Thank you for standing by. Welcome, thank you for joining the LANXESS conference call. I would now like to turn the conference over to Eva Frerker. Please go ahead. Thank you, Eva, for your kind introduction, which potentially was not that audible to everybody. I would like to welcome all of you heartfully, warmly. Reference made as to our safe harbor statements, and Michael and myself will lead you through the conference call. I start with the presentation on page four, and of course, key highlights, strategically, financially, are addressed on this page. First of, first of all, the transaction on Envalior closed, so the joint venture had a strong start emotionally, bringing two leaders together, and we alluded for the last six-tweleve months that this will be happening, and it happens. Now to the business. Q2 was a very tough quarter. We saw that the business declined further compared to Q1, and we saw that some industries really were hard hit, especially construction. We are significantly below prior year, but also driven through the fact that we followed your requests and heard you loud and clearly to focus on cash, and we threaded our working capital, especially on the inventory side, as you could see. Earnings margins were burdened by weak demands and lower utilization, and we operated, as a matter of fact, slightly below 60% utilization. This is definitely something that is extremely painful. A few years ago, when we were still in the polymers, our break-even was at 75%. I'm happy now to say that with 60% or even 58% utilization, we are still reporting EBITDA. Of course, this is something which is extraordinarily low and is not our normalized levels, because last year we were still operating at utilizations between 75, close to 80. Cash control is clearly on the radar. Net working capital further improved. We are now down to 23.8. Of course, this hurts as far as the P&L is concerned. Net debt, as promised, significantly reduced to EUR 2.8 billion, thanks to the transfers of proceeds from the Envalior transaction. Despite the really bad operational performance, despite paying out the bonus, despite paying the dividends, we basically kept debt stable versus Q1 on a pro forma basis. We started the program FORWARD! in order to mitigate the current horrible demand situation that everybody in the industry is confronted with. We see industries that used to be stable over the last decades, that face volume declines. Even on the consumer end area, we see contractions because people are cautious on spending due to the inflationary environment. We started FORWARD!, and here, basically, we explained it on page five, with short-term measures. There is, first of all, the category which are measures taken without OTC. These are ad hoc measures, reducing costs wherever they are variable. Of course, clearly, addressing projects and nice to have, that will be cut. Of course, on CapEx, we look at all CapEx that we are having and projects being planned, being delayed, or being cut. These measures are short term. They help 2023 on costs and on cash. Of course, they are only focusing, and they are ending at 2023. Until the end of 2023, we want to finish our structural measures. Structural measures mean we look at our sites worldwide, we look at our SG&A structure. After 10 years, I mean, it's also time for that. Therefore, this is something that where project work starts. Of course, we will negotiate then with the respective unions and workers council. We want then to start the implementation end of Q4. Midterm, we definitely look at our. Now that the portfolio has been found, we also need to see that this portfolio, which is strong in its nature, needs to have fully the processes, the people, and the energy to take the right market approach so that the. strength of the portfolio is fully reflected. Of course, in a downturn, you have to prepare for the upturn. If you do the work in the downturn, you come out strong in the upturn. That's what we intend. Let's now come to the details on page six, as far as Program FORWARD is concerned. Ad hoc measures, we have in the region that is impacted North Europe, a clear hire increase, strict cost control, CapEx control. Of course, there will be significant reduction in variable compensation to the managerial grades, when EBITDA is where it is. As far as management board is concerned, when you want to start with structural measures, our view and my view is you lead by example. You should start with your own salaries, and it was anonymous, decided by the management board that we cut our fixed salary by 25%, and bonus-wise, on this level, there would be no bonus. We have here hard hurdles in place. On the ad hoc measures 2023, we should come out with cost savings in the neighborhood of EUR 50. CapEx would be down by EUR 50, so cash-wise, optimized by EUR hundreds. Structural measures should lead us to EUR 150 million of savings. They would be predominantly achieved in corporate structures and also admin structures in the businesses. As I stated already, we will prepare for them in course of this year, should finish in Q4, and then we would see how much of the EUR 100 million of OTC are going to be booked in Q4 for 2024 and 2025. Energy-intensive plants are under review. We have a few other plants globally, that are not significant, i.e., more complexity than big and complexity on small plants can be revised as well when you do this. But in Germany, we look at energy-intensive plants. The two we will flag and explain to you today. Majority of savings will come from SG&A and the EUR 100 million FORWARD!. The split up, when what will be achieved, you would have on this slide on the right lower end. Let's come to Germany. Here we reviewed our plans. We flagged last year two plants that are critical in nature as far as energy intensity is concerned, one of which is likely to be closed. We have not taken the final decision yet, but we'll do that in course of the next few months. The cyclohexane oxidation plants is part of the business unit, Advanced Intermediates. The operation is extremely energy-intensive. The plant is not competitive, due to the high energy intensity, and due to the lagging demand, it is hit twice. The CO2 footprints, which in the future is not going to get better, financially, because CO2 certificates are price-wise, rising and not falling. We consider this plant long-term as not viable. There are 61 good employees that will be impacted. That's hard, because when you close a plant in Germany, it's closed for good. These are tough decisions. Implementation latest by first quarter 2026, because we still have some contractual obligations, and should they end earlier, the plant will be closed earlier, should we go for such a decision. Second plant is chromium oxides. This falls in the area of inorganic pigments. Here, the process, the production process is not that energy-intensive, but the majority of chrome oxides goes to construction and ceramics industry. Many of our customers are here in Europe, and as you can- Oliver, your time will come. As far as construction and ceramics customers are concerned, these are little customers. You will not see and hear about them in the press, the ceramics and construction process is very, very energy-intensive, they are collapsing right now. Here, the mom-and-pop shops are closing, and when your end customers and end industry is collapsing, there is no need for keeping your production alive. For that very reason, we see that this business might be sold to other players in the market that have a better setup in as far as value chains are concerned. They produce the precursors, they produce the derivative products, therefore, we are looking into a possible divestiture. Here we will give this a certain period of time. If this doesn't work out and is too complex... we will most likely take the decision to close this plant as well. It has currently a significant underutilization, and therefore it's not a money-printing machine. Also here, 52 employees will be impacted, should we take such a decision. Decision time is 2023, implementation, one way or the other, will follow 2024. Now on page eigth, we come to the Envalior transaction. Books are a little bit distorted. This is accounting on the one hand, and real life on the other hand. Real life is, we got a significant amount of cash that was wired and is booked in the bank. Now on the technical implication, we've announced last year that the enterprise value of HPM is EUR 2.5 billion. The discontinued operations shows round about EUR 1 billion, that was now moved to Envalior. The net gain, I mean, this is extraordinary, is round about EUR 1.5 billion. You see a huge net income that we report. But of course, let's face it, we will take net losses of Envalior for the next few years into our P&L, because for good reason, Envalior has taken their decisions on purchase price accounting, which is significant, so this will hurt our proportional equity line, respectively. That's a big amount for any private equity transaction, of course, interest rates are a burden as well. And as on top of that, trading environment is not that great. Last year was the good year, but this year is also hard for Envalior. The profitability currently is also not at the normalized level where this business will be at. So there will be a net loss, and the loss-- net loss, we will proportionally consolidate. As far as the quarterly hit is concerned, it will, of course, be reported under at equity. It will be a non-cash event, and it will be, it will be around EUR 50 million, and that is something you should take into consideration on a quarterly basis. The tricky thing is, any loss that we will report reduces the book value, and should the book value that we have for Envalior should be reduced, but then at a certain point in time, we sell it at the agreed contractual terms, there might be a big capital gain that we will see at the time of the exit. Now, clearly, the focus is on improving or improving the profitability through synergies and a better trading, will also kick in at some point in time, and that will then move to a reduction in net losses at net income level of Envalior. I hope this was not too detailed, but I think that with this, I could clarify all questions that came this morning to the Investor Relations team. Now, ladies and gentlemen, let's take a look at page nine, LANXESS Group. The first I would like to say is 2 negative drivers. Demand is horrific. I mean, Europe is soft. China is very concerning. I've never seen construction in my professional life as bad as it is right now. E&E, obviously, all of you have bought whatever mobile devices your children and you need during the pandemic time. We also see that E&E, despite product innovations, is hard, hard hit. Demand across the regions is tough, especially China, especially Europe. U.S. still holds up reasonably well, not great, but we don't see here the same demand disaster as we see in Europe and China. Next to demand, of course, we reduce our working capital and have advanced nicely, not only in Q1, but also in Q2. Of course, this hits utilization and impacts profitability as well. Page 10, we show you the segments. Intermediates, hard hit. Additives, which still did well or reasonably well in Q1, hard hit. That, for us, was also a surprise, and led to the profit warning in June, because construction fell like a knife after April onwards. It's, it's not back yet. We saw a sudden shock in demand in construction, and this across the regions. Of course, with this, prices are under pressure as well. Consumer Protection holds up reasonably well, and this should be the case with the portfolio transformation we've done. Now we see also, and this was coming through in April, May, as well, that agro softens. Here's some alerts. Let's come on page 11 to net working capital. You see where we stood end of the year, 2022. We started here to clearly sweat inventories out and be more aggressive on receivables collection. That works out well, and therefore, we are coming closer and closer to our announced number that I gave you with Q1 numbers of 2023 to sales. If we would go there, we have basically sweated out 4% of working capital to sales, which is tough work. Of course, this is something that we still keep following as we go forward into 2024. Ladies and gentlemen, with this, I would like to finish with the guidance, which is now at EUR 600-650. We don't expect a recovery in the second half. We still have, unfortunately, on chlorine supply and Erdingen, a force majeure, we basically don't see that this is improving, at least as far as volumes we are getting until November this year. Based on the above, our guidance is stated EUR 600-650. We should have lower cost base in second half. Focus clearly is indicated on cash generation, and CapEx, new guidance is EUR 350. Ladies and Gentlemen, with this, I would like to turn the page and open the call for your questions. Please go ahead. Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask the question may press star one one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star one one again. One moment for the first question, please. Our first question comes from Christian Faitz from Kepler Cheuvreux. Please go ahead, sir. Yes, good afternoon. Christian here sitting in for Martin. Good afternoon, Eva, Matthias, Michael, and obviously, Oliver, who's in the room trudging from his spilled coffee. Two questions, if I may. As you are reviewing the energy-intensive plans in Germany as part of your FORWARD! program, can you please elucidate how energy costs have actually evolved to date, obviously, versus the cost shocks of last year? Matthias, you just mentioned the agricultural business, Saltigo. Can you give us an indication how much volumes were down in Q2 year-over-year, as some of your key customers were plagued by weather-induced channel inventories? Would you see this coming back in the second half/going into 2024? Thank you very much. On energy, of course, energy costs are coming down, but they are still alleviated versus competitors. Here we see, if we go to cyclohexane oxidation, this is a plant that has worst world scale. This is a plant that used to be competitive in the past, but it's now competing in a situation where others are more energy competitive than we are. On top of that, if you look at the cyclohexane oxidation process, the raw materials, if they come from Europe, higher than the raw materials you have in Asia. For that very reason, these two drivers, part with the fact that this is a CO2-intensive plant. I mean, they are around about 144, 120-144 kilotons, roundabout, depending on the capacity being produced. In light of the fact that the CO2 prices are not falling, but our assumption internally is they will rise, we have decided that this is a reason to close. But here again, we do the final analysis. Decision has not been taken, but I clearly flag that to everybody today, internally, externally, so that everybody is aware that this plant is at risk. Now, on Saltigo, clearly, we hear the signs of our customers. I would say currently, when we look into the demand pattern of our customers, and here we talk about the Big Five, we see that the in the crop protection area, so in the fungicides, the commodities are impacted. The specialties so far hold up reasonably well. As Saltigo is very much focusing on specialties, and as a matter of fact, Saltigo does not have commodities, because this is custom synthesis. Advanced Industrial Intermediates, we still have some intermediates for the commodity products, and therefore, here we see clearly the volume hits. Of course, we take notice that the tonality of the five agro players turns softer, and we take that into consideration. That's the reason why we flag that. Okay, thank you very much, Matthias. You are welcome! Next question, please. We are going over to our next question. The next question comes from Konstantin Wiechert from Baader Helvea. Please go ahead, sir. Yeah. Hi, thank you very much for taking my question. Also, hello from my side to all. Maybe when I may another question on the hexane oxidation plant, I was wondering if you could maybe give some indication how much revenue this was generating in the last 12 months, or also, maybe the EBITDA, which it had generated last year. I guess it's not generating anything by now, but maybe last year. If I may, 1 further question. I think currently there's still a lot, the idea that, destocking, also in the more specialized, sectors, is about to end in this, at the end of the second quarter, and that therefore, volume should slightly improve in the second half. You are now very, conservative on the second half. Is this also including basically exactly the same levels, or are you just saying that the underlying is not improving, but the destocking is ending, and therefore you should see some improvement in the second half? Constantine, let me address them one by one. hexane oxidation, it's, it's, it's close to EUR 100 million sales, there is no EBITDA. In current times, there is even less EBITDA than nothing. More we don't say on the financials. I think this is privileged information, to go further in details. You see the business is hard hit. Destocking to an end, I mean, I talk to my peers. I, I read some transcripts on what peers say. I haven't heard broadly that destocking is over. I have not heard that, you are potentially speaking to more countries, companies. We don't see that demand in Q3 is picking up. July was as bad as April, April was not a good month. It was the worst month in the second quarter, potentially. We saw a slight uptick in June, but again, a drop in July. We don't see that destocking comes to an end, and I personally don't think that destocking will come to an end until August is over. I think everybody is still deploying the inventories. And look at us, we are also not sourcing. I mean, we are sweating out our inventories, and we are selling our finished goods. We are now down three percentage points, working capital to sales, and we still want to sweat it out. And it takes longer because market demand is so weak. It's a combination of both. With this, I think all of your questions have been, have been answered. Yeah. Thanks again. I was, for example, referring to a slight improvement in chlorine production levels that we've seen in Europe lately. Well, in chlorine, we have a force majeure, and for that we- I know, I know. I, I was, I, I was taking this as a cross read for, for improving, production levels. Well, it's after November, we get more chlorine. We will most likely, in this specific area, produce more. Next question, please. Thank you. We're going over to our next question. Our next question comes from Jonathan Chung, from Morgan Stanley. Please go ahead. Hi, thanks for taking my question. I have two, please. Just on the order book, you mentioned there's a drop in demand in a drop in volume in July. Could you give us a little bit more colors into your, sort of, across segments and regions? What do you see in terms of end markets trends? Then secondly, on your debt profile. If I look at your slide, you mentioned there are still EUR 2.8 billion of debt on the balance sheet and refinancing, well, no maturity until 2025. When 2025 comes and you have to refinance them at a higher interest cost, are you worried that you will burden a higher interest cost? What are you going to do to reduce your debt balances by 2025? Thank you. Yeah. Well, don't get me wrong, on July, I've said that we don't see business improvement in, in July. We see that July is at levels, what we've seen in Q2, but there's no further deterioration. I was answering a question before you, if now in the third quarter, we see a rebound in volumes. The answer to this is: no, we don't see that. We don't see that now we further deteriorate. This is also not the case. Please take the message very clearly, one to one, to what I said. Now, in 2025, you talk about our net debts. We are not going to refinance our entire net debt position in 2025. This is not the case. We have one maturity outstanding, one bond, which is priced at 1.1, and should we go out today to refinance, our current price indication would be around 4.5 percentage points. On EUR 500 million, I think the delta of three percentage points is easy to be calculated. That's basically it. Therefore, the first maturity that comes up in the market is in two years' time, and we currently have liquidity, which is undrawn and untapped of around round about EUR 2 billion and without covenants. Therefore, I think we should focus here on the fact that this company is full of liquidity, and that's because we've early on done our, all of our refinancing. The last refinancing we did two weeks, immediately after the Russian aggression war broke out, we tapped the markets and secured EUR 2 billion because our assumption was this will be a liquidity priority if Europe is in a war. I think we have shown in crisis times that liquidity should always be ample, and this is the case. I hope this answers your questions. Okay, thank you. We're going over to our next question. The next question comes from Rikin Patel from BNP Paribas. Please go ahead. Hi, good afternoon. Thanks for taking my question. Just one on on the outlook. You mentioned July wasn't much better than the exit rate from from Q2. I suppose taking that into consideration with seasonality, is it safe to assume that Q3 earnings will be quite similar to to Q2? Then just on a different topic, on the Standard Lithium partnership or JV, can you give any update on the timing there and when we might hear a final decision? I suppose I mean, now, now that you are putting more, even more emphasis on on capital discipline, does that mean that you may look at an agreement on taking the lithium at a discount rather than entering into an economic relationship in that JV? Thank you. Yeah, well, Rikin, as far as Q3 is concerned, we don't assume that Q3 would be a strong quarter. We basically consider that Q3 will be slightly better than Q2. That might be driven by lower cost base, and also the fact that we will most likely not as hard go for inventory reduction as we did in Q1 and Q2. The likelihood is higher that Q4 will see then a stronger improvement. As far as Standard Lithium is concerned, we haven't not yet received the data. This is due. Again, I mean, this is a company not as big as ourselves or European chemical companies. We're talking about a company with, I assume 40, 50 people, and therefore, it's, I think, not surprising that a company of this size, doing for the first time a full-fledged engineering analysis, is, is having, hard work to get it simply finalized. We know that they are in their last innings, and so therefore, we wait for the data, and then we will take a decision. That the CapEx decision on our end is very unlikely. I've communicated a few months ago, I think two quarters ago, and therefore, there's no new information, as regards this specific item. Okay. Thank you, Matthias. You're most welcome. Next question, please. We're taking our next question. The next question comes from Chetan Udeshi from JPMorgan. Please go ahead. Yeah, hi. Thanks. You know, my first question was just follow up on the previous question, Matthias, you said Q3 will not be, Q3 will not be much better than Q2, and that means you probably need, like, really strong step up in Q4, like you said, to, to get to even the low end of the guidance. And I'm just curious, what is driving that expectation of much stronger Q4? Is it the cost savings? Is it the expectations of improvement in demand? And just related to that question, you mentioned your utilization in second quarter was below 60%, and I'm just curious if you can quantify how much did that burden your EBITDA by in Q2. Was it EUR 10 million, EUR 15 million, EUR 20 million, EUR 30 million? Because I'm, I, I think it should be a pretty sizable number. The second question or different question was more, more structural in nature, which is in your AI business. I think the two-- one of the two plans that you, you are putting at risk is probably one of those two is in the AI business. Just generally speaking, your AI footprint is very much European footprint, and you are supplying these molecules typically to-... chemical companies in Europe. I'm just curious, do you, do you sense a possibility that some of these, or at least few of these customers might shut down their own production in Europe? Does that have an implication on, on AI business itself? You know, for instance, if I'm not mistaken, you supply some menthol for vitamin production and aroma production, and clearly, we've seen very, very tough environment in that market. Is that something like a second derivative, sort of risk that we should be aware about for AI business as a whole? Thank you. Yeah. Let's address again Q3, Q4. I've not stated that Q3 will be exactly where Q2 is. There are various parameters that influence the P&L. This is utilization, this is how much do you drive inventories down, this is energy pricing. Did it stop? Just a second. Our speakers will be back in one second. Just bear with me while we're establishing the connection. Hello? Hello, and our speakers are back. Okay. We're not sure when we got lost. We've got Chetan still on the line. Chetan, can you please summarize for us where your question was disturbed? No, well, I, I repeat the answer. I've stated again, Q3, Q4, we don't make enough guidance for, for number wise on the quarters, but on the, on the, the quarter Q3, there will be several cost items that would be a benefit. We will definitely sweat out less inventories compared to Q2, especially. There will be lower costs also on energy and transportation. They gradually fade downwards. The open end on Q3 is the demand side, will it stabilize? Will the stocking come to an end or not? In second quarter, we got... When we heard, listened to our customers, many said they will come back in Q3, but then in end of April, May, and June, they started to cancel for Q3. Their current indication is they will come back in Q4, we've not taken that largely into consideration. On your second question, with the utilization, yes, this 60% or 58 hurts dramatically. This is in the high double digits, millions. It's not a 20/30, it's clearly above EUR 50 billion on a quarterly side. When volumes return, we should rebound strongly. To your third question, the two plants that we might close or divest are in Advanced Intermediates. Hexane oxidation is an Advanced Industrial Intermediates, chrome oxide, and pigments. We are not selling only in intermediates to Europe. This statement is not right. We have a strong exposure to the Western Hemisphere, Europe, and United States. We even have plants in Advanced Industrial Intermediates in the United States, so our business is not solely in Europe. There are businesses that are currently impacted, like, you mentioned, Synthetic menthol. This business has been on the rise for decades with strong growth rates. There are only two players in the market, and we don't hear from our customers that they will question mark, their biggest plants, which are domiciled here in Europe, because also their biggest market is here in Europe. Of course, we look at the entire value chains, and we keep our eyes open. What is structurally questioned, we will analyze. Currently, our structural assessment led to the fact that out of the plants that we have here in Germany, 53, two will come to a decision point this year. Next question. Thank- We're going over to the next question. Thank you. The next question comes from Matthew Yates from Bank of America. Please go ahead, sir. Hey, afternoon, everyone. I'd like to ask a bit around the FORWARD! plan and the intention of deleveraging and the different measures you've outlined today to get there. The two plants specifically that you've highlighted, by the sounds of it, aren't significantly profitable. So is the expectation that you will receive any material proceeds for those assets, or is that more around just portfolio pruning? If not, are you looking at any other potential asset disposals? I was wondering, can you help me put into context the situation, the balance sheet and the leverage today versus 2014 when you did raise equity to help fund the restructuring measures of the group? How do you see the situation of the company being different today versus what it was in 2014? Thank you. Yeah, let me address one by one. The two plants, this is not a measure that we do in order to generate tons of cash. We will look what we will do. The one plant, we will not consider for sale. What we are considering and finalizing is closure. That will rather be a small cash out than a cash in. The other plans, we will assess if we will divest them. That means you run a process, and this has to be a clear, straight, simple process. We think here that there are buyers in the markets, if these buyers make a big complex project out of that, then we will not go for it, and then we will exit. I think that straightens out your first question. We still have not big businesses in our balance sheets or in our company, that we've, that we have flagged for potential exits, and we know that here the strategic players are highly interested, and they reflect that also in recent months. Should we need some cash injection, this is what we would do next year. We don't think that we are in need for cash injection, should we do something, then this will happen. On the balance sheet, I mean, 2014 was a different situation. We had a hugely volatile business, and we had a hugely volatile business in an environment that was not that bad. 2014 was not 2020. 2014 was not what we see 2022. We are currently in a demand shock. As I've referenced, after Lehman, markets came back, they collapsed, but they came back after four, five months. We've seen that Corona led to a volume shock, which led to a demand decline of around four to five months. What we now see is a demand shock that started in November 2022. We are now in the ninth month. In my professional career in chemicals, I've not seen this situation, and it's not happening only in, in Germany, it's happening in Europe. I mean, you've seen that companies in U.K. or in the Netherlands that are in very stable business have profit warnings. We see that animal nutrition that was growing for the last decade is down for the first time. Currently, if I look into your question, 2014, we had a very volatile portfolio in a market that was okay. We have a portfolio that should be far more resilient, that has shown that the break even is to make EBITDA is even below 60%. The structure that we have is better. We need to look at the balance sheets. The profitability will come back. Is it 2024? Is it 2025? Who knows? Profitability will come back to different levels. For this time of the next one to two years, we have ample of liquidity, we are, from a balance sheet perspective and portfolio perspective, in a completely different situation than compared to 2014. Should, for whatever reason, I really need cash, I have an asset that I would put into the shopping hall, and I know that, cash injection for this one, will be very, very strong, and it will be a fast process because it is wanted by players in the United States, by players in Europe, and by players in Asia. Here we will, do it should the need for this arise. I hope that clarifies your question. Thank you very much, Matthias. We're taking our next question. The next question comes from Andreas Heine from Stifel. Please go ahead, sir. Thanks for the opportunity. Two question, if I may. The first is on the review on, of, the size of many of these 53 plants in, in, in Germany. I'd like to understand, what is this approach? The energy intensity is obviously in the most upstream part, the highest. Is it possible that you, that you close plants which are upstream and that you buy in raw materials from other destinations? How complex it is really to, cut, plants of these integrated business you have? Because I would think that if there is something challenged then it's the old, let's say, legacy buyer business, which is in Trevirk, Leverkusen.... That's the first question. The second, I'd like to understand more in the Specialty Additives. Looking on demand trends and what, what the wording was in describing the three units in there, I would expect that lubricants and even rubber chemicals, volume-wise, are pretty, pretty stable given the environment we are in. That most of the decline in volume was in the additives business, and that potentially also on the price side. Could you elaborate a little bit more on this one, these polymer additives? One of your peers was also very much affected here, but I think that's really only a very short period of shock we see here, compared to the very high level you had last year. Thanks. Andreas, two valid question. Let me address the first one. I mean, hexane oxidation is a plant that has only one synthesis step, and then it goes into the next value chain. Here, this synthesis step, which leads to like hexane oxidation, you can call it KA oil as well. That value step is in competition internationally, internationally, it's competing with lower energy prices, lower raw material input costs, of course, in Europe with CO2 cost impacting the business as well. For that very reason, we, we don't need this value step. Should we need hexane oxidation, we might also buy it ourself as input costs in the global markets. For that very reason, we've taken not yet the decision, but we are clearly about to take a decision here to take it out. That should answer your first one. I clearly would like to say that our entire Advanced Industrial Intermediates business is structurally strong because we do a variety of synthesis steps in this organization. We clearly think that this business will come back. There might be still other plants and value chains where we have to trim capacities, where we have to tighten the belts. The core of Advanced Industrial Intermediates, and here I especially refer to the aromatics, is internationally a strong player. The business will come back, I'm pretty sure about that. now on Specialty Additives, you clearly flag, I mean, PLA or Polymer Additives business performed very strong last year. If you look now at the peer of, of us, that is that is reporting as well and that has also a flame retardant segment. I hope that everybody knows who it is. They also issued a profit warning and clearly referencing, referencing that construction is brutally down and prices have collapsed because there is no market anymore. We see that bromine has been on the rise for the last years due to tightness. The construction market in China is down. Nobody buys no flame retardants. Therefore, if nobody buys flame retardants, nobody needs brominated flame retardants. For that very reason, also, the bromine price, suddenly in China, collapsed from six, seven, eight to two, 1.8. That shows you that there is no demand at this point in time. The only positive is in Q3, the price, or in Q... End of Q2, the prices have stabilized and are now very, very, very tiny wise, going up again. Therefore, the business will rebound. It needs, at the end of the day, demands, especially from construction industry and especially from the electronics industry. I hope that gave you enough bone-- no, no, beef to the bone. Thanks a lot. Yes, have a good weekend. Yep, same to you. We are now going over to the next question. The next question comes from Tristan Lamotte, from Deutsche Bank. Please go ahead. Hi, thank you for taking my question. I was wondering if you could possibly talk about the trajectory of improvement when volumes do come back. To that end, are you able to elaborate on cost structure and specifically fixed costs, and how we could see that coming back? That's the first question. Second is on the detail of the underlying performance of the JV. I understand you can't necessarily give all the details here, but I was wondering if you could elaborate a bit on the impact, impact from the interest and from PPA, and whether it's making a profit on an EBITDA level. Thanks. Thank you, Tristan. On the joint venture, I mean, we are clearly bound here to a contract, and we will report what we can report. At full year, we will have to report legally more, and we'll do that, but on a quarterly basis, we are restricted to what we can say. And I can say that the underlying business, everybody is suffering, so here the underlying business is not great. PPA is in the EUR hundreds of millions. Interest, of course, are also in the EUR hundreds of millions. That drives the net income loss that we have, of course, PPA is completely cash neutral. Whatever we report in equity is not impacting us cash-wise. That's what I clearly stressed. With this, I leave it on the joint venture. On the volume side, yeah. I mean, we like to have more volumes, there's no doubt about that. We currently operate with the volume levels that we have. I think volumes currently are depressed for various reasons that you know, destocking, softer demands, China problem, and therefore, we have currently a multilayer demand shock that leads to the current situation. I cannot tell you when volumes will come back. If volumes rebounds, I mean, definitely we will be, I think, or proportionally, in a situation to benefit, because the cost structures that we currently address, is not addressing us structurally in the production or sales sides. We are not reducing shifts. We might close two plants that are anyhow not profitable, but we will not adjust our structural capacity. If volumes come back, we will rebound strongly. The cost that we want to structurally optimize next year, is clearly focusing SG&A. SG&A and corporate, and SG&A in the business, meaning back office works, et cetera, et cetera. We will not reduce our capacity position. With the two exceptions, hexane oxidation, chrome oxides, which are still in the decision process. I hope that clarifies your two, two questions. Thanks very much. We're now going over to the next question. This question comes from Oliver Schwarz, from Warburg Research. Please go ahead, sir. Thank you for taking my questions. Firstly, I, I like to delve a bit into the CapEx of the FORWARD! program. Seems to be limited to a EUR 50 million less CapEx spend in 2023. Can you please elaborate a bit what kind of saving that is? Is that delays in projects? Is that scrapping of, of, of planned projects? How should we think about CapEx progression in the periods of 2024 and 2025, please? That would be my first question. Secondly, as Mr. Zachert, you referred to the product chain of the cyclohexane oxidation, also as KA oil. I guess we're talking about cyclohexanone production here. Is that product substituted by production by LANXESS regionally, somewhere else, perhaps in Asia or in the US? Is that product completely to be substituted when required in other value chains by basically sourcing it from other producers in Europe or somewhere else globally? Basically, is there, let's say, a substitution possible by other production plants in the LANXESS group, or is that to be substituted, if required, by other producers? That would be my two questions. Thank you. Thank you for your participation and questions. On the EUR 50 million, that was your first question that we will address this year. It's basically a combination of categories. Projects that were about to start, they're being delayed. Projects that, that we are doing on a normal basis, i.e., maintenance that we wanted to do on certain plants, that are well-maintained, but here, when plants are not that profitable, of course, the amount of maintenance can also be adjusted. That can be done for 1, 2 years, but should not be done longer than that. I mean, we have our plants at good maintenance level. We are not running it like private equity, you've never heard that whenever businesses were acquired from us, that they had to report CapEx spend upgrades. Therefore, that is EUR 50 million that will not hurt. Of course, we make sure that all legal and operational standards are safeguarded. I think we, as a company, stand for that. Now, 2024, 2025, too early to tell. I mean, our run rates in CapEx reflect. Last year is at EUR 400 million. The EUR 400 million we will adjust upward, downward, depending on economic times. The underlying run rate of EUR 400 million is one we've guided for, which includes round about close to EUR 300 million on pure maintenance, and the rest is for growth. In the current environment, with 60% utilization, we don't need growth, we need to have maintenance. Before you grow, you basically load your capacities first. I think that is clearly something one needs to state. We need volumes. We don't need capacities for more profitability and cash generation. Heck, the hexane oxidation, I mean, this is a precursor which is really early in the value chain. It's one of the products that truly, in our company, is very early in the value chain. It's not downstream, it's more upstream. Upstream products you can globally source. And here, I mean, we've stated that we will close these plants, latest March 26, should the decision be taken. Because by then we have some running sales contracts, this gives us enough time to talk to the global producers of hexane oxidation and to get good long-term contracts in place, which are more competitive than producing it ourselves. The sourcing will be done outside of the company. Understood. Thank you very much. Thank you, Oliver, for participating. Next question, please. Going over to the next question. This question is from Jaideep Pandya, from On Field Research. Please go ahead, sir. Thanks a lot. First of all, wishing Michael good luck, and Oliver, a big congratulations. My 1st question is on the inventory cycle. Could you give us some color about, you know, what has led to a massive buildup of inventories? Is this really finished goods-related, or is this raw material-related? The first half that you were sacrifice utilization, taking a EUR 100 million hit, how much of finished goods inventory have you really cleared? What will be the utilization in second half versus the first half, assuming no real pickup in demand? That's my first question. The second question is really on Specialty Additives. There's been a huge drop in margin year-over-year. Now I understand that aviation is doing well, so what has really caused this, this drop? You know, when we'll see when will we see margins coming back, is it really volume-related, or are you taking actions to, you know, solve this? My last question is really on Advanced Intermediates. Are you basically price versus raw materials neutral here? Again, this is a volume issue where margins go from, you know, this mid-single digit towards the 15%, 16% that, you know, we were used to seeing a few quarters ago. Thanks a lot. Yeah, thank you, Jaideep. Let me address one by one. On the inventory side, it's definitely majority is finished goods. And, of course, we had stocks in raw materials, but, I give and take, I would say this is 80/20. We stocked up in both for safety cushions after value chains were disrupted. I think many companies did that. We did this as well. We had more business that traveled. I mean, the flame retardants, brominated, they are produced in El Dorado globally, and I could explain further. When you want to make sure that you deliver to the customers in disrupted value chain times, like last year, you have to be prepared for having volumes. Of course, we had then a second big driver on volumes, that was the introduction of our ERP system. That was a screw-up last year. We talked about that, so that led to higher volumes as well. The third effect, of course, was pricing. Now, we started the year with higher volumes, definitely, and/or higher net working capital, and we clearly said we will sweat that down, and we are doing this while the market is extremely soft. This is really the hard right that we take, and we have reduced 3 percentage points to sales, which is a lot. In the second half, this will soften out a little bit because we stated that we are at 23.8, and now we want to go down to 23. The big chunk has been digested. Where utilization will be now in the second half, I would say that depends also on demand, but if less, if demand stabilizes or picks up and we will sweat out less inventories, then utilization should move up as well, benefiting the P&L. On additives, you're right. Look at, sees clearly more momentum on aviation, undoubtedly. As far as the second business is concerned, Polymer Additives was always a strong contributor, and that contributed more and more every year after we acquired and combined it with our flame retardants business. If you look into last year, this was a, the best year of PLA, Polymer Additives ever. If you look into the segments, we reported more than EUR 400 million EBITDA. We referenced that this was a strong year with clear outperformance to normal trading levels, now the markets are collapsing. E&E, that was on the rise for the last several years, is down. Construction is collapsing. This is overdone because we know that especially in Europe, we have a need for construction, the sentiment right now is extremely negative. This has to do with interest rates. People are looking at the interest rates and want that they stabilize or go down. This has to do with sentiment, this has to do with China market being down, the reasons for that are listed in all of your reports. Here we have a sudden shock in construction, which of course, is a big demand end industry of the Polymer Additives business. It will come back. We see that China now takes first soft measures on trying to stabilize, but of course, they are far back from the momentum that they have. As far as Europe is concerned, I think, it will take some time until the construction will stabilize. This will be a gradual improvement, and not a strong rebound from my, my take, because interests, are yet to stabilize and most likely will only start to gradually decrease from next year onwards. Advanced Industrial Intermediates. Prices is low. Yeah. I think here it is volumes, volumes, volumes. I mean, the business needs volumes. We've been here last year, recovering everything: energy, raw materials, logistics in this business. The business was rolling over the input cost inflation, now we need volumes. I mean, this business serves 32 different end industries, and we currently see that the majority of the industrial production is down. This business eventually is not like Consumer Protection. This business needs volumes. It has a strong market position, but they need volumes. With this, all your questions, hopefully are answered. If I can just ask one follow-up. I'm sorry, I joined the call late. On the JV, could you give us some color on where is the EBITDA right now? Is there any need for further special measures on the restructuring side from the combined forces to improve profitability? Thanks a lot. Yeah, well, the business is a strong business. It's now becoming a global leader in polyamides. They have a fantastic market position. They have a fantastic regional reach, complementarity. This is a business where DSM reported in the past, margins around 20%. We reported margins around 15%. The joint venture, according to rumors that I heard in the market from the fixed income side, is considered a solid business going forward. They are, from what I've heard, according to market rumors, strong fixed income investors that believe in this business. Because also, because this business incrementally will have substantial synergies. Therefore, going forward, I think, the business will perform strongly. That they are currently also in a trough market environment, I think, is not coming as a surprise because all polymer companies worldwide, are also talking about the contraction in market demand. This is as far as Envalior is concerned. Your last question was on? EBITDA, Envalior. Oh, that was the only question? I think I've answered everything. Good. We're taking already a lot of your time. We're having a last question from Andres at Berenberg. Just a moment, where I'm bringing Mr. Andres Castanos-Mollor to the, to the stage. One second, please. Now we have Mr. Andres Castanos-Mollor. Please, go ahead, sir. Thank you very much. Just one clarification, please, on slide 60%, EUR 100 million, one-off hit in Q4, but then the cash flows happening 2024 and 2025. I just want to understand this well and not double count, if, if the cash flows correspond to the one-off hit provision, maybe. Secondly, I want to understand, like following up on the possibility of a capital increase. Given you have ample liquidity, fixed interest, no covenants, you don't need to raise debt. How, how strategic is to retain your investment grade rate? Thank you. Well, Michael will answer the OTCs. I would take up the capital. Michael? Andreas, you're right. I mean, that is how it works. We will book the expenses in course of Q4 2023, and then the respective cash outs will be in course of the following quarter. Whether they will be fully in 2024 or partly in 2025, that is still to be seen. The expenses are largely booked in the fourth quarter. Matthias? Yeah, I will take the capital, because at the end of the day, this is also a strategic decision. We are not in the triple B minus area. We are at triple B flat with negative watch. Or in Moody's language, it's B double A two with negative watch. They give us time, and they've seen that we take respective measures on the cost side, which is seen as a positive. They know that we have backup plans on cash, as far as divestitures are concerned. Therefore, they clearly know our track records over the last 10 years. We managed Lehman crisis, we managed pandemic, in a way that we were fully stable in the investment grades. Therefore, capital raise is currently and will not be on our agenda for the next month because we don't see any necessity for considering it. I hope this makes it crystal clear. sorry, Matthias, say next month? To be very clear, it's not on our agenda, period. Period. Good. Thank you. At this moment in time, we have no further questions in the queue. With that, I would like to hand the call back to Mr. Zachert for the closing remarks. Well, thank you very much, dear operator. I would like to finish the call with a organizational change and change in the management boards. Michael approached me last year, and he basically said, "Hey, Matthias, I've been member of the board for 8 years now. We've done so many things. I would like to do something new. Is there any possibility in this company to get an assignment abroad?" We looked into this, we discussed opportunities, but I mean, if you are on the management board, finding worldwide different board, boards, member positions are not easy. As we then decided to nominate Frederica van Baarle as female, moving to the United States, the slot closed for Michael. For that very reason, he was looking outside and now found an opportunity where this young gentleman can strengthen his language skills and international activities. Therefore, we made this announcement this morning. I thank Michael for his contribution. We did many things, and Oliver was always part of that. I thank Michael for friendship. You're a good chap, and Germany would say, Alter Schwede. We had a good time, and now it's time for Oliver to energize cash flow, finance, and the company, the management board. Of course, we know each other. I admire your energy, I admire your business acumen, and I admire the way you are. I wish you good luck from 1st of September. The good thing is we have plenty of strong candidates here in the company so that we can go internally and know that we will have the same level or even better going forward. Therefore, I'm proud that we have developed people that can take up this challenge, and therefore, I wish Michael all the best, and I wish you, dear Oliver, all the best, and a lot of fun because we have a lot of plans going forward. Thank you, both of you, and both of you, good luck. Thank all of you for your time today, and looking forward to seeing you on the roads in the near future. Thank you, and bye-bye from Cologne. Thank you, Matthias. Bye-bye. Bye. Ladies and gentlemen, this concludes the LANXESS conference call. Thank you for joining. Have a pleasant day. Goodbye.