Omv Ag

Welcome to the OMV results January to March 2025 conference call and webcast. After the speaker's presentation there will be a question and answer session. To ask a question during the session you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question please press star 1 1 again. Please be advised that today's conference is being recorded. At this time, I would like to refer you to the disclaimer, which includes our position on forward-looking statements. These forward-looking statements are based on beliefs, estimates and assumptions currently held by and information currently available to OMV. By their nature, forward-looking statements are subject to risks and uncertainties that will or may occur in the future and are outside the control of OMV. Therefore, recipients are cautioned not to place undue reliance on these forward-looking statements. OMV disclaims any obligation and does not intend to update these forward-looking statements to reflect actual results, revised assumptions and expectations and future developments and events. This presentation does not contain any recommendation or invitation to buy or sell securities in OMV. We'd now like to hand the conference over to Mr. Florian Greger, Head of Investor Relations. Please go ahead, Mr. Greger.

Thank you. Good morning, ladies and gentlemen. Welcome to OMV's earnings call for the first quarter 2025. With me on the call are our CFO, Reinhard Florey, Martijn van Kooten, Executive Vice President, Fuels and Feedstock and Chemicals, and Barry Garjo, Executive Vice President, Energy. Our CEO, Alfred Stern, sends his regards. He's hosting a high-ranking government delegation that is visiting us today and therefore cannot participate in today's call. Reinhard will walk you through the highlights of the quarter and will discuss OMB's financial performance. Following his presentation, the gentlemen are available to answer your questions. And with that, I'll hand it over to Reinhard.

Thank you, Florian. And ladies and gentlemen, good morning and thank you for joining us. In the first quarter of 2025, the macro environment showed a mixed picture with growing concerns about the global economic outlook driven by uncertainties surrounding U.S. trade policy. Oil was part of a broader sell-off which started to briefly dip below $70 per barrel in mid-February before posting a moderate recovery at the end of the quarter. European gas prices rallied to mid-February on large draws on inventories due to elevated demand, but prices eased in the second half of the quarter as LNG inflows increased and as demand tailed off seasonally. The refining indicator margins were very volatile, on average showing some recovery compared to the previous quarter, but it remained significantly below the strong prior year quarter. Oliphant indicator margins improved quarter on quarter, supported by stronger demand and tighter than expected supply due to outages at crackers and refineries. European crack operating rates saw a significant increase, rising from 67% in the fourth quarter of 2024 to 76% in the first quarter of 2025. However, macroeconomic challenges persisted. The construction sector remained stagnant. The automotive industry experienced only a modest recovery. As a result, the increase in olefin prices could not be fully passed on to customers leading polyolefin indicator margins to average slightly below the levels of the previous quarter, but remaining slightly above the prior year quarter. Our polyolefin sales volumes, including joint ventures, grew by 10% year-on-year. Fuel sales volumes remained broadly stable, and hydrocarbon production was 12% down year-on-year, impacted by the divestment of our Malaysian assets. Cash flow from operating activities reached almost 1.4 billion euros, an increase of more than 30% compared with the previous quarter. Clean CCS operating result was solid, coming in at around 1.2 billion euros, 22% below the prior year quarter level and 16% lower than the fourth quarter of 2024, which had benefited significantly from the arbitration award in gas marketing and power. Clean CCS earnings per share amounted to €1.26. Before I will go into the details of the first quarter financial results, let me give you a short update on OMV's strategic progress. At the beginning of March, we reached a major milestone in the implementation of our Strategy 2030. OMV and ABNOK, have signed a binding agreement to combine Borales and Boruche along with the simultaneous acquisition of Nova Chemicals to form the new company, Boruche Group International. This strategic partnership with ADNOC in polyolefins will bring clear benefits to OND and our shareholders. The new company will be the fourth largest polyolefin player globally with access to the largest, most attractive, and fastest growing markets across the Americas, Europe, the Middle East, and Asia. It will benefit from a highly competitive cost position with around 70% of its production capacity in feedstock advantage regions, complemented by a best-in-class specialties business. Following a €1.6 billion cash injection into the new company, OMV will hold a 36.9% stake in Borussia Group International with equal shareholdings and joint control with Adnok. Borussia Group International will serve as a substantial platform for organic growth in polyolefins, supported by a robust pipeline of near-term projects. Boruch Group International has tremendous growth potential through the cycle with EBITDA projected to exceed US$7 billion. In addition, we anticipate substantial synergies of approximately US$500 million per annum on a run rate basis by 2030. These transactions create immediate value for OMV as they are free cash flow and clean CCS EPS accretive. At the same time, OMV maintains its investment-grade credit rating and keeps its leverage ratio well below 30%. The combined strength of the three companies will position Baruch Group International well to generate attractive shareholder returns. We expect a floor dividend net to OMB of around $1 billion per year, which will further strengthen OMB's shareholder distributions. We anticipate completing both transactions by the end of the first quarter 2026. The OMB supervisory board has also given its approval. As is customary, closing the transaction is subject to the relevant regulatory approvals. In this case, merger control clearances in markets where the companies sell their products, and foreign direct investment clearances in Austria, Canada, and the U.S. Until completion, Borealis and Bruges will continue to pay dividends according to their current schedules and commitments. In Romania, we have reached another major milestone. We have commenced drilling operations at the Neptune Deep Project, located 160 kilometers offshore in the Black Sea. The project is progressing very well, according to plan and within budget, with first gas estimated for 2027. Neptune Deep, the largest offshore gas project in the European Union, will add around 70,000 barrels today to our portfolio. In addition, OMV Petron is advancing exploration activities in the Black Sea at Hanaspo offshore bloc. We have also successfully started up the re-oil plant in Austria with an annual processing capacity of up to 16,000 tons of hard-to-recycle plastics. This is a significant milestone in the chemical industry following 15 years of pioneering research and development. Complementing mechanical recycling, re-oil processes plastic waste that would otherwise remain unrecyclable and reintegrates it into the value chain. The re-oil technology is expected to reduce CO2 emissions by up to 34% compared to plastic waste incineration. We have also secured an 81 million euro grant from the European Union to support the next phase of our chemical recycling initiative the industrial scale re-oil plant with a then processing capacity of up to 200,000 tons. This morning, we announced the startup of the green hydrogen plant at Schwechat with an annual capacity of up to 10 megawatts. The green hydrogen will be used to produce more sustainable fuels and chemicals, including sustainable aviation fuels and renewable diesels. Let me now return to the performance of our business segments in the first quarter of this year. Compared to the first quarter of 2024, the clean operating result of chemicals was almost flat at €126 million. In our European business, we recorded positive market effects of €57 million, attributable mostly to rising olefin indicator margins. Inventory effects were positive, but 11 million euros lower compared to the first quarter of 2024. The utilization rate of our European crackers increased by three percentage points to 90%. The contribution of Borealis, excluding joint ventures, declined to 71 million euros. The base chemicals business decreased considerably as higher olefin indicator margins were more than offset by lower inventory valuation effects, a decreased like feedstock advantage, and higher customer discounts. Polyolefins came in lower as well, mainly as a result of higher fixed costs and lower realized margins. We were able to expand polyolefin sales volumes, excluding joint ventures by 11%. Sales volumes in the consumer products and infrastructure industries increased as more demand was captured, while sales volumes in the mobility industry declined in line with the market sentiment. The contribution of the joint ventures grew to 45 million euros, mainly due to better Perugia performance and the exclusion of Baystar's result from the clean operating result effective of March. The contribution from Boruche increased following higher sales volumes, while softer polyethylene prices in Asia partly offset this. Overall, the result was positively impacted by around 40 million euros due to the reclassification of Borealis as an asset held for sale following the signing of the transaction on March 3rd to combine the shareholdings of Borealis and Boruche into Boruche Group International. The clean CCS operating result of fuels and feedstock declined considerably to €117 million, mainly due to a lower refining indicator margin and a reduced contribution from ad-hoc refining and global trading. The European refining indicator margin dropped by $4 per barrel, resulting in a negative impact of 110 million euros. The overall refining utilization rate improved compared to the first quarter of 2024, driven by higher utilization rates at Schwechat and the Petrobras refineries. The contribution of the marketing business increased compared to the first quarter of 2024. Retail performance was better, due to higher fuel margins and sales volumes, as well as stronger performance of the non-fuel business. The result of the commercial business was similar to the first quarter of last year. The contribution of ad-hoc refining and global trading decreased significantly, close to a break-even result, mainly due to a weaker refining margin environment and lower trading results. The clean operating results of the energy segment declined by 140 million to 910 million euros as a better EMP result could not compensate for the lower gas marketing and power contribution. The performance of EMP improved, driven by positive market effects of around 140 million euros. gas prices rose significantly compared with the first quarter of 2024, while oil prices decreased. Production volumes declined by 42,000 barrels per day, primarily due to the divestment of the Malaysian assets and natural decline in Norway and New Zealand, partially offset by increased output in Libya. Production costs increased slightly to $10.1 per barrel due to lower production volumes. Sales volumes decreased in line with production, also impacted by the lifting schedule in Norway and Libya. The result of gas marketing in power declined sharply by 102 million euros with reductions seen both in East and West. The gas waste result amounted to 120 million euros, mostly driven by a lower storage result due to decreased summer-winter spreads, partially offset by arbitration award of roughly 50 million euros for the Austrian supply contract with Gazprom. Gas East came in negative down by 104 million euros compared to the first quarter 2024, which was primarily due to the change in legislation for the gas and power sector in Romania that came into effect in April 2024. At around 1.4 billion euros, cash flow from operating activities was strong, rising by 32% compared with the previous quarter. However, it was 26% below the very strong first quarter of last year, which had benefited from a higher result and higher dividends from APNIC refining. Networking capital effects were around neutral. The organic cash flow from investing activities was around 1 billion euros, mainly related to ordinary ongoing business investments and major growth projects such as Neptune Deep, the PDH plant in Belgium, and the sorting plant in Germany. As a result, the organic free cash flow before dividends for the first quarter of 2025 came in at 441 million euros. Our balance sheet remained very strong. Net debt was stable and our leverage ratio stayed low at 12%. At the end of March, OMV had a cash position of 6.5 billion euros and 4.2 billion euros in under-owned committed credit facilities. Looking ahead, we anticipate that volatility will persist. driven by uncertainties surrounding the outcome of ongoing tariff discussions and the Ukraine peace talks, which significantly limit our visibility. We do not expect to be directly impacted by the import tariffs as our operations are less export-oriented. We primarily produce and sell regionally. However, tariffs will influence the global economic environment, and this will in turn have an impact on OMB. We have adjusted our expectations for the average brand price for the full year 2025 from 75 to around $70 per barrel. Our assumptions for European natural gas prices remain unchanged. However, we now anticipate the average TAG price for the full year to trend closer to 40 euros per megawatt. In the chemicals markets, we saw stronger olefin indicator margins during the first quarter, with a further increase in April. However, the potential impacts of tariffs implementation on the markets remain uncertain. Hence, we are maintaining the full-year outlook for olefins and polyolefins provided in February. We expect to grow polyolefin sales volumes of Borealis, excluding joint ventures, to around 4.1 million tons. higher an increase of 200,000 tons compared with 2024. The refining indicator margin has been highly volatile in the first three months, peaking in February before trending downward. We continue to project approximately $6 per barrel for the entire year. All other full-year assumptions remain unchanged. In the first quarter of 2025, our organic capex came in at around 800 million euros, significantly below the previous quarter. We remain highly disciplined in managing our expenditures, both operationally and in terms of investments. Our full year outlook for organic capex is unchanged at 3.6 billion euros, lower than the prior year. And we remain strongly committed to our efficiency program targeting additional cash flow of at least half a billion euros by 2027. We have already achieved around 180 million euros last year, and we are well on track to meet our 2027 target. As highlighted in the trading update following the Boruche Group international deal, the reclassification of Borealis as an asset held for sale is expected to have a positive impact of around €140 million per quarter on the clean operating result. Additionally, the exclusion of the Baystar result will further contribute to this positive effect. There will be no effect on cash flow. We expect substantial dividend payments once again from Boruch. In the second quarter of this year, we are due to receive around €220 million as the second installment for the 2024 dividends. Rouge announced this month that total cash dividends for 2025 will be about $1.3 billion. The first tranche of around €220 million net to OMV will be paid in the fourth quarter of 2025 and the second in 2026. Thank you for your attention. My colleagues and I will now be happy to take your questions.

Thanks a lot, Reinhard. Let's now come to your questions. I'd ask you to limit your questions to only two at a time so that we can take as many questions as possible. You can, of course, always rejoin for a follow-up question. We start with Josh Stone, UBS.

Thanks, Florian, and good morning, Reinhardt and team. We're in a more volatile environment where everything's a bit less certain right now. I want to understand how you're sort of managing that situation today on the view we may go into a lower price environment. Are there particular mitigating measures you could take, in particular on CapEx, Or is it the case that your financial frame is in such a place that you don't need to weigh on capex just yet? So any comments around that would be helpful. And then second question on the upstream, so maybe this might include Barry, but you've talked in the past about adding barrels through acquisitions. I sort of wondered how you're seeing the opportunity set today on that. If any downturn on crude could actually present an opportunity for OMV Or is it the case you'd rather wait to get the BGI transaction done first before exploring that? Thanks.

Thanks, Josh. I will take the first question and pass on the second to Barry. As I indicated, we indeed believe that our visibility for the development of the markets are not very high and therefore we are i would say driving on site here nevertheless our business is set up as an integrated business and provides a significant resilience also to situations like that we have however focused our mitigation measures very much on networking capital improvement measures and on making sure that there is no overruns in capex or in other timelines. What that means is we stick to our promise to have a lower capex in 2025 compared to 2024. And we have also anticipated that both the pace and the speed and scope of some of our transformational investments on the path forward will be adjusted to the current situations. We are not changing the direction, but we are changing pace and scope as we are seeing the market developing currently slightly slower and making some of these investments more profitable if they come in later. Now over to Barry.

Hi, Josh. Thanks for the question. Barry here. Our view on adding inorganically barrels hasn't changed from a strategic perspective. I need to say, though, however, that, of course, the market out there is changing. We see a slowdown in M&A activities. Now with falling prices, we still see a gap in bid-ask spreads between buyers and sellers. But we are continuing to screen, of course, for assets, that could potentially be accretive to our existing portfolio and existing cash flows.

Thanks for the comments.

Thanks, Josh, for your questions. We now come to Rem Kamat from Barclays. Rem, please go ahead.

Hi. Thanks for taking my questions. I have a couple, please, on chemical side particularly. So in your remarks, you highlighted that European cracker operating rates have increased in Q1. I think it's around 10% quarter on quarter. With current challenges on demand side, how do you see margin evolving in the second quarter? And on the similar line, with oil price coming down, how do you see fish stock costs evolving in the Europe where you operate? And how do you see it coming through in terms of for your joint venture entities in terms of the volume, sorry, with certain scheduled turnaround in one of your joint ventures? Thank you.

Thanks, Rem, for the question. Indeed, when we are looking at the challenges of the market, we are seeing different movements. Some of these movements see a slightly lowering demand, specifically when it comes to refinery products. On the other hand, we are seeing opportunities also that the chemicals fields could open up some opportunities for volumes. We have seen a development like that already in the first quarter. We have seen that while refinery margins were very volatile, in principle, they have been stable at a level that gives us the opportunity to also keep up our utilization. Currently, as we speak, we are still an average above a refining margin of $6. So this will also give us opportunities for the future. We, however, have to see that the mix changes. In the first quarter, we have seen more of a mix on the lower end of the refineries, which ended up in lower margins. We see that middle distillates are still partly under pressure with the exception of sustainable aviation fuels and overall kerosene. And we are seeing that there is an opportunity on the chemical side that our petrochemical products can also go on further. We are seeing that olefin prices have now in April come up quite significantly, around $100. And we are also seeing that specifically in polyethylene, we have seen a $50 improvement. So this means that in general, there are market opportunities as well as some risks that we have to balance. Regarding the feedstock costs, we still see that the light feedstock advantage that we are having in our Nordic crackers will be slightly lower than what we have seen in the last year, simply because NAFTA will be benefiting from lower oil prices. whereas gas prices have been higher, at least in the first quarter. We, on the other hand, have also seen that gas prices have come down at the beginning of second quarter, so the effect then remains to be seen. But in general, I do not see only negative developments here. We are also seeing opportunities in the current market.

Thanks a lot, Rem, for your questions.

We now come to Alejandro Vigil Santander. Alejandro, please go ahead with your question.

Yes, hello. Thank you for taking my questions. The first question will be about the UNOC refunding and trading. If you can elaborate about this question. this week performance you mentioned during the call, if it's more driven by trading, less opportunities, or it's more on the refining side. And the second question is about, of course, you have a very strong balance sheet, but you're going to increase also leverage with the transaction of Boruche, Borealis. If you are planning some divestments as part of your plan for the coming years to offset this increasing leverage. Thank you.

Thanks, Alejandro. Maybe I'll start with the second question and pass on to Martijn for the first question to answer. Regarding the balance sheet and regarding the leverage, we are still very confident and see a very strong position of OMB. There is no need for us to divest business as we have already streamlined our portfolio. And we are seeing that the additional leverage that we have from the equity injection into BGI will be limited to 1.6, maybe only 1.5 billion euros. And that is easily within the frame that we have of our leverage target of 30%. We estimate that even after that, we will only be at a leverage rate slightly above 20%. So, therefore, there is nothing that we are considering at the moment in terms of major divestments, although reasonable arrendations of our portfolio are normal calls of business that we'll take.

Okay. Hello, this is Martijn. I'll then continue on the ad-hoc refining and trading question. The two main effects driving the drop in results, one is the refining margin in Middle East and Asia that has been significantly lower in Q1 this year versus last year. um the trading result has also been lower but it is still strong in our view q1 last year was exceptionally good and so these two effects together make for a tough first quarter um i'm not refining that the the team there is very focused of course on in this difficult and volatile environment to make the best and the trading opportunities but the refining margin also now in q2 in the middle east it looks very challenging there's of course driven by a combination of economic uncertainty, but it is also driven by a change in the availability of lighter and heavier crudes. Relatively speaking, the heavier crudes are now more expensive versus the lighter crudes, and that's another effect that's driving a tough refining environment for ultimate refining.

Okay, thank you.

Thanks, Alejandro. We now come to Henry Tarr, Berenberg.

Hi. Many thanks for taking my question. I guess the main one is really around the Beruge Group International and the floor dividend. So how robust do you think this is to sort of changes in the macro environment given leverage targets, et cetera, for the combined group? Or I guess another way to ask it would be, you know, what would have to happen for the floor dividend to become a risk at this point? Thank you.

Yeah, Henry, thanks for the question. And I appreciate that the floor dividend is really an attraction for BGI and BGI investors, among them OMB. Indeed, the floor dividend is adjusted to the business plan that we see ahead, even in more risky scenarios. We do not see that the floor dividend is at risk with the perspective that we have today. The beauty of BGI actually is that it's a global business and that in general, the presence on the local markets of US, of Asia, Middle East and Europe can be played alongside their strength, which means European production for European demand when it comes to specialties, when it comes to high-end plastics. where we have an upgrade of the current product portfolio in the U.S. through the new technologies. But also in Middle East, when Borush 4 will come on, we will see that there is a significant addition of both capacity and qualities that can be produced with the latest Polestar technology there. And we are also seeing that the current situation, even in tariffs, in a tariff scenario would not be adverse to this setup. because specifically we see that Middle East currently is not affected by tariffs and also the export from Buruj into the Chinese markets and other Asian markets are not negatively affected. So therefore, we feel that the floor dividend in the business plan that we have, including risk scenarios, is not something that we are currently concerned about.

Thank you so much, Reinhard.

Very helpful.

yeah thanks a lot uh henry i was just notified that the next in line uh dropped um i know it's a very busy reporting day currently there is no other people in the line asking questions so if you have a follow-up question you oh i just hear that there is a follow-up from from josh please uh josh go ahead yeah hi florence i thought i'd keep going um

I want to ask about tariffs. You mentioned no direct impact or very minimal impact on OMV. Can you maybe just expand on NOVA chemicals and running through the scenarios on that, given they have both US and Canadian assets, it's quite difficult for us to understand what the potential impact on that might be. And I'm sure you did a lot of auditing on that. So maybe just talk about that. That would be helpful. Thanks.

Yeah, thanks, Josh. Indeed, in the general note, the exposure to tariffs as we see it in the narrower sense will be marginal to OMV. The reason simply is that with our supply radius that we have both on the upstream side and the downstream side, we are not in a cross-continental trade or in cross-continental business. On the other hand, when it comes to BGI, we are seeing that this global individual setup as such will rather help to avoid being exposed to tariffs. Now, of course, I understand that you are addressing the topic between Canada and the U.S., and we have analyzed that in both the due diligence as well as in the discussions with NOVA quite significantly. Currently, Even in the current discussions that we are seeing, we are not seeing that the products of polyolefins are being affected between Canada and U.S. And we are also not seeing that this would be a reasonable measure from the U.S. to take against Canada or vice versa, because this is so much interlinked trade, and there are quite some dependencies of industry branches in the U.S. on the Canadian production. So, therefore, we see it rather as an unlikely case that there would be negative effects. calculated even in an adverse case if such tariffs would be implemented, and we still come only to a small double-digit million in negative impact on that business. So compared with the scope and size of this whole business and transaction, this seems from today's perspective as marginal.

Thanks, Ronald. Thanks a lot, Josh, for your follow-up question. Now there is questions from Sasi Kancilukwu from Morgan Stanley. Sasi, please go ahead.

Hi. Thanks for taking my questions. I had two, please. The first one was on the current refining market. You've maintained the $6 per barrel and you have highlighted margins being very volatile. I was just wondering what the current levels were that you're seeing right now. What have they been more recently? But also, I appreciate if you could provide some color on whether you're seeing any visible changes on demand over the past one month, I suppose. How do you look into the demand when you look into 2025, especially demand for middle distillates growth? The second one was related to the dividends, the dividends to Borealis minority shareholders. I was just wondering what is your guidance for the dividends to Borealis minority shareholders for 2025?

Okay, thanks, Sassi. Maybe I would have more time to start with the first question.

Yeah, thank you. Thank you, Sassi, for the question. On the refining market, we unfortunately see that April is slightly better than the average of the first quarter. So average first quarter 6.7-ish and now 6.4. So it remains a tough environment. In the Middle East, it's the same. Actually, also a lower start in Q2 than in the average of Q1. Now, what you have to keep in mind is that especially in Europe, there's also, of course, inland margins. And they are also volatile already since Q4 last year. With different dynamics playing there, we see in general that jet is doing very well. We also see that the consumers on retail kind of are holding up. But we see some weakness in the business segments. And it's similar to what Reiner described on polyolefins. So there's a different picture on the industry segments.

Then to your second question regarding dividends from Borealis. We are currently seeing a shareholding of 75% of Borealis for OMB and 25% from Adnok. So the minority shareholder, as you call it, is actually Adnok. And what we see is that, of course, you see a certain negative cash impact from a fully consolidated Borealis in our balance sheets if there is outflow on this 25% when we receive the dividends. On the other hand, the opposite is the case in Boruche, and in the total dividends that we see receiving from Boruche and trading out to Adnok from Borealis, This is a positive saldo for OMB, and that is why I indicated that this equalization payment and capital injection into BGI, which is anticipated as $1.6 billion, will be probably lower at around $1.5 billion after the dividend payouts because that will be adjusted according to the dividends that will flow from both Borealis and Huawei.

Thanks, Sassy, for your questions.

We now move on to Bertrand Audet, Kepler Chevreux.

Yes. Hello. Thank you for taking my question. I just have one. So obviously, macro is uncertain, but all price is still relatively healthy at above $60, whereas there's a lot of uncertainties around future OPEC policy, and you've kept your 2025 capex and change for now, but what is the plan B if we have a very severe oil price downturn, let's say towards $40 per barrel? So yeah, I wanted you to understand how you can flex your capex in, I would say, a stringent all-fwise downturn. Thank you.

Yeah, thanks, Bertrand. Of course, we see a $40 scenario currently is not very likely. and we are seeing it more as a remote scenario. Nevertheless, of course, also our company runs risk scenarios, and we run the kind of response possibilities and making sure that we have resilience plans. While this is nothing that we can communicate in any detail, I can assure you that we have three levers that we will definitely play on. The first is we are working very intensely on our operating cost optimization and efficiencies, which will help us to respond. The second is we see flexibility on TAPEX, of course. And as you may remember, in 2020, when COVID crisis was hitting, the markets and oil prices dropped sharply into the direction of $40. we were able to cut our capex within this one year by more than 30%. So you can see that a company does have this kind of responsiveness as well as this kind of resilience. And then, of course, it's networking capital. Networking capital is a little bit of a buffer factor that we have when oil prices and margins would come down. So you would see then immediately also the level of networking capital dropping and releasing some of that networking capital into cash, providing a certain reserve and security for the balance sheet. But we also have these kind of active responses in our plans. And this is, of course, something we are considering now. But we are rather currently seeing the span between 60 and 70 with the full year more towards the 70s still than thinking about the $40 of oil price environment as of yet.

Perfect. Thank you.

Thanks, Bertrand. We now come to Matt Smith, Bank of America.

Hi there, good morning. Two questions from me, please. The first was just a clarification on the Baruch Group International floor dividend, and that was just a simple clarification whether the floor dividend, or at least to RMV, was the, whether it was 90% of net income, whether that represented the floor, whether it was the 2.2 billion total amount, and that translated to 1 billion US dollars to RMV. So it was a simple clarification. on the BGI dividend. And then secondly, wanted to come on to the chemicals margins. You noted in sort of current and certain environments actually throwing up some opportunities. And I think you noted some improvements in some chemical spreads in April. I just wondered if you could touch on some of the drivers there, please, understand those opportunities, what you think is driving that, and therefore to help us think about the sustainability of that, please.

Thanks, Matt. Regarding the floor dividend, just to explain in some more detail, the floor dividend for the whole group of BGI is around 2.2 billion US dollars. Then, according to the current situation, OMB would be entitled a share of 46.9% after the anticipated capital increase, this will rather be a share of around 43%. This will then translate in around 1 billion US dollars or according to the exchange rate around 900 million euros. That is a net cash inflow to OMV. And whenever you see the consolidation, you would see more or less the operating cash flow being the net cash flow and the net cash flow being the dividend. That is how the non-consolidated or equity-consolidated method that we will have then the BGI group, including Borealis, um in this uh in this transaction so you would see as an operating cash flow um the 900 million and as a free cash flow also the 900 million in euros and chemicals margins Regarding opportunities, whenever we see the possibilities to shift the portfolio towards higher grading, that always unlocks an opportunity for higher margins. Currently, we have seen in Q1 rather a decline of our share on the specialties. This is something we aim to reverse for the rest of the year to come back to a quite high share of specialties. And if we see a certain recovery of the economy, and also a positive pricing of the pre-materials of the feedstock for chemicals. This enables then also a margin uplift that we could realize in the market.

And maybe this is Martijn, just a few extra words, because I think what's also good is the resilience that we have. So next to the opportunities that Ryan had talked about, we have, of course, an integrated business model. And what we see is as the refining margins are increasing, weak right the NAFTA getting getting lower and especially then for the trackers that we have in in Central Europe in in Austria and in Germany we see that the margin then expands that also gives a certain that integrated model gives us certain resilience and the same holds true for the for the borealis crackers all right thank you very much

Thanks, Matt. We now are at the end of our conference call and would like to thank you for joining us today. Should you have any further questions, please contact the investor relations team. We will be happy to help. Goodbye and have a nice day.