The conference is now being recorded. Welcome to the Wacker Chemie AG conference call, Q3 2022. At the moment, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Now I hand over to Jörg Hoffmann, Head of Investor Relations. Please go ahead. Thank you, operator. Welcome to the Wacker Chemie AG conference call on our third quarter 2022 results. Dr. Christian Hartel, CEO, and Dr. Tobias Ohler, our CFO, will take you through our prepared slides in a minute. The presentation is available on our webpage under the caption Investor Relations. Please note that management comments during this call will include forward-looking statements that involve risks and uncertainties. We encourage you to review the safe harbor statement in today's press release and in the presentation, as well as in our last annual report regarding risk factors. All documents mentioned are available on our website. Chris? Hi. Welcome everyone. Wacker continued to deliver strong results in a challenging business environment. We reported EUR 2.13 billion in Q3 sales, which is up 29% year-over-year. Despite massive raw material and energy inflation and turnaround-related costs, EBITDA was higher than last year at EUR 457 million. This strong performance is clear evidence of our competitiveness. It speaks to the resilience of our business model, even under more challenging conditions. This success highlights the strength of our specialties business and the effectiveness of our pricing management. As expected, our EBITDA margin was lower than last year and below the preceding quarters. We flagged earlier that first half of this year, performance was exceptional, particularly in silicones, where we benefited from very strong global supply and demand and some trailing raw material effects. Net cash flow at nearly EUR 300 million showed another strong cash conversion in the third quarter. In chemicals, our pricing management supported EBITDA solidly over the last year, despite strong headwinds from raw materials and energy. Now looking to the order entry, we've been registering a decline in incoming orders in some sectors, particularly in construction since the summer. I believe that this development will most likely continue in the fourth quarter and into the following year. Should this trend continue to manifest itself and Germany and Europe slip into recession, we will not be completely isolated from these effects. Now, despite near-term recessionary risks, we see our long-term prospects intact and strengthened. We remain committed to our modular growth strategy, which we detailed at our capital markets day with 23 targets earlier this year. Our biosolutions expansion project in Halle for mRNA capacity for the German Pandemic Preparedness Plan continues at a fast pace. We continue to pursue our silicone specialty expansion plans in the US. In polysilicon, semiconductor wafer customers are expanding their capacities, and they'll get higher volumes from us in the future. In polymers, we expect higher fossil fuel prices to drive further demand for our smart construction materials. This is especially the case with polymers used in external insulation systems to drive energy savings. Reducing energy consumption and improving the efficiency of our own operations has always been a priority. In light of the current energy crisis, it has become imperative. We introduced a new budget this year with new sustainability-specific KPIs. So far, we have approved 17 projects amounting to EUR 60 million, which will reduce the energy intensity of our operations and cut CO2 emissions by more than 100,000 tons per annum. This project continues steps towards reaching net zero by 2045. Sustainability is a key strategic focus for Wacker, and we see it as a clear differentiating factor among our competitors. Looking on the next slide on energy pricing in Europe. Over the last 2 quarters, the shifting dynamics of the German natural gas market kept us pretty busy. Gas prices kept soaring, with major pipelines out of service and amid a political imperative to fill gas storage before the winter. When we last spoke, a gas surcharge to soften the impact for importers and gas curtailments were options on the menu. Our last guidance reflected all these uncertainties with a provisional EUR 200 million-EUR 250 million charge against our full year expectations. However, these measures did not come to pass, and we actually no longer see gas curtailment as probable in 2022. The new LNG terminals are seeing good progress, and storage levels are over 95% here in Germany. Policy-driven and price indiscriminate buying for storage drove up the cost of natural gas in Q3. Although hedged to a high degree, the open portion of our gas and power portfolio increased so much in price that it impacted profitability in our segments. Overall, the third quarter saw more than EUR 300 million higher costs than last year for raw materials, energy and logistics. Today, the natural gas market and, as a result, the power market continue to reflect the ongoing uncertainty over future supplies and risks stemming from the ongoing war in Ukraine. Yet what we see is that the rush to fill the gas storage has now slowed and prices in Q4 are sequentially lower than in Q3. Due to the lower than expected energy and raw material prices in Q4, we now see 2022 full year raw materials, energy and logistics costs rising over last year by EUR 1.3 billion-EUR 1.4 billion. You remember the last call where we mentioned the EUR 1.5 billion flag earlier. Looking to the next year, forward contracts are still at a record high, with some declining during the last weeks. The German government is currently formulating plans for a potential power and gas price cap. At the moment it is difficult and it's only to speculate on this until we have final details available. Now page four, looking onto our guidance. Group guidance for 2022 continues to look for EUR 8 billion-EUR 8.5 billion in sales, and we also confirm our EBITDA outlook for the full year at the upper half of the range previously communicated. We expect our full year EBITDA to come between EUR 2.1 billion and EUR 2.3 billion. Despite weakening order intakes, our guidance reflects our ongoing good operational performance, improved pricing in polysilicon, and lower than initially expected energy costs in Q4. Now before I hand over to Tobias, let me touch on the biannual K Fair in Düsseldorf, the world's largest plastics and rubber fair that came to an end yesterday. We have been there for many, many decades, and this time we showcase silicone rubber compounds produced with non-fossil methanol, thus significantly conserving resources. A further spotlight was on self-adhesive liquid silicone rubber grades for polycarbonate parts, and also novel silicone resins for manufacturing molded parts that remain stable at high temperature in electrical applications. A lot of fascinating applications and true innovations for our customers. Here again, you can see the huge potential that lies in the field of silicones. In the appendix, you will find slides detailing numerous applications presented at the fair, showing, for example, the opportunity that electric vehicles present to Wacker. Tobias. Thank you, Chris. I will walk you through the Q3 performance and provide an updated outlook for the full year. Let's begin with the P&L on page 5. Q3 sales with the group came in at EUR 2.13 billion, supported mainly by price. Gross profit came in at EUR 488 million. The decrease in the gross profit margin from 29%-23% year-over-year reflects the effects of the top line inflation in energy and raw materials, and some volume declines, as well as the plant turnaround in polymers. These effects find their way through the entire P&L. EBIT came in at EUR 351 million, only EUR 8 million lower than last year, and Q3 EBITDA was EUR 457 million, slightly ahead of last year, despite significant headwinds in raw materials and energy costs. Net income for the period was EUR 259 million. Earnings per share amounted to EUR 5.08. Moving on to page 6, the balance sheet. Our balance sheet came in with a higher equity ratio of over 50%. Shareholder equity is now nearly EUR 5 billion, up from EUR 3.1 billion at the end of last year. The improvement in equity was primarily due to higher earnings and a significantly lower pension deficit following a higher discount rate. Our pension liabilities are now at EUR 690 million and roughly EUR 1.1 billion lower than at the end of 2021. Although discount rates climbed sequentially, the pension liability shown in our balance sheet has slightly increased since the end of Q2. We have reached an asset ceiling in the funded part of our pension liabilities. Fund assets now exceed the pension benefit obligation at current discount rates. However, the remaining unfunded pension liabilities in our balance sheet increased slightly due to the adjusted pension increase assumptions from inflation. Working capital increased by some EUR 560 million to EUR 1.8 billion over the year, due to high sales figures and raw materials. Silicones delivered a strong performance. Q3 sales were EUR 890 million, 31% higher than last year. Over the year, sales benefited from higher prices and an improved product mix, reflecting a higher share of specialties. Sales growth was strongest in health and care, industrials and adhesives. Segment silicones also benefited from a stronger dollar. Silicones EBITDA in Q3 was EUR 198 million. Earnings were up 23% year-over-year. The result was supported by positive price effects. As Chris mentioned, silicones benefited in the first half of the year from a very strong global supply and demand and some trailing raw material effects. In Q3, though, global supply and demand for silicone tilted towards oversupply. As a result, prices for standard products fell considerably. At the same time, inventory effects and rising costs for energy and raw materials weighed on profitability. With a 22% margin, our silicones business performed well despite the headwinds. We continue to pursue our growth options, focus on specialties, drive specialty content, and meet customer demand in new markets. Looking into Q4, we see stable pricing in specialties with slightly lower volumes and seasonality. For the full year, we see sales at EUR 3.5 billion and EBITDA reaching EUR 900 million, confirming the lower end of our previous guidance range. Polymers achieved Q3 sales of EUR 504 million, up 8% over last year, primarily due to higher prices and positive currency effects. Sales declined due to lower volumes in construction-related applications and the impact of our turnaround in Q3. Q3 EBITDA came in at EUR 60 million, about 29% lower than last year. Lower volumes, significantly higher raw material and energy costs, and the planned turnaround contributed to the decline. Taking all this into account, we updated our polymers outlook for 2022. Toward year-end, we expect to see seasonality and slower destocking. We now see about EUR 2 billion in sales, about EUR 100 million lower than our previous outlook. Our EBITDA margin outlook is unchanged. We expect it to be at last year's level. Biosolutions reported nearly EUR 90 million in sales with growth in bio ingredients. Our business with cysteine performed exceptionally well. One of our biosolutions research teams won the Alexander Wacker Innovation Award in July. They found a way to boost the productivity of our fermentation process. This development will support our biosolutions growth targets. We are also progressing at our CDMO business in microbial and advanced pharma like mRNA and pDNA products. The construction of our biotechnology center in Munich and our mRNA competence center in Halle are on schedule. The Halle site is part of the German Pandemic Preparedness Plan, and we will be good for order here already in 2024. Our growth initiatives require continued investments and higher upfront costs related to new business development and integration costs. These effects weighed on profitability in the third quarter, with EBITDA coming in at EUR 4 million. For the full year, our biosolutions forecasts are unchanged. We see low double-digit% sales growth and EBITDA significantly below the prior year. Polysilicon continues to see high demand. Q3 sales came in at EUR 619 million, 51% higher than last year. Improved pricing for solar materials was the key driver, with some ongoing positive mix effect due to growing semi volumes. Inventories remain at very low levels. Q3 EBITDA at polysilicon came in at EUR 191 million. Results declined with the previous quarter following substantially higher energy and silicon material costs. Solar pricing is firmer for longer than we initially expected. With continued strong demand for solar and semiconductor products, we updated our forecast for polysilicon. We now expect sales to be about EUR 100 million more than before at about EUR 2.2 billion for the full year. We now see EBITDA at the top end of our previous range, thus around EUR 850 million. Looking at the net financial position on page 11, we recorded a net financial asset of nearly EUR 400 million at the end of September, up from EUR 120 million at the end of June. Operating cash flow was sequentially much higher due to a release in working capital, reaching EUR 912 million at the end of September. Cash flow from long-term investing activities reduced our cash balance by about EUR 500 million, reflecting our strategy of investing in growth and mix improvements. The year-to-date position also includes the acquisition of the majority of SICO Performance Material, and as a reminder, M&A always comes on top of our full-year CapEx guidance. On page 12, our updated group guidance for 2022. Let me repeat what Chris said about our guidance. We see full year sales between EUR 8 billion and EUR 8.5 billion. Following a strong operational performance, we expect our full year EBITDA to be between EUR 2.1 billion and EUR 2.3 billion. We no longer include the EUR 200 million-EUR 250 million provisional charge against our full-year expectation introduced last quarter. For the full year CapEx, we now expect to be at the lower end of our previously communicated range. We understand your desire for 2023 guidance. From today's perspective, the next year will have its own challenges. Uncertainty and inflation surrounding energy costs, as well as emerging signs of recessions in some regions limit our visibility. Discussions with our customers show concern about volumes in the next year, but also confidence about resurgent growth beyond 2023. As you are aware, the German government is formulating new regulations to cap the price of gas and also potentially of electricity. Until we know the details, it's not possible to forecast what benefits that might have. Looking at our forecast and plans for 2023, I believe that given the many moving factors, we should stick to our usual approach to guide. We will wait for the first month to play out before we communicate our guidance as we publish our full year 2022 results in March next year. With this, I give back to Chris. Thank you, Tobias. Ladies and gentlemen, before we get into the Q&A, let me just say a few words following Tobias' presentation. You will certainly remember the core messages from our capital market day this year, earlier in March, focusing on growth, pivoting more towards specialties while improving our resilience. You know, looking back into the last years, we have delivered on that promise. We have actively implemented measures to improve our resilience. I would like to remind you on our Shape the Future restructuring program that we already started in 2019, and that covered about 1,000 different initiatives, delivering this year EUR 200 million gross savings versus our 2019 cost base. We stand on a very strong financial footing with a very strong balance sheet. We now show a cash pile of close to EUR 2 billion and have a negative net debt. Our balance sheet also benefited from a massive reduction in pension liabilities, today over EUR 1 billion less than at the end of last year, resulting not only from interest rate changes, but also from repeated contributions above and beyond IFRS requirements. Our portfolio now focuses on higher value add specialty products, supplying services beyond materials in all our major businesses. We now have less exposure to volatile commodity markets than in previous economic downturns. We optimized our hedging program, and we prepared for fuel alternatives. Our ongoing initiative efficiency programs and many other smaller day-to-day initiatives make us stronger. As I keep telling our employees, we want to be the architect of our success with our entrepreneurial spirit. All of this positions us well as we face a period of higher uncertainty and potential economic turbulence. Jörg? Thank you. Operator, we are now ready to begin with the Q&A. Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. Our first question is from the line of Charlie Webb from Morgan Stanley. Please go ahead. Yep. Afternoon, everyone. Thank you very much for taking the time to answer the questions. Maybe just first on silicones, as you think about obviously standards, seeing some price weakness, given, too, maybe some oversupply in China and some weaker demand, how do you think about that relative to obviously still very favorable specialty pricing? You know, is it normal that those should converge over time? Are you seeing kind of any in any kind of I guess certain customer groups pushing for some lower prices on the specialty side? That's kind of the first question. Second, I know you kind of said, obviously not to guide for next year, but just trying to think about biosolutions. I mean, you obviously set out a EUR 250 million number over the medium longer term. You know, if we think about the kind of ongoing restructuring charges, ramp-up costs, et cetera, that business has faced pretty much ever since 2016, 2017. You know, the earnings haven't really gone anywhere. You know, we've obviously talked about scale and other factors that have played into that. Just any sense you can give us in terms of some of the moving parts as we look ahead as to why we and how we're gonna see that EUR 250 start to emerge. I know it's not linear. I know it can be a bit lumpy, but just trying to understand what's going on in that business that's held it back so much over the last five years that we find ourselves you know, with EBITDA lower than it was in 2017. Okay. Charlie, this is Chris. I would start with the first question, your question on silicones and the decrease in pricing, which we see there, especially in China. I think we had that question also in the last sessions. You refer, is there a relation between standard and specialty pricing? Well, there is definitely not a one-to-one relation between standard and specialty pricing. The main reason for that is that these specialties are typically tailor-made product for our customers. They're typically less replaceable, and they typically also have a much higher value contribution to our customers. From that perspective, there is no direct correlation of standard pricing. Of course, I mean, of course, some customers use it as an argument in the negotiations on the pricing, and typically that might have an impact. Again, the key message here, we don't see a one-to-one relationship between standard pricing and specialty pricing, and that's also the reason why we focus our strategy on the silicone specialties. Second question on the Biosolutions. Well, Biosolutions is at a much earlier stage in the development compared to our chemical business, polymers or silicones, which means we have to invest more both in capacities, also in capabilities. That means at the moment we are in a phase where we invest more. We have higher costs. We mentioned that, for example, on the aspect of digitalization for our processes, we do some significant investments. We just acquired the business in the US for the pDNA. We are working, we are investing on the Halle site for mRNA, for the German preparedness plan. All these projects, they pay in that growth strategy. Well, it just takes a little bit more time, but we are definitely absolutely on track and there's nothing which is holding us back. Just following up on that latter point. I mean, you've been investing in this business, you know, quite a lot, I would argue, since kind of 2016. You know, we haven't really seen, at least in terms of earnings, that real ramp up. I understand obviously we have seen some sales growth. You know, how can we bridge to that EUR 250 number? I mean, at what point will we really start to see these investments come through? I mean, are we talking in 5 years' time? Is that, you know, is it a 10-year investment cycle before you see it? Or, I mean, again, it's quite hard to kind of see the road ahead for this one after, you know, what has been another tough year. No, I think, Charlie, we made a clear statement also on the CMD that the growth will come gradually. It will definitely not be backloaded, so to speak. You know, most of these businesses are in the pharma world, and the pharma world is not a business which you have from one day to another. You have to build up. You have to work on these projects. I can tell you, we have a pretty filled pipeline of very interesting and promising projects, and they will come to fruition in you know, in the next quarters. It's a gradual growth. This is Tobias here. To add to what Chris said. I mean, with our acquisitions, we typically have the experience that as we buy rather at moderate prices, where we can add with our technology, with our customer access. We expect it normally to be after two years that we really see a trajectory of additional sales that we create. That's number one. And to illustrate that a bit also, take our pandemic preparedness project in Halle. I mean, this is a fast-track project, and we will see a good order, as I said in my speech, part already in 2024. As Chris said, it's gradual. It won't be backloaded, but yeah, it takes some time. Okay. Thank you very much. The next question is from the line of Jaideep Pandya from On Field Investment Research. Please go ahead. Thanks. The first question is really around the burning topic. Chris, you obviously are very important for the European, you know, renewables industry. You know, Europe is talking about a 30-gigawatt market right now, which at least on paper will be difficult to do without Wacker. How are your discussions going with regards to getting an industrial power price and how far are we or have we come to a point where, you know, you are willing to go back to the drawing board and say, "We wanna invest in polysilicon because we are getting good, you know, prepayments. There is customer interest, and, you know, authorities and the governments are willing to give us support on the power price." Are we closer to that or is this still a far-fetched dream from your point of view? That's my first question. The second question is really around the energy, you know, bill that you guys have. Now, I know you are two-thirds hedged as of today. Could you give us some color if spot prices were to prevail, what sort of delta are you looking at with regards to the energy bill for 2023 versus 2022? And then just a final question. I know you're not gonna like this one, but, you know, if I just take your guidance for Q4 and multiply it times four like a dumb analyst, I'm significantly above consensus for 2023. Those cautionary things that, you know, are not even in the Q4 of 2022, which we should be thinking of for 2023. Thanks a lot. Jaideep, this is Christian. I would start with the first topic on what you call the burning topic. Well, rest assured we do a lot on that matter, and we just recently, you know, joined forces with other players in the European solar space, and addressed very openly and very frankly to the EU Commission that they should speed up the whole process. I think they got a pretty good understanding on that, especially as the U.S. is moving so fast with their IRA program, and Europe faces the risk of falling behind. You know, in that argumentation, we are very clear that in order to make the REPowerEU a success, first, I agree with your statement, we would need Wacker for that. I don't think there will be REPowerEU on solar side without Wacker. The second point, which we make very clear, is whereas you need on the, let's say, on the module and, the wafer side, the addition of you know investment money might be attractive. On the earlier stages of the value chain, like the polysilicon, what we do, the OpEx so the attractive or competitive power pricing is imperative. I think these messages we convey very clearly to the politicians, and I think they are also taken up very clearly. How far are we away from getting that power pricing? Very difficult to judge, but I can tell you that we do everything which is in our power, joining forces with other people that it will get implemented soon. To be honest here on your question around energy, or I take it broader around 2023, how is energy and raw materials as a cost developing? I think as we communicate, we are already hedged for about two-thirds, but 2023 hedging rate is, or hedging ratio is lower than today. We would expect a further increase in energy costs, obviously. When I look at today's futures, that increase would be slower in absolute terms than in 2022. On the raw material side, normally what you see in a recessionary environment would see a decline. I would say we are all living in a very dynamic environment. Let's discuss in March when we give our full year guidance. I would also stick to that, when you ask question number three on the consensus. I think let's look at that when we have the visibility. All right. Thanks a lot, guys. Thank you. Next question is from the line of Samuel Perry from Credit Suisse. Please go ahead. Hi, guys. Thanks for taking my questions. Firstly, on polysilicon, can you give us some color on what you're seeing on the ground in terms of capacity additions? There's obviously a lot of announcements, but in terms of them being delayed or ability to secure energy, any color you could give on that would be great. Then also on polymers, in terms of the contracts, I believe that during this inflationary period, you reduced the contract terms across a lot of products. If we start to see raw materials come off, is there a chance that the sort of margins and I guess sales in that division could fall quicker than in previous cycles? Thanks. Okay, Sam. I would start with the first question on the polysilicon and the competitive landscape. Well, first of all, let me start with saying that we are seeing a very strong demand for solar panels globally. You will note that we will be at the top end installation expectations for 2022 with about 250 gigawatts. Very, very exciting and a very strong growth momentum. You know, when we talk about the poly capacities, you also need to talk about the wafer capacities and installations. For 2023, wafer capacities are actually expected to reach 700 gigawatts. That means there is, you know, there's a lot of momentum. In the last call, we also said that, you know, the IEA, the International Energy Agency, is also talking about we need at least 500 gigawatts per year. From that perspective, we would need some more polysilicon investments. Commenting on these Chinese capacities that are announced, I can only repeat myself saying a lot of announcements. Typically, these announcements are much too aggressive, both on timing and both on capacities. You know, there will be new capacities, and we would need more capacities. If you ask for, you know, how actually these companies will succeed, you have to ask them. I cannot give you a clear answer on this. What we will see is a further very strong demand for the solar industry, and that makes me positive. Sam, Tobias, here to your question on polymers. We stated that our prices have moved up with the VAM cost moving up, and that we had some formulas for that also in place. We committed also to our customers when VAM prices and costs come down, that they would benefit. Obviously, we have other cost items also going up when we discuss largely energy, we discuss logistics. we try to bring this also into the discussions to our customers as I mean we want to keep our profitability also to be ready for investing in more capacities as this is a growth market. I would not see any margin impact if VAM comes down because we have yeah our pricing strategy in place. I'm not guiding for next year. Obviously, there's a good approach to our customers, really, that we offer the value, and we must also cover the additional costs, but we let them also benefit if some of the costs go away over time. Great. Thank you very much, guys. The next question is from the line of Mubashir Chaudhry from Citi. Please go ahead. Hi. Thank you for taking the questions. Let's start with the updated guidance of EUR 1.3 billion-EUR 1.4 billion in terms of energy and raw material headwind in 2022, how much of that has been achieved in the first nine months, please? And then secondly, how much of the energy purchases for the fourth quarter are still open? You say you're substantially hedged, so I just wanted to kind of if you could put a number around how much is open. Finally around the German gas cap, any comments around whether you're eligible for it, and if you would be, would you want to take that help, given that there is chatter around being able or inability to pay dividends if someone was to go for the state aid? Just some comments around that would be helpful. Thank you. Mubashir, Tobias here. Starting with the first two questions on our raw material, energy, logistics headwind. As we stated before, headwind in the first half of the year was more than EUR 600 million and more than EUR 300 million now for the third quarter. Just take those numbers, not literally, but if you add a similar number to Q4, for Q4 to the full year numbers, you get into the range of EUR 1.3 billion-EUR 1.4 billion in total headwind for raw materials, for energy and logistics. To your question on the hedging for Q4, we normally don't, I mean, give that detail on such a short time period, but we always said that we are largely hedged, but we are not fully hedged. That means that we have some open also demand that we are currently buying at lower prices in the spot market. I can't give you the detailed numbers for this. Okay. Mubashir, this is Chris, on the topics of gas cap or potentially electricity cap. Well, twofold answer. I mean, first of all, I think at the moment it is too early really to judge or to calculate anything specifically also for us, because it's not yet clear. There are different ideas and concepts in place. I would like to give a general statement to these concepts. I think these concepts, both in Germany and in Europe, helped to kind of soothe a little bit the markets. The nervousness in the markets got a little bit away from that. I think that is definitely positive. I also think it is pretty helpful not only to support individuals but also companies. Let me say, as I'm also head of the Bayerische Chemieverbände, and we have 60,000 people in Bavaria working for the chemicals. It's 450 companies. Many of these companies are really small or mid-cap companies with less than 100 people, which obviously don't have a, you know, energy procurement group like we have. They are much more exposed to these energy markets and have a huge burden and risk. I think it's a good idea to help these companies. Talking about us and how does it affect us? Well, as I said, it's not yet clear what will actually come into place, but my statement from the beginning, we want to be the architect of our success. We don't want to rely on others. That's the reason why we work very diligently on all these countermeasures for saving energy, but also for introducing fuel switch measures which are now ready to go. We have a very inspiring and great team with a lot of entrepreneurial spirit that is working on that. As we also said, we are, you know, two-thirds hedged for next year. From that perspective, again, it is too early to judge what it would mean for us. You mentioned the topic of these government tariffs, if you want to call them, might be linked with some sort of influence on your dividend policy. Here we want to be the architect of our own success. I'm a little bit concerned if somebody else than the company itself and the shareholders talk about dividends. I'm reluctant on that topic. Very helpful. Thank you. The next question is from the line of Chetan Udeshi from JPMorgan. Please go ahead. Yeah. Hi, thanks. Yeah, I'm a bit puzzled by your guidance on energy costs because, you know, on one hand you kept saying that 2022 is largely hedged, and yet we've seen the number for energy and raw material cost guidance being cut by, I think, EUR 150 million. Can you explain, like, what is driving that? Is it the raw material prices which are coming off, or is it energy which is driving that reduction in the energy costs? And what have you actually assumed in Q4? Let's say if the energy prices were to go from EUR 100 per megawatt hour to EUR 150 or EUR 200 again, what does that mean for numbers in Q4? That was the first question. The second question was more around the silicones. Can you talk about what you see now in terms of the order momentum? You know, you talked about weaker book-to-bill in Q3. Is that still sort of continuing as we speak? Because if I back out what is implied in the guidance for Q4, it seems, you know, you are assuming more or less a seasonal decline from Q3, nothing worse than seasonal when frankly some of the other companies are talking about really worse than seasonal trends. Thank you. Chetan, to be honest, I start with the first question on the energy and raw materials. As we said before, the unhedged portion saw significant inflation in Q3 as the markets were really going crazy in some weeks. With that view, also looking at those numbers daily, we were very cautious about the Q4. Now we see that markets are still at a high level if you look into next year, into first quarter. But they have moderated for the spot portion that we could still buy with our hedging not being at 100%. That is the effect that we have now also considered. In addition, you are right, raw materials have in some areas we talked about them before have declined. If you put that all together, I mean, we have reduced our assumption for raw material energy and logistics from the order of magnitude of EUR 1.5 billion to something between EUR 1.3 billion and EUR 1.4 billion. Yeah, Chetan, on the silicones, you asked for the order momentum. Well, we saw some decline in the order pattern, especially in the Q3 or the beginning of Q4, but it looks like these destocking effects, which were prominent in Q3, are less pronounced now in the Q4. Well, I cannot talk obviously for other companies, but as we said also in the beginning, we do have a high share of specialty business, and here we see a firm order pattern going forward. That makes us confident that our guidance for Q4 is pretty intact. Understood. Thank you. The next question is from the line of Geoff Haire from UBS. Please go ahead. Good afternoon, and thank you for the opportunity to ask questions. I just had one. Clearly you're sitting with net cash on the balance sheet. The pension deficit is obviously coming, well, has come down over the last year. I just wondered what your thoughts are around capital allocation and use of that capacity you have on the balance sheet to either return money to shareholders or, you know, what are the plans for it? Yeah, Jeff, if I understand your question correctly, that it is on the dividend policy. Well, I mean, we do have a dividend policy in place. We always look, of course, at the overall economic situation, and typically that's what we do, doing it in the first quarter of every year. It's too early to actually talk about dividends. Yeah, on the share buybacks, I think that's something we've been also very clear on. That's not something which we can do. Okay. Thank you. The next question is from the line of Rikin Patel from BNP Paribas Exane. Please go ahead. Hi. Thanks for taking my questions. Just one on volumes. On the group level, I think you reported a 3% decline. I just wondered if you could maybe quantify the headwinds in polymers and commodity silicones. And then secondly, on CapEx, you're guiding to the lower end of the range now. Just wondering if you could give a sense of why you've now lowered that amount and whether we should be shifting that EUR 50 million or so into 2023. Thanks. I can, Tobias, on the volume, I don't split that exactly by segment, but I can tell you that volume in silicones and polymers, we are below prior year. I think we talked about that destocking journey over the third quarter. In polysilicon, we are running at full capacity. If there's any, I mean, deviation in sales volume between 2023 and 2022 and 2021, sorry, it's only about inventory effect. But right now we are close to empty in inventory in polysilicon, so everything that is produced is sold. For the CapEx guidance, it's. I mean, look at the number that we had last year. I mean, we increased our CapEx program along the lines of our strategy of accelerating growth. In some projects there were smaller delays. It's not that we are not willing to go forward. It's just by the massiveness of the increase that we are not year to date at the CapEx number that we believe that we can still reach the upper end of the CapEx guidance. We lowered it to the EUR 550 million number for 2022. Rikin, if I may add this, you know, also we see the... You know, especially in the beginning of the year, there were some shortages of equipment deliveries actually, and also of qualified personnel that we faced with these increased budgets. That's also the reason why it's lower. As we didn't stop any projects, it is fair to say that these amounts will be seen in next year. Okay, thank you. Next question is from the line of Sebastian Bray from Berenberg. Please go ahead. Hello, good afternoon, and thank you for taking my questions, please. I'd have two. The first is on CapEx for 2023. It follows a little on from Rikin's question. If Wacker is spending EUR 700 million-EUR 800 million a year or maybe a little bit less than that, but around that's quite a lot. I'd just like to understand which growth projects in particular this is going to. I read a press release 2 or 3 months ago about the expansion of Holla, which I don't know if is yet approved, but I think is due online in 2025. I'm referring to the silicon metal furnace. How big is this investment, and what are the big investments for the next 2 or 3 years? The question related to that is the Dow JV for siloxane that Zhangjiagang in China going to be expanded at some stage? Are you in discussions on that or is it off the table? Third question, finally, on dividends. You refer to the dividend policy of 50% of EPS. I'm wondering, are you going to adhere rigidly to this or are you thinking about being more or less daring potentially than implied by the 50%? Thank you. Okay. Maybe, Sebastian, as Chris said, I start with the first question. Same answer as I gave before. There is a definite policy in place, and we look at the overall economic situation, and that's something which we do together with the shareholders in the first quarter, and that's the time to talk about it. Second question was on the Dow siloxane expansion. Yes, we have that joint venture in China. The majority is with Dow, so probably the best information you would get from Dow if they want to expand. We are always interested in business cases that make sense. It's a world-class client, so from that perspective we are, you know, always looking for good opportunities. With respect to the CapEx question for 2023, the biggest project that we pursue right now is silicone specialties, the semiconductor capacities for polysilicon and then the biopharma activity in Halle, the pandemic preparedness plan that we talked about, where they want to achieve good for order in 2024. You asked the question about the Holla project. This is not approved yet. For that reason, I can also not give you any number on the investment. You know, this is Chris. As we published this project, we are in a pretty early stage, and we have to look at it, and that's the reason why it's not yet approved because it's not yet in a status of being approved. It's definitely one of our high priority projects going forward. That's helpful. Thank you for taking my questions. The next question is from the line of Markus Mayer from Baader Bank. Please go ahead. Good afternoon, gentlemen. Two questions from my side. Firstly, kind of modeling question, but this plant turnaround you had in Polymers, could you quantify the effect that you see on the underlying earnings have been? The second question is again on the polysilicon division. It looks like that's becoming more positive on the sustainability of the current polysilicon price level. Besides the pretty strong demand, was there any other kind of change which has driven this kind of changed view? That's the two questions I have. Tobias Ohler here on the polymers turnaround question. I can explain that the two effects that weighed on our P&L were both the technical spending and the additional external spend for procurement, procuring the VAM that we would have produced on our own. If you take that together, and if you compare EBITDA of Q2 to Q3, it's about, I mean, a similar magnitude that is just created from that plant turnaround in that quarter. On polysilicon, our change in guidance comes from two elements. We see that strong prices hold very firm for longer. We had baked in some moderation before. The second is, we see now a lower energy burden than initially feared, I would say. That's the point that we had discussed before. Okay. Apart from that, we are running full, so we have no stock. There's no other moving factor I can use. This, what you said on polysilicon price, that's only for Q4. That's nothing, not a kind of, a statement we would also then, repeat for 2023 or beginning of 2023. Well, we see again, as you said, Markus, we see a very strong demand on the solar side. I mentioned this, 700 gigawatts for the wafer capacities being installed, which would equate to 2 million tons of polysilicon. We see a very strong demand in Q4 and going also into the next year. Okay. Thank you. Next question is from the line of Thomas Swoboda from Société Générale. Please go ahead. Yeah. Good afternoon, everyone. I have two questions left. Firstly, on polysilicon, I must admit, I remain puzzled by the phasing of the earnings in this segment. So maybe you can help me. Was there any, you know, non-recurring events in this segment in the quarter? I'm specifically thinking, did you reduce the production rates in Europe or even stop production during the quarter because of the very high energy costs? That's my first question. The second question is on your guidance regarding raw material, energy, and the logistics headwinds. Could you give us at least a rough split? What do you expect for each of those drivers? I'm especially interested in energy. Thank you. Yes, that was the second one. I mean, as we mentioned before, our energy cost is doubling from 2021 to 2022, or a bit more. That portion is, I mean, EUR 450 million was the number in 2021. You can make an estimate what comes from energy. The majority of the headwind is still from raw materials. To your first question, the phasing of the polysilicon results, I can definitely confirm there's no change in production rates due to high energy costs. No way. I mean, you look at it sequentially. Sequentially from Q2 to Q3, we see higher energy and raw material costs. I mean, energy market really spiked in that quarter. These were more or less compensated by higher sequential selling prices. There was a tiny special effect that was helping us a bit in Q2, but it is not of the magnitude that we would report it. That explains when the last difference to that. Thank you. That's already helpful. Maybe if I can sneak in a follow-up. Again, on polysilicon, I'm still trying to get my head around it. Your energy hedging, is there a possibility that your hedges or the degree of the hedging you have differs from quarter to quarter? In other words, you were less hedged on Q3 than you were, for example, in the first half of the year. Again, your hedging rate is higher for Q4. Is this something to think of, or is it completely off limits, something like that? I think it goes too much into details. I think it's typically the winter quarters are slightly higher in hedging ratios, but that is mainly applying for gas. Also our demand is different, and so we consume more in winter than summer. I would leave it there. I think it's not something that's really driving any quarterly movement between the quarterly movement in the polysilicon division. I understand. Thank you very much. We have a follow-up question from Jaideep Pandya. Please go ahead. Yes, thanks. The first question really is around your guidance. Sorry to ask you this, between 2.1 and 2.3. What sort of gets you to 2.3? 'Cause when I add up all your bottom-up guidances, I come to sort of 2.1. Just wondering, you know, what gets the 2.3 number going? Thanks. Okay, JD. On the guidance, I think I wouldn't agree entirely that you end up at the bottom end of the range. If you take our segment guidance, and you don't take them literally, it all adds up that you end up within the range. Here, I would agree rather in the lower half of the range. But as I said before, don't take it literally. I think I would also confirm that the midpoint of the guidance is, from today's perspective, more likely than any extremes. More likely than the low end and more likely than the high end. Yeah, we have two months to go, and we see how we come out in 2022. I mean, the year will be financially very successful. We will have record sales. We will have a record EBITDA. We will have another strong cash flow after two years of strong cash flow. I mean, if you add up all the cash flow over 2020, 2021, and 2023, I think you come to a number of around EUR 2 billion. We will end with a strong balance sheet as we discussed, and we will discuss guidance for next year when we are in the period of talking about full year results in March. Thanks. Just one more follow-up really, around your balance sheet and around the original question Charlie actually asked about biosolutions. Christian, are you sort of saying that even on a sort of long to 18-month view, you don't wanna spend big ticket money on biosolutions to sort of beef up this division, you know, to at least jumpstart towards the EUR 100 million range, given the fact that your balance sheet is so strong and, you know, you already have fairly large investments earmarked, and still you're generating so much cash. What is sort of stopping you from, you know, signing a big check? JD, I think we pointed out that we have a very, very clear strategy here in place. I mean, we look for the right opportunity, and regardless of how stable or strong our balance sheet is, we will not overpay for opportunities. That has always been our strategy, and we will continue with this. We do have projects in the pipeline, rest assured, and if the time is right, we will communicate on them. We do see biosolutions definitely as a big growth opportunity for this company. We are looking at the opportunities, and you will see more coming up. Let me finish. It's a great company. Wacker is a great company with a great future, and we want to be the architect of our success. Great. Quickly get that industrial power price. Yeah. Sure. Thanks. Thank you. This concludes our Q&A session, and I hand back to Jörg Hoffmann for closing comments. Thank you, operator. Thank you all for joining us today and for your interest in Wacker Chemie. Our full year conference call is scheduled for March fourteenth next year. In the meantime, please don't hesitate to contact the IR department if you have further questions. Thank you. Ladies and gentlemen, the conference is now concluded, and you may disconnect. Thank you for joining, and have a pleasant day. Goodbye.