Lanxess Ag Ord

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will be the trough quarters in the present cycle. And Q3 and Q4 will see a rebound, a revitalization also for the chemicals industry. So we expect 850 to 950 million euros EBITDA for the full year. And in the next quarters you will hear more updates. Ladies and gentlemen, so much on the business development of Q1 at Lanxess, and we will now open the call for your questions. And your interpreters did not have sound feed in between. Thank you very much. We will start with the Q&A session. If you want to ask a question, please press the telephone keys star 1 1. and then you will be given the opportunity to ask your questions in turn. Should you use a loudspeaker today, I would like to ask you to ask your questions through the telephone receiver. Thank you very much, and one moment for the first question, please. The first question is from Bernd Freundhoff, Handelsblatt. Good morning. I hope you can hear me well. Mr. Zahat. Yes. Okay. I hope the sound is okay. Two questions. One, the economic situation, and could you also give us some idea of what the expectations are for the regions and what the situation is? And you communicated that your expectations on the second quarter are based on China. Maybe you could also give us some insights on Europe and the U.S. Second question, you also said that prices could be raised and have to be maintained at a higher level. What do you think about gear inflation and that the prices will have to grow to keep the earnings high? Could you give us a statement on that, that greed inflation? Thank you, Mr. Fronthoff. Okay, let's talk about the economy. The first quarter, the economy both in Asia and in particular in Europe was weak, especially for the high-energy industries. U.S. was fairly robust still, but now in Q2 we see that there is an increase in consumption in China, but in the producing industries, We still see very little momentum. That's why I expect that in Q3 production chains in China will pick up again and thus the industrial production chains will have a higher overall efficiency and utilization. So that is our anticipation, but of course we have to make sure that it becomes visible in the order books. EU remains difficult. In Europe, also looking at the latest figures, and I think Handelsblatt reported yesterday that the trading data in the producing industries are weak, and so we don't expect vitalization before the second half of the year. U.S. Based on the governmental interventions taking place there, we expect the economy to remain robust, but we think that the increasing interest rates may lead to private consumption dropping in the second half of the year, but I take it that due to the intervention programs at high level at national and federal state level, the economy will be stable in the United States. So this is the general answer for the general economy. For the chemicals industry I think as I said when we met in March for the financial figures I said that this will be a difficult year for the chemicals industry and that the government must make sure to to help the chemicals industry stay competitive because we are at the start of the industrial chain. We're important for value creation, innovation, and transformation towards sustainability. If this link in the chain is not stable, that will be a general damage to the entire industry in Germany, which is positively influenced by the chemicals industry. If you look at the chemicals industry, the companies in the south and elsewhere, I don't think we can talk about great inflation. We think that the exploding costs for the increasing bureaucracy is what we try to hand down, but we can't do that completely anymore, and this hits us really hard. And I think with the chemicals industry we can't talk about deflation. Does that answer your question? Thank you. The energy prices are dropping, the raw material prices are dropping and a lot of people ask themselves why that hasn't got a positive effect in the costs of the chemicals industry, or is that not the case there? Well, this is the trend that you will probably observe as of Q3 and Q4. Now, we see that the high costs of the fourth quarter 2022 is accounted for in the P&L statements. So at the moment, we are still involved and confronted with the high costs of the past, and in the quarters to come, This will kind of balance to some degree, and it's understandable, and you will see that in quite clarity in the coming quarters. Thank you very much. Next question.

Patricia Weiss . Good morning to Cologne. Two questions if I may. Colleague has already made mention of prices but I've got to follow on because this is by no means a matter of course if you have a look at other companies. So can you give us an average percentage figure for the first quarter and then in view of the declining energy prices, the situation should be different. And then you also said that a postponement, the exiting, phasing out coal-fired electricity production, that you wanted to postpone that. So is that now obsolete or do you go back to the original timeline when it comes to phasing out electricity generation from coal-fired power plants and then I also wish to get your take on the further development of energy prices. Answers? Thank you very much. Prices in the first quarter, prices were still up 6% over prior year, which does not come as a surprise because we always compare our situation with a situation 12 months ago. And inflation? only became tangible in the second, third and fourth quarters and therefore does not come as a surprise that the prices are higher in comparison to 2022, but we very often have quarterly adjustments in our contracts and declining energy prices will then be passed on one quarter later. And as I have said previously, It is quite likely that in the next quarters, we will no longer have an increase in prices, but that there will be a price adjustment. This is the first question. Second, coal phase out. We did tackle this and we stretched it out a little bit when it comes to the timeline. So 2024 set to 2026. but we still want to go for a coal phase out and all the technical developments are taking place and are being continued. And we feel that the energy price situation will be less strenuous and that we then will no longer only have two wind turbines erected in Germany every day, but eight to 10 as would be required And we really want to speed up bureaucracy, the Germany speed as we saw it in the LNG terminal, that this will then be rolled out to other industries as well. Industry energy prices and interference from the government. And not normally in favor of that. I do believe that the markets should call the shots. Leave the markets intact and if we need a better electricity price then it all needs to be offer based as the other countries do it, France, Finland, the Netherlands, Poland and you name them so here they are saying okay there is this offer, there is this offer, there is this offer for the electricity price to be competitive not only for normal citizens but also for industry, but here in Germany, we go for bans. We ban nuclear power, coal power, but get the electricity from the nuclear power plants in France, provided they are running and in operation, get electricity from Poland, from coal-fired production. And that's all expensive. And if you then reduce the electricity prices for ideological reasons then you need a bridge up until you can ramp up renewable energy production but this will take five years and in this phase here where the offer has been reduced drastically from government you need an electricity price in order to prevent industry from going away because with the industry We have got production moving away, work moving away, employees moving away, tax income, tax take moving away or going lost. And if you go for an offer side approach, you have to come up with something. And therefore, I give the decisions my backing, but I prefer a functioning market. to determine energy prices. And I hope that this answers the question. So if you want to ask a question, press the star key followed by 11. Okie doke. Obviously, there are still problems with the English session. And there is a question via mail from an English journalist. Many American companies, are talking about the costly sites in Europe. Is that just a bluff? Are they pulling a bluff, or is that a real threat for Europe as an industrial site? Answer, I'm not surprised that this question would be coming, and this is certainly not pulling a bluff. and that American companies wonder whether they should continue operation in the European markets. And I mean the Americans are more tough, are much tougher than in America because in America the situation is a different one. There is an awful lot of support for the industry and here they see the red tape in Brussels and in Berlin. I mean just have a look at this glut of laws triggered recently that only steps up bureaucracy but does not give us any proper benefit and therefore many American companies are questioning whether they are in the right place and despite all the emotional links to Europe and European sites even German and European companies are wondering how long they want to stay. And I'm really reflecting on this as well. Unless we create an atmosphere to support industrial development, then we will leave. So we are actually talking about deindustrialization. First closures have already happened. We see bankruptcy in the small and medium-sized segment. And we really have to be careful in order to prevent a walking out of the industry because they will never come back. And Mr. Noel, I can only support what you have asked. American companies do wonder whether to stay on. Are there any more questions? There are no more questions. So, ladies and gentlemen, If there are no more questions, and if you are sure that there are no more questions, we take it that we have answered your questions. So have a nice day, and we just hope that we will see you in person shortly. Thank you very much for participating, and the conference is closed.