Alzchem Group Ag

Good morning, ladies and gentlemen, and a warm welcome to today's earnings call of the ArtsChem Group AG following the publication of the Q3 figures of 2024. I'm delighted to welcome the CEO Andreas Niedermeyer, CSO Dr. Georg Weichselbaumer, as well as CFO Andreas Loesler. So the gentlemen will speak in a moment and guide us through the presentation and the results. So after the presentation, we will move over to our Q&A session. in which you will be allowed to place your questions directly to the management. So having said this, Mr. Nehemiah, this stage is yours.

Yeah, thank you for your warm introduction and good morning together. Thank you for joining us today and welcome to our third quarter call. Actually, as always, we will go through the presentation first and then be available for questions at the end of the presentation. So let's skip the first pages and go directly to the page five, to the highlights. There is a whole range of positive news to report this quarter for sure. So we are able to continue to set ourselves apart from the general downward trend in the chemical industry. So we have developed particularly strongly in the area of specialties. As a result, we were even able to grow revenue in the group as a whole, increased EBITDA by 36% to €76.8 million, and at the same time increased the EBITDA margin to a very respectable 18.5% here. So in terms of the outlook, we assume that although we will achieve sales at the lower end, we will perform in the earnings above €1 million. So 100 million. So we will hear another more detailed financial analysis of the successful figures later from my colleague Andreas Loesler. So this is only a short first summary here. So what I personally was particularly pleased about was the inclusion in the SDACs. In recent years, we have worked very consistently to increase the liquidity of the share with the good performance of the figures And the inclusion in the SDAGs, not only the share price has developed very positively, but also investor interest. For example, we are very well booked at road shows and sometimes even so well that we cannot consider all interested parties, even though we have significantly increased our support capacity. So we would like to ask investors for their understanding, and we are doing our best here. So the consistent work has also paid off in the area of ESG. Here, our company and not least our ESG team were awarded the Platinum Medal for Sustainable Corporate Management. This puts us in the top 1% of companies assessed by EcoVadis worldwide. We have always taken ESG seriously and worked on it consistently. Now it will be up to us to maintain this high level, and probably we will accept this challenge. On the strategic development part, we have also achieved something great. Here we have approved the largest investment package in the company's history for the further expansion of capacity of guanidine salts and nitroguanidine, and are already in the process of implementing it. And I can explain these to you in more details on the next pages. For sure, you are already familiar with our verbund model, with the production family tree. Here, I would like to describe to you exactly where and when, what take place and what the logic behind is. The first step is the already communicated expansion of guanidine soil capacities, which we have supplemented here with the expansion of nitroguanidine capacities. In total, it is about a project sum in a capex of approximately 140 million, since the demand for nitroguanidine as an application in 155-millimeter ammunition can fluctuate greatly, we have agreed on a special capacity and financing model with our customers or are still in the process of doing so. The target is to have financed the entire CapEx sum together with the EU and our customers with the completion and commissioning of the CapEx to such an extent that we do not need any additional debt financing here. all upfront payments, whether from customers or the non-repayable grants. This was particularly important for us, as it allowed us to reduce the risk of the largest company, CapEx, very much in advance. From mid-2026, we expect commissioning in the quarter three, and the sales forecast assumes additional growth in sales in the upper double-digit million range, with correspondingly significant positive earnings contributions in the specialties segment. This is for sure the first step that we are implementing in Germany. However, there is also a second step planned for the USA. To this end, an undefinitized contract action has been concluded with the U.S. Department of Defense, which will extend over the next two years in the first joint project step. If a suitable production site is found during this period, the U.S. Department of Defense has already pledged an investment grant of $150 million for the construction of a new nitrogen production plant in the U.S. by the end of 2029, which will be operated by Altschem in addition to the facilities in Germany. Pictured under step two, you can see this is as the beginning of a new production plant in the USA. An internally formed project team will consistently drive forward the site search for locations and has already started with the project planning and pre-selection of locations. So the two projects and the grants secured for them substantiate the importance of that our defense products have become for industry and government agencies. So here on this page, you can see a summary of the two projects for Germany and the USA. Both projects are pre-financed so that no additional debt should result on Alskam's balance sheet from the CapEx after construction. However, we assume that we will need some interim financing as the payment dates for incoming and outgoing payments will not be harmonized. So these projects will make a significant contribution to the future growth of our specialty sectors and will transform the group more and more in a complete specialty group. So what else happened and how the other products of Altschem have developed is analyzed here by my colleague, Dr. Georg Weichselbaumer, to whom I may also hand over the floor now. So the floor is yours. Please start.

Thank you, Andreas. Let's start with basics and intermediates. This segment concluded the first nine months of the year with sales amounting to approximately 132 million euros. Compared to the previous year's level, this represents a decline by 15 million euros or approximately 10%. In general, it can be said that the situation within this segment has not changed materially since our last reporting date. As shown within the detailed sales analysis, the decline in sales is due to both volume and price effects and was somewhat expected. Overall, The decrease in cost for energy and other essential raw materials has mainly led to a reduction in sales prices through embedded price adjustment clauses, thereby passing on cost reductions to customers. Price reductions amounted to approximately 5% of the sales decline. The decline in sales was further impacted by targeted volume reductions in certain product areas, where the volume development must be viewed differently by product area. The guideline for the country's career also applies, stating that volume reductions are consciously accepted if the market does not allow for profitable pricing. This still applies to areas where we compete with Asian price dumping. Let's have a closer look at our business areas and start with a positive development. In terms of volume and sales, we saw positive development within our fertilizer business with our brand Perco. Due to a significant recovery in demand, revenue was substantially increased despite only slightly reduced price levels. Our neutral business is still undergoing a period of transition. The competition within this business is currently almost only price-driven, and the expected customer prices is sometimes far away from our cost structure. We made first steps to move away from standard applications and concentrate on specialized applications in the neutral sector to gain a significant competitive advantage over the low-cost competition from Asia. Sales within our metallurgical business were also below previous year's level, as we do act with price escalation clauses with most of our customers within this business. Apart from that, the general economic situation of European steel producers also caused volume declines. Despite the mentioned decline in sales, EBITDA increased by half a million euro compared to the previous year and ended up at 6.7 million euro. The deliberate avoidance of low margin business and price competition with Asian or Russian competitors has positively impacted the EBITDA margin, which rose from 4.2% in the previous year to 5.1% in the current reporting period. This reflects the effectiveness of the consisting pricing strategy and the stabilized cost level compared to the previous year. As mentioned several times, the products of our basics and intermediate segments are not only sold to the market, but are very important raw materials for our folium production steps, and all raw materials required for the growth of specialty chemicals could be produced reliably. We will now have a look at the development within this segment. As already explained by Andreas, our specialty chemical segment remains the growth driver of Altschem and was again able to significantly increase all major performance criteria compared to the previous year's period. The revenue of the segment grew by 31 million euro, which represents an increase of 13% and ended up at approximately 260 million euros. While the main driver of this sales development was volume growth, prices could be slightly increased as well. Compared to the previous year, the volume increase contributed almost 11% to the sales increase in the first nine months of 2024, and price increases added another 2%. Across the segment, most product areas were able to contribute to the growth, albeit to varying degrees. The success story of the first half of the year continued, and we could grow materially within the area of dietary supplements with our products CreaPure and CreaMetallis, with animal production, nutrition with our product CreaMino, and within the defense sector with our product NitroGuanidine. As already mentioned at our previous quarterly calls, we can still benefit from the investment in our creatine capacities commissioned at the end of 2022. After the initial smooth rent-up phase in 2023, we could produce and sell our products throughout the first nine months of 2024 at high quantities, which contributed to the growth. The next investment is on its way and will support our growth with existing and new applications for creatine within the next years. My colleague Andreas Niedermeyer has already explained our current and future growth investment into our nitrogen business. Meanwhile, our supplies of nitrogen into the defense sector are on a constantly high level. CREAMINA also developed positively. Despite the highly competitive privatizing environment, significant volume and thus revenue growth was achieved. Also, the pharmaceutical sector with BioSelect and the automotive sector with Diehard confirmed their positive sales trend. Within the automotive industry, we saw an increased trend from steel to lightweight construction, where our Diehard products are used and deliver high quality. The custom manufacturing business of our multipurpose plants is still confronted with a challenging economic surrounding. This business is clearly linked to the economics of the chemical industry in Germany and Europe and was impacted by a sales decline, solely resulting from volume effects. We see this business as a chance and do believe to be back on the growth path if the chemical industry in Europe recovers. The positive sales development was accompanied by a strong increase in EBITDA and EBITDA margins. EBITDA after nine months in 2024 reached 67 million euros, which represents an increase of 18 million euros or 36% compared to last year. Together with the EBITDA with our segment specialty chemicals, the EBITDA margin also developed very positively. This also led to a significant increase in our EBITDA margin to 26% compared to 21.7% in the previous year. Thus, the growth trend in the specialty chemics segment continues the third quarter of 2024, which is also reflected in the EBITDA margin. In summary, we can say that we are mostly satisfied with the development within this growth segment. Let us now move on to our third segment, others and holding. The revenue in this segment was slightly above the previous year, and reached 24 million euro. This development essentially corresponds to passing on of cost increases to the Chemiteriel Park customers. The services utilized by the Chemiteriel Park customers of Altschem were predominantly of a variable nature and represented energy supply, technical service, and network operations. The segment's result was slightly above the previous year's figure, which was associated with the increase in revenue for grid fees of the CapEx in our grid network last year. That was all for our detailed view on the segment development. Let's now hand over to Andreas Lösler and take a look at the overall group figures.

Also, good morning from my side and Thank you, George, for the insights in our segment development within the first nine months of the year. As always, I will start with a detailed look at our group here in Elphigus first. In terms of sales, we continued our growth story and ended up with a sales increase of 4% and reported group sales of €415 million for the nine-month period. Only looking at Q3 itself, we could report an increase of almost 7% compared to last year. As already seen throughout the year and mentioned from my colleague, the sales shifted again more and more to the segment specialty chemicals, which proved to be our growth segment. The sales portion of our specialty chemical segment was 62% of total sales, and this relationship amounted to only 57% within the comparative period and shows the current revenue trend into specialty products. My colleagues already explained the reasons for this development. If you look closer at our sales analysis, it can be seen that we had a strong volume growth of 5% over the whole group, while price effects did not have so much impact on the group sales development. Price declines were mostly linked to price escalation clauses within our commodity business in basic and intermediate segment and usually do not impact our results as they only pass through the cost developments. On a regional basis and compared to the previous period, the revenue shift into our specialty chemical segment also led to higher revenues in Asia and South America, while sales in all other regions are mostly stable. Our ABTA development could also continue the trend as seen within the first half of the year. As we generated more sales within the higher margin business of specialty chemicals, we could also increase our group-wide EBITDA enormously. Within the first nine months of the year, we earned almost 78 million euro EBITDA, and this represents a strong increase of 36% or 20 million euro. Just as a reminder for you, in 2023, we ended up with approximately 81 million EBITDA for the whole year. Our cost structure remains stable, and most of our production plants are running on a very decent utilization rate, which helps to keep efficiency high. As we do more and more price escalation clauses within our segment basic and intermediates, slightly lower costs for energy and raw materials are usually just passed through to our customers. In line with our EBITDA growth, we could also materially improve our EBITDA margin, which reached 18.5% in the first nine months and approximately 19% within the three months ended of the third quarter of 2024. Bottom line, we also managed to increase our net results, which amounted to approximately 39 million euro after nine months in 24, representing a strong increase of 66% compared to last year. Our good ABTA figures contributed the most part to this development but it was also supported by reduced financing costs and material increases in finance income. As a consequence, we increased our earnings per share to 3.83 euro per share, which represents an increase of one euro 52 cents per share compared to last year. That was the big picture of our P&L. Now let's move on to our balance sheet. After nine months in 2024, we see an increase in our total assets by 55 million euro to 480 million euro, which was mainly driven by our good cash development and increased investments, but I will now explain this in more detail. If you look at non-current assets, we can see an increase in fixed assets as we invested more again and the decline in deferred tax assets driven by changes in interest rates used for the calculation of non-current provisions. We can report an increase of approximately 50 million euro in our current assets as well, impacted mostly by the favorable development of our cash balances. While reported cash balances have increased by 29 million euro, you can also see an increase in other current assets. Here, we invested excess cash of approximately 12 million euro in a fixed interest period over more than three months, and accounting rules require the amount to be shown in other assets instead of cash balance. Our working capital remains stable. Again, we see a positive development within our equity and equity ratio. Equity amounted to €193 million, which represents an increase of approximately €30 million since last reporting date, which also led to an increase in the equity ratio to 40%, by the end of September 2024. As long-term interest rates have increased, our reported pension obligation was reduced by this valuation effect. Within the first six months of 2024, we paid out approximately 1.7 million Euro as pension payments to retired employees. Our non-current liabilities increased mainly because of the ASEP grant from the European Union. The amounts which already have been paid to us have to be shown in other liabilities until the amounts are really invested. Again, all loan repayments have been paid on schedule. That's it for the balance sheet analysis, and let's now have some words about our cash flow. As mentioned already, we are very satisfied with our strong and healthy cash development throughout the year. Our very good result in combination with a very close look at our working capital management led to an operating cash flow of 75 million euro, which represents an increase of 30 million euro compared to last year's period. Investments are higher than last year when we followed a cautious investment policy. Within the first nine months of 24, we invested 26 million euro already. Major amounts were spent for the completion of our photovoltaic park here in Troisberg, the expansion of our creatine capacity, and infrastructure measures. Furthermore, we already made initial payments into our growth project Nitro-Guanidin in Germany, and we do expect additional amounts until the end of the year, mainly for down payments. Our financing cash flow was mainly impacted by our dividend payment of 12.2 million euro and scheduled repayment of bank loans. Again, we were neither required to use our short-term financing nor our factoring lines, but we could invest our excess liquidity for short period and earned interest on that. In order to profit from better interest rates, we invested an amount of 12 million euro over more than three months and based on accounting guidance, This amount is not shown within our cash balance, but within other current assets. Taking this into account, the cash balance of 40.6 million euro with our balance sheet as of September 30 is even higher when the 12 million euro are included, and this brings us to the positive net debt position in which we do have more cash than bank debts. As you can see, Alskam is in a very stable and healthy cash situation, and Zeus is prepared for further growth investments. As we have now discussed the past, let's have a final outlook on the remaining three months of the year and start with a few last words on our guidance. First of all, as Andreas has already said, we can confirm our guidance as published within our half-year reporting in July 24. However, based on the current developments within our basic and intermediate segment, especially within the steel industry, we do expect our sales to be on the lower end of our guidance, most probably at an amount of approximately 550 million euro. In addition, there can be some shifts to the next year depending on the seasonal business within our agricultural products. As a revenue in our specialty chemical segment is pretty much in line with our expectations, We can confirm our EBITDA guidance and do expect an EBITDA of more than 100 million euro for 2024, and it's already communicated with the linear development of our half-year results. Accordingly, the same applies to the expected EBITDA margin, which we expect on a level of more than 17.5%. All other performance measures are also in line with our expectations. At the end of this presentation, I'd like to add some words about our recent publication on the share buyback program. We decided to start a share buyback program with a goal to buy back 100,000 treasury shares via the stock exchange, and we are willing to spend 6 million euro over a period of 12 months to complete the buyback program. The program is about to start at the beginning of December 2024. The buyback is primarily for the purpose of using the acquired shares as acquisition currency or issuing them to employees of our company as we already did one year ago. However, other legally permissible purposes are not excluded. And this brings me to the end of our short presentation about the news in Q3 2024. At this point, we would like to thank you for your appreciated attention. And we are now at your disposal for possible questions.

Thank you so much for your presentation and congratulations on the results. So we will now move on with our Q&A session. So if you would like to speak directly to the management, just raise up your virtual hand. Or if you have done it by phone, you can use the key combination Starkey 9 followed by Starkey 6. And for sure, you can also submit your questions in the chat box and then we will read them out for you. So we first received questions from Konstantin Wichert. So you can speak now.

Yes. Hi. That was from my side. And congratulations to the good quarter. A couple of questions, if I may. Maybe starting with one on the politics here, looking at the turbulence that we've seen in the German government, it seems, again, highly uncertain which expenses the government can finance and which might have to be cut out. I understand that obviously it only happened yesterday evening, but maybe if you could add any context on what you think a failure to pass on a budget plan for 2025 could mean for your CO2 compensation that you received from the German government, which I think has been around 10.7 million in 2022. Then the second question would be a bit more on your CREAMINO project. If I'm seeing correctly, I think Evonik, Animal Nutrition, said they grew about 3% this year so far and seem to have gained market share on that growth as well. You point towards erhebliches Mengenwachstum in the German version of your nine-month statement. So I would appreciate if you could give some more color on what that means in terms of numbers and whether you have any particular market segment that is outperforming or what's driving this stronger performance in comparison to the overall market. If I may squeeze in another one, now that you're basically in the fourth quarter, mid of the fourth quarter almost already, do you have any visibility on how your neighbors such as BASF Looking at the pricing of your infrastructure services, given the good profitability you show in the holding segment this year, do you expect any pressure for next year? Or is that kind of that we should maybe assume a similar profitability in the others in holding for next year? Any comment on that? Thank you.

Yeah, thank you, Konstantin, for your questions. May I start with the answer of the question about the German government and the expenses? So from our point of view, there is already a stability behind that. I do not expect any surprises about the CO2 compensation. So from my point of view, that should be financed through the So, yeah, funds, they already reserved for that. And from that point of view, I do not see any problems to our side. So then about Criamino, I will hand over to George.

Yeah, I think on Criamino, we need to point out what the market looks like. Olskim develops the market and Evonik follows. So our development is associated with developing new customers and new applications. And then when the market is developed, Evonik steps in with pricing. I do not know where they have the numbers from with regard to gaining market share. Let them have their truth.

And the third question, Konstantin, was with regard to our – let's say, sales power in our other end holding business. As we mentioned in the presentation, in other end holding, it's not only our customer service to our chemical park customers, it's also the passing on or charge of grid fees for our electricity network, which we charge not only to our chemical park business partners, but also to other third parties for our electricity network. So the major increase of this year, as we mentioned, is increased grid fees compared to last year, which are based on higher CapEx we made in the last year. And so automatically the grid fees for this year are higher. But the grid fees for the next year will be calculated together with the authorities by the end of the year. So We do not see any concerns from our chemical business partners here as this increase relates to another issue.

Perfect. Thanks. And if I just may follow up again on the CREAMino. Is there any way you could share sort of what a Hefliches Mengenwachstum means in terms of numbers?

So usually we try to avoid to give too much information on the basis of that. As you know, there are only, let's say, one competitor around, which is a German company ahead of a Chinese company. And from that point of view, we are not willing to give more sense about that.

All right.

Thank you so much for your questions, Konstantin. We will move on with the questions from Dorat and Murta. So you can unmute yourself now.

Good morning, everyone. Firstly, congratulations on another very strong quarter. I have a couple of questions. Firstly, you know, President Trump has made strong comments with regards to implementing tariffs. How do you see this possibly affecting demand for Alskam's products in the U.S.? And does... his possible tariff policy actually accelerate your need to invest in a U.S. plant, making it perhaps worth paying a bit of higher price to secure market share. Yeah, that would be the first question.

Okay. Good morning, Duarte, and thank you for your question. And as you can imagine, we kind of expected this question. First of all, we have to say that in the in the very small niche markets we are operating in, we do not compete with U.S.-based production companies. So there's actually no need or we don't see any need to protect any companies in the U.S. because they are not our competitors. And the second step, as you probably know, most competitors coming from China and giving the relationship to between the U.S. and Europe and the U.S. and the Chinese and what we heard in the past, we can imagine, we do not know, but we can imagine the tariffs for our Chinese competitors, which would be much higher than the tariffs which would apply to our goods. And the next thing is, if our goods are sold on the U.S. market and there's no competitor in the U.S., who could profit from these tariffs. This would only increase the prices in the U.S. for the end customers, and we do not think that this will happen. But it may happen, but we don't see a threat here.

And let me add some additional things. So I think the tariffs on the Chinese would be even higher than on the Germans. And from that point of view, it could be more of an advantage than a disadvantage. So coming back to the production plant in the U.S., from my point of view, there is an anti-fanatized contract behind it. and that contract is already closed. The €150 million are reserved for us. That grant is there, and from that point of view, I don't see any danger for that. I see more that the Americans want us to come over to the U.S. and to build up that plant.

Yeah, no, thank you. I agree. I also think that's what they want with the entire tariff policy. That's why I asked if there was perhaps a bit of urgency with the result of the election. But thank you for your answer. Just a final one from my side regarding your policy on return to shareholders. Sure. You announced a €6 million buyback, and this just seems a bit odd as free float and liquidity are already quite small. So could you just give me some guidance, shed some light on the choice to pursue a buyback instead of either increasing dividend or issuing even a special dividend? And, yeah, a buyback is the way to go going forward whenever you want to – whenever you have extra performance you want to get back to hell. Yeah.

First of all, yes, we have agreed on the buyback program, but the intention for the buyback program, as you know, we are – or as Andreas Niedermeyer said, we have already started the site selection process, and we do believe it could be a good thing to have some acquisition pricing power on our balance sheet and that in some kind of deals – a certain number of treasury shares could help to have some kind of acquisition price here. And maybe we can spend the treasury shares for an acquisition process. And then the second step we had last year, we distributed some treasury shares to our employees, which was a very successful program. We have very satisfied customers. employees here which were able to receive the stocks by, let's say, one year ago. And you can see the stock price increase since then. And we do think it could be a good idea to set up a program like this again. And that's both reasons or both topics related. We have a reason why we set up the Shavik program.

And to add one additional thing, we don't think that we want to take debt shares out of the market completely. So, debt shares will come back to the market very quick. So, we don't plan to have debt shares on a long term on our balance sheet.

Okay. No, that's clear. Thank you so much.

Thank you.

Thank you for your questions, Dorate. So we will move on with the questions from a person who's dialing by a phone with the ending 553. So you can unmute yourself by pressing star key six.

Yes, that's me, Peter Hasler. Thanks for having me in the line for questions. I would like to know if there could be an impact of the Trump election on your M&A search activities. And if there are, maybe you could explain them. And second question is, they mentioned that the prices of energy and further raw materials declined and had an impact on inventory, so not so on profitability due to the price escalation clauses. But I remember that you said that you expect the inventory to reach the peak level in the third quarter. And since we have had this situation in the third quarter now with this decline in the prices, is this still what you expect, that inventories will go down in the fourth quarter or that they could remain on the same level? And the third question, if I may, what's the current status with Clearpool regarding the increase of production capacity? Thank you.

Yeah, thank you for your questions. That's Andreas answering here. You asked about the impact of the Trump election with regard to the M&A topic. So to be honest, that's actually too early to elaborate on that. But I don't really think that will – be difficult in the future to purchase a company in the U.S. So we have several M&A topics and several M&A topics on the table we can evaluate, actually. And from that point of view, I don't think so that they will keep out the Germans purchasing U.S. companies. So they invited us more than doing that, than avoiding that. So from that point of view, I don't think that there will be a negative effect on that. So prices of energy, the inventory level, I hand over that to Andreas.

Yes. Your question was related to the development of the inventory by the end of the year, I guess. And as we pointed out in the first quarters, we had – We had assumed to be on the inventory peak by the middle of the year and Q3, and that's what actually happened. For the end of the year, we see a slightly, probably a slightly decreasing of inventory level, but mainly be stable on the level right now. But we do not expect any increases.

And then the last question with regard to the pure production capacities. So we are in the middle of that process. Actually, we have enough capacity to fulfill all the demand, all the market demand, actually. So please put in a PO, a purchase order, and then we can fulfill it, no problem. And the next production will be on stream when the market needs that capacity.

Excellent. I did that already last week. Yeah, that's good. That's good.

So from that point of view, you are definitely not alone. That's the reason for the good growth of that product.

Yes. Coming from Munich. Okay. Thank you very much. And congratulations to these excellent figures. Thank you, Peter. Bye-bye.

Thank you so much for your questions, Peter. So before we move on with the questions from Torbjörn Karp, just feel reminded that it's still possible to ask questions.

Yes. Can you hear me? Yeah. Okay. I'd like to begin with respect. I want to address to you for the year-long way that led you to these numbers. And now some questions, three questions on your U.S. business and your nitrogen business. First, on the revenue side, how much additional revenue are you expecting, not only for your European expansion in nitrogen, but also for your U.S. business? Second question is on the margin side. In the specialty segments, your EBITDA margin is 26% at the moment in this year. Is this a good guess also for this additional Nitro Granadine business? And the third question is on the future. You told about first joint project step in the U.S. How would a second or a third joint process step in the U.S. look like? Thank you.

Let's start with the final question. I mean, we have signed, as Andreas mentioned, a contract with the U.S. government, which consists of several steps. The first step is to jointly find, and we will look for it, but it needs to be approved by the U.S. government, for a production site for nitroquinone, which is the first step. And then in the second step, oils can build a nitroglycerin plant, which then would be commissioned and operational. And that's the steps which are part of the program.

So we are not talking about additional revenues out of this U.S. investment?

For sure, we are talking about additional revenues. So as we already reported, we think that we are on a lower – third digital million range of additional turnover for the European plant. And for the U.S. plant, it could be more or less the same. But let's see. So that's far away from today's point of view. Let's see what demand we are faced with. But in principle, it could be more or less the same as for the European additional plant.

Okay. And the merchants?

Okay. Yeah, you asked the margin question. As already pointed out for the pre-amino question today, we do not publish quantities or amounts on certain products, but you mentioned the 26% average WTA margin within the specialty chemical. The margin itself, the average margin itself is a good prediction for the future, but for sure, We can have in this profit center some products below 26% and also above 26%. But please note that we will not publish any ABTA margin on product level, especially if we have so less competitors in this area. Okay. Thank you very much.

Thank you.

Thank you so much for your questions, Torbjörn. So then we just come back to Konstantin as he has some further questions.

Hi. If time allows, I would have a follow-up on the CreaPure. And I want to ask a bit on two ways, I think. First of all, you said that you have enough capacity currently to serve all your customers. which I think is sort of a slightly different wording than compared to the past because there have been, if I remember correctly, times where you had been in allocation mode and could not serve every customer. Looking again, sorry to bring again Evonik on the field here, but they pointed towards that especially their ketogenic amino acids are performing particularly weak. And as far as I understand it, These are important amino acids for the fitness consumers. So taking this and your comment on Treapure, is there in your view any sort of weakening or softening in demand from the global fitness industry? Any color on that would be great.

So let me begin with the cytogenic amino acids and give you some impressions about my U.S. travel. So I had the chance last week to join the trade fair of dietary supplements in Las Vegas. And I tell you, there has been a hell of a diet risk. But what was very interesting is that there are many customers available. They are taking creatine and Creapure at least, and they are promoting Creapure. So there is always a fluctuation on the market demand for sure, but I think there is no direct connection to ketogenetic I mean, it's actually – I don't see that. So from the capacities, I think I hand over to George because he's the guy. He fills all the capacities.

Yeah, I mean, we were in a battle internally. Who could outrun the others in terms of demand and production? And for quite some time, we were actually, as you said, on allocation, but those times were over. We have invested into capacity, and we can fully supply the market. The market is still growing, and that's the reason why we decided to invest again into creatine capacities, I need to say, because creatine is not just CreaPure, but it is also CreaVitalis, our new product, where we're also making good progress.

And we have a very detailed plan how to grow that business, and that's the reason for the next step of the capacities. And we think that the next step of capacities is needed next year, and then we can grow further. Thanks again for the clarification. Yeah, thank you.

Thank you for your questions. So with a look into our empty chat box, and there are no further virtual hands, it seems everything is discussed. So we will come to the end of today's earnings call. So from my side, before I hand back to Mr. Niedermeyer for some final remarks, just let me thank you. It was a pleasure to be your host for today. I wish you all a lovely remaining week. So, Mr. Niedermeyer, last words belongs to you.

Yeah, thank you very much for all the questions and the discussion here. We can now offer, as always, you the opportunity to visit us again virtually or in person at the conferences as shown here on that slide. Otherwise, we will be back with the year-end reporting on February 28th. Thank you for your support. Stay safe and sound and stay in our good graces. And goodbye until then.