Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the LANXESS Q3 Results Call. I would now like to turn over the conference to Eva Frerker. Please go ahead. Thank you, Sarah, and a warm welcome also from our side. Thanks for joining the LANXESS Q3 earnings call. As always, I would like to begin by asking you to take notice of our safe harbor statement. With me today is Oliver Stratmann, CFO at LANXESS. Our CEO, Matthias Zachert, unfortunately cannot be here today as he does not feel well. However, he does send his best regards. We are, however, also very happy that Oliver is here today, and he is ready to start with a short presentation, and we will then open the floor for your questions. I will now hand over to Oliver. Please go ahead. Many thanks, Eva, and welcome to everybody on the call and on the webcast. Let me now briefly run you through a few charts before we then switch to Q&A. Now, Q3 was a strong cash generation quarter, despite continued low demand. You have seen by now the Q3 results of EUR 119 million EBITDA being more or less in line with market expectations, and I'd like to shed the focus on the cash generation of the quarter. The strong free cash flow of EUR 322 million was generated mainly due to our active working capital management, reducing inventories volume-wise. With that money, we have been enabled to address our net debt and bring it down by another EUR 306 million sequentially, down to EUR 2.557 billion. We are experiencing a low demand environment here, which is why we're actively addressing what is in our hands. More to that on the next chart. Our FORWARD program is on track and is being implemented as we speak, and additional measures are in execution. The total we've communicated before of EUR 100 million-EUR 150 million savings will come. We aim to see the vast majority of expenses relating to this program still in Q4 of this year, and then we're looking forward to incur the FORWARD savings of EUR 90 million in 2024 and EUR 60 million in 2025. Now, we've added the information on the redundancies we unfortunately have to go through, and you have seen that around about 870 positions globally will fall away, 460 of those being in Germany. We've also announced additional measures. We have started, I think, not surprisingly, now, the process of the divestment of the business unit Urethane Systems as a strategic step that has been clear for quite a while. As you know, we've been reporting this business unit in our former reconciliation segment, now all other segments. We have decided on board level to propose a reduction of the dividend for 2023 to EUR 0.10. Now, despite the challenging situation we are in, I'm happy to speak to you and report on our business. Let's move on to the next chart and have a quick look on group level. Volume decline here is the dominating topic. The active reduction of inventory has, of course, also burdened EBITDA, and we try to somewhat balance between the necessary debt reduction and still making the EBITDA we wanted to make. What I can tell you further on is that customer destocking that we've seen for several quarters has been there in Q3, but has leveled off, except for those customers that we have in the agrochemicals industry. By and large, we're also done with sweating out the high-priced inventory, and with that, let's move on to the segments now. On Consumer Protection, at least comparably stable, is what we saw in terms of results. Still, without a doubt, not satisfying for us, and we now are confronted with evidence that agro customers are starting a destocking. We've seen that also in announcements of other companies, and we expect to see that also in the fourth quarter and potentially thereafter. What will also be a burden here on Q4 is that we have currently a substantially reduced steam supply after a fire at a supplier's site in Botlek in the Netherlands. We are operational there with our Flavors and Fragrances business unit, which is now limited in what they can produce, so we're expecting around about a EUR 10 million impact in the fourth quarter on EBITDA from this lack of steam supply, which is expected to last into 2024. Now, let's move on to Specialty Additives. We're seeing a substantial decline in earnings here on destocking. And let me be clear, round about two-thirds of the sequential volume decline in our inventories was actually achieved in this segment. So that partly explains why we have a heavier burden of low sales volumes or lower volumes being reported and causing idle costs. Now, in Advanced Intermediates, the same themes are actually hitting. Mainly, weak construction industry demand for Inorganic Pigments and for Advanced Industrial Intermediates are the root causes here for lower volumes and a lower EBITDA. Now let me please shed a bit of light on the positive flip side of this inventory reduction that we have achieved when we go to the next chart. First of all, our net working capital was sequentially reduced by around about EUR 260 million, which led to a net debt reduction of around about EUR 300 million. Which means if we compare to year-end, we have a EUR 403 million net working capital cash inflow and a debt reduction that is north of EUR 1.2 billion and close to EUR 1.3 billion. I would also like to highlight on the de-risking side, since we've spoken a few times about refinancing necessities in May 2025, that these refinancing, refinancings of a bond have been secured by now already by bilateral bank loans. A further topic that has been in discussion a few weeks and months ago with regard to gas prices, I'd like to drop two data points here. Firstly, in Germany, where we have the largest demand for gas, the German Speicher for gas, the storages, are almost completely full already by now. On top of that, we had started to hedge our global gas price exposure, and we're going into a fourth quarter where between 40% and 50% are hedged at prices that match the current level of EUR 40-50 per megawatt hour. So I think the message should come across that we are deleveraging actively and that we are actively addressing the capital markets concerns. Let me move on to our guidance chart with that. Our view on the economic environment did not expect any uptick in underlying demand in the fourth quarter, and now we are saying the underlying demand in Q4 is unfortunately even lower than it was formerly expected. I have already mentioned burdening effects that will come on top. So the persistent force majeure situation, which is now on chlorine, expected to end with the end of the month of November. And on top comes what I've explained for the steam limitation at our Botlek site in the Netherlands. In the fourth quarter, typically there is a seasonal peak of CapEx, and we had reduced our guidance to EUR 350 million CapEx this year. We stick to that guidance, but that implies a higher CapEx in the fourth quarter, which you should bear in mind. We stick to our net working capital ratio goal of 23%, and, I hope you forgive us here, you know, standing at 22.2%, that we leave it at 23%. I personally think it would be academic, to distinguish here between 22.2% and then 22.5%. This all results in the updated guidance of EUR 500 million-EUR 550 million. And with that, I'm very happy to get into the conversation and, welcome your questions. Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star one one on their telephone keypad. If you wish to remove yourself from the question queue, you may press star one one again. And one moment please, for our first question. And our first question comes from the line of Jonathan Chung from Morgan Stanley. Please go ahead. Your line is now open. Thank you. Thanks for taking my questions. I have two, please. The first one is on the steam supplier outage. Could you give us a bit more colors on the supply outage? If this situation goes on into 2024, how much EBITDA should we expect? Should we expect just EUR 10 million per quarter times four, or should we expect something else? And what's the timeline for that to be fixed? And my second question is around the PA66 plant in Germany. I think one of your competitors mentioned they will shut down the PA66 polymerization unit in Germany, quoting some challenges in the production cost. What does that infer to the JV? I suppose the JV will also face similar issue in terms of cost of production. Could you comment a bit on the cost position, and what are you doing to improve the fixed cost in that particular unit? Thank you. Jonathan, thanks very much for the questions. On the steam outage, what has really happened there is that an incineration plant for waste material had a fire. A fire apparently came up twice, therefore more severe, and we have been supplied from this plant with steam several different pressures. Now the steam supply was interrupted. We can supply our own steam to our plant to a certain up to a certain limit, which obviously doesn't suffice for the full coverage. Since this was a severe incident, we expected to be extended into the year 2024, maybe the full year. However, now we have insurance coverage. It's only that the deductible we have amounts to EUR 10 million. Therefore, I've mentioned a EUR 10 million impact that we have to expect in the fourth quarter. For next year, the amount of burden there should be covered by our insurance. So I hope that answers the question on the steam outage. On Envalior, to be honest, I wouldn't like to comment. It's a joint venture together with Advent, and they decide on their individual comments with regard to their business activities. What I can say is that we have seen after the second quarter and now in the third quarter, also a negative contribution. We had guided to that level of contribution, and we've guided that it will probably come down to something like EUR 50 million negative in the future, as the PPA allocated to inventories has been, from an accounting perspective, digested. And this is as far as I would like to go with regard to the operational commenting. Thank you. Just, just to follow on the steam supplier. Are you able to tell us the supplier name? You are interrupting, unfortunately, so I couldn't hear the question really. Are we able to? Are you able to tell us the name of the supplier for the steam? Oh, yeah, you can even Google it. The company is called AVR, I think. Thank you. Thank you. One moment, please, while we open the line for the next question. Our next question comes from the line of Sam Perry from UBS. Please go ahead. Your line is open. Hi there. Thanks for taking my questions. A couple, please. Can you give any more detail on the committed credit lines and RCF that you show on slide 20? For instance, if this is deployed, is it a higher rate than the 1.125% bonds you're using it to pay back? And what are the terms with regards to how long you have to use it, or if you've used any of this already? And then secondly, I think in the middle of last year, it was, you began to factor receivables. Is this still ongoing, and when does it come to an end? And would you look to do this again, when that agreement does come to an end? Thank you. Sam, thanks for the questions. I will give as much detail as I can here because we typically don't disclose how we've negotiated our individual financing instruments here. And the good takeaway for you should be, there are committed credit lines in place, plus all of them are unused, and our syndicated credit revolver, amounting to EUR 1 billion, is also unused. Of course, if you agree to a financing now, it is at market rates, it doesn't contain covenants, and it is completely unused. Hence, the market rates would then apply when we really draw on the financing. And the maturities have a duration that is long enough, as I said, to finance any 2025 maturity. On the factoring, indeed, we are continuously factoring. You have, however, around about apples to apples comparison in the two periods in the cash flow. In both periods, more or less EUR 130 million have been factored, and it will come to an end if we deem that the rates we are paying become unattractive compared to other financing means. Because this financing was really put in place, and still is now, already, still a financing that is attractive compared to other instruments. Hence, it's really a financial evaluation that we are doing here, and once that turns, we will terminate it. ... Thanks. Thank you very much. Can I just have one follow-up, please, as well? Just on CapEx, for a couple of years now, it's been below D&A, and I know there's some amortization of intangibles in there. But when we think about CapEx going forward and potentially your ability to grow at or above market coming out of this weak demand, how much does CapEx have to step up over the medium term? Mm-hmm. Yeah, also there, I mean, you already touched on the point that the way some of our covering analysts are looking at the figures compared to comparing CapEx and D&A isn't really apples to apples. Because the depreciation of 500-550 contains around about EUR 150 million of intangibles. So the right number goes more into the direction of EUR 400, and here, of course, you do have flexibility. Now, to be honest, in order to grow, we don't need any CapEx right now because our plants are so substantially underutilized that we can easily, and that will be a huge thing to bear in mind once demand comes back. We can largely and hugely benefit from a higher capacity utilization, so there is no single dime necessary to step up the speed here. We do have, of course, ideas where and in which projects to invest, but for the time being, the focus is clearly on debt reduction, and hence, we stick to our EUR 350 million guidance for this year. I can also tell you that the plans for the next year won't be far away from that. So we continue to be spending what needs to be spent and what is extremely attractive in terms of expansion or debottlenecking. Because the EUR 350 million contains 250-300 as pure maintenance CapEx, so you know that there still is a bit of expansion for attractive investments still in there. Great. Thank you very much. Of course. Thank you, Sam. Thank you, and one moment, please, while we wait for our next question. Our next question comes from the line of Andreas Heine from Stifel. Please go ahead. Your line is now open. Thanks, for the opportunity to ask question. Actually, I have three. Starting with the first one, going into Q4, how do you see there your Net Working Capital? You did a lot, in bringing it down. Seasonally, usually, a Net Working Capital declines, once more in Q4, but I'm not sure whether that is the case this year, with all the efforts you have already done. And I obviously appreciate that you do not have a crystal ball and, hesitate to talk on 2024. But let's say if everything stays equal and we don't see any recovery, could you help us a little bit in the bridge of EBITDA and cash flow? So what is the special inventory, effect you had this year, negatively on EBITDA? What are the net cost savings next year? What is all the Force Majeure impacts you have this year and hopefully have less next year? And also the impact of these high-priced inventories, where you basically, well, in your inventories, you used well above, that's at least my understanding, the raw material costs at that particular point in time. And if you go the same on cash flow, what is all these restructuring impact you had on the negative side and the net effect of saving the bonus payments and the dividend? This would be my questions. Thank you. Andreas, thank you. Well, Q4 Net Working Capital, seasonally, you are right, is typically a quarter where Net Working Capital is trimmed. And the word typically already bears the idea in it that there is hardly anything that is typical in this year. So we've trimmed working capital substantially. We are having the typical Q4 maintenance turnarounds. On the other hand, our utilization in some plants is so low that you also need to, as I understand it, as a non-chemist, take care of a stable plant running here. So I wouldn't exclude that to a certain limit, we will be ramping up production, maybe producing a few kilotons on inventory. This is why we've continuously guided to 23% of sales, and including now, you know, movements in prices here, I would shy away from doing that, and rather say, if you assume something around the 23%, I think we feel confident that we can achieve that. Okay. On the 2024 bridge just now, and without going into, you know, all the nitty-gritty details that we've had, but at least mentioning some of the bridge steps, which I fully get you, you need. Let's assume, you know, midpoint of guidance is reached. What we, what we have is, first of all, and we've mentioned that before on the call, around about EUR 100 million EBITDA burden that will not reoccur from reducing our inventory and sweating out the high-priced costs. I would like to leave it in your hands, how much comes on top from customers that have destocked, because that, in essence, is then a pickup of demand question. We have a net positive number of savings that comes on top of EUR 40 million, which is the temporary EUR 50 million this year, translating to the permanent EUR 90 million of next year. Then I've already mentioned a EUR 10 million bottleneck impact in the fourth quarter, which would also not be there next year. We had the long-persisting limitation in chlorine supply, and we said that is around about EUR 10 million-EUR 20 million, so pick EUR 15 million impact. And we continue to expect synergies from our M&A integration coming on top in the magnitude of EUR 15 million next year. Now, that would still leave you with zero change in utilization rate. And of course, being now for Q3 in the low 50s only, there is, as I also mentioned, relation to, to CapEx, a huge headroom that we have to perform. So that should give you, I think, an indication where next year, without that, we can see any pickup right now on the basis of order books where that can really move to. Oliver, maybe the same for cash flow, only the extra stuff, not a- Yeah real forecast, but only bridge. I just realized I had forgotten the cash flow question. Try to note it down here. Well, on cash restructuring, we've said that EUR 50 million will occur next year. And then, depending on how you want to calculate, we have, of course, the EUR 82 million roundabout. Should the AGM agree to the intended dividend proposal, EUR 82 million, and that we are saving. And that is with regard to, with regard to restructuring and the forward program from a cash perspective. On working capital next year, I hope you don't ask me to speculate how that could develop. That would, you know, go beyond my imagination here. Yeah. May I, sorry for that, to ask again. In the second quarter, you had in the cash flow statements, -EUR 98 million for others, and I thought that is one-time payment for employees and bonuses, and those will not come, come again. Is there any number you could give for this item? Yeah, Andreas, the question is there, if you tell me what my bonus is gonna be next year, then I can tell you how much the provision is that will be in Q- Ah, no, that was cash flow. Only on cash flow. Yeah. Cash flow would- Oh, it's- Include the bonuses for 2023. Got it. Yeah, I can, I can tell you that there's not gonna be any bonus, because with our EBITDA here, we will not make any of the goals that the supervisory board has given us. So, that relief will be there. Now, in the past, we had this cash- out, and we had quantified it with EUR 80 million-EUR 90 million. So, this EUR 80 million-EUR 90 million already this year will not be paid out. Yeah. On the last point, were there sizable one-time payments in Germany for your workforce, which were agreed by the unions? Is that also an item having in mind or not? Well, you know, there are items, but I don't think that that really helps you in building a bridge. We did have- Okay, that's fair. Then, then it's fine. Yeah. If it's not important, then we don't have to. No, no, I don't, I don't think in the grand scheme of things, you're talking about next year, that really matters. It would be in the, in the magnitude of like a Q4 bottleneck or, you know- Yeah, okay ... synergies item. Thank you very much. Of course, Andreas. Take care. Thank you, and one moment for our next question, please. Our next question comes from the line of Jaideep Pandya from Onfield Research. Please go ahead. Your line is open. Thank you. The first question, sort of a two-part question, really, is sort of around your competitive landscape. It feels a bit like, you know, you guys have lost touch more volume than some of the other sort of chemical companies who cater to other end markets. Now, a few of the chemical companies have started to allude to competition out of China coming into Europe and the US. You also mentioned this. So could you give us some color in terms of the volume loss you've had this year? How much of it has been due to sort of cheap competition on pricing from, from Asia, where you had to walk away from the volume side? And the second part of that question for me is, when you look at the price versus raw material/energy bill that you had this year, is this roughly a wash, or is this been a headwind, or has that been a tailwind for you? And then the second question I have is around IFF and around Emerald. You know, how have these two businesses done this year, especially in context of, goodwill test, which will happen in a few months? Are you significantly behind the plan, or are you sort of in plan considering the demand landscape? Thanks a lot. Jaideep, thanks for the questions. Now, to be honest, it's a bit artificial to try and break down a volume loss that we've incurred because material from China at a cheaper price, sometimes extremely low price, is sold in our markets. The fact is, however, absolutely true, and I can confirm that in some of the products, we are being confronted with Chinese competitors who, based on cheap Russian oil and derivatives being produced from that, are, as we see it, temporarily selling in our markets here. So, we are looking at this very closely, and the question you have to ask yourself and our businesses are answering this question as they go: For any price relief, do they really get volumes or don't they get volumes? If you don't get volumes, it's not a wise decision to decrease prices, then you rather let the volume go. You will be sure to regain the volume. Now, on the price versus energy and raw material bridge, I can tell you that the price declines we have passed on, in large parts contractually to our customers, have been to a lesser extent than the relief we have gotten from cheaper raw material, cheaper energy, and also lower freight costs. Then you ask on IFF and Emerald and how they are doing. Also, I can understand the question, but as a corporation, you are happy to have these businesses integrated. Yeah? This is what we've been working on, so to split them out now and exactly say how they've performed is difficult. What you can see, though, is that Consumer Protection, which includes these businesses, is comparably more stable. Still, I said, not to our satisfaction. So they have also seen weak demand, and the impairment testing, which will be done for all cash-generating units, towards the end of the year, will be done indeed in the fourth quarter. So that's a question of the fourth quarter. Okay, thanks a lot. Of course, Jaideep. Thank you. Thank you. And one moment, please, while we take our next question. And our next question comes from the line of Oliver Schwarz from Warburg Research. Please go ahead. Your line is now open. Hello, Eva and Oliver. Thanks for taking my questions. Firstly, the Botlek incident, the force majeure there. I heard you say that the impact in 2023, so in the fourth quarter, is EUR 10 million due to the deductible. So does that mean that, let's say, the loss in earnings just coincides with the deductible, so it's like EUR 10 million that was lost, and the deductible is EUR 10 million, so it's a wash in Q4? Or is that, let's say, the loss higher than the deductible, and we'll see that compensated with payment from the insurance most likely in 2024? And that would also basically allude to the second part of the question, how is that to be estimated for 2024? Let's say the force majeure would last the full year, then the payment by the insurance is likely to come, as far as I know it, only in 2025. So we would see an everyday impact of that incident in 2024. How much would that be in that hypothetical case? That would be my first question. The next two are rather basic here. What is it you currently discuss with the rating agencies, given that LANXESS has a very low EBITDA generation at the moment, and from what I heard you saying, you're not that optimistic for that to jump to a new level already in the beginning of 2024. So are those rating agencies concerned? Is your rating in jeopardy? And so on and so forth. And third question is about the Urethane Systems, the upcoming divestment. Can you give us an idea in regards to timing, please? Thank you. ... Oliver, thanks. Well, on the, on the Botlek burden, let's make it brief because it's not so complex, as it apparently came across. There will be a burden that we have in Q4. This burden is EUR 10 million, and our deductible is EUR 10 million, so the burden is EUR 10 million. Next year, you are absolutely, right. In every quarter, should it last the whole year, there will be a burden. And, we right now expect that we can obtain coverage of our insurance on a quarterly basis. So not after, one year, but once the incident is clear, and the, lost, contribution margin is discussed with, the insurance. Unfortunately, we've had some experience now with, insurance cases. We feel comfortable to say that we don't think that there is an impact to be expected on a quarterly basis. I also think, frankly, it's premature to discuss the impact on next year, as this has just happened a few weeks ago. But insurance coverage for the incident, except for the EUR 10 million that we have to carry as a burden, is there. On the rating agency's discussion, look, we clearly have demonstrated over the last years that management in whatever composition, has since 2004, demonstrated a very strong and undisputed commitment to a solid investment grade rating. So the conversations that we're having very frequently with our rating agencies, circle around our active measures, what we are taking. Going above and beyond that into what we are discussing with the rating agencies, we can do if we make you an insider, as the rating agencies are, and then we can go into more depth. I sense that was almost like a Matthias Zachert's joke, so forgive me for that one. On Urethane's timing. Look, we have said we are starting the process. We're now around year end. It's an asset where we deem there is interest in the market, undoubtedly. But as you know, with your experience, to forecast a precise timing here on M&A is not a wise or serious measure. It won't take forever. I think that is an asset that is wanted in the market. So, simply the fact that these processes shouldn't be forecasted keeps me from doing that. Yeah. But it's, I don't think it will take forever. Excellent. Thank you. Thanks. Next question, please. Thank you, and one moment for our next question. The next question comes from the line of Tristan Lamotte from Deutsche Bank. Please go ahead. Your line is open. Hi, thanks for taking my question. A couple, please. Firstly, do you have any comment on the current likelihood of an energy subsidy in Germany? And is this something that you see as necessary to support the competitiveness of your German assets, for example, against these increased Chinese exports that you mentioned are currently benefiting from cheaper than normal feedstocks? And then secondly, given that performance is still quite weak and Envalior, would you be able to comment on the likely need for additional financing, given that presumably the conditions are still quite similar to where you provided the financing in the first place? Thank you. Tristan, thanks for the questions. On the energy subsidy, as a, you know, an officer working in a German company, you almost have to smile because there have been so many attempts to come up with energy subsidies, which in the end ended up with precautions and requirements that no industrial company was able to fulfill. So if the question is, is it desired? Absolutely. There's no doubt that energy costs in Germany are higher than elsewhere. Will it come? I personally have my doubts. The question on competitiveness, however, is something that to me should be seen in conjunction with demand levels, and I'll give you a brief example. If you look back at last year, and we are actually comparing Q3 over Q3, 2022 and Q3 2022, at the highest level of raw material and the highest level of energy prices that we were comparing to. So the input costs had even been higher, but our profitability on the flip side, was much higher as well. And the difference here, to me, lies in the substantial underutilization compared to last year that we are seeing, today. So energy subsidies wanted? Yes. Likely? Probably not. And we are doing everything actively to strengthen our competitiveness here, despite an environment that our politicians do not seem to be able to cope right now with. On Envalior-... Look, Tristan, we are absolutely convinced that Envalior has everything it takes to perform as a market leader, be it presence in the market, be it market positions. They have been solidly equipped, and, it's also not a surprise that their financing in a situation like these, like this, of multiple, crises, leads to a negative net result here, which, as you know, doesn't necessarily mean that this business is, from a cash perspective, negative. And as we are convinced of the business model and the combination, we stick to that strategic view, and we're also convinced that asset will perform in the future. This is why we've decided for this structure. Thank you. One moment, please, for our next question. Our next question comes from the line of Chetan Udeshi from JPMorgan. Please go ahead. Your line is now open. Yeah. Hi, thanks, thanks, Oliver. It's good to see strong free cash flow generation this quarter. My question was more on your JV with Advent and ADIA. Chetan, I unfortunately don't understand a word. There's so much noise in the background. Okay. Is this better now? Yes, much better. Okay. So, the question I had, firstly, you know, it's good to see a strong free cash flow quarter in Q3, so, congrats with that. The question I had was, can you remind us about your exit terms for Envalior in 2026? Because I'm a bit confused. Did you have a guaranteed EV secured for that business in terms of exit value, or was it a guaranteed multiple of 12x on whatever the EBITDA is in 2026, or is there no guarantee on anything? So it will depend a bit on the earnings of the company at that point in 2026, and then you will have to negotiate a price with Advent at that point, if you do decide to exit. The second question was, you know, of course, you, you guys are doing what you can to, to improve the leverage, situation, but at the same time, you also alluded to the fact that, you know, Q4 clearly has been a bit more challenging than you guys had thought in terms of trading environment. So what sort of holds you back from, from using equity as a, as a means to, to delever the balance sheet and, you know, hopefully give a bit more comfort to the market and investors that, you know, we are not sort of kicking the can down the line in terms of having to do that eventually, at some point in the future? The last question, sorry, was, again, just going back to the JV, you said, you know, we should be expecting over EUR 50 million losses per quarter. Is that all because of PPA, or have you also included operational loss within that EUR 50 million for Envalior? Thank you. Chetan, thanks for your two or three questions, and thanks also for mentioning the good and strong cash flow. Appreciate you highlighting that as well. On the exit terms of Envalior, we have clearly mentioned two or three points. First point is, we have a possibility to exit after three years. Second point, that period was very consciously chosen because we built on quite substantial synergies that can be implemented typically in this timeframe. And what we've done in the past, in this discussion around multiples, because in this specific deal, a non-disclosure was agreed. We've said it's not the first deal we've made. We have had other deals in the past, and in these other deals, multiples had been negotiated in advance, and it was with that, I think something that gives you an indication of what you should be planning for. And look, the first exit possibility will be in 2026 then. What we wanted to make clear, however, is that the reduction of our equity asset on the balance sheet by realizing the negative result and our portion of that shouldn't bring you to the wrong track to believe that that is an indication of the value. It will be an EBITDA multiple. You expressed your concerns on equity and why we would not be doing that. Now, also, let me reiterate, there is no plan for equity. I think we have demonstrated that there are means after having just reduced our indebtedness by another EUR 300 million in the quarter, EUR 400 million year to date, that we are indeed pulling all levers to address indebtedness. By the way, an equity increase at this level, simply mathematically, when you are valued at the equivalent of your inventory and part of the cash that you have on your balance sheet, doesn't make any sense. On the accounting and the EUR 50 million losses, which is our portion of the Envalior JV. No, it's not the PPA. PPA is a tiny portion of that. The fact that we have seen EUR 66 million showing up in the P&L is the remainder of the PPA allocated to the inventories, which has now been taken with the third quarter. And the big chunk of the burden simply comes from the fact that they have a high indebtedness with market equivalent interest rates, which now leads to a debt or an interest burden on their end, and that's it. That's clear. Thank you very much, Oliver. Thank you, Chetan. Thank you. One moment for our next question, please. Our next question comes from the line of Rikin Patel from BNP Paribas. Please go ahead. Your line is now open for your question. Hi, Oliver. Thanks for taking my questions. Just wanted to go back to your comments around the competitive situation, that's China. Could you maybe give a bit more detail around which business units and products, where you're seeing the most pronounced impact and possibly where the pricing pressure is the most intense? And when it comes to looking at this trend over the past year, is this something which you've seen materialize more in the last couple of months, or has it been ongoing at the same time that we've seen this destock? And secondly, Rikin, Rikin? Sorry, the second question, what has been going on? I didn't get the first part there. Yeah. Have you, have you seen these competitive pressures over the past year, or have they materialized more so in the past, quarter or two? Okay. And with competitive pressure, you were referring to Chinese competition, or, or which competitive pressures? Yes, exactly. Okay. Chinese, yes. Mm-hmm. That was the question? Yeah. Feel free to answer that. Okay. Well, look, I think one of your colleagues mentioned it before. We have already earmarked with the second quarter, definitely, that there are Chinese competitors in our markets. We've seen that in inorganic pigments. We are seeing that in parts of Advanced Intermediates. It is naturally lesser so in the more specialized segments, but I wouldn't overemphasize the pressure from Chinese competition here. To us, it's more that industry-wide demand is weak. If we look at construction, for example, you see project development companies go bust. You see real estate companies clearly say that they are not starting new projects. And if you then think about our exposure here of, let's face it, color pigments, yeah, which is not used to make a house more efficient in terms of CO2 emissions, but it provides a very stable and persisting color. But of course, here you can reduce the content, and if lesser buildings are being built, then you are impacted. So I wouldn't overemphasize the Chinese competition here. It is there. It has been there for a while, and whether it's been now 2 quarters or less or more, I don't think really matters. We are seeing that in these products. Okay, thanks. And then just had a separate follow-up on the urethanes business. Mm-hmm. Could you maybe give us a sense of what the mid-cycle EBITDA is there, in your view? Yeah. I mean, you know that we are not reporting or guiding on individual business units here, but what I have read in some of your colleagues' reports is that people assume something like a EUR 40 million or roundabout EBITDA level I've read in reports. Now, I don't want to comment on that, but that seems to be something like a consensus. Okay. Thank you very much. Thank you. And one moment for our next question, please. And our next question comes from the line of Konstantin Wiechert from Baader Helvea. Please go ahead, your line is now open. Yeah. Hi, Oliver and Eva. Thanks for taking my questions. Maybe first one regarding inorganic pigment. I think, in the past, you've also mentioned the increasing use of LFP batteries. Is that something where you have already successfully contracted volumes to, or where you are in advanced discussions with battery clients? And should we therefore expect something there in the next year already? Then maybe my second question. Sorry, again, that also involves urethane. When I look at the others line, and the sequential improvement here, was that mainly from your cost savings or also probably by some sequential EBITDA improvement in the urethanes business? ... And then maybe the last, just a clarification. When you talked about the somewhat positive price spread you currently see, is that just because of the delay you have on passing on lower raw material costs to your clients, or is there any other mechanism involved in that? Konstantin, also here, thanks for the questions. On inorganic pigments, iron oxide is what we are producing, and what we had mentioned is that there is the possibility of a functionalizing of these elements to get to lithium iron phosphate batteries. So we would be one potential part of an ingredient that goes into these batteries. As soon as there is anything contracted, you can absolutely rely on us. We will be the first to put that out, but we are still working on that. On urethanes, or you said the reporting in all other segments, indeed, you see cost avoidance here, and you also see the falling away of a hedging burden that has been in this result. On pricing, I'd like to reemphasize that for more than a year now, I think, one and a half years, we've been demonstrating that due to the fact that we have pass-on clauses in our contracts, wherever raw material and energies really matter, that are mechanically taking care with a certain time delay, that raw material and energy costs are a pass-through. So that has worked towards the end of 2022, and unfortunately, also works now. We are passing on with a time delay what we get as a relief. And if there's one or the other quarter where it's not a 100% match, then we prefer not to apologize for that, but the mechanic is working, and therefore, raw material and energy prices from your end should simply be considered a pass-through item. Perfect. Thanks. Thank you. Thank you. One moment, please, for our next question. Our next question comes from Samuel Weber. Please go ahead. Your line is open. Yes. Hello. Thank you. Can you hear me? We can hear you loud and clearly. Perfect. I have two questions. First, a short one regarding net debt for Q4. Should we expect it to remain more or less stable? Can you say something to this? And the second question, more generally, and you have spoken several times today of the low utilization, the very, very low utilization of your plants. Now, you are either very confident that volumes will come back up significantly, and maybe you can speak to your reasons why you expect this to happen, or otherwise, why you don't adjust your capacity even more. It seems you are doing a lot with your forward program, and do you think you can get in front of the development, or is there a risk of doing too little, too late, depending on how tough the environment will turn out to be? Thank you. Thank you, Samuel. On net financial debt development in Q4, we still have around about one and a half months to go here, and I think you should bear in mind that the CapEx tilt we have towards more CapEx in Q4 will at least be one item where a cash out occurs that hasn't occurred to that extent in the first three quarters. I think I've alluded to the fact that potentially we might be producing a bit to increase stock here, to run plants sustainably and in an orderly manner. So I would prefer not to guide to net financial debt, but rather reemphasize that our clear goal is to reduce indebtedness with the measures we can take. So a bit blurry answer for Q4 net debt, but there are some moving parts, and I'm sure you will appreciate that. The answer to your question on utilization, which is low and why we seem to be confident that volumes will come back. Indeed, it doesn't only seem; we are confident. We are very regularly, frequently talking to our businesses, of course, also on the question if there are any structural changes in the market, because very clearly, there hasn't been any period where we've seen a utilization as low for a period as long as it is now in the past. The very broad answer is that we don't see structural changes in the market, and hence-... We are, of course, checking plant by plant, whether what the foreseeable future will bring. And you have already seen us announce two plants, actually, that we will be closing for good, which has a mixture of reasons. Not only that we think demand will be gone, but also that they are from an energy perspective and from a CO₂ emissions perspective, negatively connoted. So we are addressing and evaluating whether and if plants should be closed. But with the capacity available right now, we feel strategically in a good position to benefit massively when demand comes back. Thank you. Thank you. Thank you. One moment for our next question, please. Our next question comes from the line of Andres Castanos- Mollor from Berenberg. Please go ahead. Your line is open. Hello, good afternoon. Thank you very much. I wanted to ask on the outlook for weakness in agriculture, how much have you seen already in Q3, and how much should we expect as an incremental negative in Q4 and the next quarters? And the second one is on urethanes. Will there be any disentangling synergies here on separation? Yeah, Andres, thanks, thanks very much. The weakness we are seeing we have seen in Q3, but it's more a topic of Q4 and the coming quarters, but it has been signaled to us. Of course, this is always an evidence that you get from discussing with your customers, right? Customers are typically not prepared to tell you exactly how their order patterns evolve, and you will appreciate that, we talk to a lot of customers, and then if our sales and marketing force starts to get indications that orders for the future are being reduced because of destocking, this is when we then tell the market. So it'll be more a topic of Q4 and then the quarters afterwards. Then you asked on urethanes and whether there would be any dis-synergies. I think that is, frankly, something that we can tell you once we know how the deal looks exactly and who we are selling to. Normally, in such a deal, there are agreements about the people that are going with the asset, about transitional contracts to provide services or not. So it's too early to say what in terms of costs here happens when urethanes leaves the portfolio. Right. Thank you very much. Thank you, and one moment for our next question, please. Our next question comes from the line of Andreas Heine from Stifel. Please go ahead. Your line is open. Thanks for squeezing me in again. Two short ones. If next year's business activity is getting better, what would happen with net working capital to sales? Would it stay on this level, or are you able to bring that ratio down a little bit more? And you were mentioning how low your utilization rates are now in the low 50s. Are you able to quantify the operational leverage you would have if volume is coming back? Andreas, nice talking to you again. Next year's net working capital to sales ratio, the way I would like to answer this question is referring to what we have guided we want to achieve, this year. And then in the longer term, on top of the 23% in a more normal environment, you've seen us between 20, 21%. I don't see any structural reason why that shouldn't be possible also in the future. But please give us the time to look into 2024 and, whether 24 has more attributes or something like a normal year, with that compared to 2023. So I think we can do better, than 23 or even higher percentage points. And now I must admit, I've forgotten your second question. That was the operational leverage. Ah. So if the utilization- Yeah. -gets back from- Yeah. -50 to something more normal Yeah, yeah. What would that mean for earnings? Yeah. Now I know the reason why I've forgotten your question, because we typically don't comment on the precise operational leverage here. But you can imagine. I mean, normally, I've always experienced and been told that if you go below 70%, utilization, normally a chemical company is really struggling. We are in the low 50s now. You have seen our results, and I think it is fair to say that we have managed to adjust our cost structures in a way, and cash out structures in a way, that demonstrates flexibility. The fact that 70% utilization from our perspective even looks appealing should tell you that there is quite a nice lever when idle costs are reduced and fixed cost absorption is improved when the utilization rises again. So, I don't want to give any precise percentage or amount there, but, having come down from high utilization, and having seen what the portfolio, even without the more stable components that we have on board, is able to deliver, I think we can be confident to have a more stable portfolio than we've ever had, now in the future, when utilization comes back. Fair enough. Thanks a lot. Yes. Thank you. Thank you. One moment for our next question, please. Our next question comes from the line of Jaideep Pandya from Onfield Research. Your line is now open. Thanks a lot for the follow-up. I just wanted to get an update around the smaller projects, although important, you know, CheMondis, Standard Lithium and the Tinci potential JV. I remember you had earmarked some capacity in Saltigo for Tinci, so just want to get an update. What's going on there? Are you gonna sell more to them in the outer years, or is this capped? And then any update on Standard Lithium, and also on CheMondis, would be great. Thanks a lot. Yeah, Jaideep, good to talk to you as well again. Let me start with CheMondis, and not really an update here. We have said we are in the process of testing monetization features in the business model on both ends. We are still in that process, and we wanted to report back with an update towards year end. So that is still out there. You can, however, imagine that also CheMondis, in an environment of much lower demand, offers lower opportunities to test these monetization features. On Standard Lithium, Standard Lithium has just published a feasibility study, and our experts are currently looking at the study, and we will inform the market once the discussion with Standard Lithium for business cooperation has come to terms. I can assure you that we'll do that as soon as we see clearly and have completely analyzed the study. Tinci, we've mentioned already last time that up and beyond what has been agreed, there is no further development. We are in continuous exchange, but no tangible update here either. All right, thanks and speedy recovery to Matthias. Thank you very much. We'll pass that on, Jaideep. And with that, I think, we have hopefully answered all of the questions. We need to run now to catch a plane, and we're looking forward, me personally, to also see you guys personally, in the future, be it on roadshow, on or on the sell- side trip. So take good care, and thanks for your attendance today. Bye-bye. Ladies and gentlemen, this concludes the LANXESS conference call for today. Thank you for joining, and have a pleasant day.