Evonik Inds Ag Unsp/Adr

Ladies and gentlemen, welcome to the Evonik Industries Q3 2024 Earnings Conference Call. I'm Vicky, the Chorus Call Operator. I would like to remind you that all participants are in Nissen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star then zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Christian Kuhlmann, CEO. Please go ahead, sir.

Ladies and gentlemen, good morning and a very warm welcome from my side and the side of the team either to our quarterly earnings call. It is another quarter in which we have delivered on expectations. It is another quarter of sector leading earnings growth and still another quarter of free cash flow generation. Some of you might say now, wait a moment, I've heard that introduction before. And you know what? Yes, you're right. It is correct. That was my. But good news like that never got out of fashion and confirm our focus on consistent delivery. From now on, however, I promise only news, no replace. News on our cost-saving initiatives, which are more and more reflected in our numbers. News on the realignment of our portfolio, where we continue to address underperforming businesses. And news on innovation, where we have defined our three new growth areas. Michael, you want to start with the question?

Sure, Christian, and welcome from me as well. In the third quarter, we have increased our margin to 15%, which is not only an improvement by five basis points from the CHUF level in 2023, but also a further improvement compared to Q2, despite flat or even slightly declining volumes sequentially. This is another proof point that our cost-saving initiatives are more and more paying off and will further ramp up next year. On the one hand, admittedly, we will partly revert our short-term contingencies, which we started in 2023. They were designed to immediately counter the drastic volume declines back then. Now, with volumes coming back, we will and have to visit more trade fairs again or enable more trainings for our employees. So 100 million euros of the contingencies will come back in 2025. but that is more than offset by the ramp-up of the savings under our Evonik tailor-made program, as well as by our business optimization measures. For example, we will start the backward integration of our US methionine plant in Mobile in the second half of 2025. That will result in a quite notable improvement of our cost position.