. Please ensure your mute function is turned off to allow your signal to reach our equipment. Again, that is the star key followed by the number one to pose a question. We will pause for just a moment to allow everyone an opportunity to signal. We will take our first question today from Matthew Yates of Bank of America. Please go ahead. Your line is open. Hey, good morning, everyone. Thanks for taking the questions. A couple if I can. The first one is around the gas mitigation plans and the switching to LPG, which I must say sounds like a very good solution, and you mentioned it may actually be a lower-cost solution. I was just wondering, is there any downside here operationally in terms of how the plant is configured and has to run? My second question is around the negative volumes that we saw, and I guess to be fair, your peers equally seem to have struggled with logistics and raw material constraints last quarter, so perhaps no surprise here. Just thinking forward, the group has pretty tough comps for Q3. So are you expecting a sort of catch up on that unfulfilled demand from Q2? Does the softer economic backdrop you referenced in your introductory remarks set us up for perhaps another quarter of volume declines in Q3? I'm particularly interested how you're seeing the evolution in the nutrition business and what's happening with the vaccine revenue there in the second half. Thank you. Okay. Hi, Matthew. Good morning. Christian speaking. I take your first question about the LPG. Maybe you've asked about the potential downsides here on our operations. First of all, it is to say it is a two-letter message, and the message is no. To give you maybe a little bit more color about it is to say, first of all, it is not to go into rhapsodize about the quality of the engineers of Evonik, but here it is fair to say that our new power plant was equipped just beforehand with the option to also use LPG instead of natural gas. Here, by considering to this opportunity, we do not have any additional costs, for example, in respect of additional CapEx or something like this. We are just here, the lucky chance of the situation, having a really good engineer staff, which has prepared, running our, new power plant with both LPG and LNG. Here it is, for example, since mid of July successfully tested this power plant in respect of running it with LPG is now paying off for us. In a nutshell, there is no downside for us. There is only upside in respect of securing and saving our production facilities, make them running on our sites in Europe and in particular in Germany too. With this, I hand over to you. Yeah. On the volumes, I think what we see, overall, of course, that demand is flattening out a little bit. If we look at Q3, we will most probably similar pattern like in Q2. The reasons were different and multitude. If we look at Nutrition & Care, we had, of course, the major impact in methionine, mainly driven by the COVID lockdowns. Of course, as they are now eased, that gives a slight chance here. Healthcare, there the volumes follow the pattern in the drug deliveries. There is a clear catch-up in the second half, but that's more really the specifics of their contract landscape. For Specialty Additives, supply constraints were an issue for lower volumes as well. Some products are still under allocation. That might ease here and there a little bit in Q3 as we see some relief in some of the raw materials. Smart Materials, sorry, had a positive development, could have been even higher. Of course, we see good demand in the whole wind turbine industry and others. PA12 sees good demand. I think that's the mix we see. Performance Materials also could have been higher in volumes, but here also raw material constraints, and I think that's pretty much the picture we also expect for Q3. Pricing will be still supportive. As I said, the price initiatives are now still going on. They have some, of course, some lagging element in that. That is what we see regarding volumes in Q2 and Q3. Thanks, Ute. Thanks very much for your time. You're welcome. We will take our next question of Martin Rödiger of Kepler Cheuvreux. Please go ahead. Yes. Good morning. I have three questions. You talked about the continued solid demand and well-filled order books at the beginning of Q3, but you also mentioned first signs of cautiousness. I'm in particular interested in the demand patterns in Specialty Additives, as well as in Smart Materials at the beginning of Q3 versus the end of Q2. Can you provide some color here also on the regional perspective for these two segments? The second question is on the LPG supply in Marl. Here I'm getting into the technicalities. You write that LPG is a side product in your C4 production network. How does the cooperation with the refinery of BP in Gelsenkirchen work practically? The third question is on natural gas. Thanks for the transparency in your slides. You use 11 TWh as energy source and 4 TWh as raw materials with natural gas. In which product is gas a raw material? I guess methanol is a gas and a precursor in your methanol production. Monosilane is a gas and used as a precursor for functional silanes and advanced silanes. Anything else I'm missing eventually in silica as well? Maybe you can roughly give us a split of the 4 TWh into these key pockets. Thanks. Good morning, Martin. Let me start with your questions about how we deal with BP and how the collaboration is working here. As you know, LPG was mostly handed back to the BP cracker in Scholven, which is close to Gelsenkirchen. You are so right here. BP in Scholven is very much supportive here to replace the natural gas in Marl. That means they do have alternatives for LPG in their own cracker, which means LPG was normally handed back to them and used as cracker feed. But as you know, BP is our partner in our Verbund Marl Scholven, and therefore, they also had an interest in continuing the operations of our C4 chain in Marl. Reason is as simple as it could be. Otherwise, there would be no outlet for their cracker C4, and then that would definitely lead to a matter of fact that they have to shut down their cracker. To sum it up and in a nutshell, Martin, here we are once again on the lucky side of life because here it is a win-win situation between BP on the one side and Evonik on the other side. We are really blessed that Scholven with the cracker and we in Marl are so close geographically that we could exchange, as I've tried to describe the raw materials and to keep our capacities in Marl running by making use of LPG. With this Mm-hmm. I hand over to Ute. Okay. I'll continue with the natural gas question. I think it, natural gas-based feedstocks, of course, the biggest share is methanol, which is relatively easily to be imported. Ammonia, that's of course, a little bit difficult in transportation, but it's a very small portion in our, EU raw material spend, plus, the main ammonia, consumer, is methionine, and they sit in Antwerp. Of course, hydrogen and Active Oxygens, they are, depending on natural gas as a feedstock. But also here, there is not so much in Germany as in other countries in the EU or even outside Europe. From that point of view, I think that should be all manageable given that the reduction we need is fully delivered by energy, generation. No, we just save nearly all gas in energy generation. If we assume like a 15%-20% cut. Our savings target for the whole country, we are well ahead of that. Of course, that leaves then room for natural gas as a raw material. I think that should not be forgotten that we talk about 15%-20% replacement or savings need. Then you asked about two divisions, Smart Materials, Specialty Additives, how the current picture is. Again, we have some signs of slowdown and increased customer cautiousness. Our order intake is very good. The picture is somewhat mixed if you look across the sectors. For instance, if you look at paints and coatings, plastics market is somewhat weak, industrial market is in good shape. Auto is also mixed here. We have some better development in the U.S., although production is not so good there. We really see also different developments. China now after the lockdown should also be stronger. Smart Materials order books are really well filled. Demand remains robust. As we say, some cautiousness, so maybe short-term order behavior a little bit more be observed. Again, that can also be caused by logistical problems and others at our customers apart. If you look at our forecast overall, given the very strong first half, there is some slowdown incorporated into our outlook, and I think that is a very realistic view and overall a very confident view as well. Thank you. Our next question will come from Charlie Webb of Morgan Stanley. Please go ahead. Morning, everyone. Thanks for letting us ask some questions. Maybe just first off, a clarification one, just to be very clear on it. Around your energy mitigation measures, certainly sounds like you're on the front foot. In terms of what would have been. So you talk about a EUR 300 million increase year-on-year 2023 in terms of your energy costs, versus 2022. What would that have been without the mitigation efforts you're putting in? Just trying to understand what the magnitude of benefit from that is. That's question number one. Question number two, just on methionine, you mentioned obviously ammonia, methanol, and then some of those raw materials and the challenges maybe we don't face in Europe. Just kind of wondering, what is the current kind of health of the market in Europe in terms of spreads, and in terms of kind of utilization rates, when you look at, you know. You're fortunate to have a global footprint in methionine, but just trying to understand how the regions compare and, you know, what measures you're taking to optimize that. Okay. Hi, Charlie. Good morning. Maybe let's start with a little bit more about methionine. Yes. First of all, it's safe to say that overall in this year we have a very stable business, and it is much more independent of macroeconomic developments, in particular in slowdowns than most of our other businesses. Now maybe split it up. First of all, let's talk about the volumes. Volumes in the second half of this year, we do expect them to continue on, let's say, a little bit slightly below the levels of the previous years. Reason for this is that we are let's say cautious in respect of the impact the lockdowns in China are having. On the other side, it is fair to assume that we, as of today, see some kind of recovery since end of June going into July, especially in China. Here in respect to volumes, first message is we expect continue slightly below the levels of the previous years because of the lockdowns in China. On the other side, worthwhile to mention that in particular, these lockdowns have been started to be eased, and therefore we do see some recovery. Question will be about this. Will this kind of recovery be sustainable? Then we could maybe expect a little bit higher volumes. If it would not become like this, so the volumes would stay as it is, and we expect it, they will, as mentioned, slightly below the levels. Now it is to say, in this maybe about the prices, yeah. It is worthwhile to mention that spot prices have come somewhat down in the end of the last quarter, but please, and therefore it's worthwhile. You have to reckon, it is to say and to acknowledge that our contract prices are definitely less volatile, thus our prices are steadier, definitely steadier than those you sometimes could read in Feedinfo. Last answered about your question about methionine was, are there any kind of big differences in the region? Here I can keep it short because the answer is no. There are no, so far, no big differences in the region. In other words, we do benefit from our geostrategic footprint, having capacities in all of the three growth markets and growth regions, North America, Europe, and in Asia too. With this, Ute. Yeah. On the energy measures. One measure was to continue to run the coal-fired power plants. That is also a small positive effect. Overall, of course, we have higher fixed costs as we have to reactivate the plant, but overall, that's a double-digit advantage. From the LPG, as Christian said, that's also financially reasonable. Also here, a smaller double-digit amount as a financial advantage plus the avoided levy, which of course, can be also a higher double-digit amount on that portion. Again, we don't know the real number in the end, and that's why this is hard to really define today. These are the three components where we have financial or economic advantages from these energy measures in the current setup. Would it be fair to assume that, you know, at current prices as you see them today, if you haven't taken these measures, you know, your energy year-on-year cost would be up maybe a triple digit amount more than what you've kind of guided to, more than the EUR 300 million? Is that fair? Yeah, I think that's a fair assumption. Okay. Thank you very much. Pretty helpful. We will take our next question from Nicola Tang of BNP Paribas. Please go ahead. Hi, everyone. Thanks for taking the questions. Firstly, on portfolio, you mentioned in the prepared remarks some of the smaller portfolio cleanups that you've been working on, but I wonder whether you could give us an update on some of the bigger ones. On the C4 side, and also on the superabsorbent side, that would be really helpful. The second question was on the lipids business, and you talked about the developments, your partnership with the U.S. government. I was wondering if you could remind us of the expected contribution from lipids in 2022 and also the kind of path that you expect over the next couple of years. I think in your prepared remarks, you talked about sort of bigger development in 2025. Perhaps you could just walk us through how we get from today to 2025. Thank you. Hi, Nicola. I'll take the first question about the portfolio management and the news on the update on the planned divestments. First of all, it's worth mentioning that all projects we are talking about and we are tackling are showing good progress, but on the other side, fair to say that there are no major news compared to our Capital Markets Day info. In detail, the Baby Care status divestment process within the next month. That is what we have given to you a couple of weeks ago, and that is what still remains right. Here, we do expect signing in the course of next year. Functional Solutions. Several parties have shown strong kind of interest and expected to join the due diligence now. The transaction structure is already finalized and, for the second half of this year, the consequence from this, the start of the due diligence process is planned, and we assume to do so. In respect of the C4 chain or C4 business, here the preparations for the carve-out are ongoing and that in a pretty and progressively positive way. With this, I hand over to Ute. Hello, Nicola. Also from my side, LNP business, lipids business. Last year, we had around EUR 100 million of sales in that business. For this year, it will be a similar level. It's all well on track. We have a good share in service and R&D revenues as well in that business. The R&D pipeline is being filled also in the years before the vaccination, of course. We are well prepared for next generation LNP drugs. They will come to market from 2026 onwards, and of course, until then, this facility is up and running. We feel very well prepared. Is it fair to assume that after this year, perhaps, you know, with some normalization or reduction in vaccines, that it might normalize or come down a little bit year-on-year in 2023 before it picks up later in a couple of years' time? Yeah, I think that's a fair assumption, but you have to see that our healthcare is working with a portfolio of projects and has a pipeline. That is all, of course not unexpected. We would see that coming and through our pipeline then with other products. Overall to grow the business step by step over the years. That. From that point of view, it's like any other normal health care project. Nothing very specific about that. All right. Thank you. We will take our next question from Markus Mayer of Baader Bank. Please go ahead. Good morning, Ute, Christian and Tim. I have several questions to make. Firstly, on this destocking you said in animal nutrition, can you quantify on what products you saw destocking? And has this something to do with the ramp up of Adisseo's new plant in Nanjing? And also if you expect this to continue in the second half? That's my first question. Then, this is my third. Second question would be on the strong Crosslinkers business. Did this mainly come from the strong earnings, so margin contribution, or had it also to do with a strong demand from the wind energy industry? Do you see a better outlook for this business due to this wind energy exposure? And then the last question is just a clarification question. Christian Kullmann said that the carve-out of C4 business is going well. I thought it was already carved out. Are there any further carve-out measures which have to be done for the preparation of the divestment? Thank you. Hi, Markus. Let me start with your last question. I guess you've mixed here the C4 business with the Baby Care business. Baby Care business, the carve-out is already done. Here you're right. In respect of the C4 business, that is what we have announced earlier this year, and that is now ongoing. I guess you have mixed it up, but never mind. Okay. About destocking. Yeah, let's keep it like this. First of all, the demand has definitely picked up in the last month, and that is what we do see in July. What we have seen in June and in July. Let's keep it this. Second, there is a higher inventory level because the supply chains are really tight. This is maybe the second element here to mention. Ute, with this to you. Yeah. Good morning, Markus. On the question for the Crosslinkers business. We see overall a healthy demand. Of course, wind is one strong element in that. Keep in mind that Crosslinkers, they had some production difficulties also in the first half, which of course also influences volumes overall. I would say it's a very healthy volume development plus a good pricing contribution. Okay. Thank you so much. Our next question comes from Jaideep Pandya of On Field Research. Please go ahead. Thanks. First question is on your C4 business, actually. You know, this year is a very strong year for this business. When you think about actually divesting, how do you think about sort of the multiples and valuation? Do we think for an average for the last 3 years, or are your, you know, buyers willing to look at this year? And then tied to that really is the question, you know, you're potentially sitting on a decent cash inflow, and at least to me, it doesn't seem like you're in a hurry to do any big acquisitions. What is the chance, Christian, that you tell your large shareholder, RAG, that the next time they want to place a block, you have the money and you are gonna buy the shares rather than them placing the block in the market? Just finally on PA12, what are the plans for a ramp up? Are you worried at all that, you know, some of the big players in China are gonna ramp up next year as well, and therefore there could be some overcapacity in PA12? Good morning, Jaideep Pandya. Maybe let's start with the third question about the PA12 business. As you know, the market in PA12 is well-structured and the PA12 market participants are only a very few, and we are one of the very strong ones, which you can see in our numbers and our figures and all the more in the quality of our products. Here we are not afraid, and instead of the opposite, we would really highly appreciate a strong competition because that is what would underpin the quality of our business right here. As you could see, we have done it in respect of building up and ramping up the capacities down in Marl despite the COVID-19 pandemic impact. That underpins once again that we are here a strong and straightforward player in this. Now you've talked about first question was about C4 business valuation and multiples. Jaideep Pandya, I'm an everyday man. As an everyday man, I know it is prudent, let me say, first of all, to make your, let me say, decent, diligent, and disciplined homework, and then to bring the news to the table, not to disappoint you instead of to surprise you. Having said so, I guess it is not very prudent from my point of view now to speculate about valuations, multiples, and so on. One thing you can really take for granted, one thing is, in other words, dead certain that we will get the highest price and the highest multiple and best valuation ever because that is our job, and we are really keen on doing as good as we could. High cash inflow from C4, and then talking about RAG-Stiftung. It is always good. Looking to Ute, I can see a bright and broad smile on her face. It is always good having a piggy bank which is filled up with a good amount of money. Having said so, I feel there's no interest on the side of RAG-Stiftung to sell their shares currently because there's no reason for them. I feel so. That is, I guess, the answer to your questions. I have really appreciated having this chance, give you a little bit more color about how we think about this. Thanks a lot for the clarity. We will take our next question from Geoff Haire of UBS. Please go ahead. Yeah, good morning, and thank you for this opportunity to ask some questions. I just wonder if we could discuss the water levels in the Rhine. I assume the coal-fired power station at Marl probably gets some of its coal from river transportation. Are there any risks that you see in that in the second half of the year? And also, would you be willing to tell us what the energy hedge rates are that you have in place for 2020 and 2021 in terms of the actual price of the gas in the hedges? Yeah, Geoff, good morning. The hedging rates are quite stable over the years as we just execute a hedging program. The share of hedged volumes does not change over the year. It's around 70% for gas, mainly in Europe for the next year. Then, of course, for the years after, accordingly lower, and we build up the hedging rate over the quarters, and up to 80% for electricity also mainly Europe. That's to remind you on that. Rhine water levels, yeah, that's critical. We are less impacted compared to other companies because we are more in the northern part here in comparison to the Rhine. If we look back at financial year 2018, where it was also quite a challenge, there we only had an effect of EUR 25 million. Kaub is the major bottleneck, that's for south-going deliveries. From that point of view, we are not as much affected from that. We have learned, of course, from 2018. We had established alternative logistical routes and booked already early when we see it arising. We secured more ships now to really get along with reduced loads. Of course, it will put additional stress on the transportation and logistics in Germany, truck drivers, rail cars. I think that is a stress for the system as well. Again, this obstacle we have experienced, and we have some countermeasures for that, also increasing storage here and there in advance. This is how we deal with that. It's not nice, but I think we are as well prepared as we can be. Thank you. Just would you be willing to tell us what the actual prices of the hedges are on average in 2022 and 2023? Or is that something you don't want to tell us? Normally, we don't disclose that. Okay, thank you. If you see that we do a hedging program quarter by quarter, you can more or less calculate it yourself. Okay, thank you. It's a hedging program, and you see the prices, and then you know it. Thank you. We will take our next question from Chetan Udeshi of JPMorgan. Please go ahead. Yeah. Hi. Thanks. A few questions first, maybe for Ute. If I look at the presentation slide 32, it clearly shows that the pension provisions have come down, but then the other provisions somehow have gone up a lot. Sorry, not the provision, but the financial debt. Is it just a function of, I guess, the working capital outflow we've seen in the first half of this year? I'm assuming, you know, that's what is driving that. The second question was, you know, when I look at your energy cost increase guidance for next year, which is EUR 300 million, and then probably you have the German gas levy on top as well. The question here is, like, how do you plan to pass it on? Are you seeing the appetite from customers to still accept higher prices? Clearly given that this levy is something which is new and also the gas price impact is coming through in phases, for different companies. Maybe one question for Christian, but more high-level. What is the mood at the moment within the European chemical industry, given that you are, I believe, the head of the Verband der Chemischen Industrie in Germany, given the cost inflation that we are seeing from gas, possible curtailments. I think the high level view is, does this make the European chemical industry structurally disadvantaged and in the scenario that we or in the context of reshoring that we keep hearing, does this make reshoring a challenge in general? Thank you. Hi, Chetan. Let me tackle the third question. Yes. It is staring us in the face that we are in a situation where we are a little bit suffering from the higher energy costs all over in Europe. That is a challenge, no doubt about. But this challenge is at the same time a chance. A chance to enhance, to lift up the transformation process of the specialty chemicals industry in Europe to become more energy efficient, to become in respect of being provided with energy greener, making you know in this respect more use of green energy. Those companies who have really set their sails over the course of the last 1 or 2 years to focus on green energy, to focus on more resource efficiency, to focus on those products and markets. For example, Ute has talked about wind energy and our contribution in respect of our Crosslinkers business to those markets, they will benefit from this in due course tremendously. Because here we just see great difference in respect of this, let me say, innovative power. Because we are, of course, under pressure, and that is what is activating this kind of innovation power we do need to stand the pace and to maybe and to get looming land. Yes, as of today, it is a challenge, but also it is in future, if we make the right decisions, it is a great chance for us to come better out of the situation than maybe companies in other regions all over the world. With this, there is confidence in that we will come out of it in a better constitution than we are now in this particular situation. Maybe with this, I hand over to Ute. Yeah. Thank you, Christian. Energy cost outlook, as I said, the increase will be much, much smaller in comparison to what we have seen in the past 2 years. So I think to pass that on is maybe less of a challenge than to do the big steps. On the other side, we see some relief here and there on the raw material side. So overall, I think that could work out quite okay. On your questions on financial debt, of course, in the first half, we had a negative cash flow. In the second quarter, we paid out the dividends. So these two numbers together, I think, already explain quite the move. If you just look at the gross numbers in the balance sheet, we had issued a bond earlier this year, relatively early to be really here in a good liquidity setup. Of course, that influences the gross numbers very much. I don't know what you're referring to net or gross, but these would be. No, I think it's clear now. Thank you, Ute and Christian. Okay. Ladies and gentlemen, this ends our call for today. We do thank you very much for your attention. Great for us having had you. Take care. Enjoy the rest of the summer and hope to meet you soon in person. Bye-bye. Bye. This concludes today's call. Thank you for your participation. You may now disconnect.