Evonik Inds Ag Unsp/Adr

Ladies and gentlemen, welcome to the Q22026 earnings conference call. I am Shari, the chorus call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Christian Kullmann, CEO. Please go ahead.

Thanks a lot and a very warm welcome to our Q2 audience conference call and thanks to everybody for joining us this morning. An especially warm welcome goes again to our new CFO, Michael Rauch, who's sitting here next to me. Michael. I am really glad that you did good stuff with us in the last month and that you are taking an active role for the first time on this call today. As usual, I will start with selected strategic highlights, Michael then will comment on our strong Q2 results, before I will take over again to discuss our upgraded outlook. As you know, From our pre-release, we recorded a second quarter above expectations. Actually, this was the best quarterly result in four years. But we are not resting on this short-term success. We know that structural challenges remain for the sector and for Evonik. What is in our hands, we are actively addressing with determination. And we can show really good progress in the first six months of this year. To demonstrate that we deliver on our promises, let me show you a slide that we already presented in February. I can only reiterate, we have more potential, even more potential than others. And we are going to realize this potential. On cost reduction, we have extended and expanded our Evonik tailor-made program. More on that in a second. On portfolio optimization, we have fully carved out Oxeno and Senect and are highly focused on executing these divestments. On growth, we have reorganized our innovation organization and added new investments to enable new business long term. And on cash, we have changed our dividend policy and stay highly disciplined when it comes to capex. Many of these are difficult decisions, especially when it comes to employee reduction targets. We are executing these in a socially responsible manner, but everybody has to contribute. I am convinced that these efforts will pay off in the end. They will significantly strengthen our financial KPIs in the years to come. Maybe a few more words on the extension of Evonik TaylorMate. Until the end of 2026, Evonik Taylor made in our business optimization programs will have led to an employee reduction of around 2,800. You can see it in our numbers. Last year, we reported a reduction of more than 850 employees. Since the beginning of this year, we already count another 700 employees less. For the first time in Evonik history, our workforce is effectively shrinking. And, ladies and gentlemen, we'll continue on this path. We'll right-size our organization by another 3,200 people between 2027 and 2029. The extended Evonik tailor-made takes a holistic view. Capturing now both administrative functions on the one side and operating businesses on the other. These reduction targets have already been negotiated with workers' representatives. We are right now working on the details of the program and aim to have finalized our plans in the course of the second half of this year. Let me stress again, with more potential, coming from an already solid starting position, Now it is all about execution. And that is, I guess, the perfect transition to you, Michael.

Thank you, Christian. Welcome to all of you. It's great to be here. I'm looking forward to a fruitful dialogue over the years to come. As Christian rightfully said, it's all about execution. That is an important part of my CFO agenda. Get our homework done. especially when it comes to portfolio and strict cost management. I will have a strong focus on cash generation and return on capital improvement while aiming to realize the significant potential of artificial intelligence across Evonik. Moving on to the numbers. Our adjusted EBITDA rose 24% year over year to 630 million euros in the second quarter. This was clearly above the expectations communicated during the Q1 call in early May. This increase was driven by both higher volumes and higher prices, contributing 7% each. Especially advanced technologies recorded a strong quarter. You are, of course, all well aware of the favorable market situation miscellany. But this was not the sole driver of earnings growth. Also Crosslinkers and our polymers did really well. Last but not least, C4 delivered improved results as expected. And cost savings also made a good contribution. As usual in such an environment, inventory revaluation effects support earnings, higher bonus provisions had an adverse effect. We are well advised to utilize this better than expected development to continue with our structural improvements. on group level and also in the segments. For example, in advanced technologies, we've completed the backwards integration of our methionine production in the US. With that, we improve our cost leadership in the US and strengthen our position as the only player with integrated production facilities in all three major regions. We also continue to optimize our production footprint in silicates and our cost position in pH 12. Our cash generation improved significantly year over year in second quarter. Our strong operating results converted nicely into cash. We have our networking capital under control and saw less outflow compared to last year despite inflation. Lower bonus payments, advanced customer payments and higher non-cash provisions additionally support our free cash flow. All in all, our good first half year cash flow performance underpins our full year guidance to again achieve around 40% cash conversion. Thanks to this cash generation and the lower dividend payment, the seasonal increase in our net financial debt is less pronounced than in the last years. And with that, back to Christian for the outlook.