Wacker Chemie Ag Ord

Welcome to the conference call, full year 2024 results conference call. I'm Moritz, the CorusCall operator. I would like to remind you that all participants will be in the listen-only mode and the conference has been recorded. The presentation will be followed by a question and answer 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 our pleasure to hand over to Jörg Hoffmann, Head of Investor Relations. Please go ahead, sir.

Jörg Hoffmann, Head of Investor Relations Thank you, operator. Welcome to the WACKER CHEMEA-HE conference call on the 2024 full-year results. Dr. Christian Hartl, our CEO, but with BSO, our CFO, will take you through our prepared slides momentarily. The press release, our IR presentation, and detailed financial tables are available on our webpage under the caption of this relation. Please note that management comments during this call include forward-looking statements involving risks and uncertainty. We encourage you to review the safe harbor statement in today's press release, the presentation, and our annual report regarding risk factors. All documents mentioned are available on our website. Chris?

Welcome, everyone. Today, we report on a challenging year, 2024, for WACKER and the entire chemical industry. The European chemical industry has been struggling with an economic recession since Q1 2022 and faced low demand and capacity utilizations. Despite these challenging conditions, WACKER remained on course and achieved some good successes. In silicones, we increased our specialty volumes despite slow momentum in the markets. We also increased volumes in polymers, despite weak construction markets. We grew the share of semi-grade volumes in polysilicon and we set up Europe's latest biotech facility to support the German pandemic preparedness program in biosolutions. All these actions were a hard one. They supported our results last year and they will have lasting effects in the future as we leverage those achievements further. For this, Please allow me and on behalf of the board to thank our employees for their engagement. Their expertise, commitment and experience really made the difference. Now looking to the figures. In 2024, we reported sales of 5.72 billion euros and an EBITDA of 763 million euros. While the group EBITDA was 7% lower year over year, Our chemicals business performed well. In sum, chemicals EBDA came in at 542 million euros, which is up 11% year over year. Specialty silicones primarily drove this improvement. In silicones, specialties were markedly higher, and this supported a better mix and a strong earnings recovery. EBDA climbed by 47% year-over-year and came in at 347 million euros. In polymers, volumes were up somewhat year-over-year, driven by dispersion for adhesives and coatings. This growth helped offset continued weakness in construction-related binders. Owing mostly to lower average prices, EBDA came at 194 million euros which is down 23% year over year. In biosolutions, EBDA was markedly higher at 35 million euros versus 7 million euros a year ago. The main driver was the new biopharma site in Halle. This, as well as our new capacities in Leon, Spain, will provide us with a strong foundation for further growth. With these major projects completed, we are now focusing on filling new capacities. In polysilicon, our strategically important semiconductor business developed positively, with both volumes and prices being resilient. However, massive overcapacities in China and U.S. tariff uncertainty weighed on solar-grade polysilicon demand. This left its mark on earnings. EBDA came in at 193 million euros which is down 40% year over year. Given the volatile market environment, achieving resilience is our key mandate. We are strategically on the right path. We increase specialty capacities and a strong focus on semi-grade polysilicon. To make us more resilient, we focus strongly on costs, efficiency, and specialties. With our established efficiency programs, we systematically lower our specific operating costs. Our WACKER operating system is the key driver for our competitiveness. Last year alone, we implemented around 1,000 measures, yielding savings of around €60 million. Looking to sustainability, we take a reliable, systematic approach here as well. Our goals are clear. By 2030, we want to cut our absolute CO2 emissions by 50% and achieved net zero by 2045. The science-based targets initiative validated this target in 24. Compared to 2020, we have already reduced our CO2 emissions by around 30%. Our sustainability efforts are not going unnoticed by rating agencies and customers. In 2024, the CDP climate change assessment WACKER earned the top A score. By offering high-performance, sustainable solutions, we support our customers' efforts to achieve their sustainability goals. A great example for this is Viv Unilever, who recently selected WACKER as a climate partner. This illustrates how sustainability is a clear business case, helping us strengthen our relationship with key global customers. Despite challenging conditions, WACKER remains on course and we keep to our established dividend policy. At our upcoming AGM on May 7, we will propose a €2.50 per share dividend. This equates to a payout ratio of 52% of our reported EPS of €4.85. We consistently generate dividends for our shareholders. Over the past 10 years, we have paid out almost 2 billion euros in dividends. Now looking to the guidance on the next page. For 2025, we forecast group sales of 6.1 to 6.4 billion euros with an EBITDA of 700 to 900 million euros. CapEx is expected to be significantly lower than last year when we have invested 666 million euros. This year, CapEx will be slightly above depreciation, which is expected to be slightly higher than 500 million euros. We see net cash flow substantially higher than last year and positive. We expect the overall market environment to remain challenging in 2025 and see higher risks for trade disputes. The good news is that we will continue to benefit from global megatrends in the medium and long term. Sustainability, digitalization, health and smart construction are among the key drivers of our business. At our Capital Markets Day in late September, we confirmed our strategy and long-term growth targets. By 2030, we target sales of more than 10 billion euros and an EVDA margin of over 20% and a ROCE two times of our cost of capital. Our focus today is on filling new capacities improving margins, and investing in targeted areas. We continue to invest in specialty growth and in production efficiency. Strategically, we concentrate even more intensely on the specialty business in the chemical divisions. This includes high-tech silicones for the energy transition and e-mobility, or polymers for modern smart construction. In biosolutions, the focus is on customized high-tech products and modern medical therapies. At Polysilicon, we focus even more on our semiconductor business. From these projects here, you can see that we are investing across our global footprint. This follows our overall strategy of investing in the regions for the regions. I'm convinced that WACKER is well positioned for the future. With our committed team and our innovative products and solutions, We enable the maximum trends of today. Now to Tobias for further details on our results. Thank you, Chris. Welcome, everybody. Looking at the profit and loss, sales during 2024 were 5.7 billion euros, down 11% over the year. The sales development was primarily due to lower prices and volumes sold in polysilicon. Pending tariffs on solar product imports into the U.S. created significant uncertainty in the market. On the other hand, sales in chemicals were, at the prior year level, with strong volume and sales growth, especially in silicones, partially offsetting lower sales in columnars. Biosolutions sales were markedly higher due to growth in biopharma. The full-year EBITDA came in at 763 million euros. While the group result was 7% lower year-over-year due to polysilicon, both chemicals and biosolutions showed a strong year-over-year improvement. The chemicals EBTA reached 542 million euros. This was an increase of 11%, driven by growth in specialty silicones. So, altogether, the group EBTA was below the prior year, but with very different dynamics across the segments. Now, looking at the last line items in the P&L, including the contribution from Sochonic, the result was 19 million euros from investments. Last year, we reported a small contribution from income tax due to previously unrecognized U.S. deferred tax assets. All told, net income was 261 million euros, equating to an earnings per share of 4 euros 85 cents. Our balance sheet shows strong financials with a high liquidity of 1.3 billion euros and 4.8 billion euros in shareholder equity. Fixed assets have climbed over the past couple of years and now total 3.4 billion euros, up from 2.5 billion euros at the end of 2021. So we have made substantial investment in expanding our capacity. There is a significant opportunity now to drive sales higher by leveraging these assets. Networking capital increased by about 350 million euros in 2024. This primarily reflects the higher inventory levels in Polysilicon. Pension provisions decreased by 83 million euros to 752 million euros due to the higher discount rates. With a high level of liquidity and low debt, we have a solid financial structure. At silicone sales in 2024, we are approximately 2.8 billion euros, up 2% year over year. At 347 million euros, EBITDA was 47% above the low 2023 result. The increase was primarily due to higher specialty volumes, good mix, and better plant loading. Overall, specialty volumes are improving, but margins were still well below target. We are examining our portfolio more granularly, aiming to focus on high margin applications and efficiency measures. For 2025, we expect sales in silicones to be approximately 10% higher than last year. The EVDA margin is expected to be slightly higher. We expect higher specialty volumes to drive this year's performance again. Business performance in silicones improved over the course of 2024 and the exit rates were clearly higher year over year. This positive trend has continued into the beginning of 2025 with demand for specialty products at a good level. Full-year sales in polymers were 1.5 billion euros The DA declined by 23% year-over-year to 194 million euros. Lower selling prices compared to the previous year primarily drove the development of sales and earnings. Volumes and polymers, on the other hand, were slightly higher year-over-year. This positive development was driven by higher demand for dispersions used in adhesives and coatings, offsetting some weakness in construction powers. While overall construction-related volumes were a bit lower year over year, our global production and technical center setup enabled us to drive volumes in Southeast Asia, Middle East, and the Americas. The growth in these regions allowed us to counter some of the headwinds in Europe and China. For 2025 in polymers, we expect sales to go by a low significant percentage, with EBTA margin at the prior year level. This year, we see slightly higher volumes in dispersions and dispersible powders with slightly lower prices. At BioSolutions, sales in 2024 were up 375 million euros, up 11%. EBTA increased to 35 million euros, up from 7 million euros in 2023. was a driver of the sales and EBITDA groups. At the beginning of June, we opened the new MR&A facility. For 2025 in BioSolutions, we expect sales of approximately 400 million euros with an EBITDA margin slightly above the prior year level. We do not see a major recovery in biotech yet and expect the project business to stay challenging. Full year sales in polysilicon came in at €949 million, 41% lower year over year. The primary drivers were the significantly lower solar grade volumes and prices. Semi, on the other hand, was resilient and the percentage of semi-grade polysilicon in the mix increased in 2024. Primarily due to the lower solar grade volumes sold, EBITDA decreased to 193 million euros. As a reminder, in the fourth quarter of 2024, we booked the IRA benefit of approximately 30 million euros. This credit relates to the US policy volume sold and produced in 2023 and in 2024. For 2025, We expect sales of 1.0 to 1.3 billion euros and EBITDA of 100 to 250 million euros. This is a wide range and it covers some different scenarios. The lower end essentially shows a no demand recovery scenario for U.S. compliant solar grade materials from today's levels. All outcomes above the lower end of the guidance require some degree of demand improvement. The upper end factors a significant demand recovery. From today's point of view, it is difficult to predict which scenario is more likely. In the second half of 2024, we reduced solar wave production volumes and we took additional steps at the start of this year. So today, our production volumes are aligned with sales volumes. With inventory in our Asian hubs, we can respond quickly to any improvement in demand. Let's move on to others. As you can see here, the CO2 compensation scheme helped back the other EBITDA during the first three quarters of last year. Then in the Q4, when the payment arrived, we saw a reversal of the debits to others during the first nine months. This dynamic will be the same in this year, so in 2025. However, when modeling the reported full year 2025 others, EBITDA, we believe that minus 40 million euros before siltronic seems reasonable. This amount is lower than last year due to primarily the lower cost absorption of group infrastructure. Also, when modeling Ziltronic's ad equity contribution this year, please consider the latest consensus figures, which call for a negative net income of approximately minus 90 million euros. This would be a substantial swing compared to last year, when we booked about plus 30 million euros for our ad equity contribution from Ziltronic, which is at 30%. Now, let's look Look at our net financial position. In 2024, we generated a cross-cash flow of 310 million euros. Cross-cash flow was held back by investments in working capital, with investments in inventory totaling approximately 369 million euros. The cash flow from investing activities was 636 million euros. As Chris spoke about, the main investments were in silicone specialties and in semi-grade polysilicate. Including the dividend payment of €149 million, we ended the year with a net debt of €691 million. For the first quarter of 2025, we see sales of approximately €1.5 billion and EBITDA of around €135 million. Before we start with the Q&A, let me summarize. is well positioned financially and strategically. We have made substantial investments, strengthened our asset base, and have a better regional exposure. Our specialty business is performing well, and we leverage our completed investments here. And we will continue investment in serving our customers in attractive markets.

Operator, We're now ready to begin the Q&A session.

Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only the handsets while asking a question. In the interest of time, please limit yourself to two questions and rejoin the queue if needed. Anyone who has a question Press star and one at this time. One moment for the first question, please. And the first question comes from Andreas Heine from Stiefel. Please go ahead.

Thanks for the opportunity to ask the first question. I have two. The first is in silicons where you were referring to quite a good demand increase in specialties. Could you a little bit refer by regions and end markets where this growth is coming from? And then on polysilicon, It's one subject, but more than one question I have to admit. The first is on the U.S. market, there seems to be quite some gray imports according to the import data from India and Turkey. Do you see any initiatives by the authorities to look into whether these are compliant material or not? The first part of that, the second IRA benefits in 2025, could you give some guidance how much that might be. And let's say you see a recovery in polysilicon in the demand. What would you do? Would you increase the production rate or would you keep it at 50% and reduce inventories? These are my questions.

Okay. Chris, on your first question on silicon specialty growth, Actually, when we look at the order book, we see demand increase in pretty much all of the segments and also in many of the regions. So there's nothing really specifically to point out. And I think what is important to keep in mind, I mean, we invested in the last couple of years quite some capacities in downstream specialty. capabilities and capacities. And now this gives us the leverage to grow the business. And yeah, we see that demand is picking up. And yeah, so that's the reason for the additional volumes we also expect in 2025. On your question on the silicon, first on the imports into the U.S., Well, I would say they have always been in the recent years, despite a rather clear regulation on the U.S. side, especially with the U.E. Group for Stable Act, there's always been some kind of gray imports, if you want to call it like this. And what we hear is that the Russian Border Protection, CBP, in the U.S. is checking, but is not able at the moment to have 100%. rate of checking, and we heard some statements they want to step up on this, but for us it is kind of difficult to judge, you know, what's the timeframe on this, and maybe there could also be, you know, some reshuffle of CDP resources because of illegal immigration into the US, so that could be something, yeah, also defect. I can take that question. As you know, the 30 million that we booked in last year was for the two years, 23 and 24, and now we're talking just about 25. And as you also know, we are not running full in general on all three sides because we want to control our inventory. So having said that, take a number a bit of half of last year's. I think that could work out for 2025 on the IRA credit. On your question, how would we react when demand picks up? So, priority number one would be to sell inventory. I mean, we have clearly baked that also into our assumption that once there is a recovery, we can control that and lower it. We are running roughly now in balance between – so supply is in balance with our firm contracts in semi and solar. But once demand picks up, we definitely want to reduce our run at a higher rate. And maybe I just want to add one comment on that. So the ramping up process itself is not something which is kind of big. It's a digital. So you cannot ramp up these capacities from one day to another from 50% to 100%. So that would also take some time. But with the inventory we have, that gives us the flexibility. And ultimately, of course, it depends on how much bigger the demand would be on which time horizon.

Then the next question comes from Tom Ricklesworth from Wong Stanley. Please go ahead.

Thanks very much. My two questions, please. The first is on silicones, actually, to follow on from Andreas's question. So you're forecasting for kind of 10%, you know, growth with specialty improvement, and yet the margin outlook is relatively muted in that context. and in the context of your chemicals margins ambitions for 2030. So could you unpack why you don't expect a better margin improvement, given that outlook in silicones? Second question, which is on your annual report, which talks about customer growth in semiconductors. I'm kind of intrigued by that because clearly when I look at all your customers, including one in which you have an equity stake, the earnings outlook suggests a negative environment. So are you seeing a turn in the semiconductor industry? Maybe if you can unpack the basis for that commentary in the annual report. Thank you.

for having a slightly improvement in margin. You said only, given that we have a roughly a 10% improvement on the sale side. I think it has to factor in that we We are not seeing a big turn in pricing yet, despite the higher loading. And we need to also, with the volume growth, we need to compensate some of the base cost inflation. Raw materials aren't moving largely. And also, although our focus is on the specialties strategically, and we are growing that, as you can see, in last year and this year, we still have a standard business where we don't see a change in profitability, given that prices are stuck at very low levels. And from that perspective, we are cautious on that side, how big that margin improvement can be in such an environment where I would still say it's not yet mid-cycle. So we say that we increase in specialty volumes because we have now available capacities. We invested in those capacities so we can benefit from all the innovation that runs along the megatrends, but we are not yet at mid-cycle. And for that reason, we believe a slight improvement is a reasonable number to factor in. we improved top line, so overall absolute EBDA definitely comes to something about 400 million euros, so that's how we see that business. Okay, and Tom, on your question on the semiconductor for the silicon side, so I mean, when we do our guidance or forecasting, I mean, for the semiconductors, it's very much based actually on the contractual volumes, which we have in that space. So keep in mind, most of these volumes for semiconductor are long-term contracts, some of them even going until the 30s. And so we see growth. We see higher demand from our customers this year. Now to conclude on what does it mean for the semiconductor industry, I think we are not really the experts in it, and I can just tell you We see growing volumes and also keep in mind, we have our new edging line coming on stream by the mid of the year. And also here, we have contracted customers for qualifying this new plant with volumes. And that's the reason why we see these growing volumes in 2025 going forward.

Thank you, Chris. Just on the edging line, how much contribution in sales or if you can be trying to dimensionalize that for us, that would be very helpful. But thank you for answering my questions.

Yeah, but, you know, Tom, typically we're not, you know, giving these information on single assets. And I can just tell you we built that plant in very good timing. It runs very well so far, and again, the opening will be mid of the year, and we have a lot of customers queuing on the qualification process for this plant. And, yeah, that's it.

Thanks, Paris. Thank you. And the next question comes from Chitan Udeshi from JP Morgan. Please go ahead.

Yeah, hi. Thanks, sir. Just in Polysilicon, can you help us understand how much inventory now do you have, whether it's in tons, in quarter volumes, is it one quarter worth of inventory, two quarters, just to understand when could be the time for you to increase the production? The second question is, I mean, is there any pressure you get from, or do you get any pressure from your auditors in terms of re-evaluating this inventory? Or, I mean, as long, because there's no shelf life, you know, you can just keep it in the warehouses, even if, you know, the prices don't recover for, let's say, you know, 12 months, 18 months. So those are the two questions on polysilicon. On... Polymers, just curious in terms of what you see in the market in terms of demand by segments. I think you mentioned construction was tough last year, but maybe seeing a recovery, I don't know. And also from a competitive landscape point of view, have you seen any major changes in polymers from competitive landscape and pricing? Thank you.

I have the first question on polymers. or the first two on policy, silicon and inventory. So first of all, I mean, as you know, I mean, see, we have just published our annual reports and our financials and others just definitely went through that topic of inventory valuation. And we meet all criteria. So we sell inventory at attractive economic rates. And as you also know, I mean, we are selling not, to the China price, but to the outside China price, international price. And with respect to the level, as I said before to Andreas, we are running now at roughly the demand rate that we have from firm contracts, and we have shipped to Asia, and we have material in our hubs, so as soon as the market picks up in demand, we would be ready to sell it. But I do not disclose what level we have there. And as I also said to Andreas, and I can just reconfirm that, we would have priority to first work down inventory and then increase production again once demand picks up. So please, also from the valuation perspective, IS2, which clearly defines inventory valuation. As I said before, we are selling it at attractive economic rates, so there's not a discussion about that. And the shelf life is years. Years.

And the next question comes from... I'm sorry.

Please go ahead. On polymers, let me answer that. I mean, if you look in 2024, what we saw is, you know, a tough market environment for the powder business because of construction industry. And we saw a good demand development for our dispersions. And now looking into 2025, we still see that construction market is not really recovering. But overall, we see slightly higher volumes in dispersions and in powders with slightly lower prices, which would go also into your second part of the question on the competitive landscape. And here, yes, we do see some competitors being more aggressive on the powder and dispersion side. obviously trying to fill capacities for their acetyl chain, and that gives some pressure on the pricing currently.

Thank you.

And the next question comes from Oliver Schwarz from Warburg Research. Please go ahead.

Yeah, thank you. Hello, gentlemen. Thank you for taking my question. So first one, I'm still trying to wrap my head around about the mix improvement in silicons that doesn't seem to have a major impact on the margin. You said you will be adding or you have added capacity and which enables you to improve your output of specialties. When looking at the capacity utilization 2024 versus 2025 plan, Are there any changes that would explain the more or less flat margin? Hence, might you even be forced to produce more standard materials in your new capacities to fill them up? That would be my first question. The second question is on Siltronic. Obviously, you don't recognize that in the balance sheet as mark-to-market. Current market number would be around $400 million. You recognize your share at $880 million. That's a whopping top-up of 120%. Why is that the case? And might you be forced to, let's say, realign the number with the market number if the share price is not coming up? And also, Mr. Hartl, you were quoted that the share of Waka King and Seltronic is below 30% in the annual report, at least. The stake is still at 30.83% unchanged year on year. Was that a misquote by the executive?

Maybe starting with the last one, I don't know who quoted this, but it's certainly not correct. I did quote, I mean, I told roughly 30% explaining what was the number, the 13 million contribution of last year plus 13, in order to make it easy for you to calculate when talking about the consensus of minus 94% this year, for 2025, for consensus net income, to take the roughly 30, I would say, have said, okay, a third to come up to minus 30 as equity contribution, which will show in others for 2025. So the 13.8% is unchanged. I can confirm that. And I continue going from question three after question one. Question two on citronic valuation, yeah, definitely. We have had to look at that for the end closure, but the IIS standard says it needs to be consistently below that last value that we sold the citronic share, which is 56. euro a share. And we had seen the dip just for a couple of weeks. And I mean, also the second ruling in the IIS standard is that it has to be not only significantly, but also substantially below that. And yeah, we come up with a valuation also that confirms that we are which is more than 90. So we definitely see the value of Stratronix currently underestimated. And we know it from 50 years of experience that this is a very volatile market. And yeah, the trust has been very long. And as you all know, with digitalization and artificial intelligence, there will be a pickup once industries are cleared. in the value chain, and so that valuation that we see in the share price is not the fundamental valuation that we would consider as fair. So your first question, Oliver, was on the mix improvement. I think if I tried to get it again, I mean, we see an improvement in specialty volumes and we see also an improvement in margin. And I think that is a clear statement. And as I said before, we are not yet at mid-cycle margins. And for that reason, we have not turned yet the pricing substantially. I believe it's So we are trying it here and there, and we will go for increases selectively. But on a broader level, silicon prices have some potential going forward. And the track from the standard pricing is still visible in our overall result. And there is no change from the oversupplies in China so far.

Okay. Thank you very much.

And the next question comes from Sebastian Bray. Please go ahead.

Hello, hello. Good afternoon, and thank you for taking my questions. I have two, please. The first is more on near-term trading. The second is about BioSolutions and return on capital employed. I'll start with the BioSolutions question. This segment now has net assets which are higher than for both polymers and polysilicon at about 525 million euro. it's a bit unusual to see a CDMO making an EBIT loss, a trough of cycle. What is going on here? Is it a particular market segment, bacterial fermentation? Is it just a bet on RNA ramping up in two years' time? And would you consider changing the portfolio here substantially to improve returns? That's my first question. My second question is on near-term trading, you helpfully gave a statement on how the sales have developed in the first two months of the year. Can you give some color on this? I've heard from some other companies, and just looking at the macro data, that January was still characterized by a bit of pre-buying, pre-tariffs, and actually February has been a bit shaky. Can you give any color on how the months have developed? Thank you.

Okay, question. This is Christian. I will start with the first question on the buyer solutions. As you know, I mean, the main focus of the current stage now is filling the capacities. We did acquisitions in the past. We have now a good basis for growing the business, but now it's about acquiring projects, and sometimes this takes longer than expected. I mean, you know that also on the financing side, especially for smaller biotechs, there has been a drag in recent years. and that also slows down the overall pipeline that you have. So from that perspective, there's not a change of what's going on. The clear focus and priority of all the teams is to fill the projects, the capacities that we have, and then we will see a better position and a better utilization and hence a better profitability on that business. On the near-term trading question, as we are now two months into the quarter, as we said for the group, we see sales at 1.5 billion euros and EBITDA around 135. In silicones, we expect significantly higher sales in EBITDA year-on-year and quarter-to-quarter due to ongoing mix. We have seen now a strong January and February according to expectations. So, yes, I would say it's a solid start. In polymers, we see volumes for our dispersible powders and dispersions roughly at prior year level, and say at EBDA will be lower. As you will recall, we ended the last year with lower prices than at the start, so this will be a drag. And so momentum for order intake is okay. So I don't see that January had especially effect that was reversed than in February. No, from our numbers, I couldn't confirm that what you hear at other places.

That's helpful. Thank you for taking my questions.

And the next question comes from Sean McLaughlin from HSBC. Please go ahead.

Good afternoon. Thanks for taking my questions. Firstly, just coming back to polysilicon, just understanding your scenarios. I mean, first of all, just to get to the midpoint, do we assume that obviously if we're at the lower end of that EBITDA range in Q1 that you're not expecting And I guess policy improvements over, let's say, the next quarter or two. Do we assume an inflection at the midpoint of the year to get to that midpoint of the range? And ultimately, what could get us to that top end of the range? Thank you. That's the first question.

So, Sean, to me, as I said before, the lower end of the range assumes that we are running at today's demand environment, that we are – performing against our firm contracts. And that brings you roughly first quarter times four to the 100 million euros. So to come to the midpoint of the range of 100 to 250 million euros, which is 175, yes, we would assume some recovery in demand starting maybe in the second quarter or second half. And that is possible as soon as there is clearance on that uncertainty, but it's hard to predict when and it's hard to predict the scale of that recovery. But we seem that the midpoint is a reasonable assumption if there's a recovery that we would end up there. The high end would assume a strong upside and a strong demand impulse But that is also possible. So we have seen that market, and it could also be that a volume pickup goes also in line with another hike in today's prices. So all is possible in this environment. But perhaps important is we run it also now with the expectation that we sort of come sort of at the midpoint, but we can also run it at the low end, and we would not increase production prematurely unless we see a sustainable firming in demand. Maybe to add a comment on this, Sean, so what are timelines or milestones for us that have an importance on decisions, and that's on the political side, so the anti-dumping and countervailing duties So the final determination that is scheduled for April of this year, so that could trigger a higher demand depending on the outcome of these, and they will be then finally determined by the International Trade Commission in June, which would then speak for the second half having a changed demand pattern.

Thank you. That's very helpful. And I appreciate it might be early stage, but if you could comment on any impacts on your business from the proposed infrastructure and defense spending packages in Germany.

Well, indeed, it is very, very premature because we today even don't know if that program will come or not. I think that should be probably determined this week. That's my understanding. But negotiations are still going on. I mean, in general, I think... There's no doubt that on the defense side, Europe needs to do more. And also, if you talk about infrastructure in Germany, I would say also it's necessary to do something here. So what does it mean for us? Very difficult to say because still not clear whether it comes at all, how much will come. And yes, infrastructure could have an impact, but, you know, please keep in mind, you know, WACKER is a global company, and we have only 16% of our sales. In Germany, I think that gives also an order of magnitude of the impact. And second of all, I think if you talk about infrastructure, especially infrastructure and government spending, this is, in my view, not something which is running super fast. So that could really drag into the next year. So is there a big impact in this year?

Thank you. That's very helpful.

But it's a great, I mean, it's definitely, I mean, we appreciate that something, that direction is coming, just, you know, to make this statement.

Then the next question comes from Joff here from UBS. Please go ahead.

Yeah, good afternoon, and thank you for the presentation. I just had one question going back to the outlook statement guidance that you've given. Clearly, generating 135 million of EBITDA NQ1, you expect to get to the midpoint of your full year range. Quite a substantial recovery in EBITDA in the next three quarters. What gives you the confidence that you can achieve that?

Dr. Weiss here. I think it's important to understand that 135 in the first quarter does not include any effect from the CO2 compensation that we get as credit for the CO2 cost that we had in our electricity that we procured. But we can only book it in the fourth quarter once we get the payment. That's how the auditors have set it up. So that means you have to take 135 times 4, which gives you $500. and then you add the CO2 compensation, and then you come to the lower end of the range, which is 700. So, and then, as we discussed before, we assume a recovery of some magnitude in polysilicon, and we also assume a slightly stronger second half for all the other divisions, for the chemical divisions, for silicons, for polymers, for biosolutions. And that brings you to the midpoint of 800 million euros. So the 135 of the first quarter are fully in line with our midpoint for the full year.

And can I ask, the stronger second half that you're sort of assuming for the chemicals divisions, is that just a sort of, as it were, staying still where you are at the moment because you've got an easier comp versus last year? or are you expecting the underlying recovery to come straight?

It's a bit of sequential growth, and then that brings you there. I mean, we are gradually growing silicone specialties, as we talked about, and that is not defined by calendar years. So it doesn't give you a jump in 25, and then it runs flat. So we are winning customer projects. We are filling available capacities and that gives you a little bit of a better second half and you don't need to assume much of an economic recovery for that.

Okay, thank you.

And we do have one follow-up question from Tom Wigglesworth from Wong Stanley. Please go ahead.

You started to touch on the question on the German infrastructure, but obviously, Christine, you spent quite a long time with the last administration around policy for the chemicals industry, so less on WACA and more about, do you think the new administration in Germany will take a different stance towards, you know, supporting the chemicals industry? How do you see that evolving given the change in government?

Well, that's a very good question, but it's a very difficult question to answer. And actually, I mean, what we do as WACKER, but even more so as the Chemical Association, we very clearly state, you know, what we need for competitiveness staying in Germany. And I think this has been clearly understood by the last administration, obviously not fully implemented. And I think it's also fully understood by the new administration. But I think it is still too early to say where their priorities will be. What we hear is that they want to strengthen the industry or the economy, which is a good sign. But, again, I would love to share more, but I don't know. Again, we put our positions to them very clearly. And, yeah, I hope that they will be heard.

Understood. Thank you.

So, ladies and gentlemen, this was the last question for today. I would now like to turn the conference back over to Jörg Hoffmann, Head of Investor Relations, for any closing remarks.

Thank you, Operator. Thank you all for joining us today and for your interest in Wacker Chemie. Our next conference call on the first quarter of 2015 results is scheduled for April 30th. As always, please don't hesitate to contact the IR department if you have further questions. Thank you for your interest in Wacker.

Ladies and gentlemen, the conference is now concluded and you may disconnect. Thank you for joining and have a pleasant day. Goodbye.