Alzchem Group Ag New

The floor will be open for upcoming questions following the presentation. We are looking forward to the presentation, and with this, I hand over to you, Mr. Niedermeyer.

Yes, thank you for your short introduction, and thank you for joining us today, and welcome to our first call. This year, as always, we will go through the presentation first, and then we'll be available for questions at the end. Therefore, let's start directly with the presentation and with the highlights here. So we have started the year 2024 quite successfully. In the first quarter this year, we achieved a group turnover of approximately €150 million roughly at the previous year's level. Thanks to our consistent focus on high margin niche products in the specialty chemical segment, we have been able to seamlessly continue the strong performance of the 2023 financial year. The areas of human nutrition with CreaPure, animal nutrition with CreaMino, and defense with NitroGranidine continued to develop particularly well. On the other hand, the business in the custom manufacturing with our multipurpose business and multipurpose plants and nitrites business remained really challenging due to the ongoing strong price-driven competition from China. So overall, the growth segment specialty chemicals was able to convince and successfully compensate for the declining sales development in basis and intermediate segment. And our group EBTA increased significantly by around 32% to approximately 25 or 24.9 million euros in the first quarter of 2024. The free cash flow was very positive due to the operational performance and lower inventories and the analysis will be done later on by Andreas. So at the same time as the very good performance in the operating business, the price of the Altscam share also developed very positively in the first quarter with a significant increase in value with our broad diversification strategy. of products and our high innovation power, we are able to grow steadily, especially with the specialty chemicals here. And for this reason, we also see ourselves in a position to confirm our outlook for 2024, especially for EBTA. So as a special highlight, there is still the investment grant from the other project to report. So on the next slide, I would like to start in our production tree with our product Dicendimide, a versatile intermediate for various markets, including the pharmaceutical industry. So you can see that here. DCD itself is used as the most important raw material for the production of metformin, for example. Metformin is the largest and fastest growing drug. for type 2 diabetes, and we are the only European raw material supplier for that product. So from DCD, we produce very interesting products, such as diehards, the hardeners and accelerators in power paste and liquid form for epoxy resins, products such as wind turbines, bicycle frames, plastic springs, tennis rackets, and even hydrogen cylinders are also part of the application spectrum here. Our guanidine salts, highlighted by the magnifying glass, are often used as modern fuel for gas generators in airbags for your protection and are considered very safe to handle and durable. Highest quality comes from the only Western resource and the only Western manufacturer with us from our company from Alskam. So guanidine salts, especially nitro guanidine, are also used in agrochemicals such as insecticides in the neonicotinoid group of active ingredients here. A third application for nitrogranidine is defense in the context of 155-millimeter ammunition with three bases. Currently, we supply one of the three bases, which is called our product nitrogranidine, to all known Western ammunition manufacturers. The advantage of the modern fuel nitrogen is their high stability during storage. It burns cool, and it produces a high gas volume in the short term. So, that are the same features and advantages as in the airbag application. So, how does this relate to the other project, the EU funding? Last year, the Act in Support of Ammunition Production Project, or short ASAP project, was launched by the EU Commission. This project, with a total tender volume of 500 million euros, is about measures to urgently strengthen the capacities in the EU defence industry in ammunition production. A key goal of this project is the EU level, is the identification of bottlenecks in supply chains. And our Altschem group was granted an investment grant of 34.4 million euros in principle after applying in December 2023 on March now 15th in 2024. The final allocation with the respective call-off plan will take place with the conclusion of a corresponding funding agreement probably still in May or in June this year. So we want to use the funds to increase the bottleneck production capacity of nitroguanidine on the one hand and to renew and expand the existing plans for the production of the precursor of guanidine nitrate on the other hand. What are the financial details? The capex volume will be around 75 million euros over two and a half years. The main expenses will then be in court In 2025 and 2026, the investment grant is deducted tax-neutrally directly from the acquisition costs. And as early as 2025, the first quality increases of nitroglycerin from the bottlenecking project will be available and will be sold to the market. So, so much for these topics. Now, let's take another look at the segments and their contributions to the result. Therefore, I would like to hand over to the floor to Dr. Georg Weichsel-Baumer now.

Georg Weichsel- Thank you, Andreas. The basics and intermediate segment concluded the reporting period with sales amounting to approximately 15 million euros. Compared to the previous year's level, this represents a decline by 8 million euros or 14 percent. The situation within this segment in Q1 is generally different compared to the first three months of last year. While cost-related price increases led to a rise in sales in the previous year, the development of cost and sales prices has reversed again in the current fiscal year. As shown within the detailed sales analysis, we had to reduce our prices over all products within this segment by approximately 7% compared to last year. These price declines are not intended to keep us with the Chinese or Asian competition, but are the result of various price escalation clauses that are widespread for our products within this segment. Also in this fiscal year, our continued guideline is that volume reductions are consciously accepted if the market does not allow for profitable pricing. We do not see price competition has a sustainable strategy if our competitors work with significantly lower energy and CO2 costs and operate under completely different ESGT conditions than we do. However, we also had to accept volume decreases. The main impact resulted from our nitrates with applications in the pharmaceutical, agrochemical, and basic chemical industry. The competition within this business is currently almost only price-driven And as explained already, Chinese competitors are flooding the market with dumping prices. We work strong with each customer in order to gain back market share with our key arguments, quality, delivery reliability, and made in Bavaria. Sales within our metallurgical business were also slightly below previous year's level. Seasonal competition from Eastern Europe, as well as the general economic condition of European steel producers, were the main cause here. Positive volume developments could be reached within the pharmaceutical sector with the building block Dysine Diamide, as well as in our fertilizer business with our brand Perlcar. The customers are willing to pay a premium for our quality and product specifications. The decline in sales led also to a reduction of segment EVTA. In the first three months of the fiscal year 24, EBITDA amounted to €1.8 million, which is €1 million short to previous year's level. At the same time, EBITDA margin dropped to 3.7%. Even though we could experience some cost reductions for energy compared to the first quarter of 2023, this could not overcompensate the decline in EBITDA based on the volume reductions, especially within the neutralized business. Nevertheless, it is worthwhile to mention that the development within our basics and intermediate segment was generally in line with our expectations, and the segment produced and delivered all raw materials required for the growth of our specialty chemical segment, which I will explain to you now. The specialty chemical segment remains our growth driver and was again able to significantly increase revenue EBITDA and EBITDA margin compared to the previous year's period. Within the first three months of 24, specialty Cambria products reached a sales volume of 93 million euros, which represents an increase of 7 million or 8.4% compared to Q123. This development has increased the segment share of total group sales to 62% after 57% in last year's comparative period. Looking at the segment's detailed sales analysis, we saw an increase in volumes at 7% as well as minor price increases. However, while some business areas within this segment recorded strong volume increases, some areas had to deal with the overall economic situation in the chemical industry and reported volume declines, which were obviously overcompensated by the growth businesses. Most of the product areas within the specialty chemicals have developed as expected. This applies above all and again to the business area of human nutrition and dietary supplements. The demand for our creatine products under the brand names CreaPure, Levadur, and also now CreaVitalis has developed very well again. As we understand there is still growing market potential, we decided again to increase capacity. Especially the market potential for creatine made in Bavaria for use in the food and pharmaceutical industries is promising, and we want to be part of this development. Our sector animal nutrition with the brand Creamino could also grow in volume and sales, but we experience an increased price-intensive competitive situation. However, our global sales network pays off, and we are confident to keep our global market share. As already outlined in our last financial statements, there is an increasing demand for our product nitroglucanidine from the defense sector. The growing importance of applications in the field of military defense has resulted in the further shift in revenues within this product category, moving away from applications in agrochemicals and the automotive industry. Based on the current political circumstances, we believe that this trend will continue. The EU subsidy from ASAP program is just another proof for this development. The products in the pharmaceutical sectors, mainly BioSelect, and in the automotive sector, Diehard, also show a pleasing development. Here, the negative trend from the previous year was reversed. On the other hand, there was a decline in sales in the custom manufacturing of our multipurpose plants. Here we were not able to completely escape the continuing negative development of the chemical industry in Germany. But also here, we are also confident that this business is a chance once the chemical industry recovers. The positive sales development was accompanied by a strong increase in EBITDA and EBITDA margin. EBITDA could be materially increased by €6.7 million to €22.7 million which represents an increase of almost 42% compared to Q1-23. Our ABTA margin reached 24.4% in Q1 after 18.7% within prior year's period. Overall, our specialty chemical segment contributed 91% to our group ABTA after 85% in Q1-23. Let us now move on to our third segment, others and holdings. The revenue in this segment was slightly above the previous year and reached 7.8 million Euro. This development essentially corresponds to passing on of cost increases to the chemical park customers. The services utilized by the chemical park customers of Altschem were predominantly of a variable nature, and represented energy supply, technical services, and network operations. The segment's result was slightly above the previous year's figure, which was associated with an increase in revenue. This was all for our detailed view on the segment development. Let's now hand over to Andreas Loeffler and take a look at the overall group figures.