Thank you for joining our LANXESS Q1 Results 2026 conference call. If you would like to ask a question, you will need to press star nine and the pound key on the telephone and wait for your name to be announced later. First, we will hand over to Eva Husmann, Head of Investor Relations, for opening remarks. Yeah. Thank you. Welcome to our Q1 call. Before we start, please take note of our safe harbor statement. As always, we have our CEO Matthias Zachert here, as well as CFO Oliver Stratmann. Matthias will start with a quick presentation before we answer your questions. Matthias, please go ahead. Thank you, Eva, and welcome all of you to our conference call on first quarter 2026. I start the presentation straight on page four, where we comment on the key financial indicators. As far as Q1 is concerned, we guided in March already that it will be a soft start to the year. We've seen lower volumes, especially in January, February. A positive tone on March, where business started to improve from the volume sides and was clearly a difference compared to the previous months and also towards the fourth quarter. Please take note of the fact that in the comparison base last year, we have a relatively strong dollar and still the contribution from our urethanes business units, both has changed. In first quarter this year, urethanes is no longer consolidated, and the dollar has visibly weakened. We put a lot of attention on cash flow and financial balance sheet strength is something that we have reinforced over the last few quarters, and you can clearly see that also in Q1. Cash flow is still negative, but that's the normal seasonality. We start off with negative cash normally in first and second quarter and then improve afterwards. As far as net working capital is concerned, we clearly manage that pretty tightly. Compared to previous year, it's lower. I do expect a gradual increase now in Q2, also driven by the fact that the precursors and energy will move up, but nevertheless, we will continue running it tightly. Net debt, beginning of the year normally sees an increase of EUR 100 million-EUR 200 million, in light of the good cash management, you see that we by and large keep net debt at comparable level. Let's turn the attention to Middle East. Middle East's escalation or conflicts has swiftly changed market conditions. We clearly see that value chains are under pressure. We clearly see that customers have concern on delivery security. Therefore, let me give you the following color on what we would like to shed light on. Here I clearly would like to stress that the conflict that we have seen, the war that we have seen in the Ukraine area in the Ukraine situation massively impacted Europe and definitely led to a disadvantage as far as the European chemical industry is concerned. The Iran conflict is different. Whilst through Ukraine, Russian gas and oil was reduced in Europe, the Iranian gas and oil is primarily being a supply source to Asia. While we were suffering in Europe through the Ukraine war implications, in the current Middle East conflicts, we clearly stress it will put pressure on the worldwide economy, definitely, as far as energy price inflation is concerned, but the region that suffers most is going to be Asia, according to our analysis. Logistical chains are definitely under pressure as well, but here I can give you comfort. We have agreed contracts in place on ocean freight, on other logistical chains that are needed. For that very reason, we had until now no negative impacts through supply that was being shipped to us or to our customers. Of course, we took note of the fact that prices were on the rise as far as chemical precursors and energy costs are concerned. We saw the reaction on the oil markets, gas markets, beginning of March. That was the reason why we swiftly analyzed our market situation. I think we were one of the first chemical companies that went out with a series of price increases in order to at least mitigate the current input cost inflation. On working capital, I alluded to the fact that we expect a increase in Q2, but it will be tightly managed. You can bet on this. Let's turn the attention to page six. What we try to do here is simply to give you some effects on hands so that you can better understand how we look into our segments, into current trading vis-a-vis Q1 and the last two quarters of 2025. When we look at the current conflicts in Middle East, our assumption is that the Consumer Protection Segment will by and large not be really affected. There will be some precursors on the rise, but the Consumer Protection Segment is not so much impacted through oil derivatives. Here, basically, consumer demand is central, and we do have some precursors coming here from China, that is a watch out. All in all, don't expect that this will change the current trading vis-a-vis the past two to three quarters. On additives, we see a moderate upside potential. Of course, you need to take into consideration that flame retardants or bromine, for instance, is also coming and is shipped from Middle East. We don't depend on that primarily. We have sources in El Dorado, which is not affected at all. Here we do see upside potential in trading, but the strongest momentum we clearly see in Advanced intermediates. This segment, and here notably the business unit AII, was suffering through competition coming from China. Of course, we had a substantial amount of pressure on some of the value chains here. This should change. Here customers are clearly looking for delivery security, one. Second, we've seen over the last four to six weeks that even the chemical pricing on these products in China have been on the rise. Guess what? They are on the rise in our business as well. This should give you some qualitative color on how you should look at the segments, compared to the last three quarters. Let's see if you can then better model second quarter, and it's up to you how you look into 2026 in total. What we would like to give you comfort for or comfort on is our full year guidance. The world is in quite a turmoil for various reasons that are all known to you. We clearly see positive momentum for Q2, so we try to here give you a quantitative corridor of 130- 150, which would be a strong sequential improvement versus Q1, which we clearly see either driven through volume or through pricing, in some cases, driven by both in respective business units. We don't change our yearly guidance in light of the turmoil that we see in the world. If Q2 momentum continues, of course, that could give further comfort to potentially go into the upper range of the guidance. Please take note of the fact that escalation in the Middle East could accelerate again, and then we potentially look at demand crash, and then we look into the lower ends of the guidance. For that very reason, we give you a broad range. Where you slot in yourself is in your hands, we want to give you comfort on the full year guidance and definite comfort that second quarter will come out sequentially, clearly stronger than the first one. Here we see that the business is moving accordingly. This is what we would like to give you as entry presentation on Q1, we now open up the floor for your questions. Thank you. If you would like to ask a question, please press star nine and the pound key on your telephone and wait for your name to be announced. We have the first question from Thomas Wrigglesworth from Morgan Stanley. The floor is yours. Thank you very much for the presentation. Couple of questions, if I may? Thank you for the guidance range that you've given for 2Q. That's very helpful. How much visibility do you actually have into your order books? You know, do you have to make this solely on what you're seeing in April and make a best guess for the next two months? Any sense of how you think those volumes will continue through the quarter? Second question, if I may? One of the things that we've seen, and it's in the context of Saltigo, has been a significant spike in glyphosate and what I assume is glufosinate as well, which would suggest that maybe some of the generics from Asia are gonna have less market presence for crop protection chemicals. I appreciate that Saltigo makes the API. Could we possibly see a rotation from customers away from generics, given supply chain risk, back towards more branded products which probably have more LANXESS-orientated product embedded in them. Just kind of keen to get the crop protection picture, both from a disruption and actually if you could add any color around the seasonality, that would be helpful as well. Thank you. Tom, very valid questions indeed. Let me take them one by one. As far as visibility is concerned, we have clearly April, strong clarity as far as volumes and pricing is concerned. Sales are known to us, and we have a good order book for May, so very reasonable visibility and of course, a softer but already a reasonable indication for the month of June. We see in April that the momentum from March continued. Of course, we know when our price increases will more and more contribute to quarterly support. Of course, we are still in the rollout of the announced price increases of March. Once you do price increase, you afterwards go to your customers. In some cases, you have contractual agreements that you cannot change on a quarterly basis, but you then go for the spot markets, and afterwards you adjust for the quarterly contracts in the following quarter. This is an ongoing process, but we know definitely that volume are at the same momentum that we've seen in March with a slight uptick for April and May. Then, of course, we know ourselves what price initiatives are ending up in the P&L and when this is going to occur. As far as visibility is concerned, I think we have a for the next quarter, a reasonable good indication. Now, your question on Saltigo is operationally very focused and smart. In the last 12 months, we have seen in the crop protection space, here I'm not alluding to glyphosate, but to crop protection specifically, that the commodity products in crop protection were under severe generic pressure from India and China. I think that was being mentioned by the big agro company themselves. They all alluded to pricing pressure, and that was definitely not on the innovative products, but on the commodity grades. Now with China facing substantial freight issues and cost explosion on freights, and some areas also a pressure in their supply chain, we definitely have to monitor the markets. We don't see an immediate reaction here in Europe, but that is likely to come in the weeks and months to go. That could change, of course, the competitive landscape for the European crop protection companies, which we don't see at this point in time, but normally we would see that three to six months later. This is something high on our radar, and I'm very impressed that you have spotted that as well. Okay. Thank you very much, Matthias. Appreciate the answers. You're welcome, Tom. Let's move on. The next question comes from Christian Bell from UBS. The floor is yours. Thanks again for allowing us to ask questions and for the really useful presentation. I just have a couple. My first one, I guess, picks up following the discussion in the previous question on April customer demand dynamics. Are you able to just please give a sense of how much of the volumes that came through in April were at the higher prices that were implemented in mid to late March? I'm just trying to understand, you know, how much of those volumes that have come through are getting ahead of prices or whether they are, what percentage is actually effective at the new pricing. Then my second question would be just to help us bridge to your EBITDA guidance. At the midpoint, your second quarter guide is roughly 7% below last year, which implies you need to do about 20% growth in the second half to reach the midpoint of the full year guidance, which is quite an acceleration. Just what do you think underpins that acceleration? Is it, is it largely price costs normalization? If possible, if you could sort of speak to any potential demand deterioration that you're thinking about that may offset some of that margin improvement. Thank you. Thank you, Christian, for these thoughtful questions. I would take them in the same sequence as you asked them. As far as April is concerned, we basically see same to slightly modestly higher volume pattern compared to March. This is positive because April is, if you look into holiday seasonality, that was a main impact here as far as Europe is concerned in April Easter holiday season. As far as underlying trading volume-wise is concerned, slight uptake versus March. On pricing, as I said before, we made the announcements in March, in course of March. Afterwards, wherever you have spot contracts, or spot pricing, you can then adjust customer by customer. This takes normally something like four to six weeks, depending on the customer base, depending on, of course, the sensitivity, elasticity they have. You change the pricing, one by one. On the contracts established quarterly contract pricing, you basically can take that only with a certain delay, but that follows afterwards. On pricing, generally, you should assume that this will ramp up, first steps in April, then the, I would say, 2/3, will be reached in May, and then the full effect you will see or should see in June. Of course, we have to monitor what implications that has on the volume side. From the pure pricing side, there will be a gradual build up, at cost of Q2. Of course, if momentum remains healthy, the contracts, the quarterly contract pricing will then be also a driver for Q3 going onwards. All this having this assumption that the underlying momentum on volumes will not change and with all questions on geopolitical tensions. That should hopefully answer your first question. On second quarter, I think, my answer on the volume and pricing side will give you also some color on Q2. If you look into second half of this year, of course, our cost savings that we've initiated will gradually ramp up as well, and that should give you the indication that we are still not falling in euphoria. For the second half, we are clearly very, very straightforward and not modest, but we take the current geopolitical tension very seriously, and therefore we keep here our assumptions in a normal environment and not into a gradually improving environment. With this, I think you have the best basis for modeling the full year implications for our company. Thank you very much, Matthias. If I could just quickly follow up on that last point. Are you able to, like, given second half cost savings are important to the full year guidance, are you able to give us or tell us what the net cost saving you are expecting in the second half will be from your cost-saving programs? Given that, you know, there should be a relatively, I guess, concrete level of foresight over there. Yeah. We've given you the yearly number, and I think this should suffice with the comments that I've made that this will gradually build up. Therefore, please take this as basis. Okay, great. Thank you. You're most welcome. Who's next? The next question comes from Anil Shenoy from Barclays. The floor is yours. Good afternoon, everyone, and thank you so much for taking my questions. Just the two, please. The first one is a little difficult question on your unconditional put on Envalior in 2028. You have mentioned that the put obligation sits at a holdco level and not Advent. I know you have a confidentiality agreement, you cannot give a lot of details, but just theoretically, what are the funding pathways that the holdco will have in 2028? From what I understand, it's either refinancing from Advent, or taking on external debt or dividends upstream from Envalior. Would that be the right way to think about it? Finally, on a sort of pessimistic note, what happens if the holdco declares bankruptcy? I mean, in that case, does LANXESS end up becoming an unsecured creditor? In other words, basically what I'm asking is there a risk to this unconditional put in 2028? Let's take it step by step. First question is a question I cannot answer due to confidentiality reasons. I stick to that 100%. Your second question, I've read your report. This basically shed a 100% concern on our company and completely one-sided. I was very much surprised about this. Therefore, let me simply come on a higher level. You said it's a theoretical question. I give you a theoretical answer. In insolvencies or bankruptcy, the party going insolvent loses everything. Everything is gone. It is normally by somebody who runs the insolvency afterwards. Any possible areas where you can get proceeds is going to the lenders. If there's a company holding shares, they lose everything. 100% loss. This is the consequence. Taking such a hit for any investor who might have a major investment is a complete disaster. Next to this, the company, theoretically, that goes into bankruptcy loses its global reputation. That might be even a bigger damage. Therefore, that's my answer on your theoretical question with a theoretical answer. Food for thought. Next question, please. The next question comes from Chetan Udeshi from JP Morgan. The floor is yours. Hi. Thanks. Hi, thanks for taking my questions. My first question was, you know, you said you've already seen April sales, and I was just curious, you talked about volume versus, you know, March, but are you able to provide some clarity on when we think about year-on-year, how are we tracking in terms of volumes? You know, is it now up, you know, 5%, 6%, 7%? Any sort of color in terms of how you see the volume momentum building on a year-on-year basis, that would be helpful. The second question was, you know, LANXESS was one of the companies that was more active, I would say, over the last 18 months in pushing the European Union to, you know, to do more of these anti-dumping investigations. Some of these investigation actually went into your favor last year with adipic acid, phosphorus, additives and all those stuff. I'm just curious, have you seen any benefit from these from these anti-dumping investigations in your numbers, given that some of those were already, you know, decided and ruled into your favor in second half of last year? The last question I have is, you know, you mentioned about customers coming to LANXESS for security of supply. Is that because you actually, based on your conversation with these customers, do you actually see that your Asian competitors are not able to supply right now? In other words, some of your Chinese or Indian co-competitors, are they having supply issues or are customers coming to LANXESS just to make the supply chain more resilient, rather than not necessarily driven by short-term, supply shortages? Thank you very much. Thank you, Chetan. We will take them one by one, Oliver will start on price and volume, I take the other two questions. Oliver. Yeah, many thanks, Chetan. Actually, I'm thinking about what I could add because Matthias has already been pretty diligent here in outlining how volumes have picked up in March and what we have seen in April. To be absolutely frank here, I wouldn't like to go into a monthly reporting now. I would just like to remind you that there is an awful lot of uncertainty out there, and I think the commentary that you've received so far is a positive one with regard to going into Q1 and going to Q2 and the volume development. Beyond that, we really need to see how things evolve, but the positive impetus is there. Back to Matthias. Thanks, Oliver. On European dumping, I think being very clear at the outset when we mentioned it, that this is taking time, and we said that this normally lasts 12- 18 months. This is the normal duration of an anti-dumping case or an anti-dumping file. You mentioned adipic acid, so that was one that was decided in, I think it was August last year, summertime. What you need to take into consideration is that the anti-dumping, once it's declared, is of course positive for any supplier operating in this market like us. In the first anti-dumping cases, like on adipic acids, we have seen that China was loading up the value chains before the anti-dumping declaration was imposed. China was loading this value chain by around six to nine months with capacity. Only once this capacity is absorbed, you truly see volume momentum rising and pricing rising. For adipic acid, this is now happening. We've seen the declaration on anti-dumping last summer. The value chains and stocks were loaded immediately before the declaration became effective. I have to say, fortunately, the European Commission has realized this practice in many other similar cases and have now basically put the volume build-up under scrutiny as well. This will be re-retroactive impacted by price adjustment or anti-dumping cases as well, which is a positive move. This gives you the color. I do expect that further anti-dumping cases will be decided in course of this year. I know that many chemical companies have cases that are filed in the European Commission. We keep a close eye on this, I do support that one and the other products could positively be impacted by us as well, which will help us going forward in areas where we see dumping being practiced. That should address your second question. On the third question, there are basically two drivers. First, European customers want to protect their supply chain. They want to have security. They are concerned that similar disruptions could happen that they've seen in corona times. We've seen over the last six to nine months that customers went to China because of pricing benefits. We had a very tough economic situation here in Europe, pricing was essential. Now for many customers, supply security is higher in the prior-priority, and some of the customers that left for China in the last nine months are coming back into our order book. We also see completely new customers, which is a positive sign. Second point is, I think also China and Chinese companies have realized that the pricing level of last year has also ruined the pricing level in China itself, which is not liked by the administration. Of course, long term, no company can generate losses. We also see that the pricing level now in China is moving upwards, which is a clear difference to the last 12 months. When the pricing level in China moves upwards, you can assume that, then of course, pricing in the European area is also being positively impacted by that. You have two perspectives on this, and I think this answers your third question. That's clear. Thank you. The next question comes from Tristan Lamotte from Deutsche Bank. The floor is yours. Hi. Two questions, please. The first one is coming back to your comments that you made on pricing timings. I'm just wondering, kind of high level, do you generally see net pricing as likely to be a positive? Kind of how do you expect the phasing to be there? Is it, for example, negative net pricing in Q2 and then positive in Q3 if all current conditions stay the same? Second question is, could you maybe elaborate a bit on the current dynamics in bromine? 'Cause I think there was a price spike and the China price has fallen back. Obviously appreciate that you don't necessarily have direct exposure to the China price, but what kind of underlying dynamics are going on there? Has the demand fallen off versus what it was? Thanks. Thank you, Tristan. Let's take that also step by step. On your first question on pricing, I would like to give you the indication on a sequential basis, not vis-à-vis previous year, but versus Q1. What we should see in second quarter, that prices versus Q1 should be up. The tendency, if the momentum continues, like I explained, and you assume that there is no insanity happening in geopolitics anymore or no further escalation, and current trading continues, you should also see a sequential price increase in Q3 vis-à-vis Q2. With all the nonsense that is happening on the geopolitical sides, I take that of course with a pinch of cautiousness. I hope you understand the rationale for this. Now, on bromine, I would like to allude again, or come back to the stated seasonality we see in China on the spot markets. We always have a seasonal price increase in bromine prices, notably in Q4 and Q1, because of the bromine extraction methodology, i.e., water vaporization. When in the colder months, Q4, Q1, you normally see that bromine prices are on the rise, and they go down again Q2, Q3. If you now look at the last six months, that was exactly what happened. Bromine prices went up. They went up to a high level of EUR 60,000- EUR 70,000. And are now moving down to round about EUR 38,000, EUR 39,000, EUR 40,000. This is the normal seasonal pattern, but overall, the pricing level is clearly still in the healthy territory. 40,000 is 100% up compared to one year ago or two years ago, when the prices were more depressed. Now the pricing level, despite having fallen down the last four weeks, is still at a reasonably high level. I hope that clarifies the points on bromine, Tristan. Thanks. Maybe just to follow up on the pricing question. I understood your comments on the kind of price rises timing. How does that align to the cost increases? i.e. what kind of net impact should we think about modeling? Is that just too many moving parts to comment on? No, this is a smart one, Tristan. I think we've always stated that a lot of our input costs are basically set up in a way that like in Q1, when you have a rise in input costs, you adjust in the afterwards. You've seen the increase in precursors on raw materials, on oil derivatives, on energy. You've basically seen that already in March with no real implication on our P&L. We clearly stressed that in March, we rather had a positive momentum, profitability-wise, turnover-wise. This was volume-driven, but not because input costs have been fallen. They have rather been on the rise, but not impacting the first quarter P&L. The implications of the higher input costs will be visible in second quarter. That's the reason why we've given you the financial guidance. We basically, in our guidance of EUR 130 million- EUR 150 million, we absorb the rising costs that we have now seen in March, which will roll into our P&L in the second quarter. That's the reason why we tried to give you a good hard landing so that you understand that we are sequentially clearly managing the situation and manage the input cost increases. Very helpful. Thanks a lot. Thank you. The last question comes from Georgina Fraser from Goldman Sachs. The floor is yours. Hi there. Thank you very much for taking my question. I just have left. Given the situation, I was wondering how your relationship with your distributors might be evolving. Are you kind of selling through the same distribution channels as historically, or are you seeing more direct-to-customer sales? Thank you. May I understand more of the background to this question, Georgina? Well, I wanted to understand if every single chemical company is discussing the fact that security of supply is number one. The question is, are customers seeing the manufacturers as the most likely source of secure supply, or are distributors being seen as being able to source from lots of different places? Does that make sense? Yeah, that makes sense. I mean, the distributor world in chemicals is very broad. In parts, you have niche distributors, then you have specialized distributors in certain chemical value chains. You have the bigger distributors that have the broad reach. You have some that only pack and ship. Others give a service like finishing, like analytics, et cetera. The world in chemical distribution is very, very broad. Giving a general answer that solves everything is, I think, not possible. I would like to give you the following. In our interaction, we use distributors basically globally. Wherever we see that the size of the order level is simply too small for us, or the customer is too distant away for us. We use distributors, but companies like ourself, of course, are more and more reinforcing the direct contact to customers as well. This is a trend on our side. I cannot speak for the industry. What we are doing, we use distributors, but also we would like to have better markets transparency, markets dynamics, customer trends, et cetera, on our end. Therefore we strengthen the re-relationship also to the next level of manufacturing. Therefore, of course, also question if we do need a distributor or not. That is the one thing I can say for our group. For customers, we do see customers that want to have the direct access to the manufacturer in order to have clarity and also pre-preferred treatments. When we are selling to a distributor, there are some that are very, very close to us, but some that we simply use to pack and ship. If a customer is ordering from a distributor, he does not get the same preferred treatments that direct customers often have. Therefore, on the customer side, we also see that for very important precursors and chemicals, they also tend to establish more direct relationships. I say again, this is an answer that does not apply to this huge distribution network that you have in the chemical space. There are different kind of distributors with different business models, so the specific answer I have given will not be an answer for the general industry. I hope that clarifies the point. It does. That was very insightful. Thank you, Matthias. You're welcome. Any further questions? Thank you. There are no further question, and I will now hand back to Matthias Zachert for closing remarks. Well, thank you so much for orchestrating this conference call, and thank you to everybody who listens in. I hope this was giving you enough color on current markets and trading environments. We will be now heading on the road to speak to investors and looking forward to the exchange. If you have follow-up questions, please don't hesitate to torture my investor relations team, and they would be very happy to take any questions and provide answers. Thank you so much. Take care, and bye-bye.